NOTES
TO FINANCIAL STATEMENTS
For
the Nine MONTHS ended AUGUST 31, 2020
AND 2019 (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 Flat 1204 Block B, Mei Li Yuan, Hong Ling Middle Road, Luohu, Shenzhen 518000 China.
The
accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and
the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements,
for the nine months ended and as at August 31, 2020, the Company incurred a net loss of $29,118 which arrives at accumulated deficit
of $98,123. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one
year of the date that the financial statements are issued. The financial statements do not include any adjustments that might
be necessary if the Company is unable to continue as a going concern.
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.
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.
For
the nine months ended August 31, 2020, the Company has no revenue through providing accounting and advisory related services to
customers.
General
and administrative expenses
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, transfer agent fee and legal fees.
For
the three and nine months ended August 31, 2019, the company has incurred general and administrative expenses of $45,029 and $53,662
respectively, which consist of mainly company incorporation fee, audit fee and professional fees.
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 three months or less as of the purchase date of such investments.
The
company has a cash and cash equivalents of $508 and $525 as of August 31, 2020 and November 30, 2019 respectively.
Deferred
Revenue
For
service contracts where the performance obligation is not completed, deferred revenue is recorded for any payments received in
advance of the performance obligation.
For
the three and nine months ended August 31, 2020, the Company has no revenue.
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:
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 months and nine months ended August 31, 2020 respectively.
For
the three and nine months ended August 31, 2019, the company has incurred $135 and $406 of depreciation expenses respectively.
Going
Concern
The
accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and
the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements,
for the nine months ended August 31, 2020, the Company incurred a net loss of $29,118 which arrives at accumulated deficit of
$98,123 and no revenue has been generated. These factors raise substantial doubt about the Company’s ability to continue
as a going concern within one year of the date that the financial statements are issued. The financial statements do not include
any adjustments that might be necessary if the Company is unable to continue as a going concern.
The
Company’s ability to continue as a going concern is dependent upon improving its profitability and the continuing financial
support from its shareholders. Management believes the existing shareholders or external financing will provide the additional
cash to meet the Company’s obligations as they become due. No assurance can be given that any future financing, if needed,
will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able
to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing,
or cause substantial dilution for its stockholders, in the case of equity financing.
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
The
Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption
of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.
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 $98,123 and $69,005 as of August 31, 2020 and November 30, 2019 respectively.
For
nine months ended August 31, 2020 and 2019, the company has incurred a net loss of $29,118.
The
Company’s cash position is not significant 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 improve profitability and the ability to acquire financial
support from its shareholder.
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, 2020, and November 30, 2019, the company has a loan from sole director of $62,232 and $25,065 respectively, which
is unsecured and non-interest bearing with no fixed terms of repayment.
For
the nine months period ended August 31, 2020, director has further advance $37,167 for the settlement of audit fee for previous
quarter and this quarter transfer agent fee.
Currently,
our office is provided by our director, Seah Chia Yee, without charge.
Our
director, Seah Chia Yee, has not been compensated for the services.
5.
PREPAYMENT
As
of August 31, 2020, and November 30, 2019, the company has a prepayment of $791 represented an outstanding prepaid service fee.
6.
PROPERTY AND EQUIPMENT, NET
|
|
As of
August 31, 2020
|
|
|
As of
November 30, 2019
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
Office equipment
|
|
$
|
2,709
|
|
|
$
|
2,709
|
|
|
|
|
2,709
|
|
|
|
2,709
|
|
|
|
|
|
|
|
|
|
|
Less: Accumulated depreciation
|
|
|
(1,391
|
)
|
|
|
(985
|
)
|
Total
|
|
$
|
1,318
|
|
|
$
|
1,724
|
|
The
company has incurred depreciation expenses of $135 and $406 for the three months and nine months ended August 31, 2020 respectively.
For
the three and nine months ended August 31, 2019, the company has incurred $135 and $406 of depreciation expenses respectively.
7.
ACCRUED EXPENSES
As
at August 31, 2020, the company has an outstanding accrued expense as following:
|
|
As of
August 31, 2020
|
|
|
As of
November 30, 2019
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
Accrued audit fee
|
|
|
-
|
|
|
|
9,500
|
|
Accrued transfer agent fee
|
|
|
-
|
|
|
|
150
|
|
Accrued Reissuance of audit opinion
|
|
|
-
|
|
|
|
3,000
|
|
Accrued review fee
|
|
|
3,000
|
|
|
|
-
|
|
Total
|
|
$
|
3,000
|
|
|
$
|
12,950
|
|
8.
CONCENTRATION OF RISK
For
the three and nine months ended August 31, 2020, the Company has no revenue from customers.
For
the three and nine months ended August 31, 2019, the Company has realized a revenue of $43,800 and $46,600 respectively, from
two and three customers respectively.
|
|
For three months ended August 31
|
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
|
Revenues
|
|
|
Percentage of
revenues
|
|
|
Accounts receivable,
trade
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer A
|
|
$
|
-
|
|
|
$
|
41,000
|
|
|
|
-
|
|
|
|
94
|
%
|
|
$
|
-
|
|
|
$
|
-
|
|
Customer B
|
|
|
-
|
|
|
|
2,800
|
|
|
|
-
|
|
|
|
6
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
$
|
-
|
|
|
$
|
43,800
|
|
|
|
-
|
|
|
|
100
|
%
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
For nine months ended August 31
|
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
|
Revenues
|
|
|
Percentage of
revenues
|
|
|
Accounts receivable,
trade
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer A
|
|
$
|
-
|
|
|
$
|
41,000
|
|
|
|
-
|
|
|
|
88
|
%
|
|
$
|
-
|
|
|
$
|
-
|
|
Customer B
|
|
|
-
|
|
|
|
2,800
|
|
|
|
-
|
|
|
|
6
|
%
|
|
|
-
|
|
|
|
-
|
|
Customer C
|
|
|
-
|
|
|
|
2,800
|
|
|
|
-
|
|
|
|
6
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
$
|
-
|
|
|
$
|
46,600
|
|
|
|
-
|
|
|
|
100
|
%
|
|
$
|
-
|
|
|
$
|
-
|
|
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.
As
of August 31, 2020, 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, 2020 up through the date the Company issued the financial statements.
On
September 28, 2020 the Board of Directors of Leader Hill Corp. approved the resignation of Total Asia Associates PLT as the independent
registered public accounting firm of the Company, effective immediately.
Concurrent
with the dismissal of Total Asia the Company, upon the Board of Directors’ approval, engaged JP Centurion & Partners
PLT as the Company’s independent registered public accounting firm, effective immediately.
Other
than aforementioned events, no other events or transaction has occurred material to the knowledge of shareholders.
11.
SIGNIFICANT EVENTS
Imposition
of lockdown and other restrictive measures
On
23 January 2020, the Chinese government imposed a lockdown in Wuhan and other cities in the province of Hubei in an effort to
quarantine the center of an outbreak of COVID-19. The lockdown in the city of Wuhan has set a precedent to other cities, where
other cities within the country has implemented respective restrictive measures, including outdoor restrictions and closed management
of communities. Shanghai, where the Company primarily operates the business in, was put under closed managed communities on 10
February 2020. The Chinese economy did fully restart until April 2020.
Before
the financial statements were made out, the Board of Directors had considered the impact of COVID-19 outbreak in China, which
would have affected the financial position, performance and cash flow of the Company as ended on the reporting date thereon.
The
Management concluded that the impact of non-adjusting events from the COVID-19 outbreak has not significantly affected the fair
value of the financial assets or liabilities and non-financial assets of the Company, including the classification of current
and non-current items that were presented on the reporting date.