Credit One Financial (COFI) 10-Q 16 May 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Jun. 30, 2015
Document and Entity Information:
Entity Registrant Name	CREDIT ONE FINANCIAL INC.
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Trading Symbol	cofi
Amendment Flag	false
Entity Central Index Key	1,201,135
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding	326,155,623
Entity Public Float		$ 224,000
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1

CREDIT ONE FINANCIAL, INC. - Co

CREDIT ONE FINANCIAL, INC. - Consolidated Balance Sheets - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Assets, Current
Cash and Cash Equivalents, at Carrying Value	$ 137,736	$ 1,501,835
Notes, Loans and Financing Receivable, Net, Current	1,599,072
Interest receivable	15,991
Prepaid Expense and other current assets	675,468	682,319
Assets, Current	2,428,267	2,184,154
Notes, Loans and Financing Receivable, Net, Noncurrent	7,573,052	7,441,978
Assets	10,001,319	9,626,132
Liabilities, Current
Accounts Payable and accrued liabilities	53,181	8,079
Deferred Revenue and Credits, Current	203,108
Liabilities, Current	256,289	8,079
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest
Common Stock, Value, Issued	326,156	326,156
Additional Paid in Capital, Common Stock	12,589,304	12,589,304
Accumulated Other Comprehensive Income (Loss), Net of Tax	699	5,046
Retained Earnings (Accumulated Deficit)	(3,171,129)	(3,302,453)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ 9,745,030	$ 9,618,053
Stockholders' Equity, Number of Shares, Par Value and Other Disclosures
Common Stock, Shares Authorized	500,000,000	500,000,000
Common Stock, Shares Issued	326,155,623	326,155,623
Common Stock, Shares Outstanding	326,155,623	326,155,623
Common Stock, Value, Outstanding	$ 326,156	$ 326,156
Liabilities and Equity	$ 10,001,319	$ 9,626,132

CREDIT ONE FINANCIAL, INC. - C3

CREDIT ONE FINANCIAL, INC. - Consolidated Statements of Operations and Comprehensive Income (loss) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenues
Revenue from advertising	$ 67,538	$ 58,023
Revenues	67,538	56,023
Operating Expenses
License fee	51,796	47,195
Amortization of intangible asset		72,545
Selling, General and Administrative Expense	34,768	46,967
Operating Expenses	86,564	166,707
Operating Income (Loss)	(19,026)	(108,684)
Investment Income, Nonoperating
Interest income	150,350	102,182
Nonoperating Income (Expense)	150,350	102,182
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest	131,324	(6,502)
Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest	131,324	(6,502)
Net Income (loss)	131,324	(6,502)
Other comprehensive income (loss)
Foreign currency translation adjustment	(4,347)	4,476
Total comprehensive income (loss)	$ 126,977	$ (2,026)
Earnings Per Share
Weighted Average Number of Shares Outstanding, Basic and Diluted	326,155,623	326,155,623

CREDIT ONE FINANCIAL, INC. - C4

CREDIT ONE FINANCIAL, INC. - Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Net Cash Provided by (Used in) Operating Activities
Net Income (loss)	$ 131,324	$ (6,502)
Adjustments, Noncash Items, to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities
Accretion of interest on long-term notes receivable	(134,393)	(102,183)
Amortization of intangible asset		72,545
Depreciation		9
Increase (Decrease) in Operating Assets
Increase (Decrease) in Other Receivable	(15,952)
Increase (Decrease) in Prepaid Expense and Other Assets	6,500	6,166
Increase (Decrease) in Accounts Payable and Accrued Liabilities	44,976	49,038
Increase (Decrease) in Deferred Revenue	202,614	(57,936)
Net Cash Provided by (Used in) Operating Activities	235,069	(38,863)
Net Cash Provided by (Used in) Investing Activities
Investment in notes receivable	(1,595,184)
Payments to Acquire Intangible Assets		(2,375)
Net Cash Provided by (Used in) Investing Activities	(1,595,184)	(2,375)
Net Cash Provided by (Used in) Financing Activities
Effect of exchange rate on cash and cash equivalents	(3,984)	462
Cash and Cash Equivalents, Period Increase (Decrease)	(1,364,099)	(40,776)
Cash and Cash Equivalents, at Carrying Value	1,501,835	641,514
Cash and Cash Equivalents, at Carrying Value	$ 137,736	$ 600,738

Note 1 - Nature of Business

Note 1 - Nature of Business	3 Months Ended
	Mar. 31, 2016
Notes
Note 1 - Nature of Business	Note 1 – Nature of Business Credit One Financial, Inc. (the “Company”) was incorporated in the State of Florida on September 24, 1999. In August 2010, the Company established a wholly owned subsidiary, E&M International Limited (“E&M”), in the Cayman Islands. On September 16, 2010, E&M changed its name to CEM International Ltd. (“CEM”). The Company, through CEM, operates as an advertising agent to place and handle advertising for its clients. On August 26, 2010, CEM entered into an exclusive agreement with Macau Lotus Satellite TV Media Limited (“Lotus TV”) to provide advertising services for a ten-year period commencing on September 1, 2010. Because the clients of the Company have created and produced their own advertising clips and trailers, or programs, the Company currently acts only as an advertising placement agent for Lotus TV, and there is no advertising creating and planning activities involved at this time. The exclusive right agreement was amended in 2014. The Company is currently a preferred advertising agent of Lotus TV. As Lotus TV’s preferred advertising agent, the Company provides advertising agency services to its clients by providing them with the advertising time slots the Company obtains from Lotus TV. Advertisers can purchase advertising time slots of Lotus TV directly from the Company. The Company generates revenues primarily from advertising sales paid by clients for the planning and placement of advertisements on Lotus TV.

Note 2 - Summary of Significant

Note 2 - Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2016
Notes
Note 2 - Summary of Significant Accounting Policies	Note 2 - Summary of Significant Accounting Policies Basic Presentation The accompanying unaudited consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim unaudited consolidated financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. The unaudited consolidated financial statements furnished reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2015 and notes thereto contained in the Company’s Annual Report on Form 10-K (Amendment No. 1) filed on April 18, 2016. Consolidation Scope and Principles of Consolidation The consolidated financial statements present the financial position and the results of operations of Credit One Financial, Inc. and its 100% owned subsidiary, CEM International Ltd. All significant intercompany transactions and balances have been eliminated in consolidation. Use of Estimates in the Preparation of the Financial Statements The preparation of financial statements in conformity with generally accepted accounting principles 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 revenues and expenses during the reporting period. Actual results could differ from those estimates and those differences could be material. Fair Value Measurements The Company follows accounting guidance relating to fair value measurements. This guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows: Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. Level 2 – inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. Level 3 – unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the unobservable inputs. The fair value of the Company’s financial instruments, which consist principally of cash and cash equivalents, are based on level 1 input, and equal carrying amounts. Foreign Currency The Company reports its financial position and results of operations in U.S. dollars. For its subsidiaries that have functional currencies that are foreign currencies, the elements of the financial statements are translated by using a current exchange rate. For assets and liabilities, the exchange rate at the balance sheet date is used. Revenues, expenses, gains, and losses were translated at the average exchange rate for the periods presented. Transaction adjustments result from the process of translating the subsidiary’ financial statements into U.S. dollars are not included in determining net income, but are reported in other comprehensive income (loss). Foreign currency transactions are transactions denominated in a currency other than the entity's functional currency. At the date the transaction is recognized, each asset, liability, revenue, expense, gain, or loss arising from the transaction is measured and recorded in the functional currency of the recording entity by use of the exchange rate in effect at that date. At each balance sheet date, recorded balances that are denominated in a currency other than the functional currency of the recording entity are adjusted to reflect the current exchange rate, with any resulting differences reported in the current period statement of operations. Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of March 31, 2016, the Company maintained $112,152 in foreign bank accounts not subject to Federal Deposit Insurance Corporation (“FDIC”) coverage. The remaining balance of $25,584 at March 31, 2016 was maintained in a U.S. bank account and was fully insured by FDIC. Long-Term Notes Receivable Long-term notes receivable are recorded at issuance at its present value using an effective interest rate. At the balance sheet date, the notes are revalued with the change in present value recorded as interest income in the Consolidated Statements of Operations. Impairment of Long Lived Assets Management reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison for the carrying amount of an asset to future cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount exceeds the fair value of the assets which considers the discounted future net cash flows. Revenue Recognition The Company recognizes revenue in accordance with Securities and Exchange Commission revenue recognition accounting standards. As an advertising agent, CEM is in the service business dedicated to planning and handling advertising for its clients. Advertising revenue is recognized upon the delivery of the contracted advertising services and when no significant Company performance obligation remains. Service revenue is recognized as the contracted services are rendered. Provision for Income Taxes An asset and liability approach is used for financial accounting and reporting for income taxes. Deferred income taxes arise from temporary differences between income tax and financial reporting and principally relate to recognition of revenue and expenses in different periods for financial and tax accounting purposes and are measured using currently enacted tax rates and laws. In addition, a deferred tax asset can be generated by net operating loss carryforwards. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. Earnings (Loss) Per Common Share Earnings (loss) Per Common Share (“EPS”) is computed by dividing net income available to common stockholders by the weighted average number of common stock shares outstanding during the year. Diluted EPS is computed by dividing net income available to common stockholders by the weighted average number of common stock shares outstanding during the year plus potential dilutive instruments such as stock options and warrants. The effect of stock options on diluted EPS is determined through the application of the treasury stock method, whereby proceeds received by the Company based on assumed exercises are hypothetically used to repurchase the Company's common stock at the average market price during the period. The Company has no stock options, warrants or other potentially dilutive instruments outstanding at March 31, 2016 and 2015. Subsequent Events The Company’s management reviewed all material events through the date of the consolidated financial statements were issued for subsequent event disclosure consideration. Reclassification Certain prior year amounts have been reclassified for consistency with the current period presentation . Recently Issued Accounting Standards In May 2014, a pronouncement was issued that creates common revenue recognition guidance for U.S. GAAP and International Financial Reporting Standards. The new guidance supersedes most preexisting revenue recognition guidance. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, with an option to adopt the standard one year earlier. The new standard is to be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is currently evaluating the impact of the new pronouncement on its financial statements. In February 2016, a pronouncement was issued that creates new accounting and reporting guidelines for leasing arrangements. The new guidance requires organizations that lease assets to recognize assets and liabilities on the balance sheet related to the rights and obligations created by those leases, regardless of whether they are classified as finance or operating leases. Consistent with current guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease primarily will depend on its classification as a finance or operating lease. The guidance also requires new disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The new standard is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with early application permitted. The new standard is to be applied using a modified retrospective approach. The Company is currently evaluating the impact of the new pronouncement on its financial statements. The Company does not believe that any other recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements.

Note 3 - Note Receivable

Note 3 - Note Receivable	3 Months Ended
	Mar. 31, 2016
Notes
Note 3 - Note Receivable	Note 3 – Note Receivable In February 2016, the Company entered into a promissory note agreement to lend approximately $1,600,000 (HK$ 12,400,000) to a third party. The note matures in February 2017 and has an annual interest rate of 12%. For the three months ended March 31, 2016, the Company recorded interest income of approximately $16,000 (HK$124,000). As of March 31, 2016, the Company had interest receivable of approximately $16,000.

Note 4 - Prepaid Advertising Co

Note 4 - Prepaid Advertising Cost	3 Months Ended
	Mar. 31, 2016
Notes
Note 4 - Prepaid Advertising Cost	Note 4 – Prepaid Advertising Cost In 2012, the Company paid $1,000,000 to Lotus TV for 20,000 advertising slots. The Company had used 6,500 slots as of March 31, 2016 and December 31, 2015. As of March 31, 2016 and December 31, 2015, the Company had prepaid advertising cost of $674,855 and $682,124, respectively.

Note 5 - Long-term Notes Receiv

Note 5 - Long-term Notes Receivable and Advertising Right	3 Months Ended
	Mar. 31, 2016
Notes
Note 5 - Long-term Notes Receivable and Advertising Right	Note 5 – Long-Term Notes Receivable and Advertising Right On August 26, 2010, CEM entered into an exclusive agreement with Lotus TV to provide advertising services for a ten-year period commencing on September 1, 2010. In consideration for the exclusive advertising rights granted by Lotus TV, CEM will provide advertising services and issue, over the course of the agreement, $10 million in loans to Lotus TV. The amount and duration of each loan shall be negotiated by the parties, depending on Lotus’s financial needs. Prior to December 31, 2013, CEM issued Lotus TV various non-interest bearing promissory notes of approximately $9,500,000 (HK$74,242,425). During the year ended December 31, 2014, CEM issued Lotus TV an additional loan of approximately $1,390,000 (HK$10,800,000). All the notes receivable were due on August 31, 2020 and discounted to its estimated fair value using an effective interest rate of 8%. This difference between the face value and the present value of was allocated to the intangible asset captioned Advertising Rights. This difference was deemed an asset because the interest-free note was a condition of the advertising right agreement. On November 25, 2014, CEM amended its 2010 agreement with Lotus TV whereby Lotus TV agreed to accelerate its repayment of the loan balance in annual instalments of $2,000,000 (amended to annual minimum instalments of $1,000,000 on December 28, 2015) each starting from 2015 until the entire remaining loan balance shall have been paid in full. Additionally, CEM agreed to forego its exclusive advertising rights granted by Lotus TV, but remain as Lotus TV’s preferred advertising agent. As a result of the November 25, 2014 amendment to accelerate repayment of the notes and to forego exclusive rights but remain as a preferred agent, the Company increased the carrying value of the notes receivable by $1,889,427 and decreased the intangible asset by $1,889,427. The adjustment was based on the calculated present value of the notes in aggregate using annual repayment installments of $2 million beginning in 2015 until paid in full and an effective interest rate of 8%. A summary of the notes receivable is as follows: Schedule of Notes Receivable Issuance Date March 31, 2016 December 31, 2015 December 17, 2010 $ 1,934,361 $ 1,935,309 January 31, 2011 784,577 784,961 May 12, 2011 5,635,437 5,638,200 August 9, 2011 618,995 619,299 April 9, 2013 600,738 601,033 February 17, 2014 1,005,868 1,006,361 June 13, 2014 386,873 387,063 Total principal 10,966,849 10,972,226 Total repayments (2,062,188) (2,063,199) Discount (1,331,609) (1,467,049) Notes receivable, net $ 7,573,052 $ 7,441,978 For the three months ended March 31, 2016 and 2015, the Company recorded interest income on the notes of $134,393 and $102,182, respectively. At December 31, 2015, the Company determined that the advertising right was impaired and recorded an impairment loss of $1,295,605 (translated at average exchange rate for the year ended December 31, 2015). The net amount of the advertising right was $0 at March 31, 2016 and December 31, 2015. For the three months ended March 31, 2016 and 2015, the Company recorded amortization expense of $0 and $72,545, respectively.

Note 6 - Income Taxes

Note 6 - Income Taxes	3 Months Ended
	Mar. 31, 2016
Notes
Note 6 - Income Taxes	Note 6 – Income Taxes The Company operates through the parent company in the United States and a subsidiary in Macau, China. Income taxes have been provided based upon the tax laws and rates of the countries in which operations are conducted and income is earned. Effective January 1, 2008, the Chinese government enacted the Corporate Income Tax Law, and promulgated related regulations, which, among other things, imposes a unified income tax rate of 25% for both domestic and foreign invested enterprises. The tax rate for Macau is 12%. As of March 31, 2016, the Company had net operating loss carry-forwards of approximately $701,000 in U.S. and $1,237,000 in Macau. Due to the Company’s accumulated net losses, there was no provision for income taxes. The Company’s effective tax rate for the period ended March 31, 2016 was 0% due to the net operating loss carry-forward. A valuation allowance equal to the tax benefit of the accumulated net operating losses has been established since it is uncertain that future taxable income from operations in the United States of America will be realized during the applicable carry-forward periods. The net operating loss carry-forwards may be limited under the change of control provisions of the Internal Revenue Code, Section 382. The following are the major tax jurisdictions in which the Company operates and the tax year that net operating loss carry-forward subject to expiration: Jurisdiction Expiration United States 2019 - 2036 Macau 2016 - 2019

Note 7 - Advertising Revenues

Note 7 - Advertising Revenues	3 Months Ended
	Mar. 31, 2016
Notes
Note 7 - Advertising Revenues	Note 7 – Advertising Revenues In October 2014, the Company entered into an advertising agreement with a third party. Pursuant to the agreement, the Company agreed to provide advertising service to the third party from January 1, 2015 to December 31, 2015 for a monthly fee of approximately $38,300 (HK$300,000) with service from July to December 2015 free of charge. The Company received prepayment from the third party in 2014 and recorded deferred revenue of $232,028 at December 31, 2014. For the three months ended March 31, 2015, the Company recorded advertising revenue of approximately $58,000 (HK$450,000) related to this agreement. In December 2015, the Company entered into a new advertising agreement with the third party. Pursuant to the agreement, the Company agreed to provide advertising service to the third party from January 1, 2016 to December 31, 2016 for approximately $270,000 (HK$ 2,100,000) with service from January to May 2016 free of charge. The Company received prepayment of approximately $270,000 (HK$ 2,100,000) from the third party in February 2016. For the three months ended March 31, 2016, the Company recorded advertising revenue of approximately $68,000 (HK$525,000) related to this agreement. As of March 31, 2016, the Company had deferred revenue of $203,108 (HK$1,575,000). All of the Company’s revenues are from one customer for the three months ended March 31, 2016 and 2015.

Note 8 - Commitments and Contin

Note 8 - Commitments and Contingencies	3 Months Ended
	Mar. 31, 2016
Notes
Note 8 - Commitments and Contingencies	Note 8 - Commitments and Contingencies In consideration for Lotus TV’s grant of the advertising right, CEM agreed to pay Lotus TV a fixed annual fee every year regardless of the total amount of advertising revenues received by CEM. Under the agreement, CEM paid Lotus TV an initial annual fee of approximately $128,900 (HK$1,000,000) for the first year of the agreement, which annual fee will increase at 10% every year for the following five years. As of March 31, 2016 and December 31, 2015, the Company had license fee payable of $51,922 and $0, respectively. For the three months ended March 31, 2016 and 2015, the Company recorded license fee expense of $51,796 and $47,195, respectively. The Company’s future minimum annual license fee payments under the agreement for years ending December 31 after March 31, 2016 are as follows: Schedule of Future Minimum Annual License Fee Payment Amount Minimum license fee payable in 2016 $ 155,765 Minimum license fee payable in 2017 207,687 Minimum license fee payable in 2018 207,687 Minimum license fee payable in 2019 207,687 Minimum license fee payable in 2020 and thereafter 138,458 Total $ 917,284

Note 2 - Summary of Significa13

Note 2 - Summary of Significant Accounting Policies: Basic Presentation (Policies)	3 Months Ended
	Mar. 31, 2016
Policies
Basic Presentation	Basic Presentation The accompanying unaudited consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim unaudited consolidated financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. The unaudited consolidated financial statements furnished reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2015 and notes thereto contained in the Company’s Annual Report on Form 10-K (Amendment No. 1) filed on April 18, 2016.

Note 2 - Summary of Significa14

Note 2 - Summary of Significant Accounting Policies: Consolidation Scope and Principles of Consolidation (Policies)	3 Months Ended
	Mar. 31, 2016
Policies
Consolidation Scope and Principles of Consolidation	Consolidation Scope and Principles of Consolidation The consolidated financial statements present the financial position and the results of operations of Credit One Financial, Inc. and its 100% owned subsidiary, CEM International Ltd. All significant intercompany transactions and balances have been eliminated in consolidation.

Note 2 - Summary of Significa15

Note 2 - Summary of Significant Accounting Policies: Use of Estimates in The Preparation of The Financial Statements (Policies)	3 Months Ended
	Mar. 31, 2016
Policies
Use of Estimates in The Preparation of The Financial Statements	Use of Estimates in the Preparation of the Financial Statements The preparation of financial statements in conformity with generally accepted accounting principles 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 revenues and expenses during the reporting period. Actual results could differ from those estimates and those differences could be material.

Note 2 - Summary of Significa16

Note 2 - Summary of Significant Accounting Policies: Fair Value Measurements (Policies)	3 Months Ended
	Mar. 31, 2016
Policies
Fair Value Measurements	Fair Value Measurements The Company follows accounting guidance relating to fair value measurements. This guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows: Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. Level 2 – inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. Level 3 – unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the unobservable inputs. The fair value of the Company’s financial instruments, which consist principally of cash and cash equivalents, are based on level 1 input, and equal carrying amounts.

Note 2 - Summary of Significa17

Note 2 - Summary of Significant Accounting Policies: Foreign Currency (Policies)	3 Months Ended
	Mar. 31, 2016
Policies
Foreign Currency	Foreign Currency The Company reports its financial position and results of operations in U.S. dollars. For its subsidiaries that have functional currencies that are foreign currencies, the elements of the financial statements are translated by using a current exchange rate. For assets and liabilities, the exchange rate at the balance sheet date is used. Revenues, expenses, gains, and losses were translated at the average exchange rate for the periods presented. Transaction adjustments result from the process of translating the subsidiary’ financial statements into U.S. dollars are not included in determining net income, but are reported in other comprehensive income (loss). Foreign currency transactions are transactions denominated in a currency other than the entity's functional currency. At the date the transaction is recognized, each asset, liability, revenue, expense, gain, or loss arising from the transaction is measured and recorded in the functional currency of the recording entity by use of the exchange rate in effect at that date. At each balance sheet date, recorded balances that are denominated in a currency other than the functional currency of the recording entity are adjusted to reflect the current exchange rate, with any resulting differences reported in the current period statement of operations.

Note 2 - Summary of Significa18

Note 2 - Summary of Significant Accounting Policies: Cash and Cash Equivalents (Policies)	3 Months Ended
	Mar. 31, 2016
Policies
Cash and Cash Equivalents	Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Note 2 - Summary of Significa19

Note 2 - Summary of Significant Accounting Policies: Long-term Notes Receivable (Policies)	3 Months Ended
	Mar. 31, 2016
Policies
Long-term Notes Receivable	Long-Term Notes Receivable Long-term notes receivable are recorded at issuance at its present value using an effective interest rate. At the balance sheet date, the notes are revalued with the change in present value recorded as interest income in the Consolidated Statements of Operations.

Note 2 - Summary of Significa20

Note 2 - Summary of Significant Accounting Policies: Impairment of Long Lived Assets (Policies)	3 Months Ended
	Mar. 31, 2016
Policies
Impairment of Long Lived Assets	Impairment of Long Lived Assets Management reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison for the carrying amount of an asset to future cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount exceeds the fair value of the assets which considers the discounted future net cash flows.

Note 2 - Summary of Significa21

Note 2 - Summary of Significant Accounting Policies: Revenue Recognition (Policies)	3 Months Ended
	Mar. 31, 2016
Policies
Revenue Recognition	Revenue Recognition The Company recognizes revenue in accordance with Securities and Exchange Commission revenue recognition accounting standards. As an advertising agent, CEM is in the service business dedicated to planning and handling advertising for its clients. Advertising revenue is recognized upon the delivery of the contracted advertising services and when no significant Company performance obligation remains. Service revenue is recognized as the contracted services are rendered.

Note 2 - Summary of Significa22

Note 2 - Summary of Significant Accounting Policies: Provision For Income Taxes (Policies)	3 Months Ended
	Mar. 31, 2016
Policies
Provision For Income Taxes	Provision for Income Taxes An asset and liability approach is used for financial accounting and reporting for income taxes. Deferred income taxes arise from temporary differences between income tax and financial reporting and principally relate to recognition of revenue and expenses in different periods for financial and tax accounting purposes and are measured using currently enacted tax rates and laws. In addition, a deferred tax asset can be generated by net operating loss carryforwards. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.

Note 2 - Summary of Significa23

Note 2 - Summary of Significant Accounting Policies: Earnings (loss) Per Common Share (Policies)	3 Months Ended
	Mar. 31, 2016
Policies
Earnings (loss) Per Common Share	Earnings (Loss) Per Common Share Earnings (loss) Per Common Share (“EPS”) is computed by dividing net income available to common stockholders by the weighted average number of common stock shares outstanding during the year. Diluted EPS is computed by dividing net income available to common stockholders by the weighted average number of common stock shares outstanding during the year plus potential dilutive instruments such as stock options and warrants. The effect of stock options on diluted EPS is determined through the application of the treasury stock method, whereby proceeds received by the Company based on assumed exercises are hypothetically used to repurchase the Company's common stock at the average market price during the period. The Company has no stock options, warrants or other potentially dilutive instruments outstanding at March 31, 2016 and 2015.

Note 2 - Summary of Significa24

Note 2 - Summary of Significant Accounting Policies: Subsequent Events (Policies)	3 Months Ended
	Mar. 31, 2016
Policies
Subsequent Events	Subsequent Events The Company’s management reviewed all material events through the date of the consolidated financial statements were issued for subsequent event disclosure consideration.

Note 2 - Summary of Significa25

Note 2 - Summary of Significant Accounting Policies: Reclassification (Policies)	3 Months Ended
	Mar. 31, 2016
Policies
Reclassification	Reclassification Certain prior year amounts have been reclassified for consistency with the current period presentation

Note 2 - Summary of Significa26

Note 2 - Summary of Significant Accounting Policies: Recently Issued Accounting Standards (Policies)	3 Months Ended
	Mar. 31, 2016
Policies
Recently Issued Accounting Standards	Recently Issued Accounting Standards In May 2014, a pronouncement was issued that creates common revenue recognition guidance for U.S. GAAP and International Financial Reporting Standards. The new guidance supersedes most preexisting revenue recognition guidance. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, with an option to adopt the standard one year earlier. The new standard is to be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is currently evaluating the impact of the new pronouncement on its financial statements. In February 2016, a pronouncement was issued that creates new accounting and reporting guidelines for leasing arrangements. The new guidance requires organizations that lease assets to recognize assets and liabilities on the balance sheet related to the rights and obligations created by those leases, regardless of whether they are classified as finance or operating leases. Consistent with current guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease primarily will depend on its classification as a finance or operating lease. The guidance also requires new disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The new standard is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with early application permitted. The new standard is to be applied using a modified retrospective approach. The Company is currently evaluating the impact of the new pronouncement on its financial statements. The Company does not believe that any other recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements.

Note 5 - Long-term Notes Rece27

Note 5 - Long-term Notes Receivable and Advertising Right: Schedule of Accounts, Notes, Loans and Financing Receivable (Tables)	3 Months Ended
	Mar. 31, 2016
Tables/Schedules
Schedule of Accounts, Notes, Loans and Financing Receivable	Issuance Date March 31, 2016 December 31, 2015 December 17, 2010 $ 1,934,361 $ 1,935,309 January 31, 2011 784,577 784,961 May 12, 2011 5,635,437 5,638,200 August 9, 2011 618,995 619,299 April 9, 2013 600,738 601,033 February 17, 2014 1,005,868 1,006,361 June 13, 2014 386,873 387,063 Total principal 10,966,849 10,972,226 Total repayments (2,062,188) (2,063,199) Discount (1,331,609) (1,467,049) Notes receivable, net $ 7,573,052 $ 7,441,978

Note 8 - Commitments and Cont28

Note 8 - Commitments and Contingencies: Schedule of Future Minimum Annual License Fee Payment (Tables)	3 Months Ended
	Mar. 31, 2016
Tables/Schedules
Schedule of Future Minimum Annual License Fee Payment	Amount Minimum license fee payable in 2016 $ 155,765 Minimum license fee payable in 2017 207,687 Minimum license fee payable in 2018 207,687 Minimum license fee payable in 2019 207,687 Minimum license fee payable in 2020 and thereafter 138,458 Total $ 917,284

Note 5 - Long-term Notes Rece29

Note 5 - Long-term Notes Receivable and Advertising Right: Schedule of Accounts, Notes, Loans and Financing Receivable (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Details
December 17, 2010	$ 1,934,361	$ 1,935,309
January 31, 2011	784,577	784,961
May 12, 2011	5,635,437	5,638,200
August 9, 2011	618,995	619,299
April 9, 2013	600,738	601,033
February 17, 2014	1,005,868	1,006,361
June 13, 2014	386,873	387,063
Total principal	10,966,849	10,972,226
Total repayments	(2,062,188)	(2,063,199)
Discount	(1,331,609)	(1,467,049)
Notes receivable, net	$ 7,573,052	$ 7,441,978