The following management's discussion and analysis should be read in conjunction
with the historical financial statements and the related notes thereto contained
in the exhibits to this Report. The management's discussion and analysis
contains forward-looking statements, such as statements of our plans,
objectives, expectations and intentions. Any statements that are not statements
of historical fact are forward-looking statements. When used, the words
"believe," "plan," "intend," "anticipate," "target," "estimate," "expect" and
the like, and/or future tense or conditional constructions ("will," "may,"
"could," "should," etc.), or similar expressions, identify certain of these
forward-looking statements. These forward-looking statements are subject to
risks and uncertainties, including those under "Risk Factors" commencing on page
17 above, that could cause actual results or events to differ materially from
those expressed or implied by the forward-looking statements. The Company's
actual results and plans could differ materially from those anticipated in these
forward-looking statements as a result of several factors, some of which cannot
be anticipated or predicted. The Company does not undertake any obligation to
update forward-looking statements to reflect events or circumstances occurring
after the date of this Report.
As a result of the Share Exchange and the change in business and operations of
the Company, a discussion of the past financial results of the Company is not
pertinent, and under applicable accounting principles the historical financial
results of Almost Never, the accounting acquirer, prior to the Share Exchange
are considered the historical financial results of the Company.
Upon the completion of the Share Exchange, Almost Never became a wholly-owned
subsidiary of the Company. All references to "Almost Never" shall mean and refer
to Almost Never prior to the Share Exchange and to the Company as well as to the
business of Almost Never (constituting our only business) after the Share
Exchange as required by the context.
The following discussion highlights Almost Never's results of operations and the
principal factors that have affected our financial condition as well as our
liquidity and capital resources for the periods described, and provides
information that management believes is relevant for an assessment and
understanding of the statements of financial condition and results of operations
presented herein. The following discussion and analysis are based on Almost
Never's audited and unaudited financial statements supplied as exhibits to this
Report, which we have prepared in accordance with United States generally
accepted accounting principles. You should read the discussion and analysis
together with such financial statements and the related notes thereto.
Basis of Presentation
The audited financial statements of Almost Never from June 30, 2020 to June 30,
2021, including a summary of our significant accounting policies and notes
thereto, should be read in conjunction with the discussion below. In the opinion
of management, all material adjustments necessary to present fairly the results
of operations for such periods have been included in these audited financial
statements. All such adjustments are of a normal recurring nature.
Upon the consummation of the transactions contemplated by the Exchange
Agreement, on January 15, 2017, we issued 1,000,000 shares of our Series A
Convertible Preferred Stock to the Almost Never Shareholders in exchange for all
100,000,000 shares of issued and outstanding common stock of Almost Never. As a
result of the Exchange Agreement, Almost Never became our wholly-owned
subsidiary, and the two Almost Never Shareholders have voting power equal to
approximately 80% of the voting power of the Company.
Almost Never Films Inc. was founded as an Indiana corporation in July 2015.
Activities since inception, through October 31, 2015, were devoted primarily to
business development that included meetings with producers, actors, directors
and screenwriters in the film industry to explore various partnerships and other
collaborations. Development consists of meeting with screenwriters, producers,
directors, talent agencies, and other motion picture industry executives.
As part of Share Exchange, Doug Samuelson, our sole officer, resigned from all
his positions with the Company and Danny Chan was elected as our Chief Executive
Officer, Chief Financial Officer and a director on our Board, and Derek Williams
was elected as our Chief Operating Officer. Mr. Chan and Mr. Williams held the
same executive office positions at Almost Never prior to the Share Exchange.
Effectively ten (10) days after the filing and distribution of an Information
Statement on Schedule 14f-1, Mr. Williams became a director on our Board and
Doug Samuelson, a former director, resigned.
Table of Contents
On August 2, 2017, Derek Williams presented the Board of Directors of the
Company with his resignation as Chief Operating Officer and a member of the
Board of Directors of the Company. Mr. William's decision to resign was not due
to any disagreement with the Company.
On August 24, 2017, the Board of Directors of the Company appointed Daniel Roth
as Chief Creative Officer of the Corporation and Damiano Tucci as Chief
Operating Officer of the Corporation.
On September 13, 2017, the Company completed a 1 for 40 reverse stock split and
changed the authorized capital of the Company to 25,000,000 shares of common
stock, par value $.001 per share.
On October 18, 2018, Damiano Tucci presented the Board of Directors of the
Company with his resignation as Chief Operating Officer of the Company. Mr.
Tucci's decision to resign was not due to any disagreement with the Company. On
October 18, 2018, the Board of Directors of the Company accepted Mr. Tucci's
resignation. Accordingly, Damiano Tucci ceased to be the Company's Chief
Operating Officer. Daniel Roth, the Company's current Chief Creative Officer,
accepted the additional position of Chief Operating Officer.
Results of Operations for the years ended June 30, 2021 and 2020
June 30, Change
2021 2020 Amount
Revenue $ - $ 343,256 $ (343,256 )
Cost of revenue - 343,256 (343,256 )
Operating expenses 96,029 261,037 (165,008 )
Other income (expenses), net (32,120 ) (52,025 ) (19,905 )
$ (128,149 ) $ (313,062 ) $ 184,913
Revenue. During the years ended June 30, 2021 and 2020, the Company recorded
revenue of nil and $343,256, respectively. Revenue during the year ended June
30, 2020 was associated with one film completed under a Production Service
Cost of revenue. During the years ended June 30, 2021 and 2020, the Company
incurred cost of revenue of nil and $343,256, respectively. Cost of Revenue
during the year ended June 30, 2020 was associated with one film completed under
a Production Service Agreement.
Operating Expenses. Operating expenses were $96,029 and $261,037 for the years
ended June 30, 2021, and 2020, respectively. During the years ended June 30,
2021 and 2020, operating expenses consisted of professional fees of $11,732 and
$63,970, respectively; and general administrative expenses of $84,297 and
$197,067 respectively. The decrease in operating expenses during the year ended
June 30, 2021 compared to the prior year were primarily related to amortization
of two prepaid consulting contracts during the year ended June 30, 2020, of
which there was no similar expense incurred during the year ended June 30, 2021,
in addition to reductions in general office overhead and a reduction in
utilization of professional services.
Other Expense. During the year ended June 30, 2021, the Company incurred
interest expenses of $32,120, relating to unsecured promissory notes payable.
During the year ended June 30, 2020, the Company incurred interest expenses of
$59,807, relating to unsecured promissory notes payable, a gain on modification
debt of $19,782, and a loss attributed to bad debt on a loan receivable of
Net Loss. For the years ended June 30, 2021, and 2020, we incurred a loss of
$28,149 and $313,062, respectively. The decrease in loss was attributable to an
increase in gross profit in addition to decreases in our general and
administrative expenses, professional fees, and interest expense, and a bad debt
loss associated with a loan receivable, offset by a gain on modification of debt
incurred during the year ended June 30, 2020.
Table of Contents
Liquidity and Capital Resources
June 30, June 30, Change
2021 2020 Amount
Cash $ 138,482 $ 80,510 $ 57,972
Current Assets $ 138,482 $ 100,510 $ 37,972
Current Liabilities 521,000 354,879 (166,121 )
Working Capital $ (382,518 ) $ (254,369 ) $ (128,149 )
Liquidity is the ability of a company to generate funds to support its current
and future operations, satisfy its obligations, and otherwise operate on an
ongoing basis. Significant factors in the management of liquidity are funds
generated by operations, levels of accounts receivable and accounts payable and
As of June 30, 2021 and 2020, we had a cash balance of $138,482 and $80,510,
respectively. We do not have sufficient funds to operate for the next twelve
months. There can be no assurance that additional capital will be available to
the Company. We currently have no agreements, arrangements or understandings
with any person or entity to obtain funds through bank loans, lines of credit or
any other sources. Since the Company has no such arrangements or plans currently
in effect, its inability to raise funds for the above purposes will have a
severe negative impact on its ability to remain a viable company.
As of June 30, 2021, we had a working capital deficit of $382,518 as compared to
working capital deficit of $254,369 as of June 30, 2020. The increase in working
capital deficit was mainly due to cash utilized in the Company's net loss and
repayments of principal on a notes payable, offset by advances from the
Company's Chief Executive Officer.
June 30, Change
2021 2020 Amount
Net Cash provided by Operating Activities $ 8,650 $ 422,559 $ (413,909 )
Net Cash used in Investing Activities
$ - $ - $ -
Net Cash provided by (used in) Financing
Activities $ 49,322 $ (399,203 ) $ 448,525
Net Increase in Cash and Cash Equivalents $ 57,972 $ 23,356 $ 34,616
Cash Flows provided by Operating Activities
Cash flows provided by Operating Activities were during the year ended June 30,
2021 was $8,650 compared to $422,559 net cash provided by operating activities
for the year ended June 30, 2020. The decrease in cash flows provided by
operating activities during the year ended June 30, 2021 compared to the prior
year was primarily a result of a collection of accounts receivable of $583,333
during the year ended June 30, 2020.
During the year ended June 30, 2021, net cash provided by financing activities
was $49,322, compared to cash used in financing activities of $399,203 for the
year ended June 30, 2020. During the year ended June 30, 2021, cash flows
provided financing activities were the result of $83,299 of advances from the
Company's Chief Executive Officer and $20,000 from repayment of a note
receivable from a related party offset by $53,977 in principal repayments of
notes payable. During the year ended June 30, 2020, cash flows used in financing
activities were the result of a repayment advances from a related party of
$12,000 and $387,203 in repayments of a note payable.
Table of Contents
Going Concern Consideration
The accompanying condensed consolidated financial statements have been prepared
on a going concern basis of accounting, which contemplates continuity of
operations, realization of assets and liabilities and commitments in the normal
course of business. The accompanying condensed consolidated financial statements
do not reflect any adjustments that might result if the Company is unable to
continue as a going concern. During the year ended June 30, 2021, the Company
incurred a net loss of $128,149. As of June 30, 2021, the Company had a working
capital deficiency of $382,518 and an accumulated deficit of $2,196,358. These
factors, among others, raise substantial doubt about the Company's ability to
continue as a going concern.
The ability of the Company to continue as a going concern and appropriateness of
using the going concern basis is dependent upon, among other things, an
additional cash infusion and an identification of new business opportunities.
During the period ended June 30, 2021, the Company did not raise any capital
from investors. Management believes this funding and future funding will provide
the additional cash needed to meet the Company's obligations as they become due,
and will allow it to continue looking for opportunities to acquire operating
companies or merge with other operational entities. 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 operations, in
the case of debt financing, or cause substantial dilution for our stock holders,
in case of equity financing.
Off-Balance Sheet Arrangements
We have no "off-balance sheet arrangements" (as that term is defined in Item
303(a)(4)(ii) of Regulation S-K).
Critical Accounting Policies, Estimates, and Judgments
Our financial statements are prepared in accordance with accounting principles
that are generally accepted in the United States. The preparation of these
financial statements requires us to make estimates and judgments that affect the
reported amounts of assets and liabilities, 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. We continually evaluate our
estimates and judgments, our commitments to strategic alliance partners and the
timing of the achievement of collaboration milestones. We base our estimates and
judgments on historical experience and other factors that we believe to be
reasonable under the circumstances. Materially different results can occur as
circumstances change and additional information becomes known. Besides the
estimates identified above that are considered critical, we make many other
accounting estimates in preparing our financial statements and related
disclosures. All estimates, whether or not deemed critical, affect reported
amounts of assets, liabilities, revenues and expenses, as well as disclosures of
contingent assets and liabilities. These estimates and judgments are also based
on historical experience and other factors that are believed to be reasonable
under the circumstances. Materially different results can occur as circumstances
change and additional information becomes known, even for estimates and
judgments that are not deemed critical.
© Edgar Online, source Glimpses