China Media (CHND) 10-Q 14 Feb 20 2019 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Dec. 31, 2019	Feb. 12, 2020
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 31, 2019
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2019
Current Fiscal Year End Date	--06-30
Entity File Number	333-150952
Entity Registrant Name	China Media Inc.
Entity Central Index Key	0001434674
Entity Tax Identification Number	46-0521269
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	Room 10128, No. 269-5-1 Taibai South Road
Entity Address, Address Line Two	Yanta District, Xi'an City
Entity Address, City or Town	Shaan'xi Province
Entity Address, Country	CN
Entity Address, Postal Zip Code	710068
City Area Code	86
Local Phone Number	298765-1114
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Entity Common Stock, Shares Outstanding		39,750,000

CONSOLIDATED BALANCE SHEETS (Un

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Dec. 31, 2019	Jun. 30, 2019
Current assets
Cash and cash equivalents	$ 1,987	$ 2,603
Other receivable, net of allowance of $116,428 and $118,145 at December 31, 2019 and June 30, 2019, respectively	3,294	3,780
Other current assets	431
Total current assets	5,712	6,383
Fixed assets, net	14,521	14,736
Operating lease right-of-use asset - related party	53,404
Total Assets	73,637	21,119
Current liabilities
Accounts payable	8,837	8,924
Accrued liabilities and other payable	303,152	287,592
Accrued liabilities - related party	43,352	73,270
Operating lease liability, current - related party	55,421
Due to related parties	797,147	717,974
Total current liabilities	1,207,909	1,087,760
Operating lease liability, non-current - related party	36,454
Total liabilities	1,244,363	1,087,760
Stockholders' equity
Common stock, $0.00001 par value, 180,000,000 shares authorized; 39,750,000 shares issued and outstanding at December 31, 2019 and June 30, 2019, respectively	398	398
Additional paid-in capital	11,338,914	11,323,440
Accumulated other comprehensive income	644,963	630,561
Accumulated deficit	(13,155,001)	(13,021,040)
Total stockholders' equity	(1,170,726)	(1,066,641)
Total liabilities and stockholders' equity	$ 73,637	$ 21,119

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2019	Jun. 30, 2019
Statement of Financial Position [Abstract]
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 LOSS - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Income Statement [Abstract]
Selling, general and administrative	$ 60,758	$ 60,256	$ 118,441	$ 119,464
Impairment loss		729,001		729,001
Total operating expenses	60,758	789,257	118,441	848,465
Other income (expense)
Interest expense	8,672	6,684	15,520	13,532
Net income before income taxes	(69,430)	(795,941)	(133,961)	(861,997)
Income taxes benefit
Net loss	(69,430)	(795,941)	(133,961)	(861,997)
Comprehensive income
Net loss	(69,430)	(795,941)	(133,961)	(861,997)
Foreign currency translation gain (loss)	(26,881)	1,824	14,402	7,235
Comprehensive income (loss)	$ (96,311)	$ (794,117)	$ (119,559)	$ (854,762)
Net income per common share, basic and diluted	$ 0	$ (0.02)	$ 0	$ (0.02)
Weighted average number of shares outstanding-basic and diluted	39,750,000	39,750,000	39,750,000	39,750,000

CONSOLIDATED STATEMENT OF CHANG

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT (Unaudited) - USD ($)	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income	Accumulated Deficit	Total
Beginning Balance at Jun. 30, 2018	$ 398	$ 11,298,300	$ 619,693	$ (12,056,334)	$ (137,943)
Beginning Balance (in shares) at Jun. 30, 2018	39,750,000
Foreign currency translation adjustment			5,411		5,411
Imputed interest on related party loan		6,801			6,801
Net income / (loss)				(66,056)	(66,056)
Ending Balance at Sep. 30, 2018	$ 398	11,305,101	625,104	(12,122,390)	(191,787)
Ending Balance (in shares) at Sep. 30, 2018	39,750,000
Beginning Balance at Jun. 30, 2018	$ 398	11,298,300	619,693	(12,056,334)	(137,943)
Beginning Balance (in shares) at Jun. 30, 2018	39,750,000
Foreign currency translation adjustment					7,235
Net income / (loss)					(861,997)
Ending Balance at Dec. 31, 2018	$ 398	11,311,784	626,928	(12,918,331)	(979,221)
Ending Balance (in shares) at Dec. 31, 2018	39,750,000
Beginning Balance at Sep. 30, 2018	$ 398	11,305,101	625,104	(12,122,390)	(191,787)
Beginning Balance (in shares) at Sep. 30, 2018	39,750,000
Foreign currency translation adjustment			1,824		1,824
Imputed interest on related party loan		6,683			6,683
Net income / (loss)				(795,941)	(795,941)
Ending Balance at Dec. 31, 2018	$ 398	11,311,784	626,928	(12,918,331)	(979,221)
Ending Balance (in shares) at Dec. 31, 2018	39,750,000
Beginning Balance at Jun. 30, 2019	$ 398	11,323,440	630,561	(13,021,040)	(1,066,641)
Beginning Balance (in shares) at Jun. 30, 2019	39,750,000
Foreign currency translation adjustment			41,283		41,283
Imputed interest on related party loan		6,804			6,804
Net income / (loss)				(64,531)	(64,531)
Ending Balance at Sep. 30, 2019	$ 398	11,330,244	671,844	(13,085,571)	(1,083,085)
Ending Balance (in shares) at Sep. 30, 2019	39,750,000
Beginning Balance at Jun. 30, 2019	$ 398	11,323,440	630,561	(13,021,040)	(1,066,641)
Beginning Balance (in shares) at Jun. 30, 2019	39,750,000
Foreign currency translation adjustment					14,402
Net income / (loss)					(133,961)
Ending Balance at Dec. 31, 2019	$ 398	11,338,914	644,963	(13,155,001)	(1,170,726)
Ending Balance (in shares) at Dec. 31, 2019	39,750,000
Beginning Balance at Sep. 30, 2019	$ 398	11,330,244	671,844	(13,085,571)	(1,083,085)
Beginning Balance (in shares) at Sep. 30, 2019	39,750,000
Foreign currency translation adjustment			(26,881)		(26,881)
Imputed interest on related party loan		8,670			8,670
Net income / (loss)				(69,430)	(69,430)
Ending Balance at Dec. 31, 2019	$ 398	$ 11,338,914	$ 644,963	$ (13,155,001)	$ (1,170,726)
Ending Balance (in shares) at Dec. 31, 2019	39,750,000

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
CASH FLOWS OPERATING ACTIVITIES
Net loss	$ (133,961)	$ (861,997)
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Imputed interest	15,474	13,484
Impairment loss on film costs		729,001
Operating lease right-of-use asset - related party	8,102
Changes in operating assets and liabilities:
Accrued liabilities and other payable	19,565	38,400
Operating lease liability - related party	1,431
Net cash provided by (used in) operating activities	(89,389)	(81,112)
CASH FLOW FINANCING ACTIVITIES
Proceeds from related parties	88,816	77,758
Net cash used in financing activities	88,816	77,758
Effect of exchange rate changes on cash	(43)	(260)
NET CHANGE IN CASH AND CASH EQUIVALENTS	(616)	(3,614)
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR	2,603	7,179
CASH AND CASH EQUIVALENTS AT END OF THE YEAR	1,987	3,565
SUPPLEMENTAL INFORMATION:
Interest paid
Income taxes paid

Description of Business

Description of Business	6 Months Ended
	Dec. 31, 2019
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. (“Vallant”), 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, 2019
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 Inc. 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, 2019. 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, 2019 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 On July 1, 2019, the Company adopted Accounting Standards Update (ASU) 2016-02, Leases (as amended by ASU 2018-01, 2018-10, 2018-11, 2018-20, and 2019-01, collectively ASC Topic 842), using the modified retrospective method. The Company elected the transition method which allows entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result of electing this transition method, previously reported financial information has not been restated to reflect the application of the new standard to the comparative periods presented. The Company elected the package of practical expedients permitted under the transition guidance within ASC 842, which among other things, allows the Company to carry forward certain historical conclusions reached under ASC Topic 840 regarding lease identification, classification, and the accounting treatment of initial direct costs. The Company elected not to record assets and liabilities on its consolidated balance sheet for new or existing lease arrangements with terms of 12 months or less. The Company recognizes lease expenses for such lease on a straight-line basis over the lease term. The primary impact of applying ASC Topic 842 is the initial recognition of $92,000 of lease liability and $62,000 of right-of-use asset on the Company’s consolidated balance sheet as of July 1, 2019, for lease classified as operating leases under ASC Topic 840, as well as enhanced disclosure of the Company’s leasing arrangement. There is no cumulative effect to retained earnings or other components of equity recognized as of July 1, 2019 and the adoption of this standard did not impact the consolidated statement of operations and comprehensive loss or consolidated statement of cash flows of the Company. The Company does not have finance lease arrangements as of December 31, 2019. See Note 4 for further discussion. Going Concern The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company has suffered recurring losses from operations and has a working capital deficit as of December 31, 2019. The Company also generated negative operating cash flows and incurred net loss for the six months ended December 31, 2019. These matters, among others, raise substantial doubt about our ability to continue as a going concern. While the Company's cash position may not be significant enough to support the Company's daily operations, management intends to raise additional funds by way of cooperation with other film and television producers, obtaining loans from shareholders and borrowing from Dean Li, the President and Chief Executive Officer of the Company, to fund operations. The consolidated financial statements do not include any adjustments that may result should the Company be unable to continue as a going concern.

Related Party Transactions

Related Party Transactions	6 Months Ended
	Dec. 31, 2019
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, 2019 and June 30, 2019, the Company owed Dean Li $797,147 and $717,974, 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 3.39%-4.15% with reference to one-year loan. The Company has a five-year lease agreement with Shaanxi Gede Trading Co., Ltd. (“Gede”) to lease its main office for a monthly rent of RMB11,167 (approximately $1,637) with a term of five years and expiration date on December 31, 2022. Gede’s Legal Representative and Chief Executive Officer is a major shareholder of the Company. As of December 31, 2019, the Company had right-of-use asset of $53,404 and lease liability of $91,875 of this lease. The Company also owed Gede rent payable of $43,352 for another lease that ended December 31, 2017. As of June 30, 2019, total rent payable owed to Gede was $81,823. See Note 4 for more details. On December 11, 2018, the Company provided a guarantee for Shaanxi Hengtai Mingji Trading Co., Ltd.’s (“Hengtai”) two-year loan borrowed from Chang’An Bank in the amount of RMB 210,532,513 (approximately $30,616,700 when borrowed). The loan was pledged by Hengtai’s receivable from Shaanxi Senzhiyuan Industrial Co., Ltd. (“Senzhiyuan”), a related party of the Company. See Note 5 for more details.

Operating Lease

Operating Lease	6 Months Ended
	Dec. 31, 2019
Notes to Financial Statements
Operating Lease	NOTE 4. Operating Lease On January 1, 2018, the Company entered into a lease agreement with Shaanxi Gede Trading Co., Ltd. (“Gede”), a related party, to lease its main office for a monthly rent of RMB11,167 (approximately $1,637) with a term of five years. Balance sheet information related to the operating lease is as follows: December 31, Operating lease right-of-use asset – related party $ 53,404 Operating lease liability, current – related party $ 55,421 Operating lease liability, non-current – related party 36,454 Total operating lease liability $ 91,875 For the six months ended December 31, 2019, the Company had operating lease cost of $9,533 and the reduction in operating lease right-of-use asset – related party was $8,102. No cash was paid for amount included in the measurement of operating lease liability – related party during the six months ended December 31, 2019. The weighted-average remaining lease term and the weighted-average discount rate of our lease are as follows: December 31, Weighted-average remaining lease term 3.00 years Weighted-average discount rate 4.85% The following table summarizes the maturity of our operating lease liability – related party as of December 31, 2019: For The Years Ended June 30, 2020 (remaining) $ 48,089 2021 19,235 2022 19,235 2023 and thereafter 9,618 Total lease payment 96,177 Less imputed interest (4,302) Total lease liability – related party $ 91,875

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	NOTE 5. Commitments and Contingencies On December 11, 2018, the Company entered into a guarantee agreement to provide guarantee for Shaanxi Hengtai Mingji Trading Co., Ltd.’s (“Hengtai”) two-year loan borrowed from Chang’An Bank in the amount of RMB 210,532,513 (approximately $30,616,700). The guarantee period is two years starting from the date the payment is due. The loan is pledged by Hengtai’s receivable from Shaanxi Senzhiyuan Industrial Co., Ltd. (“Senzhiyuan”) in the amount of RMB 226,000,000 and 50 million equity interest in Hengtai’s two shareholders. The controlling shareholder of Senzhiyuan is also a principal shareholder of the Company. The information of lease commitment is provided in Note 4.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Dec. 31, 2019
Disclosure Summary Of Significant Accounting Policies Policies Abstract
Basis of Presentation and Consolidation	Basis of Presentation and Consolidation The accompanying unaudited interim consolidated financial statements of China Media Inc. 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, 2019. 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, 2019 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 On July 1, 2019, the Company adopted Accounting Standards Update (ASU) 2016-02, Leases (as amended by ASU 2018-01, 2018-10, 2018-11, 2018-20, and 2019-01, collectively ASC Topic 842), using the modified retrospective method. The Company elected the transition method which allows entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result of electing this transition method, previously reported financial information has not been restated to reflect the application of the new standard to the comparative periods presented. The Company elected the package of practical expedients permitted under the transition guidance within ASC 842, which among other things, allows the Company to carry forward certain historical conclusions reached under ASC Topic 840 regarding lease identification, classification, and the accounting treatment of initial direct costs. The Company elected not to record assets and liabilities on its consolidated balance sheet for new or existing lease arrangements with terms of 12 months or less. The Company recognizes lease expenses for such lease on a straight-line basis over the lease term. The primary impact of applying ASC Topic 842 is the initial recognition of $92,000 of lease liability and $62,000 of right-of-use asset on the Company’s consolidated balance sheet as of July 1, 2019, for lease classified as operating leases under ASC Topic 840, as well as enhanced disclosure of the Company’s leasing arrangement. There is no cumulative effect to retained earnings or other components of equity recognized as of July 1, 2019 and the adoption of this standard did not impact the consolidated statement of operations and comprehensive loss or consolidated statement of cash flows of the Company. The Company does not have finance lease arrangements as of December 31, 2019. See Note 4 for further discussion.
Going Concern	Going Concern The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company has suffered recurring losses from operations and has a working capital deficit as of December 31, 2019. The Company also generated negative operating cash flows and incurred net loss for the six months ended December 31, 2019. These matters, among others, raise substantial doubt about our ability to continue as a going concern. While the Company's cash position may not be significant enough to support the Company's daily operations, management intends to raise additional funds by way of cooperation with other film and television producers, obtaining loans from shareholders and borrowing from Dean Li, the President and Chief Executive Officer of the Company, to fund operations. The consolidated financial statements do not include any adjustments that may result should the Company be unable to continue as a going concern.

Operating Lease (Tables)

Operating Lease (Tables)	6 Months Ended
	Dec. 31, 2019
Disclosure Commitments And Contingencies Tables Abstract
Schedule of Operating Lease	Balance sheet information related to the operating lease is as follows: December 31, Operating lease right-of-use asset – related party $ 53,404 Operating lease liability, current – related party $ 55,421 Operating lease liability, non-current – related party 36,454 Total operating lease liability $ 91,875
Schedule of Weighted-average remaining lease term	The weighted-average remaining lease term and the weighted-average discount rate of our lease are as follows: December 31, Weighted-average remaining lease term 3.00 years Weighted-average discount rate 4.85%
Schedule of maturity of operating lease liability	The following table summarizes the maturity of our operating lease liability – related party as of December 31, 2019: For The Years Ended June 30, 2020 (remaining) $ 48,089 2021 19,235 2022 19,235 2023 and thereafter 9,618 Total lease payment 96,177 Less imputed interest (4,302) Total lease liability – related party $ 91,875

Related Party Transactions (Det

Related Party Transactions (Details Narrative) - USD ($)	6 Months Ended
	Dec. 31, 2019	Jun. 30, 2019
Minimum [Member]
Range of Annual Imputed Interest Rate (as a percentage)	3.39%
Maximum [Member]
Range of Annual Imputed Interest Rate (as a percentage)	4.15%
Dean Li, President and Shareholder
Advance from Related party	$ 797,147	$ 717,974

Operating Lease (Details)

Operating Lease (Details) - USD ($)	6 Months Ended
	Dec. 31, 2019	Jun. 30, 2019
Disclosure Operating Lease Details Abstract
Operating lease right-of-use asset - related party	$ 53,404
Operating lease liability, current - related party	55,421
Operating lease liability, non-current - related party	36,454
Total operating lease liability	91,875
Operating Lease cost	9,533
Reduction in operating lease right-of-use asset - related party	$ 8,102
Weighted-average remaining lease term	3 years
Weighted-average discount rate	4.85%

Operating Lease (Details 2)

Operating Lease (Details 2)	Dec. 31, 2019USD ($)
Disclosure Operating Lease Details Abstract
2020	$ 48,089
2021	19,235
2022	19,235
2023	9,618
Total	96,177
Less imputed interest	(4,302)
Total lease liability - related party	$ 91,875