NOTES
TO (UNAUDITED) FINANCIAL STATEMENTS
NOTE
1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
ESP
Resources, Inc. (“ESP Resources” the “Company”) was incorporated in the State of Nevada on October 27, 2004.
On
March 10, 2016, ESP Resources, Inc. (the “Company” and/or the “Debtor”) filed a voluntary petition (the “Voluntary
Petition”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) Case No.
16-60021-H2-11 seeking relief under the provisions of Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”).
The Company’s bankruptcy case is being jointly administered with that of ESP Petrochemicals, Inc. under Case No. 16-60020-H2-11.
On
January 7, 2021, as a result of a custodianship in Clark County, Nevada, Case Number: A-20-825339-B, Custodian Ventures LLC (“Custodian”)
was appointed custodian of (the “Company”). David Lazar is the managing director of Custodian.
On
January 7, 2021, Custodian appointed David Lazar as the Company’s Chief Executive Officer, President, Secretary, Chief Financial
Officer, Chief Executive Officer and Chairman of the Board of Directors.
On
August 19, 2021, Ms. Zhuang Qiao Luan (the “Purchaser”) purchased 10,000,000 shares (the “Shares”)
of the Series A Preferred Stock (the “Series A”) of ESP Resources, Inc. from NYJJ (Hong Kong) Limited. The Purchaser purchased
the Shares for cash consideration of $400,000. The Shares represent 100% of the issued and outstanding Series A. The Series
A has 90% of the voting power of all classes of stock issued and outstanding of the Company.
On
August 31, 2021 David Lazar resigned from his positions as sole member of the Board of Directors of the Company and President, CEO, Treasurer,
CFO and Secretary positions of the Company. On the same day the Company’s Board approved, by unanimous written consent in lieu
of special meeting of the Board, the appointment of Messrs. Zhuang Rong Cheng and Zhuang Ze Qiang as the new directors of the Company,
effective as of the Effective Time. The Board submitted such appointment for approval and ratification by the Company’s stockholders,
who approved such appointment by a vote of 90% of the total voting stock of the Company.
Zhuang
Rong Cheng, 64, acted as director of Pacific International Limited, a food trading business, from 1991 to July 2021. He is currently
serving as the legal representative of Shihui Jiagang Real Estate Development Co. Ltd., Shenzhen Jinshuihe Green Food Management Co.,
Ltd., and as a director of Chuang’s Foundation Limited. Mr. Zhuang was selected to serve as a director due to his extensive management
and marketing experience and his judgment in assessing business strategies and accompanying risks. Neither Mr. Zhuang nor his affiliates
have within the past five years, filed any bankruptcy petition, been convicted in or been the subject of any pending criminal proceedings,
nor or is any such person the subject of any order, judgment or decree involving the violation of any state or federal securities laws.
Mr. Zhuang does not anticipate taking cash compensation from the Company in connection with his service as officer of the Company and
has yet to negotiate a compensation agreement with the Company.
Zhuang
Ze Qiang, 51, is the managing director of Asia Gem International Trading Limited and CNWeb Culture Media Co., Limited. Mr. Zhuang was
selected to serve as a director due to his broad experience spanning different industries and sectors, including marketing, food, cosmetics,
and health products. Neither he nor his affiliates have, within the past five years, filed any bankruptcy petition, been convicted in
or been the subject of any pending criminal proceedings, nor or is any such person the subject of any order, judgment or decree involving
the violation of any state or federal securities laws. Mr. Zhuang does not anticipate taking cash compensation from the Company in connection
with his service as officer of the Company and has yet to negotiate a compensation agreement with the Company.
The
Company’s year-end is December 31.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying financial statements have been prepared in accordance with the Financial Accounting Standards Board (“FASB”)
“FASB Accounting Standard Codification™” (the “Codification”) which is the source of authoritative
accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in
conformity with generally accepted accounting principles (“GAAP”) in the United States.
Management’s
Representation of Interim Financial Statements
The
accompanying unaudited financial statements have been prepared by the Company without audit pursuant to the rules and regulations of
the Securities and Exchange Commission (“SEC”). The Company uses the same accounting policies in preparing quarterly and
annual financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by
such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading.
These financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of
financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily
indicative of results for a full year. These financial statements should be read in conjunction with the audited financial statements
and notes thereto on December 31, 2021, as presented in the Company’s Annual Report on Form 10-K.
Use
of Estimates
The
preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements,
and the reported amounts of revenue and expenses during the reporting period. Management makes these estimates using the best information
available at the time the estimates are made; however actual results could differ from those estimates.
Cash
and Cash Equivalents
Cash
and cash equivalents consist of cash on hand, cash in bank with no restrictions, as well as highly liquid investments which are unrestricted
as to withdrawal or use, and which have remaining maturities of three months or less when initially purchased.
Income
Taxes
The
Company accounts for income taxes under FASB ASC 740, “Accounting for Income Taxes”. Under FASB ASC 740, 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. 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. Under FASB ASC 740, 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. FASB ASC 740-10-05, “Accounting for Uncertainty in Income Taxes” prescribes
a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or
expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained
upon examination by taxing authorities.
The
amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate
settlement. The Company assesses the validity of its conclusions regarding uncertain tax positions quarterly to determine if facts or
circumstances have arisen that might cause it to change its judgment regarding the likelihood of a tax position’s sustainability
under audit.
Net
Loss per Share
Net
loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined
by Financial Accounting Standards, ASC Topic 260, “Earnings per Share.” Basic earnings per common share (“EPS”)
calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year.
Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares
and dilutive common share equivalents outstanding.
Recent
Accounting Pronouncements
There
are no recent accounting pronouncements that impact the Company’s operations.
NOTE
3 – GOING CONCERN
As
of March 31, 2022, the Company had $-0- in cash and cash equivalents. The Company has net loss of $20,410 for the three months ended
March 31, 2022 and has an accumulated deficit of $26,890,514 on March 31, 2022. The Company’s principal sources of liquidity
have been cash provided by operating activities, as well as financial support from related parties. The Company’s operating results
for future periods are subject to numerous uncertainties and it is uncertain if the Company will be able to maintain profitability and
continue growth for the foreseeable future. If management is not able to increase revenue and/or manage operating expenses in line with
revenue forecasts, the Company may not be able to maintain profitability. These factors raise substantial doubt about the Company’s
ability to continue as a going concern.
The
Company will focus on improving operation efficiency and cost reduction, developing core cash-generating business, and enhancing marketing
function. Actions include developing more customers, as well as creating synergy using the Company’s resources.
The
Company believes that available cash and cash equivalents, the cash provided by operating activities, together with actions as developing
more customers and create synergy of the Company’s resources, should enable the Company to meet presently anticipated cash needs
for at least the next 12 months after the date that the financial statements are issued and the Company has prepared the financial statements
on a going concern basis. If the Company encounters unforeseen circumstances that place constraints on its capital resources, management
will be required to take various measures to conserve liquidity, which could include, but not necessarily be limited to, obtaining financial
support from related parties and controlling overhead expenses. Management cannot provide any assurance that the Company’s efforts
will be successful. The 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 from the outcome of these uncertainties.
NOTE
4 – EQUITY
Common
Stock
The
Company has authorized 350,000,000 shares of $0.001 par value, common stock. As of March 31, 2022 and December 31, 2021,
there were 237,830,249 shares of Common Stock issued and outstanding.
NOTE
5 – RELATED PARTY NOTES PAYABLE
This
amount was treated as a capital contribution from a related party and did not have any impact on the Company’s Statement of Operations
for the three months ended March 31, 2022.
NOTE
6 – COMMITMENTS AND CONTINGENCIES
The
Company did not have any contractual commitments as of March 31, 2022.
NOTE
7 – SUBSEQUENT EVENTS
In
accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events after March 31, 2022 through the date
that the financial statements were available to be issued and has determined that it does not have any material subsequent events to
disclose in these financial statements.