Notes
to Financial Statements
For
the Nine Months Ended September 30, 2017 and 2016
(Unaudited)
NOTE
1. NATURE OF BUSINESS
Organization
Sichuan
Leaders Petrochemical Company (“we,” “us,” “our” or the “Company”), formally known
as Quality Wallbeds, Inc., was incorporated under the laws of the State of Florida on June 29, 2000. From our inception through
May 2013, we have provided quality space saving custom home furniture and closet organizing systems to the general public. We
offered our services to people and companies needing assistance in the organization of their living/work space. In May 2013, our
Board of Directors (the “Board”) determined that to continue to protect and increase shareholder value, it would be
to the advantage, welfare and best interests of our shareholders to consider alternative corporate strategies to generate new
business revenue for the Company. The Board proposed that we pursue opportunities in Asia to acquire companies in the wholesale
and resale of products in the automotive oil industry. To facilitate this action, the Board voted to dispose of all of our assets
related to the retail operation of the wall bed products. This action was approved on May 21, 2013 by shareholders representing
87% of our issued and outstanding shares of common stock.
NOTE
2. GOING CONCERN
The accompanying financial statements have
been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the
normal course of business. The Company had no ongoing business or other source of income and incurred a net loss of ($40,542)
for the nine month period ended September 30, 2017. These factors raise substantial doubt about the ability of the Company to
continue as a going concern within one year after the date that the financial statements are issued.
The
Company is currently evaluating acquisitions and other business opportunities. The ability to continue as a going concern is dependent
upon the Company generating profitable operations in the future and, or, obtaining the necessary financing to meet its obligations
and repay its liabilities arising from normal business operations when they come due. No assurance can be given that the Company
will be successful in these efforts.
NOTE
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying unaudited financial statements of the Company have been prepared in accordance with accounting principles generally
accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to
Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP
for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered
necessary for a fair presentation have been included. In the opinion of management there have been no changes to the Company’s
significant accounting policies, referred to in the audited financial statements and footnotes thereto, included in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2016, filed July 25, 2017. All Amounts referenced in these Financial
Statements and this Report are in US Dollars unless otherwise stated.
In the opinion of management, all adjustments
consisting of normal recurring adjustments necessary for a fair statement of (a) the result of operations for the nine month period
ended September 30, 2017 and 2016; (b) the financial position at September 30, 2017 and December 31, 2016; and (c) cash flows
for the nine month period ended September 30, 2017 and 2016, have been made. Management believes that these estimates are reasonable
and have been discussed with the Board of Directors; however, actual results could differ from those estimates. Operating results
for the nine month period ended September 30, 2017 are not necessarily indicative of the results that may be expected for the
year ended December 31, 2017.
Cash
and Cash Equivalents
We consider cash equivalent with original
maturities of 90 days or less to be cash equivalents.
Use of Estimates
The preparation of the financial statements
in conformity with U.S. GAAP 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 expenses during the reporting periods. Management makes these estimates using the best information available at the time the
estimates are made; however actual results could differ materially from those estimates.
Beneficial Conversion Features
From time to time, the Company may issue convertible notes that may contain an embedded beneficial conversion
feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying
common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering
the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The
intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid
in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.
Net Loss Per Common Share
The Company complies with accounting and disclosure
requirements of FASB ASC 260, “Earnings Per Share.” Net loss per common share is computed by dividing net loss applicable
to common stockholders by the weighted average number of common shares outstanding for the period. At September 30, 2017 and 2016,
the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into common
stock and then share in the earnings of the Company. As a result, diluted loss per common share is the same as basic loss per common
share for the period.
Financial Instruments and Fair Value of
Financial Instruments
Fair value estimates discussed herein are based
upon certain market assumptions and pertinent information available to management as of September 30, 2017 and December 31, 2016.
The respective carrying value of certain on-balance-sheet financial instruments, approximate their fair values. These financial
instruments include cash, accounts payable, and notes payable. Fair values were assumed to approximate carrying values for these
financial instruments because they are short term in nature and their carrying amounts approximate fair values.
The Company uses fair value measurements under
the three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure for fair value measures.
The three levels are defined as follows:
Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 inputs to the valuation methodology
include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability,
either directly or indirectly, for substantially the full term of the financial instruments.
Level 3 inputs to the valuation methodology
are unobservable and significant to the fair value.
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Fair Value Measurements
Using Fair Value Hierarchy
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Level 1
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Level 2
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Level 3
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Convertible notes payable (net of unamortized BCF) – September 30, 2017
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$
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-
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$
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-
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$
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5,851
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Recently Issued or Adopted Standards
The Company does not expect the adoption of
recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial
position or cash flow.
NOTE
4. COMMITMENTS AND CONTINGENCIES
Related
Party
The
controlling shareholders have pledged support to fund continuing operations, as necessary. From time to time, the Company is dependent
upon the continued support of these parties, through temporary advances or through arrangements of their personal credit. However,
there is no written commitment to this effect.
In addition to further assist the Company former Chief Executive Officer, Andy Fan has agreed to forgive
the total amount of $16,700 in interest payable on the $110,000 note from February 10, 2015. The forgiveness of debt was recorded
under additional paid in capital.
March 1, 2017 the Board of Directors agreed
to cancel the management agreement with AF Ocean Investment Management Company (AF Ocean) effective April 1, 2017. For the nine
months ended September 30, 2017 and 2016, management fee paid to AF Ocean were $10,489 and $17,968.
The
amounts and terms of the above transactions may not necessarily be indicative of the amounts and terms that would have been incurred
had comparable transactions been entered into with independent third parties.
The
Company does not have employment contracts with its key employees, including the officers of the Company.
Leases
And Facility
Our
office is located at 3904 US Hwy 301 N Ellenton, FL 34222. We share the office with the Service Provider and ChinAmerica Andy
Movie Entertainment Media Co. The service provider pays rent in the amount of $50 per month. However, the management agreement
between the Company and the Service Provider AF Ocean was cancelled as of April 1, 2017.
Other
Commitments
On
May 31, 2017, the Company entered into a transactional agreement (the “Agreement”) with VentureVest Capital
(VentureVest) in a consulting capacity to assist in bringing the Company’s delinquent filings current. VentureVest has
offered to loan the Company an estimated amount of $22,370, and has agreed to accept promissory notes for each issuance of
funds on the date the transfer of funds takes place. See below for details of all Promissory Notes issued to date.
Furthermore, the Company has agreed that VentureVest will have the exclusive right to represent the Company and to locate a
buyer for the common stock owned by Mr. Fan. Any and all contractual obligations of VentureVest under the Agreement have been
terminated upon closing of the change of control transaction.
On May 31, 2017, VentureVest has agreed
to accept the 1
st
convertible Promissory Note (“Promissory Note 1”) for the total amount of $6,000, the
note is interest free until December 31, 2017, after which time it shall bear an interest rate of 6% per annum. The conversion
rate is $0.05 per share.
On June 14, 2017, VentureVest has agreed
to accept the 2nd convertible Promissory Note (“Promissory Note 2”) for the total amount of $8,690, the note is interest
free until December 31, 2017, after which time it shall bear an interest rate of 6% per annum. The conversion rate is $0.05 per
share.
On July 31, 2017, VentureVest has agreed
to accept the 3rd convertible Promissory Note (“Promissory Note 3”) for the total amount of $7,680, the note is interest
free until December 31, 2017, after which time it shall bear an interest rate of 6% per annum. The conversion rate is $0.05 per
share.
These notes had beneficial conversion feature
(“BCF”) of $22,370 and was recorded in the balance sheet at face value less the unamortized BCF.
At September 30, 2017, convertible notes
payable consisted of the following:
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September 30,
2017
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Convertible note payable
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$
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22,370
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Less: unamortized discount of BCF
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(16,519
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)
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Convertible notes payable, net of BCF
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$
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5,851
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NOTE
5. SUBSEQUENT EVENTS
On
September 28, 2017, Andy Fan (the “Seller”) and Yap Nee Seng (the “Purchaser”) entered into a Stock Purchase
Agreement (the “Agreement”). The closing of the transactions (the “Closing”) contemplated by the Agreement
occurred and consummated on November 3, 2017. Pursuant to the Agreement, the Sellers sold to the Buyers, and the Buyers agreed
to purchase from the Sellers, 40,000,020 shares of common stock, par value $0.01 per share (the “Common Stock”) of
the Company, constituting approximately 92.1% of the issued and outstanding Common Stock (the “Change of Control”).
Effective
October 31, 2017, Mr. Andy Fan resigned from the positions of Chief Executive Officer, Chief Financial Officer, President and
Chairman of the Board he held with the Company and Tina Donnelly resigned from the corporate secretary position she held with
the Company. Effective on October 31, 2017, the Company appointed Seng Nee Yap as Chief Executive Officer, President and Chairman
of the Board of the Company and the Company appointed Yin Pei Cheah as Chief Financial Officer, Secretary and director of the
Company.
On
November 3, 2017, The Promissory Note 1, 2 and 3 due to VentureVest by the Company in total amount of $22,370 were paid in full
of purchase price of the Closing and cancelled upon closing of the Change of Control transaction.