UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] | Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the fiscal year ended April 30, 2016 | |
[ ] | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from ____________ to ___________ | |
Commission file number 0-18945 |
GOLIATH FILM AND MEDIA HOLDINGS
(Exact name of registrant as specified in its charter)
Nevada | 84-1055077 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) |
4640 Admiralty Way, Suite 500, Marina del Rey, California | 90292 | |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (909) 612-1708
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.001
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES [ ] NO [X]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES [ ] NO [X]
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 [X] NO [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporation Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files).[ ]
Indicate by check mark if the disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer or a small reporting company. See definition of “large accelerated filer”, “accelerated filer” and “small reporting company” in Rule 12b-2 of the Securities Exchange Act of 1934.
Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES [ ] NO [X]
State issuer’s revenues for its most recent fiscal year: $175,000
The aggregate market value of the voting stock held by non-affiliates of the registrant as of October 31, 2015 was $86,567 based on 28,855,555 shares being owned by non-affiliates, and the last sale price of $0.003 as of October 31, 2015.
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
There were 158,213,917 shares of common stock, $0.001 par value, issued and outstanding as November 22, 2016
DOCUMENTS INCORPORATED BY REFERENCE – NONE
PART I
Item 1. BUSINESS
Background.
The Company was incorporated in Nevada on February 16, 2010 under the name “China Advanced Technology” as the successor by merger to Vitalcare Diabetes Treatment Centers, Inc. (“Vitalcare”). In February and March 2010, Vitalcare underwent a holding company reorganization under Delaware law, pursuant to which it became a wholly-owned subsidiary of Vitalcare Holding Corporation, and Vitalcare, together with its assets and liabilities, was sold to a non-affiliated third party. Vitalcare Holding Corporation subsequently reincorporated in Nevada by merger into China Advanced.
Vitalcare was in the business of administering medical clinics specializing in diabetes treatment. It was the successor to Network Financial Services, Inc. (“Network”), which went public in an underwritten offering in 1987. Network was engaged in mortgage origination, and changed its name to Westmark Group Holdings (“Westmark”) in 1993 in connection with the acquisition of Westmark Mortgage from Primark Corporation. Westmark ceased operations at some time in 2006, and in 2006 ceased filing reports under the Securities Exchange Act of 1934. The corporate entity was thereafter known as Viking Consolidated, Inc. (2006), Tailor Aquaponics World Wide, Inc. (2007) and Diversified Acquisitions (2007) until it entered the medical clinic business in early 2008. The Company has no information regarding any business activities from 2006 after the mortgage origination business closed, to early 2008.
On October 25, 2011, Goliath Film and Media International, a California corporation, entered into an Agreement and Plan of Reorganization (the “Exchange Agreement”), pursuant to which Goliath Film and Media International was acquired by China Advanced Technology. Prior to the acquisition, our principal operations consisted of internet marketing, and were conducted through a wholly owned subsidiary, Live Wise, Inc. Live Wise was disposed of on October 31, 2011 for cancellation of debt and shares described below. At the Closing Date, there were no assets or liabilities on China Advanced Technology’s balance sheets.
The transaction closed on October 31, 2011 (the “Closing Date”). On the Closing Date China Advanced Technology acquired Goliath Film and Media International by issuing 47,000,000 shares of its Common Stock, constituting 70.1% of the outstanding shares after giving effect to their issuance and the cancellation of 15,619,816 shares held by China Advanced Technology’s prior control person. Immediately following the Closing, 67,100,000 shares were issued and outstanding. On the Closing Date, the name of China Advanced Technology was changed to Goliath Film and Media Holdings. All share numbers herein have been adjusted for an eight-for-1 forward stock split affected as of the Closing Date. The forward stock split was reflected in the trading market on February 13, 2012.
Overview.
Goliath Film and Media Holdings, through its wholly-owned subsidiaries Goliath Film and Media International and Goliath Movie Partners 1, LLC (collectively, “Goliath” or the “Company”), develops, produces and licenses for distribution, domestically and internationally, quality digital content with an emphasis on “niche” markets of the feature motion picture and television content segments of the entertainment industry, such as, without limitation, education, faith-based, horror and socially responsible minority content. Goliath does not intend to engage in domestic theatrical distribution of motion pictures to any significant extent.
In qualified cases, Goliath will develop screenplays that will be outsourced to an independent entity for production, but will be licensed for distribution through the Company. Also, in certain cases Goliath will produce content that is tied to working with an established distributor that provides an advance or minimum guarantee for the production of a project that will be licensed by the participating distributor. Goliath plans to produce content and to distribute domestically and internationally, through a wide distribution network which includes major international theatrical exhibitors, and other distributors and television networks. We plan to utilize corporate sponsorships as a means of reducing the costs of advertising and marketing in distribution. Further, we may augment our marketing efforts with a limited and strategically focused advertising campaign in traditional “print” media with press releases targeted specifically toward standard entertainment industry trade journals and publications on an “as needed” basis as well as the inclusion of targeted “social media” campaigns.
Goliath’s revenue model includes receiving revenue from distribution fees. A limited number of its content properties include projects developed and produced by Goliath and those produced by an independent third party production entity.
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Questions and Answers
What is your business?
We develop, produce and distribute motion pictures and digital content. At this time we do not intend to engage in theatrical releases of motion pictures, due to the high up- front costs of advertising and marketing theatrically. However, in some specific cases the company will consider theatrical releases based upon a “four wall, “ limited release delivery that will be focused on targeted niche audiences.
Distribution Rights
The Company has the following distribution rights:
On December 9, 2014 Goliath signed a distribution agreement with Runaway Production for the distribution of two full length motion pictures, “Halloween Party” and “Wedding Video Nightmare”. No revenue has been recognized to date.
This distribution agreement was cancelled on January 29, 2016.
On December 8, 2014 Goliath signed a distribution agreement with CJ Creative Productions for the distribution of three full length motion pictures, “Sharp Teeth”, “Vampire Dentist”, and “Marina Monster”. Goliath Film and Media Holding will receive 25% of gross proceeds. Goliath will have both North America and foreign distribution rights for a term of 36 months from December 8, 2014. No revenue has been recognized to date. This distribution agreement was cancelled on November, 30, 2015.
On December 8, 2014 Goliath signed a distribution agreement with Brightfilm Productions for the distribution of the full length motion picture, “I Wish You Love”. Goliath will receive 25% of gross proceeds. Goliath Film and Media Holdings will have both North America (excluding Canada) and foreign distribution rights for a term of 36 months from December 8, 2014. No revenue has been recognized to date. This distribution agreement was cancelled on October 15, 2015.
On March 9, 2015 Goliath signed a non-exclusive license to sell the feature length motion pictures: “Farewell”, “Buddies” and “The Pit.” The term is for one year expiring on March 9, 2016 with compensation to Goliath of 25% of gross proceeds from the sales of each of these films. No revenue has been recognized to date.
On October 22, 2014 Goliath entered into an agreement to distribute all foreign rights for the motion picture “Virus X,” “Film” starring Sybil Danning with some of the key terms as follows:
1. Time frame (Term) – 18 months with ability to renew at same terms for another 18 months if agreed by both parties by end of the 18 month term. Term begins October 22, 2014
2. Markets – In all foreign media known and unknown
3. Compensation to Goliath- 15% of gross proceeds on all foreign territories. Said 15% (of 100%) is inclusive and includes, but not limited to, all payments, fees and reimbursements of any and all kinds made and/or incurred by Goliath through the exploitation of the Film. No revenue has been recognized to date.
4. Renewals - when the contract is renewed by a particular territory, Goliath will be the entity of record to effectuate the renewals, yet only after notification is made to and approved verbally or written by Empire Films.
On October 29, 2014, Goliath entered into a Distribution and Sales Agreement with EMILIO ROSO (“Producer”) granting all domestic and foreign distribution rights, excluding digital streaming for the motion pictures “Day of Redemption,” “On Borrowed Time” and “Tumbleweed,” with some of the major terms as follows:
1. Time frame (Term) – 18 months. Term began October 29, 2014. This contract will not automatically renew.
2. Markets – In all domestic and foreign media known and unknown and all domestic and foreign territories.
3. Compensation to Goliath - 25% of gross proceeds on all domestic and foreign territories, except digital streaming. Said 25% (of 100%) is inclusive and includes, but not limited to, all payments, fees and reimbursements of any and all kinds made and/or incurred by Goliath through the exploitation of the motion pictures. No revenue has been recognized to date.
On February 13, 2012 the Company announced that it has acquired the distribution rights to the following motion pictures: Seducing Spirits, The Perfect Argument, Marina Murders, Film Struggle, Divorce in America, A Wonderful Summer, The Truth About Layla, Living with Cancer, and The Biggest Fan. Under the distribution agreements, Goliath will receive 30% of the gross revenues for each picture it distributes. In general, the Company’s distribution contracts cover both domestic and international licensing agreements; however, for the picture The Biggest Fan, the Company obtained limited distribution rights. No revenue has been recognized to date.
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Production Agreements
On March 4, 2016 Goliath signed a distribution agreement with Mar Vista Entertainment, LLC to distribute a feature length motion picture currently in post-production by Goliath. Per the agreement, Goliath will receive $125,000 in advance payments per an agreed delivery schedule for providing distribution rights on the motion picture “Bridal Bootcamp” a romantic comedy movie being produced by Goliath to Mar Vista Entertainment LLC. Additionally, Mar Vista Entertainment, LLC will receive 35% of the gross proceeds for a period of 25 years on the motion picture. As of April 30, 2016, the Company has received $25,000 of the advance payments. Subsequent to year end the Company received an additional $75,000.
On September 18, 2015 Goliath signed a distribution agreement with Mar Vista Entertainment, LLC to distribute a feature length motion picture currently completed by Goliath. Per the agreement, Goliath will receive $125,000 in advance payments per an agreed delivery schedule for providing distribution rights on the motion picture “Merry Exes” a Christmas holiday movie being produced by Goliath to Mar Vista Entertainment LLC. Additionally, Mar Vista Entertainment, LLC will receive 35% of the gross proceeds for a period of 25 years on the motion picture. As of April 30, 2016, the Company has received $75,000 of the advance payments. Subsequent to year end the Company received the remaining $50,000. Merry Exes was completed June 6, 2016 and Mar Vista is looking to distribute this film.
On May 20, 2015 Goliath signed a distribution agreement with Mar Vista Entertainment, LLC to distribute a feature length motion picture currently completed by Goliath and being licensed by Mar vista Entertainment, LLC.. Per the agreement, the Company will receive $175,000 in advance payments per an agreed delivery schedule for providing distribution rights on the motion picture “Terror Birds” a science fiction movie produced by Goliath to Mar Vista Entertainment LLC. Additionally, Mar Vista Entertainment, LLC will receive 30% of the gross proceeds for a period of 25 years on the film. As of April 30, 2016, the Company has received $175,000 of the advance payments. Terror Birds was completed December 14, 2015 and Mar Vista is looking to distribute this film.
On April 15, 2015 Goliath signed an agreement whereby the Company agreed to invest $15,000 to KKO Productions to produce a feature length motion picture known as “Forgiven”. Per the agreement Goliath will receive 15% of adjusted gross proceeds after its initial investment has been entirely recouped through adjusted gross proceed. Additionally, the Company will receive two on screen credits as Executive Producer as well as receiving credit on all advertising, publicity and packaging of the motion picture. The investment of $15,000 presented in other assets on the balance sheet has not yet been repaid, due to the fact that no revenues will be generated until this motion picture’s released.
What is the timeline for your activities during the next 12 months?
Over the next 90 days to one year, our efforts will be concentrated on developing and producing content with distributors for licensing by them of at least three projects.
What is this going to cost you?
We expect that producing the aforementioned content will cost approximately $150,000 per project, however licensing and distribution will be handled by an experienced distributor for a fee of anywhere from 30 – 35% and the costs of advertising and marketing will be handled by them and charged against gross distribution licensing proceeds.
Why are these motion pictures not being distributed already?
The motion pictures that are being produced by the Company and distributed by Mar Vista Entertainment, LLC take anywhere from six to nine months from completion of production and delivery to obtain licensing agreements.
Generically, the main reason why good, quality motion pictures are not distributed is that the production of a motion picture requires money and creativity, and marketing a motion picture requires an entirely different set of skills. Many people dream of making a movie; few aspire to distribute them. We estimate that there are in excess of 10,000 such motion pictures “gathering dust.” There also have been and continue to be substantial tax incentives for motion picture production in many States and international Territories, so that many producers do not need to depend on successful marketing in order to find investors for their projects. A secondary factor is the difficulty of finding a reputable distributor. We think that our management has an excellent reputation in the industry and we will be able to obtain distribution rights for content. Finally, many distributors as well as buyers do not have an interest in niche market films, because they see the market as limited. Goliath sees the problem to be, rather, there is no market merely because no one has assembled a critical mass of films for these niches. Most participants in the motion picture industry are based in “Hollywood” and the major coastal metropolitan areas. Our “faith-based” films especially are targeted toward the “Bible Belt” and the “Flyover Country”: places that the industry has consistently overlooked.
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Why are you able to identify and acquire these motion pictures and educational videos?
After attending all the major content acquisition markets around the world over the last three years, our Staff has developed relationships with numerous quality filmmakers who need assistance in marketing and distributing their product. Goliath has also developed vital relationships with many of the major content distributors and networks. Many of the filmmakers have requested the Company’s assistance in marketing and distributing their product. Goliath will continue to pursue the marketing and distribution of product that is demanded in the marketplace and desired by major aggregators, distributors, networks and studios.
So how are you different than Amazon, Netflix, Blockbuster and Hulu, to name a few? How can you compete with them? They have a lot of money and name recognition. Why wouldn’t they jump into your niches?
As a content provider we are not competing with these entities but rather are working on providing them with quality content. As an example, NETFLIX has such a high demand for programming content, they are spending $5 billion this year for the acquisition of completed programming as well as for the development of original content by them. Therefore, as is mentioned, part of their resources are directed toward acquiring content and part is targeting in-house” and joint venture production of quality content. This content will be targeted to their subscription base on a domestic and international level.
There are a number of quality content producers that work with the major networks and content distributors, Goliath is moving toward becoming one of these content providers. We believe there exists significant opportunities for our company in that the demand for programming is increasing almost exponentially. Irrespective of the platform for viewing by the consumer/subscriber, the demand for quality content is continuing to expand. As an example there are currently, approximately 416 original scripted programs being aired in the entire television universe – a cancellation rate of 10% reflects a number that represents the entire programming universe in the late 1990’s and early 2000’s.. The upward trend is ongoing, which is where we see an opportunity for Goliath to provide product to reach many components of the overall market.
Don’t cable and satellite networks already offer specialty channels like TBN (for faith based) and BET (Black Entertainment Television (for the African-American Community)?
As mentioned above about NETFLIX, even though these channels maybe in niche markets they must expand the type, genre and format of the content that they are showing in order to remain viable, therefore the opportunity to assist them by providing quality programming is ongoing and expanding..
What other niches are you looking at entering?
We believe that there is an increasing and ongoing trend in home entertainment in servicing niches. Many viewers have cable or satellite service with hundreds of channels, but view only a few channels that cater to their particular interests. One significant type of niche we are targeting are the numerous immigrant groups in the United States. Other than Spanish speaking immigrants, coverage is scarce. The last official data (2004) from the US Census Bureau is that 34.2 million persons in the US are foreign born, with 54% from Latin America, 25% from Asia and 14% from Europe. Foreign-born immigrants like to watch movies from their home countries.
There are many interest groups that might be interested in specialty movies or programming. As an example in Hawaii and Southern California, for instance, Surfing is quite popular, and there exists a huge body of surfing films which would be of interest.
What about ancillary markets?
We plan to incorporate advertising and marketing through social media and traditional outlets to the highest degree possible.
What films do you have now in inventory?
We presently have acquired the distribution rights to the following motion pictures: , Seducing Spirits, The Perfect Argument, Marina Murders, Film Struggle, Divorce in America, A Wonderful Summer, The Truth About Layla, Living with Cancer, The Biggest Fan, Days of Redemption, On Borrowed Time, Tumbleweed, Virus X, Farewell, Buddies, and The Pit. Under the distribution agreements Goliath will receive 30% of the gross revenues for each of the pictures we distribute. In general, our distribution contracts cover both domestic and international licensing agreements; however, for the picture The Biggest Fan we obtained limited distribution rights.
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How do these distribution rights work?
We enter into a Distribution Agreement for each motion picture. Terms may be perpetual or limited by years. The motion pictures that we are acquiring with the proceeds of this offering will have a term of five years. We will generally obtain a fee of 20% to 30% of gross revenues. Licensing will be flexible for usage applications on a yearly or multi-year basis. Most markets, especially foreign territories have a tendency to continuously renew content licensing.
How many employees do you have? Do you have an office?
We have just 3 employees and we believe that is sufficient during the development, production and “content aggregation” phase of our development. Our administrative office is in Marina del Rey, California.
Do you have a website?
Our website is www.goliathfilmandmediainternational.com. We have a mirror site at www.goliathfilmandmedia.com.
Background
Item 1A. RISK FACTORS.
Risks Related to Our Business
Our limited operating history makes it difficult to evaluate our future business prospects and to make decisions based on of our historical performance.
We have a limited operating history, which makes it difficult to evaluate our business on the basis of historical operations. As a consequence, it is difficult to forecast our future results based upon our historical data. Reliance on our historical results may not be representative of the results we will achieve. Because of the uncertainties related to our lack of historical operations, we may be hindered in our ability to anticipate and timely adapt to increases or decreases in sales, product costs or expenses. If we make poor budgetary decisions as a result of unreliable historical data, we could be less profitable or incur losses, which may result in a decline in our stock price.
Economic conditions and uncertain economic outlook could adversely affect our results of operations and financial condition
The global economy is currently undergoing a period of unprecedented volatility. We cannot predict when economic conditions will improve or stabilize. A prolonged period of economic volatility or decline could have a material adverse effect on our results of operations and financial condition and/or exacerbate the other risks related to its business.
Our results of operations depend significantly upon the commercial success of the motion pictures and television programming that we distribute, and underperformance at the box office or in television licensing of one or more motion pictures in any period can cause our results to be less than anticipated
Our results of operations will depend significantly upon the commercial success of the motion pictures and television programming that we distribute, which cannot be predicted with certainty. In particular, the underperformance at the box office of one or more motion pictures in any period may cause our revenue and earnings results for that period (and potentially, subsequent periods) to be less than anticipated, in some instances to a significant extent. Due to the difficulty of predicting our results of operations and the other factors, it is difficult for industry or financial analysts to accurately forecast our results. The trading market for our common shares is influenced by the research and reports that such industry or financial analysts publish about us or our business. If an analyst who covers us changes his or her financial estimates or investment recommendation, or if our results of operations fall short of their estimates, the price of our common shares could decline.
Our results of operations are difficult to predict and depend on a variety of factors
Our results of operations will depend significantly upon the commercial success of the motion pictures or television content that we distribute, which cannot be predicted with certainty. Accordingly, our results of operations may fluctuate significantly from period to period, and the results of any one period may not be indicative of the results for any future periods. Our results of operations also may fluctuate due to the timing, mix, number and availability of our theatrical motion picture and home entertainment releases, as well as license periods for our content. Our operating results may increase or decrease during a particular period or fiscal year due to differences in the number and/or mix of films released compared to the corresponding period in the prior year or prior fiscal year. Our operating results also fluctuate due to our accounting practices (which are standard for the industry) which may cause us to recognize the production and marketing expenses in different periods than the recognition of related revenues, which may occur in later periods. For example, in accordance with GAAP and industry practice, we are required to expense film advertising costs as incurred, but are also required to recognize the revenue from any motion picture or television program over the entire revenue stream expected to be generated by the individual picture or television program.
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The comparability of our results may be affected by changes in accounting guidance or changes in our ownership of certain assets and businesses. Accordingly, our results of operations from year to year may not be directly comparable to prior reporting periods.
As a result of the foregoing and other factors, our results of operations may fluctuate significantly from period to period, and the results of any one period may not be indicative of the results for any future period.
Our success depends on the ability of our senior management team, as well as our ability to attract and retain key personnel.
Our success is highly dependent on the abilities of its management team. The management team must be able to effectively work together to successfully conduct our current operations, as well as implement our strategy, which includes significant domestic expansion. If we are unable to do so, our results of operations and financial condition may suffer. In addition, as part of our strategy of international expansion, there is intense competition for the services of qualified personnel. The failure to retain current key managers or key members of the development, production, or marketing staff, or to hire additional qualified personnel for new operations could be detrimental to our business.
Risks Related to Our Securities
We may raise capital in future offerings.
An offering might require the participation of institutional investors, which are more likely to demand more stringent terms for any placement. We have not determined the terms for any offering. Any future offering may be for common stock, or may be for a security with rights superior to that of the common stock. In connection with any offering, we may be required to add investor’s representatives to the Board of Directors, or may be required to commit to other conditions. If other conditions are not met, existing investors could have their rights or equity ownership substantially diluted. We cannot at this time determine the terms of any follow-on offering or whether it will ever occur.
We do not expect to pay dividends on our outstanding shares in the foreseeable future.
We have not paid dividends in the past and do not have, or anticipate having, any funds for such purpose in the foreseeable future. Even if such funds become available, we do not expect to pay dividends in the foreseeable future but, instead, will use all funds from operations for the continued development of the business.
Our common stock is quoted only on the OTC Bulletin Board, which may have an unfavorable impact on our stock price and liquidity.
Our common stock is quoted on the OTC Bulletin Board. The OTC Bulletin Board is a significantly more limited market than the New York Stock Exchange or NASDAQ system. The quotation of our shares on the OTC Bulletin Board may result in a less liquid market available for existing and potential stockholders to trade shares of our common stock, could depress the trading price of our common stock, and could have a long-term adverse impact on our ability to raise capital in the future.
Because we became public by means of a “reverse merger,” we may not be able to attract the attention of major brokerage firms.
Additional risks may exist since we became public through a “reverse merger.” Securities analysts of major brokerage firms may not provide coverage of us since there is little incentive to brokerage firms to recommend the purchase of our common stock. We cannot assure you that brokerage firms will want to conduct any secondary offerings on behalf of us in the future.
We cannot assure you that the common stock will become liquid or that it will be listed on a securities exchange.
We would like to list our common stock on the NASDAQ Capital Market as soon as practicable. However, we cannot assure you that we will be able to meet the initial listing standards of either of those or of any other stock exchange, or that we will be able to maintain any such listing. We are presently on the OTC Bulletin Board thus, investor liquidity may be limited.
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In the event we seek additional capital through equity or debt offerings, our existing stockholders may be diluted or we may be unable to find additional capital on terms favorable to us and our stockholders.
In the event that we need additional working capital for our projected operations, we may seek capital through debt or equity offerings which could result in the issuance of additional shares of our capital stock and/or rights to acquire additional shares of our capital stock. Those additional issuances of capital stock would result in a reduction of the percentage of ownership interest held by our existing stockholders. Also, the addition of a substantial number of shares of our common stock into the market or the registration of any other securities may significantly and negatively affect the prevailing market price for our common stock. Finally, we may not be able to find additional capital on terms favorable to us through existing markets or investors due to market conditions, our historical performance, or our stock price.
There may be issuances of shares of preferred stock in the future.
Although we currently do not have preferred shares outstanding, we could at some time in the future authorize preferred shares and the board of directors could complete the issuance of a series of preferred stock that would grant holders preferred rights to our assets upon liquidation, the right to receive dividends before dividends would be declared to common stockholders, and the right to the redemption of such shares, possibly together with a premium, prior to the redemption of the common stock. To the extent that we do issue preferred stock, the rights of holders of common stock could be impaired thereby, including without limitation, with respect to liquidation.
Compliance with corporate governance and disclosure standards is costly.
We have spent and continue to spend a significant amount of management time and resources to comply with laws, regulations and standards relating to corporate governance and public disclosure. Because we qualify as a smaller reporting company, our independent registered public accounting firm is not required to provide an attestation report. However, there is no guarantee that we will receive management assurance or an attestation by our independent registered public accounting firm that internal control over financial reporting is effective in future periods. In the event that our chief executive officer, chief financial officer or independent registered public accounting firm determines that our internal controls over financial reporting is not effective as required by Section 404 of Sarbanes-Oxley, investor perceptions of us may be adversely affected. In addition, overhead may increase as a result of the additional costs associated with complying with the complex legal requirements associated with being a public reporting company.
Our compliance with SEC rules concerning internal controls may be time consuming, difficult and costly.
It may be time consuming, difficult and costly for us to develop and implement the internal controls and reporting procedures required by SEC rules including Sarbanes-Oxley. We may need to hire additional financial reporting, internal controls and other finance staff in order to develop and implement appropriate internal controls and reporting procedures. If we are unable to comply with Sarbanes-Oxley’s internal controls requirements, we may not be able to obtain the independent accountant certifications that Sarbanes-Oxley Act requires publicly-traded companies to obtain.
Item 1B. UNRESOLVED STAFF COMMENTS
This item is not applicable because we are a “smaller reporting company” as defined in Exchange Act Rule 12b-2.
Item 2. PROPERTIES
Our principal executive and administrative offices are currently located at 4640 Admiralty Way, Suite 500, Marina del Rey, CA 90292. We rent these offices on a month to month basis and they are adequate for our current needs.
Item 3. LEGAL PROCEEDINGS
We are not a party to or otherwise involved in any legal proceedings.
In the ordinary course of business, from time to time we may be involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations. However, in the opinion of our management, other than as set forth herein, matters currently pending or threatened against us are not expected to have a material adverse effect on our financial position or results of operations.
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Item 4. MINE SAFETY DISCLOSURES
Not Applicable.
PART II
Item 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
(a) | Market information and issuance of unregistered securities |
The high and low sales prices for the common stock through April 30, 2016 were as follows:
Quarter Ended | High | Low | |||||||
April 30, 2016 | $ | 0.003 | $ | 0.002 | |||||
January 31, 2015 | 0.004 | 0.002 | |||||||
October 31, 2015 | 0.005 | 0.002 | |||||||
July 31, 2015 | 0.005 | 0.002 |
Quarter Ended | High | Low | |||||||
April 30, 2015 | $ | 0.006 | $ | 0.003 | |||||
January 31, 2014 | 0.005 | 0.002 | |||||||
October 31, 2014 | 0.004 | 0.001 | |||||||
July 31, 2014 | 0.006 | 0.002 |
All share information is adjusted for stock splits and stock dividends. The above information was supplied by the OTC Exchange and these prices reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
(b) | Holders |
As of November 22, 2016, there were 89 record holders of our common stock.
(c) | Dividends |
We have not paid any dividends on its common stock. We currently intend to retain any earnings for use in our business, and therefore does not anticipate paying cash dividends in the foreseeable future.
(d) | Equity Compensation Plans |
There are no Equity Compensation Plans in place as of April 30, 2016
Company issuances of common stock during the years ended April 30, 2016 and 2015.
None
(e) Performance Graphic. We are not required to provide a performance graph since it is a “smaller reporting company” as defined in Regulation S-K Rule 10(f).
In fiscal year 2016, we issued a total of 13,249,000 restricted common shares to an affiliate in accordance with Rule 144, in exchange for approximately $132,490. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was sophisticated and familiar with our operations at the time of the issuance of the shares.
In fiscal year 2016, we issued a total of 6,000,000 restricted common shares to a third party investor in accordance with Rule 144, in exchange for approximately $60,000. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was sophisticated and familiar with our operations at the time of the issuance of the shares.
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Item 6. | SELECTED FINANCIAL DATA |
As a smaller reporting company we are not required to respond to this item.
Item 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS |
Disclaimer Regarding Forward-Looking Statements
This Annual Report on Form 10-K contains forward-looking statements within the meaning of the federal securities laws. These include statements about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such as “anticipate,” “expect,” “intend,” “plan,” “will,” “we believe,” “believes,” “management believes” and similar language. Except for the historical information contained herein, the matters discussed in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this report are forward-looking statements that involve risks and uncertainties. The factors listed in the section captioned “Risk Factors,” as well as any cautionary language in this report; provide examples of risks, uncertainties and events that may cause our actual results to differ materially from those projected. Except as may be required by law, we undertake no obligation to update any forward-looking statement to reflect events after the date of this Form 10-K.
Critical Accounting Policies and Estimates
The SEC has defined a company’s critical accounting policies as the ones that are most important to the portrayal of the Company’s financial condition and results of operations and which require the Company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, we have identified the critical accounting policies and judgments addressed below. We also have other key accounting policies that are significant to understanding our results. For additional information, see Note 1 - Summary of Significant Accounting Policies.
The following are deemed to be the most significant accounting policies affecting the Company.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant inter-company balances and transactions are eliminated on consolidation.
Basis of Presentation
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that (1) recorded transactions are valid; (2) all valid transactions are recorded and (3) transactions are recorded in the period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the company for the respective periods being presented.
Use of Estimates
The preparation of financial statements in accounting principles generally accepted in the United States of America 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. A change in managements’ estimates or assumptions could have a material impact on the Company’s financial condition and results of operations during the period in which such changes occurred. The more significant estimates and assumptions by management include among others: Estimated revenue of films. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions.
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Actual results could differ from those estimates. The Company’s financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented.
Revenue Recognition
We will recognize revenues in accordance with ASC 926-605, “Entertainment Films, Revenue Recognition”.
Under ASC 926-605, five conditions must be met before revenue can be recognized: (i) there is persuasive evidence that an arrangement exists, (ii) the film is complete and has been delivered, (iii) the license period has begun, (vi) the price is fixed or determinable, and (v) collection is reasonably assured. The Company provides for an allowance for doubtful account based history and experience considering economic and industry trends. The Company does not have any off-Balance Sheet exposure related to its customers.
The Company recognizes revenue when the distributor confirms to the Company that the film has been delivered to the distributor with all technical and document deliveries received, waived or deferred and the film has been entered into the distributor’s rights system.
Accounts Receivable
Accounts receivable, if any are carried at the expected net realizable value. The allowance for doubtful accounts, when determined, will be based on management’s assessment of the collectability of specific customer accounts and the aging of the accounts receivables. If there were a deterioration of a major customer’s creditworthiness, or actual defaults were higher than historical experience, our estimates of the recoverability of the amounts due to us could be overstated, which could have a negative impact on operations.
The Company currently does not have any accounts receivable. The above accounting policies will be adopted upon the Company carrying accounts receivable.
Intangible Assets
The Company’s intangible assets consist of intellectual property, principally motion pictures. The Company periodically reviews its long lived assets to ensure that their carrying value does not exceed their fair market value. There was no amortization expense or impairment for the years ended April 30, 2016 and 2015.
Income Taxes
We account for income taxes under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 740, Income Taxes (“ASC 740”). Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
Stock Compensation
In accordance with ASC No. 718, Compensation – Stock Compensation (“ASC 718”), we measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. We apply this statement prospectively. Equity instruments (“instruments”) issued to other than employees are recorded on the basis of the fair value of the instruments, as required by ASC 718. ASC No. 505, Equity Based Payments to Non-Employees (“ASC 505”) defines the measurement date and recognition period for such instruments. In general, the measurement date is (a) when a performance commitment, as defined, is reached or (b) when the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the ASC 505.
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Accounting for Derivative Financial Instruments
We evaluate financial instruments using the guidance provided by ASC 815 and apply the provisions thereof to the accounting of items identified as derivative financial instruments not indexed to our stock.
Fair Value of Financial Instruments
We follow the provisions of ASC 820. This Topic defines fair value, establishes a measurement framework and expands disclosures about fair value measurements.
We use fair value measurements for determining the valuation of derivative financial instruments payable in shares of its common stock. This primarily involves option pricing models that incorporate certain assumptions and projections to determine fair value. These require management’s judgment.
Fair Value Measurements
Effective beginning second quarter 2010, the FASB ASC Topic 825, Financial Instruments, requires disclosures about fair value of financial instruments in quarterly reports as well as in annual reports. For the Company, this statement applies to certain investments and long-term debt. Also, the FASB ASC Topic 820, Fair Value Measurements and Disclosures , clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements.
Various inputs are considered when determining the value of the Company’s investments and long-term debt. The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in these securities. These inputs are summarized in the three broad levels listed below.
● | Level 1 – observable market inputs that are unadjusted quoted prices for identical assets or liabilities in active markets. |
● | Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.). |
● | Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments). |
The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. The Company had no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. The Company had no financial assets and/or liabilities carried at fair value on a recurring basis at April 30, 2016, assets and liabilities approximate fair value due to their short term nature.
The availability of inputs observable in the market varies from instrument to instrument and depends on a variety of factors including the type of instrument, whether the instrument is actively traded, and other characteristics particular to the transaction. For many financial instruments, pricing inputs are readily observable in the market, the valuation methodology used is widely accepted by market participants, and the valuation does not require significant management discretion. For other financial instruments, pricing inputs are less observable in the market and may require management judgment. As of April 30, 2016, the Company had no assets other than prepaid expenses and capitalized film production costs.
Basic and diluted earnings per share
Basic earnings per share are based on the weighted-average number of shares of common stock outstanding. Diluted Earnings per share is based on the weighted-average number of shares of common stock outstanding adjusted for the effects of common stock that may be issued as a result of the following types of potentially dilutive instruments:
● | Warrants, |
● | Employee stock options, and |
● | Other equity awards, which include long-term incentive awards. |
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The FASB ASC Topic 260, Earnings Per Share, requires the Company to include additional shares in the computation of earnings per share, assuming dilution.
Diluted earnings per share is based on the assumption that all dilutive options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options are assumed to be exercised at the time of issuance, and as if funds obtained thereby were used to purchase common stock at the average market price during the period.
Basic and diluted earnings per share are the same as there were no potentially dilutive instruments for the years ended April 30, 2016 and 2015.
Concentrations, Risks, and Uncertainties
The Company did not have a concentration of business with suppliers or customers constituting greater than 10% of the Company’s gross sales during 2016 and 2015.
Recent Accounting Pronouncements
We have evaluated new accounting pronouncements that have been issued and are not yet effective for us and determined that there are no such pronouncements expected to have an impact on our future financial statements.
Plan of Operations
Although the Company had net income of $34,460 for the year ended April 30, 2016, the Company had a net loss of $278,815 for the year ended April 30, 2015. These factors create substantial doubt about the Company’s ability to continue as a going concern. The Company’s management plan to continue as a going concern revolves around its ability to execute its business strategy of distributing digital content, as well as raising the necessary capital to pay ongoing general and administrative expenses of the Company.
In the fiscal years ending April 30, 2016 and 2015, $192,490 and $136,365, respectively, was raised from the sale of stock for future business projects with us.
Results of Operations
Fiscal Year Ended April 30, 2016 Compared to Fiscal Year Ended April 30, 2015
Revenue
For the fiscal year ended April 30, 2016, we completed and delivered Terror Birds and recognized $175,000 as revenue from advance payments previously received from Mar Vista Entertainment. For the fiscal year ended April 30, 2015, we had no revenues.
Cost of Sales
For the fiscal year ended April 30, 2016, we completed and delivered Terror Birds and recognized $83,075 of production costs as cost of sales. For the fiscal year ended April 30, 2015, we had no cost of sales.
Operating expenses
Operating expenses decreased by $217,034, or 79.4%, to $56,145 in the year ended April 30, 2016 from $273,179 in the year ended April 30, 2015 primarily due to decreases in professional fees, consulting services, travel costs, stock based compensation expense, marketing costs, and equipment rental costs, offset primarily by increases in rent.
Operating expenses for the year ended April 30, 2016 were comprised primarily of $1,174 in professional fees; $40,150 in consulting services costs, travel costs of $7,569; rent of $2,190, and $5,062 of other operating expenses.
Operating expenses for the year ended April 30, 2015 were comprised primarily of $77,489 in consulting services costs; travel costs of $14,619, equipment rental costs of $2,775, stock based compensation expense of $136,000, marketing costs of $28,245, office rent of $1,642, professional fees of $10,192, and $2,217 of other operating expenses.
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Net income (loss) before income taxes
Net income (loss) before income taxes for the year ended April 30, 2016 totaled $35,780 primarily due to revenue of $175,000 and decreases in professional fees, consulting services costs, office rent, and travel costs, compared to a loss of $277,975 for the year ended April 30, 2015 primarily due to consulting services costs, travel costs, marketing costs, stock based compensation expenses, office rent, and professional fees.
Assets and Liabilities
Total assets were $356,516 as of April 30, 2016 compared to $878 as of April 30, 2015, or an increase of $355,638, primarily the result of increases in film production costs of $315,907, other assets of $15,000, and cash of $25,310. Total liabilities as of April 30, 2016 were $168,073 compared to $39,385 as of April 30, 2015, or an increase of $128,688. The increase was primarily the result of increases in advance for film production costs of $100,000, line of credit of $20,887, and accounts payable of $16,801, offset by a decrease in related party payables of $9,000.
Stockholders’ Equity (Deficit)
Stockholders’ equity (deficit) was $188,443 as of April 30, 2016. Stockholder’s equity (deficit) during the fiscal year ended April 30, 2016 consisted primarily of shares issued for cash in the amount of $192,490, and net profit of $34,460, offset partially by previous deficit of $(38,507).
Liquidity and Capital Resources
General – Overall, we had an increase in cash flows of $24,731 in the year ending April 30, 2016 resulting from cash provided by financing activities of $213,377, offset partially by cash used in operating activities of $173,646, and cash used in investing activities of $15,000.
The following is a summary of our cash flows provided by (used in) operating, investing, and financing activities during the periods indicated:
Year Ended April 30, | ||||||||
2016 | 2015 | |||||||
Cash at beginning of period | $ | 579 | $ | - | ||||
Net cash used in operating activities | (173,646 | ) | (133,892 | ) | ||||
Net cash used in investing activities | (15,000 | ) | - | |||||
Net cash provided by financing activities | 213,337 | 134,471 | ||||||
Cash at end of period | $ | 25,310 | $ | 579 |
Net cash used in operating activities was $173,646 for the year ending April 30, 2016 compared to net cash used in operations for the year ending April 30, 2015 of $133,892 primarily due to the change in operating assets and liabilities of $208,106, primarily due to the change in film production costs of $315,907, payables of $7,801, and advances for film production of $100,000, and offset partially by net profit of $34,460 for the year ending April 30, 2016.
Net cash used in investing activities was $15,000 for the year ending April 30, 2016, compared to net cash used in investing activities of $0 for the year ending April 30, 2015 primarily as the result of the investment in the production of motion pictures.
Net cash provided by financing activities was $213,337 for the year ending April 30, 2016, compared to net cash provided by financing activities of $134,471 for the year ending April 30, 2015 primarily as the result of the issuance of stock for cash of $192,490, and a line of credit from bank of $20,887.
Our cash needs in the year ending April 30, 2016 are estimated to be $200,000. This budget is based on the assumption that we will carry out one project at a time for which we will need about $50,000 in working capital; general and administrative expenses of $150,000 for the costs related to being public, and miscellaneous office expenses. We sold 30,852,250 shares for net proceeds of $328,855 in offerings conducted in fiscal years 2016 and 2015. As we move forward with our business plan we will need to raise additional capital either through the sale of stock or funding from shares and or officers and directors to cover our cash needs through the end of the 2017 fiscal year.
Information included in this report includes forward looking statements, which can be identified by the use of forward-looking terminology such as may, expect, anticipate, believe, estimate, or continue, or the negative thereof or other variations thereon or comparable terminology. The statements in “Risk Factors” and other statements and disclaimers in this report constitute cautionary statements identifying important factors, including risks and uncertainties, relating to the forward-looking statements that could cause actual results to differ materially from those reflected in the forward-looking statements.
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Equity Financing
During the year ended April 30, 2016, we entered into private placement memorandums with an affiliate under which we issued 13,249,000 shares of our common stock, restricted in accordance with Rule 144, in exchange for $132,490. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investors were sophisticated and familiar with our operations at the time of the issuance of the shares.
During the year ended April 30, 2016, we entered into a private placement memorandum with a third party investor under which we issued 6,000,000 shares of our common stock, restricted in accordance with Rule 144, in exchange for $60,000. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investors were sophisticated and familiar with our operations at the time of the issuance of the shares.
During the year ended April 30, 2015, we entered into private placement memorandums with an affiliate under which we issued 11,603,250 shares of our common stock, restricted in accordance with Rule 144, in exchange for $136,365. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investors were sophisticated and familiar with our operations at the time of the issuance of the shares.
We issued 5,000,000 restricted common shares to John Ballard on May 1, 2014, our Chief Financial Officer pursuant to his consulting contract dated May 1, 2014. We also issued 2,000,000 restricted common shares for professional services per consulting contracts dated May 1, 2014.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Inflation
Management believes that inflation has not had a material effect on the Company’s results of operations.
Item 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
This item is not applicable since we are a smaller reporting company.
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Item 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
Our financial statements include the following:
GOLIATH FILM AND MEDIA HOLDINGS
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED APRIL 30, 2016 AND 2015
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Goliath Film & Media Holdings
We have audited the accompanying consolidated balance sheets of Goliath Film & Media Holdings (the Company) as of April 30, 2016 and 2015 and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for each of the years in the two year period ended April 30, 2016. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion the financial statements referred to above present fairly, in all material respects, the financial position of Goliath Film & Media Holdings as of April 30, 2016 and 2015, and the results of their operations and cash flows for each of the years in the two year period ended April 30, 2016, in conformity with U.S. generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company does not have significant cash or other current assets, nor does it have an established source of revenues sufficient to cover its operating costs as of April 30, 2016 which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Sadler, Gibb & Associates, LLC | |
Salt Lake City, UT | |
November 30, 2016 |
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GOLIATH FILM AND MEDIA HOLDINGS
APRIL 30, | ||||||||
2016 | 2015 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 25,310 | $ | 579 | ||||
Prepaid expense | 299 | 299 | ||||||
Total current assets | 25,609 | 878 | ||||||
Long-term assets | ||||||||
Other assets | 15,000 | - | ||||||
Film production costs | 315,907 | - | ||||||
Total long-term assets | 330,907 | - | ||||||
Total assets | $ | 356,516 | $ | 878 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued expenses | $ | 47,186 | $ | 30,385 | ||||
Accounts payable - related party | - | 9,000 | ||||||
Line of credit | 20,887 | - | ||||||
Total current liabilities | 68,073 | 39,385 | ||||||
Long-term liabilities | ||||||||
Advances for film production | 100,000 | - | ||||||
Total long-term liabilities | 100,000 | - | ||||||
Total liabilities | 168,073 | 39,385 | ||||||
Stockholders’ equity (deficit) | ||||||||
Preferred stock, $0.001 par value, 1,000,000 shares authorized; no shares issued and outstanding at April 30, 2016 and 2015 | - | - | ||||||
Common stock, $0.001 par value, 300,000,000 shares authorized; 158,213,917 and 138,964,917 shares issued and outstanding, at April 30, 2016 and 2015, respectively | 158,214 | 138,965 | ||||||
Additional paid in capital | 624,741 | 451,500 | ||||||
Accumulated deficit | (594,512 | ) | (628,972 | ) | ||||
Total stockholders’ equity (deficit) | 188,443 | (38,507 | ) | |||||
Total liabilities and stockholders’ equity (deficit) | $ | 356,516 | $ | 878 |
See accompanying notes to consolidated financial statements.
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GOLIATH FILM AND MEDIA HOLDINGS
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Year Ended, | ||||||||
April 30, 2016 | April 30, 2015 | |||||||
Film production revenues | $ | 175,000 | $ | - | ||||
Cost of sales | 83,075 | - | ||||||
Gross profit | 91,925 | - | ||||||
Operating Expenses | ||||||||
Sales and marketing | - | 28,245 | ||||||
General and administrative | 56,145 | 244,934 | ||||||
Total operating expenses | 56,145 | 273,179 | ||||||
Income (loss) from operations | 35,780 | (273,179 | ) | |||||
Other expense | - | (4,796 | ) | |||||
Total other expense | - | (4,796 | ) | |||||
Income (loss) before income taxes | 35,780 | (277,975 | ) | |||||
Provision for income taxes | (1,320 | ) | (840 | ) | ||||
Net income (loss) | $ | 34,460 | $ | (278,815 | ) | |||
Net loss per share of common stock: | ||||||||
Basic and diluted | $ | (0.00 | ) | $ | (0.00 | ) | ||
Weighted average shares | ||||||||
Outstanding-Basic and diluted | 148,119,227 | 133,069,779 |
See accompanying notes to consolidated financial statements.
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GOLIATH FILM AND MEDIA HOLDINGS
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
Common Stock | Additional Paid | Accumulated | Total | |||||||||||||||||
Shares | Amount | in Capital | Deficit | Capital | ||||||||||||||||
Balances, April 30, 2014 | 93,361,667 | $ | 93,362 | $ | 224,738 | $ | (350,157 | ) | $ | (32,057 | ) | |||||||||
Issuance of shares – services | 34,000,000 | 34,000 | 102,000 | - | 136,000 | |||||||||||||||
Issuance of shares – private placement | 11,603,250 | 11,603 | 124,762 | - | 136,365 | |||||||||||||||
Net loss, year ended April 30, 2015 | - | - | - | (278,815 | ) | (278,815 | ) | |||||||||||||
Balances, April 30, 2015 | 138,964,917 | $ | 138,965 | $ | 451,500 | $ | (628,972 | ) | $ | (38,507 | ) | |||||||||
Issuance of shares – private placement | 19,249,000 | 19,249 | 173,241 | - | 192,490 | |||||||||||||||
Net profit, year ended April 30, 2016 | - | - | - | 34,460 | 34,460 | |||||||||||||||
Balances, April 30, 2016 | 158,213,917 | $ | 158,214 | $ | 624,741 | $ | (594,512 | ) | $ | 188,443 |
See accompanying notes to consolidated financial statements.
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GOLIATH FILM AND MEDIA HOLDINGS
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Year Ended | ||||||||
April 30, 2016 | April 30, 2015 | |||||||
Cash flows from operating activities | ||||||||
Net income (loss) | $ | 34,460 | $ | (278,815 | ) | |||
Adjustments to reconcile net income (loss) to net cash used in operating activities | ||||||||
Amortization of prepaid expenses | - | 136,000 | ||||||
Changes in operating assets and liabilities: | ||||||||
Film production costs | (315,907 | ) | - | |||||
Prepaid assets | - | 4,786 | ||||||
Accounts payable and accrued expenses | 16,801 | |||||||
Accounts payable – related party | (9,000 | ) | 4,137 | |||||
Advances for film production | 100,000 | - | ||||||
Net cash used in operating activities | (173,646 | ) | (133,892 | ) | ||||
Cash flows from investing activities | ||||||||
Investment in films | (15,000 | ) | - | |||||
Net cash used in investing activities | (15,000 | ) | - | |||||
Cash flows from financing activities | ||||||||
Proceeds from issuance of common stock | 192,490 | 136,365 | ||||||
Line of credit | 20,887 | (1,894 | ) | |||||
Proceeds from notes payable | 25,000 | - | ||||||
Repayment of notes payable | (25,000 | ) | - | |||||
Net cash provided by financing activities | 213,377 | 134,471 | ||||||
Net change in cash | 24,731 | 579 | ||||||
Cash at beginning of period | 579 | - | ||||||
Cash at end of period | $ | 25,310 | $ | 579 | ||||
Supplemental Disclosure of cash flow information | ||||||||
Cash paid for interest | $ | - | $ | - | ||||
Cash paid for taxes | 519 | - | ||||||
Supplemental Disclosure of cash flow Information: | ||||||||
Common stock issued for prepaid services | $ | - | $ | 136,000 |
See accompanying notes to consolidated financial statements
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GOLIATH FILM AND MEDIA HOLDINGS
FOR THE YEARS ENDED APRIL 30, 2016 AND 2015
NOTE 1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
On October 31, 2011 (the “Closing Date”), China Advanced Technology (an entity formed on February 16, 2010 in the State of Nevada) acquired Goliath Film and Media International, a California corporation, by issuing 47,000,000 shares of its Common Stock, constituting 70.1% of the outstanding shares after giving effect to their issuance and the cancellation of 15,619,816 shares held by China Advanced Technology’s prior control person. Immediately following the Closing, 67,100,000 shares were issued and outstanding. On the Closing Date, the name of China Advanced Technology was changed to Goliath Film and Media Holdings (“Goliath” or “the Company”). All share numbers herein have been adjusted for an eight-for-1 forward stock split affected as of the Closing Date. The forward stock split was reflected in the trading market on February 13, 2012. The transaction was accounted for as a reverse acquisition in which Goliath Film and Media International is deemed to be the accounting acquirer, and the prior operations of Goliath (formerly China Advanced Technology) are consolidated for accounting purposes. Since Goliath had no operations, assets, or liabilities as of the Closing, no audit of that entity was required under the materiality thresholds of Regulation S-X Rule 8-04.
Organization, Nature of Business and Trade Name
The Company is engaged in the production and distribution of motion pictures and television content. The Company has begun to realize revenues from its planned principal business purpose.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated.
Basis of Presentation
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that (1) recorded transactions are valid; (2) all valid transactions are recorded and (3) transactions are recorded in the period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the company for the respective periods being presented.
Use of Estimates
The preparation of financial statements in accounting principles generally accepted in the United States of America 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. A change in managements’ estimates or assumptions could have a material impact on the Company’s financial condition and results of operations during the period in which such changes occurred.
Actual results could differ from those estimates. The Company’s financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.
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GOLIATH FILM AND MEDIA HOLDINGS
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED APRIL 30, 2016 AND 2015
Accounts Receivable
Accounts receivable, if any are carried at the expected net realizable value. The allowance for doubtful accounts, when determined, will be based on management’s assessment of the collectability of specific customer accounts and the aging of the accounts receivables. If there were a deterioration of a major customer’s creditworthiness, or actual defaults were higher than historical experience, our estimates of the recoverability of the amounts due to us could be overstated, which could have a negative impact on operations.
The Company currently does not have any accounts receivable. The above accounting policies will be adopted upon the Company carrying accounts receivable.
Intangible Assets
The Company’s intangible assets consist of intellectual property, principally motion pictures. The Company periodically reviews its long lived assets to ensure that their carrying value does not exceed their fair market value. There was no amortization expense or impairment for the years ended April 30, 2016 and 2015.
Films and Televisions Costs
The Company capitalizes production costs for films produced in accordance with ASC 926-20, “Entertainment-Films - Other Assets - Film Costs”. Accordingly, production costs are capitalized at actual cost and then charged against revenue quarterly as a cost of production based on the relative fair value of the film(s) delivered and recognized as revenue. The Company evaluates its capitalized production costs annually and limits recorded amounts by its ability to recover such costs through expected future sales.
Revenue Recognition
We will recognize revenues in accordance with ASC 926-605, “Entertainment Films, Revenue Recognition”.
Under ASC 926-605, five conditions must be met before revenue can be recognized: (i) there is persuasive evidence that an arrangement exists, (ii) the film is complete and has been delivered, (iii) the license period has begun, (iv) the price is fixed or determinable, and (v) collection is reasonably assured. The Company provides for an allowance for doubtful account based history and experience considering economic and industry trends. The Company does not have any off-Balance Sheet exposure related to its customers.
The Company recognizes revenue when the distributor confirms to the Company that the film has been delivered to the distributor with all technical and document deliveries received, waived or deferred and the film has been entered into the distributor’s rights system.
Advertising
Advertising expenses are recorded as general and administrative expenses when they are incurred. Advertising expense was $0 and $1,404, for the years ended April 30, 2016 and 2015, respectively.
Research and Development
All research and development costs are expensed as incurred. There was no research and development expense for the years ended April 30, 2016 and 2015.
Income tax
We account for income taxes under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 740, Income Taxes (“ASC 740”). Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
23 |
GOLIATH FILM AND MEDIA HOLDINGS
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED APRIL 30, 2016 AND 2015
Fair Value of Financial Instruments
The Company follows the provisions of ASC 820. This Topic defines fair value, establishes a measurement framework and expands disclosures about fair value measurements.
The Company uses fair value measurements for determining the valuation of derivative financial instruments payable in shares of its common stock. This primarily involves option pricing models that incorporate certain assumptions and projections to determine fair value. These require management’s judgment.
Fair Value Measurements
Effective beginning second quarter 2010, the FASB ASC Topic 825, Financial Instruments, requires disclosures about fair value of financial instruments in quarterly reports as well as in annual reports. For the Company, this statement applies to certain investments and long-term debt. Also, the FASB ASC Topic 820, Fair Value Measurements and Disclosures , clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements.
Various inputs are considered when determining the value of the Company’s investments and long-term debt. The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in these securities. These inputs are summarized in the three broad levels listed below.
● Level 1 – observable market inputs that are unadjusted quoted prices for identical assets or liabilities in active markets.
● Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.).
● Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments).
The Company’s adoption of FASB ASC Topic 825 did not have a material impact on the Company’s consolidated financial statements.
The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. The Company had no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. The Company had no financial assets and/or liabilities carried at fair value on a recurring basis at April 30, 2016, assets and liabilities approximate fair value due to their short term nature.
The availability of inputs observable in the market varies from instrument to instrument and depends on a variety of factors including the type of instrument, whether the instrument is actively traded, and other characteristics particular to the transaction. For many financial instruments, pricing inputs are readily observable in the market, the valuation methodology used is widely accepted by market participants, and the valuation does not require significant management discretion. For other financial instruments, pricing inputs are less observable in the market and may require management judgment. As of April 30, 2016, the Company had no assets other than prepaid expenses and capitalized film production costs.
Basic and diluted earnings per share
Basic earnings per share are based on the weighted-average number of shares of common stock outstanding. Diluted Earnings per share is based on the weighted-average number of shares of common stock outstanding adjusted for the effects of common stock that may be issued as a result of the following types of potentially dilutive instruments:
24 |
GOLIATH FILM AND MEDIA HOLDINGS
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED APRIL 30, 2016 AND 2015
● | Warrants, | |
● | Employee stock options, and | |
● | Other equity awards, which include long-term incentive awards. |
The FASB ASC Topic 260, Earnings Per Share, requires the Company to include additional shares in the computation of earnings per share, assuming dilution.
Diluted earnings per share is based on the assumption that all dilutive options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options are assumed to be exercised at the time of issuance, and as if funds obtained thereby were used to purchase common stock at the average market price during the period.
Basic and diluted earnings per share are the same as there were no potentially dilutive instruments for the years ended April 30, 2016 and 2015.
Concentrations, Risks, and Uncertainties
The Company did not have a concentration of business with suppliers or customers constituting greater than 10% of the Company’s gross sales during 2016 and 2015.
Stock Based Compensation
In accordance with ASC No. 718, Compensation – Stock Compensation (“ASC 718”), we measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. We apply this statement prospectively. Equity instruments (“instruments”) issued to other than employees are recorded on the basis of the fair value of the instruments, as required by ASC 718. ASC No. 505, Equity Based Payments to Non-Employees (“ASC 505”) defines the measurement date and recognition period for such instruments. In general, the measurement date is (a) when a performance commitment, as defined, is reached or (b) when the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the ASC 505.
Accounting for Derivative Financial Instruments
We evaluate financial instruments using the guidance provided by ASC 815 and apply the provisions thereof to the accounting of items identified as derivative financial instruments not indexed to our stock.
Recently Enacted Accounting Standards
The Company does not expect the adoption of any other recent accounting pronouncements to have a material impact on its financial statements.
NOTE 2 – COMMON STOCK
The Company has authorized 1,000,000 shares of preferred stock, $0.001 par value, with such rights, preferences and designation and to be issued in such series as determined by the Board of Directors. No shares of preferred stock are issued and outstanding at April 30, 2016 or 2015.
The Company has authorized 300,000,000 shares of par value $0.001 common stock, of which 158,213,917 and 138,964,917 shares are outstanding at April 30, 2016 and 2015, respectively.
During the year ended April 30, 2016, the Company entered into separate private placement memorandums with an affiliate shareholder under which we issued 13,249,000 shares of our common stock, restricted in accordance with Rule 144, in exchange for $132,490. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was sophisticated and familiar with our operations at the time of the issuance of the shares.
25 |
GOLIATH FILM AND MEDIA HOLDINGS
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED APRIL 30, 2016 AND 2015
During the year ended April 30, 2016, the Company entered into a separate private placement memorandums with a third party under which we issued 6,000,000 shares of our common stock, restricted in accordance with Rule 144, in exchange for $60,000. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was sophisticated and familiar with our operations at the time of the issuance of the shares.
During the year ended April 30, 2015, the Company entered into separate private placement memorandums with an affiliate shareholder under which we issued 11,603,250 shares of our common stock, restricted in accordance with Rule 144, in exchange for $136,365. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was sophisticated and familiar with our operations at the time of the issuance of the shares.
NOTE 3 - GOING CONCERN
The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company does not have significant cash or other current assets, nor does it have an established source of revenues sufficient to cover its operating costs, which raises substantial doubt about our ability to continue as a going concern.
Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading, or seeking protection from creditors pursuant to laws or regulations. Accordingly, assets and liabilities are recorded on the basis that the entity will be able to realize its assets and discharge its liabilities in the normal course of business.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern.
During the next year, the Company’s foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing and making the requisite filings with the Securities and Exchange Commission. The Company may experience a cash shortfall and be required to raise additional capital.
Historically, the Company has relied upon internally generated funds and funds from the sale of shares of stock to finance its operations and growth. Management may raise additional capital through future public or private offerings of the Company’s stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company’s failure to do so could have a material and adverse effect upon its and its shareholders.
In the past year, the Company funded operations by using cash proceeds received through the issuance of common stock. For the coming year, the Company plans to continue to fund the Company through debt and securities sales and issuances, focus on a possible joint venture or merger until the company generates revenues through the operations of such merged company or joint venture as stated above.
NOTE 4 - RELATED PARTY TRANSACTIONS
During the year ended April 30, 2016, the Company sold 13,249,000 restricted common shares to an affiliate shareholder pursuant to a private placement memorandum in exchange for $132,490.
During the year ended April 30, 2015, the Company sold 11,603,250 restricted common shares to an affiliate shareholder pursuant to a private placement memorandum in exchange for $136,365.
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GOLIATH FILM AND MEDIA HOLDINGS
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED APRIL 30, 2016 AND 2015
In the year ended April 30, 2016, the Company paid C&R Film for capitalized film costs, consulting and reimbursement of various expenses $50,191, similarly the Company paid $5,450 in year ended April 30, 2015. C&R Film is controlled by Lamont Robert, CEO and Acting CFO of the Company.
Additionally, Debbie Criscione, wife of Director of the Company Mike Criscione received payments of $0 in year ended April 30, 2016 and $4,950 in year ended April 30, 2015 for consulting and reimbursements for expenses paid on behalf of the Company.
Further, Mike Criscione, Director of the Company received payments of $46,145 in year ended April 30, 2016 and $10,850 in year ended April 30, 2015 for capitalized film costs, consulting and reimbursements for expenses paid on behalf of the Company.
Additionally, Lamont Roberts, CEO and Acting CFO of the Company, received payments of $0 in year ended April 30, 2016 and $3,600 in year ended April 30, 2015 for consulting and reimbursements for expenses paid on behalf of the Company.
We issued 5,000,000 restricted common shares to our Chief Financial Officer pursuant to his consulting contract dated May 1, 2014. We also issued 2,000,000 restricted common shares for professional services per consulting contracts dated May 1, 2014.
We issued 2,000,000 restricted common shares to our President and Chief Executive Officer, pursuant to his consulting contract dated May 1, 2014. Further, we issued 25,000,000 restricted common shares to a Director of the Company and to manage sales and marketing activities for the Company pursuant to his consulting contract dated May 1, 2014.
Related party transactions have been disclosed in the other notes to these financial statements.
NOTE 5 – INCOME TAXES
As of April 30, 2016, the Company had net operating loss carryforwards of approximately $595,000, which expire in varying amounts between 2018 and 2035. Realization of this potential future tax benefit is dependent on generating sufficient taxable income prior to expiration of the loss carryforward. The deferred tax asset related to this (and other) potential future tax benefits has been offset by a valuation allowance in the same amount. The amount of the deferred tax asset ultimately realizable could be increased in the near term if estimates of future taxable income during the carryforwards period are revised.
Deferred income tax assets of approximately $249,000 at April 30, 2016, was offset in full by a valuation allowance.
The approximate components of the Company’s net deferred tax assets, including a valuation allowance, are as follows:
Deferred Tax Assets | As of April 30, 2016 | As of April 30, 2015 | ||||||
Net operating loss carryforwards | $ | 595,000 | $ | 629,000 | ||||
Net deferred tax assets before valuation allowance | 249,000 | 264,000 | ||||||
Less: Valuation allowance | (249,000 | ) | (264,000 | ) | ||||
Net deferred tax assets | 0 | 0 |
A reconciliation between the amounts of income tax benefit determined by applying the applicable U.S. and State statutory income tax rate to pre-tax loss is as follows:
As of April 30, 2016 | As of April 30, 2015 | |||||||
Statutory federal income tax | (35.0 | )% | (35.0 | )% | ||||
Statutory state income tax | (6.9 | )% | (6.9 | )% | ||||
Change in valuation allowance on deferred tax assets | (41.9 | )% | (41.9 | )% |
27 |
GOLIATH FILM AND MEDIA HOLDINGS
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED APRIL 30, 2016 AND 2015
For the Years Ending | ||||||||
Components of Income Tax Expense | April 30, 2016 | April 30, 2015 | ||||||
Federal U.S. Income Taxes | ||||||||
Current | - | - | ||||||
Deferred | - | - | ||||||
State Income Taxes | ||||||||
Current | $ | 1,320 | $ | 840 | ||||
Deferred | - | - | ||||||
Total Income Tax Expense | $ | 1,320 | $ | 840 |
Due to the inherent uncertainty in forecasts and future events and operating results, the Company has provided for a valuation allowance in an amount equal to gross deferred tax assets resulting in the above figures for the periods audited.
NOTE 6 – INVESTMENT IN FILMS
April 30, | ||||||||
2016 | 2015 | |||||||
Released, net of accumulated amortization | $ | 120,781 | $ | - | ||||
In progress | 195,126 | - | ||||||
Intangible assets, net | $ | 315,907 | $ | - |
Amortization expense was $83,075 and $0 for each of the years ended April 30, 2016 and 2015, respectively, and is classified in cost of sales in the Statements of Operations.
NOTE 7 – OPERATING LEASE
On July 1, 2014, we entered into a month to month lease for office space at location 4640 Admiralty Way, Marina del Rey, California, 90292. The rent is $199 per month.
The total rent and lease expense was $2,190 and $1,642 for the years ended April 30, 2016 and 2015, respectively.
NOTE 8 – ADVANCE FOR FILM PRODUCTION COSTS
Advance for film production costs represent amounts received in advance from Mar Vista Entertainment, LLC (“Mar Vista”) for providing film distribution rights.
NOTE 9 – LINE OF CREDIT
The Company has two credit cards with a total available balance of $25,000. The credit cards are not personally guaranteed by the Officers and Directors of the Company nor are the credit cards guaranteed by the Company. The credit cards have an interest rate of 28.24 percent.
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GOLIATH FILM AND MEDIA HOLDINGS
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED APRIL 30, 2016 AND 2015
NOTE 10 – COMMITMENTS AND CONTINGENCIES
Production Agreements
On April, 1, 2015 Goliath signed an agreement whereby the Company agree to invest $15,000 to KKO Productions to produce a feature length film known as “Forgiven”. Per the agreement Goliath will receive 15% of adjusted gross proceeds after its initial investment has been entirely recouped through adjusted gross proceed. Additionally, the Company will receive two on screen credits as Executive Producer as well as receiving credit on all advertising, publicity and packaging of the film.
On March 4, 2016 Goliath signed a distribution agreement with Mar Vista to distribute a feature film currently in development by Goliath. Per the agreement, Goliath will receive $125,000 in advance payments per an agreed delivery schedule for providing distribution rights of the film “Bridal Boot Camp” a romantic comedy movie being produced by Goliath to Mar Vista. Additionally, Mar Vista will receive 35% of the gross proceeds for a period of 25 years on the film.
Legal
The Company is not a party to or otherwise involved in any legal proceedings.
In the ordinary course of business, from time to time the Company may be involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon the Company’s financial condition and/or results of operations. However, in the opinion of management, other than as set forth herein, matters currently pending or threatened against the Company are not expected to have a material adverse effect on its financial position or results of operations.
NOTE 11 – SUBSEQUENT EVENTS
There were no events subsequent to May 1, 2016, and up to the date of this filing that would require disclosure.
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Item 9A(T). CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure Controls and Procedures. We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized, and reported accurately, in accordance with U.S. Generally Accepted Accounting Principles and within the required time periods, and that such information is accumulated and communicated to our management, including our Chief Executive Officer, and our Chief Financial Officer, as appropriate, to allow for timely decisions regarding disclosure. As of the end of the period covered by this report (April 30, 2016), we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer, and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)). Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that as of the end of the period covered by this Annual Report on Form 10-K our disclosure controls and procedures were not effective to enable us to accurately record, process, summarize and report certain information required to be included in the Company’s periodic SEC filings within the required time periods, and to accumulate and communicate to our management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Internal Control Over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations (“COSO”). Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that as of the end of the period covered by this Annual Report on Form 10-K our internal control over financial reporting was not effective as of the fiscal year ended April 30, 2016.
There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
This annual report on internal control over financial reporting does not include an attestation report of the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Annual Report.
Changes in Internal Controls
There have been no changes in our internal controls over financial reporting during the quarter ended April 30, 2016 that have materially affected or are reasonably likely to materially affect our internal controls.
Item 9B. OTHER INFORMATION
Not applicable
Item 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE.
Directors and Executive Officers
The member of the Board of Directors of Goliath Film and Media Holdings serves until the next annual meeting of stockholders, or until their successors have been elected. The officer serves at the pleasure of the Board of Directors. The following are the directors and executive officers of Goliath Film and Media Holdings.
Lamont Robert, President, Chief Executive Officer and Acting Chief Financial Officer
Lamont Roberts, 60, has been President, Chief Executive Officer and Director of Goliath since October, 2011. In 1997 he co-founded Millennium Personal and Business Management Corporation with Wilt Chamberlain, representing and managing a client base comprising actors, athletes, directors, musicians and writers. In the late 1990s Mr. Roberts also began producing film and television projects. In 2003, he was hired as the Executive Director of Reel Image, Inc., a content funding corporation. As the head of Reel Image, Inc., he is working on distributing a documentary that he wrote and produced entitled “Chosen By God- the Great Black Pharaohs of the 25th Dynasty.” As an independent producer, Mr. Roberts produced the feature films “The Truth About Layla,” and “The Marina Murders.” He acted as an Associate Producer on the feature film “Seducing Spirits,” and was the executive in charge of production for the feature film “The Perfect Argument,” and the documentaries “Film Struggle,” and “Living with Cancer.” Mr. Roberts has a BSBA in Finance and an MA in Real Estate and Urban Economics from the University of Florida. He is a best-selling author and lives in Marina Del Rey, CA.
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Mike Criscione, Director
Mike Criscione, 63, has been on the Board since May 1, 2014 has been a highly successful business man and real estate developer. He brought this extensive experience to the film business in 1991, producing “LA Goddess”. From 2008 to the present Mr. Criscione has directed, financed and produced numerous commercials, music videos, several motion pictures, and documentaries. He is a graduate of Vision Bible College in Whittier, California where he earned his Bachelor degree.
Director Independence
Currently, the Company does not have any independent directors. Since the Company’s Common Stock is not currently listed on a national securities exchange, we have used the definition of “independence” of The NASDAQ Stock Market to make this determination.
Under NASDAQ Listing Rule 5605(a)(2), an “independent director” is a “person other than an officer or employee of the company or any other individual having a relationship which, in the opinion of the company’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.”
We do not currently have a separately designated audit, nominating or compensation committee. However, we do intend to comply with the independent director and committee composition requirements in the future.
Limitation of Liability and Indemnification
Goliath’s Articles of Incorporation provisions may be interpreted to provide for the indemnification of officers and directors for certain civil liabilities, including liabilities arising under the Securities Act. In the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
Code of Ethics
Goliath Film and Media Holdings has not adopted a code of ethics which applies to the chief executive officer, chief operating officer and chief financial officer, because of our level of operations of the public entity in 2016.
Audit Committee Financial Expert
Goliath Film and Media Holdings does not have either an Audit Committee or a financial expert on the Board of Directors. The Board of Directors believes that obtaining the services of an audit committee financial expert is not economically rational at this time in light of the costs associated with identifying and retaining an individual who would qualify as an audit committee financial expert, the limited scope of our operations and the relative simplicity of our financial statements and accounting procedures.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires Goliath Film and Media Holdings officers, directors and persons who own more than ten percent of a registered class of our equity securities to file reports of ownership and changes in ownership with the SEC. Officers, directors and ten percent stockholders are required by regulation to furnish Goliath Film and Media Holdings with copies of all Section 16(a) forms they file. The Company’s common stock did not become registered under the Exchange Act until after the year ended April 30, 2012, so Section 16(a) is not applicable to the Company.
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Item 11. EXECUTIVE COMPENSATION
The following table sets forth the compensation of the Company’s sole executive officer for the years ended April 30, 2016, 2015, and 2014.
SUMMARY COMPENSATION TABLE | ||||||||||||||||||||||||||||||||||
Name and Principal Position (a) | Year (b) | Salary ($) (c) | Bonus ($) (d) | Stock Awards ($) (e) | Option Awards ($) (f) | Non-Equity Incentive Plan Compensation ($) (g) | Nonqualified Deferred Compensation Earnings ($) (h) | All Other Compensation ($) (i) | Total ($) (j) | |||||||||||||||||||||||||
Lemont Roberts, CEO and PRES. | 2016 2015 2014 | 0 0 0 | 0 0 0 | 0 0 0 | 0 0 0 | 0 0 0 | 0 0 0 | 0 5,450 2,000 | 0 5,450 2,000 | |||||||||||||||||||||||||
Mike Criscione, DIRECTOR | 2016 2015 2014 | 0 0 0 | 0 0 0 | 0 0 0 | 0 0 0 | 0 0 0 | 0 0 0 | 0 10,850 25,000 | 0 10,850 25,000 | |||||||||||||||||||||||||
Kaila Criscione, COO | 2015 2014 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 |
0 0 | |||||||||||||||||||||||||
John Ballard | 2015 2014 | 0 0 | 0 0 | 0 0 | 0 0 | 0 0 | 0 0 | 0 5,000 | 0 5,000 |
Mr. Ballard received 5,000,000 restricted common shares pursuant to his consulting contract dated May 1, 2014 and expiring May 1, 2015. The Chief Financial Officer elected to not renew the contract and resigned effective May 1, 2015.
Mr. Roberts received 2,000,000 restricted common shares pursuant to his consulting contract dated May 1, 2014. The employment contract has not been renewed and is on a month to month basis.
Mr. Criscione received 25,000,000 restricted common shares as a Director of the Company and to manage sales and marketing activities for the Company pursuant to his consulting contract dated May 1, 2014. The consulting contract expired May 1, 2015. The consulting contract has not been renewed and is on a month to month basis.
Mr. Roberts received 6,000,000 shares per his employment contract in May 2012 for service valued at $6,000 or $3,000 per year expiring May 2014. There is no other cash or non-cash compensation paid to Mr. Roberts.
Ms. Criscione received 10,000,000 shares per her employment contract in May 2012 for service valued at $10,000 or $5,000 per year expiring May 2014. There is no other cash or non-cash compensation paid to Ms. Criscione. Ms. Criscione resigned from the Company on May 1, 2014.
Mr. Ballard received 5,138,889 shares per his employment contract in May 2012 for service valued at $5,139 or $2,570 per year expiring May 2014. Mr. Ballard also received $9,000 in cash in the year ending April 2012. There is no other cash or non-cash compensation paid to Mr. Ballard.
Ms. Criscione resigned from the Company on May 1, 2014
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No amounts are paid or payable to directors for acting as such.
Employment Agreements with Executive Officers
We do have any employment agreements with our executive officers at this present time.
Director Compensation
Currently our directors serve without compensation.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The following table sets forth information relating to the beneficial ownership of Company common stock as of July 1, 2012 by (i) each person known by Goliath Film and Media Holdings to be the beneficial owner of more than 5% of the outstanding shares of common stock (ii) each of Goliath Film and Media Holdings directors and executive officers, and (iii) the Percentage After Offering assumes the sale of all shares offered. Unless otherwise noted below, Goliath Film and Media Holdings believes that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them. For purposes hereof, a person is deemed to be the beneficial owner of securities that can be acquired by such person within 60 days from the date hereof upon the exercise of warrants or options or the conversion of convertible securities. Each beneficial owner’s percentage ownership is determined by assuming that any warrants, options or convertible securities that are held by such person (but not those held by any other person) and which are exercisable within 60 days from the date hereof, have been exercised.
Beneficial ownership is determined in accordance with SEC rules and generally includes voting or investment power with respect to the shares. We had 158,213,917 shares outstanding as of November 1, 2016.
Name | Office | Number of Common Shares Owned | Percentage of Shares Owned | |||||||
Lamont Roberts | Chief Executive Officer | 15,000,000 | (1) | 9.5 | % | |||||
Mike Criscione | Director | 25,166,000 | 15.9 | % | ||||||
John Ballard | Chief Financial Officer | 10,394,445 | (3) | 6.6 | % | |||||
Kaila Criscione | Chief Operating Officer | 30,000,000 | (2) | 19.0 | % | |||||
Kevin Frawley | none | 48,797,917 | (1) | 30.8 | % | |||||
Total officer/director/5% owners | 129,358,362 | 81.8 | % |
(1) | Mr. Frawley has granted to Lamont Roberts all rights to vote and direct the disposition of 20,000,000 shares held of record by Mr. Frawley. |
(2) | Ms. Criscione resigned from the Company on May 1, 2014. |
(3) | John Ballard resigned from the Company on May 1, 2015. |
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
During the year ended April 30, 2016, the Company sold 13,249,000 restricted common shares to an affiliate shareholder pursuant to a private placement memorandum in exchange for $132,490.
During the year ended April 30, 2015, the Company sold 11,603,250 restricted common shares to an affiliate shareholder pursuant to a private placement memorandum in exchange for $136,365.
The Chief Financial Officer received a total of 5,000,000 shares with a consulting contract expiring May 1, 2014. In addition, the individual providing accounting services received 500,000 restricted common shares with a contract expiring on May 1, 2014.
33 |
Director Independence
Currently, the Company does not have any independent directors. Since the Company’s Common Stock is not currently listed on a national securities exchange, we have used the definition of “independence” of The NASDAQ Stock Market to make this determination.
Under NASDAQ Listing Rule 5605(a)(2), an “independent director” is a “person other than an officer or employee of the company or any other individual having a relationship which, in the opinion of the company’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.”
We do not currently have a separately designated audit, nominating or compensation committee. However, we do intend to comply with the independent director and committee composition requirements in the future.
Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Audit Fees
During the period covering the fiscal years ended April 30, 2016 and 2015, our principal accounting firm Sadler Gibb & Associates was paid $9,500 in 2016 and $9,500 in 2015 for audit and review work.
Tax Fees
None.
All Other Fees
None.
Audit Committees pre-approval policies and procedures
We do not have an audit committee. Our engagement of Sadler and Gibb as our independent registered public accounting firm was approved by the Board of Directors.
PART IV
Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Financial Statements. All Financial Statements are listed in Item 7. No schedules are required.
(b) Exhibits. The following exhibits of the Company are included herein.
Number | Description | ||
3.1 | Articles of Incorporation (1) | ||
3.2 | Articles of Merger with China Advanced Technologies Corporation (1) | ||
3.3 | Bylaws (1) | ||
31.1 | Certification of Chief Executive and Financial Officer pursuant to Exchange Act Rule 13a-14(a)(2) | ||
32.1 | Certification of Chief Executive and Financial Officer pursuant to 18 U.S.C. Section 1350(2). |
(1) Incorporated by reference with the exhibit so numbered in the Company’s Registration Statement on Form S-1, file number 333-169212.
(2) Filed herewith.
34 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on December 1, 2016.
GOLIATH FILM AND MEDIA HOLDINGS | ||
By: | /s/ Lamont Roberts | |
Lamont Roberts | ||
Chief Executive Officer, President and acting | ||
Chief Financial Officer | ||
By: | /s/ Mike Criscione | |
Mike Criscione | ||
Director |
35 |
EXHIBIT 31.1
SECTION 302 CERTIFICATION
I, Lamont Roberts, certify that:
1. I have reviewed this annual report on Form 10-K of Goliath Film and Media 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;
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. I am 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. 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: December 1, 2016
/s/ Lamont Roberts | |
Lamont Roberts | |
Chief Executive Officer and Chief Financial Officer |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Reign Sapphire Corporation (the “Company”) on Form 10-K for the year ended April 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lamont Roberts, Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:
(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 for the dates and periods covered by the Report.
This certificate is being made for the exclusive purpose of compliance by the Chief Executive Officer and Chief Financial Officer of the Company with the requirements of Section 906 of the Sarbanes-Oxley Act of 2002, and may not be disclosed, distributed or used by any person or for any reason other than as specifically required by law.
/s/ Lamont Roberts | |
Lamont Roberts | |
Chief Executive Officer and Chief Financial Officer | |
December 1, 2016 |
Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Apr. 30, 2016 |
Nov. 22, 2016 |
Oct. 31, 2015 |
|
Document And Entity Information | |||
Entity Registrant Name | Goliath Film & Media Holdings | ||
Entity Central Index Key | 0000820771 | ||
Document Type | 10-K | ||
Document Period End Date | Apr. 30, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --04-30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 86,567 | ||
Entity Common Stock, Shares Outstanding | 158,213,917 | ||
Trading Symbol | GFMH | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2016 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Apr. 30, 2016 |
Apr. 30, 2015 |
Oct. 31, 2011 |
---|---|---|---|
Statement of Financial Position [Abstract] | |||
Preferred stock, par value | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | |
Preferred stock, shares issued | |||
Preferred stock, shares outstanding | |||
Common stock, par value | $ 0.001 | $ 0.001 | |
Common stock, shares authorized | 300,000,000 | 300,000,000 | |
Common stock, shares issued | 158,213,917 | 138,964,917 | 67,100,000 |
Common stock, shares outstanding | 158,213,917 | 138,964,917 | 67,100,000 |
Consolidated Statements of Operations - USD ($) |
12 Months Ended | |
---|---|---|
Apr. 30, 2016 |
Apr. 30, 2015 |
|
Income Statement [Abstract] | ||
Film production revenues | $ 175,000 | |
Cost of sales | 83,075 | |
Gross profit | 91,925 | |
Operating Expenses | ||
Sales and marketing | 28,245 | |
General and administrative | 56,145 | 244,934 |
Total operating expenses | 56,145 | 273,179 |
Income (loss) from operations | 35,780 | (273,179) |
Other expense | (4,796) | |
Total other expense | (4,796) | |
Income (loss) before income taxes | 35,780 | (277,975) |
Provision for income taxes | (1,320) | (840) |
Net income (loss) | $ 34,460 | $ (278,815) |
Net loss per share of common stock: | ||
Basic and diluted | $ (0.00) | $ (0.00) |
Weighted average shares Outstanding-Basic and diluted | 148,119,227 | 133,069,779 |
Consolidated Statement of Stockholders' Equity (Deficit) - USD ($) |
Common Stock [Member] |
Additional Paid In Capital [Member] |
Accumulated Deficit [Member] |
Total |
---|---|---|---|---|
Balance at Apr. 30, 2014 | $ 93,362 | $ 224,738 | $ (350,157) | $ (32,057) |
Balance, shares at Apr. 30, 2014 | 93,361,667 | |||
Issuance of shares - services | $ 34,000 | 102,000 | 136,000 | |
Issuance of shares - services, shares | 34,000,000 | |||
Issuance of shares - private placement | $ 11,603 | 124,762 | 136,365 | |
Issuance of shares - private placement, shares | 11,603,250 | |||
Net profit (loss) | (278,815) | (278,815) | ||
Balance at Apr. 30, 2015 | $ 138,965 | 451,500 | (628,972) | (38,507) |
Balance, shares at Apr. 30, 2015 | 138,964,917 | |||
Issuance of shares - private placement | $ 19,249 | 173,241 | 192,490 | |
Issuance of shares - private placement, shares | 19,249,000 | |||
Net profit (loss) | 34,460 | 34,460 | ||
Balance at Apr. 30, 2016 | $ 158,214 | $ 624,741 | $ (594,512) | $ 188,443 |
Balance, shares at Apr. 30, 2016 | 158,213,917 |
Nature of Operations and Summary of Significant Accounting Policies |
12 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2016 | ||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||
Nature of Operations and Summary of Significant Accounting Policies | NOTE 1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
On October 31, 2011 (the “Closing Date”), China Advanced Technology (an entity formed on February 16, 2010 in the State of Nevada) acquired Goliath Film and Media International, a California corporation, by issuing 47,000,000 shares of its Common Stock, constituting 70.1% of the outstanding shares after giving effect to their issuance and the cancellation of 15,619,816 shares held by China Advanced Technology’s prior control person. Immediately following the Closing, 67,100,000 shares were issued and outstanding. On the Closing Date, the name of China Advanced Technology was changed to Goliath Film and Media Holdings (“Goliath” or “the Company”). All share numbers herein have been adjusted for an eight-for-1 forward stock split affected as of the Closing Date. The forward stock split was reflected in the trading market on February 13, 2012. The transaction was accounted for as a reverse acquisition in which Goliath Film and Media International is deemed to be the accounting acquirer, and the prior operations of Goliath (formerly China Advanced Technology) are consolidated for accounting purposes. Since Goliath had no operations, assets, or liabilities as of the Closing, no audit of that entity was required under the materiality thresholds of Regulation S-X Rule 8-04.
Organization, Nature of Business and Trade Name
The Company is engaged in the production and distribution of motion pictures and television content. The Company has begun to realize revenues from its planned principal business purpose.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated.
Basis of Presentation
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that (1) recorded transactions are valid; (2) all valid transactions are recorded and (3) transactions are recorded in the period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the company for the respective periods being presented.
Use of Estimates
The preparation of financial statements in accounting principles generally accepted in the United States of America 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. A change in managements’ estimates or assumptions could have a material impact on the Company’s financial condition and results of operations during the period in which such changes occurred.
Actual results could differ from those estimates. The Company’s financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.
Accounts Receivable
Accounts receivable, if any are carried at the expected net realizable value. The allowance for doubtful accounts, when determined, will be based on management’s assessment of the collectability of specific customer accounts and the aging of the accounts receivables. If there were a deterioration of a major customer’s creditworthiness, or actual defaults were higher than historical experience, our estimates of the recoverability of the amounts due to us could be overstated, which could have a negative impact on operations.
The Company currently does not have any accounts receivable. The above accounting policies will be adopted upon the Company carrying accounts receivable.
Intangible Assets
The Company’s intangible assets consist of intellectual property, principally motion pictures. The Company periodically reviews its long lived assets to ensure that their carrying value does not exceed their fair market value. There was no amortization expense or impairment for the years ended April 30, 2016 and 2015.
Films and Televisions Costs
The Company capitalizes production costs for films produced in accordance with ASC 926-20, “Entertainment-Films - Other Assets - Film Costs”. Accordingly, production costs are capitalized at actual cost and then charged against revenue quarterly as a cost of production based on the relative fair value of the film(s) delivered and recognized as revenue. The Company evaluates its capitalized production costs annually and limits recorded amounts by its ability to recover such costs through expected future sales.
Revenue Recognition
We will recognize revenues in accordance with ASC 926-605, “Entertainment Films, Revenue Recognition”.
Under ASC 926-605, five conditions must be met before revenue can be recognized: (i) there is persuasive evidence that an arrangement exists, (ii) the film is complete and has been delivered, (iii) the license period has begun, (iv) the price is fixed or determinable, and (v) collection is reasonably assured. The Company provides for an allowance for doubtful account based history and experience considering economic and industry trends. The Company does not have any off-Balance Sheet exposure related to its customers.
The Company recognizes revenue when the distributor confirms to the Company that the film has been delivered to the distributor with all technical and document deliveries received, waived or deferred and the film has been entered into the distributor’s rights system.
Advertising
Advertising expenses are recorded as general and administrative expenses when they are incurred. Advertising expense was $0 and $1,404, for the years ended April 30, 2016 and 2015, respectively.
Research and Development
All research and development costs are expensed as incurred. There was no research and development expense for the years ended April 30, 2016 and 2015.
Income tax
We account for income taxes under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 740, Income Taxes (“ASC 740”). Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
Fair Value of Financial Instruments
The Company follows the provisions of ASC 820. This Topic defines fair value, establishes a measurement framework and expands disclosures about fair value measurements.
The Company uses fair value measurements for determining the valuation of derivative financial instruments payable in shares of its common stock. This primarily involves option pricing models that incorporate certain assumptions and projections to determine fair value. These require management’s judgment.
Fair Value Measurements
Effective beginning second quarter 2010, the FASB ASC Topic 825, Financial Instruments, requires disclosures about fair value of financial instruments in quarterly reports as well as in annual reports. For the Company, this statement applies to certain investments and long-term debt. Also, the FASB ASC Topic 820, Fair Value Measurements and Disclosures , clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements.
Various inputs are considered when determining the value of the Company’s investments and long-term debt. The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in these securities. These inputs are summarized in the three broad levels listed below.
● Level 1 – observable market inputs that are unadjusted quoted prices for identical assets or liabilities in active markets.
● Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.).
● Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments).
The Company’s adoption of FASB ASC Topic 825 did not have a material impact on the Company’s consolidated financial statements.
The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. The Company had no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. The Company had no financial assets and/or liabilities carried at fair value on a recurring basis at April 30, 2016, assets and liabilities approximate fair value due to their short term nature.
The availability of inputs observable in the market varies from instrument to instrument and depends on a variety of factors including the type of instrument, whether the instrument is actively traded, and other characteristics particular to the transaction. For many financial instruments, pricing inputs are readily observable in the market, the valuation methodology used is widely accepted by market participants, and the valuation does not require significant management discretion. For other financial instruments, pricing inputs are less observable in the market and may require management judgment. As of April 30, 2016, the Company had no assets other than prepaid expenses and capitalized film production costs.
Basic and diluted earnings per share
Basic earnings per share are based on the weighted-average number of shares of common stock outstanding. Diluted Earnings per share is based on the weighted-average number of shares of common stock outstanding adjusted for the effects of common stock that may be issued as a result of the following types of potentially dilutive instruments:
The FASB ASC Topic 260, Earnings Per Share, requires the Company to include additional shares in the computation of earnings per share, assuming dilution.
Diluted earnings per share is based on the assumption that all dilutive options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options are assumed to be exercised at the time of issuance, and as if funds obtained thereby were used to purchase common stock at the average market price during the period.
Basic and diluted earnings per share are the same as there were no potentially dilutive instruments for the years ended April 30, 2016 and 2015.
Concentrations, Risks, and Uncertainties
The Company did not have a concentration of business with suppliers or customers constituting greater than 10% of the Company’s gross sales during 2016 and 2015.
Stock Based Compensation
In accordance with ASC No. 718, Compensation – Stock Compensation (“ASC 718”), we measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. We apply this statement prospectively. Equity instruments (“instruments”) issued to other than employees are recorded on the basis of the fair value of the instruments, as required by ASC 718. ASC No. 505, Equity Based Payments to Non-Employees (“ASC 505”) defines the measurement date and recognition period for such instruments. In general, the measurement date is (a) when a performance commitment, as defined, is reached or (b) when the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the ASC 505.
Accounting for Derivative Financial Instruments
We evaluate financial instruments using the guidance provided by ASC 815 and apply the provisions thereof to the accounting of items identified as derivative financial instruments not indexed to our stock.
Recently Enacted Accounting Standards
The Company does not expect the adoption of any other recent accounting pronouncements to have a material impact on its financial statements. |
Common Stock |
12 Months Ended |
---|---|
Apr. 30, 2016 | |
Equity [Abstract] | |
Common Stock | NOTE 2 – COMMON STOCK
The Company has authorized 1,000,000 shares of preferred stock, $0.001 par value, with such rights, preferences and designation and to be issued in such series as determined by the Board of Directors. No shares of preferred stock are issued and outstanding at April 30, 2016 or 2015.
The Company has authorized 300,000,000 shares of par value $0.001 common stock, of which 158,213,917 and 138,964,917 shares are outstanding at April 30, 2016 and 2015, respectively.
During the year ended April 30, 2016, the Company entered into separate private placement memorandums with an affiliate shareholder under which we issued 13,249,000 shares of our common stock, restricted in accordance with Rule 144, in exchange for $132,490. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was sophisticated and familiar with our operations at the time of the issuance of the shares.
During the year ended April 30, 2016, the Company entered into a separate private placement memorandums with a third party under which we issued 6,000,000 shares of our common stock, restricted in accordance with Rule 144, in exchange for $60,000. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was sophisticated and familiar with our operations at the time of the issuance of the shares.
During the year ended April 30, 2015, the Company entered into separate private placement memorandums with an affiliate shareholder under which we issued 11,603,250 shares of our common stock, restricted in accordance with Rule 144, in exchange for $136,365. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was sophisticated and familiar with our operations at the time of the issuance of the shares. |
Going Concern |
12 Months Ended |
---|---|
Apr. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | NOTE 3 - GOING CONCERN
The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company does not have significant cash or other current assets, nor does it have an established source of revenues sufficient to cover its operating costs, which raises substantial doubt about our ability to continue as a going concern.
Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading, or seeking protection from creditors pursuant to laws or regulations. Accordingly, assets and liabilities are recorded on the basis that the entity will be able to realize its assets and discharge its liabilities in the normal course of business.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern.
During the next year, the Company’s foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing and making the requisite filings with the Securities and Exchange Commission. The Company may experience a cash shortfall and be required to raise additional capital.
Historically, the Company has relied upon internally generated funds and funds from the sale of shares of stock to finance its operations and growth. Management may raise additional capital through future public or private offerings of the Company’s stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company’s failure to do so could have a material and adverse effect upon its and its shareholders.
In the past year, the Company funded operations by using cash proceeds received through the issuance of common stock. For the coming year, the Company plans to continue to fund the Company through debt and securities sales and issuances, focus on a possible joint venture or merger until the company generates revenues through the operations of such merged company or joint venture as stated above. |
Related Party Transactions |
12 Months Ended |
---|---|
Apr. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 4 - RELATED PARTY TRANSACTIONS
During the year ended April 30, 2016, the Company sold 13,249,000 restricted common shares to an affiliate shareholder pursuant to a private placement memorandum in exchange for $132,490.
During the year ended April 30, 2015, the Company sold 11,603,250 restricted common shares to an affiliate shareholder pursuant to a private placement memorandum in exchange for $136,365.
In the year ended April 30, 2016, the Company paid C&R Film for capitalized film costs, consulting and reimbursement of various expenses $50,191, similarly the Company paid $5,450 in year ended April 30, 2015. C&R Film is controlled by Lamont Robert, CEO and Acting CFO of the Company.
Additionally, Debbie Criscione, wife of Director of the Company Mike Criscione received payments of $0 in year ended April 30, 2016 and $4,950 in year ended April 30, 2015 for consulting and reimbursements for expenses paid on behalf of the Company.
Further, Mike Criscione, Director of the Company received payments of $46,145 in year ended April 30, 2016 and $10,850 in year ended April 30, 2015 for capitalized film costs, consulting and reimbursements for expenses paid on behalf of the Company.
Additionally, Lamont Roberts, CEO and Acting CFO of the Company, received payments of $0 in year ended April 30, 2016 and $3,600 in year ended April 30, 2015 for consulting and reimbursements for expenses paid on behalf of the Company.
We issued 5,000,000 restricted common shares to our Chief Financial Officer pursuant to his consulting contract dated May 1, 2014. We also issued 2,000,000 restricted common shares for professional services per consulting contracts dated May 1, 2014.
We issued 2,000,000 restricted common shares to our President and Chief Executive Officer, pursuant to his consulting contract dated May 1, 2014. Further, we issued 25,000,000 restricted common shares to a Director of the Company and to manage sales and marketing activities for the Company pursuant to his consulting contract dated May 1, 2014.
Related party transactions have been disclosed in the other notes to these financial statements. |
Income Taxes |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | NOTE 5 – INCOME TAXES
As of April 30, 2016, the Company had net operating loss carryforwards of approximately $595,000, which expire in varying amounts between 2018 and 2035. Realization of this potential future tax benefit is dependent on generating sufficient taxable income prior to expiration of the loss carryforward. The deferred tax asset related to this (and other) potential future tax benefits has been offset by a valuation allowance in the same amount. The amount of the deferred tax asset ultimately realizable could be increased in the near term if estimates of future taxable income during the carryforwards period are revised.
Deferred income tax assets of approximately $249,000 at April 30, 2016, was offset in full by a valuation allowance.
The approximate components of the Company’s net deferred tax assets, including a valuation allowance, are as follows:
A reconciliation between the amounts of income tax benefit determined by applying the applicable U.S. and State statutory income tax rate to pre-tax loss is as follows:
Due to the inherent uncertainty in forecasts and future events and operating results, the Company has provided for a valuation allowance in an amount equal to gross deferred tax assets resulting in the above figures for the periods audited. |
Investment in Films |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||
Investments Schedule [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Investment in Films | NOTE 6 – INVESTMENT IN FILMS
Amortization expense was $83,075 and $0 for each of the years ended April 30, 2016 and 2015, respectively, and is classified in cost of sales in the Statements of Operations. |
Operating Lease |
12 Months Ended |
---|---|
Apr. 30, 2016 | |
Leases [Abstract] | |
Operating Lease | NOTE 7 – OPERATING LEASE
On July 1, 2014, we entered into a month to month lease for office space at location 4640 Admiralty Way, Marina del Rey, California, 90292. The rent is $199 per month.
The total rent and lease expense was $2,190 and $1,642 for the years ended April 30, 2016 and 2015, respectively. |
Advance for Film Production Costs |
12 Months Ended |
---|---|
Apr. 30, 2016 | |
Advance For Film Production Costs | |
Advance for Film Production Costs | NOTE 8 – ADVANCE FOR FILM PRODUCTION COSTS
Advance for film production costs represent amounts received in advance from Mar Vista Entertainment, LLC (“Mar Vista”) for providing film distribution rights. |
Line of Credit |
12 Months Ended |
---|---|
Apr. 30, 2016 | |
Debt Disclosure [Abstract] | |
Line of Credit | NOTE 9 – LINE OF CREDIT
The Company has two credit cards with a total available balance of $25,000. The credit cards are not personally guaranteed by the Officers and Directors of the Company nor are the credit cards guaranteed by the Company. The credit cards have an interest rate of 28.24 percent. |
Commitments and Contingencies |
12 Months Ended |
---|---|
Apr. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies |
NOTE 10 – COMMITMENTS AND CONTINGENCIES
Production Agreements
On April, 1, 2015 Goliath signed an agreement whereby the Company agree to invest $15,000 to KKO Productions to produce a feature length film known as “Forgiven”. Per the agreement Goliath will receive 15% of adjusted gross proceeds after its initial investment has been entirely recouped through adjusted gross proceed. Additionally, the Company will receive two on screen credits as Executive Producer as well as receiving credit on all advertising, publicity and packaging of the film.
On March 4, 2016 Goliath signed a distribution agreement with Mar Vista to distribute a feature film currently in development by Goliath. Per the agreement, Goliath will receive $125,000 in advance payments per an agreed delivery schedule for providing distribution rights of the film “Bridal Boot Camp” a romantic comedy movie being produced by Goliath to Mar Vista. Additionally, Mar Vista will receive 35% of the gross proceeds for a period of 25 years on the film.
Legal
The Company is not a party to or otherwise involved in any legal proceedings.
In the ordinary course of business, from time to time the Company may be involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon the Company’s financial condition and/or results of operations. However, in the opinion of management, other than as set forth herein, matters currently pending or threatened against the Company are not expected to have a material adverse effect on its financial position or results of operations. |
Subsequent Events |
12 Months Ended |
---|---|
Apr. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 11 – SUBSEQUENT EVENTS
There were no events subsequent to May 1, 2016, and up to the date of this filing that would require disclosure. |
Nature of Operations and Summary of Significant Accounting Policies (Policies) |
12 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2016 | ||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||
Organization, Nature of Business and Trade Name | Organization, Nature of Business and Trade Name
The Company is engaged in the production and distribution of motion pictures and television content. The Company has begun to realize revenues from its planned principal business purpose. |
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Principles of Consolidation | Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated. |
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Basis of Presentation | Basis of Presentation
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that (1) recorded transactions are valid; (2) all valid transactions are recorded and (3) transactions are recorded in the period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the company for the respective periods being presented. |
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Use of Estimates | Use of Estimates
The preparation of financial statements in accounting principles generally accepted in the United States of America 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. A change in managements’ estimates or assumptions could have a material impact on the Company’s financial condition and results of operations during the period in which such changes occurred.
Actual results could differ from those estimates. The Company’s financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented. |
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Cash and Cash Equivalents | Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. |
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Accounts Receivable | Accounts Receivable
Accounts receivable, if any are carried at the expected net realizable value. The allowance for doubtful accounts, when determined, will be based on management’s assessment of the collectability of specific customer accounts and the aging of the accounts receivables. If there were a deterioration of a major customer’s creditworthiness, or actual defaults were higher than historical experience, our estimates of the recoverability of the amounts due to us could be overstated, which could have a negative impact on operations.
The Company currently does not have any accounts receivable. The above accounting policies will be adopted upon the Company carrying accounts receivable. |
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Intangible Assets | Intangible Assets
The Company’s intangible assets consist of intellectual property, principally motion pictures. The Company periodically reviews its long lived assets to ensure that their carrying value does not exceed their fair market value. There was no amortization expense or impairment for the years ended April 30, 2016 and 2015. |
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Films and Televisions Costs | Films and Televisions Costs
The Company capitalizes production costs for films produced in accordance with ASC 926-20, “Entertainment-Films - Other Assets - Film Costs”. Accordingly, production costs are capitalized at actual cost and then charged against revenue quarterly as a cost of production based on the relative fair value of the film(s) delivered and recognized as revenue. The Company evaluates its capitalized production costs annually and limits recorded amounts by its ability to recover such costs through expected future sales. |
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Revenue Recognition | Revenue Recognition
We will recognize revenues in accordance with ASC 926-605, “Entertainment Films, Revenue Recognition”.
Under ASC 926-605, five conditions must be met before revenue can be recognized: (i) there is persuasive evidence that an arrangement exists, (ii) the film is complete and has been delivered, (iii) the license period has begun, (iv) the price is fixed or determinable, and (v) collection is reasonably assured. The Company provides for an allowance for doubtful account based history and experience considering economic and industry trends. The Company does not have any off-Balance Sheet exposure related to its customers.
The Company recognizes revenue when the distributor confirms to the Company that the film has been delivered to the distributor with all technical and document deliveries received, waived or deferred and the film has been entered into the distributor’s rights system. |
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Advertising | Advertising
Advertising expenses are recorded as general and administrative expenses when they are incurred. Advertising expense was $0 and $1,404, for the years ended April 30, 2016 and 2015, respectively. |
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Research and Development | Research and Development
All research and development costs are expensed as incurred. There was no research and development expense for the years ended April 30, 2016 and 2015. |
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Income Tax | Income tax
We account for income taxes under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 740, Income Taxes (“ASC 740”). Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
Fair Value of Financial Instruments
The Company follows the provisions of ASC 820. This Topic defines fair value, establishes a measurement framework and expands disclosures about fair value measurements.
The Company uses fair value measurements for determining the valuation of derivative financial instruments payable in shares of its common stock. This primarily involves option pricing models that incorporate certain assumptions and projections to determine fair value. These require management’s judgment. |
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Fair Value Measurements | Fair Value Measurements
Effective beginning second quarter 2010, the FASB ASC Topic 825, Financial Instruments, requires disclosures about fair value of financial instruments in quarterly reports as well as in annual reports. For the Company, this statement applies to certain investments and long-term debt. Also, the FASB ASC Topic 820, Fair Value Measurements and Disclosures , clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements.
Various inputs are considered when determining the value of the Company’s investments and long-term debt. The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in these securities. These inputs are summarized in the three broad levels listed below.
● Level 1 – observable market inputs that are unadjusted quoted prices for identical assets or liabilities in active markets.
● Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.).
● Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments).
The Company’s adoption of FASB ASC Topic 825 did not have a material impact on the Company’s consolidated financial statements.
The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. The Company had no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. The Company had no financial assets and/or liabilities carried at fair value on a recurring basis at April 30, 2016, assets and liabilities approximate fair value due to their short term nature.
The availability of inputs observable in the market varies from instrument to instrument and depends on a variety of factors including the type of instrument, whether the instrument is actively traded, and other characteristics particular to the transaction. For many financial instruments, pricing inputs are readily observable in the market, the valuation methodology used is widely accepted by market participants, and the valuation does not require significant management discretion. For other financial instruments, pricing inputs are less observable in the market and may require management judgment. As of April 30, 2016, the Company had no assets other than prepaid expenses and capitalized film production costs. |
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Basic and Diluted Earnings Per Share | Basic and diluted earnings per share
Basic earnings per share are based on the weighted-average number of shares of common stock outstanding. Diluted Earnings per share is based on the weighted-average number of shares of common stock outstanding adjusted for the effects of common stock that may be issued as a result of the following types of potentially dilutive instruments:
The FASB ASC Topic 260, Earnings Per Share, requires the Company to include additional shares in the computation of earnings per share, assuming dilution.
Diluted earnings per share is based on the assumption that all dilutive options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options are assumed to be exercised at the time of issuance, and as if funds obtained thereby were used to purchase common stock at the average market price during the period.
Basic and diluted earnings per share are the same as there were no potentially dilutive instruments for the years ended April 30, 2016 and 2015. |
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Concentrations, Risks, and Uncertainties | Concentrations, Risks, and Uncertainties
The Company did not have a concentration of business with suppliers or customers constituting greater than 10% of the Company’s gross sales during 2016 and 2015. |
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Stock Based Compensation | Stock Based Compensation
In accordance with ASC No. 718, Compensation – Stock Compensation (“ASC 718”), we measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. We apply this statement prospectively. Equity instruments (“instruments”) issued to other than employees are recorded on the basis of the fair value of the instruments, as required by ASC 718. ASC No. 505, Equity Based Payments to Non-Employees (“ASC 505”) defines the measurement date and recognition period for such instruments. In general, the measurement date is (a) when a performance commitment, as defined, is reached or (b) when the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the ASC 505. |
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Accounting for Derivative Financial Instruments | Accounting for Derivative Financial Instruments
We evaluate financial instruments using the guidance provided by ASC 815 and apply the provisions thereof to the accounting of items identified as derivative financial instruments not indexed to our stock. |
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Recently Enacted Accounting Standards | Recently Enacted Accounting Standards
The Company does not expect the adoption of any other recent accounting pronouncements to have a material impact on its financial statements. |
Income Taxes (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Net Deferred Tax Assets, Including Valuation Allowance |
The approximate components of the Company’s net deferred tax assets, including a valuation allowance, are as follows:
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Schedule of Federal Statutory Income Tax Rate to Total Income Taxes |
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Schedule of Components of Income Tax Expense |
|
Investment in Films (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||
Investments Schedule [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets |
|
Nature of Operations and Summary of Significant Accounting Policies (Details Narrative) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Oct. 31, 2011 |
Apr. 30, 2016 |
Apr. 30, 2015 |
|
Common stock, issued | 67,100,000 | 158,213,917 | 138,964,917 |
Common stock, outstanding | 67,100,000 | 158,213,917 | 138,964,917 |
Forward stock split | eight-for-1 forward stock split | ||
Advertising costs | $ 0 | $ 1,404 | |
Research and development expense | |||
Potentially dilutive instruments | $ (0.00) | $ (0.00) | |
Percentage of concentration risk gross of business with suppliers or customers | 10.00% | 10.00% | |
China Advanced Technology [Member] | |||
Stock issuing for acquisition | 47,000,000 | ||
Constituting outstanding shares | 70.10% | ||
Cancellation share | 15,619,816 |
Common Stock (Details Narrative) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Apr. 30, 2016 |
Apr. 30, 2015 |
Oct. 31, 2011 |
|
Preferred stock, par value | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | |
Preferred stock, shares issued | |||
Preferred stock, shares outstanding | |||
Common stock, shares authorized | 300,000,000 | 300,000,000 | |
Common stock, par value | $ 0.001 | $ 0.001 | |
Common stock, shares issued | 158,213,917 | 138,964,917 | 67,100,000 |
Common stock, shares outstanding | 158,213,917 | 138,964,917 | 67,100,000 |
Affiliated Shareholders [Member] | Private Placement [Member] | |||
Restricted common stock shares issued during period | 13,249,000 | 11,603,250 | |
Restricted common stock issued during period | $ 132,490 | $ 136,365 | |
Third Party [Member] | Private Placement [Member] | |||
Restricted common stock shares issued during period | 6,000,000 | ||
Restricted common stock issued during period | $ 60,000 |
Income Taxes (Details Narrative) |
12 Months Ended |
---|---|
Apr. 30, 2016
USD ($)
| |
Income Tax Disclosure [Abstract] | |
Operating loss carry forward | $ 595,000 |
Operating loss expiration date | 2018 and 2035 |
Deferred income tax assets | $ 249,000 |
Income Taxes - Components of Net Deferred Tax Assets, Including Valuation Allowance (Details) - USD ($) |
Apr. 30, 2016 |
Apr. 30, 2015 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 595,000 | $ 629,000 |
Net deferred tax assets before valuation allowance | 249,000 | 264,000 |
Less: Valuation allowance | (249,000) | (264,000) |
Net deferred tax assets | $ 0 | $ 0 |
Income Taxes - Schedule of Federal Statutory Income Tax Rate to Total Income Taxes (Details) |
12 Months Ended | |
---|---|---|
Apr. 30, 2016 |
Apr. 30, 2015 |
|
Income Tax Disclosure [Abstract] | ||
Statutory federal income tax | 35.00% | 35.00% |
Statutory state income tax | (6.90%) | (6.90%) |
Change in valuation allowance on deferred tax assets | (41.90%) | (41.90%) |
Income Taxes - Schedule of Components of Income Tax Expense (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Apr. 30, 2016 |
Apr. 30, 2015 |
|
Income Tax Disclosure [Abstract] | ||
Federal U.S. Income Taxes, Current | ||
Federal U.S. Income Taxes, Deferred | ||
State Income Taxes, current | 1,320 | 840 |
State Income Taxes, Deferred | ||
Total Income Tax Expense | $ 1,320 | $ 840 |
Investment in Films (Details Narrative) - USD ($) |
12 Months Ended | |
---|---|---|
Apr. 30, 2016 |
Apr. 30, 2015 |
|
Investments Schedule [Abstract] | ||
Amortization expense | $ 83,075 | $ 0 |
Investment in Films - Schedule of Intangible Assets (Details) - USD ($) |
Apr. 30, 2016 |
Apr. 30, 2015 |
---|---|---|
Investments Schedule [Abstract] | ||
Released, net of accumulated amortization | $ 120,781 | |
In progress | 195,126 | |
Intangible assets, net | $ 315,907 |
Operating Lease (Details Narrative) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Jul. 01, 2014 |
Apr. 30, 2016 |
Apr. 30, 2015 |
|
Leases [Abstract] | |||
Rent per month | $ 199 | ||
Total rent and lease expense | $ 2,190 | $ 1,642 |
Line of Credit (Details Narrative) - Two Credit Cards [Member] |
Apr. 30, 2016
USD ($)
|
---|---|
Line of credit, available balance | $ 25,000 |
Percentage of interest rate | 28.24% |
Commitments and Contingencies (Details Narrative) - USD ($) |
Mar. 04, 2016 |
Apr. 30, 2016 |
Apr. 30, 2015 |
Apr. 01, 2015 |
---|---|---|---|---|
Advance payments | $ 315,907 | |||
Production Agreements [Member] | KKO Productions [Member] | ||||
Investment in productions | $ 15,000 | |||
Percentage of received as gross proceeds on films | 15.00% | |||
Distribution Agreement [Member] | Mar Vista Entertainment, LLC [Member] | ||||
Percentage of received as gross proceeds on films | 35.00% | |||
Advance payments | $ 125,000 | |||
Film period | 25 years |
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