NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2017
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
Organization, Nature of Business and Trade Name
JobLocationMap Inc. (the Company) was incorporated in the State of Nevada on June 15, 2010. JobLocationMap Inc.’s principal business objective is developing and marketing an online map application. The Company is located at 500 North Michigan Avenue #600, Chicago, Illinois.
The Company’s activities are subject to significant risks and uncertainties including failing to secure additional funding to operationalize the Company’s online map application before another company develops a similar app.
Recent Developments
On July 10, 2017, the Company acquired all of the shares of Bio Health Products Inc. a Nevada corporation, in exchange for 200,000 shares of the Company’s common stock, whereby Bio Health Products Inc. became a wholly owned subsidiary of the Company. Bio Health Products Inc. had previously acquired the assets of Essential Oils, a sole proprietorship. Bio Health Products Inc. was owned by Liang Chen, the CEO of the Company.
As these transactions are between entities under common control, the Company has reported the results of operations for the period in a manner similar to a pooling of interests and has consolidated financial results since the initial date in which the above companies were under common control. Assets and liabilities were combined on their carrying values and no recognition of goodwill was made. The Company has presented earnings per share based on the new parent company shares issued to the former shareholders of the Company.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of significant accounting policies of the Company is presented to assist in understanding the Company’s consolidated financial statements. The accounting policies presented in these footnotes conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the accompanying financial statements. These financial statements and notes are representations of the Company’s management who are responsible for their integrity and objectivity.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany transactions and balances have been eliminated.
Use of Estimates
The preparation of financial statements in accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. A change in managements’ estimates or assumptions could have a material impact on JobLocationMap Inc.’s financial condition and results of operations during the period in which such changes occurred. Actual results could differ from those estimates. JobLocationMap Inc.’s financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all short-term debt securities purchased with maturity of three months or less to be cash equivalents.
Inventory
The Company’s inventory consists of oil products. All inventory is finished goods. Inventories are stated at the lower of cost or market value. Inventory is stored off-site and held by a third party. The Company utilizes last-in first-out for inventory items held. Items determined to be obsolete are reserved for. The Company provides for the possible inability to sell its inventories by providing an excess inventory reserve. As at December 31, 2017, the Company determined that no reserve was required.
Goodwill
We account for goodwill in accordance with ASC 350
”Intangibles-Goodwill and Other”
(“ASC 350”). ASC 350 requires that goodwill with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below its carrying value. In addition, ASC 350 requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests when circumstances indicate that the recoverability of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment test requires judgment, including the identification of reporting units; assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions or the occurrence of one or more confirming events in future periods could cause the actual results or outcomes to materially differ from such estimates and could also affect the determination of fair value and/or goodwill impairment at future reporting dates.
During the year ended December 31, 2017, we determined that the carrying value of goodwill exceeded its fair value at the measurement date, requiring step two in the impairment test process. The fair value of the goodwill was determined primarily using an income approach based on the present value of discounted cash flows. We determined the implied fair value of goodwill was substantially below the carrying value of the reporting unit’s goodwill. Accordingly, we recognized a goodwill impairment loss of $87,896, which resulted in goodwill of $0 as of December 31, 2017.
Fair Value of Financial Instruments
The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
Level 1
– Quoted prices in active markets for identical assets or liabilities.
Level 2
– Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3
– Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.
In accordance with the fair value accounting requirements, companies may choose to measure eligible financial instruments and certain other items at fair value. The Company has not elected the fair value option for any eligible financial instruments.
As of December 31, 2017 and 2016 the carrying value of cash and cash equivalent, accounts payable and loans that are required to be measured at fair value, approximated fair value due to the short-term nature and maturity of these instruments.
Beneficial Conversion Feature
For conventional convertible debt where the rate of conversion is below market value, the Corporation records a Beneficial Conversion Feature (the “BCF”) and related debt discount.
When the Company records a BCF, the intrinsic value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument (offset to additional paid-in capital) and amortized to interest expense over the life of the debt.
Income Taxes
The Company recognizes the tax effects of transactions in the year in which such transactions enter into the determination of net income, regardless of when reported for tax purposes.
Recent Accounting Pronouncements
In September 2017, the FASB has issued Accounting Standards Update (ASU) No. 2017-13, “Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments.” The amendments in ASU No. 2017-13 amends the early adoption date option for certain companies related to the adoption of ASU No. 2014-09 and ASU No. 2016-02. Both of the below entities may still adopt using the public company adoption guidance in the related ASUs, as amended. The effective date is the same as the effective date and transition requirements for the amendments for ASU 2014-09 and ASU 2016-02.
In May 2014, the FASB issued an accounting standards update which modifies the requirements for identifying, allocating, and recognizing revenue related to the achievement of performance conditions under contracts with customers. This update also requires additional disclosure related to the nature, amount, timing, and uncertainty of revenue that is recognized under contracts with customers. This guidance is effective for fiscal and interim periods beginning after December 15, 2017 and is required to be applied retrospectively to all revenue arrangements. The adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial statements.
In January 2017, the FASB has issued Accounting Standards Update (ASU) No. 2017-04,” Intangibles
- Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.”
These amendments eliminate Step 2 from the goodwill impairment test. The annual or interim goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. Effective for public business entities that are a SEC filers for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. ASU 2017-04 should be adopted on a prospective basis.
In January 2017, the FASB issued ASU No. 2017-01,” Business
Combinations (Topic 805): Clarifying the Definition of a Business.”
This new standard clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This new standard will be effective for the Company on January 1, 2018, however, early adoption is permitted with prospective application to any business development transaction.
NOTE 3 – GOING CONCERN
The Company’s consolidated financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company does not have an established source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern.
Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading, or seeking protection from creditors pursuant to laws or regulations. Accordingly, assets and liabilities are recorded on the basis that the entity will be able to realize its assets and discharge its liabilities in the normal course of business.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the Nature of Business and Trade Name paragraph and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern.
During the next year, the Company’s foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing and making the requisite filings with the Securities and Exchange Commission, and the payment of expenses associated with research and development. The Company may experience a cash shortfall and be required to raise additional capital.
Historically, it has mostly relied upon internally generated funds and funds from the sale of shares of stock to finance its operations and growth. Management may raise additional capital through future public or private offerings of the Company’s stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company’s failure to do so could have a material and adverse effect upon it and its shareholders.
In the past year, the Company funded operations by using cash proceeds received through the issuance of common stock and loan from related party. For the coming year, the Company plans to continue to fund the Company through debt and securities sales and issuances until the company generates enough revenues through the operations as stated above.
NOTE 4 – EQUITY
The Company has authorized 100,000,000 shares of common stock with a par value of $0.0001 and 50,000,000 shares of preferred stock with a par value of $0.0001.
Preferred stock
As of December 31, 2017 and 2016, there was no shares issued and outstanding.
Common stock
On July 10, 2017, the Company issued 200,000 shares to acquire all of the shares of Bio Health Products Inc. (Note 1).
9,700,000 and 9,500,000 shares of common stock were issued and outstanding as of December 31, 2017 and 2016.
NOTE 5 – NOTE PAYABLE
On June 9, 2017, the Company issued note payable of $7,500 to a third party. The note is a 40 % interest bearing promissory note that is payable on demand. During the year ended December 31, 2017, the Company recognized interest expense of $1,693.
On August 14, 2017, the Company issued note payable of $20,000 to a third party. The note is a 40 % interest bearing promissory note that is payable on demand. During the year ended December 31, 2017, the Company recognized interest expense of $3,065.
As of December 31, 2017 and 2016, the Company owed notes payable of $27,500 and $0, respectively.
NOTE 6 – CONVERTIBLE NOTE PAYABLE
On December 31, 2017, the Company issued a convertible note of $4,875 with a conversion price of $0.01. The convertible note is unsecured, bears interest at 57% per annum, has no maturity date and due on demand. The Company recorded a discount on the convertible note due to a beneficial conversion feature of $4,875 and amortized $4,875 for the year ended December 31, 2017. As of December 31, 2017, the Company had a convertible note of $4,875. During the year ended December 31, 2017, the Company recognized interest expense of $8.
On December 31, 2017, the Company issued a convertible note of $6,803 with a conversion price of $0.01. The convertible note is unsecured, bears interest at 57% per annum, has no maturity date and due on demand. The Company recorded a discount on the convertible note due to a beneficial conversion feature of $6,803 and amortized $6,803 for the year ended December 31, 2017. As of December 31, 2017, the Company had a convertible note of $6,803. During the year ended December 31, 2017, the Company recognized interest expense of $11.
On December 31, 2017, the Company issued a convertible note of $11,200 with a conversion price of $0.005. The convertible note is unsecured, bears interest at 50% per annum, has no maturity date and due on demand. The Company recorded a discount on the convertible note due to a beneficial conversion feature of $11,200 and amortized $11,200 for the year ended December 31, 2017. As of December 31, 2017, the Company had a convertible note of $11,200. During the year ended December 31, 2017, the Company recognized interest expense of $15.
NOTE 7 – RELATED TRANSACTIONS
Due to related parties
During the year ended December 31, 2017, 2017, the Company received loans from the previous Related Party Directors of $10,834 to pay for operating expenses. Prior to the sale of their shares, the loans to the two previous Related Party Directors were $21,107. Upon completion of the share purchase agreements between the two previous Related Party Directors, and the new CEO, the $14,807 was forgiven, and recorded to additional paid-in capital.
During the year ended December 31, 2017, 2017, the new CEO loaned the Company $49,825 for operational expenses and acquisition of subsidiary.
During the year ended December 31, 2017, the former officer of the subsidiary advanced $1,082 for operational expenses and repaid $8,009.
As of December 31, 2017 and 2016, related party loan payable outstanding is $75,279 and $8,273, respectively.
NOTE 8 – INCOME TAXES
For the year ended December 31, 2017, the Company has incurred net losses and, therefore, has no tax liability. The net deferred tax asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward is $133,956 at December 31, 2017 and will expire beginning in the year 2032.
The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 34% to the net loss before provision for income taxes for the years ended December 31, 2017 and 2016 are as follows:
|
|
For the Year Ended
|
|
|
|
December 31,
|
|
|
|
2017
|
|
|
2016
|
|
Income tax expense (benefit) at statutory rate
|
|
$
|
(13,288
|
)
|
|
$
|
(4,780
|
)
|
Change in valuation allowance
|
|
|
13,288
|
|
|
|
4,780
|
|
Income tax expense
|
|
$
|
-
|
|
|
$
|
-
|
|
Net deferred tax assets consist of the following components as of December 31, 2017 and December 31, 2016:
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2017
|
|
|
2016
|
|
NOL Carryover
|
|
$
|
45,545
|
|
|
$
|
32,257
|
|
Valuation allowance
|
|
|
(45,545
|
)
|
|
|
(32,257
|
)
|
Net deferred tax asset
|
|
$
|
-
|
|
|
$
|
-
|
|
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of $133,956 for federal income tax reporting purposes could be subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.
The Company has no uncertain tax positions that require the Company to record a liability.
The Company had no accrued penalties and interest related to taxes as of December 31, 2017.
NOTE 9 – SUBSEQUENT EVENT
The Company evaluated all events or transactions that occurred after December 31, 2017, through the date of this filing. The Company determined that it does not have any subsequent event requiring recording or disclosure in the financial statements for the year ended December 31, 2017.