UNITED STATES
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

 

 

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.

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.

Cautionary Note Regarding Forward-Looking Statements

1

PART I - Financial Information
Item 1. Financial Statements	2
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
Item 3. Quantitative and Qualitative Disclosures about Market Risk	12
Item 4. Controls and Procedures	12

PART II - Other Information
Item 1. Legal Proceedings	13
Item 2. Unregistered Sales of Equity Securities And Use Of Proceeds	13
Item 3. Defaults Upon Senior Securities	13
Item 4. Mine Safety Disclosures	13
Item 5. Other information	13
Item 6. Exhibits	14
Signatures	15

 

 

 

 

 

 

 

PART I – FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

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.

NOTES TO FINANCIAL STATEMENTS

For the Three Month Period Ended March 31, 2016 and March 31, 2015

(Unaudited)

 

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.

 

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.

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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.

 

 

 

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.

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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.

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.

 

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.

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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.

 

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.

 

 

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.

 

 

Liquidity and Capital Resources

 

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.

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.

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PART II – OTHER INFORMATION

 

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.

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*	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.

 

****	See Note 2 of Notes to Financial Statements.

 

SIGNATURES
 

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.