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2012-09-30
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SW China Imports, Inc.
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--12-31
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<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><b>NOTE 1 – Summary of Significant Accounting Policies</b></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><u>Unaudited Interim Financial Information</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The accompanying Balance Sheet as of September 30, 2012, Statements of Operations for the three months ended September 30, 2012 and September 30, 2011, for the nine months ended September 30, 2012, for the period from February 23, 2011 (inception) to September 30, 2011, and cumulative from February 23, 2011 (Inception) to September 30, 2012, Statement of Stockholder’s (Deficit) for the cumulative period from February 23, 2011 (Inception) to September 30, 2012, and the Statements of Cash Flows for the nine months ended September 30, 2012, for the period from February 23, 2011 (inception) to September 30, 2011, and cumulative from February 23, 2011 (Inception) to September 30, 2012, are unaudited.  These unaudited interim financial statements have been prepared in accordance with accounting principles accepted in the United States of America (“GAAP”).  In the opinion of the company’s management, the unaudited interim financial statements have been prepared on the same basis as the audited financial statements and included all adjustments necessary for the fair presentation of the Company’s statement of financial position at September 30, 2012 and its results of operations and its cash flows for the period ended September 30, 2012 and cumulative from February 23, 2011 (inception) to September 30, 2012.  The results for the period ended September 30, 2012 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2012.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><u>Organization</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>SW China Imports, Inc. (“Company” or “SW China Imports”) is a development stage company with minimal operations.  SW China Imports was incorporated under the laws of the State of Nevada on February 23, 2011.  The Company’s business plan calls for the Company to import high-end handmade lace wigs and hairpieces, as well as other beauty supplies and products, manufactured in China and South Korea into the United States.  SW China Imports intends to sell these products in bulk to beauty supply stores, hair salons, and independent hair stylists.  SW China Imports also intends to sell its products directly to the retail consumer via the Internet. </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><u>Basis of Presentation</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The accompanying financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (US GAAP) for financial information and in accordance with the Securities and Exchange Commission’s (SEC) Regulation S-X.  They reflect all adjustments which are, in the opinion of the Company’s management, necessary for a fair presentation of the financial position and operating results as of and for the period ended September 30, 2012 and for the period February 23, 2011 (inception) to September 30, 2012.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><u>Use of Estimates</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The accompanying financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America.  Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment.  Actual results may vary from these estimates.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><u>Cash and Cash Equivalents</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>For purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.  As of September 30, 2012 and December 31, 2011 the Company had $3,987 and $14,773 cash, respectively.  There were no cash equivalents as of September 30, 2012 and December 31, 2011.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><u>Investments</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The Company accounts for its marketable securities, which are classified as trading securities, in accordance with generally accepted accounting principles for certain investments in debt and equity securities, which requires that trading securities be carried at fair value.  Unrealized gains and losses due to changes in fair value as well as realized gains and losses resulting from sales of securities are reported as Other Income/Expenses in the statement of operations.  Fair value of the securities is based upon quoted market prices in active markets or estimated fair value when quoted market prices are not available.  The cost basis for realized gains and losses is determined on a specific identification basis.  As of September 30, 2012 the Company had no investments.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><u>Fair Value of Financial Instruments</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>ASC 820, “Fair Value Measurements” and ASC 825, Financial Instruments, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.  It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value.  A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.  It prioritizes the inputs into three levels that may be used to measure fair value:</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;margin-left:.5in;text-align:justify;text-autospace:none'><i>Level 1</i></p> <p style='margin:0in;margin-bottom:.0001pt;margin-left:.5in;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;margin-left:.5in;text-align:justify;text-autospace:none'>Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.</p> <p style='margin:0in;margin-bottom:.0001pt;margin-left:.5in;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;margin-left:.5in;text-align:justify;text-autospace:none'><i>Level 2</i></p> <p style='margin:0in;margin-bottom:.0001pt;margin-left:.5in;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;margin-left:.5in;text-align:justify;text-autospace:none'>Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.</p> <p style='margin:0in;margin-bottom:.0001pt;margin-left:.5in;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;margin-left:.5in;text-align:justify;text-autospace:none'><i>Level 3</i></p> <p style='margin:0in;margin-bottom:.0001pt;margin-left:.5in;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;margin-left:.5in;text-align:justify;text-autospace:none'>Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.</p> <p style='margin:0in;margin-bottom:.0001pt;margin-left:.5in;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>As of September 30, 2012 and December 31, 2011 we believe that the recorded values of all of our financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><u>Net Loss per Share Calculation</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>Basic net loss per common share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period.   Diluted earnings per shares is computed similar to basic 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 shares had been issued and if the additional common shares were dilutive.  During the period ended September 30, 2012 and cumulative from February 23, 2011 (inception) to September 30, 2012 the Company had no dilutive financial instruments issued or outstanding.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><u>Income Taxes</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The Company accounts for income taxes pursuant to FASB ASC 740, Income Taxes.  Under FASB ASC 740-10-25, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes.  The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The Company maintains a valuation allowance with respect to deferred tax assets.  SW China Imports establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period.  Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carryforward period under the Federal tax laws.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about its ability to realize the related deferred tax asset.  Any change in the valuation allowance will be included in income in the year of the change in estimate.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><u>Fiscal Year</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'>The Company elected December 31st for its fiscal year end. </p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><b>NOTE 2 – Development Stage Activities and Going Concern</b></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The Company is in the development stage and has minimal operations, and as such has devoted most of its efforts since its inception to developing its business plan, issuing common stock, attempting to raise capital, establishing its accounting systems and other administrative functions.  The Company plans on importing high-end handmade lace wigs and hairpieces manufactured in China and South Korea into the United States.  After import, the Company intends to sell its products in bulk to beauty supply stores, hair salons, and independent hair stylists.  The Company also intends to sell its products directly to the retail consumer via the Internet.  Additionally, the Company intends to conduct additional capital formation activities through the issuance of its common stock and to achieve these long-term business growth strategies.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>While management of the Company believes that SW China Imports will be successful in its planned operating activities under its business plan and capital formation activities, there can be no assurance that it will be able to successfully execute on either of these or that it will be able to generate adequate revenues to earn a profit or sustain its operations.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United State of America, which contemplate continuation of the Company as a going concern.  The Company has not established a source of revenues sufficient to cover its operating costs, and as such, has incurred an operating loss since its inception.  Further, as of September 30, 2012, the Company had a working capital deficiency of ($54,001).  These and other factors raise substantial doubt about the Company’s ability to continue as a going concern.  The accompanying financial statements do not include any adjustments or classifications that may result from the possible inability of the Company to continue as a going concern.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><b>NOTE 3 – Common Stock</b></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The total number of common shares authorized that may be issued by the Company is 500,000,000 shares with a par value of $0.0001 per share.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>During the period February 23, 2011 (inception) to September 30, 2012 the Company issued an aggregate of 112,570,000 shares as follows:</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <ul type="disc" style='margin-top:0in'> <li style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>100,000,000 shares to its officers as Founder’s Shares;</li> <li style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>10,000,000 shares to consultants for total consideration of $100,000, or $0.01 per share, based on the value of the services performed;</li> <li style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>1,570,000 shares to investors for $15,700 in cash ($0.01 per share); and</li> <li style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>1,000,000 shares to an investor that has subscribed to pay the Company $10,000 in cash ($0.01 per share). </li> </ul> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>On August 6, 2012, after making numerous attempts to collect the cash due for subscribed stock, the Company cancelled and returned to its treasury 1,000,000 shares of its subscribed common stock, $0.0001 par value.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>As of September 30, 2012, the Company had 111,570,000 shares of its common stock issued and outstanding.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><b>NOTE 4 – Preferred Stock</b></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The total number of preferred shares authorized that may be issued by the Company is 50,000,000 shares with a par value of $0.0001 per share.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>As of September 30, 2012, the Company had no shares of its preferred stock issued and outstanding.</p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><b>NOTE 5 – Income Taxes</b></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The provision (benefit) for income taxes for the period from February 23, 2011 (inception) to September 30, 2012 was as follows, assuming a 35 percent effective tax rate:</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" width="993" style='width:496.7pt;margin-left:135.9pt;border-collapse:collapse'> <tr> <td width="557" colspan="3" valign="top" style='width:278.45pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> </td> <td width="45" valign="top" style='width:22.7pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> </td> <td width="183" valign="top" style='width:91.3pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:center;text-autospace:none'> </p> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:center;text-autospace:none'>For the nine</p> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:center;text-autospace:none'> months ended</p> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:center;text-autospace:none'>9/30/12</p> </td> <td width="26" valign="top" style='width:12.85pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:center;text-autospace:none'> </p> </td> <td width="183" valign="top" style='width:91.4pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:center;text-autospace:none'>For the period</p> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:center;text-autospace:none'>February 23, 2011</p> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:center;text-autospace:none'>(inception) to</p> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:center;text-autospace:none'>9/30/1212</p> </td> </tr> <tr> <td width="557" colspan="3" valign="top" style='width:278.45pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><b>Current tax provision:</b></p> </td> <td width="45" valign="top" style='width:22.7pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:center;text-autospace:none'> </p> </td> <td width="183" valign="top" style='width:91.3pt;border:none;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> </td> <td width="26" valign="top" style='width:12.85pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> </td> <td width="183" valign="top" style='width:91.4pt;border:none;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> </td> </tr> <tr> <td width="55" valign="top" style='width:27.45pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> </td> <td width="502" colspan="2" valign="top" style='width:251.0pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>Federal</p> </td> <td width="45" valign="top" style='width:22.7pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:center;text-autospace:none'> </p> </td> <td width="183" valign="top" style='width:91.3pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> </td> <td width="26" valign="top" style='width:12.85pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> </td> <td width="183" valign="top" style='width:91.4pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> </td> </tr> <tr> <td width="116" colspan="2" valign="top" style='width:58.1pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> </td> <td width="441" valign="top" style='width:220.35pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>Taxable income</p> </td> <td width="45" valign="top" style='width:22.7pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:center;text-autospace:none'>$</p> </td> <td width="183" valign="top" style='width:91.3pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'>-</p> </td> <td width="26" valign="top" style='width:12.85pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'>$</p> </td> <td width="183" valign="top" style='width:91.4pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'> </p> </td> </tr> <tr> <td width="116" colspan="2" valign="top" style='width:58.1pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> </td> <td width="441" valign="top" style='width:220.35pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> </td> <td width="45" valign="top" style='width:22.7pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:center;text-autospace:none'> </p> </td> <td width="183" valign="top" style='width:91.3pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'> </p> </td> <td width="26" valign="top" style='width:12.85pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'> </p> </td> <td width="183" valign="top" style='width:91.4pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'> </p> </td> </tr> <tr> <td width="116" colspan="2" valign="top" style='width:58.1pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> </td> <td width="441" valign="top" style='width:220.35pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>Total current tax provision</p> </td> <td width="45" valign="top" style='width:22.7pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:center;text-autospace:none'>$</p> </td> <td width="183" valign="top" style='width:91.3pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'>-</p> </td> <td width="26" valign="top" style='width:12.85pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'>$</p> </td> <td width="183" valign="top" style='width:91.4pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'> </p> </td> </tr> <tr> <td width="557" colspan="3" valign="top" style='width:278.45pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> </td> <td width="45" valign="top" style='width:22.7pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:center;text-autospace:none'> </p> </td> <td width="183" valign="top" style='width:91.3pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'> </p> </td> <td width="26" valign="top" style='width:12.85pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'> </p> </td> <td width="183" valign="top" style='width:91.4pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'> </p> </td> </tr> <tr> <td width="557" colspan="3" valign="top" style='width:278.45pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><b>Deferred tax provision:</b></p> </td> <td width="45" valign="top" style='width:22.7pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:center;text-autospace:none'> </p> </td> <td width="183" valign="top" style='width:91.3pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'> </p> </td> <td width="26" valign="top" style='width:12.85pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'> </p> </td> <td width="183" valign="top" style='width:91.4pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'> </p> </td> </tr> <tr> <td width="55" valign="top" style='width:27.45pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> </td> <td width="502" colspan="2" valign="top" style='width:251.0pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>Federal</p> </td> <td width="45" valign="top" style='width:22.7pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:center;text-autospace:none'> </p> </td> <td width="183" valign="top" style='width:91.3pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> </td> <td width="26" valign="top" style='width:12.85pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> </td> <td width="183" valign="top" style='width:91.4pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> </td> </tr> <tr> <td width="116" colspan="2" valign="top" style='width:58.1pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> </td> <td width="441" valign="top" style='width:220.35pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>Loss carryforwards</p> </td> <td width="45" valign="top" style='width:22.7pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:center;text-autospace:none'>$</p> </td> <td width="183" valign="top" style='width:91.3pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'>12,625</p> </td> <td width="26" valign="top" style='width:12.85pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'>$</p> </td> <td width="183" valign="top" style='width:91.4pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'>25,997</p> </td> </tr> <tr> <td width="116" colspan="2" valign="top" style='width:58.1pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> </td> <td width="441" valign="top" style='width:220.35pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>Change in valuation allowance</p> </td> <td width="45" valign="top" style='width:22.7pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:center;text-autospace:none'> </p> </td> <td width="183" valign="top" style='width:91.3pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'>(12,625)</p> </td> <td width="26" valign="top" style='width:12.85pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'> </p> </td> <td width="183" valign="top" style='width:91.4pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'>(25,997)</p> </td> </tr> <tr> <td width="116" colspan="2" valign="top" style='width:58.1pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> </td> <td width="441" valign="top" style='width:220.35pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> </td> <td width="45" valign="top" style='width:22.7pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:center;text-autospace:none'> </p> </td> <td width="183" valign="top" style='width:91.3pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'> </p> </td> <td width="26" valign="top" style='width:12.85pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'> </p> </td> <td width="183" valign="top" style='width:91.4pt;background:#C6D9F1;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'> </p> </td> </tr> <tr> <td width="116" colspan="2" valign="top" style='width:58.1pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> </td> <td width="441" valign="top" style='width:220.35pt;padding:0in 5.4pt 0in 5.4pt'> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>Total deferred tax provision</p> </td> <td width="45" valign="top" style='width:22.7pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-align:center;text-autospace:none'>$</p> </td> <td width="183" valign="top" style='width:91.3pt;border:none;border-bottom:double windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'>-</p> </td> <td width="26" valign="top" style='width:12.85pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'>$</p> </td> <td width="183" valign="top" style='width:91.4pt;border:none;border-bottom:double windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt'> <p align="right" style='margin:0in;margin-bottom:.0001pt;text-align:right;text-autospace:none'>-</p> </td> </tr> <tr> <td width="55" style='border:none'></td> <td width="61" style='border:none'></td> <td width="438" style='border:none'></td> <td width="45" style='border:none'></td> <td width="182" style='border:none'></td> <td width="32" style='border:none'></td> <td width="182" style='border:none'></td> </tr> </table> </div> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>As of September 30, 2012, the Company had approximately $74,278 in tax loss carryforwards that can be utilized in future periods to reduce taxable income through 2031.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The Company provided a valuation allowance equal to the deferred income tax assets for the period from February 23, 2011 (inception) to September 30, 2012 because it is not presently known whether future taxable income will be sufficient to utilize the tax loss carryforwards.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The Company has no uncertain tax positions.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><b>NOTE 6 – Related Party Transactions</b></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>As of September 30, 2012, the Company operated out of office space that is being provided to us by our treasurer and secretary, Jae Hwang, free of charge.  There is no written agreement or other material terms relating to this arrangement.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>As of September 30, 2012, the Company had notes payable to a related party stockholder in the amount of $37,750.  This note is payable on demand and is non-interest bearing.  As of September 30, 2012 this note has accrued $4,587 in imputed interest that has been recorded in the financial statements as additional paid-in capital.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><b>NOTE 7 – Note Payable to Unrelated Party</b></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>On August 28, 2012, the Company issued a one (1) year promissory note and borrowed $20,000 from an unrelated party.  This note accrues interest at an annual rate of three (3%) percent and is payable in a single balloon payment, inclusive of principal and accrued interest.  The lender, at its sole option, may demand early repayment, inclusive of principal and accrued interest, at any time prior to maturity by making a formal demand or may convert the principal and accrued interest into shares of the Company’s common stock at a predetermined fixed conversion rate of two ($0.02) cents per share without any beneficial conversion features (BCF).</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><b>NOTE 8 – Recent Accounting Pronouncements</b></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>In May 2011, the FASB issued ASU 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” This update amended explanations of how to measure fair value to result in common fair value measurement and disclosure requirements in GAAP and International Financial Reporting Standards.  ASU 2011-04 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 with prospective application required.  The adoption of this did not have a material effect on the Company`s financial position, results of operations or cash flows.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>In June 2011, the FASB issued ASU 2011-05, “Presentation of Comprehensive Income.”  This update amended the presentation options in Accounting Standards Codification (“ASC”) 220, “Comprehensive Income,” to provide an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements.  ASU 2011-05 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 with retrospective application required.  The adoption of this standard did not have a material effect on the Company`s financial position, results of operations or cash flows.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>In September 2011, the FASB issued ASU 2011-08 “Intangibles – Goodwill and Other”.  This new guidance on testing goodwill provides an entity the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.  If an entity determines that this is the case, it is required to perform the currently prescribed two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized for that reporting unit (if any).  If an entity determines that the fair value of a reporting unit is less than its carrying amount, the two-step goodwill impairment test is not required.  ASU 2011-08 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 with prospective application required.  The adoption of this standard did not have a material effect on the Company`s financial position, results of operations or cash flows.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>In December 2011, the FASB issued ASU 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items out of Accumulated Other Comprehensive Income” in Accounting Standards Update No. 2011-05.  This update defers the requirement to present items that are reclassified from accumulated other comprehensive income to net income in both the statement of income where net income is presented and the statement where other comprehensive income is presented.  The adoption of ASU 2011-12 is not expected to have a material impact on our financial position or results of operations.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>In July 2012, the FASB issued ASU 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in Accounting Standards Update No. 2012-02.  This update amends ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles - Goodwill and Other - General Intangibles Other than Goodwill.  The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012.  Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance.  The adoption of ASU 2012-02 is not expected to have a material impact on our financial position or results of operations.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>In August 2012, the FASB issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03.  This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114.  The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results of operations.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'>The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial statements.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><b>NOTE 9 – Subsequent Events</b></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>No other material events or transactions have occurred through the date the financial statements were issued which required recognition or disclosure in the financial statements.</p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><u>Unaudited Interim Financial Information</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The accompanying Balance Sheet as of September 30, 2012, Statements of Operations for the three months ended September 30, 2012 and September 30, 2011, for the nine months ended September 30, 2012, for the period from February 23, 2011 (inception) to September 30, 2011, and cumulative from February 23, 2011 (Inception) to September 30, 2012, Statement of Stockholder’s (Deficit) for the cumulative period from February 23, 2011 (Inception) to September 30, 2012, and the Statements of Cash Flows for the nine months ended September 30, 2012, for the period from February 23, 2011 (inception) to September 30, 2011, and cumulative from February 23, 2011 (Inception) to September 30, 2012, are unaudited.  These unaudited interim financial statements have been prepared in accordance with accounting principles accepted in the United States of America (“GAAP”).  In the opinion of the company’s management, the unaudited interim financial statements have been prepared on the same basis as the audited financial statements and included all adjustments necessary for the fair presentation of the Company’s statement of financial position at September 30, 2012 and its results of operations and its cash flows for the period ended September 30, 2012 and cumulative from February 23, 2011 (inception) to September 30, 2012.  The results for the period ended September 30, 2012 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2012.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><u>Organization</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>SW China Imports, Inc. (“Company” or “SW China Imports”) is a development stage company with minimal operations.  SW China Imports was incorporated under the laws of the State of Nevada on February 23, 2011.  The Company’s business plan calls for the Company to import high-end handmade lace wigs and hairpieces, as well as other beauty supplies and products, manufactured in China and South Korea into the United States.  SW China Imports intends to sell these products in bulk to beauty supply stores, hair salons, and independent hair stylists.  SW China Imports also intends to sell its products directly to the retail consumer via the Internet.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><u>Basis of Presentation</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The accompanying financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (US GAAP) for financial information and in accordance with the Securities and Exchange Commission’s (SEC) Regulation S-X.  They reflect all adjustments which are, in the opinion of the Company’s management, necessary for a fair presentation of the financial position and operating results as of and for the period ended September 30, 2012 and for the period February 23, 2011 (inception) to September 30, 2012.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><u>Use of Estimates</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The accompanying financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America.  Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment.  Actual results may vary from these estimates.</p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><u>Cash and Cash Equivalents</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>For purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.  As of September 30, 2012 and December 31, 2011 the Company had $3,987 and $14,773 cash, respectively.  There were no cash equivalents as of September 30, 2012 and December 31, 2011.</p>
<!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><u>Investments</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The Company accounts for its marketable securities, which are classified as trading securities, in accordance with generally accepted accounting principles for certain investments in debt and equity securities, which requires that trading securities be carried at fair value.  Unrealized gains and losses due to changes in fair value as well as realized gains and losses resulting from sales of securities are reported as Other Income/Expenses in the statement of operations.  Fair value of the securities is based upon quoted market prices in active markets or estimated fair value when quoted market prices are not available.  The cost basis for realized gains and losses is determined on a specific identification basis.  As of September 30, 2012 the Company had no investments.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><u>Fair Value of Financial Instruments</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>ASC 820, “Fair Value Measurements” and ASC 825, Financial Instruments, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.  It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value.  A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.  It prioritizes the inputs into three levels that may be used to measure fair value:</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;margin-left:.5in;text-align:justify;text-autospace:none'><i>Level 1</i></p> <p style='margin:0in;margin-bottom:.0001pt;margin-left:.5in;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;margin-left:.5in;text-align:justify;text-autospace:none'>Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.</p> <p style='margin:0in;margin-bottom:.0001pt;margin-left:.5in;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;margin-left:.5in;text-align:justify;text-autospace:none'><i>Level 2</i></p> <p style='margin:0in;margin-bottom:.0001pt;margin-left:.5in;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;margin-left:.5in;text-align:justify;text-autospace:none'>Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.</p> <p style='margin:0in;margin-bottom:.0001pt;margin-left:.5in;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;margin-left:.5in;text-align:justify;text-autospace:none'><i>Level 3</i></p> <p style='margin:0in;margin-bottom:.0001pt;margin-left:.5in;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;margin-left:.5in;text-align:justify;text-autospace:none'>Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.</p> <p style='margin:0in;margin-bottom:.0001pt;margin-left:.5in;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>As of September 30, 2012 and December 31, 2011 we believe that the recorded values of all of our financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><u>Net Loss per Share Calculation</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>Basic net loss per common share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period.   Diluted earnings per shares is computed similar to basic 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 shares had been issued and if the additional common shares were dilutive.  During the period ended September 30, 2012 and cumulative from February 23, 2011 (inception) to September 30, 2012 the Company had no dilutive financial instruments issued or outstanding.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><u>Income Taxes</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The Company accounts for income taxes pursuant to FASB ASC 740, Income Taxes.  Under FASB ASC 740-10-25, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes.  The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>The Company maintains a valuation allowance with respect to deferred tax assets.  SW China Imports establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period.  Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carryforward period under the Federal tax laws.</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'>Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about its ability to realize the related deferred tax asset.  Any change in the valuation allowance will be included in income in the year of the change in estimate.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'><u>Fiscal Year</u></p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify;text-autospace:none'> </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'>The Company elected December 31st for its fiscal year end. </p>
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