UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
x ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended June 30, 2015
¨ TRANSITION REPORT
UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 000-53780
STAR CENTURY PANDAHO CORPORATION
(Exact name of registrant as specified in its
charter)
Nevada |
27-0491634 |
(State or other jurisdiction of incorporation or organization |
(I.R.S. Employer Identification No.) |
|
|
8250 w. Charleston Blvd. Suite 120
Las Vegas, Nevada |
89117 |
(Address of Principal executive offices) |
(Zip Code) |
|
|
Registrant’s telephone number, including area code. |
(702) 628-8899 |
Securities registered under Section 12(b) of the Exchange Act: |
None |
|
|
Securities registered under Section 12(g) of the Exchange Act: |
Common stock, par value $0.001 per share |
|
(Title of Class) |
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 Section 15(d) of the Act. Yes ¨ No x
Indicate by check mark whether the issuer (1) filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act during the last 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 corporate Web site, if any, every Interactive Data File required to
be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files). Yes x
No ¨
Indicate by check mark if disclosure
of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) 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, a non-accelerated filer, or a smaller reporting company. See the
definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company”
in Rule 12b-2 of the Exchange Act.
|
Large accelerated filer ¨ |
Accelerated filer ¨ |
|
Non-accelerated filer ¨ |
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
Aggregate market value of the voting
and non-voting common equity held by non-affiliates of the registrant as of December 31, 2014: $93,255
As of September 23, 2015 the registrant
had 68,252,650 outstanding shares of Common Stock.
Documents incorporated by reference: None.
TABLE OF CONTENTS
PART I |
|
Page |
Item 1. |
Business |
4 |
Item 1A. |
Risk Factors |
5 |
Item 1B. |
Unresolved Staff Comments |
8 |
Item 2. |
Properties |
8 |
Item 3. |
Legal Proceedings |
8 |
Item 4. |
Mine
Safety Disclosures |
8 |
PART II |
|
|
Item 5. |
Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
8 |
Item 6. |
Selected Financial Data |
9 |
Item 7. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
9 |
Item 7A. |
Quantitative and Qualitative Disclosures About Market Risk |
13 |
Item 8. |
Financial Statements and Supplementary Data |
13 |
Item 9. |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
13 |
Item 9A. |
Controls and Procedures |
13 |
Item 9B. |
Other Information |
14 |
PART III |
|
|
Item 10. |
Directors, Executive Officers and Corporate Governance |
14 |
Item 11. |
Executive Compensation |
15 |
Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
18 |
Item 13. |
Certain Relationships and Related Transactions and Director Independence |
18 |
Item 14. |
Principal Accountant Fees and Services |
19 |
PART IV |
|
|
Item 15. |
Exhibits, Financial Statement Schedules |
19 |
|
Signatures |
20 |
PART I.
Forward-Looking Information
Much of the discussion in this Item is “forward
looking”. Actual operations and results may materially differ from present plans and projections due to changes in
economic conditions, new business opportunities, changed business conditions, and other developments. Other factors that
could cause results to differ materially are described in our filings with the Securities and Exchange Commission.
There are several factors that could cause
actual results or events to differ materially from those anticipated, and include, but are not limited to, general economic, financial
and business conditions, changes in and compliance with governmental laws and regulations, including various state and federal
environmental regulations, our ability to obtain additional financing from outside investors and/or bank and mezzanine lenders,
and our ability to generate sufficient revenues to cover operating losses and position us to achieve positive cash flow.
Readers are cautioned not to place undue reliance
on the forward-looking statements contained herein, which speak only as of the date hereof. We believe the information contained
in this Form 10-K to be accurate as of the date hereof. Changes may occur after that date. We will not update
that information except as required by law in the normal course of its public disclosure practices.
ITEM 1. BUSINESS.
Company Overview
Star Century Pandaho Corporation (formerly
Journal of Radiology, Inc.) (“SCPD” or "the Company") was organized under the laws of the State of Nevada
on May 21, 2009. The Company was established as part of the Chapter 11 reorganization of AP Corporate Services, Inc. ("AP").
Under AP's Plan of Reorganization, as confirmed by the U.S. Bankruptcy Court for the Central District of California, the Company
was organized to own and develop a professional journal devoted to radiology.
On January 8, 2015, two shareholders of the
Company agreed to sell an aggregate of 216,000 shares of the Company’s common stock, representing 53.66% of total outstanding
shares to Star Century Entertainment, Inc., an unrelated third party, and the Company experienced a change in control. In conjunction
with the change in control, three individuals were elected to be the Company’s management, and the Company’s former
President resigned. Effective January 16, 2015, the Company’s Board of Directors and the majority shareholder amended the
Company’s Articles of Incorporation to (i) change the name of the Company to Star Century Pandaho Corporation (ii) effect
a 1-for-5,000 reverse common stock split and (iii) decrease the Company’s authorized common stock to 150,000,000 shares,
par value $0.001.
On May 20, 2015, the Company’s Board
of Directors and the majority shareholder amended the Company’s Articles of Incorporation to increase authorized common stock
to 250,000,000 shares.
The Company’s headquarters are based
in Las Vegas with the planned main operation center to be located in Beijing, China. Our planned services will be offered throughout
China, Asia-Pacific countries, and the United States. The Company’s business model includes the establishment of official
and professional fan clubs for celebrities that will engage in event management, talent shows, music festivals, and movie productions.
In addition, planned operations will include Pandaho (Panda) themed areas that include branding, toys, art, entertainment and e-commerce.
Employees
Star Century Pandaho Corporation currently has three employees.
Office and Facilities
Our corporate headquarters are located at 8250
W. Charleston Blvd. Suite 120, Las Vegas, Nevada 89117.
ITEM 1A. RISK FACTORS.
An investment
in our common stock involves a high degree of risk. You should carefully consider the risks described below before deciding to
purchase shares of our common stock. If any of the events, contingencies, circumstances or conditions described in the risks below
actually occurs, our business, financial condition or results of operations could be seriously harmed.
RISK FACTORS CONCERNING OUR BUSINESS
Our business is subject to numerous risk factors, including
the following:
The Company's independent registered public accounting firm
have issued a report questioning the Company's ability to continue as a going concern.
Primarily as a result of our recurring losses
and our lack of liquidity, the Company’s independent registered public accounting firm, in their report on our financial
statements for the year ending June 30, 2015, expressed substantial doubt about the Company’s ability to continue as a going
concern. We anticipate incurring losses in the foreseeable future. We do not have an established source of revenue sufficient to
cover our operating costs. Our ability to continue as a going concern is dependent upon our ability to successfully compete, operate
profitably and/or raise additional capital through other means. If we are unable to reverse our losses, we will have to discontinue
operations.
We have had little operating history and no revenues or earnings
from operations.
We will, in all likelihood, sustain operating
expenses without corresponding revenues, at least until we begin to generate revenue from new plan of operations. This may result
in us incurring a net operating loss that will increase continuously until we can generate revenues or raise additional capital
through other means. There is no assurance that we can identify such a business entity and consummate such an agreement or combination.
We do not have significant cash or other material
assets and we are relying on advances from stockholders, officers and directors to meet our limited operating expenses. We may
become insolvent if we are unable to pay our debts in the ordinary course of business as they become due.
Our proposed plan of operation is speculative.
Our proposed plan of operation strategy depends
in large part on our ability to build a robust platform of official and professional fan clubs for the celebrities. We may not
be able to enter into a substantial number of contracts that we anticipate would be necessary to support our business model.
There can be no assurance that the Company will be able to
enhance its products or services, or develop other products or services.
If we are unable to achieve profitability in
the future, recruit sufficient personnel or raise money in the future, our ability to develop our services would be adversely affected.
Our inability to develop our services or develop new services, in view of rapidly changing technology, changing customer demands
and competitive pressures, would have a material adverse effect upon our business, operating results and financial condition.
Our principal shareholder will be able
to approve all corporate actions without shareholder consent and will control our Company.
On January 8, 2015, Star Century
Entertainment, Inc. owned 53.66% of the Company’s total outstanding shares of common stock. In May and June 2015, the
Company issued approximately 67.9 million shares of common stock for the licensing of the Pandaho intellectual property and
for various services. After the issuance of shares, Star Century Entertainment, Inc. owned less than 1% of our Common Stock.
On September 4, 2015, the Board of Directors designated 100,000 shares of Series B Preferred Stock, par value $0.01. Each
share of Series B Preferred Stock has the voting power of 5,000 common shares. On September 8, 2015, the Company
issued 25,000 shares of Series B Preferred Stock Star Century Entertainment Inc. that will have voting power of 125,000,000
common shares and will have significant influence over all matters requiring approval by our shareholders, but not requiring
the approval of the minority shareholders. Because it will have the majority of voting rights, it will be able to elect all
of the members of our board of directors, allowing it to exercise significant control of our affairs and management.
In addition, it may transact most corporate matters requiring shareholder approval by written consent, without a
duly-noticed and duly-held meeting of shareholders.
The reporting requirements under federal
securities law may delay or prevent us from making certain acquisitions.
Sections 13 and 15(d) of the Securities Exchange
Act of 1934, as amended, (the "1934 Act"), require companies subject thereto to provide certain information about significant
acquisitions, including certified financial statements for the company acquired, covering one, two, or three years, depending on
the relative size of the acquisition. The time and additional costs that may be incurred by some target entities to prepare such
statements may significantly delay or essentially preclude consummation of an otherwise desirable acquisition by the Company. Acquisition
prospects that do not have or are unable to obtain the required audited statements may not be appropriate for acquisition so long
as the reporting requirements of the 1934 Act are applicable.
In addition to the audited financial statements,
the time and additional costs that may be incurred by some target entities to prepare and disclose such information may significantly
delay or essentially preclude consummation of an otherwise desirable acquisition by the Company.
An acquisition could create a situation wherein we would be
required to register under The Investment Company Act of 1940 and thus be required to incur substantial additional costs and expenses.
Although we will be subject to regulation under
the 1934 Act, management believes the Company will not be subject to regulation under the Investment Company Act of 1940, insofar
as we will not be engaged in the business of investing or trading in securities. In the event we engage in a business combination
that results in us holding passive investment interests in a number of entities, we could be subject to regulation under the Investment
Company Act of 1940. In such event, we would be required to register as an investment company and could be expected to incur significant
registration and compliance costs. We have obtained no formal determination from the Securities and Exchange Commission as to the
status of our Company under the Investment Company Act of 1940 and, consequently, any violation of such Act would subject us to
material adverse consequences.
The requirement of audited financial
statements may disqualify some business opportunities seeking a business combination with us.
Our
management believes that any potential business combination opportunity must provide audited financial statements for review, for
the protection of all parties to the business combination. One or more attractive business opportunities may choose to forego the
possibility of a business combination with us, rather than incur the expenses associated with preparing audited financial statements.
If our Common Stock does not meet blue
sky resale requirements, certain shareholders may be unable to resell our Common Stock.
The resale of Common Stock must meet the blue
sky resale requirements in the states in which the proposed purchasers reside. If we are unable to qualify the Common Stock and
there is no exemption from qualification in certain states, the holders of the Common Stock or the purchasers of the Common Stock
may be unable to sell them.
Our shareholders may face significant
restrictions on the resale of our Common Stock due to state "blue sky" laws or if we are determined to be a "blank
check" company.
There are state regulations that may adversely
affect the transferability of our Common Stock. We have not registered our Common Stock for resale under the securities or "blue
sky" laws of any state. We may seek qualification or advise our shareholders of the availability of an exemption. We are under
no obligation to register or qualify our Common Stock in any state or to advise the shareholders of any exemptions.
Current shareholders, and persons who desire
to purchase the Common Stock in any trading market that may develop in the future, should be aware that there might be significant
state restrictions upon the ability of new investors to purchase the Common Stock.
Blue sky laws, regulations, orders, or interpretations
place limitations on offerings or sales of securities by "blank check" companies or in "blind-pool" offerings,
or if such securities represent "cheap stock" previously issued to promoters or others. Our former CEO, because he received
stock at a price of $.001 for each share, may be deemed to hold "cheap stock." These limitations typically provide, in
the form of one or more of the following limitations that such securities are:
(a) Not eligible for sale
under exemption provisions permitting sales without registration to accredited investors or qualified purchasers;
(b) Not eligible for the
transaction exemption from registration for non-issuer transactions by a registered broker-dealer;
(c) Not eligible for registration
under the simplified small corporate offering registration (SCOR) form available in many states;
(d) Not eligible for the
"solicitations of interest" exception to securities registration requirements available in many states;
(e) Not permitted to be
registered or exempted from registration, and thus not permitted to be sold in the state under any circumstances.
Virtually all 50 states have adopted one or
more of these limitations, or other limitations or restrictions affecting the sale or resale of stock of blank check companies
or securities sold in "blind pool" offerings or "cheap stock" issued to promoters or others. Specific limitations
on such offerings have been adopted in:
Alaska |
Nevada |
Tennessee |
Arkansas |
New Mexico |
Texas |
California |
Ohio |
Utah |
Delaware |
Oklahoma |
Vermont |
Florida |
Oregon |
Washington |
Georgia |
Pennsylvania |
|
Idaho |
Rhode Island |
|
Indiana |
South Carolina |
|
Nebraska |
South Dakota |
|
Any secondary trading market which may develop
may only be conducted in those jurisdictions where an applicable exemption is available or where the shares have been registered.
Current shareholders and persons who desire
to purchase the Common Stock in any trading market that may develop in the future, should be aware that we are under no obligation
to register the shares on behalf of our shareholders under the Securities Act of 1933, as amended.
The Company's officers, directors and
majority shareholders have expressed their intentions not to engage in any transactions with respect to the Company's Common
Stock except in connection with or following a business combination resulting in us no longer being defined as a blank check
issuer. Any transactions in our Common Stock by said shareholders will require compliance with the registration requirements
under the Securities Act of 1933, as amended.
Our Common Stock may be subject to significant
restriction on resale due to federal penny stock restrictions.
The Securities and Exchange Commission has
adopted rules that regulate broker or dealer practices in connection with transactions in penny stocks. Penny stocks generally
are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges
or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities
is provided by the exchange system). The penny stock rules require a broker or dealer, prior to a transaction in a penny stock
not otherwise exempt from the rules, to deliver a standardized risk disclosure document prepared by the Securities and Exchange
Commission that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker
or dealer also must provide the customer with bid and offer quotations for the penny stock, the compensation of the broker or dealer,
and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the
customer's account. The penny stock rules also require that prior to a transaction in a penny stock not otherwise exempt from such
rules, the broker or dealer must make a special written determination that a penny stock is a suitable investment for the purchaser
and receive the purchaser's written agreement to the transaction.
These disclosure requirements may have the
effect of reducing the level of trading activity in any secondary market for our stock that becomes subject to the penny stock
rules, and accordingly, shareholders of our Common Stock may find it difficult to sell their securities, if at all.
ITEM
1B. UNRESOLVED STAFF COMMENTS
We
have received no written comments regarding our periodic or current reports from the staff of the SEC that were issued 180 days
or more preceding the end of our fiscal year 2015 that remain unresolved.
ITEM
2. PROPERTIES.
The Company owns no real property.
ITEM 3. LEGAL PROCEEDINGS.
None.
ITEM 4. MINE SAFETY DISCLOSURES
N/A
PART
II.
ITEM 5. MARKET
FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information
Our
common stock is quoted under the symbol “SCPD” on the OTCBB operated by the Financial Industry Regulatory Authority,
Inc. (“FINRA”) and the OTCQB operated by OTC Markets Group, Inc. Few
market makers continue to participate in the OTCBB system because of high fees charged by FINRA. Consequently, market makers
that once quoted our shares on the OTCBB system may no longer be posting a quotation for our shares. As of the date of this report,
however, our shares are quoted by several market makers on the OTCQB. The criteria for listing on either the OTCBB or OTCQB are
similar and include that we remain current in our SEC reporting.
Only a limited market exists for our securities.
There is no assurance that a regular trading market will develop, or if developed, that it will be sustained. Therefore, a shareholder
may be unable to resell his securities in our company.
The following tables set forth the range of
high and low prices for our common stock for the each of the periods indicated as reported by the OTCQB. These quotations reflect
inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
Fiscal Year Ending June 30, 2015 |
Quarter Ended | |
High $ | |
Low $ |
| June 30, 2015 | | |
$ | 0.63 | | |
$ | 0.30 | |
| March 31, 2015 | | |
$ | 1.00 | | |
$ | 0.50 | |
| December 31, 2014 | | |
$ | 1.00 | | |
$ | 0.50 | |
| September 30, 2014 | | |
$ | 2.00 | | |
$ | 0.50 | |
Fiscal Year Ending June 30, 2014 |
Quarter Ended | |
High $ | |
Low $ |
| June 30, 2014 | | |
$ | 1.50 | | |
$ | 0.50 | |
| March 31, 2014 | | |
$ | 2.00 | | |
$ | 0.50 | |
| December 31, 2013 | | |
$ | 1.00 | | |
$ | 0.50 | |
| September 30, 2013 | | |
$ | 1.50 | | |
$ | 0.50 | |
On September 23, 2015, the last sales price per share of our common
stock was $0.95.
Penny Stock
The SEC has adopted rules that regulate broker-dealer
practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a market price of
less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided
that current price and volume information with respect to transactions in such securities is provided by the exchange or system.
The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure
document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in
both public offerings and secondary trading; (b) contains a description of the broker's or dealer's duties to the customer and
of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities
laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and
the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary
actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains
such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation.
ITEM 6. SELECTED FINANCIAL DATA.
Not
Applicable.
ITEM 7. MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Star Century Pandaho Corporation (formerly
Journal of Radiology, Inc.) (“SCPD” or "the Company") was organized under the laws of the State of Nevada
on May 21, 2009. The Company was established as part of the Chapter 11 reorganization of AP Corporate Services, Inc. ("AP").
Under AP's Plan of Reorganization, as confirmed by the U.S. Bankruptcy Court for the Central District of California, the Company
was organized to own and develop a professional journal devoted to radiology.
On January 8, 2015, two shareholders of the
Company agreed to sell an aggregate of 216,000 shares of the Company’s common stock, representing 53.66% of total outstanding
shares at the time to Star Century Entertainment, Inc., an unrelated third party, and the Company experienced a change in control.
In conjunction with the change in control, three individuals were elected to be the Company’s management, and the Company’s
former President resigned. Effective January 16, 2015, the Company’s Board of Directors and the majority shareholder amended
the Company’s Articles of Incorporation to (i) change the name of the Company to Star Century Pandaho Corporation (ii) effect
a 1-for-5,000 reverse common stock split and (iii) decrease the Company’s authorized common stock to 150,000,000 shares,
par value $0.001.
On May 20, 2015, the Company’s Board
of Directors and the majority shareholder amended the Company’s Articles of Incorporation to increase authorized common stock
to 250,000,000 shares.
The Company’s headquarters are based
in Las Vegas, Nevada with planned primary operation in Beijing, China. Our planned services, though to be offered globally, will
initially be focused throughout China, surrounding Asia-Pacific countries, the United States and Canada. The Company’s business
plan includes the establishment of officially licensed and professional operated fan clubs for celebrities and selected brands
that will engage in event management, talent shows, brand and image licensing and associated product distribution, music festivals,
and multi-media productions such as movies, television shows and web channel content. Within our planned services we also intend
to utilize our license rights to the character and brand Pandaho, not only for the above referenced activities but also for Pandaho
(Panda) themed areas as well branding, toys, art, entertainment and e-commerce.
Pandaho the Panda is a cartoon styled
character developed by Ms. Liu Li that is quickly growing in popularity and recognition throughout the global Chinese
community. On May 22, 2015, the Company issued 40,000,000 shares of common stock to Lui Li as payment for the non-exclusive
licensing rights in the the “Pandaho” brand and other related names and products. Immediately after the
transaction Lui Li held 61.5% of the outstanding common stock of the Company. Based on Li’s 61.5% ownership percentage,
Li in substance controlled the Pandaho intellectual property directly before and after the purchase of the Pandaho IP by the
Company. Given this, the value of the intellectual property recorded at the date of acquisition was carried over at the
historical cost to Li of zero.
On April 30, 2015, the Pandaho Trademark Patent
Right (“Pandaho brand”) owned by Liu Li was appraised by a third party professional valuation firm, Zhongheng Guotai
(Beijing) Assets Evaluation Co., Ltd. On the valuation date of April 30, 2015, the valuation firm appraised the value of the Pandaho
Trademark Patent Right at approximately $10,000,000.
The Company is optimistic about the opportunity
to utilize the Pandaho brand. The Panda image is a national treasure of China. The Company plans to develop and launch appropriate
commercial, philanthropic and cultural activities as a part of the comprehensive brand development of Pandaho, the Panda. The Company
believes that Pandaho, the Panda, brand is an excellent entry point for the implementation of the Company’s business plan.
Critical Accounting Policies and Estimates
The preparation of our consolidated financial
statements in conformity with accounting principles generally accepted in the United States, or GAAP, requires us to make estimates
and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent
assets and liabilities. When making these estimates and assumptions, we consider our historical experience, our knowledge of economic
and market factors and various other factors that we believe to be reasonable under the circumstances. Actual results may differ
under different estimates and assumptions.
The accounting estimates and assumptions discussed
in this section are those that we consider to be the most critical to an understanding of our financial statements because they
inherently involve significant judgments and uncertainties.
REVENUE
Revenue is recognized when the price is
fixed or determinable, persuasive evidence of an arrangement exists, the service has been delivered, and collectability is
reasonably assured. In transactions in which the Company brokers a sale and determines that it was not the primary obligor in
the arrangement, the Company records as net the commission earned from the transaction.
STOCK-BASED COMPENSATION
The Company may periodically issue stock options
and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company
accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the
FASB whereas the value of the award is measured on the date of grant and recognized over the vesting period. The Company accounts
for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the FASB
whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance
commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee
stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances
where there are no future performance requirements by the non-employee, option grants are immediately vested and the total stock-based
compensation charge is recorded in the period of the measurement date.
The fair value of the Company's common stock
option grants are estimated using the Black-Scholes option pricing model, which uses certain assumptions related to risk-free interest
rates, expected volatility, expected life of the common stock options, and future dividends. Compensation expense is recorded based
upon the value derived from the Black-Scholes option pricing model, and based on actual experience. The assumptions used in the
Black-Scholes option pricing model could materially affect compensation expense recorded in future periods.
RESULTS OF OPERATIONS
FISCAL YEAR ENDED JUNE 30, 2015 COMPARED
TO THE FISCAL YEAR ENDED JUNE 30, 2014
RELATED PARTY COMMISSION REVENUE
For the fiscal years ended June 30, 2015 and
2014, we had $50,000 and $0 of commission revenue, respectively for the sales of plush toys.
In May 2015, the Company sold 2,000 Pandaho
themed products to an unrelated party, Beijing Rui He Jia Ye International for $100,000, and purchased the 2,000 Pandaho themed
products from Beijing Yishengyuankai Culture Co., a company wholly owned by Li Lui, at a cost of $50,000. The Company determined
that it was an agent and not the primary obligor in the arrangement and recorded the transaction as a net commission revenue of
$50,000. There were no such transactions for the fiscal year ended June 30, 2014.
OPERATING COSTS
Administrative expenses were $393,195 for the
fiscal year ended June 30, 2015, compared to $48,208 for the fiscal year ended June 30, 2014. The increase in total administration
costs is due to accounting, audit, legal and transfer agent costs related to SEC compliance, compensation, and investor relation
expenses.
Stock-based compensation was $4,375,000 for
the fiscal year ended June 30, 2015, compared to $0 for the fiscal year ended June 30, 2014. During the year ended June 30, 2015,
the Company issued 4,200,000 shares of common stock valued at $1,290,000 for consulting services, 650,000 shares of common stock
valued at $195,000 to three executives as signing bonuses, and accrued the cost of 3,000,000 shares of common stock valued at $1,890,000
for merger related costs. The Company also recorded $1,000,000 expense related to the difference between the total fair value of
the 20,000,000 shares of common stock issued and the face amount of a note receivable received in consideration for the shares
of $5,000,000. There were no such transactions for the fiscal year ended June 30, 2014.
OTHER INCOME (EXPENSE)
Other income (expense) includes interest expense
of $30,602 and $65,888 for the years ended June 30, 2015 and 2014, respectively, related to the redeemable secured note issued
on February 20, 2014.
In addition, the face value of the redeemable secured note was increased by $11,403 on the issue date of
February 20, 2014 and was recorded as a loan inducement fees in the statement of operations for the period ended June 30, 2014.
NET LOSS
Our net losses for the year ended June 30,
2015 and 2014 was $4,748,797 and $125,499, respectively. Our losses increased in the current year primarily because of an increase
in stock-based compensation expense.
LIQUIDITY
The accompanying financial statements have
been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going
concern. As of June 30, 2015, we had cash of $15,291 and total liabilities of $625,863. For the fiscal year ended June 30, 2015,
net cash used in operating activities was $55,392. Our current cash balance and cash flow from operating activities will not be
sufficient to fund our operations. Our cash flow provided by financing activities for the fiscal year ended June 30, 2015 was $70,468
from advances. The Company has a working capital deficiency of $503,115 and a shareholders’ deficit of $599,605 at June 30,
2015. At June 30, 2015, the Company has an accumulated deficit of $114,429,290.
Over the next 12 months we expect to expend
approximately $100,000 in cash for legal, accounting and related services. Cash used for other expenditures is expected to be minimal.
We hope to be able to attract suitable investors for our business plan, which will not require us to use our cash, although there
can be no assurances that we will be successful in these efforts. If the Company becomes profitable and raises additional capital,
the Company may be able to mitigate this adverse conditions.
We expect to be able to secure capital through
advances from our Chief Executive Officer, shareholders and others in order to pay expenses such as organizational costs, filing
fees, accounting fees and legal fees. We believe it will be difficult to secure capital in the future because we have no assets
to secure debt and there is currently no trading market for our securities. We will need additional capital in the next twelve
months and if we cannot raise such capital on acceptable terms, we may have to curtail our operations or terminate our business
entirely.
The inability to obtain financing or generate
sufficient cash from operations could require us to reduce or eliminate expenditures for acquiring suitable partners or otherwise
curtail or discontinue our operations, which could have a material adverse effect on our business, financial condition and results
of operations. Furthermore, to the extent that we raise additional capital through the sale of equity or convertible debt securities,
the issuance of such securities may result in dilution to existing stockholders. If we raise additional funds through the issuance
of debt securities, these securities may have rights, preferences and privileges senior to holders of our common stock and the
terms of such debt could impose restrictions on our operations. Regardless of whether our cash assets prove to be inadequate to
meet our operational needs, we may seek to compensate providers of services by issuing stock in lieu of cash, which may also result
in dilution to existing stockholders.
OPERATING CAPITAL AND CAPITAL EXPENDITURE
REQUIREMENTS
Our controlling shareholders expect to advance
us additional funding for operating costs in order to implement our business plan. The funds are loaned to the Company as required
to pay amounts owed by the Company. As such, our operating capital is currently limited to the resources of our controlling shareholders.
The loans from our controlling shareholders are unsecured and non-interest bearing and have no set terms of repayment. We anticipate
receiving additional capital once we are able to have our securities actively trading on a public exchange. There is no guarantee
our stock will develop a market on that public exchange.
PLAN OF OPERATION
AND FUNDING
We do not currently engage
in enough business activities that provide cash flow. The costs of investigating and analyzing business combinations for the next
12 months and beyond such time will be paid with amounts to be loaned to or invested in us by our stockholders, management or other
investors.
During
the next twelve months we anticipate incurring costs related to:
(i)
filing of Exchange Act reports, and
(ii)
costs relating to developing our new business plan
We believe we will be able to meet these costs
through amounts, as necessary, to be loaned to or invested in us by our stockholders, management or other investors.
Off-Balance Sheet Arrangements
We
do not have any off-balance sheet arrangements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK.
Not applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA.
The financial statements
and related notes are included as part of this report as indexed in the appendix on page F-1 through F-13.
ITEM 9. CHANGE IN AND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 9A. CONTROLS AND
PROCEDURES.
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15 under the
Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of our disclosure controls and procedures
as of the end of the period covered by this annual report, being June 30, 2015. This evaluation was carried out under the supervision
and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer.
Disclosure controls and procedures are controls
and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under
the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities
and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to
ensure that information required to be disclosed in our company’s reports filed under the Securities Exchange Act of 1934
is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely
decisions regarding required disclosure.
Based upon that evaluation, including our
Chief Executive Officer and Chief Financial Officer, we have concluded that our disclosure controls and procedures were not effective
as of the end of the period covered by this annual report.
Management’s Report on Internal Control
over Financial Reporting
Our management is responsible for establishing
and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange
Act of 1934). Management has assessed the effectiveness of our internal control over financial reporting as of June 30, 2015 based
on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission. As a result of this assessment, management concluded that, as of June 30, 2015 our internal control over financial
reporting was not effective. Our management identified the following material weaknesses in our internal control over financial
reporting, which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk
assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements
and application of both US GAAP and SEC guidelines.
We plan to take steps to enhance and improve
the design of our internal control over financial reporting. During the period covered by this annual report on Form 10-K, we have
not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we hope to implement the following
changes during our fiscal year ending June 30, 2016: (i) appoint additional qualified personnel to address inadequate segregation
of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial
reporting. The remediation efforts set out in (i) and (ii) are largely dependent upon our securing additional financing to cover
the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely
affected in a material manner.
Changes in Internal Control over Financial Reporting
There was no change in the Company’s
internal control over financial reporting identified in connection with the requisite evaluation that occurred during the last
fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control
over financial reporting.
ITEM 9B. OTHER INFORMATION.
None.
PART III
ITEM 10. DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The executive officers and directors of the Company as of September
16, 2015 are as follows:
|
Name |
Age |
Position |
|
Fen Xing |
37 |
Chief Executive Officer, Secretary, Treasurer and Director |
|
Jian Zhang |
32 |
Chief Operating Officer and Director |
|
Yan Zhang |
59 |
Director of Public Relations and Director |
Duties, Responsibilities and Experience
Biographical Information
Fen Xing Ms.
Xing brings over 15 years of entrepreneurial business development and management/marketing experience. From 1999 to 2002,
Ms. Xing acted as vice president for Japan plastic products Co. Ltd. Tianjin branch. Ms. Xing was appointed as chairman of
the board of Beijing Net Technology Co., ltd. in 2005. In 2009 Ms. Xing set up the Beijing North Kidd energy equipment
limited company and served as assistant general manager. This company merged in 2010 and Beijing actor Collier Energy
Equipment Co. Ltd in Beijing actor Collier energy equipment limited company and she served as marketing manager responsible
for the company’s marketing planning and sales work. In 2008, Ms. Xing assisted in the establishment of the small
Lanting Pavilion private clubs in China World Trade Center district business Mong block center, classical furniture, luxury
goods exhibition, held a private party. At the same time she also assisted Beijing client manager Shandong Zhongkai wind
power equipment manufacturing Co., Ltd. financing work. In December 2014, Ms. Xing resigned from Collier Energy
Equipment.
Education:
In 1997 October, Tianjin
University Department of computer education. The database.
In1999 July Tianjin
Foreign Studies University study. English level Four.
In 2003 October, Beijing
foreign language school to learn business English, business English four levels of Japanese.
In 2007 12 School of economics and management
of Beijing Jiaotong University attended EMBA (EMBA) Bachelor's degree
Jian Zhang Mr. Zhang, has over ten years
of experience in analyzing management structures and finance. From 2006 to 2012, Mr. Zhang served as finance director as well as
serving in other entry level positions of Hunan Fudizhiye Co., LTD. From 2013 to 2014, he served as a member of the board of directors
of Changsha Sky Network Technology Co., LTD as well as participating in project construction and operations. In 2014, Zhang served
as a member of the board of directors of Xiangxi Longchang. Manganese Industry Co., LTD as well as assisting in the electrolytic
manganese listing in Boce Commodity Exchange. September 2013, Mr. Zhang participated in the BOCE Commodity Exchange, commodities
analyst qualification training and in November 2013, obtained the Senior management personnel qualification certificate. December
2013, he obtained the commodities analyst qualification. From 2004 to 2007, Mr. Zhang studied at China Central Radio and Television
University, majoring in accounting professional.
Yan Zhang Mr.
Zhang, has over thirty years entrepreneurial experience in entertainment and medical industry. In 1985, Mr. Zhang assisted medical
team involved in the agricultural economy in Peng Republic. In 1995 he participated in the 50th anniversary celebration of the
United Nations Mission of China to the United Nations in New York, accompanied by the leadership of the heads of state reception.
In 1998, Mr. Zhang organized by the famous painter solo exhibition at the United Nations, In 2012, he assisting in the Zuying concert
held at the Austrian Embassy and In 2014, he organized the artist Zhang Yi who wrote solo exhibition in Paris. Mr. Zhang’s
Civil aviation licenses & professional certifications include Advanced Certificate in 1993 national authority technology assessment.
ITEM 11. EXECUTIVE COMPENSATION.
Summary
of Cash and Certain Other Compensation
The following table provides certain summary
information concerning the compensation earned by the named executive officers for the fiscal years ended June 30, 2015 and 2014,
for services rendered in all capacities to Star Century Pandaho Corporation:
Name & Principal Position | |
Year | |
Salary ($) | |
Bonus ($) | |
Stock Awards ($) | |
Option Awards ($) | |
Non-Equity Incentive Plan Compensation ($) | |
Nonqualified Deferred Compensation Earnings ($) | |
All Other Compensation ($) | |
Total ($) |
Fen Xing, Chief Executive Officer, Secretary, Treasurer and Director
| |
| 2015 | | |
$ | 56,877 | | |
$ | — | | |
$ | 77,500 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 134,377 | |
| |
| 2014 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Jian Zhang, Chief Operating Officer and Director
| |
| 2015 | | |
$ | 56,877 | | |
$ | — | | |
$ | 77,500 | | |
| `$ - | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 134,377 | |
| |
| 2014 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Yan Zhang, Director of Public Relations and Director
| |
| 2015 | | |
$ | 45,501 | | |
$ | — | | |
$ | 46,350 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 91,851 | |
| |
| 2014 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Aaron Shrira, President and Director | |
| 2015 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | |
| |
| 2014 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Elana Berman-Shrira, Secretary, Treasurer and Director | |
| 2015 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | |
| |
| 2014 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Director Compensation
The following table provides compensation summary concerning the
compensation earned by the named directors for the years ended June 30, 2015 and 2014.
Name | |
Year | |
Fees Earned or Paid in Cash | |
Stock Awards | |
Option Awards | |
Non-Equity Incentive Plan Compensation | |
Non-Qualified Deferred Compensation Earnings | |
All Other Compensation | |
Total |
Fen Xing, Chief Executive Officer, Secretary, Treasurer and Director
| |
| 2015 | | |
$ | 56,877 | | |
$ | 77,500 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 134,377 | |
| |
| 2014 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Jian Zhang, Chief Operating Officer and Director
| |
| 2015 | | |
$ | 56,877 | | |
$ | 77,500 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 134,377 | |
| |
| 2014 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Yan Zhang, Director of Public Relations and Director
| |
| 2015 | | |
$ | 45,501 | | |
$ | 46,350 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 91,851 | |
| |
| 2014 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Aaron Shrira, Director | |
| 2015 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | |
| |
| 2014 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Elana Berman-Shrira, Director | |
| 2015 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | |
| |
| 2014 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
ITEM 12. SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
Security Ownership of Certain Beneficial Owners and
Management
The following table sets forth, as of September
23, 2015, information about the beneficial ownership of our capital stock with respect to each person known by Star Century Pandaho
Corporation to own beneficially more than 5% of the outstanding capital stock, each director and officer, and all directors and
officers as a group.
|
Number of Shares Beneficially Owned |
|
Percentage of Class (2) |
Name and Address(1) |
Class |
Fen Xing, Chief Executive Officer |
250,000 |
Common |
* |
Jian Zhang, Chief Operating Officer |
250,000 |
Common |
* |
Yan Zhang, Director of Public Relations |
150,000 |
Common |
* |
All directors and executive
officers (3 persons) |
650,000
|
Common
|
* |
5% Holders |
|
|
|
Memory Hospitality Consultancy PTE Ltd. |
22,082,500 |
Common |
32.4% |
Asia International Holdings Limited |
20,000,000 |
Common |
29.3% |
Lui LI |
16,900,000 |
Common |
24.8% |
Changsha 3D Technology Co., Ltd. |
4,000,000 |
Common |
5.9% |
*Denotes less than 1% |
| 1) | Unless
noted otherwise, the address for all persons listed is c/o the Company at 8250 W. Charleston Blvd. Suite 110, Las Vegas, Nevada
89117. |
| 2) | The
above percentages are based on 68,252,650 shares of common stock outstanding as September
23, 2015. |
“Beneficial ownership” means
the sole or shared power to vote or to direct the voting of, a security, or the sole or shared investment power with respect to
a security (i.e., the power to dispose of or to direct the disposition of, a security).
There are no arrangements,
known to us, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a
change in control of Star Century Pandaho Corporation
There are no arrangements
or understandings among members of both the former and the new control groups and their associates with respect to election of
directors or other matters.
ITEM 13. CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.
None.
ITEM 14. PRINCIPAL ACCOUNTANT
FEES AND SERVICES.
Audit Fees
The aggregate fees billed
by the Company's auditors for the professional services rendered in connection with the audit of the Company's annual financial
statements, review of our Form 10 and reviews of the financial statements included in the Company's Forms 10-Qs and Form 10-Ks
for fiscal 2015 and 2014 were approximately $22,450 and $16,730, respectively.
Audit-Related Fees
None.
Tax Fees
None.
All Other Fees
None.
PART IV.
ITEM 15. EXHIBITS.
|
|
|
Incorporated by reference |
Exhibit |
Exhibit Description |
Filed herewith |
Form |
Period ending |
Exhibit |
Filing date |
3.1 |
Articles of Incorporation |
|
10/A#2 |
|
3.1 |
11/5/2009 |
3.2 |
Bylaws |
|
10/A #2 |
|
3.2 |
11/5/2009 |
31.1 |
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
X |
|
|
|
|
31.2 |
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
X |
|
|
|
|
32.1 |
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
X |
|
|
|
|
32.2 |
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
X |
|
|
|
|
SIGNATURES
In accordance with Section
13 or 15 (d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
|
STAR CENTURY PANDAHO CORPORATION |
|
|
|
|
|
|
Date: October 16, 2015 |
By: |
/s/ Fen Xing |
|
|
Fen Xing
Chief Executive Officer, Secretary, Treasurer and Director (Principal
Executive Officer, Principal Accounting and Financial Officer) |
|
|
|
|
|
|
|
|
|
Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.
|
|
|
Date: October 16, 2015 |
By: |
/s/ Fen Xing |
|
|
Fen Xing
Chief Executive Officer, Secretary, Treasurer and Director (Principal
Executive Officer, Principal Accounting and Financial Officer) |
|
|
|
|
|
|
|
|
|
STAR CENTURY PANDAHO CORPORATION
Index to Financial Statements
|
Page |
Report of Independent Registered Accounting Firm |
F-2 |
Balance Sheets as of June 30, 2015 and 2014 |
F-3 |
Statements of Operations for the years ended June 30, 2015 and 2014 |
F-4 |
Statement of Stockholders’ Deficit for the years ended June 30, 2015 and 2014 |
F-5 |
Statements of Cash Flows for the years ended June 30, 2015 and 2014 |
F-6 |
Notes to Financial Statements |
F-7 |
Report of Independent
Registered Public Accounting Firm
To the Board of Directors and Stockholders,
Star Century Pandaho Corporation
We have audited the accompanying balance sheets
of Star Century Pandaho Corporation (the “Company”) as of June 30, 2015 and 2014, and the related statements of operations,
stockholders’ deficiency, and cash flows for the years then ended. 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 audit to obtain reasonable assurance about whether the 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 audit 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 Star Century Pandaho Corporation as of June 30, 2015
and 2014, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern. As disclosed in Note 1 to the financial statements, the
Company has a stockholders’ deficiency and has experienced recurring losses from operations and used cash in operating activities
since inception. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s
plans in regard to these matters are also described in Note 1 to the financial statements. The accompanying financial statements
do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the
amounts and classifications of liabilities that might result from the outcome of this uncertainty.
/s/Weinberg & Company, P.A.
Los Angeles, California
October 13, 2015
STAR CENTURY PANDAHO CORPORATION |
BALANCE SHEETS |
| |
| |
|
| |
June 30, | |
June 30, |
| |
2015 | |
2014 |
Assets | |
| | | |
| | |
Cash | |
$ | 15,291 | | |
$ | 215 | |
Prepaid expense | |
| 10,967 | | |
| 1,375 | |
Total current assets | |
| 26,258 | | |
| 1,590 | |
Total assets | |
$ | 26,258 | | |
$ | 1,590 | |
| |
| | | |
| | |
Liabilities and Stockholders’ Deficiency | |
| | | |
| | |
Current Liabilities: | |
| | | |
| | |
Accounts payable and accrued liabilities (including $287,693 and zero due to related parties, respectively) | |
$ | 394,996 | | |
$ | 97,601 | |
Advances, including $44,787 and $0 due to shareholder | |
| 134,377 | | |
| 63,909 | |
Total current liabilities | |
| 529,373 | | |
| 161,510 | |
| |
| | | |
| | |
Non-redeemable convertible note, net of debt discount of $0 and $13,093, respectively | |
| 96,490 | | |
| 65,888 | |
Total liabilities | |
| 625,863 | | |
| 227,398 | |
| |
| | | |
| | |
Commitments and contingencies | |
| | | |
| | |
| |
| | | |
| | |
Stockholders' Deficiency: | |
| | | |
| | |
Preferred stock; par value $0.01; 48,000,000 shares authorized, no shares issued and outstanding | |
| — | | |
| — | |
Series A Convertible Preferred Stock; par value $0.01; 1,000,000 shares authorized, no shares issued and outstanding | |
| — | | |
| — | |
Series B Convertible Preferred Stock; par value $0.01; 1,000,000 shares authorized, no shares issued and outstanding | |
| — | | |
| — | |
Common stock; par value $0.001; 250,000,000 shares authorized, 68,252,650 and 402,650 issued and outstanding | |
| 95,253 | | |
| 403 | |
Additional paid-in capital | |
| 118,734,432 | | |
| 109,454,282 | |
Stock subscription receivable | |
| (5,000,000 | ) | |
| — | |
Accumulated deficit | |
| (114,429,290 | ) | |
| (109,680,493 | ) |
Total stockholders' deficiency | |
| (599,605 | ) | |
| (225,808 | ) |
Total liabilities and stockholders’ deficiency | |
$ | 26,258 | | |
$ | 1,590 | |
| |
| | | |
| | |
| |
| | | |
| | |
The accompanying notes are an integral part
of these financial statements.
STAR CENTURY PANDAHO CORPORATION
STATEMENTS OF OPERATIONS
| |
Year ended June 30, 2015 | |
Year ended June 30, 2014 |
| |
| |
|
| |
| |
|
Related party commission revenue, net | |
$ | 50,000 | | |
$ | — | |
| |
| | | |
| | |
Operating costs: | |
| | | |
| | |
General and administrative | |
| 393,195 | | |
| 48,208 | |
Fair value of common shares subscribed for in excess of purchase price (related party) | |
| 1,000,000 | | |
| — | |
Share-based compensation (including related party share-based compensation of $2,085,000 and zero) | |
| 3,375,000 | | |
| — | |
Total operating expenses | |
| 4,768,195 | | |
| 48,208 | |
| |
| | | |
| | |
Loss from operations | |
| (4,718,195 | ) | |
| (48,208 | ) |
| |
| | | |
| | |
Other expenses: | |
| | | |
| | |
Interest expense | |
| (30,602 | ) | |
| (65,888 | ) |
Loan inducement fee | |
| — | | |
| (11,403 | ) |
| |
| (30,602 | ) | |
| (77,291 | ) |
Net loss | |
$ | (4,748,797 | ) | |
$ | (125,499 | ) |
| |
| | | |
| | |
Net loss per common share-basic and diluted | |
$ | (0.65 | ) | |
$ | (0.31 | ) |
| |
| | | |
| | |
Weighted average number of common shares outstanding – basic and diluted | |
| 7,327,171 | | |
| 402,650 | |
| |
| | | |
| | |
The accompanying notes are an integral part
of these financial statements.
STAR CENTURY PANDAHO CORPORATION
STATEMENT OF STOCKHOLDERS' DEFICIENCY
| |
Common Shares | |
Common Stock | |
Additional Paid-in Capital | |
Accumulated Deficit | |
Stock subscription receivable | |
Total Stockholders’ Deficiency |
Balance July 1, 2013 | |
| 402,650 | | |
$ | 403 | | |
$ | 109,386,282 | | |
$ | (109,554,994 | ) | |
$ | — | | |
$ | (168,309 | ) |
Beneficial conversion feature | |
| — | | |
| — | | |
| 68,000 | | |
| — | | |
| — | | |
| 68,000 | |
Net loss | |
| — | | |
| — | | |
| — | | |
| (125,499 | ) | |
| — | | |
| (125,499 | ) |
Balance June 30, 2014 | |
| 402,650 | | |
| 403 | | |
| 109,454,282 | | |
| (109,680,493 | ) | |
| — | | |
| (225,808 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Related party | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Shares issued for Pandaho licensing rights | |
| 40,000,000 | | |
| 40,000 | | |
| (40,000 | ) | |
| — | | |
| — | | |
| — | |
Fair value of shares issued to officers | |
| 650,000 | | |
| 650 | | |
| 194,350 | | |
| — | | |
| — | | |
| 195,000 | |
Fair value of shares issued for subscription receivable | |
| 20,000,000 | | |
| 20,000 | | |
| 5,980,000 | | |
| — | | |
| (5,000,000 | ) | |
| 1,000,000 | |
Fair value of shares issued for services | |
| 3,000,000 | | |
| 30,000 | | |
| 1,860,000 | | |
| — | | |
| — | | |
| 1,890,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Other | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Fair value of shares issued for services | |
| 4,200,000 | | |
| 4,200 | | |
| 1,285,800 | | |
| — | | |
| — | | |
| 1,290,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net loss | |
| — | | |
| — | | |
| — | | |
| (4,748,797 | ) | |
| — | | |
| (4,748,797 | ) |
Balance June 30, 2015 | |
| 68,252,650 | | |
$ | 95,253 | | |
$ | 118,734,432 | | |
$ | (114,429,290 | ) | |
$ | (5,000,000 | ) | |
$ | (599,605 | ) |
The accompanying notes are an integral part
of these financial statements
STAR CENTURY PANDAHO CORPORATION
STATEMENTS OF CASH FLOWS
| |
Year Ended June 30, 2015 | |
Year Ended June 30, 2014 |
Cash Flows from Operating Activities | |
| | | |
| | |
Net loss | |
$ | (4,748,797 | ) | |
$ | (125,499 | ) |
Adjustments to reconcile net loss to net cash used in operating activities and liabilities: | |
| | | |
| | |
Accrued interest expense | |
| 17,509 | | |
| 10,981 | |
Amortization of debt discount | |
| 13,093 | | |
| 54,907 | |
Loan inducement fee | |
| — | | |
| 11,403 | |
Fair value of common shares subscribed for in excess of purchase price | |
| 1,000,000 | | |
| — | |
Share-based compensation | |
| 3,375,000 | | |
| — | |
Changes in operating assets and liabilities | |
| | | |
| | |
Prepaid expenses | |
| (9,592 | ) | |
| (1,375 | ) |
Accounts payable and accrued expenses | |
| 297,395 | | |
| (2,585 | ) |
Net cash used in operating activities | |
| (55,392 | ) | |
| (52,168 | ) |
| |
| | | |
| | |
Cash Flows from Financing Activities: | |
| | | |
| | |
Advances | |
| 25,681 | | |
| 51,823 | |
Advances from shareholder | |
| 44,787 | | |
| — | |
Net cash provided by financing activities | |
| 70,468 | | |
| 51,823 | |
| |
| | | |
| | |
Net change in cash | |
| 15,076 | | |
| (345 | ) |
Cash beginning of year | |
| 215 | | |
| 560 | |
Cash end of year | |
$ | 15,291 | | |
$ | 215 | |
| |
| | | |
| | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |
| | | |
| | |
Cash paid during period for: | |
| | | |
| | |
Interest paid | |
$ | — | | |
$ | — | |
Income tax paid | |
$ | — | | |
$ | — | |
Exchange of advances from shareholder for redeemable secured note payable with beneficial conversion feature | |
$ | — | | |
$ | 68,000 | |
Shares issued for Pandaho licensing rights | |
$ | — | | |
$ | — | |
The accompanying notes are an integral part
of these financial statements.
STAR CENTURY PANDAHO CORPORATION
Notes to Financial Statements
For the years ended June 30, 2015 and 2014
NOTE 1. NATURE AND BACKGROUND OF BUSINESS
Star Century Pandaho Corporation (formerly
Journal of Radiology) ("the Company") was organized under the laws of the State of Nevada on May 21, 2009. The Company
was established as part of the Chapter 11 reorganization of AP Corporate Services, Inc. ("AP").
On January 8, 2015, two shareholders of the
Company agreed to sell an aggregate of 216,000 shares of the Company’s common stock, representing 53.66% of total outstanding
shares at the time to Star Century Entertainment, Inc., an unrelated third party, and the Company experienced a change in control.
In conjunction with the change in control, three individuals were elected to be the Company’s management, and the Company’s
former President resigned. Effective January 16, 2015, the Company’s Board of Directors and Star Century Entertainment, Inc,
the majority shareholder in the Company at the time, amended the Company’s Articles of Incorporation to (i) change the name
of the Company to Star Century Pandaho Corporation (ii) effect a 1-for-5,000 reverse common stock split and (iii) decrease the
Company’s authorized common stock to 150,000,000 shares, par value $0.001. All common stock share and per-share amounts for
all periods presented in these financial statements have been adjusted retroactively to reflect the reverse stock split.
On May 20, 2015, the Company’s Board
of Directors and the majority shareholder amended the Company’s Articles of Incorporation to increase authorized common stock
to 250,000,000 shares.
The Company’s headquarters are based
in Las Vegas with the planned main operation center to be located in Beijing, China. Our planned services will be offered throughout
China, Asia-Pacific countries, and the United States. The Company’s business model includes the establishment of official
and professional fan clubs for celebrities that will engage in event management, talent shows, music festivals, and movie productions.
In addition, planned operations will include Pandaho (Panda) themed areas that include branding, toys, art, entertainment and e-commerce.
Pandaho the Panda is a cartoon styled character.
On May 22, 2015, the Company secured certain licensing rights to the Pandaho character and brand though a non-exclusive licensing
agreement with the creator of Pandaho, Ms. Liu Li in exchange for 40,000,000 shares of common stock representing 61.5% of the Company’s
then outstanding shares of common stock. Based on Li’s 61.5% ownership percentage, the value of the Pandaho intellectual
property is recorded at the historical cost to Li of zero. The Company’s aim is to build Pandaho into a competitive cartoon
brand with Pandaho-themed merchandise and multi-media exhibitions.
Going concern
The Company's financial statements are prepared
in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of
assets and the settlement of liabilities and commitments in the normal course of business. The Company has a shareholders’
deficiency and has experienced recurring operating losses and used cash in operating activities since inception. For the year ended
June 30, 2015, the Company had a net loss of $4,748,797 and used cash in operating activities of $55,392, and at June 30, 2015,
had a working capital deficiency of $503,115 and stockholders’ deficiency of $599,605. Currently, the Company does not have
significant cash or other material assets, nor does it have operations or a source of revenue sufficient to cover its operation
costs and allow it to continue as a going concern. The Company’s officers and directors have committed to advancing certain
operating costs of the Company. The accompanying financial statements do not include any adjustments relating to the recoverability
and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.
Primarily as a result of our recurring losses
and our lack of liquidity, the Company’s independent registered public accounting firm, in their report on our financial
statements for the year ending June 30, 2015, expressed substantial doubt about the Company’s ability to continue as a going
concern.
Over the next 12 months, the Company expects
to expend approximately $100,000 in cash for legal, accounting and related services. The Company has not yet determined the amount
of cash that will be necessary to fund its planned operations in China. We hope to be able to attract suitable investors for our
business plan, which will not require us to use our cash, although there can be no assurances that we will be successful in these
efforts.
We expect to be able to secure capital through
advances from our officers or principal shareholders in order to pay expenses such as filing fees, accounting fees and legal fees.
We believe it will be difficult to secure capital in the future because we have no assets to secure debt and there is currently
no trading market for our securities. We will need additional capital in the next twelve months and if we cannot raise such capital
on acceptable terms, we may have to curtail our operations or terminate our business entirely.
The inability to obtain financing or generate
sufficient cash from operations could require us to reduce or eliminate expenditures or otherwise curtail or discontinue our operations,
which could have a material adverse effect on our business, financial condition and results of operations. Furthermore, to the
extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities
may result in dilution to existing stockholders. If we raise additional funds through the issuance of debt securities, these securities
may have rights, preferences and privileges senior to holders of our common stock and the terms of such debt could impose restrictions
on our operations. Regardless of whether our cash assets prove to be inadequate to meet our operational needs, we may seek to compensate
providers of services by issuing stock in lieu of cash, which may also result in dilution to existing stockholders.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ESTIMATES
The preparation of financial statements in
conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
The more significant estimates and assumptions by management include, among others, the accrual of potential liabilities and assumptions
used in the valuation of share-based instruments issued for services.
CASH AND CASH EQUIVALENTS
Investments with original maturity of three
months or less are considered to be cash equivalents.
The Company minimizes its credit risk associated
with cash by periodically evaluating the credit quality of its primary financial institution. The balance at times may exceed federally
insured limits. At June 30, 2015 and June 30, 2014, the balance did not exceed the federally insured limit.
INCOME TAXES
The Company follows the asset and liability
method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the estimated
tax consequences attributable to differences between the financial statement carrying values and their respective income tax basis
(temporary differences). The effect on deferred income tax assets and liabilities of a change in tax rates is recognized as income
(loss) in the period that includes the enactment date.
REVENUE
Revenue is recognized when the price is
fixed or determinable, persuasive evidence of an arrangement exists, the service has been delivered, and collectability is
reasonably assured. In transactions in which the Company brokers a sale and determines that it was not the primary obligor in
the arrangement, the Company records as net the commission earned from the transaction.
BASIC AND DILUTED LOSS PER SHARE
Basic loss per share is computed by dividing
net loss applicable to common stockholders by the weighted average number of outstanding common shares during the period. Diluted
loss per share is computed by dividing the net loss applicable to common stockholders by the weighted average number of common
shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common
shares had been issued. Diluted loss per share excludes all potential common shares if their effect is anti-dilutive.
At June 30, 2015 and 2014, notes payable convertible
into 1,940,000 and 157,962 shares of common stock, respectively has been excluded from the calculation of diluted loss per share
as the effect is anti-dilutive.
STOCK-BASED COMPENSATION
The Company may periodically issue stock options
and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company
accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the
FASB whereas the value of the award is measured on the date of grant and recognized over the vesting period. The Company accounts
for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the FASB
whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance
commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee
stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances
where there are no future performance requirements by the non-employee, option grants are immediately vested and the total stock-based
compensation charge is recorded in the period of the measurement date.
The fair value of the Company's common stock
option grants are estimated using the Black-Scholes option pricing model, which uses certain assumptions related to risk-free interest
rates, expected volatility, expected life of the common stock options, and future dividends. Compensation expense is recorded based
upon the value derived from the Black-Scholes option pricing model, and based on actual experience. The assumptions used in the
Black-Scholes option pricing model could materially affect compensation expense recorded in future periods.
FAIR VALUE
OF FINANCIAL INSTRUMENTS
Fair value is defined as the price that would
be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at
the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated
based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity.
In addition, the fair value of liabilities should include consideration of non-performance risk including our own credit risk.
In addition to defining fair value, the standard
expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy
prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the
market. Each fair value measurement is reported in one of the three levels which are determined by the lowest level input that
is significant to the fair value measurement in its entirety. These levels are:
Level 1 – inputs are based
upon unadjusted quoted prices for identical instruments traded in active markets.
Level 2 – inputs are based
upon significant observable inputs other than quoted prices included in Level 1, such as quoted prices for identical or similar
instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable
in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 – inputs are
generally unobservable and typically reflect management’s estimates of assumptions that market participants would use
in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option
pricing models, discounted cash flow models, and similar techniques.
The estimated fair value of certain financial
instruments, including cash and cash equivalents and accounts payable and accrued expenses are carried at historical cost basis,
which approximates their fair values because of the short-term nature of these instruments. The recorded value of the non-redeemable
convertible note approximates its fair value based upon its effective interest rate.
CONCENTRATION OF CREDIT RISK
Financial instruments, which potentially subject
the Company to concentrations of credit risk, consist of cash and cash equivalents. The Company places its cash with high quality
financial institutions and at times may exceed the FDIC $250,000 insurance limit. The Company does not anticipate incurring any
losses related to these credit risks. The Company extends credit based on an evaluation of the customer's financial condition,
generally without collateral. Exposure to losses on receivables is principally dependent on each customer's financial condition.
The Company monitors its exposure for credit losses and intends to maintain allowances for anticipated losses, as required.
During the year ended June 30, 2015, 100% of
our revenue was a commission from one customer in Asia, a related party.
RECENT ACCOUNTING
PRONOUNCEMENTS
In May 2014, the Financial Accounting Standards
Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive
revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace
it with a principle based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue
based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure
about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant
judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective
for interim and annual periods beginning after December 15, 2017. Early adoption is permitted only in annual reporting periods
beginning after December 15, 2016, including interim periods therein. Entities will be able to transition to the standard either
retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is in the process of evaluating the
impact of ASU 2014-09 on the Company’s financial statements and disclosures.
In June 2014, the FASB issued Accounting Standards
Update No. 2014-12, Compensation – Stock Compensation (Topic 718). The pronouncement was issued to clarify the accounting
for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service
period. The pronouncement is effective for reporting periods beginning after December 15, 2015. The adoption of ASU 2014-12 is
not expected to have a significant impact on the Company’s consolidated financial position or results of operations.
In August 2014, the FASB issued Accounting
Standards Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which
provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. ASU 2014-15
requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within
one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise
substantial doubt about the entity’s ability to continue as a going concern. ASU 2014-15 is effective for annual periods
ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The Company is currently evaluating
the impact the adoption of ASU 2014-15 on the Company’s financial statements and disclosures.
Other recent accounting pronouncements issued
by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities
and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future
consolidated financial statements.
NOTE 3. ADVANCES
The Company from time to time borrows from
our officers, principal shareholders, or others, to pay general and administrative expenses. These advances are non-interest bearing,
unsecured, and generally due upon demand. At June 30, 2015 and 2014, the Company was obligated for the following advances:
| |
June 30, 2015 | |
June 30, 2014 |
Advances due to shareholder | |
$ | 44,787 | | |
$ | — | |
Advances due to former President | |
| 24,000 | | |
| 49,000 | |
Advances due to others | |
| 65,590 | | |
| 14,909 | |
| |
$ | 134,377 | | |
$ | 63,909 | |
At June 30, 2015, advances due to others includes
$10,200 due June 3, 2016, that is convertible into 102,000 shares of common stock at the option of the holder.
NOTE 4. NON-REDEEMABLE CONVERTIBLE NOTE
On February 20, 2014, the Company agreed to
exchange advances due an unrelated party for a note for $68,000. The note bears interest at 20% per annum, and is secured by all
the assets of the Company. The note was originally due August 1, 2014 and has been was extended to August 1, 2015. The Company
may prepay the note in readily available funds at any time prior to the maturity date. The Company has the right to convert the
note into shares of the Company’s common stock at any time prior to the maturity date at a fixed price of $0.05 per share
of common stock. At June 30, 2015, the face amount of the note plus accrued interest was $96,490 and is convertible into 1,929,800
shares of common stock. As it is the Company’s choice to convert the note into shares of the Company’s common stock
or to pay the note in cash, the note is presented below current liabilities on the accompanying condensed consolidated balance
sheets. In January 2015, the $25,000 of the note was assigned to another individual.
On issuance, the Company recognized a note
discount of $68,000 related to a beneficial conversion feature because the closing price of the Company’s shares on the date
issued was higher than the conversion price of $0.50 per share of common stock. The discount was amortized over the initial term
of the note from February 20, 2014 to August 1, 2014. At June 30, 2014, the unamortized balance of the discount was $13,093. During
the year ended June 30, 2015, $13,093 of discount amortization is included in interest expense, and at June 30, 2015, there was
no remaining unamortized balance of the note discount.
On July 31, 2015, the Company delivered a
cashier’s check to one of the note holders for $43,000 principal plus accrued interest. As of October 9, 2015 the note
holder has not cashed the check and indicated he wants to convert the note into shares. The balance of $25,000 was not paid
at maturity and is under negotiation to extend the due date.
NOTE 5. STOCKHOLDERS' EQUITY
Related party transactions
On May 22, 2015, the Company issued 40,000,000
shares of common stock to Ms. Lui Li as payment for the non-exclusive licensing rights in the “Pandaho” the Panda brand
and other related names and intangibles. Immediately after the transaction Lui Li held 61.5% of the outstanding common stock of
the Company. Based on Li’s 61.5% ownership percentage, Li in substance controlled the Pandaho intellectual property directly
before and after the purchase of the Pandaho IP by the Company. Given this, the value of the intellectual property recorded at
the date of acquisition was carried over at the historical cost to Li of zero.
On May 22, 2015, the Board
authorized the issuance of 20,000,000 shares of common stock to Asia International Finance Holdings, Hong Kong for an
unsecured, non-interest bearing note receivable with a face value of $5,000,000 due on December 31, 2016. The difference
between the total fair value of the common shares issued of $6,000,000 and the purchase price of $5,000,000 is recorded as an
operating expense for the year ended June 30, 2015. The note receivable is presented as stock subscription receivable in the
balance sheet as a deduction from stockholders’ equity. The CEO of Asian International is also the President of Star
Century Entertainment.
During the year ended June 30, 2015, the Company
issued 3,000,000 shares of common stock valued at $1,890,000 to Mr. Peter Chin for services rendered for the Company on the merger
and acquisition of the Company by Star Century Entertainment.
On May 22, 2015 the Company issued 650,000
shares of common stock valued in the aggregate at $195,000 to three members of management as signing bonuses for their employment
contracts.
Other
During the year ended June 30, 2015, the Company
issued 4,200,000 shares of common stock to unrelated consultants valued in aggregate at $1,290,000 for services,
NOTE 6. RELATED PARTY TRANSACTIONS
In May 2015, the Company sold 2,000 Pandaho
themed products to an unrelated party, Beijing Rui He Jia Ye International for $100,000, and purchased the 2,000 Pandaho themed
products from Beijing Yishengyuankai Culture Co., a company wholly owned by Li Lui, at a cost of $50,000. The Company determined
that it was an agent and not the primary obligor in the arrangement and recorded the transaction as a net commission revenue of
$50,000.
NOTE 7. INCOME TAXES
Income taxes differ from the amount that would
be computed by applying the Federal statutory income tax rates of 34% as follows:
| |
2015 | |
2014 |
Provision for income taxes: | |
| | | |
| | |
Net loss | |
$ | (4,748,797 | ) | |
$ | (125,999 | ) |
Adjustments: | |
| | | |
| | |
Amortization of debt discount | |
| 13,093 | | |
| — | |
Share based compensation | |
| 4,375,000 | | |
| — | |
| |
| (360,704 | ) | |
| (125,999 | ) |
Federal statutory income tax rate | |
| 34 | % | |
| 34 | % |
Income tax expense (benefit) | |
| (122,639 | ) | |
| (42,840 | ) |
Change in valuation allowance | |
| 122,639 | | |
| 42,840 | |
| |
$ | — | | |
$ | — | |
Deferred tax assets
and liabilities consist of the following as of June 30:
| |
2015 | |
2014 |
Deferred tax assets: | |
| | | |
| | |
Net operating loss carry forwards | |
$ | 225,114 | | |
$ | 102,475 | |
Less valuation allowance | |
| (225,114 | ) | |
| (102,475 | ) |
Net deferred tax asset | |
$ | — | | |
$ | — | |
The tax years 2009 through 2015 remain open
to examination by the major taxing jurisdictions in which the Company operates. The Company expects no material changes to unrecognized
tax positions within the next twelve months.
NOTE 7. SUBSEQUENT EVENTS
On September 4, 2014, the Board of Directors
designated 100,000 shares of Series B Preferred Stock, par value $0.01. Each share of Series B Preferred Stock has the voting power
of 5,000 common shares.
On January 8, 2015, Star
Century Entertainment, Inc. owned 53.66% of the Company’s total outstanding shares of common stock. In the year ended
June 30, 2015, the Company issued approximately 67.9 million shares of common stock for the licensing of the Pandaho
intellectual property and for various services and at June 30, 2015, Star Century Entertainment, Inc. owned less than 1% of
the Company’s common stock. On September 8, 2015, the Company issued 25,000 shares of Series B Preferred Stock to
Star Century Entertainment, Inc. in settlement of $44,787 due it. The 25,000 shares of Series B Preferred Stock will have
voting power of 125,000,000 common shares and will have significant influence over all matters requiring approval by our
shareholders, but not requiring the approval of the minority shareholders. Because it will have the majority of voting
rights, it will be able to elect all of the members of our board of directors, allowing it to exercise significant control of
our affairs and management. In addition, it may transact most corporate matters requiring shareholder approval by written
consent, without a duly-noticed and duly-held meeting of shareholders.
EXHIBIT 31.1
STAR CENTURY PANDAHO CORPORATION
OFFICER'S CERTIFICATE PURSUANT TO SECTION 302
I, Fen Xing certify
that:
1. I have reviewed this Form 10-K of Star Century Pandaho Corporation;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer and I are
responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant
and have:
a. Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the
period in which this report is being prepared;
b. Designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
c. Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth
fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
5. The registrants other certifying officer and I have
disclosed, based on my 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.
Dated: October 16, 2015
By: /s/ Fen Xing
Fen Xing
Chief Executive Officer
(Principal Executive Officer)
EXHIBIT 31.2
STAR CENTURY PANDAHO CORPORATION
OFFICER'S CERTIFICATE PURSUANT TO SECTION 302
I, Fen Xing
certify that:
1. I have reviewed this Form 10-K of Star Century Pandaho Corporation;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer and I are
responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant
and have:
a. Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the
period in which this report is being prepared;
b. Designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
c. Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth
fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
5. The registrants other certifying officer and I have
disclosed, based on my 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.
Dated: October 16, 2015
By: /s/ Fen Xing
Fen Xing
Chief Financial Officer
(Principal Financial Officer)
EXHIBIT 32.1
STAR CENTURY PANDAHO CORPORATION
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 Annaul Report of Star Century Pandaho
Corporation (the Registrant) on Form 10-K for the period ended June 30, 2015 as filed with the Securities and
Exchange Commission on the date hereof (the Report), I, Fen Xing, Principal Executive Officer of the
Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, 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.
A signed original of this written statement required by
Section 906 has been provided to Fen Xing and will be retained by Star Century Pandaho
Corporation and furnished to the Securities and Exchange Commission or its staff upon request.
Dated: October 16, 2015
By: /s/ Fen Xing
Fen Xing
Chief Executive Officer
(Principal Executive Officer)
EXHIBIT 32.2
STAR CENTURY PANDAHO CORPORATION
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 Star Century Pandaho Corporation
(the Registrant) on Form 10-K for the period ended June 30, 2015 as filed with the Securities and
Exchange Commission on the date hereof (the Report), I, Fen Xing, Principal Financial Officer of the
Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, 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.
A signed original of this written statement required by Section 906
has been provided to Fen Xing and will be retained by Star Century Pandaho Corporation and furnished
to the Securities and Exchange Commission or its staff upon request.
Dated: October 16, 2015
By: /s/ Fen Xing
Fen Xing
Chief Financial Officer
(Principal Financial Officer)