UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 2015
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to _____________
For the transition period from ____________ to _____________
Commission File Number 000-54769
ChinAmerica Andy Movie Entertainment Media Co. | ||
| (Exact name of registrant as specified in its charter) | ||
| Florida | 65-1170540 | |||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||
| 11015 Gatewood Drive Unit 103 Lakewood Ranch, FL 34211 | ||||
| (Address of principal executive offices, including zip code) | ||||
| (941) 224-6975 | ||||
| (Registrant’s telephone number, including area code) | ||||
15500 Roosevelt Boulevard Suite 305 Clearwater, FL 33760 (Former name, former address and former fiscal year, if changed since last report) | ||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer.☐ | Accelerated filer. ☐ |
Non-accelerated filer. ☐ (Do not check if a smaller reporting company) | Smaller reporting company. ☑ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ☑
As of August 10, 2015 there were 125,628,400 shares of common stock outstanding.
Page | ||
| Cautionary Note Regarding Forward-Looking Statements | 1 | |
| Item 1 | 2 | |
| Item 2 | 9 | |
| Item 3 | 14 | |
| Item 4 | 14 | |
| Item 6 | 15 | |
| 16 | ||
This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended, (the "Exchange Act"). These forward-looking statements are generally located in the material set forth under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" but may be found in other locations as well. These forward-looking statements are subject to risks and uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. You should not unduly rely on these statements.
We identify forward-looking statements by use of terms such as "may," "will," "expect," "anticipate," "estimate," "hope," "plan," "believe," "predict," "envision," "intend," "will," "continue," "potential," "should," "confident," "could" and similar words and expressions, although some forward-looking statements may be expressed differently. You should be aware that our actual results could differ materially from those contained in the forward-looking statements.
Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this report. These factors include, among others:
| · | our ability to raise capital; |
| · | our ability to execute on our growth strategies; |
| · | declines in general economic conditions in the markets where we may compete; |
| · | our anticipated needs for working capital; and |
| · | significant competition in the markets where we may operate. |
Where we express an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis.
Forward-looking statements speak only as of the date of this report or the date of any document incorporated by reference in this report. Except to the extent required by applicable law or regulation, we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.
CHINAMERICA ANDY MOVIE ENTERTAINMENT MEDIA CO.
BALANCE SHEETS
June 30, 2015 (unaudited) | December 31, 2014 (audited) | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 928,378 | $ | 167,717 | ||||
| Escrow funds held by related party | 440,119 | 837,296 | ||||||
| Prepaid expenses | 28,169 | 1,784 | ||||||
| Loan to shareholder | - | 325,600 | ||||||
| Total current assets | 1,396,666 | 1,332,397 | ||||||
| Total Assets | $ | 1,396,666 | $ | 1,332,397 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accrued payroll liabilities | 159,429 | - | ||||||
| Accrued expenses (other) | $ | 2,667 | $ | 2,667 | ||||
| Accrued income tax | 271,935 | 339,438 | ||||||
| Shareholder loan | 180,000 | - | ||||||
| Total current liabilities | 614,031 | 342,105 | ||||||
| Total Liabilities | $ | 614,031 | $ | 342,105 | ||||
| Stockholders’ equity | ||||||||
| Common Stock, $.01 par value, 5,000,000,000 shares authorized; 125,628,400 and 125,628,400 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively. | 1,256,284 | 1,256,284 | ||||||
| Additional paid-in capital | (924,900 | ) | (924,900 | ) | ||||
| Accumulated other comprehensive income | (20,172 | ) | (15,919 | ) | ||||
| Retained Earnings | 471,423 | 674,827 | ||||||
| Total stockholders’ equity | 782,635 | 990,292 | ||||||
| Total liabilities and stockholders’ equity | $ | 1,396,666 | $ | 1,332,397 | ||||
The accompanying notes are an integral part of these financial statements.
CHINAMERICA ANDY MOVIE ENTERTAINMENT MEDIA CO.
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Six Months Ended June 30, (unaudited) | Three Months Ended June 30, (unaudited) | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 (Restated) | |||||||||||||
| Revenue | $ | - | $ | 983,330 | $ | - | $ | 160,830 | ||||||||
| Expenses | ||||||||||||||||
| General and Administrative – Related Party | 66,380 | 104,683 | 47,330 | 22,433 | ||||||||||||
| General and Administrative - Officer Salary | 150,000 | - | 150,000 | - | ||||||||||||
| General and Administrative | 35,005 | 35,084 | 23,679 | 28,657 | ||||||||||||
| Total Operating Expenses | 251,385 | 139,767 | 221,009 | 51,090 | ||||||||||||
| Operating (Loss) Income | (251,385 | ) | 843,563 | (221,009 | ) | 109,740 | ||||||||||
| Other Income | ||||||||||||||||
| Interest Income | 3,530 | 967 | 438 | 738 | ||||||||||||
| Total Other Income | 3,530 | 967 | 438 | 738 | ||||||||||||
| Net Income (Loss) Before Income Taxes | $ | (247,855 | ) | $ | 844,530 | $ | (220,571 | ) | $ | 110,478 | ||||||
Provision For / (Benefit From) Income Taxes | (44,451 | ) | 212,800 | (34,274 | ) | 41,309 | ||||||||||
| Net Income | $ | (203,404 | ) | $ | 631,730 | $ | (186,297 | ) | $ | 69,169 | ||||||
| Foreign Currency Gain (Loss) | (4,253 | ) | (15,054 | ) | (1,338 | ) | 1,325 | |||||||||
| Net Comprehensive Income (Loss) | $ | (207,657 | ) | $ | 616,676 | $ | (187,635 | ) | $ | 70,494 | ||||||
| Earnings (Loss) Per Share - Basic and Dilutive | (0.00 | ) | 0.00 | (0.00 | ) | 0.00 | ||||||||||
| Weighted Average Shares | 125,628,400 | 124,945,306 | 125,628,400 | 125,488,400 | ||||||||||||
The accompanying notes are an integral part of these financial statements.
CHINAMERICA ANDY MOVIE ENTERTAINMENT MEDIA CO.
STATEMENTS OF CASH FLOWS
Six months ended June 30, (unaudited) | ||||||||
| 2015 | 2014 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net Income (Loss) | $ | (203,404 | ) | $ | 631,730 | |||
| Adjustments To Reconcile Net Income (Loss) To Net Cash Provided By (Used In) Operating Activities: | ||||||||
| Changes In Operating Assets and Liabilities: | ||||||||
| Funds Held In Escrow By Related Party | 397,177 | - | ||||||
| Accrued payroll | 159,429 | - | ||||||
| Accounts Payable and Accrued Expenses | - | 213,575 | ||||||
| Accrued Income Tax | (67,503 | ) | - | |||||
| Prepaid Expenses | (26,385 | ) | (513 | ) | ||||
| Total Adjustments | 462,718 | 213,062 | ||||||
| Net Cash (Used In) Provided By Operating Activities | 259,314 | 844,792 | ||||||
| Cash Flows From Investing Activities | ||||||||
| Collection On Shareholder Loan | 325,600 | - | ||||||
| Net Cash (Used In) Provided By Investing Activities | 325,600 | - | ||||||
| Cash Flows From Financing Activities | ||||||||
| (Repayments To) Advances From Related Parties | 180,000 | (24,616 | ) | |||||
| Net Cash (Used In) Provided By Financing Activities | 180,000 | (24,616 | ) | |||||
| Foreign Currency Gain (Loss) | (4,253 | ) | (15,054 | ) | ||||
| Net Increase (Decrease) In Cash | 760,661 | 805,122 | ||||||
| Cash At Beginning Of Year | 167,717 | 286,383 | ||||||
| Cash At End Of Year | $ | 928,378 | $ | 1,091,505 | ||||
| Supplemental Disclosures Of Cash Flow Information: | ||||||||
| Income Taxes Paid | $ | 23,052 | $ | 0 | ||||
| Non-Cash Investing and Financing Activities | ||||||||
| Issuance Of Common Stock For Converted Debt | $ | - | $ | 20,500 | ||||
The accompanying notes are an integral part of these financial statements.
CHINAMERICA ANDY MOVIE ENTERTAINMENT MEDIA CO.
NOTES TO FINANCIAL STATEMENTS
For the Three and Six Month Period Ended June 30, 2015 and June 30, 2014
(Unaudited)
NOTE 1. NATURE OF BUSINESS
Organization.
ChinAmerica Andy Movie Entertainment Media Co.(“CAME” or the “Company”) was incorporated under the laws of the State of Florida on September 26, 2002. The Company’s headquarters are located in Clearwater, Florida.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Use of Estimates. In the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair statement of (a) the result of operations for the three and six month period ended June 30, 2015 and 2014; (b) the financial position at June 30, 2015; and (c) cash flows for the six month period ended June 30, 2015 and 2014, have been made. Management believes that these estimates are reasonable and have been discussed with the Board of Directors; however, actual results could differ from those estimates.
The accompanying unaudited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information regarding the Company's significant accounting policies, refer to the audited financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission on April 1, 2015.
Cash and Cash Equivalents. The majority of cash is maintained with a major financial institution in Shanghai, China held on our behalf by AF Ocean Investment Management Company (Shanghai Ltd.) (“AF Ocean Shanghai”). There are also funds held in the United States. Deposits with these banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed on demand and, therefore, bear minimal risk. The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. All amounts referenced in these financial statements and this report are in U.S. Dollars unless otherwise stated.
Foreign Currency Translation. The Company addressed the effect of the exchange rate differences resulting from the translation for currency transferred to the Company for consulting services from an account held by AF Ocean Shanghai in China, by using the current day exchange rate from CNY to USD conversion. The accumulated other comprehensive income for the six month period ended June 30, 2015 was a net loss of $4,253. The effect of the foreign currency translation is recorded in comprehensive income. The relative value of the Chinese CNY to the United States USD remained relatively constant during the six month period ended June 30, 2015 ranging from .1628 on January 1, 2015 to .1611 on June 30, 2015, CNY to the USD.
Revenue Recognition. Revenue from consulting and management services is recognized according to the terms of the consulting and management services agreements. Generally, consulting and management services revenue will be recognized over the term of the agreement. Consulting Revenue recognized to date consists of pre-production research and strategizing, introduction of American talents and potential partners, training and global market consulting, especially regarding distribution and production in the United States. Revenue is not related to final film production or licensing and therefore is not subject to FASB ASC 926 – Films revenue recognition guidance.
Share-based Compensation. The Company may issue stock options whereby all share-based payments to employees, including grants of employee stock options are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). The Company had no common stock options or common stock equivalents granted or outstanding for all periods presented.
The Company accounts for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees. The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method. The Company accounts for non-employee share-based awards in accordance with the measurement and recognition provisions ASC Topic 505-50. The Company estimates the fair value of stock options at the grant date by using the Black-Scholes option-pricing model.
The Company may issue restricted stock for various business and administrative services. Cost for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached; or (ii) the date at which the counterparty’s performance is complete. There was no share-based compensation paid in the quarter ended June 30, 2015.
Income Taxes. The Company accounts for income taxes pursuant to the provisions of ASC 740-10, “Accounting for Income Taxes,” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. The tax effects of the temporary differences between reportable financial statement income and taxable income are recognized as deferred tax assets and liabilities.
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.
Earnings per Share. In accordance with ASC 260-10, “Earnings Per Share”, basic net earnings (loss) per common share is computed by dividing the net earnings (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share are computed using the weighted average number of common and dilutive common stock equivalent shares outstanding during the period.
Diluted earnings (loss) per share calculations are determined by dividing net income (loss) by the weighted average number of shares plus the effect of the dilutive potential common shares outstanding during the period using the treasury stock method.Diluted income per share includes the dilutive effects of stock options, warrants, and stock equivalents. To the extent stock options, stock equivalents and warrants are anti-dilutive; they are excluded from the calculation of diluted income per share.
Recent Accounting Pronouncements. The Company reviews new accounting standards as issued. No new standards had any material effect on these financial statements. The accounting pronouncements issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these financial statements as presented.
NOTE 3. GOING CONCERN
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of June 30, 2015, total assets exceeded total liabilities by $782,635. Total assets increased from $1,332,397 at December 31, 2014 to $1,396,666 at June 30, 2015, and total liabilities increased from $342,105 at December 31, 2014 to $614,031 at June 30, 2015.
We had consulting revenue of $0 and a net loss of ($186,297) for the three month and ($203,404) for the six month period ended June 30, 2015 as compared to revenue of $983,330 and a net income of $631,730 for the six month period ended June 30, 2014. These factors raise substantial doubt about our ability to continue as a going concern for a reasonable period of time.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
NOTE 4. RELATED PARTY TRANSACTIONS
On December 23, 2013, the Company and AF Ocean Shanghai entered into a management agreement for the collection and maintenance of all funds received in the People's Republic of China on behalf of the Company. All deposits received in China incur a management fee of ten percent (10%) due to AF Ocean Shanghai. During the six month period ended June 30, 2015, no payments have been received for this management service. As of June 30, 2015, the current balance in AF Ocean Shanghai, account held on behalf of the Company is $440,119.
Commencing on May 1, 2015, we renewed the management services agreement with AF Ocean Investment Management Company (“the Service Provider”) for an additional year. We share the same Chief Executive Officer and controlling shareholder as the Service Provider. We pay the Service Provider $20,480 per month for access to and use of office space at a location leased by the Service Provider from a third party, legal services, management and accounting related services including, without limitation, preparing periodic and other reports required to be filed under the Securities Exchange Act of 1934, preparing financial reports, bookkeeping, managing their websites, handling previous employee matters, and related governmental filings, handling advertising matters, and processing payables. (collectively, the “Services”). This amount also includes legal reviews of all SEC filings and rent for the Company’s office space.
In February 2015, the loan advanced in December, 2014 was paid back in full in the amount of $325,600 by February, 2015.
On April 27, 2015, the $299,000 loan made to a related party on March 13, 2015 was paid back in full.
On April 27, 2015, shareholder Andy Fan advanced the Company $180,000.
NOTE 5. INCOME TAXES
The Company’s tax expense differs from the “expected” tax expense for Federal income tax purposes (computed by applying the United States Federal tax rate of 34% and State tax rate of 5.5% to income before taxes). The tax effects of the temporary differences between reportable financial statement income and taxable income are recognized as deferred tax assets and liabilities.
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.
We had a net loss before income taxes of ($247,855) for the six month period ended June 30, 2015.
We have an estimated tax liability of $271,935 at an effective tax rate of 37.3%. All net operating carry forwards have been utilized. At June 30, 2015 we had an income tax benefit of $92,450 and adjustment to 2014 income tax expense of $47,999. The net tax benefit was ($44,451)
| Six Month Period Ended June 30, (Unaudited) | ||||||||
| 2015 | 2014 | |||||||
| Tax Expense (Benefit) At The Statutory Rate | $ | (92,450 | ) | $ | 212,800 | |||
| Change In Estimated Income Tax in 2014 | 47,999 | - | ||||||
| Total | $ | 44,451 | $ | 212,800 | ||||
NOTE 6. STOCKHOLDERS’ EQUITY
Common Stock
The total authorized capital stock of the corporation is five billion 5,000,000,000 shares.
The Company is authorized to issue five billion (5,000,000,000) shares of common stock, and one class of preferred blank check to be issued solely at the discretion of the Board. No shares of capital stock have been designated as preferred stock.
As of June 30, 2015 the Company had 125,628,400 shares of common stock issued and outstanding.
No shares were issued during the three month period ended June 30, 2015.
The Company has no options or warrants issued or outstanding.
NOTE 7. COMMITMENTS AND CONTINGENCIES
Related Party
On December 23, 2013, the Company entered into a management agreement with AF Ocean Shanghai for the collection and maintenance of all funds received in the People's Republic of China on behalf of the Company. All deposits received in China incur a management fee of ten percent (10%) due and payable to AF Ocean Shanghai. As of June 30, 2015, the current balance in AF Ocean Shanghai’s account held on behalf of the Company is $440,119.
On April 27, 2015, the related party loan in the amount of $299,000 was repaid in its entirety.
Commencing May 1, 2015, the Company renewed the management services agreement with the Service Provider to provide management services to the Company for an additional year. The Company pays the Service Provider $20,480 per month.
The amounts and terms of the above transaction may not necessarily be indicative of the amounts and terms that would have been incurred had comparable transactions been entered into with independent third parties.
Legal Matters
From time to time the Company may become a party to litigation matters involving claims against the Company. Management believes that there are no current matters that would have a material effect on the Company’s financial position or results of operations.
Leases and Facility
The office space is rented by the Service Provider, and the Company pays a monthly management fee to them for services provided which includes the Company’s rent.
NOTE 8. SUBSEQUENT EVENTS
Management has evaluated subsequent events through July 31, 2015, the date the financial statements were available to be issued. Management is not aware of any other significant events that occurred subsequent to the balance sheet date that would have a material effect on the financial statements thereby requiring adjustment or disclosure.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of financial condition and results of operations should be read in conjunction with our financial statements and related notes included elsewhere in this report. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. See "Cautionary Note Regarding Forward-Looking Statements." Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors discussed elsewhere in this report.
Overview
ChinAmerica Andy Movie Entertainment Media Co.("CAME" or the "Company") was incorporated under the laws of the State of Florida on September 26, 2002. On October 11, 2012, the Company changed its operations to focus on movie, entertainment and media.
We are looking to establish a CAME presence in Hengdian, China which is deemed to be the "Hollywood of China," as well as Hollywood, California. Our Board of Directors believes that we can operate as a movie, entertainment and documentary company during the next 9-12 months, increasing revenues of the Company. However, the production of our documentaries or animated films may take years to complete and future cash flows, if any, are impossible to predict at this time. The realization value from any production or animated film is largely dependent on factors beyond our control such as the market for our films.
Results of Operations
Six Month Period Ended June 30, 2015 and 2014
The following table provides a comparison of a summary of our results of operations for the six month period ended June 30, 2015 and 2014.
Six Months Ended June 30, (unaudited) | ||||||||||||
| 2015 | 2014 | % Change | ||||||||||
| Revenue From Operations | $ | - | $ | 983,330 | 100 | % | ||||||
| General and Administrative – Related Party | 66,380 | 104,683 | 37 | % | ||||||||
| General and Administrative - Officer Salary | 150,000 | - | 100 | % | ||||||||
| General and Administrative Expenses | 35,005 | 35,084 | 1 | % | ||||||||
| Total General and Administrative Expenses | 251,385 | 139,767 | 80 | % | ||||||||
| Income (Loss) From Operations | (251,385 | ) | 843,563 | 130 | % | |||||||
| Other Income (Expense) | ||||||||||||
| Interest Income | 3,530 | 967 | 265 | % | ||||||||
| Total Other Income (Expense), net | $ | 3,530 | $ | 967 | 265 | % | ||||||
| Net Income (Loss) Before Income Tax | $ | (247,855 | ) | $ | 844,530 | 130 | % | |||||
| Provision For / (Benefit From) Income Taxes | (44,451 | ) | 212,800 | 121 | % | |||||||
| Net Income (Loss) | $ | (203,404 | ) | $ | 631,730 | 133 | % | |||||
| Foreign Currency Gain (Loss) | (4,253 | ) | (15,054 | ) | 72 | % | ||||||
| Comprehensive Income | $ | (207,657 | ) | $ | 616,676 | 134 | % | |||||
| Income (Loss) Per Share: Basic and Diluted | (0.00 | ) | 0.00 | |||||||||
Revenue from Operations - For the six month period ended June 30, 2015, total revenue was $0 as compared to $822,500 for the six month period ended June 30, 2014. Loss from operations was ($251,385) for the six month period ended June 30, 2015 as compared to $843,563 for the six month period ended June 30, 2014. The decrease in revenue is due to the absence of new consulting contracts. Our Board of Directors has determined that we need to be focusing more on evaluating other opportunities both domestically and in China.
General and Administrative Expenses - General and administrative expenses decreased by $79 to $35,005 for the six month period ended June 30, 2015 as compared to $35,084 for the six month period ended June 30, 2014.
General and Administrative - Officer Salary – The officer salary expenses increased by $150,000 to $150,000 for the six month period ended June 30, 2015 as compared to $0 for the six month period ended June 30, 2014. The increase in is due to the new officer salary.
General and Administrative Expenses – Related Party. The related party expenses decreased by $38,303 to $66,380 for the six month period ended June 30, 2015 as compared to $104,683 for the six month period ended June 30, 2014. The decrease in expenses is due to the discontinued contract with Zhong Mei Yin Shi. A decrease in revenue deposited into and held by AF Ocean Shanghai decreases the management fee the Company has to pay to AF Ocean Shanghai.
Net Income (Loss) - As a result of the decrease in revenue and increase in expenses discussed above, our net income decreased, resulting in a net loss of ($203,404) for the six month period ended June 30, 2015 as compared to net income of $631,730 for the six month period ended June 30, 2014.
Three Month Period Ended June 30, 2015 and June 30, 2014
The following table provides a comparison of a summary of our results of operations for the three month period ended June 30, 2015 and 2014.
Three Months Ended June 30, (unaudited) | ||||||||||||
| 2015 | 2014 | % Change | ||||||||||
| Revenue From Operations | $ | - | $ | 160,830 | 100 | % | ||||||
| General and Administrative Expenses - Related Party | $ | 47,330 | $ | 22,433 | -111 | % | ||||||
| General and Administrative - Officer Salary | 150,000 | - | 100 | % | ||||||||
| General and Administrative Expenses | $ | 23,679 | $ | 28,657 | 18 | % | ||||||
| Total General and Administrative Expenses | $ | 221,009 | $ | 51,090 | -333 | % | ||||||
| Income (loss) From Operations | (221,009 | ) | 109,740 | 302 | % | |||||||
| Other Income (Expense) | ||||||||||||
| Interest Income | $ | 438 | $ | 738 | 41 | % | ||||||
| Total Other Income (Expense), Net | $ | 438 | $ | 738 | 41 | % | ||||||
| Net Income (Loss) Before Income Tax | $ | (220,571 | ) | $ | 110,478 | 300 | % | |||||
| Provision For / (Benefit From) Income Taxes | $ | (34,274 | ) | $ | 41,309 | 183 | % | |||||
| Net Income (Loss) | (186,297 | ) | 69,169 | 370 | % | |||||||
| Foreign Currency Gain (Loss) | $ | (1,338 | ) | $ | 1,325 | 203 | % | |||||
| Comprehensive Income | $ | (187,635 | ) | $ | 70,494 | 366 | % | |||||
| Income (loss) per share: basic and diluted | $ | (0.00 | ) | $ | 0.00 | |||||||
Revenue from Operations - For the three month period ended June 30, 2015, total revenue was $0 as compared to $160,830 for the three month period ended June 30, 2014. Loss from operations was ($221,009) for the three month period ended June 30, 2015 as compared to $109,740 for the three month period ended June 30, 2014. The decrease in revenue is due to the absence of new consulting contracts. Our Board of Directors has determined that we need to be focusing more on evaluating other opportunities both domestically and in China.
General and Administrative Expenses - General and administrative expenses decreased by $4,978 to $23,679 for the three month period ended June 30, 2015 as compared to $28,657 for the three month period ended June 30, 2014. The decrease in these expenses is attributable to the reduction in international travel expenses in 2015, and the timing in which the audit fees were paid in 2014.
General and Administrative - Officer Salary – The officer salary expenses increased by $150,000 to $150,000 for the three month period ended June 30, 2015 as compared to $0 for the three month period ended June 30, 2014. The increase is due to the new officer salary.
General and Administrative Expenses - Related party. The related party expenses increased by $24,897 to $47,330 for the three month period ended June 30, 2015 as compared to $22,433 for the three month period ended June 30, 2014. In May, 2015 the Company received notification from the Service Provider that the management fee would be increasing to properly cover the Company's operating expenses. The Company agreed and the management agreement was renewed in May, 2015.
Net Income (Loss) - As a result of the decrease in revenue and increase in expenses discussed above, our net income decreased, resulting in a net loss of ($186,297) for the three month period ended June 30, 2015 as compared to net income of $69,169 for the three month period ended June 30, 2014.
Liquidity and Capital Resources
General.
As of June 30, 2015, we had cash and cash equivalents of $928,378 as compared to cash and cash equivalents of $1,091,505 of June 30, 2014. We have met our cash needs through our consulting revenue and loans from shareholders. Our cash requirements are generally for professional services and general and administrative activities. We do not believe that our cash balance and expected consulting fees are sufficient to finance our cash requirements for expected operational activities going forward, and therefore we will require additional funding through either loans or the sale of equity, or both.
Operating Activities. Our operating activities used cash of $259,314 for the six month period ended June 30, 2015 as compared to $844,792 for the six month period ended June 30, 2014.
Investing Activities. Our investing activities provided cash of $325,600 for the six month period ended June 30, 2015 as compared to $0 for the six month period ended June 30, 2014.
Financing Activities. Our financing activities provided cash of $180,000 for the six month period ended June 30, 2015, as compared to ($24,616) for the six month period ended June 30, 2014.
Cash Flow. The following table provides a summary of our cash flows for the six month period ended June 30, 2015, and 2014.
Six Month Ended June 30, (unaudited) | ||||||||
| 2015 | 2014 | |||||||
| Cash used in operating activities | $ | 259,314 | $ | 844,792 | ||||
| Cash provided by investing activities | $ | 325,600 | $ | - | ||||
| Cash used in financing activities | $ | 180,000 | $ | (24,616 | ) | |||
| Foreign currency translation | $ | (4,253 | ) | $ | (15,054 | ) | ||
| Net increase (decrease) in cash | $ | 760,661 | $ | 805,122 | ||||
Income Taxes
At this time there is not an income tax expense to report. However, at the end of each fiscal quarter the Company evaluates the income tax liability under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on temporary differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. In the event we were to determine that we would be able to realize our deferred income tax assets in the future in excess of their net recorded amount, we would make an adjustment to the valuation allowance, which would reduce the provision for income taxes.
Revenue Recognition
Revenue from consulting services is recognized according to the terms of the consulting agreements. Generally, consulting revenue will be recognized over the term of the agreement. Occasionally, deposits or prepayments may result in deferred income which will be recognized into income as the services are performed.
Inflation
Inflation does not materially affect our business or the results of our operations.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Critical Accounting Policies
We prepare our financial statements in accordance with generally accepted accounting principles of the United States ("GAAP"). GAAP represents a comprehensive set of accounting and disclosure rules and requirements. The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the 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. Our actual results could differ from those estimates. We use historical data to assist in the forecast of our future results. Deviations from our projections are addressed when our financials are reviewed on a monthly basis. This allows us to be proactive in our approach to managing our business. It also allows us to rely on proven data rather than having to make assumptions regarding our estimates. Management does not believe that our actual results are related to any sensitivity in estimates made by management. The year-end consistency of our results has shown that our prior year's historical data is the best projector of our future results.
Recent Accounting Pronouncements
We have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on our financial statements.
We are a "smaller reporting company" as defined by Item 10(f)(1) of Regulation S-K, and as such are not required to provide the information contained in this item pursuant to Item 305 of Regulation S-K.
Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to our management, as appropriate, to allow timely decisions regarding required disclosure.
Our management has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, management has concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that has materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Exhibit No. | Description |
| 3.1 | Amended and Restated Articles of Incorporation * |
| 3.2 | Articles of Amendment to Articles of Incorporation ** |
| 3.3 | Articles of Amendment to Articles of Incorporation *** |
| 3.4 | Bylaws * |
| 10.1 | Management Agreement between AF Ocean Investment Management Company (Shanghai Ltd.) and ChinAmerica Andy Movie Entertainment Media Co., effective December 23, 2013 *** |
| 10.2 | |
| 31 | |
| 32 | |
| 101 | Financial statements for the quarterly report on Form 10-Q of ChinAmerica Andy Movie Entertainment Media Co. for the fiscal quarter ended June 30, 2015, formatted in XBRL: (i) the Balance Sheets; (ii) the Statements of Operations and Comprehensive Income; (iii) the Statements of Cash Flows; and (iv) the Notes to Financial Statements Filed herewith |
* Incorporated herein by reference to ChinAmerica Andy Movie Entertainment Media Co.'s Registration Statement on Form S-1 filed with the SEC on May 9, 2012.
** Incorporated herein by reference to ChinAmerica Andy Movie Entertainment Media Co.'s Current Report on Form 8-K filed with the SEC on October 4, 2012.
*** Incorporated herein by reference to ChinAmerica Andy Movie Entertainment Media Co.'s Annual Report on Form 10-K filed with the SEC on April 1, 2015.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
CHINAMERICA ANDY MOVIE ENTERTAINMENT MEDIA CO. | ||
| Dated: August 12, 2015 | By: | /s/ Andy Fan |
Andy Z. Fan Chief Executive Officer | ||
| (Principal Executive Officer) | ||
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