EDGAR 10-K Filing

Company CIK: 1365357
Filing Year: 2022
Filename: 1365357_10-K_2022_0001213900-22-020183.json

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ITEM 1. BUSINESS
Item 1. Business
Background
We were incorporated under the laws of the State of Nevada on September 9, 2005 under the name of JML Holdings, Inc. and we subsequently merged with Baoshinn International Express, Inc. and changed our name to Baoshinn Corporation on January 10, 2006. We changed our name to Green Standard Technologies, Inc. on June 17, 2015andon May 19, 2016, we changed our name to ZZLL Information Technology, Inc. (the “Company”).
On April 23, 2013, we formed a wholly owned subsidiary, Syndicore Asia Limited (“SAL”) under the laws of Hong Kong, which principally holds our ownership interest in Hunan Syndicore Asia Limited (“HSAL”), an e-Commerce company organized under the laws of the People’s Republic of China (the “PRC”).
On August 18, 2016, we entered into a joint venture agreement with Network Service Management Limited (“NSML”) to form Z-Line International E-Commerce Company Limited (“Z-Line”) under the laws of Hong Kong. We initially owned 55% of the equity interests in Z-Line, which was formed to provide consumer-to-consumer, business-to-consumer and business-to-business-sales services via web portals. On October 8, 2019, we acquired the remaining 45% equity interest in Z-Line from NSML. Z-Line has had limited operating activities since incorporation.
On May 23, 2020, we formed a wholly owned subsidiary, Shenzhen Ezekiel Technology Co. Limited (“Ezekiel”) under the laws of the PRC, which is engaged in the distribution of petroleum based products in the PRC.
We currently operate our business through our subsidiaries, SAL, HSAL and Ezekiel. The structure of our corporate organization is as follows:
Holding Foreign Company Accountable Act
In December 2020, the Holding Foreign Companies Accountable Act, or the HFCAA, was signed into law. The HFCAA amended the Sarbanes Oxley Act to prohibit trading on U.S. exchanges of public reporting companies audited by audit firms located in foreign jurisdictions that the PCAOB has been unable to inspect for three sequential years. Trading in our securities may be prohibited under the HFCAA, if the Public Company Accounting Oversight Board (United States) (the “PCAOB”) determines that it cannot inspect or investigate completely our auditor.
Pursuant to the HFCAA, the PCAOB issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in (i) the PRC because of a position taken by one or more authorities in the PRC and (ii) Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in Hong Kong. In addition, the PCAOB’s report identified the specific registered public accounting firms which are subject to these determinations.
The PCAOB is currently unable to conduct inspections in China without the approval of Chinese government authorities. If it is later determined that the PCAOB is unable to inspect or investigate our auditor completely, investors may be deprived of the benefits of such inspection. Any audit reports not issued by auditors that are completely inspected by the PCAOB, or a lack of PCAOB inspections of audit work undertaken the PRC that prevents the PCAOB from regularly evaluating our auditors’ audits and their quality control procedures, could result in a lack of assurance that our financial statements and disclosures are adequate and accurate.
Our auditor, WWC, P.C., is an independent registered public accounting firm with the PCAOB, and as an auditor of publicly traded companies in the U.S., is subject to laws in the U.S. pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. WWC, P.C. , is based in California and has been inspected by the PCAOB on a regular basis, including in December 2021. Should the PCAOB be unable to fully conduct inspection of our auditor’s work papers relating to our activity in the PRC, it will make it difficult to evaluate the effectiveness of our auditor’s audit procedures or equity control procedures. Investors may consequently lose confidence in our reported financial information and procedures or quality of the financial statements, which would adversely affect us and our securities.
Moreover, if trading in our securities is prohibited under the HFCAA in the future because the PCAOB determines that it cannot inspect or fully investigate our auditor at such future time, our securities will likely be delisted.
Description of the Business
In 2021 and 2020 we were engaged in two business segments, (i) the e-commerce business, consisting of HSAL and SAL’s e-commerce operation and (ii) Ezekiel’s sales of petroleum based products and multi-function lottery machines.
HSAL’s e-Commerce business
HSAL is an e-Commerce company that developed “Bibishengjia”, an online application based on a shopping search engine that concurrently searches many shopping sites, primarily based in China, including major shopping sites such as Taobao.com, Tmall.com, JD.com and Pinduoduo.com, and helps customers meet their one-stop online shopping needs. The shopping sites included in the Bibishengjia search engine pay us commissions for directing customers to their sites. Additionally, if a seller on a shopping site offers a rebate to the shopping site for purchases made from such seller, the shopping site typically shares such rebates with the search engine that directed the customer to the shopping site. Besides directing traffic to shopping sites, Bibishengjia also runs its own online shopping platforms - Bibi Mall and Lianlian Nongyuan Agricultural Products Store, and sources and resells agricultural and other goods on Bibishengjia. Bibi Mall and Lianlian Nongyuan Agricultural Products Store do not take possession of the products and use third party delivery services to pick up the products sold from vendors and deliver the goods to customers directly. Bibishengjia was launched on August 18, 2019 and is currently available for download at the Apple APP Store and other major mobile download stores.
On September 26, 2019, we, through SAL, entered into an agreement (the “Pretech Agreement”) with Pretech International Co., Limited (“Pretech”), a company incorporated under the laws of Hong Kong (“HK”). Pretech is a software, hardware and digital company that also specializes in the development and manufacture of consumer electronics. Under the terms of the Pretech Agreement, Pretech agreed to act as SAL’s sales agent to promote and bring more customers to Bibishengjia and also make sales of its own products through the use of Bibishengjia. Pretech paid $1 million for the use of Bibishengjia, and the Company agreed to pay Pretech 5% of all sales made in the PRC and HK through Bibishengjia. The term of the Pretech Agreement was initially for 24 months. On October 26, 2020, the Pretech Agreement was amended and restated whereby Pretech was given the right to use Bibishengjia directly for 7 years. When users browse the Bibishengjia APP, they are able to click on the Pretech hyperlink and be directed to Pretech’s own site where they can make purchases of Pretech’s products. Additional features and functions may be added to the APP according to the Pretech’s needs, markets conditions and additional requirements upon separate agreement between the parties, either in conjunction with the needs of SAL and HSAL or specifically for Pretech. Under the Pretech Agreement, the Bibishengjia APP, its contents and all related intellectual property rights including rights related to the Pretech hyperlink, are the sole property of SAL, including any additional developments or modifications made in the APP, in perpetuity Pretech’s use of Bibishengjia is accomplished by a section on the Bibishengjia APP created specifically for Pretech.
Ezekiel’s petroleum based products distribution business
In October 2020, Ezekiel entered into the business of distribution of petroleum based products, such as asphalt, heat conduction oil and machine (lubricating) oil. Ezekiel’s suppliers include large Chinese state-owned enterprises as well as reputable private Chinese companies. Ezekiel doesn’t take possession of the petroleum based products sold to third parties, which are stored in the suppliers’ designated warehouses, and is not responsible for delivery to the customers.
Ezekiel’s multi-function lottery ticket machine business
In late 2020, Ezekiel started a new business where it purchases custom-made multi-function lottery ticket machines and re-sells them to third parties. The machines are designed and manufactured by third parties with third party technologies. Ezekiel doesn’t own any intellectual property rights relating to the machines. Besides dispensing lottery tickets for which the machine owner retains 7-8% of the ticket sales price, the machines also function as a cellphone charging station for about $0.45 per hour and includes a disinfectant wipes dispenser. The machine has a LED screen which allows a customer to browse the Bibishengjia APP and make purchases there. Ezekiel has obtained licenses from several second and third-tier cities in the PRC where competition for lottery tickets sales and lottery tickets machines is manageable. The licenses allow the machines to dispense lottery tickets in these cities. Besides selling the machines to third parties, Ezekiel also plans to install, as owner and operator, the multi-function machines in cities where Ezekial has received licenses to sell lottery tickets.
The cost of each machine is approximately $950 and we sell these machines to third parties for approximately $1,375. We currently generate revenue from sales of our machines to third parties. If and when we are able to install machines, as an owner and operator, we expect to generate revenue from the fees retained on all lottery ticket sales made by the machines, and fees generated by the cellphone charging station.
Our Strategy
HSAL’s e-Commerce business
We have been focusing on blue-collar millennials living in second and third tier cities in China as our targeted customers and intend to expand our footprint in such geographic areas. We also plan to include white collar millennials living in these cities as targeted customers. Our internally conducted survey indicates that office workers are interested in value shopping due to limitations on their disposable income.
Ezekiel’s petroleum based products distribution business
Ezekiel’s suppliers include large Chinese state-owned enterprises as well as reputable private Chinese companies. Ezekiel plans to establish itself as a reliable distributor by offering quality products and services. Accordingly, it believes that developing and maintaining relationships with large state-owned suppliers and reputable privately-owned suppliers is a key to its business. Management believes that maintaining relationship with Ezekiel’s customers is also critical to its future success because substantially all of its sales in 20202021 came from one large customer, which management believes will continue to place purchase orders for large quantity of products. We plan to develop more customers and to increase the size of our business through referrals and from our existing business relationships.
Ezekiel’s multi-function lottery ticket machine business
Our plan is to increase our market share and sales in second and third-tier cities in the PRC where competition for lottery tickets sales and lottery tickets machines is manageable..
Markets and Customers
HSAL’s e-Commerce business
HSAL’s primary customers are blue-collar workers in their 20’s and 30’s living in second and third tier cities in China who are sensitive to product prices. We also plan to include white collar millennials living in these cities as targeted customers. According to data published by Sina Finance, about 61.58% of newly-added customers of major e-commerce websites in China during the 2019 holiday seasons were millennials living in third tier cities. The published data indicates 63.4% of the population in third tier cities in China prefer online shopping with a shopping frequency of 5.8 times per month. We intend to capitalize on these trends and demographics in our future marketing initiatives.
Ezekiel’s petroleum based products distribution business
Asphalt production is concentrated in the eastern part of China, and according to Caihui News, the demand gap in the western part of the country continues to expand. Our suppliers include large Chinese state-owned enterprises as well as reputable private Chinese companies who provide stable and high quality products to us. Purchasers of our goods are mainly state-owned enterprises with good credit.
For the year ended December 31, 2021, one customer, Qingdao Jiuzhou Xintong Industry & Trade Co., Ltd. located in the city of Qingdao accounted for 77.85% of our total revenue, and one state-owned supplier, Yanchang Petroleum (Zhejiang FTZ) Limited, located in the city of Zhoushan accounted for 100% of our purchases.
Ezekiel’s multi-function lottery tickets machine business
Lotteries are generally conducted to promote public welfare in the PRC and are uniformly operated and actively encouraged by the state. Depending on the type of the program, laws in the PRC mandate that a certain percentage of the lottery tickets sales will be used by the government to support state projects. Sports lotteries support national sports projects and welfare lotteries support the progress of social welfare such as state-run assisted living programs and orphanages. Data published by the China Welfare Lottery official website indicates that only 20%~30% of the annual lottery tickets sales in China are made through self-service methods (e.g. online sales), while in developed countries in Europe and the United States instant scratch-off lottery tickets account for 60% of the market share and self-service terminals are widely available. China’s scratch-off lottery tickets only account for 6% of the Chinese lottery market share. We believe that the market for self-service terminal-based lottery ticket sales is potentially large and that significant growth can be anticipated as the use of self-service machines become more popular and gain market acceptance.
We did not generate any revenues from the sale of multi-function lottery tickets machine in 2021 due to the pandemic and the lockdowns in China.
Marketing and Promotion
HSAL’s e-Commerce business
We formed a partnership in March 2020 with the government of Hunan Province to help market local products on the Bibi Mall and Lianlian Nongyuan Agricultural Products Store on the Bibishengjia.APP. These products are otherwise hard to sell due to transportation and other logistical limitations.
We have historically promoted our APP on local TV programs and host community gatherings to share shopping experiences. In the third quarter of 2020, we started to promote the Bibishengjia. APP through “Momo”, a free social search and instant messaging mobile app with over 100 million monthly active live streaming users as of September 2020. We believe that mobile streaming media will accelerate our growth in the future. We registered Bibishengjia on Momo and have hired streamers/influencers who promote Bibishengjia. in their live streaming studios.
Ezekiel’s petroleum based products distribution business
Because our suppliers include large Chinese state-owned enterprises as well as reputable private Chinese companies, we believe that we quickly became known for our stable and high-quality products. The entry barrier for this business is relatively high and we believe that an established business may not be easily duplicated by competitors. Members of Ezekiel’s management team have established personal relationships with suppliers and customers, and we aim to maintain these relationships as well as develop new relationships using personal connections and other industry resources in order to further establish ourselves and gain additional customers.
Ezekiel’s multi-function lottery tickets machine business
We currently rely on trade shows to promote our machines to third party buyers. In addition to selling to third parties, we also plan to install the multi-function lottery ticket machines in strategically chosen second or third tier cities. The colorful moving images of lottery tickets on the LED screens of the machines help to attract customers . We have been exploring opportunities in many provinces and cities across the country with the goal of installing our own machines or selling machines to third parties in these locations.
Competition
HSAL’s e-Commerce business
The shopping search e-commerce industry itself is a service industry and our Bibishengjia. App does not have distinguishable competitive advantage other than offering users the ability to purchase products at advantageous prices. Many non-shopping search e-commerce platforms now offer discounts on their products and large e-commerce platforms such as Taobao, JD, Pinduoduo, etc. have also created platforms that offer shopping search functions. As the competition in e-commerce increases , we believe that accurate traffic capture platforms with a traffic guidance model such as Bibishengjia. will offer unique advantages and gain popularity.
Ezekiel’s petroleum based products distribution business
Our competitive advantage is that our suppliers include large Chinese state-owned enterprises as well as reputable private Chinese companies who provide stable and high quality products to us. However, we are in the early stages of business development and do not have an established reputation in the industry. In addition, costs for petroleum based products are significant and because our funds are limited, the scale of our business growth may be restricted.
Ezekiel’s multi-function lottery tickets machine business
According to market surveys, China’s population accounts for about 19% of the world population, but accounts for only about 2% of global lottery sales. Only 10% of the population in China have purchased lottery tickets compared with more than 75% of the populations in developed countries such as the United States, France, and Japan, according to data published on the China Welfare Lottery official website. Currently in China, lottery tickets are mainly sold in ticket offices by sales people. In the developed countries, however, lottery ticket machines with self-service functions are installed in supermarkets, convenience stores, subways and other public places. We believe that the self-service lottery sales model will be the leading channel in the development of China’s lottery industry. Based on our survey, individuals who purchase lottery tickets in China at present have not formed the habit of buying lottery tickets from automatic terminals. Most customers still prefer to visit a physical lottery ticket sales office to meet like-minded people and enjoy tickets analysis services offered by the ticket sales offices. We may also encounter the problem that operating a lottery ticket machine may be challenging for some individuals.
In the Chinese lottery market, only lotteries permitted by the state can legally sell lottery tickets and lottery issuing agencies all are government-owned institutions. In addition to selling tickets themselves, lottery issuing agencies also authorize third parties to sell tickets. Competition among the lottery issuing agencies is fierce, and competition among their authorized lottery machine owners/operators is fierce as well.
We are currently competing against other lottery machine sellers. However, our custom-made multi-function lottery machines offer features and expanded applications that we believe the other machines don’t have, including a cellphone charger, a disinfectant wipes dispenser and a web shopping function. Paper currency transactions are not available on our machines. Customers can choose to use the online payment tool Alipay or the online social media WeChat to make contact-less purchases of lottery tickets. If a lottery player wins a prize, he can use the “scan code to redeem” function to redeem prizes on the spot. The prizes will be credited to the winner’s account in real time and the redemption process is safe and fast. If, as planned we install and operate the machines as an owner, , we will face competition from other lottery ticket dispensing machines that are also licensed to dispense tickets in the same city and from existing lottery ticket offices.. We will aim to gain a competitive advantages over other lottery machines through the promotion of the expanded applications on our machines.
Regulatory Compliance
Because substantially all of our business is conducted within the PRC, our operations are subject to regulations imposed by both the PRC and local governments. These include:
Regulations on Sales of Lottery Tickets and Lottery Ticket Machines.
The lottery industry is heavily regulated in the PRC. Pursuant to the Lottery Administrative Regulations and the Detailed Rules for the Implementation of Lottery Administrative Regulations, the issuance of lottery tickets requires the State Council’s special permission. Lottery issuing agencies, lottery sales agencies and licensed lottery tickets sales companies must follow detailed rules in making lottery tickets sales, including a prohibition against false advertisements, unfair competition, selling lottery tickets to minors and selling lottery tickets on credit. Lottery equipment and related technical services must meet the standards prescribed by the law. A lottery sales company may sell lottery tickets only after it has received a lottery sales license from the lottery sales agencies. Licensed lottery tickets sales companies must meet specific qualification requirements, such as capital and location requirements, non-criminal records requirements and creditworthiness requirements. Licensed lottery tickets sales companies must also enter into a form contract formulated by the Ministry of Civil Affairs and other national government agencies in order to become qualified. The form contract has to specifically set forth the provision and management of the lottery machines.
Regulations on Annual Inspection.
In accordance with relevant PRC laws, all types of enterprises incorporated under PRC laws are required to conduct annual inspections with the State Administration for Industry and Commerce of the PRC or its local branches. In addition, foreign invested enterprises are subject to annual inspections conducted by other applicable PRC governmental authorities. In order to reduce enterprises’ burden of submitting inspection documentation to different governmental authorities, the Measures on Implementing Joint Annual Inspection on Foreign-invested Enterprises issued in 1998 by State Administration of Foreign Exchange (“SAFE”), together with six other ministries, stipulated that foreign-invested enterprises must participate in an annual inspection jointly conducted by all relevant PRC governmental authorities.
Regulations on Foreign Currency Exchange.
Pursuant to the Foreign Currency Administration Rules promulgated in 1996 and amended in 2008 and various regulations issued by the State Administration of Industry and Commerce (“SAIC”) and the SAFE and other relevant PRC governmental authorities, Renminbi are freely convertible only to the extent of current account items, such as trade related receipts and payments, interest and dividends. Capital account items, such as direct equity investments, loans and repatriation of investment, require prior approval from SAFE or its local counterpart for conversion of Renminbi into a foreign currency, such as US dollars, and remittance of the foreign currency outside the PRC.
Payments for transactions that take place within the PRC must be made in Renminbi. Unless otherwise approved, PRC companies must repatriate foreign currency payments received from abroad. Foreign-invested enterprises may retain foreign exchange in accounts with designated foreign exchange banks subject to a cap set by SAFE or its local counterpart. Unless otherwise approved, domestic enterprises must convert all of their foreign currency receipts into Renminbi. On August 29, 2008, SAFE promulgated a circular regulating the conversion by a foreign-invested company of its registered capital in foreign currency into Renminbi by restricting how the converted Renminbi may be used. This circular stipulates that the registered capital of a foreign-invested company settled in Renminbi converted from foreign currencies may only be used for purposes within the business scope approved by the applicable governmental authority and may not be used for equity investments within China. Violations of this circular can result in severe penalties, including monetary fines.
In addition, any foreign loans to an operating subsidiary in China that is a foreign invested enterprise, cannot, in the aggregate, exceed the difference between its approved total investment amount and its approved “registered capital amount”.
Regulation of Foreign Exchange in Certain Onshore and Offshore Transactions.
In October 2005, SAFE issued Circular 75, which regulates foreign exchange matters in relation to the use of a “special purpose vehicle” by PRC residents to seek offshore equity financing and conduct “return investment” in China. Under Circular 75, a “special purpose vehicle” refers to an offshore entity established or controlled, directly or indirectly, by PRC citizens or PRC entities (collectively, as PRC residents) for the purpose of seeking offshore equity financing using assets or interests owned by such PRC residents or PRC entities in onshore companies, while “round trip investment” refers to the direct investment in China by PRC residents through the use of “special purpose vehicles,” including without limitation, establishing foreign invested enterprises and using such foreign invested enterprises to purchase or control (by way of contractual arrangements) onshore assets. Circular 75 requires that, before establishing or controlling a “special purpose vehicle,” PRC residents are required to complete foreign exchange registration with the competent local counterparts of SAFE for their overseas investments. In addition, such PRC resident is required to amend his or her SAFE registration or to file with SAFE or its competent local branch, with respect to that offshore special purpose vehicle in connection with any increase or decrease of capital, transfer of shares, merger, division, equity investment or creation of any security interest over any assets located in China by the offshore special purpose vehicle. To further clarify the implementation of such amendment or filing procedure, SAFE requires domestic enterprises under Circular 75 to coordinate and supervise such amendment or filings with SAFE or its local counterparts by such PRC residents. If PRC residents fail to comply, the domestic enterprises are required to report to the local SAFE authorities.
Failure to comply with the registration procedures set forth in Circular 75 may result in restrictions being imposed on the foreign exchange activities of the relevant onshore company, including being prohibited from distributing its profits and proceeds from any reduction in capital, share transfer or liquidation to its offshore parent or affiliate, and restrictions on the ability to contribute additional capital from the offshore entity to the PRC entities, and may also subject relevant PRC residents to penalties under PRC foreign exchange administration regulations.
Regulation of Overseas Listings.
On August 8, 2006, The Ministry of Commerce of the People’s Republic of China (“MOFCOM”), China Securities Regulatory Commission (the “CSRC”), the State-owned Assets Supervision and Administration Commission, State Administration of Taxation (the “SAT”), the SAIC and SAFE jointly promulgated the “Rules on the Mergers and Acquisition of Domestic Enterprises by Foreign Investors,” which became effective on September 8, 2006, and was further amended on June 22, 2009, or the M&A Rules. Among other things, the M&A Rules include provisions that purport to require that an offshore special purpose vehicle, or SPV, formed for listing purposes and controlled directly or indirectly by PRC companies or individuals must obtain the approval of the CSRC prior to the listing and trading of such SPV’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures specifying documents and materials required to be submitted to it by SPVs seeking CSRC approval of their overseas listings. However, the application of this PRC regulation remains unclear with no consensus currently existing among the leading PRC law firms regarding the scope and applicability of the CSRC approval requirement to various types of transactions, including those which involve the use of variable interest entity agreements.
Regulations of Dividend Distribution.
Under current applicable laws and regulations, each of our consolidated PRC entities may pay dividends only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, each of our consolidated PRC entities is required to deposit at least ten percent (10%) of its after-tax profit based on PRC accounting standards each year into its statutory surplus reserve fund until the accumulative amount of such reserve reaches fifty percent (50%) of its registered capital. These reserves are not distributable as cash dividends.
Regulations Relating to Taxation.
The PRC Enterprise Income Tax Law applies a 25% enterprise income tax rate to both foreign-invested enterprises and domestic enterprises, except to the extent tax incentives are granted to special industries and projects. Under the PRC Enterprise Income Tax Law and its implementation regulations, dividends generated from the business of a PRC subsidiary after January 1, 2008 and payable to its foreign investor may be subject to a withholding tax rate of 10% if the PRC tax authorities determine that the foreign investor is a non-resident enterprise, unless there is a tax treaty with China that provides for a preferential withholding tax rate. Distributions of earnings generated before January 1, 2008 are exempt from PRC withholding tax.
Under the PRC Enterprise Income Tax Law, an enterprise established outside China with “de facto management bodies” within China is considered a “resident enterprise” for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income. A circular issued by the State Administration of Taxation in April 2009 regarding the standards used to classify certain Chinese-invested enterprises controlled by Chinese enterprises or Chinese enterprise groups and established outside of China as “resident enterprises” clarified that dividends and other income paid by such PRC “resident enterprises” will be considered PRC-source income and subject to PRC withholding tax, currently at a rate of 10%, when paid to non-PRC enterprise shareholders. This circular also subjects such PRC “resident enterprises” to various reporting requirements with the PRC tax authorities.
Under the implementation regulations to the PRC Enterprise Income Tax Law, a “de facto management body” is defined as a body that has material and overall management and control over the manufacturing and business operations, personnel and human resources, finances and properties of an enterprise. In addition, the tax circular mentioned above specifies that certain PRC invested overseas enterprises controlled by a Chinese enterprise or a Chinese enterprise group in the PRC will be classified as PRC resident enterprises if the following are located or resident in the PRC: senior management personnel and departments that are responsible for daily production, operation and management; financial and personnel decision making bodies; key properties, accounting books, the company seal, and minutes of board meetings and shareholders’ meetings; and 50% or more of the senior management or directors having voting rights.
Seasonality
Our management believes that our operations are not currently subject to seasonal influences, except during the two-week period before the “Singles’ Day” (November 11) and Chinese New Year’s Day our Bibishengjia online sales increase.
Employees
As of December 31, 2021, we had a total of 18 employees working in China, performing sales, operational and administrative functions and 2 employees in Hong Kong, performing managerial functions. We believe we have a good relationship with our employees. We have taken necessary precautions in response to the COVID-19 outbreak, including offering employees flexibility to work from home and mandatory social distancing requirements in the workplace.

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ITEM 1A. RISK FACTORS
Item 1A. Risk Factors
Not Applicable as a smaller reporting company.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. Unresolved Staff Comments
None.

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ITEM 2. PROPERTIES
Item 2. Properties
We lease office space of approximately 50 square meters for our executive offices in the Carnival Commercial Building, 18 Java Road, North Point Hong Kong. Our current lease is for a two-year term ending on August 27, 2023 at a monthly charge of HK$ 8,000 per month (approximately $1,031).
Our subsidiary, Hunan Syndicore Asia Limited, leases approximately a 683 square meter office space at Tower E1, Li Gu Yu Yuan, No. 27 Wen Xuan Road, Chang Sha, Hunan Province, China at a monthly charge of RMB 22,523 per month (approximately $3,218 per month). The lease expires in May 2024. The lease may be renewed upon three months prior written notice.
Our Ezekiel subsidiary leases a 297 square meter office space at Xin Li Kang Tower, Suite 22C, Nanshan District, Shenzhen, Guangdong Province, China at a monthly charge of RMB 36,440 per month (approximately $5,205 per month). The lease expires in April 2023. The lease may be renewed upon six months prior written notice.

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ITEM 3. LEGAL PROCEEDINGS
Item 3. Legal Proceedings
We may be subject to litigation from time to time as a result of our normal business operations. Presently, there are no material pending legal proceedings to which we are a party or as to which any of our property is subject, and no such proceedings are known to be threatened or contemplated against us.

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ITEM 4. MINE SAFETY DISCLOSURE
Item 4. Mine Safety Disclosure
Not Applicable
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Our common shares are quoted for trading on the OTC Bulletin Board under the symbol “ZZLL”. The closing price of our common stock, as reported by the NASDAQ.com on December 31, 2021, was $0.12.
As of December 31, 2021, we had approximately 84 shareholders of record who held 20,277,448 shares of the Company’s common stock. This does not include shareholders whose shares are held in street or nominee names.
We have not declared or paid any cash dividends on our common stock and we do not intend to declare or pay any cash dividends in the foreseeable future. The payment of dividends, if any, is within the discretion of our Board of Directors and will depend on our earnings, if any, our capital requirements and financial condition and such other factors as our Board of Directors may consider.

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ITEM 6. SELECTED FINANCIAL DATA
Item 6. Reserved

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The discussion and analysis which follows in this Annual Report may contain trend analysis and other forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 which reflect our current views with respect to future events and financial results. These include statements regarding our future financial results, projected growth and forecasts, and similar matters which are not historical facts. We remind stockholders that forward-looking statements are merely predictions and therefore are inherently subject to uncertainties and other factors which could cause the actual future events or results to differ materially from those described in the forward-looking statements. These uncertainties and other factors include, among other things, the impact of the spread of the COVID-19 pandemic, business conditions affecting our business and general economic conditions; our ability to generate sufficient revenues to reach profitable operations; and our need to obtain additional financing. The forward-looking statements contained in this Annual Report and made elsewhere by or on our behalf should be considered in light of these factors.
We currently operate our business through our subsidiaries, HSAL, SAL and Ezekiel.
HSAL’s e-Commerce business
HSAL is an e-Commerce company operating through its self-developed online application “Bibishengjia”. Bibishengjia is a shopping search engine that concurrently searches many shopping sites, preliminarily based in China, including major shopping sites such as Taobao.com, Tmall.com, JD.com and Pinduoduo.com, and helps customers meet their one-stop online shopping needs. Bibishengjia also runs its own online shopping platforms - Bibi Mall and Lianlian Nongyuan Agricultural Products Store. Bibishengjia was launched on August 18, 2019 and is currently available for download at the Apple APP Store and other major mobile download stores.
In addition to our own marketing and promotional efforts and Pretech’s sales support, in the third quarter of 2020, we started to promote the Bibishengjia APP through “Momo” by using live streaming. We believe the mobile streaming media will accelerate our growth in the future.
Ezekiel’s petroleum based products distribution business
In October 2020, Ezekiel entered into the business of distribution of petroleum based products, such as asphalt, heat conduction oil and machine (lubricating) oil. Ezekiel’s suppliers include large Chinese state-owned enterprises as well as reputable private Chinese companies. Ezekiel doesn’t take possession of the petroleum based products which are stored in the supplier’s designated warehouse and is not responsible for delivery to the customers.
Ezekiel’s multi-function lottery tickets machine business
In late 2020, Ezekiel started a new business where it purchases custom-made multi-function lottery ticket machines and re-sells them to third parties. The machines are designed and manufactured by third parties with third party technologies. Ezekiel doesn’t own any intellectual property rights relating to the machines. Besides dispensing lottery tickets for which the machine owner retains 7-8% of the ticket sales price, the machines also function as a cellphone charging station for about $0.45 per hour and a disinfectant wipes dispenser at cost. No sales were recorded in 2021.
Critical Accounting Policies
Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The policies discussed below are considered by management to be critical to an understanding of our financial statements because their application places the most significant demands on management’s judgment, with financial reporting results relying on estimation about the effect of matters that are inherently uncertain. Specific risks for these critical accounting policies are described in the following paragraphs. For all of these policies, management cautions that future events rarely develop exactly as forecast, and the best estimates routinely require adjustment.
Revenue Recognition.
We adopted Accounting Standard Codification (“ASC”) Topic 606, Revenues from Contract with Customers (“ASC 606”) for all periods presented. Under ASC 606, revenue is recognized when control of the promised goods and services is transferred to the Company’s customers, in an amount that reflects the consideration that we expect to be entitled to in exchange for those goods and services, net of value-added tax. We determine revenue recognition through the following steps:
● Identify the contract with a customer;
● Identify the performance obligations in the contract;
● Determine the transaction price;
● Allocate the transaction price to the performance obligations in the contract; and
● Recognize revenue when (or as) the entity satisfies a performance obligation.
The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied by the control of the promised goods and services is transferred to the customers, which at a point in time or over time as appropriate.
Our revenues are net of value added tax (“VAT”) collected on behalf of PRC tax authorities in respect to the sales of merchandise. VAT collected from customers, net of VAT paid for purchases, is recorded as a liability in the accompanying consolidated balance sheets until it is paid to the relevant PRC tax authorities
Ezekiel’s petroleum-based product distribution business generates revenue from its sales. Ezekiel’s multi-function lottery ticket machine business generates revenue from the sale of machines to third parties and from its retention of a percentage of all lottery ticket sales made by the machines.
Cost of sales. Cost of sales includes the cost of direct labor, merchandise and materials.
Selling expenses. Selling expenses include advertising, depreciation and amortization, and certain expenses associated with operating the Company’s corporate headquarters.
General and administrative expenses. General and administrative expenses include rent, salaries, business registration fees, telephone and utilities costs, and office miscellaneous expenses.
Accounts Receivable. We don’t have any accounts receivable in this period. For our e-commence segment, our customers are required to pay while placing their orders per our policy, and therefore we don’t record any accounts receivable. The payment under the Pretech Agreement was paid in full upon signing. Lump sum payments are required to be made for our petroleum based products and our multi-function lottery machines per our sales policy, and therefore we don’t incur any material accounts receivable.
Plant and equipment. Plant and equipment are stated at cost less accumulated depreciation. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. Maintenance, repairs and betterments, including replacement of minor items, are charged to expense; major additions to physical properties are capitalized. Depreciation of plant and equipment is provided using the straight-line method over their estimated useful lives at the following annual rates.
Income Taxes. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
Recent accounting pronouncements
Our company considers the applicability and impact of all Accounting Standard Updates (“ASUs”). ASUs not discussed below were assessed and determined to be either not applicable or are expected to have minimal impact on our balance sheets or statements of operations.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments. The amendments in this Update require a new topic to be added (Topic 326) to the Accounting Standards Codification (“ASC”) and removes the thresholds that entities apply to measure credit losses on financial instruments measured at amortized cost, such as loans, trade receivables, reinsurance recoverables and off-balance-sheet credit exposures, and held-to-maturity securities. Under current U.S. GAAP, entities generally recognize credit losses when it is probable that the loss has been incurred. The guidance under ASU 2016-13 will remove all current recognition thresholds and will require entities under the new current expected credit loss (“CECL”) model to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that an entity expects to collect over the instrument’s contractual life. The new CECL model is based upon expected losses rather than incurred losses. The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We are currently evaluating the effect that this new guidance will have on our financial statements and related disclosures.
Recent Developments
The COVID-19 outbreak has resulted in travel restrictions, closed international borders, enhanced health screenings at ports of entry and elsewhere, disruption of and delays in healthcare service preparation and delivery, prolonged quarantines, cancellations, supply chain disruptions, and lower consumer demand, layoffs, defaults and other significant economic impacts, as well as general concern and uncertainty. The current severity of the pandemic and the uncertainty regarding the length of its effects could have negative consequences for our company.
Most of our administrative functions are being performed remotely. A small crew maintains each of our three offices for those functions that cannot be handled remotely. Our ability to collect money, pay bills, handle customer and consumer communications, schedule production, and order ingredients necessary for our production has not been impacted.
To date, the pandemic has had minimal impact on our sales. The majority of our sales are made online. We experienced a slight decline in sales at the beginning of the imposition of restrictions to mitigate the spread of COVID-19. To date we have not experienced a significant change in the timeliness of payments of our invoices and our cash position, remains stable with approximately $1,932,693 of cash and cash equivalents as of December 31, 2021.
Segment Reporting
In 2021 and 2020, we were engaged in two business segments, (i) the e-commerce business, consisting of HSAL and SAL’s e-commerce operations and (ii) Ezekiel’s sales of petroleum based products and multi-function lottery machines.
Gross
Revenue Percentage
E-commerce segment $ 915,550.00 1.2 %
Sales segment $ 77,569,749.00 98.8 %
Consolidated total $ 78,485,299.00 100 %
Result of Operations
Year Ended December 31, 2021 Compared with the Year Ended December 31, 2020
The following table sets forth a summary of our consolidated statements of operations for the periods indicated.
Full year Ended Variance
December 31,
December 31,
Amount %
Net sales $ 78,485,299 $ 4,508,703 73,976,596 1,641 %
Cost of revenues (76,906,929 ) (4,266,850 ) (72,640,079 ) 1,702 %
Gross profit 1,578,370 241,853 1,336,517 553 %
General and administrative and other operating expenses (1,407,566 ) (676,983 ) (730,583 ) 108 %
Income (loss) from operations 170,804 (435,130 ) 605,934 -139 %
Other non-operating income 9,262 228,251 (218,989 ) -96 %
Other expenses (7,752 ) (156,575 ) 148,824 -95 %
Interest income (3 ) -60 %
Interest expenses (156,350 ) (23,378 ) (132,972 ) 569 %
Income (loss) before income taxes 15,967 (386,827 ) 402,794 -104 %
Income taxes - - - -
Net income (loss) 15,967 (386,827 ) 402,794 -104 %
Net revenue for the year ended December 31, 2021 was $78,485,299, an increase of $73,976,596, or 1,641%, from net revenue of $4,508,703 for the year ended December 31, 2020. The increase is primarily attributable to an increase in revenues from the operations of Ezekiel that entered the business of selling petroleum-based products and the sales of multi-function lottery ticket machines in 2021. In 2021, Ezekiel recorded net revenues of $ $77,5697,49 from the sale of petroleum-based products and revenues of $ 0 from the sale of multi-function lottery tickets machines compared to revenue of $3,929,716 from petroleum-based product, $44,416 from lottery ticket machines and design. E-commerce generated revenues of $915,550 in the year ended December 31, 2021 compared to revenues of $277,099 in the year ended December 31, 2020.
Our cost of revenues increased to $76,906,929 for the year ended December 31, 2021, an increase of $72,640,079, or 1,702%, from $4,266,850 for the year ended December 31, 2020. The increased costs are primarily attributable to Ezekiel’s sales of petroleum based products. In 2021, Ezekiel had cost of revenues of $76,782,221 and the e-Commerce segment’s cost of revenues were $124,709.
Our gross profit increased by $1,336,517, or 553%, to $1,578,370 in the year ended December 31, 2021 from $241,853 in the year ended December 31, 2020. Our gross profit percentage was 2.01% in the year ended December 31, 2021 compared to 5.36% in the year ended December 31, 2020. In 2020, we started the business of selling petroleum-based products and the lottery machines. which have high costs of goods . Ezekiel’s gross profit was $787,528 in 2021 compared to $197,289 in the year ended December 31, 2020 and the e-Commerce segment’s gross profit was $790,841 in 2021 compared to $44,564 in the year ended December 31, 2020.
Selling, general and administrative expenses increased by $730,593, or 108%, to $1,407,566 in the year ended December 31, 2021, from $676,983 in the year ended December 31, 2020. The increase is mainly attributable to increased rent expenses and increased employee salaries.
We had income from operations of $170,804 for the year ended December 31, 2021 compared to a loss from operations of $435,130 for the year ended December 31, 2020.
We had non-operating income of $9,262 in the year ended December 31, 2021 compared to non-operating income of $228,251 in the year ended December 31, 2020. In 2020 we recognized income from the expiration of warrants issued in 2018.
We did not pay any taxes in the two years ended December 31, 2021.
As a result of the foregoing we had net income of $15,967 in the year ended December 31, 2021 compared to a net loss of $386,827 for the year ended December 31, 2020.
Liquidity and Capital Resources
As of December 31, 2021, we had $1,932,693 in cash and cash equivalents and a working capital deficit of $982,679 compared with $932,102 in cash and cash equivalents and a working capital deficit of $595,800 at December 31, 2020. Our accumulated deficit at December 31, 2021 was $2,790,808.
To date the Company has funded its operations by advances from related parties which are interest free, unsecured, and have no fixed repayment terms and in 2021 from cash provided from operations including the prepayment made under the Pretech Agreement. As of December 31, 2021 and December 31, 2020, the Company had received net advances of $1,348,102 and $1,157,601 from shareholders and related parties for operating expenses. These advances bear no interest, no collateral and have no repayment term.
On December 31, 2021, Ezekiel entered into a loan agreement with Mr. Jianjun Du, a Chinese resident, whereby Ezekiel borrowed RMB 10 million from Mr. Du for operating purposes. The initial term of the loan is from December 14, 2021 to May 13, 2022 during which time there is no interest. The term of the loan may be extended upon the parties’ mutual agreement. After the initial term, the loan will bear an annual interest of 10%.
Management has continued to support the Company’s operations and the Company has relied on its officers and directors to perform essential functions with minimal compensation. If the Company is unable to raise the funds it requires from third parties it will have to find alternative sources, such as loans from our officers and directors.
As of December 31, 2021 and December 31, 2020, the Company reported related party receivables in the aggregate amount of $414,395 and $779,768, respectively, due from Hunan Zhong Zong Hong Fu Culture Industry Company Limited (“Hong Fu”) and Hunan Zhong Zong Lianlian Information Technology Limited Company (“Lianlian”), respectively. 100% of equity interests of Hong Fu and Lianlian are owned by Wei Liang and Wei Zhu, the two majority shareholders of the Company. The amount due from Hong Fu, which is a loan in the principal amount of RMB 600,000 (approximately $88,203) for a two-year term beginning on July 1, 2019 and free of interest. The amount due from Lianlian in 2021, which is a loan with the principal amount of RMB 4,500,000 (approximately $ 689,675) for a two-year term beginning on January 1, 2020 and free of interest. The $13,018 due from Lianlian, is free of interests and due on demand. All of these loans were made in the ordinary course of business.
Management has actively taken steps to monitor its operating and financial requirements and believes that its current and available capital resources will allow the Company to continue its operations throughout this fiscal year.
The following table summarizes our cash flows for the periods presented:
Full year
Ended
December 31,
Full year
Ended
December 31,
Net cash provided by (used for) operating activities $ (1,129,288 ) $ 243,113
Net cash used for investing activities (28,323 ) (152,724 )
Net cash provided by (used for) financing activities 2,128,505 (44,306 )
Net increase (decrease) in cash and cash equivalents $ 970,894 $ 46,083
Net cash used for operating activities during the year ended December 31, 2021 was $1,129,288, primarily attributable to our increase level of activity in 2021 and net income of $408,409, compared to net cash provided by operating activities of $243,113 in 2020, attributable to Pretech contract asset.
Net cash used for investing activities during the year ended December 31, 2021, was $28,323 compared to net cash used by investing activities of $152,724 in 2020. The cash used for investing activities relate to the purchase of fixed assets, consisting of furniture and lottery machines in 2021.
Net cash provided by financing activities was $2,128,505 for the year ended December 31, 2021 compared to net cash used by financing activities of $44,306 in 2020. This change was primarily due to proceeds of $1,572,631 from short term loan and advances of $412,568 from related parties and repayment of loans from related parties.
We believe our existing cash and cash equivalents on hand at December 31, 2021 and the cash flows expected from operations, will be sufficient to support our operating and capital requirements during the next twelve months.
Inflation and Seasonality
We do not believe that our operating results have been materially affected by inflation during the preceding two years. There can be no assurance, however, that our operating results will not be affected by inflation in the future. Our business is subject to minimal seasonal variations.
Off-Balance Sheet Arrangements
The Company did not have off-balance sheet arrangements as of December 31, 2021 and 2020.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Report of the Independent Registered Public Accounting Firm, and our Financial Statements and accompanying Notes to the Financial Statements that are filed as part of the report, are listed under “Item 15. Exhibits and Financial Statement Schedules” and are set forth beginning on page immediately following the signature pages to this report.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.

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ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of December 31, 2021, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) under the Securities Exchange Act of 1934 (the “Exchange Act”)as of the end of the period covered by this Annual Report on Form 10-K. Based on our evaluation, our Chief Executive Officer and Chief Financial Officer, determined that our internal controls over disclosure controls and procedures were not effective and were inadequate to insure that the information required to be disclosed by the Company in reports it files or submits under the Exchange Act were recorded, processed, summarized and reported within the time period specified in the commission rules and forms.
Disclosure Controls and Internal Controls.
As provided in Rule 13a-14 under the Exchange Act, Disclosure Controls are defined as meaning controls and procedures that are designed with the objective of insuring that information required to be disclosed in our reports filed under the Exchange Act, is recorded, processed, designed and reported within the time periods specified by the SEC’s rules and forms. Disclosure Controls include, within the definition under the Exchange Act, and without limitation, controls and procedures to insure that information required to be disclosed by us in our reports is accumulated and communicated to our management, including our chief executive officer and principal financial officer, as appropriate to allow timely decisions regarding disclosure. Internal Controls are procedures which are designed with the objective of providing reasonable assurance that (1) our transactions are properly authorized; (2) our assets are safeguarded against unauthorized or improper use; and (3) our transactions are properly recorded and reported, all to permit the preparation of our financial statements in conformity with generally accepted accounting principles.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Under the supervision of our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2021 using the May 2013 updated criteria established in “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. In our assessment of the effectiveness of internal control over financial reporting as of December 31, 2021, we identified material weakness as follows: (1) lack of adequate segregation of duties and necessary corporate accounting resources in our financial reporting process and accounting function, and (2) lack of control procedures that include multiple levels of review. To date, we have been unable to remediate these weaknesses. The remediation initiatives planned by the Company include hiring more personnel with public company experience and engaging an outside consultant with considerable public company reporting experience and breadth of knowledge of US GAAP to provide more training in connection with the preparation and review of our financial statements.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting during the period covered by this report on Form 10-K that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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ITEM 9B. OTHER INFORMATION
Item 9B. Other Information
None.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10. Directors, Executive Officers and Corporate Governance
Directors and Executive Officers
The following table sets forth the name, age, and position of our directors and our executive officers as of December 31, 2021. Each director holds office (subject to our By-Laws) until the next annual meeting of shareholders and until such director’s successor has been elected and qualified. Each executive officer holds his office until he resigns, is removed by the board of directors, or his successor is elected and qualified, subject to applicable employment agreements.
NAME AGE POSITION
Sean Webster Director
Wei Liang Director
Wei Zhu Director
Yanfei Tang Director, Chief Executive and Financial Officer, President, and Secretary
Mr. Sean Webster has been a director of the Company since March 2008. From March 2008 until November 2019, he served as President and Chief Executive Officer of our company. Mr. Webster was the Chief Operating Officer, Chief Financial Officer, Treasurer and Secretary of Biopack Environmental Solutions, Inc. from October 6, 2008 until April 27, 2012. Mr. Webster was Senior Vice President of Finance & Business Development of Grand Power Logistics Group Inc., from April 8, 2008 until June 1, 2011. From May 1999 to October 2007 he served as an Investment Advisor at Blackmont Capital Inc. Mr. Webster graduated from the University of Calgary in 1996 with a B.A. degree in Economics, and a minor in Management and Commerce.
Mr. Wei Liang has served as a director since June 2016. He is an engineer with over 15 years’ experience in e-Business system design, computer engineering, internet framework and system design, implementation and management, specifically in banking e-Business systems. Mr. Liang also has expertise in design and development of electronic platforms for education. Since April 2015, Mr. Liang has acted as Managing Director of Hunan Longitudinal Uned Information Technology Co., Ltd. Prior to this position, from March 2013 to April 2015, Mr. Liang was the Managing Director of Hunan Ming Da Educational Technology Company Limited. Mr. Liang was the Principal of Lou Di City Electronic Technology Vocational College from 2011 to 2013. From 2004 to 2011, Mr. Liang was an Engineer with the Lou Di City Bureau of Education. Mr. Liang earned a B.A. degree in Computers from the University of Nanchang in 2008 and a Masters’ degree in Computer Engineering from the University of Jilin in 2011.
Mr. Wei Zhu has served as a director since March 2017. Since April 2015, Mr. Zhu has been the president and co-founder of Hunan Longitudinal Uned Information Technology Co., Ltd. Prior to this position and since 2008, Mr. Zhu and his partner started another company in home security industry, Hunan Zhongdun Security Intelligent & Technology Co., Ltd. and held the position of General Manager. From 2006 to 2008, Mr. Zhu was the manager of Hunan Shichuang Decoration Engineering Co., Ltd, a decoration and renovation firm, manager with Industrial and Commercial Bank of China, manager with Agricultural Bank of China, and manager with Bank of China. Mr. Zhu earned an EMBA degree from Tsinghua University.
Ms. Yanfei Tang has been a director, Chief Executive Officer, Chief Financial Officer, President, and Secretary of the Company since November 2019. Ms. Tang has over 15 years of experience in the international trade business and technology. Since January 2012, she has also served as the General Manager of Zevo Hi-Tech Group., Ltd. of Hong Kong, S.A.R., a company engaged in international trade in consumer electronics. Ms. Tang earned a BS. degree in chemistry from the University of Xiangtan in 2004.
Family Relationships
There are no family relationships between any of our directors and executive officers. There have been no events under any bankruptcy act, no criminal proceedings and no judgments, orders or decrees material to the evaluation of the ability and integrity of any director or executive officer of the Company during the past five years.
Compliance with Section 16(A) of The Securities Exchange Act of
Section 16(a) of the Securities Exchange Act of 1934 requires our Directors and executive officers and persons who beneficially own more than ten percent of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of change in ownership of common stock and other equity securities of the Company. Officers, Directors and greater than ten percent shareholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Based solely upon a review of Forms 3, 4 and 5 and amendments thereto furnished to us under Rule 16a-3(e) during the year ended December 31, 2021, and the representations made by the reporting persons to us, we believe that during the year ended December 31, 2021, our executive officers and Directors and all persons who own more than ten percent of a registered class of our equity securities complied with all Section 16(a) filing requirements.
Code of Business Conduct and Ethics
Our board of directors adopted an informal Code of Business Conduct and Ethics that applies to, all our officers, directors, employees and agents. Certain provisions of the Code apply specifically to our president and secretary (being our principle executive officer, principle financial officer and principle accounting officer, controller), as well as persons performing similar functions. As adopted, our Code of Business Conduct and Ethics sets forth written standards that are designed to deter wrongdoing and to promote the following:
● Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
● Full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, the Securities and Exchange Commission and in other public communications made by us;
● Compliance with applicable governmental laws, rules and regulations;
● The prompt internal reporting of violations of the Code of Business Conduct and Ethics to an appropriate person identified in our Code of Business Conduct and Ethics; and
● Accountability for adherence to the Code of Business Conduct and Ethics.
Our Code of Business Conduct and Ethics requires, among other things, that all of our Company’s senior officers commit to timely, accurate and consistent disclosure of information; that they maintain confidential information; and that they act with honesty and integrity.
In addition, our Code of Business Conduct and Ethics emphasizes that all employees, and particularly senior officers, have a responsibility for maintaining financial integrity within our Company, consistent with generally accepted accounting principles, and federal and state securities laws. Any senior officer who becomes aware of any incidents involving financial or accounting manipulation or other irregularities, whether by witnessing the incident or being told of it, must report it to our management.
We will provide a copy of our Code of Business Conduct and Ethics without charge to any person that requests it. Any such request should be made in writing to the attention of Ms. Yanfei Tang, Chief Executive Officer, ZZLL Information Technology, Inc., Unit 1504, 15/F., Carnival Commercial Building, 18 Java Road, North Point, Hong Kong.
Committees of the Board of Directors
We do not presently have a designated audit committee, compensation committee, nominating committee, executive committee or any other committees of our Board of Directors. The functions of those committees are currently undertaken by our Board of Directors. Because we have only one independent Director, we believe that the creation of these committees, at this time, would be cumbersome and constitute more form over substance.

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ITEM 11. EXECUTIVE COMPENSATION
Item 11. Executive Compensation
The following table sets forth the annual and long-term compensation of our Named Executive Officers for services rendered in all capacities to the Company for the years ended December 31, 2021, December 31, 2020 and December 31, 2018.
Summary Compensation Table
Name and Principal Position (3)
Salary Deferred
Compensation Bonus Stock
Awards Option
and
Warrant
Awards All Other
Compensation (4) Total
Sean Webster (1) $ - $ - $ - $ - $ - $ 27,500 $ 27,500
Former Chief Executive Officer $ - $ - $ - $ - $ - $ 90,000 $ 90,000
Yanfei Tang (2) $ - $ - $ - $ - $ - $ $
Chief Executive Officer,
Chief Financial Officer and Director $ - $ - $ - $ - $ - $ 15,000 $ 15,000
(1) Mr. Webster resigned as CEO on November 8, 2019
(2) Ms. Yanfei Tang was appointed as CEO and Director on November 8, 2019
(3) No other executive received any compensation from the Company and any of its subsidiaries for the previous three years
(4) Occasional allowances.
Option / SAR Grants
The Company currently has no option plans.
Narrative Disclosure to Summary Compensation Table
There are no employment contracts, compensatory plans or arrangements, including payments to be received from the Company with respect to any executive officer, that would result in payments to such person because of his or her resignation, retirement or other termination of employment with the Company, or its subsidiaries, any change in control, or a change in the person’s responsibilities following a change in control of the Company.
Outstanding Equity Awards at Fiscal Year-End
There are no current outstanding equity awards to our executive officers as of December 31, 2021.
Long-Term Incentive Plans
There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers.
Compensation Committee
We currently do not have a compensation committee of the Board of Directors. The Board of Directors as a whole determines executive compensation.
Compensation of Directors
Directors receive no extra compensation for their services to our Board of Directors.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth certain information regarding the beneficial ownership of our Common Stock as of April 14, 2022: by (i) each person who is known by us to own beneficially more than 5% of our outstanding Common Stock, (ii) by each of our directors, (iii) by each of our executive officers and (iv) by all our directors and executive officers as a group. On such date, we had 20,277,448 shares of Common Stock outstanding.
As used in the table below, the term beneficial ownership with respect to a security consists of sole or shared voting power, including the power to vote or direct the vote, and/or sole or shared investment power, including the power to dispose or direct the disposition, with respect to the security through any contract, arrangement, understanding, relationship, or otherwise, including a right to acquire such power(s) during the 60 days immediately following April 14, 2022. Except as otherwise indicated, the stockholders listed in the table have sole voting and investment powers with respect to the shares indicated.
Name and Address(1) of Beneficial Owner Shares of
Common
Stock
Beneficially
Owned Percentage of
Class
Beneficially
Owned(2)
Wei Liang No 271, Xing Zhi Garden, Shi Yu Street, Lou Xing District, Lou Di, Hunan, PRC 9,363,750 46.178 %
Wei Zhu No 271, Xing Zhi Garden, Shi Yu Street, Lou Xing District, Lou Di, Hunan, PRC 8,032,750 39.614 %
Sean Webster, Director - -
Wei Liang, Director - -
Wei Zhu, Director - -
Yanfei Tang, Director - -
All Directors and Officers as a Group (4 persons) 17,396,500 85.792 %
(1) Unless indicated otherwise, the beneficial owner’s address is Unit 1504, 15/F., Carnival Commercial Building, 18 Java Road, North Point Hong Kong
(2) Applicable percentage of ownership is based on 20,277,448 shares of Common Stock outstanding as of April 14, 2022. Beneficial ownership is determined in accordance with the rules of the United States Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of Common Stock subject to securities exercisable or convertible into shares of Common Stock that are currently exercisable or exercisable within 60 days of April 8, 2021, are deemed to be beneficially owned by the person holding such securities for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. There are no options, warrants, rights, conversion privileges or similar rights to acquire the common stock of the Company and the Common Stock is the only outstanding class of equity securities of the Company.
As of April 14, 2022, there were a total of 84 stockholders of record holding 20,277,448 shares of our common stock.
During 2021, the Company did not issue any additional shares.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. Certain Relationships and Related Transactions, and Director Independence
As of December 31, 2021 and 2020, the Company had lent $367,200 and $779,768, respectively, to businesses controlled by the Company’s principal shareholders.
As of December 31, 2021 and 2020, the Company had received net advances of $1,348,102 and $1,157,601, respectively, from certain major shareholders and related parties for operating expenses as shown in the table below. These advances bear no interest, are not collateralized and do not have specified repayment terms.
Amounts due from related parties are as follows:
December 31,
December 31,
Amount due from related parties:
Hunan Zhong Zong Hong Fu Culture Industry Company Limited (b)(d) $ 19,049 $ 90,093
Hunan Zhong Zong Lianlian Information Technology Limited Company (b)(e) 395,346 689,675
$ 414,395 $ 779,768
Amount due to related parties:
Sean Webster $ - $ -
Wei Zhu (a) 232,265 233,603
Hunan Longitudinal Uned Information Technology Co., Ltd. (b) - -
Shenzhen Zong Wang Internet Information Limited Company (b) - 18,843
Zhong He Lian Chuang (b) - 15,319
Shen Tian (c) 626,438 496,814
Various other shareholders and directors 448,742 393,022
Loan from Harry Cheung 40,656 -
$ 1,348,102 $ 1,157,601
(a) Major shareholder of the Company.
(b) Under common control.
(c) Ezekiel’s general manager.
(d) Hunan Zhong Zong Hong Fu Culture Industry Company Limited (“Hong Fu”): 100% of equity interests of Hong Fu are owned by Wei Liang and Wei Zhu, the two majority shareholders of the Company. Hong Fu provides services to the cultural and entertainment industries and related marketing services to other industries. Hong Fu has been servicing the Company by making available more than a dozen of online live promoters/influencers trained by Hong Fu to HSAL on a continuous basis in the Bibishengjia APP. The Company lent RMB 600,000 (approximately $88,203) to Hong Fu when Hong Fu needed funds to improve its recruitment and training of online live promoters/influencers. This loan is from July 1, 2019 to June 30, 2021, free of interests.
(e) Hunan Zhong Zong Lianlian Information Technology Limited Company (“Lianlian”): 100% of equity interests of Lianlian are owned by Wei Liang and Wei Zhu, the two majority shareholders of the Company. Lianlian is engaged in technology and online-to-offline marketing services. Lianlian served the Company by utilizing its local connections and local marketing resources to help the Company secure a partnerships in March 2020 with the government of Hunan province to help to market local products on the Bibishengjia APP that are otherwise hard to sell due to transportation and other logistics limitations, and an opportunity to promote the Bibishengjia APP in local TV programs and host community gatherings to share shopping experience in Hunan province. The Company lent RMB 4,500,000 (approximately $ 689,675) to Lianlian when Lianlian needed additional funds to cover operating costs and office renovation costs. This loan is from January 1, 2020 to December 31, 2021, bearing no interests. The Company lent $13,018 to Lianlian in 2019 to help cover Lianlian’s operating costs, free of interest and due on demand.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. Principal Accounting Fees and Services
The following table presents aggregate fees, including reimbursements for expenses, professional audit services and other services rendered by our independent registered public accounting firm WWC C.P.A. Company for the period ended December 31, 2021 and our former auditors, Centurion ZD CPA & Co. (as successor to Centurion ZD CPA Limited) during the year ended December 31, 2020.
December 31,
December 31,
Audit Fees (1) $ 31,700 $ 38,337
Audit Related Fees (2) $ - $ -
Tax Fees (3) $ - $ -
All Other Fees (4) $ - $ -
Total $ 31,700 $ 38,337
(1) Audit Fees consist of fees billed for professional services rendered for the audit of the Company’s consolidated annual financial statements and review of the interim consolidated financial statements included in quarterly reports.
(2) Audit-Related Fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements and are not reported under “Audit Fees.”
(3) Tax Fees consist of fees billed for professional services rendered for tax compliance, tax advice and tax planning.
(4) All Other Fees consist of fees for products and services other than the services reported above.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)(1) Financial Statements.
A list of the financial information included herein, are included in Part II, Item 8 of this Report.
(a)(2) Financial Statement Schedules.
All schedules are omitted because they are not applicable or the required information is shown in the Financial Statements or Notes thereto.
(a)(3) Exhibits. The list of Exhibits filed as a part of this Form 10-K are set forth on the Exhibit Index immediately preceding such Exhibits and is incorporated herein by this reference.