Florida
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59-2318378
|
|
(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
|
Room 1902, 19/F., Kodak House II,
|
||
321 Java Road, Hong Kong
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n/a
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer £
|
Accelerated filer £
|
Non-accelerated filer £ (Do not check if a smaller reporting company)
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Smaller reporting company T
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March 31,
2013
(Unaudited)
|
December 31,
2012
(Audited)
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS
|
||||||||
Cash and cash equivalents
|
$ | 298,490 | $ | 218,773 | ||||
Accounts receivable
|
148,009 | 353,122 | ||||||
Inventories
|
- | 10,438 | ||||||
Short term loan receivable
|
140,495 | 140,495 | ||||||
Prepaid expenses and other receivables
|
154,890 | 165,932 | ||||||
Assets held for disposal
|
62,248 | - | ||||||
Total current assets
|
804,132 | 888,760 | ||||||
TOTAL ASSETS
|
$ | 804,132 | $ | 888,760 | ||||
LIABILITIES AND EQUITY
|
||||||||
LIABILITIES
|
||||||||
CURRENT LIABILITIES
|
||||||||
Accounts payable
|
734,312 | 997,911 | ||||||
Accrued expenses and other payables
|
111,685 | 84,720 | ||||||
Unearned revenue
|
15,584 | 27,691 | ||||||
Amount due to related parties
|
- | 38,128 | ||||||
Short-term borrowings
|
66,387 | 63,656 | ||||||
Convertible notes
|
182,207 | 168,926 | ||||||
Liabilities held by discontinued operations
|
369,679 | - | ||||||
Total current liabilities
|
1,479,854 | 1,381,032 | ||||||
LONG-TERM LIABILITIES
|
||||||||
Convertible note
|
31,301 | 31,301 | ||||||
31,301 | 31,301 | |||||||
TOTAL LIABILITIES
|
$ | 1,511,155 | $ | 1,412,333 | ||||
SHAREHOLDERS’ EQUITY
|
||||||||
Common stock, par value $0.01; 375,000,000 shares authorized; 80,498,453 and 78,876,021 shares issued and outstanding as of March 31, 2013 and December 31, 2012, respectively
|
804,986 | 788,761 | ||||||
Additional paid in capital
|
7,693,358 | 7,640,618 | ||||||
Accumulated deficits
|
(8,763,928 | ) | (8,457,669 | ) | ||||
Accumulated other comprehensive loss
|
1,492 | 1,492 | ||||||
Less: Subscription receivable
|
(442,931 | ) | (496,775 | ) | ||||
TOTAL SHAREHOLDERS’ EQUITY
|
$ | (707,023 | ) | $ | (523,573 | ) | ||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$ | 804,132 | $ | 888,760 | ||||
Three months ended March 31,
|
||||||||
2013
|
2012
|
|||||||
CONTINUING OPERATIONS
|
||||||||
REVENUES
|
$ | 371,391 | $ | 435,318 | ||||
COST OF SALES
|
168,269 | 269,827 | ||||||
GROSS PROFIT
|
203,122 | 165,491 | ||||||
EXPENSES
|
||||||||
General and administrative
|
299,249 | 194,409 | ||||||
TOTAL OPERATING EXPENSES
|
299,249 | 194,409 | ||||||
LOSS FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES
|
(96,127 | ) | (28,918 | ) | ||||
OTHER INCOME/(EXPENSE)
|
||||||||
Other income
|
2,214 | 2,105 | ||||||
Interest expenses
|
(32,246 | ) | - | |||||
Other expenses
|
(6,152 | ) | (3,316 | ) | ||||
TOTAL OTHER EXPENSE
|
(36,184 | ) | (1,211 | ) | ||||
NET LOSS BEFORE PROVISION FOR INCOME TAXES
|
(132,311 | ) | (30,129 | ) | ||||
PROVISION FOR INCOME TAXES
|
- | - | ||||||
NET LOSS FROM CONTINUING OPERATIONS
|
$ | (132,311 | ) | $ | (30,129 | ) | ||
DISCONTINUED OPERATIONS
|
||||||||
Net (loss) / income
|
(173,948 | ) | 10,035 | |||||
NET INCOME FROM DISCONTINUED OPERATIONS
|
$ | (173,948 | ) | $ | 10,035 | |||
NET (LOSS) / INCOME FOR THE PERIOD
|
$ | (306,259 | ) | $ | (20,094 | ) | ||
OTHER COMPREHENSIVE LOSS
|
- | - | ||||||
Arising from continuing operations
|
- | - | ||||||
Arising from discontinued operations
|
- | - | ||||||
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD
|
||||||||
Arising from continuing operations
|
(132,311 | ) | (30,129 | ) | ||||
Arising from discontinued operations
|
(173,948 | ) | 10,035 | |||||
$ | (306,259 | ) | $ | (20,094 | ) | |||
LOSS PER SHARE, BASIC AND DILUTED – CONTINUING OPERATIONS
|
$ | (0.00 | ) | (0.00 | ) | |||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, BASIC AND DILUTED
|
80,341,537 | 58,501,824 |
For the three months ended March 31,
|
||||||||
2013
|
2012
|
|||||||
Cash flows from operating activities
|
||||||||
Net loss from continuing operations
|
$ | (132,311 | ) | $ | (30,129 | ) | ||
Adjustments to reconcile net income to net cash flows used in operating activities for:
|
||||||||
Amortization of discount on Convertible Notes
|
25,257 | - | ||||||
Accrued interest expense on Convertible Notes
|
6,989 | - | ||||||
Changes in operating assets and liabilities:
|
||||||||
Decrease in accounts receivable
|
32,818 | 42,148 | ||||||
Decrease in prepaid expenses and other receivables
|
10,606 | 4,846 | ||||||
Increase in accounts payable
|
37,090 | 203,463 | ||||||
Decrease in unearned revenue
|
(12,107 | ) | 10,365 | |||||
Decrease in accrued expenses and other payables
|
62,976 | (126,343 | ) | |||||
Net cash provided by/(used in) continuing operating activities
|
31,318 | 104,350 | ||||||
Net cash (used in)/provided by discontinued operating activities
|
(255,639 | ) | 111,647 | |||||
Net cash (used in)/provided by operating activities
|
(224,321 | ) | 215,997 | |||||
Cash flows from financing activities
|
||||||||
Net cash flows from continuing investing activities
|
- | - | ||||||
Net cash used in discontinued financing activities
|
(23,311 | ) | - | |||||
Net cash (used in)/provided by operating activities
|
(23,111 | ) | - | |||||
Cash flows from financing activities
|
||||||||
Decrease in short term loan
|
- | (126,514 | ) | |||||
Advance from short-term borrowings
|
2,731 | 17,382 | ||||||
Decrease in subscription receivable
|
53,844 | - | ||||||
Issue of convertible note
|
50,000 | - | ||||||
Cash advanced to discontinued operations
|
(14,064 | ) | (8,022 | ) | ||||
Repayment of convertible note
|
- | (13,032 | ) | |||||
Net cash provided by/(used in) continuing financing activities
|
92,511 | (130,186 | ) | |||||
Net cash provided by/(used in) discontinued financing activities
|
234,838 | (107,803 | ) | |||||
Net cash provided by/(used in) financing activities
|
327,349 | (237,989 | ) | |||||
Net increase /(decrease) in cash and cash equivalents
|
||||||||
Continuing operations
|
123,829 | (25,836 | ) | |||||
Discontinued operations
|
(44,112 | ) | 3,844 | |||||
79,717 | (21,992 | ) | ||||||
Effect of foreign exchange rate changes
|
||||||||
Continuing operations
|
- | (10 | ) | |||||
Discontinued operations
|
- | - | ||||||
- | (10 | ) | ||||||
Cash and cash equivalents at beginning of period
|
||||||||
Continuing operations
|
174,661 | 228,813 | ||||||
Discontinued operations
|
44,112 | 76,399 | ||||||
218,773 | 305,212 | |||||||
Cash and cash equivalents at end of period
|
||||||||
Continuing operations
|
298,490 | 202,967 | ||||||
Discontinued operations
|
- | 80,243 | ||||||
$ | 298,490 | $ | 283,210 | |||||
Supplemental disclosure of cash flows information:
|
||||||||
Non cash continuing financing activities:
|
||||||||
Conversion of debt to shares
|
$ | 68,965 | $ | 206,042 | ||||
Issuance of shares unpaid
|
- | 519,210 | ||||||
$ | 68,965 | $ | 725,252 |
March 31, 2013 (Unaudited)
|
December 31, 2012 (Audited)
|
|||||||||||||||||||||||
GCG
|
GCM
|
Total
|
GCG
|
GCM
|
Total
|
|||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Current assets
|
||||||||||||||||||||||||
Cash and cash equivalents
|
$ | 15,825 | $ | 7,486 | $ | 23,311 | $ | 38,343 | $ | 5,769 | $ | 44,112 | ||||||||||||
Accounts receivable
|
- | 34,858 | 34,858 | - | 172,294 | 172,294 | ||||||||||||||||||
Inventory
|
3,643 | - | 3,643 | 3,643 | 6,795 | 10,438 | ||||||||||||||||||
Other receivables and deposit
|
436 | - | 436 | 436 | - | 436 | ||||||||||||||||||
Total current assets
|
19,904 | 42,344 | 62,248 | 42,422 | 184,858 | 227,280 | ||||||||||||||||||
Liabilities
|
||||||||||||||||||||||||
Current liabilities
|
||||||||||||||||||||||||
Accounts payable
|
- | 110,777 | 110,777 | 2,325 | 296,037 | 298,362 | ||||||||||||||||||
Accrued expenses and other payables
|
- | 258,902 | 258,902 | 2,327 | 74,137 | 76,464 | ||||||||||||||||||
Total current liabilities
|
- | 369,679 | 369,679 | 4,652 | 370,174 | 374,826 | ||||||||||||||||||
Net assets
|
19,904 | (327,335 | ) | (307,431 | ) | 37,770 | (185,316 | ) | (147,546 | ) |
Three months ended March 31,
|
|||||||||||||||||||||||||
2013
|
2012
|
||||||||||||||||||||||||
GCG
|
GCM
|
Total
|
GCG
|
GCM
|
Total
|
||||||||||||||||||||
Revenue
|
- | 11,030 | 11,030 | 393,966 | 625,170 | 1,019,136 | |||||||||||||||||||
Gross margin
|
- | 5,519 | 5,519 | 28,160 | 241,204 | 269,364 | |||||||||||||||||||
Loss before provision for income taxes
|
(3,724 | ) | (170,224 | ) | (173,948 | ) | (5,790 | ) | 15,825 | 10,035 | |||||||||||||||
Net loss after non-controlling interest
|
(3,724 | ) | (170,224 | ) | (173,948 | ) | (5,790 | ) | 15,825 | 10,035 |
-
|
Persuasive evidence of an arrangement exists,
|
-
|
Delivery has occurred or services have been rendered,
|
-
|
The seller’s price to the buyer is fixed or determinable, and
|
-
|
Collectability is reasonably assured
|
(i)
|
Revenue from provision of artist management, event management, and promotion for its clients is recognized when services are rendered.
|
(ii)
|
Revenue from artist-related merchandising is recognized when receipt is confirmed by clients according to the relating predetermined agreements.
|
(iii)
|
Revenue from intellectual property rights on CD, DVD and video products is recognized upon delivery of products to customers.
|
(i)
|
Revenue from electronic content sales like iPhone and Android applications is recognized when receipt is confirmed by service providers.
|
(ii)
|
Revenue from traditional paper magazines sales is recognized when magazines are sold to customers, net of sales return.
|
(iii)
|
Revenue from the provision of advertising services is recognized when services are rendered.
|
(iv)
|
Revenue from retail sales of video games and accessories is recognized upon delivery of goods to customers.
|
March 31, 2012
|
December 31, 2011
|
March 31, 2011
|
||||||||||
Period end HKD : US$ exchange rate
|
0.1282 | 0.1282 | 0.1282 | |||||||||
Average for the period HKD : US$ exchange rate
|
0.1282 | 0.1282 | 0.1282 |
■
|
Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period.
|
■
|
Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.
|
March 31, 2013
|
December 31, 2011
|
||||||
Raw materials
|
$ | - | $ | 6,795 | |||
Trading inventories
|
- | 3,643 | |||||
Total
|
$ | - | $ | 10,438 |
March 31,2013
|
December 31, 2012
|
||||||
Noncurrent liabilities:
|
|||||||
Non-interest bearing convertible note
|
$ | 31,301 | $ | 31,301 | |||
Current liabilities:
|
|||||||
8% convertible note 2, net (including fair value adjustment on option $ 37,655 and accrued interest expense $2,000)
|
- | 68,965 | |||||
8% convertible note 3, net (including accrued interest expense $25,454)
|
48,003 | 42,524 | |||||
8% convertible note 4, net (including fair value adjustment on option $ 39,914, accrued interest expense $1,284, net of unamortized discount $14,459)
|
78,454 | 57,437 | |||||
8% convertible note 5, net (including fair value adjustment on option $ 37,655, accrued interest expense $300, net of unamortized discount $32,007)
|
55,750 | 57,437 | |||||
182,207 | 168,926 | ||||||
Total convertible note outstanding
|
$ | 213,508 | $ | 200,227 |
Number
of shares
|
Weighted average number of shares
|
|||||||
Issued and outstanding as of January 1, 2013
|
78,876,021 | 78,876,021 | ||||||
Issuance of share on January 2, 2013 for debt conversion
|
684,932 | 677,322 | ||||||
Issuance of share on January 14, 2013 for debt conversion
|
625,000 | 534,722 | ||||||
Issuance of share on January 18, 2013 for debt conversion
|
312,500 | 253,472 | ||||||
Issued and outstanding as of March 31, 2013
|
80,498,453 | 80,341,537 |
2013
|
2012
|
|||||||
Amortization on discount of convertible note
|
$ | 25,257 | $ | - | ||||
Accrued interest on convertible note
|
6,989 | - | ||||||
Total
|
$ | 32,246 | $ | - |
2013
|
2012
|
|||||||
Lease payment of discontinuing operations
|
$ | 19,230 | $ | 19,230 |
For the year ending December 31,
|
||||
2013
|
83,388 | |||
2014
|
46,088 | |||
Total
|
129,476 |
For the three months ended March 31,
|
||||||||
2013
|
2012
|
|||||||
Revenues from:
|
||||||||
Continuing operations
|
||||||||
GMEH
|
$ | 371,391 | $ | 435,318 | ||||
Corporate
|
- | - | ||||||
$ | 371,391 | $ | 435,318 | |||||
Discontinued operations
|
||||||||
GCM
|
5,511 | 625,170 | ||||||
GCG
|
- | 393,668 | ||||||
5,511 | 1,018,838 | |||||||
$ | 376,902 | $ | 1,454,156 | |||||
Segment net profit/(loss) from:
|
||||||||
GMEH
|
$ | 47,466 | $ | 10,635 | ||||
Corporate
|
(179,777 | ) | (40,764 | ) | ||||
$ | (132,311 | ) | $ | (30,129 | ) | |||
Discontinued operations
|
||||||||
GCM
|
(170,224 | ) | 15,825 | |||||
GCG
|
(3,724 | ) | (5,790 | ) | ||||
$ | (173,948 | ) | $ | 10,035 | ||||
(306,259 | ) | 20,094 |
Segment assets:
|
March 31, 2013
|
December 31,2012
|
||||||
Continuing operations
|
||||||||
GMEH
|
675,334 | 582,568 | ||||||
Corporate
|
66,550 | 78,912 | ||||||
$ | 741,884 | $ | 263,770 | |||||
Discontinued operations
|
||||||||
GCM
|
$ | 19,904 | $ | 184,858 | ||||
GCG
|
42,344 | 42,422 | ||||||
62,248 | 227,280 | |||||||
$ | 804,132 | $ | 888,760 |
(i)
|
Revenue from provision of artist management, event management, and promotion for its clients is recognized when services are rendered.
|
(ii)
|
Revenue from artist-related merchandising is recognized when receipt is confirmed by clients according to the relating predetermined agreements.
|
(iii)
|
Revenue from intellectual property rights on CD, DVD and video products is recognized upon delivery of products to customers.
|
(i)
|
Revenue from electronic content sales like iPhone and Android applications is recognized when receipt is confirmed by service providers.
|
(ii)
|
Revenue from traditional paper magazines sales is recognized when magazines are sold to customers, net of sales return.
|
(iii)
|
Revenue from the provision of advertising services is recognized when services are rendered.
|
(iv)
|
Revenue from retail sales of video games and accessories is recognized upon delivery of goods to customers.
|
Three months ended
March 31,
|
||||||||||||||||
2013
|
2012
|
Increase (decrease) |
% Change
|
|||||||||||||
Revenue
|
$ | 371,391 | $ | 435,318 | $ | (63,927 | ) | (14.69 | %) | |||||||
Cost of sales
|
168,269 | 269,827 | (101,558 | ) | (37.64 | %) | ||||||||||
Gross profit
|
203,122 | 165,491 | 37,631 | 22.74 | % | |||||||||||
General & administrative
|
299,249 | 194,409 | 104,840 | 53.93 | % | |||||||||||
Loss from operations
|
(96,127 | ) | (28,918 | ) | (67,209 | ) | (232.41 | %) | ||||||||
Other income (expense)
|
(36,184 | ) | (1,211 | ) | (34,973 | ) | (2,887.94 | %) | ||||||||
Income tax expenses
|
- | - | - | N/A | ||||||||||||
Net loss from continuing operations
|
$ | (132,311 | ) | $ | (30,129 | ) | $ | (102,182 | ) | (339.15 | %) |
Three months ended March 31,
|
||||||||||||||||
2013
|
2012
|
Increase (decrease)
|
% Change
|
|||||||||||||
Payroll cost
|
139,511 | 133,204 | 6,307 | 4.73 | % | |||||||||||
Rental expenses
|
32,016 | 36,438 | (4,422 | ) | (12.14 | %) | ||||||||||
Legal and professional fee
|
109,749 | 5,834 | 103,915 | 1,781.20 | % | |||||||||||
Entertainment
|
8,798 | 3,006 | 5,792 | 192.68 | % | |||||||||||
Miscellaneous
|
9,175 | 15,927 | (6,752 | ) | (42.39 | %) | ||||||||||
299,249 | 194,409 | 104,840 | 53.93 | % |
Three months ended
March 31,
|
||||||||||||||||
2013
|
2012
|
Increase (decrease)
|
% Change
|
|||||||||||||
Revenue
|
||||||||||||||||
GCM
|
$ | 11,030 | $ | 625,170 | $ | (614,140 | ) | (98.24 | %) | |||||||
GCG
|
- | 393,668 | (393,668 | ) | (100.00 | %) | ||||||||||
11,030 | 1,018,838 | (1,007,808 | ) | (98.92 | %) | |||||||||||
Cost of sales
|
||||||||||||||||
GCM
|
5,511 | 383,966 | (378,455 | ) | (98.56 | %) | ||||||||||
GCG
|
- | 365,508 | (365,508 | ) | (100.00 | %) | ||||||||||
5,511 | 749,474 | (743,963 | ) | (99.26 | %) | |||||||||||
Gross profit
|
||||||||||||||||
GCM
|
5,519 | 241,204 | (235,685 | ) | (97.71 | %) | ||||||||||
GCG
|
- | 28,160 | (28,160 | ) | (100.00 | %) | ||||||||||
5,519 | 269,364 | (263,845 | ) | (97.95 | %) | |||||||||||
General & administrative
|
178,271 | 261,357 | (83,086 | ) | (31.79 | %) | ||||||||||
Loss from operations
|
(172,752 | ) | 8,007 | (180,759 | ) | (2,257.51 | %) | |||||||||
Other income (expense)
|
(1,196 | ) | 2,028 | (3,224 | ) | (158.97 | %) | |||||||||
Income tax expenses
|
- | - | - | N/A | ||||||||||||
Net loss from continuing operations
|
||||||||||||||||
GCM
|
(170,224 | ) | 15,825 | (186,049 | ) | (1,175.67 | %) | |||||||||
GCG
|
(3,724 | ) | (5,790 | ) | 2,066 | 35.68 | % | |||||||||
$ | (173,948 | ) | $ | 10,035 | $ | (183,983 | ) | (1,833.41 | %) |
Three months ended
March 31,
|
||||||||||||||||
2013
|
2012
|
Increase (decrease)
|
% Change
|
|||||||||||||
Payroll cost
|
146,668 | 200,523 | (53,855 | ) | (26.86 | %) | ||||||||||
Rental expenses
|
19,230 | 46,383 | (27,153 | ) | (58.54 | %) | ||||||||||
Legal and professional fee
|
212 | 308 | (96 | ) | (31.17 | %) | ||||||||||
Entertainment
|
543 | 98 | 445 | 454.08 | % | |||||||||||
Miscellaneous
|
11,618 | 14,045 | (2,427 | ) | (17.28 | %) | ||||||||||
178,271 | 261,357 | (83,086 | ) | (31.79 | %) |
1.
|
Insufficient accounting personnel with the appropriate level of accounting knowledge, experience and training in the application of accounting principles generally accepted in the United States commensurate with financial statement reporting requirements.
|
|
·
|
additional training of our accounting personnel by our independent accountants of the proper format and compilation of data for US GAAP financial statements; and
|
|
·
|
additional coordination with our local accountants and auditors to strengthen our controls in an attempt to supplement the additional training of our employees
|
|
·
|
additional training of our accounting personnel by our independent accountants of the proper format and compilation of data for US GAAP financial statements; and
|
|
·
|
additional coordination with our local accountants and auditors to strengthen our controls in an attempt to supplement the additional training of our employees.
|
Exhibit Number
|
Description
|
31.1
|
Certification of Chief Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2
|
Certification of Chief Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
Certification of Chief Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
Certification of Chief Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the period ended March 31, 2013 of Great China Mania Holdings;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: May 17, 2013
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/S/ Kwong Kwan Yin Roy.
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|
Kwong Kwan Yin Roy
Chief Executive Officer
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1.
|
I have reviewed this quarterly report on Form 10-Q for the period ended March 31, 2013 of Great China Mania Holdings;
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2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: May 17, 2013
|
/S/ Kwong Kwan Yin Roy
|
|
Kwong Kwan Yin Roy
Chief Financial Officer
|
1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Note 9 - Convertible Notes: Convertible Notes Table (Details) (USD $)
|
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Convertible Debt, Noncurrent | $ 31,301 | $ 31,301 |
Convertible notes | 182,207 | 168,926 |
Total convertible note outstanding | 213,508 | 200,227 |
Note 2
|
||
Convertible notes | 68,965 | |
Note 3
|
||
Convertible notes | 48,004 | 42,524 |
Note 4
|
||
Convertible notes | 78,455 | 57,437 |
Note 5
|
||
Convertible notes | $ 55,750 | $ 57,437 |
Note 15- Subsequent Events (Details) (USD $)
|
3 Months Ended |
---|---|
Mar. 31, 2013
|
|
Details | |
Acquisitions and Disposals, Date of Transaction for Acquisition or Disposal | Apr. 23, 2013 |
Redundancy payment | $ 273,285 |
Note 3 - Disposal of Subsidiaries: Summary of balance sheet (Details) (USD $)
|
Mar. 31, 2013
|
Dec. 31, 2012
|
Mar. 31, 2012
|
Dec. 31, 2011
|
---|---|---|---|---|
Cash and cash equivalents | $ 298,490 | $ 218,773 | $ 283,210 | $ 305,212 |
Inventories | 10,438 | |||
Total current assets | 804,132 | 888,760 | ||
Accounts payable | 734,312 | 997,911 | ||
Total current liabilities | 1,479,854 | 1,381,032 | ||
Great China Games Limited (GCG)
|
||||
Cash and cash equivalents | 15,825 | 38,343 | ||
Inventories | 3,643 | 3,643 | ||
Deposit Assets | 436 | 436 | ||
Total current assets | 19,904 | 42,422 | ||
Accounts payable | 2,325 | |||
Accounts Payable and Other Accrued Liabilities, Current | 2,327 | |||
Total current liabilities | 4,652 | |||
Assets, Net | 19,904 | 37,770 | ||
Great China Media Limited (GCM)
|
||||
Cash and cash equivalents | 7,486 | 5,769 | ||
Accounts receivable | 34,858 | 172,294 | ||
Inventories | 6,795 | |||
Total current assets | 42,344 | 184,858 | ||
Accounts payable | 110,777 | 296,037 | ||
Accounts Payable and Other Accrued Liabilities, Current | 258,902 | 74,137 | ||
Total current liabilities | 369,679 | 370,174 | ||
Assets, Net | (327,335) | (185,316) | ||
Total
|
||||
Cash and cash equivalents | 23,311 | 44,112 | ||
Accounts receivable | 34,858 | 172,294 | ||
Inventories | 3,643 | 10,438 | ||
Deposit Assets | 436 | 436 | ||
Total current assets | 62,248 | 227,280 | ||
Accounts payable | 110,777 | 298,362 | ||
Accounts Payable and Other Accrued Liabilities, Current | 258,902 | 76,464 | ||
Total current liabilities | 369,679 | 374,826 | ||
Assets, Net | $ (307,431) | $ (147,546) |
Note 5- Inventories: Schedule of Inventory Table (Tables)
|
3 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2013
|
|||||||||||||
Tables/Schedules | |||||||||||||
Schedule of Inventory Table |
|
Note 11 - Interest Expenses: Schedule of interest expenses (Details) (USD $)
|
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Details | ||
Amortization of discount on Convertible Notes | $ 25,257 | |
Interest Expense, Debt, Excluding Amortization | 6,989 | |
Interest expenses | $ 32,246 |
Note 6 - Short Term Loan Receivable (Details) (USD $)
|
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Details | ||
Short term loan amount | $ 140,495 | |
Interest and Fee Income, Loans and Leases | $ 2,107 | $ 1,590 |
Note 4 - Summary of Significant Accounting Policies
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2013
|
|||||||||||||||||||||||||||||||||||||||||
Notes | |||||||||||||||||||||||||||||||||||||||||
Note 4 - Summary of Significant Accounting Policies | NOTE 4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Economic and political risk
The Companys continuing operations and discontinued operations are conducted in Hong Kong. Accordingly, the political, economic, and legal environments in the Hong Kong may influence the Companys business, financial condition, and results of operations.
The Companys major operations in the Hong Kong are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic, and legal environment. The Companys results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, and rates and methods of taxation, among other things.
(b) Cash and cash equivalents
The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Companys continued operations maintain bank accounts in Hong Kong. The Companys discontinued operations maintain bank accounts in Hong Kong.
(c) Income tax
Income taxes are based on pre-tax financial accounting income. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. The Company periodically assesses the need to establish valuation allowances against its deferred tax assets to the extent the Company no longer believes it is more likely than not that the tax assets will be fully utilized.
The Company evaluates a tax position to determine whether it is more likely than not that the tax position will be sustained upon examination, based upon the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is subject to a measurement assessment to determine the amount of benefit to recognize and the appropriate reserve to establish, if any. If a tax position does not meet the more-likely-than-not recognition threshold, no benefit is recognized
In accordance with the relevant tax laws and regulations of Hong Kong, the applicable corporation income tax rate was 16.5% on assessable profits, if any, for the periods ended March 31, 2013 and 2012, respectively.
(d) Fair value of financial instruments
The Companys financial instruments primarily consist of cash and cash equivalents, amount due from a related company, prepaid expenses and other receivables, accounts payable, accrued expenses and other payables, receipt in advance, taxes payable and amount due to a related party.
The estimated fair value amounts have been determined by the Company, using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange.
As of the balance sheet dates, the estimated fair values of the financial instruments were not materially different from their carrying values as presented, due to the short maturities of these instruments and the fact that the interest rates on the borrowings approximate those that would have been available for loans of similar remaining maturity and risk profiles at respective year ends.
(e) Revenue recognition
Revenue represents the invoiced value of goods sold or services rendered during the year, net of sales discounts and returns. Generally revenue is recognized when all of the following criteria are met:
Revenue recognition policies for each of the major products and services of continuing operations are illustrated as follows:
For discontinued operations, the Company recognizes revenue when the following criteria are met:
(f) Earnings per share
Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. As of March 31, 2013 and 2012, there were no dilutive securities outstanding.
(g) Use of estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. Actual results may differ from those estimates.
(h) Comprehensive income
Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other financial statements. Comprehensive income includes net income and the foreign currency translation gain, net of tax.
(i) Foreign currency translation
The accompanying consolidated financial statements are presented in United States Dollars (US$). The functional currency of the Company is Hong Kong Dollar (HKD). Capital accounts of the consolidated financial statements are translated into United States dollars from HKD at their historical exchange rates when the capital transactions occurred. Assets and liabilities are translated at the exchange rates as of balance sheet date. Income and expenditures are translated at the average exchange rate of the period. The translation rates are as follows:
(j) Recent accounting pronouncements
In December 2011, the Financial Accounting Standards Board ("FASB") issued ASU 2011-11, Balance Sheet (Topic 210) Disclosures about Offsetting Assets and Liabilities. The amendments in this update will enhance disclosures required by U.S. GAAP by requiring improved information about financial instruments and derivative instruments that are either (1) offset in accordance with either ASC 210-20-45 or ASC 815-10-45 or (2) subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in accordance with either ASC 210-20-45 or ASC 815-10-45. This information will enable users of an entity's financial statements to evaluate the effect or potential effect of netting arrangements on an entity's financial position, including the effect or potential effect of rights of setoff associated with certain financial instruments and derivative instruments in the scope of this Update. The amendments in this Update are effective for annual periods for fiscal years beginning on or after January 1, 2013. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.
In December 2011, the FASB has issued Accounting Standards Update (ASU) No.2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. ASU No. 2011-11 is intended to supersede certain pending paragraphs in Accounting Standards Update No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income, to effectively defer only those changes in Update 2011-05 that relate to the presentation of reclassification adjustments out of accumulated other comprehensive income. The amendments will be temporary to allow the Board time to redeliberate the presentation requirements for reclassifications out of accumulated other comprehensive income for annual and interim financial statements for public, private, and non-profit entities. All other requirements in ASU No. 2011-05 are not affected by ASU No. 2011-12, including the requirement to report comprehensive income either in a single continuous financial statement or in two separate but consecutive financial statements. Public entities should apply these requirements for fiscal years, and interim periods within those years, beginning after December 15, 2011. Nonpublic entities should begin applying these requirements for fiscal years ending after December 15, 2012, and interim and annual periods thereafter. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.
In August 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-03, Technical Amendments and Corrections to SEC Sections. This ASU amends various SEC paragraphs pursuant to SAB 114, SEC Release No. 33-9250, and ASU 2010-22, which amend or rescind portions of certain SAB Topics. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.
In October 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-04, Technical Corrections and Improvements. This ASU make technical corrections, clarifications, and limited-scope improvements to various Topics throughout the Codification. The amendments in this ASU that will not have transition guidance will be effective upon issuance for both public entities and nonpublic entities. For public entities, the amendments that are subject to the transition guidance will be effective for fiscal periods beginning after December 15, 2012. For nonpublic entities, the amendments that are subject to the transition guidance will be effective for fiscal periods beginning after December 15, 2013.The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.
In January 2013, FASB has issued Accounting Standards Update (ASU) No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. This ASU clarifies that ordinary trade receivables and receivables are not in the scope of ASU No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. Specifically, ASU 2011-11 applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with specific criteria contained in the FASB Accounting Standards Codification (Codification) or subject to a master netting arrangement or similar agreement. The FASB undertook this clarification project in response to concerns expressed by U.S. stakeholders about the standards broad definition of financial instruments. After the standard was finalized, companies realized that many contracts have standard commercial provisions that would equate to a master netting arrangement, significantly increasing the cost of compliance at minimal value to financial statement users. An entity is required to apply the amendments in ASU 2013-01 for fiscal years beginning on or after January 1, 2013, and interim periods within those annual periods. An entity should provide the required disclosures retrospectively for all comparative periods presented. The effective date is the same as the effective date of ASU 2011-11.The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.
In February 2013, FASB has issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This ASU improves the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in this ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP.
The new amendments will require an organization to:
Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.
The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). A private company is required to meet the reporting requirements of the amended paragraphs about the roll forward of accumulated other comprehensive income for both interim and annual reporting periods. However, private companies are only required to provide the information about the effect of reclassifications on line items of net income for annual reporting periods, not for interim reporting periods. The amendments are effective for reporting periods beginning after December 15, 2012, for public companies and are effective for reporting periods beginning after December 15, 2013, for private companies. Early adoption is permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.
In February 2013, FASB issued Accounting Standards Update (ASU) No. 2013-03, Financial Instruments (Topic 825). This ASU clarifies the scope and applicability of a disclosure exemption that resulted from the issuance of Accounting Standards Update No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The amendment clarifies that the requirement to disclose "the level of the fair value hierarchy within which the fair value measurements are categorized in their entirety (Level 1, 2, or 3)" does not apply to nonpublic entities for items that are not measured at fair value in the statement of financial position, but for which fair value is disclosed. This ASU is the final version of Proposed Accounting Standards Update 2013-200Financial Instruments (Topic 825) which has been deleted. The amendments are effective upon issuance. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.
In February 2013, FASB has issued Accounting Standards Update (ASU) No. 2013-04, Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date. This ASU provides guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this ASU is fixed at the reporting date, except for obligations addressed within existing guidance in U.S. GAAP. The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance in this ASU also requires an entity to disclose the nature and amount of the obligation as well as other information about those obligations. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. For nonpublic entities, the amendments are effective for fiscal years ending after December 15, 2014, and interim periods and annual periods thereafter. The amendments in this ASU should be applied retrospectively to all prior periods presented for those obligations resulting from joint and several liability arrangements within the ASUs scope that exist at the beginning of an entitys fiscal year of adoption. An entity may elect to use hindsight for the comparative periods (if it changed its accounting as a result of adopting the amendments in this ASU) and should disclose that fact. Early adoption is permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.
In March 2013, FASB has issued Accounting Standards Update (ASU) No. 2013-05, Foreign Currency Matters (Topic 830). This ASU resolve the diversity in practice about whether Subtopic 810-10, ConsolidationOverall, or Subtopic 830-30, Foreign Currency MattersTranslation of Financial Statements, applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity. In addition, the amendments in this Update resolve the diversity in practice for the treatment of business combinations achieved in stages (sometimes also referred to as step acquisitions) involving a foreign entity. This ASU is the final version of Proposed Accounting Standards Update EITF11ArForeign Currency Matters (Topic 830), which has been deleted. The amendments in this Update are effective prospectively for fiscal years (and interim reporting periods within those years) beginning after December 15, 2013. For nonpublic entities the amendments in this Update are effective prospectively for the first annual period beginning after December 15, 2014, and interim and annual periods thereafter. The amendments should be applied prospectively to derecognition events occurring after the effective date. Prior periods should not be adjusted. Early adoption is permitted. If an entity elects to early adopt the amendments, it should apply them as of the beginning of the entitys fiscal year of adoption. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. |