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: March 31, 2016
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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.) | |||
| 3904 US-301, Ellenton, FL 34222 | ||||
| (Address of principal executive offices, including zip code) | ||||
| (941) 224-6975 | ||||
| (Registrant’s telephone number, including area code) | ||||
| 11015 Gatewood Drive, Unit 103 Lakewood Ranch, FL 34211 | ||||
| (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 May 16, 2016 there were 125,628,400 shares of common stock outstanding.
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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
March 31, 2016 (Unaudited) | December 31, 2015 (Audited) | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and Cash Equivalents | $ | 387,322 | $ | 421,522 | ||||
| Escrow Funds Held By Related Party | 346,886 | 355,615 | ||||||
| Due From Related Party | 9,119 | |||||||
| Prepaid Expenses | 1,325 | 2,917 | ||||||
| Refundable Income Tax | 13,942 | 13,942 | ||||||
| Total Current Assets | 758,594 | 793,996 | ||||||
| Total Assets | $ | 758,594 | $ | 793,996 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts Payable | 44,995 | - | ||||||
| Deferred Revenue | 483,980 | 483,980 | ||||||
| Management Fee Liabilities | 130,522 | 130,522 | ||||||
| Shareholder loan | 180,000 | 180,000 | ||||||
| Total current liabilities | 839,497 | 794,502 | ||||||
| Total Liabilities | $ | 839,497 | $ | 794,502 | ||||
| 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 March 31, 2016 and December 31, 2015, respectively. | 1,256,284 | 1,256,284 | ||||||
| Additional paid-in capital | (924,900 | ) | (924,900 | ) | ||||
| Accumulated other comprehensive income | (38,824 | ) | (39,104 | ) | ||||
| Retained Earnings | (373,463 | ) | (292,786 | ) | ||||
| Total stockholders’ equity | (80,903 | ) | (506 | ) | ||||
| Total liabilities and stockholders’ equity | $ | 758,594 | $ | 793,996 | ||||
The accompanying notes are an integral part of these financial statements.
CHINAMERICA ANDY MOVIE ENTERTAINMENT MEDIA CO.
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Three Months Ended March 31, (Unaudited) | ||||||||
| 2016 | 2015 | |||||||
| Revenue | $ | - | $ | - | ||||
| Expenses | ||||||||
| General and Administrative – Related Party | 60,480 | 19,050 | ||||||
| General and Administrative | 20,448 | 11,326 | ||||||
| Total Operating Expenses | 80,928 | 30,376 | ||||||
| Operating (Loss) Income | $ | (80,928 | ) | $ | (30,376 | ) | ||
| Other Income | ||||||||
| Interest Income | 251 | 3,092 | ||||||
| Total Other Income | 251 | 3,092 | ||||||
| Net Income (Loss) Before Income Taxes | $ | (80,677 | ) | $ | (27,284 | ) | ||
| Provision (benefit) for taxes | - | (10,177 | ) | |||||
| Net (Loss) Income | $ | (80,677 | ) | $ | (17,107 | ) | ||
| Foreign Currency Translation | 280 | 2,915 | ||||||
| Net Comprehensive Income (Loss) | $ | (80,397 | ) | $ | (14,192 | ) | ||
| Earnings (Loss) Per Share - Basic and Dilutive | (0.00 | ) | 0.00 | |||||
| Weighted Average Shares | 125,628,400 | 125,628,400 | ||||||
The accompanying notes are an integral part of these financial statements.
CHINAMERICA ANDY MOVIE ENTERTAINMENT MEDIA CO.
STATEMENTS OF CASH FLOWS
Three Months Ended March 31, (Unaudited) | ||||||||
| 2016 | 2015 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net Income (Loss) | $ | (80,677 | ) | $ | (17,107 | ) | ||
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 | 8,729 | 373,223 | ||||||
| Due From Related Party | (9,119 | ) | ||||||
| Accounts Payable and Accrued Expenses | 44,995 | 2,920 | ||||||
| Income Tax Liability | - | (10,177 | ) | |||||
| Prepaid Expenses | 1,592 | 1,188 | ||||||
| Total Adjustments | 46,197 | 367,154 | ||||||
| Net Cash (Used In) Provided By Operating Activities | (34,480 | ) | 350,047 | |||||
| Cash Flows From Investing Activities | ||||||||
| Net Cash (Used In) Provided By Investing Activities | - | - | ||||||
| Cash Flows From Financing Activities | ||||||||
| (Repayments To) Advances From Related Parties | - | 26,600 | ||||||
| Net Cash (Used In) Provided By Financing Activities | - | 26,600 | ||||||
| Foreign Currency Gain (Loss) | 280 | (2,915 | ) | |||||
| Net Increase (Decrease) In Cash | (34,200 | ) | 373,732 | |||||
| Cash At Beginning Of Year | 421,522 | 167,717 | ||||||
| Cash At End Of Period | $ | 387,322 | $ | 541,449 | ||||
| Supplemental Disclosures Of Cash Flow Information: | ||||||||
| $ | - | $ | - | |||||
The accompanying notes are an integral part of these financial statements.
CHINAMERICA ANDY MOVIE ENTERTAINMENT MEDIA CO.
NOTES TO FINANCIAL STATEMENTS
For the Three Month Period Ended March 31, 2016 and March 31, 2015
(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 Ellenton, 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 month period ended March 31, 2016 and 2015; (b) the financial position at March 31, 2016; and (c) cash flows for the three month period ended March 31, 2016 and 2015, 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, 2015 filed with the Securities and Exchange Commission on March 30, 2016.
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 three month period ended March 31, 2016 was a net loss of $38,824. 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 three month period ended March 31, 2016 ranging from .1540 on January 1, 2016 to .1547 on March 31, 2016, 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 March 31, 2016.
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 March 31, 2016, total liabilities exceed total assets by $80,903. Total assets decreased from $793,996 at December 31, 2015 to $758,594 at March 31, 2016, and total liabilities increased from $794,502 at December 31, 2015 to $839,497 at March 31, 2016.
During the three month period ended March 31, 2016 the Company had revenue of $0 and a net loss of ($80,677), as compared to revenue of $0 and a net loss of ($17,107) for the three month period ended March 31, 2015.
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 three month period ended March 31, 2015, no payments have been received for this management service. As of March 31, 2015, the current balance in AF Ocean Shanghai, account held on behalf of the Company is $346,886.
Commencing on May 1, 2015, the Company renewed the management services agreement with AF Ocean Investment Management Company (“the Service Provider”) for an additional year. The Company shares the same Chief Executive Officer and controlling shareholder as the Service Provider. We pay the Service Provider $20,000 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.
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 $(80,677) for the three month period ended March 31, 2016.
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 March 31, 2016 the Company had 125,628,400 shares of common stock issued and outstanding. No shares were issued during the three month period ended March 31, 2016. 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 March 31, 2016, the current balance in AF Ocean Shanghai’s account held on behalf of the Company is $346,886.
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 $20,000 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 from 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 May 16, 2016, 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.
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 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
Three Month Period Ended March 31, 2016 and 2015
The following table provides a comparison of a summary of our results of operations for the three month period ended March 31, 2016 and 2015.
Three Months Ended March 31, (unaudited) | ||||||||||||
| 2016 | 2015 | % Change | ||||||||||
| Revenue From Operations | $ | - | $ | - | - | |||||||
| General and Administrative Expenses - Related Party | $ | 60,480 | $ | 19,050 | 217 | % | ||||||
| General and Administrative Expenses | $ | 20,448 | $ | 11,326 | -81 | % | ||||||
| Total Operating Expenses | $ | 80,928 | $ | 30,376 | -166 | % | ||||||
| Income (loss) From Operations | (80,928 | ) | (30,376 | ) | -166 | % | ||||||
| Other Income (Expense) | ||||||||||||
| Interest Income | $ | 251 | $ | 3,092 | -92 | % | ||||||
| Total Other Income (Expense), Net | $ | 251 | $ | 3,092 | -92 | % | ||||||
| Net Income (Loss) Before Income Tax | $ | (80,677 | ) | $ | (27,284 | ) | -196 | % | ||||
| Provision For / (Benefit From) Income Taxes | $ | - | $ | (10,177 | ) | 100 | % | |||||
| Net Income (Loss) | (80,677 | ) | (17,107 | ) | -372 | % | ||||||
| Foreign Currency Gain (Loss) | $ | 280 | $ | 2,915 | 91 | % | ||||||
| Comprehensive Income | $ | (80,397 | ) | $ | (14,192 | ) | 467 | % | ||||
| Income (loss) per share: basic and diluted | $ | (0.00 | ) | $ | 0.00 | |||||||
Revenue from Operations – There was no revenue for the three month period ended March 31, 2016 & 2015 respectively. Loss from operations was ($80,928) for the three month period ended March 31, 2016 as compared to $(30,376) for the three month period ended March 31, 2015. Our Board of Directors has determined that we need to be focusing more on evaluating other opportunities domestically as well as China.
General and Administrative Expenses - General and administrative expenses increased by $9,122 to $20,448 for the three month period ended March 31, 2016 as compared to $11,326 for the three month period ended March 31, 2015.
General and Administrative Expenses - Related party. The related party expenses increased by $41,430 to $60,480 for the three month period ended March 31, 2016 as compared to $19,050 for the three month period ended March 31, 2015. In May, 2015 the Service Provider increased the management fee to properly cover the Company’s operating expenses.
Net Income (Loss) - As a result of the decrease in revenue and increase in expenses discussed above, our net loss increased, resulting in a net loss of ($80,677) for the three month period ended March 31, 2016 as compared to net loss of $(17,107) for the three month period ended March 31, 2015.
Liquidity and Capital Resources
General.
As of March 31, 2016, we had cash and cash equivalents of $387,322 as compared to cash and cash equivalents of $541,449 March 31, 2015. 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 $(34,480) for the three month period ended March 31, 2016 as compared to cash provided of $350,047 for the three month period ended March 31, 2015.
Investing Activities. Our investing activities provided cash of $0 for the three month period ended March 31, 2016 as compared to $0 for the three month period ended March 31, 2015.
Financing Activities. Our financing activities used cash of $0 for the three month period ended March 31, 2016, as compared to cash provided by $26,600 for the three month period ended March 31, 2015.
Cash Flow. The following table provides a summary of our cash flows for the three month period ended March 31, 2016, and 2015.
Three Month Ended March 31, (unaudited) | ||||||||
| 2016 | 2015 | |||||||
| Cash provided (used in) operating activities | $ | (34,480 | ) | $ | 350,047 | |||
| Cash provided by investing activities | $ | - | $ | - | ||||
| Cash provided (used in) financing activities | $ | - | $ | 26,600 | ||||
| Foreign currency translation | $ | 280 | $ | (2,915 | ) | |||
| Net increase (decrease) in cash | $ | (34,200 | ) | $ | 373,732 | |||
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.
With respect to the period ending March 31, 2016, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934.
Based upon our evaluation regarding the period ending March 31, 2016, the Company’s management, including its Principal Executive Officer and Principal Financial Officer, has concluded that its disclosure controls and procedures were not effective due to the Company’s limited internal resources and lack of ability to have multiple levels of transaction review. Material weaknesses noted are lack of an audit committee, lack of a majority of outside directors on the board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; and management is dominated by two individuals, without adequate compensating controls. However, through the review process, management believes that the financial statements and other information presented herewith are materially correct.
The Company’s disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives. However, the Company’s management, including its Principal Executive Officer and Principal Financial Officer, does not expect that its disclosure controls and procedures will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefit of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.
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.
We were not subject to any legal proceedings during the three months ended March 31, 2016, nor to the best of our knowledge and belief are any threatened or pending.
We did not sell any unregistered equity securities during the three months ended March 31, 2016.
No senior securities were issued and outstanding during the three months ended March 31, 2016.
Not applicable to our Company.
None.
| 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 | ||
| 11.1 | Statement re computation of per share earnings**** | |
| 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 March 31, 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. |
| **** | See Note 2 of Notes to Financial Statements. |
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: May 18, 2016 | By: | /s/ Andy Fan |
Andy Z. Fan Chief Executive Officer | ||
| (Principal Executive Officer) |
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