UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

 

(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended December 31, 2015

or

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

 

Commission file number 000-53780

 

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

 

(Former name and former address, if changed since last Report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

 

 

1 
 

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. o

 

Large accelerated filer          o Accelerated filer                   o     
Non-accelerated filer            o Smaller reporting company   þ

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

 

As of February 10, 2016, the registrant had 68,252,650 outstanding shares of Common Stock.

 

 

 

 

 

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STAR CENTURY PANDAHO CORPORATION

INDEX

 

   

Page

Number

PART I. FINANCIAL INFORMATION  
     
Item 1   Financial Statements:  
  Condensed Balance Sheets as of December 31, 2015 (Unaudited) and June 30, 2015 4
  Condensed Statements of Operations for the Three and Six Months Ended December 31, 2015 and 2014 (Unaudited) 5
  Condensed Statement of Stockholders’ Deficiency for the Six Months Ended December 31, 2015 (Unaudited) 6
  Condensed Statements of Cash Flows for the Six Months Ended December 31, 2015 and 2014 (Unaudited) 7
  Notes to Condensed Financial Statements-December 31, 2015 and 2014 (Unaudited) 8
Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 14
Item 3 Quantitative and Qualitative Disclosures About Market Risk 17
Item 4T Controls and Procedures 17
     
PART II OTHER INFORMATION  
     
Item 1 Legal Proceedings 18
Item 1A Risk Factors 18
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 18
Item 3 Defaults upon Senior Securities 18
Item 4 Mine Safety Disclosures 18
Item 5 Other Information 18
Item 6 Exhibits 19
     
SIGNATURES 19
     
EXHIBITS  

 

 

 

 

3 
 

PART 1 – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

 

STAR CENTURY PANDAHO CORPORATION
CONDENSED BALANCE SHEETS
 
    As of    As of 
    December 31,    June  30, 
    2015    2015 
Assets   (Unaudited)      
 Current assets:          
 Cash  $3,234   $15,291 
 Prepaid expenses   4,266    10,967 
 Total assets  $7,500   $26,258 
           
Liabilities and Stockholders’ Deficiency           
Current Liabilities:          
Accounts payable and accrued liabilities  $141,844   $107,303 
Accrued compensation    1,200,748    287,693 
Advances (including $25,000 and $79,987 due to related parties at December 31, 2015 and June 30, 2015, respectively)   79,390    134,377 
Convertible notes - related parties, net of debt discount of $72,539 and $0 at December 31, 2015 and June 30, 2015, respectively   48,242    —   
Total current liabilities   1,470,224    529,373 
           
Non-redeemable convertible note (including $38,973 and $35,474 due to related parties at December 31, 2015 and June 30, 2015, respectively)   38,973    96,490 
Total liabilities   1,509,197    625,863 
           
Commitments and contingencies          
           
Stockholders' Deficiency :          
Preferred stock; par value $0.01; 48,900,000 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 Preferred Stock; par value $0.01; 100,000 shares authorized,
25,000 shares and 0 issued and outstanding at December 31, 2015 and June 30, 2015 respectively
   250    —   
Common stock; par value $0.001; 250,000,000 shares authorized,
68,252,650 issued and outstanding at December 31, 2015 and June 30, 2015 respectively
   95,253    95,253 
Additional paid-in capital   118,889,550    118,734,432 
Notes receivable   (5,000,000)   (5,000,000)
Accumulated deficiency   (115,486,750)   (114,429,290)
Total stockholders' deficiency   (1,501,697)   (599,605)
Total liabilities and stockholders’ deficiency  $7,500   $26,258 
           

 

The accompanying notes are an integral part of these condensed financial statements.

 

4 
 

STAR CENTURY PANDAHO CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

 

   For the Three Months Ended
December 31, 2015
  For the Three Months Ended
December 31, 2014
  For the Six Months Ended
December 31, 2015
  For the Six Months Ended
December 31, 2014
             
             
Revenue  $   $   $   $ 
                     
Costs and expenses:                    
Compensation   408,888    —      913,055    —   
Administrative expenses   36,877    12,024    101,988    23,705 
Loss from operations   445,765    12,024    1,015,043    23,705 
                     
Other income (expense)                    
Interest expense   (27,406)   (4,114)   (42,417)   (22,509)
                     
Net loss  $(473,171)  $(16,138)  $(1,057,460)  $(46,214)
                     
Net loss per share-basic and diluted  $(0.01)  $(0.04)  $(0.02)  $(0.11)
                     
Weighted average shares outstanding-basic and diluted   68,252,550    402,510    68,252,550    402,510 

  

The accompanying notes are an integral part of these condensed financial statements.

 

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 STAR CENTURY PANDAHO CORPORATION

CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIENCY

FOR THE SIX MONTHS ENDED DECEMBER 31, 2015

(Unaudited)

 

   Common
Shares
  Common
Stock
  Preferred B Shares  Preferred B Stock  Additional Paid-in Capital  Accumulated
Deficiency
  Note
Receivable
  Total Stockholders’
Deficiency
Balance June 30, 2015   68,252,650   $95,253    —     $—     $118,734,432   $(114,429,290)  $(5,000,000)  $(599,605)
                                         
Preferred shares issued to settle  $44,787 advances due to shareholder   —      —      25,000    250    44,537    —      —      44,787 
 Beneficial conversion feature associated with issued
convertible notes
   —      —      —      —      110,581    —      —      110,581 
                                         
Net loss   —      —      —      —      —      (1,057,460)   —      (1,057,460)
Balance December 31, 2015 (Unaudited)   68,252,650   $95,253    25,000   $250   $118,889,550   $(115,486,750)  $(5,000,000)  $(1,501,697)

 

The accompanying notes are an integral part of these condensed financial statements.

 

 

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   STAR CENTURY PANDAHO CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
       
    For the Six Months    For the Six Months 
    Ended    Ended 
    December 31,    December 31, 
    2015    2014 
Cash Flows from operating activities          
Net loss  $(1,057,460)  $(46,214)
Adjustments to reconcile net loss to net cash used in operating activities:          
Accrued interest   4,375    —   
Amortization of debt discount   38,042    13,093 
Changes in operating assets and liabilities          
Prepaid expenses   6,701    1,375 
Accounts payable and accrued liabilities   34,541    6,693 
Accrued interest on redeemable secured note payable        9,416 
Accrued compensation    913,055    —   
Net cash used in operating activities   (60,746)   (15,637)
           
Cash Flows from financing activities          
  Advances from shareholder   —      15,481 
  Cash payment made on non-redeemable convertible note   (61,892)   —   
  Proceeds from issuance of convertible notes-related parties   110,5811    —   
Net cash provided by financing activities   48,689    15,481 
           
Net increase (decrease) in cash   (12,057)   (156)
Cash, beginning of period   15,291    215 
Cash, end of period  $3,234   $59 
           
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:          
Cash paid during the period for:          
 Interest  $—     $—   
 Income taxes  $—     $—   
NON-CASH FINANCING ACTIVITIES          
Issuance of Series B Preferred Stock in settlement of advance due to a shareholder  $44,787   $—   
Beneficial conversion feature associated with issued convertible notes  $110,581   $—   
Reclassification of  advances to convertible notes  $10,200   $—   
           

 The accompanying notes are an integral part of these condensed financial statements.

 

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STAR CENTURY PANDAHO CORPORATION

Notes to Condensed Financial Statements

Three and Six months ended December 31, 2015 and 2014

(Unaudited)

 

NOTE 1. NATURE AND BACKGROUND OF BUSINESS

 

Star Century Pandaho Corporation ("the Company", “SCPD”) 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").

 

In January, 2015, Star Century Entertainment, Inc acquired 53.66% of total outstanding shares of the Company. In conjunction with gaining control of the Company, Star Century Entertainment elected three individuals to be the Company’s management, 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. 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.

 

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 licensing agreement with the creator of Pandaho, Ms. Liu Li. The Company’s aim is to build Pandaho into a competitive cartoon brand with Pandaho-themed merchandise and multi-media exhibitions.

 

BASIS OF PRESENTATION

 

The accompanying condensed financial statements are unaudited. These unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these unaudited interim condensed financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2015 filed with the SEC. The condensed balance sheet as of June 30, 2015 included herein was derived from the audited financial statements as of that date, but does not include all disclosures, including notes, required by GAAP.

 

In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments necessary to fairly present the Company’s financial position and results of operations for the interim periods reflected. Unless noted, all adjustments contained herein are of a normal recurring nature. Results of operations for the fiscal periods presented herein are not necessarily indicative of fiscal year-end results.

 

GOING CONCERN

 

The Company’s condensed financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. For the six months ended December 31, 2015, the Company incurred a net loss of $1,057,460 and used cash in operating activities of $60,746, and at December 31, 2015, had a working capital deficiency of $1,462,724 and a stockholders’ deficiency of $1,501,697.

 

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s independent registered public accounting firm, in their report on the Company’s financial statements for the year ending June 30, 2015, expressed substantial doubt about the Company’s ability to continue as a going concern. The Company’s financial statements do not include any adjustments that might result be necessary if the Company is unable to continue as a going concern.

 

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The Company’s ability to continue as a going concern is dependent upon its ability to develop additional sources of capital and to ultimately achieve profitable operations. 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 operating costs and allow it to continue as a going concern. Over the next 12 months, the Company expects to expend up to approximately $100,000 for legal, accounting and administrative costs. The Company’s officers or principal shareholders have committed to making advances or loans to pay for these legal, accounting, and administrative costs. The Company has not yet determined the amount of cash that will be necessary to fund its planned operations in China.

 

The Company hopes to be able to attract suitable investors for our business plan, which will not require us to use our cash. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution for our stockholders, in case or equity financing.

 

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 the assumptions used in valuing share-based instruments issued for services.

 

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 December 31, 2015 and 2014, we excluded the outstanding securities summarized below, which entitle the holders thereof to acquire shares of common stock as their effect would have been anti-dilutive:

 

   December 31, 2015  December 31, 2014
Common stock issuable upon conversion of convertible and non-redeemable convertible notes payable   1,987,270    176,794 
Common stock issuable upon conversion of accrued compensation   1,212,877    —   
Total   3,200,147    176,794 

 

 

 

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STOCK-BASED COMPENSATION

 

The Company may periodically issue shares of common stock, stock options, or 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 convertible notes-related parties and non-redeemable convertible note approximates its fair value based upon its effective interest rate.

 

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 on in annual reporting periods beginning after December 31, 2016. The Company is in the process of evaluating the impact of ASU 2014-09 on the Company’s financial statements and disclosures.

 

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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 principal shareholders, or others, to pay expenses such as filing fees, accounting fees and legal fees. These advances are non-interest bearing, unsecured, and generally due upon demand. At December 31, 2015 and June 30, 2015, the Company was obligated for the following advances:

 

   December 31,
2015
(unaudited)
  June 30,
2015
Advances due to shareholders  $25,000   $79,987 
Advances due to unrelated parties   54,390    54,390 
   $79,390   $134,377 
           

NOTE 4. CONVERTIBLE NOTES-RELATED PARTIES

 

   December 31
2015
(unaudited)
  June 30,
2015
Balance due on convertible notes  $120,781   $—   
Unamortized note discounts   (72,539)   —   
Balance on convertible notes, net of note discounts  $48,242   $—   

 

During the six months ended December 31, 2015, the Company issued seven convertible notes for total proceeds of $110,581. The notes are unsecured, accrue interest at 10% per annum, are due through December 12, 2016, and are convertible into 1,105,810 shares of the Company’s common stock at a conversion price of $0.10 per share. The closing price of the Company’s common stock ranged from $0.53 per share to $0.81 per share on the dates the notes were issued. The Company determined that the notes contained a beneficial conversion feature of $110,581 since the market price of the Company’s common stock was higher than the conversion price of the notes when issued. The Company recorded the beneficial conversion feature as a discount (up to the face amount of the applicable note) to be amortized over the life of the related note. During the three and six months ended December 31, 2015, $25,597 and $38,042 of discount amortization is included in interest expense, respectively, and at December 31, 2015, there was an unamortized discount balance of $72,539 to be amortized through September 2016. In addition, at December 31, 2015, $10,200 of advances due to shareholders that are convertible into 102,000 shares of the Company’s common stock at a conversion price of $0.10 per share are included in the balance due on convertible notes. The advances are unsecured, noninterest bearing, and due June 3, 2016.

 

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NOTE 5. NON-REDEEMABLE CONVERTIBLE NOTE

 

On February 20, 2014, the Company agreed to exchange advances due an unrelated party, the original note holder, 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, 2016. 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. In January 2015, $25,000 of the $68,000 principal and accrued interest was assigned to a related party of the Company by the original note holder. On July 31, 2015, the Company repaid $61,892 of principal and interest due to the original not holder. At December 31, 2015, the face amount of the note, due to a related party, plus accrued interest was $38,973 and is convertible into 779,460 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 balance sheets.

 

NOTE 6. STOCKHOLDERS' EQUITY

 

Designation and issuance of Series B Preferred stock

 

On September 4, 2015, the Company filed a Certificate of Designation designating the rights and restrictions of 100,000 shares of Series B Preferred stock, par value $0.01 pursuant to resolutions approved by the Company’s Board of Directors on June 11, 2015.

 

The holders of Series B Preferred stock are entitled to vote together with the holders of common stock, as a single class, upon all matters submitted to holders of common stock for a vote. Each share of Series B Preferred Stock has the voting power of 5,000 shares of common stock. The Series B Preferred stock is not convertible into common stock. In the event of any liquidation, dissolution or winding up of the Company, Series B Preferred stock shall have a liquidation preference to the common stock in the amount of par value per share.

 

On September 8, 2015, the Company issued 25,000 shares of Series B Preferred Stock in exchange for $44,787 due to Star Century Entertainment Corporation. The price per share of the Series B Preferred Stock was determined to be $0.73 per share, which was the closing price of the Company's common stock on September 8, 2015. The debt settled by the issuance of shares totaled $44,787. Based on $0.73 per share, this results in a valuation of the 25,000 shares of Series B Preferred Stock of $18,250. The difference of $26,537 is a gain on settlement of debt, which is recorded as a contribution to capital because it is a transaction between a principal shareholder of the Company and the Company. At December 31, 2015, there were 68,252,650 shares of common stock outstanding. Based on the voting rights of the Series B Preferred stock of 125,000,000 shares of common stock, Star Century Entertainment has the ability to elect our directors and determine the outcome of votes by our stockholders on corporate matters, including mergers, sales of our assets, charter amendments and other matters requiring stockholder approval.

 

NOTE 7. RELATED PARTY TRANSACTIONS

 

Compensation and accrued compensation represent amounts recorded for employment contracts with three executives and a consulting agreement with a shareholder. Pursuant to the terms of these agreements, total annual compensation for services is $396,000 (“cash compensation”), and the executives and shareholder have the option to accept shares of the Company’s common stock in lieu of cash based on a 50% discount to the average stock price, as defined. The option to accept shares of common stock in lieu of cash is accounted for at the intrinsic value of the potentially issuable common shares and is subject to adjustment at each reporting date based on the change in market value of the shares. At December 31, 2015, accrued cash compensation totaled $485,151, which, if the executives and shareholder elected to be paid in shares of common stock, would result in the issuance of 1,212,877 shares of the Company’s common stock valued at $1,200,748. Accordingly, at December 31, 2015, the Company has recorded accrued compensation of $1,200,748. For the three and six months ended December 31, 2015, the Company recorded $408,888 and $913,055 of compensation, respectively, related to these agreements, which included $98,729 and $197,458, respectively, for the pro-rata accrual of annual cash compensation, with the balance reflecting an expense for the value that could be paid in shares of common stock.

 

12 
 

 

Forward-Looking Statements

This report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “1933 Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact are “forward-looking statements” for purposes of this Quarterly Report on Form 10-Q, including any projections of earnings, revenue or other financial items, any statements regarding the plans and objectives of management for future operations, any statements concerning proposed new products or services, any statements regarding future economic conditions or performance, any statements regarding expected benefits from any transactions and any statements of assumptions underlying any of the foregoing. In some cases, forward-looking statements can be identified by the use of terminology such as “may,” “will,” “expects,” “plans,” “anticipates,” “estimates,” “potential” or “continue,” or the negative thereof or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements contained herein are reasonable, there can be no assurance that such expectations or any of the forward-looking statements will prove to be correct and actual results could differ materially from those projected or assumed in the forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to inherent risk and uncertainties, including, but not limited to, the risk factors set forth in “Part II, Item 1A – Risk Factors” below and for the reasons described elsewhere in this Quarterly Report on Form 10-Q. All forward looking statements and reasons why results may differ included in this report are made as of the date hereof and we do not intend to update any forward-looking statements except as required by law or applicable regulations. Except where the context otherwise requires, in this Quarterly Report on Form 10-Q, the “Company,” “Star Century Pandaho Corporation,”, “the Company ”, “we,” “us” and “our” refer to Star Century Pandaho Corporation, a Nevada corporation.

 

 

13 
 

 

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2015 AND 2014

Company Overview

 

Star Century Pandaho Corporation (“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, 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 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.

 

The Company is optimistic about the opportunity to utilize the Pandaho brand. The associated 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.

 

Cooperation Agreement

 

On November 1, 2015, the Company entered into a cooperation agreement with Pisona Tour Company Limited (“Pisona”) that outlines the intentions of the Company and Pisona in relation to Patong Bay Hill, a master planned community and hotel being developed in Thailand by Pisona. Under the agreement, the Company has agreed to allow Pisona to use the “Pandaho” trademark as the hotel’s mascot, and to sell “Pandaho” products under a license agreement to be negotiated. The agreement has an initial term of five years. At December 31, 2015, the Company and Pisona have not engaged in any licensed product activity.

 

RESULTS OF OPERATIONS

 

THREE MONTHS ENDED DECEMBER 31, 2015 COMPARED WITH THE THREE MONTHS ENDED DECEMBER 31, 2014

 

REVENUES

 

For the three months ended December 31, 2015 and 2014, we had no revenues. We are completely dependent upon the willingness of our management to fund our operations by way of loans or advances from our Chief Executive Officer, shareholders and others.

 

14 
 

 

COSTS AND EXPENSES

 

Compensation was $408,888 for the three months ended December 31, 2015, compared to $0 for the three months ended December 31, 2014. The increase in compensation is due to employment contracts with three executives and a consulting agreement with a shareholder entered into during 2015. Pursuant to the terms of these agreements, total annual compensation for services is $396,000. The executive or shareholder have the option to accept shares of the Company’s common stock in lieu of cash based on a 50% discount to the average stock price, as defined. For the three months ended December 31, 2015, the Company recorded $408,888 of compensation related to these agreements, which included $98,729 for accrual of annual compensation with the balance reflecting an expense for the value that could be paid in shares of common stock.

 

Administrative expenses were $36,877 for the three months ended December 31, 2015, compared to $12,024 for the three months ended December 31, 2014. Included in administrative expenses for the three months ended December 31, 2015 are $7,553 of payroll taxes, compared to no payroll taxes in 2014. Other increases in total administrative costs for the three months ended December 31, 2015 compared to 2014 are due to increases in accounting, audit, legal and transfer agent costs related to SEC compliance, and investor relation expenses.

 

OTHER INCOME (EXPENSE)

 

Other income (expense) includes interest expense of $27,406 for the three months ended December 31, 2015 and interest expense of $4,114 for the three months ended December 31, 2014.

 

NET LOSS

 

Our net losses for the three months ended December 31, 2015 and 2014 were $473,171 and $16,138, respectively. Our losses increased in the current year primarily because of an increase in compensation, administrative, professional fees, amortization on debt discount and interest expense.

 

SIX MONTHS ENDED DECEMBER 31, 2015 COMPARED WITH THE SIX MONTHS ENDED DECEMBER 31, 2014

 

REVENUES

 

For the six months ended December 31, 2015 and 2014, we had no revenues. We are completely dependent upon the willingness of our management to fund our operations by way of loans or advances from our Chief Executive Officer, shareholders and others.

 

OPERATING COSTS

 

Compensation was $913,055 for the six months ended December 31, 2015, compared to $0 for the six months ended December 31, 2014. The increase in compensation is due to employment contracts with three executives and a consulting agreement with a shareholder entered into during 2015. Pursuant to the terms of these agreements, total annual compensation for services is $396,000. The executive or shareholder have the option to accept shares of the Company’s common stock in lieu of cash based on a 50% discount to the average stock price, as defined. For the six months ended December 31, 2015, the Company recorded $913,055 of compensation related to these agreements, which included $197,458 for accrual of annual compensation with the balance reflecting an expense for the value that could be paid in shares of common stock.

 

Administrative expenses were $101,988 for the six months ended December 31, 2015, compared to $23,705 for the six months ended December 31, 2014. Included in administrative expenses for the six months ended December 31, 2015 are $37,114 of payroll taxes, compared to no payroll taxes in 2014. Other increases in total administrative costs for the six months ended December 31, 2015 compared to 2014 are due to increases in accounting, audit, legal and transfer agent costs related to SEC compliance, and investor relation expenses.

 

15 
 

OTHER INCOME (EXPENSE)

 

Other income (expense) includes interest expense of $42,417 for the six months ended December 31, 2015 and interest expense of $22,509 for the six months ended December 31, 2014.

 

NET LOSS

 

Our net losses for the six months ended December 31, 2015 and 2014 were $1,057,460 and $46,214, respectively. Our losses increased in the current year primarily because of an increase in compensation, administrative, professional fees, and amortization on debt discount and interest expense.

 

LIQUIDITY

 

As of December 31, 2015, we had cash of $3,234, a decrease of $12,057 compared to $15,291 at June 30, 2015. Net cash used in operating activities for the six month ended December 31, 2015 was $60,746 compared to $15,637 cash used in operating activities in the same period of the prior year. Cash used in operations during the six months ended December 30, 2015 was primarily due to our net loss in the period offset by non-cash charges and an increase in accrued compensation. Net cash provided by financing activities of $48,689 during the six months ended December 31, 2015 was primarily due to proceeds received from notes payable of $110,581 offset by payments on notes payable of $61,892. During the same period of the prior year, net cash provided by financing activities of $15,481 was from advances made by a shareholder.

 

The Company’s condensed financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. For the six months ended December 31, 2015, the Company incurred a net loss of $1,057,460 and used cash in operating activities of $60,746, and at December 31, 2015, had a working capital deficiency of $1,462,724 and a stockholders’ deficiency of $1,501,697.

 

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s independent registered public accounting firm, in their report on the Company’s financial statements for the year ending June 30, 2015, expressed substantial doubt about the Company’s ability to continue as a going concern. The Company’s financial statements do not include any adjustments that might result be necessary if the Company is unable to continue as a going concern.

 

The Company’s ability to continue as a going concern is dependent upon its ability to develop additional sources of capital and to ultimately achieve profitable operations. 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 operating costs and allow it to continue as a going concern. Over the next 12 months, the Company expects to expend up to approximately $100,000 for legal, accounting and administrative costs. The Company’s officers or principal shareholders have committed to making advances or loans to pay for these legal, accounting, and administrative costs. The Company has not yet determined the amount of cash that will be necessary to fund its planned operations in China.

 

The Company hopes to be able to attract suitable investors for our business plan, which will not require us to use our cash. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution for our stockholders, in case or equity financing.

 

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. 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.

 

 

16 
 

 

Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements.

Recent Accounting Pronouncements

 

See Footnote 2 of condensed financial statements for a discussion of recently issued accounting standards.

 

Critical Accounting Policies

 

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 shares of common stock, stock options, or 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.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

 

ITEM 4T. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

 

As required by Rule 13a-15 of the Securities Exchange Act of 1934, our principal executive officer and principal financial officer evaluated our company's disclosure controls and procedures (as defined in Rules 13a-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded that as of the end of the period covered by this report, these disclosure controls and procedures were not effective to ensure that the information required to be disclosed by our company in reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities Exchange Commission and to ensure that such information is accumulated and communicated to our company's management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. The conclusion that our disclosure controls and procedures were not effective was due to the presence of the following material weaknesses in 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 United States generally accepted accounting principles and Securities and Exchange Commission guidelines. Management anticipates that such disclosure controls and procedures will not be effective until the material weaknesses are remediated. 

 

17 
 

 

We plan to take steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes during our fiscal year ending June 30, 2016, subject to obtaining additional financing: (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 above 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 were no changes in our internal control over financial reporting during the quarter ended December 31, 2015 that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

NONE.

ITEM 1A. RISK FACTORS

 

There have been no material changes in our risk factors from those disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended June 30, 2015.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

 

None

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable

ITEM 5. OTHER INFORMATION.

None

18 
 

ITEM 6. EXHIBITS.

Except as so indicated in Exhibits 32.1 and 32.2, the following exhibits are filed as part of, or incorporated by reference, to this Quarterly Report on Form 10-Q.

 

      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        
101

Interactive Data Files for the Star Century Pandaho Corporation Form 10Q for the period ended December 31, 2015

 

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:  February 10, 2016 By: /s/ Fen Xing
   

Fen Xing

Chief Executive Officer, Secretary, Treasurer and Director (Principal Executive Officer, Principal Accounting and Financial Officer)

     
     
     

 

 

 

 

19 
 

 



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-Q 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 registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on 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: February 10, 2016

 

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-Q 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 registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on 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: February 10, 2016

 

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 Quarterly Report of Star Century Pandaho Corporation (the Registrant) on Form 10-Q for the period  ended December 31, 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: February 10, 2016

 

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 Quarterly Report of Star Century Pandaho Corporation (the Registrant) on Form 10-Q  for the period  ended December 31, 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: February 10, 2016

 

By: /s/ Fen Xing

Fen Xing

Chief Financial Officer
(Principal Financial Officer)

 

 

 
 

 



v3.3.1.900
Document and Entity Information - shares
6 Months Ended
Dec. 31, 2015
Feb. 10, 2016
Document And Entity Information    
Entity Registrant Name STAR CENTURY PANDAHO Corp  
Entity Central Index Key 0001470550  
Document Type 10-Q  
Document Period End Date Dec. 31, 2015  
Amendment Flag false  
Current Fiscal Year End Date --06-30  
Is Entity a Well-known Seasoned Issuer? No  
Is Entity a Voluntary Filer? No  
Is Entity's Reporting Status Current? Yes  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   68,252,650
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2016  


v3.3.1.900
Condensed Balance Sheets - USD ($)
Dec. 31, 2015
Jun. 30, 2015
Current assets:    
Cash $ 3,234 $ 15,291
Prepaid expenses 4,266 10,967
Total assets 7,500 26,258
Current Liabilities:    
Accounts payable and accrued liabilities 141,844 107,303
Accrued compensation 1,200,748 287,693
Advances (including $25,000 and $79,987 due to related parties at December 31, 2015 and June 30, 2015, respectively) 79,390 $ 134,377
Convertible notes-related parties, net of debt discount of $72,539 and $0 at December 31, 2015 and June 30, 2015, respectively 48,242
Total current liabilities 1,470,224 $ 529,373
Non-redeemable convertible note (including $38,973 and $35,474 due to related parties at December 31, 2015 and June 30, 2015, respectively) 38,973 96,490
Total liabilities 1,509,197 $ 625,863
Stockholders' Deficiency :    
Preferred stock; par value $0.01; 48,900,000 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 Preferred Stock; par value $0.01; 100,000 shares authorized, 25,000 shares and 0 issued and outstanding at December 31, 2015 and June 30, 2015 respectively 250
Common stock; par value $0.001; 250,000,000 shares authorized, 68,252,650 issued and outstanding at December 31, 2015 and June 30, 2015 respectively 95,253 $ 95,253
Additional paid-in capital 118,889,550 118,734,432
Notes receivable 5,000,000 5,000,000
Accumulated deficiency (115,486,750) (114,429,290)
Total stockholders' deficiency (1,501,697) (599,605)
Total liabilities and stockholders’ deficiency $ 7,500 $ 26,258
Series A Convertible Preferred Stock [Member]    
Stockholders' Deficiency :    
Preferred stock; par value $0.01; 48,900,000 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 Preferred Stock; par value $0.01; 100,000 shares authorized, 25,000 shares and 0 issued and outstanding at December 31, 2015 and June 30, 2015 respectively
Total stockholders' deficiency
Total liabilities and stockholders’ deficiency
Series B Preferred Stock [Member]    
Stockholders' Deficiency :    
Preferred stock; par value $0.01; 48,900,000 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 Preferred Stock; par value $0.01; 100,000 shares authorized, 25,000 shares and 0 issued and outstanding at December 31, 2015 and June 30, 2015 respectively $ 250
Total stockholders' deficiency 250
Total liabilities and stockholders’ deficiency $ 250


v3.3.1.900
Condensed Balance Sheets (Parenthetical) - USD ($)
Dec. 31, 2015
Jun. 30, 2015
Advances - due to related parties, current $ 25,000 $ 79,987
Debt discount $ 72,539 $ 0
Preferred stock, par value per share $ 0.01 $ 0.01
Preferred stock, shares authorized 48,900,000 48,900,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value per share $ 0.001 $ 0.001
Common stock, shares authorized 250,000,000 250,000,000
Common stock, shares issued 68,252,650 68,252,650
Common stock, shares outstanding 68,252,650 68,252,650
Series A Convertible Preferred Stock [Member]    
Preferred stock, par value per share $ 0.01 $ 0.01
Preferred stock, shares authorized 1,000,000 1,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Series B Preferred Stock [Member]    
Preferred stock, par value per share $ 0.01 $ 0.01
Preferred stock, shares authorized 100,000 100,000
Preferred stock, shares issued 25,000 0
Preferred stock, shares outstanding 25,000 0
Non-Redeemable Convertible Note [Member]    
Non-redeemable convertible note - due to related parties $ 38,973 $ 35,474


v3.3.1.900
Condensed Statements Of Operations (Unaudited) - USD ($)
3 Months Ended 6 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Income Statement [Abstract]        
Revenue
Costs and expenses:        
Compensation $ 408,888 $ 913,055
Administrative expenses 36,877 $ 12,024 101,988 $ 23,705
Loss from operations (445,765) (12,024) (1,015,043) (23,705)
Other income (expense)        
Interest expense 27,406 4,114 42,417 22,509
Net loss $ (473,171) $ (16,138) $ (1,057,460) $ (46,214)
Net loss per share-basic and diluted $ (0.01) $ (0.04) $ (0.02) $ (0.11)
Weighted average shares outstanding - basic and diluted 68,252,550 402,510 68,252,550 402,510


v3.3.1.900
Condensed Statement Of Stockholders' Deficiency (Unaudited) - USD ($)
3 Months Ended 6 Months Ended
Dec. 31, 2015
Dec. 31, 2015
Common Stock [Member]    
Balance common stock, shares   68,252,650
Balance, value   $ 95,253
Beneficial conversion feature associated with issued convertible notes  
Net loss  
Balance common stock, shares 68,252,650 68,252,650
Balance, value $ 95,253 $ 95,253
Series B Preferred Stock [Member]    
Balance preferred stock, shares  
Balance, value  
Preferred shares issued to settle $44,787 advances due to shareholder, shares   25,000
Preferred shares issued to settle $44,787 advances due to shareholder, value   $ 250
Beneficial conversion feature associated with issued convertible notes  
Net loss  
Balance preferred stock, shares 25,000 25,000
Balance, value $ 250 $ 250
Additional Paid-in Capital [Member]    
Balance, value   118,734,432
Preferred shares issued to settle $44,787 advances due to shareholder, value   44,537
Beneficial conversion feature associated with issued convertible notes   $ 110,581
Net loss  
Balance, value 118,889,550 $ 118,889,550
Accumulated Deficiency [Member]    
Balance, value   $ (114,429,290)
Preferred shares issued to settle $44,787 advances due to shareholder, value  
Beneficial conversion feature associated with issued convertible notes  
Net loss   $ (1,057,460)
Balance, value (115,486,750) (115,486,750)
Note Receivable [Member]    
Balance, value   $ (5,000,000)
Preferred shares issued to settle $44,787 advances due to shareholder, value  
Beneficial conversion feature associated with issued convertible notes  
Net loss  
Balance, value (5,000,000) $ (5,000,000)
Balance common stock, shares   68,252,650
Balance preferred stock, shares  
Balance, value   $ (599,605)
Preferred shares issued to settle $44,787 advances due to shareholder, value   44,787
Beneficial conversion feature associated with issued convertible notes   110,581
Net loss $ (473,171) $ (1,057,460)
Balance common stock, shares 68,252,650 68,252,650
Balance preferred stock, shares
Balance, value $ (1,501,697) $ (1,501,697)


v3.3.1.900
Condensed Statement Of Stockholders' Deficiency (Unaudited) (Parenthetical)
Sep. 08, 2015
USD ($)
Statement of Stockholders' Equity [Abstract]  
Due to shareholder $ 44,787


v3.3.1.900
Condensed Statements Of Cash Flows (Unaudited) - USD ($)
6 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Cash Flows from operating activities    
Net loss $ (1,057,460) $ (46,214)
Adjustments to reconcile net loss to net cash used in operating activities:    
Accrued interest 4,375
Amortization of debt discount 38,042 $ 13,093
Changes in operating assets and liabilities    
Prepaid expenses (6,701) (1,375)
Accounts payable and accrued liabilities 34,541 6,693
Accrued interest on redeemable secured note payable   $ 9,416
Accrued compensation 913,055
Net cash used in operating activities $ (60,746) $ (15,637)
Cash Flows from financing activities    
Advances from shareholder $ 15,481
Cash payment made on non-redeemable convertible note $ 61,892
Proceeds from issuance of convertible notes-related parties 110,581
Net cash provided by financing activities 48,689 $ 15,481
Net increase (decrease) in cash (12,057) (156)
Cash, beginning of period 15,291 215
Cash, end of period $ 3,234 $ 59
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:    
Cash paid during the period for: Interest
Cash paid during the period for: Income taxes
NON-CASH FINANCING ACTIVITIES    
Issuance of Series B Preferred Stock in settlement of advance due to a shareholder $ 44,787
Beneficial conversion feature associated with issued convertible notes 110,581
Reclassification of advances to convertible notes $ 10,200


v3.3.1.900
Nature And Background Of Business
6 Months Ended
Dec. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Nature and Background of Business

NOTE 1. NATURE AND BACKGROUND OF BUSINESS

 

Star Century Pandaho Corporation ("the Company", “SCPD”) 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").

 

In January, 2015, Star Century Entertainment, Inc acquired 53.66% of total outstanding shares of the Company. In conjunction with gaining control of the Company, Star Century Entertainment elected three individuals to be the Company’s management, 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. 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.

 

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 licensing agreement with the creator of Pandaho, Ms. Liu Li. The Company’s aim is to build Pandaho into a competitive cartoon brand with Pandaho-themed merchandise and multi-media exhibitions.

 

BASIS OF PRESENTATION

 

The accompanying condensed financial statements are unaudited. These unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these unaudited interim condensed financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2015 filed with the SEC. The condensed balance sheet as of June 30, 2015 included herein was derived from the audited financial statements as of that date, but does not include all disclosures, including notes, required by GAAP.

 

In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments necessary to fairly present the Company’s financial position and results of operations for the interim periods reflected. Unless noted, all adjustments contained herein are of a normal recurring nature. Results of operations for the fiscal periods presented herein are not necessarily indicative of fiscal year-end results.

 

GOING CONCERN

 

The Company’s condensed financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. For the six months ended December 31, 2015, the Company incurred a net loss of $1,057,460 and used cash in operating activities of $60,746, and at December 31, 2015, had a working capital deficiency of $1,462,724 and a stockholders’ deficiency of $1,501,697.

 

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s independent registered public accounting firm, in their report on the Company’s financial statements for the year ending June 30, 2015, expressed substantial doubt about the Company’s ability to continue as a going concern. The Company’s financial statements do not include any adjustments that might result be necessary if the Company is unable to continue as a going concern.

 

The Company’s ability to continue as a going concern is dependent upon its ability to develop additional sources of capital and to ultimately achieve profitable operations. 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 operating costs and allow it to continue as a going concern. Over the next 12 months, the Company expects to expend up to approximately $100,000 for legal, accounting and administrative costs. The Company’s officers or principal shareholders have committed to making advances or loans to pay for these legal, accounting, and administrative costs. The Company has not yet determined the amount of cash that will be necessary to fund its planned operations in China.

 

The Company hopes to be able to attract suitable investors for our business plan, which will not require us to use our cash. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution for our stockholders, in case or equity financing.



v3.3.1.900
Summary Of Significant Accounting Policies
6 Months Ended
Dec. 31, 2015
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

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 the assumptions used in valuing share-based instruments issued for services.

 

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 December 31, 2015 and 2014, we excluded the outstanding securities summarized below, which entitle the holders thereof to acquire shares of common stock as their effect would have been anti-dilutive:

 

   December 31, 2015  December 31, 2014
Common stock issuable upon conversion of convertible and non-redeemable convertible notes payable   1,987,270    176,794 
Common stock issuable upon conversion of accrued compensation   1,212,877    —   
Total   3,200,147    176,794 

  

STOCK-BASED COMPENSATION

 

The Company may periodically issue shares of common stock, stock options, or 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 convertible notes-related parties and non-redeemable convertible note approximates its fair value based upon its effective interest rate.

 

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 on in annual reporting periods beginning after December 31, 2016. The Company is in the process of evaluating the impact of ASU 2014-09 on the Company’s financial statements and disclosures.

 

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.



v3.3.1.900
Advances
6 Months Ended
Dec. 31, 2015
Notes to Financial Statements  
Advances

NOTE 3. ADVANCES

 

The Company from time to time borrows from our principal shareholders, or others, to pay expenses such as filing fees, accounting fees and legal fees. These advances are non-interest bearing, unsecured, and generally due upon demand. At December 31, 2015 and June 30, 2015, the Company was obligated for the following advances:

 

   December 31, 2015
(unaudited)
  June 30, 2015
Advances due to shareholders  $25,000   $79,987 
Advances due to unrelated parties   54,390    54,390 
   $79,390   $134,377 


v3.3.1.900
Convertible Notes-Related Parties
6 Months Ended
Dec. 31, 2015
Debt Disclosure [Abstract]  
Convertible Notes-Related Parties

NOTE 4. CONVERTIBLE NOTES-RELATED PARTIES

 

   December 31
2015
(unaudited)
  June 30,
2015
Balance due on convertible notes  $120,781   $—   
Unamortized note discounts   (72,539)   —   
Balance on convertible notes, net of note discounts  $48,242   $—   

 

During the six months ended December 31, 2015, the Company issued seven convertible notes for total proceeds of $110,581. The notes are unsecured, accrue interest at 10% per annum, are due through December 12, 2016, and are convertible into 1,105,810 shares of the Company’s common stock at a conversion price of $0.10 per share. The closing price of the Company’s common stock ranged from $0.53 per share to $0.81 per share on the dates the notes were issued. The Company determined that the notes contained a beneficial conversion feature of $110,581 since the market price of the Company’s common stock was higher than the conversion price of the notes when issued. The Company recorded the beneficial conversion feature as a discount (up to the face amount of the applicable note) to be amortized over the life of the related note. During the three and six months ended December 31, 2015, $25,597 and $38,042 of discount amortization is included in interest expense, respectively, and at December 31, 2015, there was an unamortized discount balance of $72,539 to be amortized through September 2016. In addition, at December 31, 2015, $10,200 of advances due to shareholders that are convertible into 102,000 shares of the Company’s common stock at a conversion price of $0.10 per share are included in the balance due on convertible notes. The advances are unsecured, noninterest bearing, and due June 3, 2016.



v3.3.1.900
Non-Redeemable Convertible Note
6 Months Ended
Dec. 31, 2015
Debt Disclosure [Abstract]  
Non-Redeemable Convertible Note

NOTE 5. NON-REDEEMABLE CONVERTIBLE NOTE

 

On February 20, 2014, the Company agreed to exchange advances due an unrelated party, the original note holder, 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, 2016. 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. In January 2015, $25,000 of the $68,000 principal and accrued interest was assigned to a related party of the Company by the original note holder. On July 31, 2015, the Company repaid $61,892 of principal and interest due to the original not holder. At December 31, 2015, the face amount of the note, due to a related party, plus accrued interest was $38,973 and is convertible into 779,460 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 balance sheets.



v3.3.1.900
Stockholders' Equity
6 Months Ended
Dec. 31, 2015
Equity [Abstract]  
Stockholders' Equity

NOTE 6. STOCKHOLDERS' EQUITY

 

Designation and issuance of Series B Preferred stock

 

On September 4, 2015, the Company filed a Certificate of Designation designating the rights and restrictions of 100,000 shares of Series B Preferred stock, par value $0.01 pursuant to resolutions approved by the Company’s Board of Directors on June 11, 2015.

 

The holders of Series B Preferred stock are entitled to vote together with the holders of common stock, as a single class, upon all matters submitted to holders of common stock for a vote. Each share of Series B Preferred Stock has the voting power of 5,000 shares of common stock. The Series B Preferred stock is not convertible into common stock. In the event of any liquidation, dissolution or winding up of the Company, Series B Preferred stock shall have a liquidation preference to the common stock in the amount of par value per share.

 

On September 8, 2015, the Company issued 25,000 shares of Series B Preferred Stock in exchange for $44,787 due to Star Century Entertainment Corporation. The price per share of the Series B Preferred Stock was determined to be $0.73 per share, which was the closing price of the Company's common stock on September 8, 2015. The debt settled by the issuance of shares totaled $44,787. Based on $0.73 per share, this results in a valuation of the 25,000 shares of Series B Preferred Stock of $18,250. The difference of $26,537 is a gain on settlement of debt, which is recorded as a contribution to capital because it is a transaction between a principal shareholder of the Company and the Company. At December 31, 2015, there were 68,252,650 shares of common stock outstanding. Based on the voting rights of the Series B Preferred stock of 125,000,000 shares of common stock, Star Century Entertainment has the ability to elect our directors and determine the outcome of votes by our stockholders on corporate matters, including mergers, sales of our assets, charter amendments and other matters requiring stockholder approval.



v3.3.1.900
Related Party Transactions
6 Months Ended
Dec. 31, 2015
Related Party Transactions [Abstract]  
Related Party Transactions

NOTE 7. RELATED PARTY TRANSACTIONS

 

Compensation and accrued compensation represent amounts recorded for employment contracts with three executives and a consulting agreement with a shareholder. Pursuant to the terms of these agreements, total annual compensation for services is $396,000 (“cash compensation”), and the executives and shareholder have the option to accept shares of the Company’s common stock in lieu of cash based on a 50% discount to the average stock price, as defined. The option to accept shares of common stock in lieu of cash is accounted for at the intrinsic value of the potentially issuable common shares and is subject to adjustment at each reporting date based on the change in market value of the shares. At December 31, 2015, accrued cash compensation totaled $485,151, which, if the executives and shareholder elected to be paid in shares of common stock, would result in the issuance of 1,212,877 shares of the Company’s common stock valued at $1,200,748. Accordingly, at December 31, 2015, the Company has recorded accrued compensation of $1,200,748. For the three and six months ended December 31, 2015, the Company recorded $408,888 and $913,055 of compensation, respectively, related to these agreements, which included $98,729 and $197,458, respectively, for the pro-rata accrual of annual cash compensation, with the balance reflecting an expense for the value that could be paid in shares of common stock.



v3.3.1.900
Nature And Background Of Business (Policies)
6 Months Ended
Dec. 31, 2015
Nature And Background Of Business Policies  
Basis of Presentation

BASIS OF PRESENTATION

 

The accompanying condensed financial statements are unaudited. These unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these unaudited interim condensed financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2015 filed with the SEC. The condensed balance sheet as of June 30, 2015 included herein was derived from the audited financial statements as of that date, but does not include all disclosures, including notes, required by GAAP.

 

In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments necessary to fairly present the Company’s financial position and results of operations for the interim periods reflected. Unless noted, all adjustments contained herein are of a normal recurring nature. Results of operations for the fiscal periods presented herein are not necessarily indicative of fiscal year-end results.



v3.3.1.900
Summary Of Significant Accounting Policies (Policies)
6 Months Ended
Dec. 31, 2015
Summary Of Significant Accounting Policies Policies  
Estimates

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 the assumptions used in valuing share-based instruments issued for services.

Revenue

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 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 December 31, 2015 and 2014, we excluded the outstanding securities summarized below, which entitle the holders thereof to acquire shares of common stock as their effect would have been anti-dilutive:

 

   December 31, 2015  December 31, 2014
Common stock issuable upon conversion of convertible and non-redeemable convertible notes payable   1,987,270    176,794 
Common stock issuable upon conversion of accrued compensation   1,212,877    —   
Total   3,200,147    176,794 
Stock-Based Compensation

STOCK-BASED COMPENSATION

 

The Company may periodically issue shares of common stock, stock options, or 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 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 convertible notes-related parties and non-redeemable convertible note approximates its fair value based upon its effective interest rate.

Recent Accounting Pronouncements

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 on in annual reporting periods beginning after December 31, 2016. The Company is in the process of evaluating the impact of ASU 2014-09 on the Company’s financial statements and disclosures.

 

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.



v3.3.1.900
Summary Of Significant Accounting Policies (Tables)
6 Months Ended
Dec. 31, 2015
Earnings Per Share [Abstract]  
Schedule of Antidilutive Securities Excluded from Computation of Earnings per Share

At December 31, 2015 and 2014, we excluded the outstanding securities summarized below, which entitle the holders thereof to acquire shares of common stock as their effect would have been anti-dilutive:

 

   December 31, 2015  December 31, 2014
Common stock issuable upon conversion of convertible and non-redeemable convertible notes payable   1,987,270    176,794 
Common stock issuable upon conversion of accrued compensation   1,212,877    —   
Total   3,200,147    176,794 


v3.3.1.900
Advances (Tables)
6 Months Ended
Dec. 31, 2015
Debt Disclosure [Abstract]  
Schedule of Advances

At December 31, 2015 and June 30, 2015, the Company was obligated for the following advances:

 

   December 31, 2015
(unaudited)
  June 30, 2015
Advances due to shareholders  $25,000   $79,987 
Advances due to unrelated parties   54,390    54,390 
   $79,390   $134,377 


v3.3.1.900
Convertible Notes-Related Parties (Tables)
6 Months Ended
Dec. 31, 2015
Convertible Notes-related Parties Tables  
Schedule of convertible notes
   December 31
2015
(unaudited)
  June 30,
2015
Balance due on convertible notes  $120,781   $—   
Unamortized note discounts   (72,539)   —   
Balance on convertible notes, net of note discounts  $48,242   $—   


v3.3.1.900
Summary Of Significant Accounting Policies (Details) - shares
6 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Antidilutive securities excluded from computation of earnings per share 3,200,147 176,794
Common Stock Issuable Upon Conversion Of Convertible And Non-Redeemable Convertible Notes Payable [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Antidilutive securities excluded from computation of earnings per share 1,987,270 176,794
Common Stock Issuable Upon Conversion Of Accrued Compensation [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Antidilutive securities excluded from computation of earnings per share 1,212,877


v3.3.1.900
Advances (Details) - USD ($)
Dec. 31, 2015
Jun. 30, 2015
Short-term Debt [Line Items]    
Advances due to shareholders $ 25,000 $ 79,987
Total Advances 79,390 134,377
Advances [Member]    
Short-term Debt [Line Items]    
Advances due to shareholders 25,000 79,987
Advances due to unrelated parties 54,390 54,390
Total Advances $ 79,390 $ 134,377


v3.3.1.900
Convertible Notes-Related Parties (Details) - USD ($)
Dec. 31, 2015
Jun. 30, 2015
Short-term Debt [Line Items]    
Unamortized note discounts $ 72,539 $ 0
Balance on convertible notes, net of note discounts 48,242
Convertible Notes-Related Parties [Member]    
Short-term Debt [Line Items]    
Balance due on convertible notes 120,781
Unamortized note discounts 72,539
Balance on convertible notes, net of note discounts $ 48,242


v3.3.1.900
Nature And Background Of Business (Narrative) (Details)
1 Months Ended 6 Months Ended
May. 20, 2015
Jan. 31, 2015
Dec. 31, 2015
USD ($)
Working capital deficiency     $ 1,462,724
Description of cash expend for legal, accounting and administrative costs    

Over the next 12 months, the Company expects to expend up to approximately $100,000 for legal, accounting and administrative costs.

Common Stock [Member]      
Reverse stock split  

Effect a 1-for-5,000 reverse common stock split

 
Changes in capital structure

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.

Decrease the Company’s authorized common stock to 150,000,000 shares, par value $0.001.

 
Common Stock [Member] | Star Century Entertainment Corporation [Member]      
Percentage of outstanding shares of the company acquired   0.5366  


v3.3.1.900
Advances (Narrative) (Details)
6 Months Ended
Dec. 31, 2015
Advances [Member]  
Advances description

These advances are non-interest bearing, unsecured, and generally due upon demand.



v3.3.1.900
Convertible Notes-Related Parties (Narrative) (Details) - USD ($)
3 Months Ended 6 Months Ended
Dec. 31, 2015
Dec. 31, 2015
Dec. 31, 2014
Sep. 08, 2015
Jun. 30, 2015
Short-term Debt [Line Items]          
Proceeds from seven convertible note issued   $ 110,581    
Beneficial conversion feature   110,581    
Discount amortization   38,042 $ 13,093    
Unamortized discount $ 72,539 72,539     $ 0
Advances to shareholders       $ 44,787  
Convertible Notes-Related Parties [Member]          
Short-term Debt [Line Items]          
Proceeds from seven convertible note issued   $ 110,581      
Note interest rate   10.00%      
Note maturity date   Dec. 12, 2016      
Note convertible terms  

Convertible into 1,105,810 shares of the Company’s common stock

     
Conversion price per share $ 0.10 $ 0.10      
Common stock price range on the date of note issued  

The closing price of the Company’s common stock ranged from $0.53 per share to $0.81 per share on the dates the notes were issued

     
Beneficial conversion feature   $ 110,581      
Discount amortization $ 25,597 38,042      
Unamortized discount $ 72,539 $ 72,539    
Advances [Member]          
Short-term Debt [Line Items]          
Advances description  

These advances are non-interest bearing, unsecured, and generally due upon demand.

     
Advances [Member] | Principal Shareholders [Member]          
Short-term Debt [Line Items]          
Note maturity date   Jun. 03, 2016      
Note convertible terms  

Convertible into 102,000 shares of the Company’s common stock

     
Conversion price per share $ 0.10 $ 0.10      
Advances to shareholders $ 10,200 $ 10,200      
Advances description  

The advances are unsecured, noninterest bearing

     


v3.3.1.900
Non-Redeemable Convertible Note (Narrative) (Details) - USD ($)
1 Months Ended 6 Months Ended
Jul. 31, 2015
Feb. 20, 2014
Jan. 31, 2015
Dec. 31, 2015
Dec. 31, 2014
Jun. 30, 2015
Debt Instrument [Line Items]            
Note repayment of principal and interest       $ 61,892  
Note plus accrued interest outstanding       38,973   $ 96,490
Non Redeemable Convertible Note - Unrelated Party [Member]            
Debt Instrument [Line Items]            
Advance exchanged for a note   $ 68,000        
Note interest rate   20.00%        
Note maturity date   Aug. 01, 2014        
Extended maturity date   Aug. 01, 2016        
Debt instrument redemption description  

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.

       
Conversion price per share   $ 0.05        
Note repayment of principal and interest $ 61,892          
Note transfered to related party     $ (25,000)      
Non Redeemable Convertible Note - Related Party [Member]            
Debt Instrument [Line Items]            
Note transfered to related party     $ 25,000      
Note plus accrued interest outstanding       $ 38,973    
Shares eligible for converting the note and interest       779,460    


v3.3.1.900
Stockholders' Equity (Narrative) (Details) - USD ($)
Sep. 08, 2015
Sep. 04, 2015
Dec. 31, 2015
Jun. 30, 2015
Preferred stock shares authorized     48,900,000 48,900,000
Preferred stock par value per share     $ 0.01 $ 0.01
Series B Preferred Stock [Member]        
Preferred stock shares authorized   100,000 100,000 100,000
Preferred stock par value per share   $ 0.01 $ 0.01 $ 0.01
Preferred stock voting rights  

The holders of Series B Preferred stock are entitled to vote together with the holders of common stock, as a single class, upon all matters submitted to holders of common stock for a vote. Each share of Series B Preferred Stock has the voting power of 5,000 shares of common stock.

   
Preferred stock exercise rights  

The Series B Preferred stock is not convertible into common stock. In the event of any liquidation, dissolution or winding up of the Company, Series B Preferred stock shall have a liquidation preference to the common stock in the amount of par value per share.

   
Series B Preferred Stock [Member] | Debt Payable [[Member] | Star Century Entertainment Corporation [Member]        
Stock issued for exchange of debt 25,000      
Debt amount settled $ 44,787      
Preferred stock conversion price per share $ 0.73      
Preferred stock issue value based on closing price $ 18,250      
Gain loss on settlement of debt $ 26,537      
Controlling interest

Based on the voting rights of the Series B Preferred stock of 125,000,000 shares of common stock, Star Century Entertainment has the ability to elect our directors and determine the outcome of votes by our stockholders on corporate matters, including mergers, sales of our assets, charter amendments and other matters requiring stockholder approval.

 

     


v3.3.1.900
Related Party Transactions (Narrative) (Details) - USD ($)
3 Months Ended 6 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Jun. 30, 2015
Related Party Transaction [Line Items]          
Accrued compensation $ 1,200,748   $ 1,200,748   $ 287,693
Compensation 408,888 913,055  
Employment Contracts With Three Executives And A Consulting Agreement With A Shareholder [Member]          
Related Party Transaction [Line Items]          
Annual compensation for services 396,000   $ 396,000    
Consulting agreement description    

The executives and shareholder have the option to accept shares of the Company’s common stock in lieu of cash based on a 50% discount to the average stock price, as defined.

   
Accrued expected cash compensation 485,151   $ 485,151    
Eligible shares as compensation to executives     1,212,877    
Eligible share compensation value to executives     $ 1,200,748    
Accrued compensation 1,200,748   1,200,748    
Compensation 408,888   913,055    
Annual compensation included in compensation on pro-rate $ 98,729   $ 197,458