Document and Entity Information
Document and Entity Information - USD ($) | 6 Months Ended | |
Dec. 31, 2016 | Feb. 10, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | China Media Inc. | |
Entity Central Index Key | 1,434,674 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Public Float | $ 0 | |
Entity Common Stock, Shares Outstanding | 39,750,000 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,017 |
Consoldiated Balance Sheets (Un
Consoldiated Balance Sheets (Unaudited) - USD ($) | Dec. 31, 2016 | Jun. 30, 2016 |
Current assets | ||
Cash and cash equivalents | $ 7,052 | $ 37,190 |
Accounts receivable, net of allowance of 614,053 and 641,810 at December 31, 2016 and June 30, 2016, respectively | 578,942 | 605,112 |
Notes receivable, net of allowance of 2,046,207 and 2,138,702 at December 31, 2016 and June 30, 2016, respectively | 2,017,404 | 2,138,702 |
Prepaid and other receivable | 148,139 | 155,020 |
Total current assets | 2,751,537 | 2,936,024 |
Fixed assets, net | 16,577 | 18,142 |
Film costs | 720,077 | 752,627 |
Prepaid and other assets | 720,077 | 752,627 |
Total assets | 4,208,268 | 4,459,420 |
Current liabilities | ||
Accounts payable | 8,857 | 9,122 |
Accrued liabilities and other payable | 283,884 | 286,437 |
Due to related parties | 325,633 | 272,501 |
Total current liabilities | 618,374 | 568,060 |
Total liabilities | 618,374 | 568,060 |
Stockholders' equity | ||
Common stock, 0.00001 par value, 180,000,000 shares authorized; 39,750,000 shares issued and outstanding at December 31, 2016 and June 30, 2016 | 398 | 398 |
Additional paid-in capital | 11,265,945 | 11,257,801 |
Accumulated other comprehensive income | 510,393 | 674,991 |
Accumulated deficit | (8,186,842) | (8,041,830) |
Total stockholders' equity | 3,589,894 | 3,891,360 |
Total liabilities and stockholders' equity | $ 4,208,268 | $ 4,459,420 |
Consoldiated Balance Sheets (U3
Consoldiated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Dec. 31, 2016 | Jun. 30, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 639,308 | $ 641,810 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 180,000,000 | 180,000,000 |
Common stock, shares issued | 39,750,000 | 39,750,000 |
Common stock, shares outstanding | 39,750,000 | 39,750,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | ||||
Revenues | ||||
Cost of revenues | ||||
Gross profit | ||||
Selling, general and administrative | 102,516 | 97,015 | 140,349 | 133,553 |
Depreciation and amortization expense | 396 | 573 | 802 | 1,056 |
Total operating expenses | 102,912 | 97,588 | 141,151 | 134,609 |
Other income (expense) | ||||
Interest income | 61,714 | |||
Interest expense | (4,038) | (11,641) | (8,174) | (11,056) |
Other expense | 4,313 | 4,313 | ||
Net income (loss) before income taxes | (102,637) | (109,229) | (145,012) | (83,951) |
Income taxes | ||||
Net income (loss) | (102,637) | (109,229) | (145,012) | (83,951) |
Net income (loss) | (102,637) | (109,229) | (145,012) | (83,951) |
Foreign currency translation loss | (149,433) | (148,612) | (164,598) | (460,413) |
Comprehensive loss | $ (252,070) | $ (257,841) | $ (309,610) | $ (544,364) |
Net income (loss) per common share, basic and diluted | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted average number of shares outstanding-basic and diluted | 39,750,000 | 39,750,000 | 39,750,000 | 39,750,000 |
Consoldiated Statements of Cash
Consoldiated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS OPERATING ACTIVITIES | ||
Net income (loss) | $ (145,012) | $ (83,951) |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Imputed interest | 8,144 | 11,056 |
Depreciation expense | 802 | 1,056 |
Changes in operating assets and liabilities: | ||
Prepaid and other receivable | 181 | (795,768) |
Accrued liabilities and other payable | 10,119 | 25,647 |
Net change in film costs | 1,598,772 | |
Net cash provided by (used in) operating activities | (125,766) | 756,812 |
CASH FLOW INVESTING ACTIVITIES | ||
Collection of notes receivable | 30,004 | |
Net cash provided by investing activities | 30,004 | |
CASH FLOW FINANCING ACTIVITIES | ||
Proceeds from related parties | 66,785 | 57,456 |
Repayments to related parties | (799,386) | |
Net cash used in financing activities | 66,785 | (741,930) |
Effect of exchange rate changes on cash | (1,161) | (13,214) |
NET CHANGE IN CASH AND CASH EQUIVALENTS | (30,138) | 1,668 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR | 37,190 | 75,612 |
CASH AND CASH EQUIVALENTS AT END OF THE YEAR | 7,052 | 77,280 |
SUPPLEMENTAL INFORMATION: | ||
Interest paid | ||
Income taxes paid |
Description of Business
Description of Business | 6 Months Ended |
Dec. 31, 2016 | |
Description Of Business | |
Description of Business | NOTE 1. Description of Business China Media Inc. (“we”, “our”, the “Company”, “China Media”), formerly Protecwerx Inc., was incorporated in the State of Nevada on October 16, 2007. The Company does not conduct any substantive operations of its own; rather, it conducts its primary business operations through Vallant Pictures Entertainment Co., Ltd., its wholly owned subsidiary incorporated under the laws of the British Virgin Islands, which in turn, conducts its business through Xi’an TV Media Co. Ltd. (“Xi’An TV”). Effective control over Xi’An TV was transferred to the Company through the series of contractual arrangements without transferring legal ownership in Xi’An TV. As a result of these contractual arrangements, the Company maintained the ability to approve decisions made by Xi’An TV and was entitled to substantially all of the economic benefits of Xi’An TV. Xi’An TV was incorporated in Xi’An, Shaan’xi Province, People’s Republic of China (“PRC”) and is in the business of investing, producing and developing film and television programming for the Chinese market. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Dec. 31, 2016 | |
Summary Of Significant Accounting Policies | |
Summary of Significant Accounting Policies | NOTE 2. Summary of Significant Accounting Policies Basis of Presentation and Consolidation The accompanying unaudited interim consolidated financial statements of China Media have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s annual financial statements for the year ended June 30, 2016. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the year ended June 30, 2016 have been omitted. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes, including estimates of ultimate revenues and ultimate costs of film and television products, the amount of receivables that ultimately will be collected, the potential outcome of future tax consequences of events that have been recognized in the Company’s financial statements and loss contingencies. Actual results could differ from those estimates. To the extent that there are material differences between these estimates and actual results, the Company’s financial condition or results of operations will be affected. Estimates are made based on past experience and other assumptions that management believes are reasonable under the circumstances, and management evaluates these estimates on an ongoing basis. Recent Accounting Pronouncements In October 2016, the FASB issued ASU No. 2016-17, “Consolidation (Topic 810): Interest Held through Related Parties That Are under Common Control”. These amendments change the evaluation of whether a reporting entity is the primary beneficiary of a variable interest entity by changing how a reporting entity that is a single decision maker of a variable interest entity treats indirect interests in the entity held through related parties that are under common control with the reporting entity. If a reporting entity satisfies the first characteristic of a primary beneficiary (such that it is the single decision maker of a variable interest entity), the amendments require that reporting entity, in determining whether it satisfies the second characteristic of a primary beneficiary, to include all of its direct variable interests in a variable interest entity and, on a proportionate basis, its indirect variable interests in a variable interest entity held through related parties, including related parties that are under common control with the reporting entity. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity adopts the pending content that links to this paragraph in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements. In December 2016, the FASB issued ASU No. 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers”. The amendments in ASU 2016-20 affect narrow aspects of the guidance issued in ASU 2014-09 including Loan Guarantee Fees, Contract Costs, Provisions for Losses on Construction-Type and Production-Type Contracts, Disclosure of Remaining Performance Obligations, Disclosure of Prior Period Performance Obligations, Contract Modifications, Contract Asset vs. Receivable, Refund Liability, Advertising Costs, Fixed Odds Wagering Contracts in the Casino Industry, and Costs Capitalized for Advisors to Private Funds and Public Funds. The amendments in this ASU is effective for public companies for annual periods beginning after December 15, 2017, including interim periods within those periods. Early adoption is permitted under certain circumstances. The amendments should be applied prospectively as of the beginning of the period of adoption. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions | |
Related Party Transactions | NOTE 3. Related Party Transactions From time to time, the Company borrowed loans from Dean Li, the President and Chief Executive Officer of the Company. As of December 31, 2016 and June 30, 2016, the Company owed Dean Li $325,633 and $272,501, respectively. The loans borrowed from Mr. Dean Li are non-secured, free of interest with no specified maturity date. The imputed interests are assessed as an expense to the business operation and an addition to the paid-in-capital and calculated based on annual interest rate in the range of 4.60-6.56% with reference to one-year loan. In July 2015, the Company entered into an agreement to invest RMB 5 million (approximately $752,627) in a film that is produced by Beijing Huaxia Star Media Co., Ltd. and the payment was made in August 2015. As of December 31, 2016, the film was still in preparation stage. Dean Li, the President and Chief Executive Officer of the Company, holds 13% equity interest in Beijing Huaxia Star Media Co., Ltd. |
Notes Receivable
Notes Receivable | 6 Months Ended |
Dec. 31, 2016 | |
Notes Receivable | |
Notes Receivable | NOTE 4. Notes Receivable, Net On March 20, 2013, the Company lent RMB 946,500 (approximately $155,000) in the form of an interest free loan to China Fengde Movie and TV Copyright Agency (“ZhongshiFengde”), one of the Company’s business partners. The Company collected RMB 530,000 (approximately $86,305) as of June 30, 2015. No repayment was collected during the year ended June 30, 2016. As of December 31, 2016, an allowance of RMB 208,250 (approximately $29,991) was reserved by the Company against the note receivable. On June 13, 2014, the Company lent RMB 18 million (approximately $2,931,119) to Shaan’xi Hushi Culture Communication Company (SHCC), a company owned by a business friend of Dean Li, the President and Chief Executive Officer of the Company. Based on the agreement, the Company will waive interest on the loan if SHCC repays the loan within 30 days; the Company will charge interest rate at 200% of the prevailing PRC prime rate if SHCC repays the loan after 30 days. In July 2014, the Company received repayment of RMB 11 million (approximately $1,786,410). On January 8, 2015, the Company received interest of RMB 455,000 (approximately $74,165) on the loan. The outstanding balance was RMB 7 million (approximately $1,008,108) as of December 31, 2016 and an allowance of RMB 3.5 million (approximately $504,054) was reserved by the Company against the note receivable. On July 1, 2014, the Company lent an additional RMB 3 million (approximately $487,203) to SHCC with three months term. Based on the agreement, the Company will waive interest on the loan if SHCC repays the loan within 30 days; the Company will charge interest rate at four times of the current bank loan rate if SHCC repays the loan after 30 days. On January 19, 2015, the Company received interest of RMB 360,000 (approximately $58,694) on the loan. In September 2016, the Company received repayment of RMB 100,000 (approximately $15,002) from SHCC. An allowance of RMB 1.5 million (approximately $216,023) was reserved by the Company against the note receivable as of December 31, 2016. On November 30, 2012, the Company entered into an agreement with ZhongshiFengde to co-purchase copyrights of two TV series with the Company’s total investment at RMB 18 million (approximately $2.86 million at the time of investment). On January 28, 2015, both parties agreed to transfer the Company’s payment in these two TV series to a short-term loan to ZhongshiFengde as the copyrights purchase was not successfully completed. As a result, film costs of approximately $2.8 million were reclassified to notes receivable. In September 2016, the Company received repayment of RMB 100,000 (approximately $15,002) from ZhongshiFengde. As of December 31, 2016, the Company reserved RMB 9 million (approximately $1,296,139) against the notes receivable. |
Summary of Significant Accoun10
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Dec. 31, 2016 | |
Summary Of Significant Accounting Policies Policies | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying unaudited interim consolidated financial statements of China Media have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s annual financial statements for the year ended June 30, 2016. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the year ended June 30, 2016 have been omitted. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes, including estimates of ultimate revenues and ultimate costs of film and television products, the amount of receivables that ultimately will be collected, the potential outcome of future tax consequences of events that have been recognized in the Company’s financial statements and loss contingencies. Actual results could differ from those estimates. To the extent that there are material differences between these estimates and actual results, the Company’s financial condition or results of operations will be affected. Estimates are made based on past experience and other assumptions that management believes are reasonable under the circumstances, and management evaluates these estimates on an ongoing basis. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In October 2016, the FASB issued ASU No. 2016-17, “Consolidation (Topic 810): Interest Held through Related Parties That Are under Common Control”. These amendments change the evaluation of whether a reporting entity is the primary beneficiary of a variable interest entity by changing how a reporting entity that is a single decision maker of a variable interest entity treats indirect interests in the entity held through related parties that are under common control with the reporting entity. If a reporting entity satisfies the first characteristic of a primary beneficiary (such that it is the single decision maker of a variable interest entity), the amendments require that reporting entity, in determining whether it satisfies the second characteristic of a primary beneficiary, to include all of its direct variable interests in a variable interest entity and, on a proportionate basis, its indirect variable interests in a variable interest entity held through related parties, including related parties that are under common control with the reporting entity. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity adopts the pending content that links to this paragraph in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements. In December 2016, the FASB issued ASU No. 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers”. The amendments in ASU 2016-20 affect narrow aspects of the guidance issued in ASU 2014-09 including Loan Guarantee Fees, Contract Costs, Provisions for Losses on Construction-Type and Production-Type Contracts, Disclosure of Remaining Performance Obligations, Disclosure of Prior Period Performance Obligations, Contract Modifications, Contract Asset vs. Receivable, Refund Liability, Advertising Costs, Fixed Odds Wagering Contracts in the Casino Industry, and Costs Capitalized for Advisors to Private Funds and Public Funds. The amendments in this ASU is effective for public companies for annual periods beginning after December 15, 2017, including interim periods within those periods. Early adoption is permitted under certain circumstances. The amendments should be applied prospectively as of the beginning of the period of adoption. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements. |
Notes Receivable (Details)
Notes Receivable (Details) - Business Partner [Member] - Zhongshi Fengde [Member] - USD ($) | Dec. 31, 2016 | Mar. 20, 2013 |
Amount lent | $ 155,000 | |
Notes Receivable | $ 29,991 |