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OFFON

ALMOST NEVER FILMS INC.

(HLWD)
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ALMOST NEVER FILMS : Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-K)

09/29/2021 | 06:09am EST

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.



Overview


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.




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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



                                      Years Ended
                                       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 ) Net loss

                       $ (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 Agreement.

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 $12,000.

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.




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Liquidity and Capital Resources



Working Capital



                       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 capital expenditures.

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.



Cash Flows



                                                          Year Ended
                                                           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.



Financing Activities


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.




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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

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Financials (USD)
Sales 2021 - - -
Net income 2021 -0,13 M - -
Net Debt 2021 0,08 M - -
P/E ratio 2021 -5,90x
Yield 2021 -
Capitalization 0,81 M 0,81 M -
EV / Sales 2020 2,86x
EV / Sales 2021 -
Nbr of Employees -
Free-Float 44,3%
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Managers and Directors
Danny Chan Director, Chief Executive & Financial Officer
Daniel T. Roth Chief Operating & Creative Officer
Mike Zhou Investor Relations Contact
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