UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A-1
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
for the quarterly period ended: June 30, 2013
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
for the transition period from ____________ to _____________
Commission File No. 000-54769
![[came10qa063013001.jpg]](came10qa063013001.jpg)
ChinAmerica Andy Movie Entertainment Media Co. |
(Exact name of small business issuer as specified in its charter) |
| FLORIDA |
| 65-1170540 |
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| (State or other jurisdiction of incorporation or organization) |
| (I.R.S. Tax. I.D. No.) |
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6371 Business Blvd., Suite 200, Sarasota, Florida 34240 | ||||
(Address of Principal Executive Offices) | ||||
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(863) 688-3800 | ||||
(Registrant’s Telephone Number, Including Area Code) | ||||
(Registrant’s former name) | ||||
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 þ No o
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 þ No o
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.o | Accelerated filer. o |
Non-accelerated filer. o (Do not check if a smaller reporting company) | Smaller reporting company. þ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o No þ
The number of shares outstanding of each of the issuer’s classes of common stock as of June 30, 2013: 8,500,000
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TABLE OF CONTENTS
Part I – Financial Information
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
XBRL EXPLANATORY NOTE
Pursuant to Rule 406T of Regulation S-T, the XBRL files contained in Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
RESTATEMENT EXPLANATORY NOTE
The purpose of this Amendment No. 1 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013 as originally filed with the Securities and Exchange Commission on July 16, 2013 is to correct errors in the Financial Statements. We have made necessary conforming changes in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other text discussing the financials resulting from the corrections of this error.
SUMMARY RESTATEMENT
ChinAmerica Andy Movie Entertainment Media Co.
Financial Statement Items As Originally Reported And Restated
As of and For The Six Months Ended June 30, 2013
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| Originally Reported |
| Adjustments |
| Restated |
Balance Sheet |
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Current assets1 | $ | 49,799 | $ | 299,931 | $ | 349,730 |
| $ | 49,799 | $ | 299,931 | $ | 349,730 |
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Current liabilities |
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Loans from Shareholders2 | $ | 23,800 | $ | 300,200 | $ | 324,000 |
| $ | 23,800 | $ | 300,200 | $ | 324,000 |
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Common stock |
| 85,000 |
| - |
| 85,000 |
Additional paid in capital |
| (24,900) |
| - |
| (24,900) |
Retained Earnings |
| (34,691) |
| (269) |
| (34,960) |
Total Stockholder’s (Deficiency) Equity |
| 25,409 |
| (269) |
| 25,140 |
Total Liabilities and Stockholder’s (Deficit) Equity | $ | 49,799 | $ | 299,931 | $ | 349,730 |
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Statement of Cash Flows |
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Net Loss | $ | (15,232) | $ | (269) | $ | (15,501) |
Net cash used in Operating Activities3 | $ | (14,642) | $ | (269) | $ | (14,911) |
Net cash provided by Financing Activities4 | $ | 60,800 | $ | 300,200 | $ | 361,000 |
Net change in Cash and Cash Equivalents | $ | 46,158 | $ | 299,931 | $ | 346,089 |
Net loss | $ | (15,232) | $ | (269) | $ | (15,501) |
1 Amended Cash and Cash Equivalents of $299,931 for quarter ended June 30, 2013 2 Amended Loans from Shareholders of $300,200 for quarter ended June 30, 2013 3 General and Administrative Expenses Increased by $269 for quarter ended June 30, 2013 4 Loans from Shareholder increased by $300,200 for the period ended June 30, 2013 | ||||||
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PART I – FINANCIAL INFORMATION
ITEM 1.
FINANCIAL STATEMENTS
ChinAmerica Andy Movie Entertainment Media Co.
BALANCE SHEETS
As of June 30, 2013 (unaudited) and December 31, 2012 (audited)
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| June 30, 2013 (unaudited & restated) |
| December 31, 2012 (audited) |
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Assets |
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Current Assets: |
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Cash and Cash Equivalents | $ | 349,730 | $ | 3,641 | |
Total Assets | $ | 349,730 | $ | 3,641 | |
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Liabilities and Stockholders’ Equity |
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Current Liabilities: |
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| Accounts Payable | $ | 590 | $ | - |
| Loans from Shareholders | $ | 324,000 | $ | 13,000 |
Total Current Liabilities | $ | 324,590 | $ | 13,000 | |
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Stockholders’ Equity: |
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Common Stock, $.01 per share par value; 5,000,000,000 shares authorized; and 8,500,000 and 3,500,000 shares issued and outstanding |
| 85,000 |
| 35,000 | |
Additional Paid in Capital |
| (24,900) |
| (24,900) | |
(Accumulated deficit) Retained Earnings |
| (34,960) |
| (19,459) | |
Total Stockholders’ (Deficiency) Equity |
| 25,140 |
| (9,359) | |
Total Liabilities and Stockholders’ (Deficit) Equity | $ | 349,730 | $ | 3,641 | |
The accompanying footnotes are an integral part of the statements.
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ChinAmerica Andy Movie Entertainment Media Co.
STATEMENTS OF OPERATIONS
For the Three and Six Months Ended June 30,
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|
| Six Months ended June 30 |
| Three Months Ended June 30 | ||||
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| 2013 (unaudited & restated) |
| 2012 (unaudited) |
| 2013 (unaudited & restated) |
| 2012 (unaudited) |
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Revenue: |
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| Sales | $ | - | $ | - | $ | - | $ | - |
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Expenses: |
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| General and Administrative | $ | 15,501 | $ | - | $ | 6,855 | $ | - |
| Profit (Loss) from Operations | $ | (15,501) | $ | - | $ | (6,855) | $ | - |
| Profit (Loss) from Discontinued Operations |
|
| $ | 2,592 |
|
| $ | (760) |
| Income Tax Benefit |
| - |
| - |
| - |
| - |
Net (Loss) Profit | $ | (15,501) | $ | 2,592 | $ | (6,855) | $ | (760) | |
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Basic and Diluted Net Loss per Share: |
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Continuing Operations |
| (0.00) |
|
|
| (0.00) |
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Discontinued Operations |
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| 0.00 |
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| (0.00) | |
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Weighted average shares outstanding - Basic and Diluted |
| 5,323,204 |
| 2,500,000 |
| 7,126,374 |
| 2,500,000 | |
The accompanying footnotes are an integral part of the statements.
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ChinAmerica Andy Movie Entertainment Media Co.
STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30,
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| 2013 (unaudited & restated) |
| 2012 (unaudited) |
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Cash Flows from Operating Activities |
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| Net (Loss) income | $ | (15,501) | $ | 2,592 |
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Changes in Operating Assets and Liabilities: |
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| Accounts Receivable | $ | - | $ | (1,080) |
| Accounts Payable | $ | 590 | $ | (1,636) |
| Other Current Assets | $ | - | $ | (2,395) |
Net Cash (Used In) Provided by Operating Activities | $ | (14,911) | $ | (2,519) | |
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Cash Flows From Financing Activities: |
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Loans from Shareholders | $ | 311,000 | $ | 5,000 | |
Issuance of Common Stock | $ | 50,000 | $ | - | |
Net Cash Provided By Financing Activities | $ | 361,000 | $ | 5,000 | |
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Net Change in Cash and Cash Equivalents: | $ | 346,089 | $ | 2,481 | |
Cash and Cash Equivalents, beginning of period | $ | 3,641 | $ | 804 | |
Cash and Cash Equivalents, end of period | $ | 349,730 | $ | 3,285 | |
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Supplemental Disclosure: |
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Cash paid for interest | $ | - | $ | - | |
Cash paid for income taxes | $ | - | $ | - | |
The accompanying footnotes are an integral part of the statements.
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ChinAmerica Andy Movie Entertainment Media Co.
Notes to Financial Statements
June 30, 2013
(Unaudited and Restated)
NOTE 1.
BUSINESS DESCRIPTION AND NATURE OF OPERATIONS
Organization
ChinAmerica Andy Movie Entertainment Media Co., formerly known as Court Document Services, Inc. (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.
NOTE 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Use of 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 consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 filed with the Securities and Exchange Commission on March 29, 2013.
In the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair statement of (a) the result of operations for the three and six month periods ended June 30, 2013 and 2012; (b) the financial position at June 30, 2013; and (c) cash flows for the six month periods ended June 30, 2013 and 2012, 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
Our financial statements may not be comparable to companies that comply with public company effective dates. Due to our election not to opt out of the extended transition period that allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies.
Going Concern
The accompanying consolidated 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. The Company had no sales for the second fiscal period and net loss of ($15,501) for the six months ended June 30, 2013 compared to the income from discontinued operations of $2,592 for the six months ended June 30, 2012. These factors raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time. The Company is somewhat dependent on its ability to obtain clients and investment capital from future funding opportunities to fund the current and planned operating levels. No assurance can be given that the Company will be successful in these efforts.
Cash and Cash Equivalents
The majority of cash is maintained with a major financial institution in the United States. Deposits with this bank 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 six months or less to be cash equivalents.
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Stock-Based Compensation
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.
Income Taxes
Beginning September 1, 2009, the Company adopted the provisions of ASC 740-10, “Accounting for Uncertain Income Tax Positions.” When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination.
The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for unrecognized tax benefits. As of June 30, 2013, tax years 2012, 2011 and 2010 remain open for IRS audit. The Company has received no notice of audit from the IRS for any of the open tax years.
Effective September 1, 2009, the Company adopted ASC 740-10, “Definition of Settlement in FASB Interpretation No. 48”, (“ASC 740-10”), which was issued on May 2, 2007. ASC 740-10 amends FIN 48 to provide guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits. The term “effectively settled” replaces the term “ultimately settled” when used to describe recognition, and the terms “settlement” or “settled” replace the terms “ultimate settlement” or “ultimately settled” when used to describe measurement of a tax position under ASC 740-10. ASC 740-10 clarifies that a tax position can be effectively settled upon the completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The adoption of ASC 740-10 did not have an impact on the accompanying consolidated financial statements.
Net Earnings (Loss) Per Share
Basic earnings Per Share,” 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. At June 30, 2013 and December 31, 2012 there were no potentially dilutive securities.
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 consolidated financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these consolidated financial statements as presented and does not anticipate the need for any future restatement of these consolidated financial statements because of the retro-active application of any accounting pronouncements issued subsequent to June 30, 2013 through the date these financial statements were issued.
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NOTE 3.
RELATED PARTY TRANSACTIONS
The shareholders loan money to the Company as needed. During the period ended June 30, 2013, shareholders advanced the Company $361,000 for operating expenses. These loans are payable on demand and are non-interest bearing. They are convertible to stock at market price.
During the period ended June 30, 2013, the Company issued 5,000,000 shares of stock to an officer for $50,000 that was advanced to the Company; the stock was issued at par value. During 2012, the Company issued 1,000,000 shares of stock to an officer for $10,000.
NOTE 4.
COMMITMENTS AND CONTINGENCIES
Legal
From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of June 30, 2013, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations, except as noted.
Other Commitments
The Company enters into various contracts or agreements in the normal course of business whereby such contracts or agreements may contain commitments. There are no firm commitments as of June 30, 2013.
The Company leases office space in Sarasota, Florida on a month by month basis. The monthly rent is $300. The Company is pursuing the location of a production facility in Beijing, China and is currently in soft negotiations with authorities in Beijing regarding a location for our facility in the Southern Province of China.
NOTE 5.
STOCKHOLDERS’ EQUITY
In January 2012 the authorized amount was increased to 500,000,000 shares of common stock and a stock split was approved at 5,000:1. On October 11, 2012, the Articles of Incorporation were amended as follows: the total authorized capital stock of the corporation was increased to five billion (5,000,000,000) shares.
During the period ended June 30, 2013, the Company issued 5,000,000 shares of stock to an officer for $50,000 that the officer advanced to the Company; the stock was issued at market price.
As of June 30, 2013, there were 8,500,000 shares issued and outstanding.
The Company has no options or warrants outstanding in either year.
NOTE 6.
INCOME TAX
As of June 30, 2013 and December 31, 2012, the Company has net operating losses from operations. The carry forwards expire through the year 2022. The Company’s net operating loss carry forward may be subject to annual limitations, which could reduce or defer the utilization of the losses as a result of an ownership change as defined in Section 382 of the Internal Revenue Code. A valuation allowance has been applied due to the uncertainty of realization.
The Company’s net deferred tax asset as of June 30, 2013 and December 31, 2012 is as follows:
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| June 30, 2013 |
| December 31, 2012 |
Deferred tax assets | $ | 5,200 | $ | 2,900 |
Valuation allowance |
| (5,200) |
| (2,900) |
Net deferred tax asset |
| - |
| - |
A reconciliation of (provision) benefit for income taxes to income taxes at the statutory rate is as follows:
|
| June 30, 2013 |
| June 30, 2012 |
Federal income (tax) benefit | $ | 2,300 | $ | (400) |
State (taxes) benefit |
| - |
| - |
Valuation allowance |
| (2,300) |
| 400 |
(Provision) benefit for income taxes |
| - |
| - |
NOTE 7.
DISCONTINUED OPERATIONS AND CHANGE IN DIRECTION
On October 11, 2012, the Board of Directors appointed Mr. Andy Z. Fan as Director and Chairman of the Board. On September 21, 2012, Chairman Andy Fan held a special meeting of the Board of Directors to discuss a change is business strategy and business model for the Company due to the current economic conditions. The legal liabilities and the strong competition in the legal services industry did not provide the necessary climate for building the former business model.
The Board believed that to continue to protect and increase shareholder value, it would be to the advantage, welfare and best interests of the shareholders for the Company to consider alternative corporate strategies to generate new business revenue for the Company. The Board of Directors and the Shareholders approved moving in a new direction and changing the name of the Company to reflect
the new direction and mission. The approved new strategic direction of the Company will be focusing on Movie, Entertainment and Media.
The new name approved by the Board and the Shareholders was “ChinAmerica Andy Movie Entertainment Media Co. The new business model is to produce or facilitate projects in the entertainment business in the United States and in the Peoples’ Republic of China.
To facilitate this new direction, the Board voted to the disposal of the Company assets which was approved by Shareholders representing 87% of the shares issued and outstanding.
Summary of results of discontinued operations is as follows:
Summary of Results of Discontinued Operations
| For the Six Months ended June 30, |
| For the Three Months ended June 30, | ||||||
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| 2013 |
| 2012 |
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| 2013 |
| 2012 |
Revenue | $ | - | $ | 80,795 |
| $ | - | $ | 40,240 |
Operating expenses | $ | - | $ | 78,203 |
| $ | - | $ | 41,000 |
Net operating income (loss) | $ | - | $ | 2,592 |
| $ | - | $ | (760) |
Income (loss) from discontinued operations | $ | - | $ | 2,592 |
| $ | - | $ | (760) |
NOTE 8.
SUBSEQUENT EVENTS
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No events have occurred subsequent to the balance sheet date through the date these financial statements were issued that would require disclosure in or adjustment to the financial statements.
NOTE 9.
RESTATEMENT
The Chairman of the Board added two (2) accounts to the balance sheet that were not disclosed with the internet banking access during Quarter ended March 31, 2013. The accounts were not discovered by our Chief Financial Officer prior to the original filing for the quarters ended March 31, 2013 and June 30, 2013. Once we discovered the omission, we immediately determined that we would have to amend the financial statements.
| Restated |
| As Originally Filed |
| As Restated |
| Net Effect |
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Revenue | $ | - | $ | - | $ | - | |
Net Loss from Operations | $ | (15,232) | $ | (15,501) | $ | (269) | |
Other Expenses | $ | 15,232 | $ | 15,501 | $ | 269 | |
Net Loss (Profit) | $ | (15,232) | $ | (15,501) | $ | (269) | |
Basic and Diluted Net Loss Per Share |
| (0.00) |
| (0.00) |
| - | |
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ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
The following discussion should be read in conjunction with our financial statements and the notes thereto.
Forward-Looking Statements
This quarterly report contains forward-looking statements relating to us that are based on the beliefs of our management as well as assumptions made by, and information currently available to, our management. When used in this Report, the words “anticipate”, “believe”, “estimate”, “expect”, “intend”, “plan” and similar expressions, as they relate to us or our management, are intended to identify forward-looking statements. These statements reflect management’s current view of us concerning future events and are subject to certain risks, uncertainties and assumptions, including among many others: our potential inability to raise additional capital, the possibility that third parties hold proprietary rights that preclude us from marketing our products, the emergence of additional competing technologies, changes in domestic and foreign laws, regulations and taxes, changes in economic conditions, a general economic downturn, a downturn in the securities markets, Securities and Exchange Commission regulations which affect trading in
the securities of “penny stocks,” and other risks and uncertainties. Should any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this Report as anticipated, estimated or expected.
Use of Certain Defined Terms
Except as otherwise indicated by the context, references in this report to "ChinAmerica Andy Movie Entertainment Media Co." "we," "us," or "our" and the "Company" are references to the business of ChinAmerica Andy Movie Entertainment Media Co.
Use of GAAP Financial Measures
We use GAAP financial measures in the section of this quarterly report captioned “Management’s Discussion and Analysis and Results of Operation.” All of the GAAP financial measures used by us in this report relate to the inclusion of financial information.
Overview
This subsection of MD&A is an overview of the important factors that management focuses on in evaluating our businesses, financial condition and operating performance, our overall business strategy and our earnings for the periods covered.
General
ChinAmerica Andy Movie Entertainment Media Co., formally known as Court Document Services, Inc., is an operating company that is seeking to increase operations in the development, production and distribution of documentaries and animated films within the movie, entertainment and media field in Beijing, China. We have an operating history and have generated revenues that have produced both net incomes and losses in the periods in which we have been fully operational.
While we have held discussions with the local authorities in Beijing, China regarding available locations to meet our space requirements we have begun to expand our discussions with provincial officials in provinces in the south of China. With the ever expanding business base increasing in places such as Sichuan Province we will try to take advantage of the increasing business climate in this particular province. In our discussions with the local authorities we have been presented with multiple locations that the authorities have indicated would be available on favorable terms in the event we do locate our production and distribution in the Beijing area. The production of documentaries will be focused on the Chinese government, culture and the history of the People’s Republic of China. We are currently in discussion with parties to begin production on a project utilizing facilities already in production.
Our Board of Directors believes that we can operate as a Movie, Entertainment and Documentary Company during the next twelve months increasing revenues of the company. However, the additional services to be offered may take years to complete and future cash flows, if any, are impossible to predict at this time. The realization value from any additional services to be offered is largely dependent on factors beyond our control such as the market for our services. Management is proposing the addition of offering our services to sole practitioners and small law firms. We believe that by outsourcing these types of firms can save money.
We may raise cash from sources other than our operations. Our only other source for cash at this time is investment by others in the Company.
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Employees
As of June 30, 2013, there are two (2) officers and directors who oversee the operations of the corporation.
Critical Accounting Policies
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.
To be as accurate with our estimates as possible, we use our historical data to forecast 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.
Income Taxes
We account for income taxes 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 the 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.
In July 2006, the Financial Accounting Standards Board (“FASB”) issued Financial Interpretation (“FIN”) 48, “Accounting for Uncertainty in Income Taxes” (codified primarily in FASB ASC Topic 740, Income Taxes) which clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with Statement of Financial Accounting Standards (“SFAS”) 109, “Accounting for Income Taxes” (codified primarily in FASB ASC Topic 740, Income Taxes). FIN 48 provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized upon the adoption of FIN 48 and in subsequent periods. This interpretation also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. We adopted FIN 48 effective January 1, 2007. As a result of the implementation of FIN 48, the Company recognized no increase in the liability for unrecognized tax benefits.
Impairment of Long-Lived Assets
The Statement of Financial Accounting Standards (SFAS) No. 144 requires that long-lived assets and certain identifiable intangibles held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We assess the potential impairment of long-lived assets, principally property and equipment, whenever events or changes in circumstances indicate that the carrying value may not be recoverable. We determine if there is impairment by comparing undiscounted future cash flows from the related long-lived assets with their respective carrying values. In determining future cash flows, significant estimates are made by us with respect to future operating results of the restaurant over its remaining lease term. If assets are determined to be impaired, the impairment charge is measured by calculating the amount by which the asset carrying amount exceeds its fair value. This process of assessing fair values requires the use of estimates and assumptions, which are subject to a high degree of judgment. If these assumptions change in the future, we may be required to record impairment charges for these assets. The adoption of SFAS No. 144 has not materially affected the Company’s reported earnings, financial condition or cash flows. In accordance with ASC360, the Company has identified impairment of its long lived assets and has disclosed these impairments in notes 3 and 4 of the financials.
Results of Operations
The Company determined that it had erred in not disclosing all of the funds that were in the bank accounts of the company and has accordingly amended the financial statements and filings.
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The following table provides a summary of the results of operations for the quarter ended June 30, 2013 and 2012 as well as the results of discontinued operations.
Results of Operations for both the Three and Six Months ended June 30, 2013 and 2012
The following tables set forth key components of our results of operations and revenue for the periods indicated in dollars.
Table 3.0 Comparison of our Statement of Operations for the Three and Six months Ended June 30, 2013 and 2012
| For the Three months Ended June 30, |
| ||||
|
| 2013 |
| 2012 |
| %Change |
Revenue: | $ | - | $ | - |
| 0% |
General and administrative expense | $ | 6,855 | $ | - |
| 100% |
Income (loss) from operations | $ | (6,855) | $ | - |
| (100)% |
Income (loss) from discontinued operations | $ | - | $ | (760) |
| 100% |
Net income (loss) | $ | (6,855) | $ | (760) |
| (802)% |
Income (loss) per share: basic and diluted | $ | (0.00) | $ | (0.00) |
| - |
| For the Six Months Ended June 30, |
| ||||
|
| 2013 |
| 2012 |
| %Change |
Revenue: | $ | - | $ | - |
| 0% |
General and administrative expense | $ | 15,501 | $ | - |
| 100% |
Income (loss) from operations | $ | (15,501) | $ | - |
| (100)% |
Income (loss) from discontinued operations | $ | - | $ | 2,592 |
| 100% |
Net income (loss) | $ | (15,501) | $ | 2,592 |
| (698)% |
Income (loss) per share: basic and diluted | $ | (0.00) | $ | 0.00 |
| - |
Income from Operations. For the six months ended June 30, 2013, total income was $0.00 due to the discontinued operations of the legal document services and the change in direction for the company. We showed a loss from operations while we focus on setting up operations in the People’s Republic of China.
Operating Expenses. Expenses decreased to $15,501 for the six months ended June 30, 2013 as compared to $78,203 for the six months ended June 30, 2012. This difference is primarily due to a change in operations and all expenses for the six months ended June 30, 2012 were attributable to discontinued operations. Our current expenses are directly attributable to our professional expenses for legal and accounting services. Management believes that our expenses will remain more constant relative to the level of expenditures for the second quarter of 2013. Expenses decreased approximately twenty percent (20%) from $8,646 for the three months ended March 31, 2013 to $6,855 for the three months ended June 30, 2013. The slight increase of expenses in the first quarter is primarily related to additional expenses in the first quarter to startup operations in the People’s Republic of China for the business, ChinAmerica Andy Movie Entertainment Media Co.
Net Income (Loss). As a result of the factors described above, we show a net loss of $(15,501) for the six months ended June 30, 2013 compared to the loss of $(6,855) for the three months ended June 30, 2013. We believe the loss from operations is related to the new operations being set up in Beijing and the Sichuan Province of China.
Liquidity and Capital Resources
General. As of June 30, 2013 we had cash and cash equivalents of $349,730, due to two (2) additional accounts added to the balance sheet by the Chairman of the Board. At December 31, 2012, we had cash and cash equivalents of $3,641. We have historically met our cash needs through a combination of cash flows from operating activities, which have been discontinued. Our cash requirements are generally for general and administrative activities. We believe that our cash balance is sufficient to finance our cash requirements for expected operational activities, capital improvements and partial repayment of debt through the next 12 months. We have raised capital through officer loans.
Between September 26, 2002 and September 31, 2012, the Company concentrated its efforts in the legal document services. At the time, our management believed we could capitalize on the legal document low cost services we offered.
Our operating activities used cash of $14,911 for the six months ended June 30, 2013 as compared to $2,519 for the period ended June 30, 2012. We received additional funding through loans from the majority shareholder.
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Cash generated in our financing activities was $361,000 for the six months ended June 30, 2013, compared to $5,000 during the comparable period in 2012.
As of June 30, 2013, current assets exceeded current liabilities.
Going Concern
The accompanying consolidated 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. The Company had no sales and a net loss of ($15,501) for the six months ended June 30, 2013 compared to net gain of $2,592 for the six months ended June 30, 2012. These factors raise doubt about the ability of the Company to continue as a going concern for a reasonable period of time. The Company is somewhat dependent on its ability to obtain clients and investment capital from future funding opportunities to fund the current and planned operating levels. No assurance can be given that the Company will be successful in these efforts.
Inflation
Inflation does not materially affect our business or the results of our operations.
Recent Accounting Pronouncements
The Company has carefully considered the new pronouncements that altered generally accepted accounting principles. The Company does not believe that any new or modified principles will have a material impact on the Company’s reported financial position or operations in the near term, other than the following as reported in our financial statements:
Off-Balance Sheet Arrangements
We do not have any off-balance arrangements.
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The following discussion about the Company’s market rate risk involves forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements.
In general, business enterprises can be exposed to market risks, including fluctuation in the unemployment rate, foreign currency exchange rates, and interest rates that can adversely affect the cost and results of operating, investing, and financing.
In seeking to minimize the risks and/or costs associated with such activities, the Company manages exposure to changes in the unemployment rate, interest rates and foreign currency exchange rates through its regular operating and financing activities. The Company does not utilize financial instruments for trading or other speculative purposes, nor does the Company utilize leveraged financial instruments or other derivatives.
Our operations are conducted primarily in the People’s Republic of China however we are not subject to foreign currency exchange rate risk due to the fact that we are currently not generating any revenues or direct expenses from our work in the People’s Republic of China.
ITEM 4.
CONTROLS AND PROCEDURES
Disclosure Controls and Procedures.
The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) that are designed to ensure that information required to be disclosed in the Company’s Securities Exchange Act reports 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 the Company’s management, as appropriate, to allow timely decisions regarding required disclosure.
The Company’s management has evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, management has concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were not effective.
Changes in Internal Controls over Financial Reporting.
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We had no significant changes in our internal controls during the three months ended June 30, 2013. Management concluded that there has been no change in our internal control over financial reporting during the period ended June 30, 2013, that has materially affected or is reasonably likely to affect our internal control over financial reporting.
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PART II – OTHER INFORMATION
ITEM 2
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There have been no sales of ChinAmerica Andy Movie Entertainment Media Co.'s common stock without registration during the last three years.
ITEM 6
EXHIBITS
Exhibit No. | Description |
3.1 | Articles of Incorporation Filed on May 9, 2012 as Exhibit 3.1 to the issuer’s Registration Statement on Form S-1 (File No. 333-181276) and incorporated herein by reference. |
3.2 | Amended and Restated Articles of Incorporation Filed on May 9, 2012 as Exhibit 3.2 to the issuer’s Registration Statement on Form S-1 (File No. 333-181276) and incorporated herein by reference. |
3.3 | By-Laws Filed on May 9, 2012 as Exhibit 3.3 to the issuer’s Registration Statement on Form S-1 (File No. 333-181276) and incorporated herein by reference. |
5 | Opinion Regarding Legality and Consent of Counsel by Harrison Law, P.A. Filed on May 9, 2012 as Exhibit 5 to the issuer’s Registration Statement on Form S-1 (File No. 333-181276) and incorporated herein by reference. |
14 | Code of Ethics Filed on May 9, 2012 as Exhibit 14 to the issuer’s Registration Statement on Form S-1 (File No. 333-181276) and incorporated herein by reference. |
23.1 | Consent of Experts and Counsel: Independent Auditor's Consent by DKM, C.P.A.’s Filed on May 9, 2012 as Exhibit 23.1 to the issuer’s Registration Statement on Form S-1 (File No. 333-181276) and incorporated herein by reference. |
23.2 | Consent of Experts and Counsel: Counsel’s Consent, by Harrison Law, P.A., included in Exhibit 5 Filed on May 9, 2012 as Exhibit 23.2 to the issuer’s Registration Statement on Form S-1 (File No. 333-181276) and incorporated herein by reference. |
31.1 | Certification of Chief Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Filed herewith |
31.2 | Certification of Chief Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Filed herewith |
32 | Certification of Chief Executive Officer and 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. Filed herewith |
101 | Financial statements from the quarterly report on Form 10-Q of ChinAmerica Andy Movie Entertainment Media Co. for the quarter ended June 30, 2013, formatted in XBRL: (i) the Balance Sheet, (ii) the Statement of Income, (iii) the Statement of Cash Flows and (iv) the Notes to the Financial Statements. Filed herewith |
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
| CHINAMERICA ANDY MOVIE ENTERTAINMENT MEDIA CO. |
|
|
Dated: August 30, 2013 | /s/ ANDY Z FAN |
| Andy Z. Fan |
| President, Director, Chairman of the Board |
|
|
Dated: August 30, 2013 | /s/MICHAEL J. DANIELS |
| Michael J. Daniels |
| Secretary, Treasurer, Chief Financial Officer, and Director |
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