NOTES
TO FINANCIAL STATEMENTS
FOR
THE NINE MONTHS ENDED AUGUST 31, 2021 AND AUGUST 31, 2020 (UNAUDITED)
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
1.
ORGANIZATION AND BUSINESS BACKGROUND
Leader
Hill Corporation, a Nevada corporation (“the Company”) was incorporated under the laws of the State of Nevada
on August
21, 2017.
We,
Leader Hill Corporation (“the Company”), are an early stage business consulting company that intends to assist start-up to
midsize companies in the East Asia region, with a focus on mainland China and Hong Kong, to operate their businesses more cost effectively
through our multifaceted consulting services.
The
Company’s executive office is located at Room 0701, Unit 2, Building 11, Shui’an Xindu, Coastal Industrial Base, Yingkou
City, Liaoning Province, 115000, China.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of presentation
The
financial statements for Leader Hill Corporation are prepared in accordance with accounting principles generally accepted in the United
States of America (“US GAAP”). The Company has adopted November 30 as its fiscal year end. In the opinion of management all
adjustments that are necessary in order to make the financial statements not misleading have been made.
Use
of estimates
Management
uses estimates and assumptions in preparing these financial statements in accordance with US GAAP. Those estimates and assumptions affect
the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities in the balance sheets, and the reported
revenue and expenses during the periods reported. Actual results may differ from these estimates.
Revenue
from services
The
Company adopted Accounting Standards Codification (“ASC”) 606. ASC 606, Revenue from Contracts with Customers, establishes
principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s
contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer
of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange
for those goods or services recognized as performance obligations are satisfied.
The
Company has assessed the impact of the guidance by performing the following five steps analysis:
Step
1: Identify the contract
Step
2: Identify the performance obligations
Step
3: Determine the transaction price
Step
4: Allocate the transaction price
Step
5: Recognize revenue
Based
on the assessment, the Company concluded that there was no change to the timing and pattern of revenue recognition for its current revenue
streams in scope of Topic 606 and therefore there were no material changes to the Company’s consolidated financial statements upon
adoption of ASC 606.
Revenue
is measured at the fair value of the consideration received or receivable, net of discounts and taxes applicable to the revenue.
Revenue
from supplies of consulting services is recognized when title and risk of loss are transferred and there are no continuing obligations
to the customer. Title and the risks and rewards of ownership transfer to and accepted by the customer when the services are collected
by the customer at the Company’s office. Revenue is recorded net of sales discounts, returns, allowances, and other adjustments
that are based upon management’s best estimates and historical experience and are provided for in the same period as the related
revenues are recorded. Based on limited operating history, management estimates that there was no sales return for the period reported.
The
Company derives its revenue from direct sales to individuals and business companies. Generally, the Company recognizes revenue when services
are sold and accepted by the customers and there are no continuing obligations to the customer.
General
and administrative expenses
For
the three and nine months ended August 31, 2021, the company has incurred general and administrative expenses of $3,135
and $13,015
respectively, which consist of mainly financial
statement review, filing and transfer agent fee.
For
the three and nine months ended August 31, 2020, the company has incurred general and administrative expenses of $5,013
and $29,118
respectively, which consist of mainly financial
statement review, filing and transfer agent fee.
Cash
and cash equivalents
Cash
and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions
and all highly liquid investments with an original maturity of nine months or less as of the purchase date of such investments.
The
company has a cash and cash equivalents of $Nil
and $512
as of August 31, 2021 and November 30, 2020 respectively.
Accounts
receivable
Accounts
receivable are recorded at the invoiced amount less an allowance for any uncollectible accounts and do not bear interest, which are due
on demand. Management reviews the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical collection trends
and aging of receivables. Management also periodically evaluates individual customer’s financial condition, credit history, and
the current economic conditions to make adjustments in the allowance when it is considered necessary. Account balances are charged off
against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.
Plant
and equipment
Plant
and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated
on the straight-line basis over the following expected useful lives from the date on which they become fully operational:
SCHEDULE
OF PROPERTY AND EQUIPMENT EXPECTED USEFUL LIVES
Categories
|
|
Estimated
useful life
|
Office
equipment
|
|
5
years
|
Expenditures
for maintenance and repairs are expensed as incurred. The gain or loss on the disposal of plant and equipment is the difference between
the net sales proceeds and the carrying amount of the relevant assets and is recognized in the statement of operations.
The
company has incurred depreciation expenses of $135
and $406
for the three and nine months ended August 31,
2021 respectively.
The
company has incurred depreciation expenses of $135
and $406
for the three and nine months ended August 31,
2020 respectively.
Net
income/(loss) per share
The
Company calculates net income/(loss) per share in accordance with ASC Topic 260, “Earnings per Share.” Basic income/(loss)
per share is computed by dividing the net income/(loss) by the weighted-average number of common shares outstanding during the period.
Diluted income per share is computed similar to basic income/(loss) per share except that the denominator is increased to include the
number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if
the additional common shares were dilutive.
Related
parties
Parties,
which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control
the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also
considered to be related if they are subject to common control or common significant influence.
Fair
value of financial instruments:
The
carrying value of the Company’s financial instruments: receivables and amount due to a director approximate at their fair values
because of the short-term nature of these financial instruments.
The
Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”),
with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy
that prioritizes the inputs used in measuring fair value as follows:
Level
1: Observable inputs such as quoted prices in active markets;
Level
2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level
3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
Recent
accounting pronouncements
In
June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial
Statements. This ASU requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the
net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost
basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. This
Accounting Standards Update affects entities holding financial assets and net investment in leases that are not accounted for at fair
value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet
credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual rights
to receive cash. For smaller public business entities, the amendments in this Update are effective for fiscal years beginning after January
1, 2023, including interim periods within those fiscal years. All entities may adopt the amendments in this Update through a cumulative-effect
adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective
approach). The Company is in the process of evaluating the impact of the adoption of this pronouncement on its consolidated financial
statements.
The
Company reviews new accounting standards as issued. Management has not identified any other new standards that it believes will have
a significant impact on the Company’s financial statements.
3.
GOING CONCERN UNCERTAINTIES
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The company having accumulated
deficit of $122,029
and $109,014
as of August 31, 2021 and November 30, 2020 respectively.
For the three and nine months ended August 31, 2021, the company has net loss of $3,135
and $13,015
respectively. For the three and nine months ended
August 31, 2020, the company has net loss of $5,013
and $29,118
respectively.
While
the Company is attempting to generate revenues, the Company’s cash position may not be significant enough to support the Company’s
daily operations. While the Company believes in the viability of its strategy and in its ability to raise additional funds, there can
be no assurances to that effect. The Company’s ability to continue as a going concern is dependent upon its ability to achieve
profitable operations or obtain adequate financing.
These
and other factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the
date that financial statements are issued. These financial statements do not include any adjustments to reflect the possible future effects
on the recoverability and classification of assets or the amounts and classification of liabilities that may result in the Company not
being able to continue as a going concern.
4.
AMOUNT DUE TO A DIRECTOR
As
of August 31, 2021, and November 30, 2020, the company has no loan from sole director.
Currently,
our office is provided by our director, Liu Muzhen, without charge.
Our
director, Liu Muzhen, has not been compensated for the services.
5.
PREPAYMENT
As
of August 31, 2021, the company has a prepayment of $1,101,
of which included prepaid Edgar filing fee and company renewal agent fee. As of November 30, 2020, the Company has a prepayment of $1,101,
of which included prepaid Edgar filing fee and company renewal agent fee.
6.
PROPERTY AND EQUIPMENT, NET
SCHEDULE
OF PROPERTY AND EQUIPMENT, NET
|
|
As
of
|
|
|
As
of
|
|
|
|
August
31, 2021
|
|
|
November
30, 2020
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
Office equipment
|
|
$
|
2,709
|
|
|
$
|
2,709
|
|
Property and equipment, gross
|
|
$
|
2,709
|
|
|
$
|
2,709
|
|
|
|
|
|
|
|
|
|
|
Less: Accumulated depreciation
|
|
$
|
(1,933
|
)
|
|
$
|
(1,527
|
)
|
Total
|
|
$
|
776
|
|
|
$
|
1,182
|
|
Depreciation,
classified as operating expenses, was $135
and $406
for the three and nine months ended August 31,
2021 respectively.
Depreciation,
classified as operating expenses, was $135
and $406
for the three and nine months ended August 31,
2020 respectively.
7.
ACCRUED EXPENSES
As
of August 31, 2021 and November 30, 2020, the company has an outstanding accrued expense as following:
SCHEDULE
OF ACCRUED EXPENSES
|
|
As
of
|
|
|
As
of
|
|
|
|
August
31, 2021
|
|
|
November
30, 2020
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
Accrued audit fee
|
|
$
|
11,300
|
|
|
$
|
9,500
|
|
Loan from Director
|
|
$
|
7,800
|
|
|
$
|
-
|
|
Accrued transfer agent fee
|
|
$
|
99
|
|
|
$
|
99
|
|
Accrued review fee
|
|
$
|
3,000
|
|
|
$
|
-
|
|
Total
|
|
$
|
22,199
|
|
|
$
|
9,599
|
|
8.
CONCENTRATIONS OF RISK
Since
the company has not generated any revenue nor incurring any cost of sales for the nine months ended August 31, 2021 and August 31, 2020,
the company has no concentration of risk on customer or supplier.
9.
COMMON STOCK
On
August 21, 2017, the Company issued 4,000,000
shares of restricted common stock, each with
a par value of $0.001
per share, to Mr. Seah for initial working capital
of $4,000.
From
June 1, 2018 to August 31, 2018, the Company sold a total of 825,000
initial public offering shares to 33 shareholders,
all of which reside in China, Hong Kong and Malaysia, at a price of $0.04
per share. The total proceeds to the Company
amounted to a total of $33,000.
The proceeds will be used as working capital.
On
December 17, 2020, as a result of a private transactions, 4,000,000
shares of common stock, $0.001
par value per share (the “Shares”)
of Leader Hill Corporation, a Nevada corporation (the “Company”), were transferred from Chia Yee Seah to certain purchasers
(collectively, the “Purchasers”). As a result, the Purchasers became the holders of approximately 82.9%
of the issued and outstanding share capital of the Company and our new CEO, Mr. Liu Muzhen held 2,700,000
common shares or 55.95%
shareholding of the Company. The consideration paid for the Shares was $287,000.
The source of the cash consideration for the Shares was personal funds of the Purchasers. In connection with the transaction, Chia Yee
Seah released the Company from all debts owed to him.
As
of August 31, 2021, we have authorized capital stock consisting of 75,000,000
shares of common stock, $0.001
par value per share of which 4,825,000
shares of common stock were issued and outstanding.
10.
SUBSEQUENT EVENTS
In
accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure
of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or
transactions that occurred after August 31, 2021 up through the date the Company issued the financial statements.