Quarterly Report (10-q)

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

This quarterly report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology including "could", "may", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential" and the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this report.

Revenue and Cost

We had no sales and cost for the six months ended December 31, 2019 and 2018.

Operating expenses

During the six months ended December 31, 2019, our total operating expenses were $118,441, a decrease of $730,024 or 86% as compared to $848,465 for the six months ended December 31, 2018. The decrease was primarily due to decrease in impairment loss on film costs.

Net loss

For the six months ended December 31, 2019, we incurred a net loss of $133,961, as compared to a net loss of $861,997 for the six months ended December 31, 2018, a decrease of $728,036 or 84%. This decrease was primarily due to the decrease in operating expenses.

Comparison of the three months ended December 31, 2019 and 2018:

Revenue and Cost

We had no sales and cost for the three months ended December 31, 2019 and 2018.

Operating expenses

During the three months ended December 31, 2019, our total operating expenses were $60,758, a decrease of $728,499 or 92% as compared to $789,257 for the three months ended December 31, 2018. The decrease was primarily due to decrease in impairment loss on film costs.

Net loss

For the three months ended December 31, 2019, we incurred a net loss of $69,430, as compared to a net loss of $795,941 for the three months ended December 31, 2018, a decrease of $726,511 or 91%. This decrease was primarily due to the decrease in operating expenses.

As of December 31,2019, we had cash of $1,987 in our bank accounts and a working capital deficit of $1,202,197.

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For the six months ended December 31, 2019, we used net cash of $89,389 in operating activities, compared to net cash used of $81,112 in operating activities during the same period of 2018. The increase of $8,277 for net cash used in operating activities was mainly due to the decrease in the change in accrued liabilities and other payablein this period.

During the six months ended December 31, 2019, we received net cash of $88,816 from financing activities, compared to net cash received of $77,758 in financing activities during the same period in fiscal year 2018. The increase of $11,058 in net cash provided by financing activities was due to the increase in loan from a related party.

Our cash level decreased by $616 during the six months ended December 31, 2019, compared to a decrease of $3,614 in the same period of 2018. The changes in cash were a result of the factors described above.

We anticipate that we will meet our ongoing cash requirements through equity or debt financing. We plan to cooperate with various individuals and institutions to acquire the financing required to produce and distribute our products and anticipate this will continue until we accrue sufficient capital reserves to finance all of our productions independently.

We intend to meet our cash requirements for the next 12 months through a combination of debt financing and equity financing and partnerships with finance groups on television and movie projects.

Critical Accounting Policies and Estimates

Please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2019 10-K for disclosures regarding our critical accounting policies and estimates. The interim financial statements follow the same accounting policies and methods of computations as those for the year ended June 30, 2019.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Inflation

The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.

Audit Committee

The functions of the audit committee are currently carried out by our Board of Directors, who has determined that we do not have an audit committee financial expert on our Board of Directors to carry out the duties of the audit committee. The Board of Directors has determined that the cost of hiring a financial expert to act as a director and to be a member of the audit committee or otherwise perform audit committee functions outweighs the benefits of having a financial expert on the audit committee.