Disclaimer Regarding Forward-Looking Statements
This Annual Report on Form 10-K contains forward-looking statements within the
meaning of the federal securities laws. These include statements about our
expectations, beliefs, intentions or strategies for the future, which we
indicate by words or phrases such as "anticipate," "expect," "intend," "plan,"
"will," "we believe," "believes," "management believes" and similar language.
Except for the historical information contained herein, the matters discussed in
this "Management's Discussion and Analysis of Financial Condition and Results of
Operations," and elsewhere in this report are forward-looking statements that
involve risks and uncertainties. The factors listed in the section captioned
"Risk Factors," as well as any cautionary language in this report; provide
examples of risks, uncertainties and events that may cause our actual results to
differ materially from those projected. Except as may be required by law, we
undertake no obligation to update any forward-looking statement to reflect
events after the date of this Form 10-K.
Critical Accounting Policies and Estimates
The SEC has defined a company's critical accounting policies as the ones that
are most important to the portrayal of the Company's financial condition and
results of operations and which require the Company to make its most difficult
and subjective judgments, often as a result of the need to make estimates of
matters that are inherently uncertain. Based on this definition, we have
identified the critical accounting policies and judgments addressed below. We
also have other key accounting policies that are significant to understanding
our results. For additional information, see Note 1 - Summary of Significant
The following are deemed to be the most significant accounting policies
affecting the Company.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and
its subsidiaries. All significant inter-company balances and transactions are
eliminated on consolidation.
Basis of Presentation
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the reported period. Actual results could differ
from those estimates. Management further acknowledges that it is solely
responsible for adopting sound accounting practices, establishing and
maintaining a system of internal accounting control and preventing and detecting
fraud. The Company's system of internal accounting control is designed to
assure, among other items, that (1) recorded transactions are valid; (2) all
valid transactions are recorded and (3) transactions are recorded in the period
in a timely manner to produce financial statements which present fairly the
financial condition, results of operations and cash flows of the company for the
respective periods being presented.
Use of Estimates
The preparation of financial statements in accounting principles generally
accepted in the United States of America 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. A change in managements' estimates or assumptions could have a
material impact on the Company's financial condition and results of operations
during the period in which such changes occurred. The more significant estimates
and assumptions by management include among others: Estimated revenue of films.
The current economic environment has increased the degree of uncertainty
inherent in these estimates and assumptions.
Actual results could differ from those estimates. The Company's financial
statements reflect all adjustments that management believes are necessary for
the fair presentation of their financial condition and results of operations for
the periods presented.
On January 1, 2018, the Company adopted Accounting Standards Codification ASC
606 ("ASC 606"), Revenue from Contracts with Customers, using the modified
retrospective approach for all contracts not completed as of the date of
The Company generates all of its revenue from contracts with customers. The
Company recognizes revenue when we satisfy a performance obligation by
transferring control of the promised services to a customer in an amount that
reflects the consideration that we expect to receive in exchange for those
services. The Company determines revenue recognition through the following
1. Identification of the contract, or contracts, with a customer.
2. Identification of the performance obligations in the contract.
3. Determination of the transaction price.
4. Allocation of the transaction price to the performance obligations in the
5. Recognition of revenue when, or as, we satisfy a performance obligation.
At contract inception, the Company assesses the services promised in our
contracts with customers and identifies a performance obligation for each
promise to transfer to the customer a service (or bundle of services) that is
distinct. To identify the performance obligations, the Company considers all of
the services promised in the contract regardless of whether they are explicitly
stated or are implied by customary business practices. The Company allocates the
entire transaction price to a single performance obligation.
The Company recognizes revenue when the distributor confirms to the Company that
the film has been delivered to the distributor with all technical and document
deliveries received, waived or deferred and the film has been entered into the
distributor's rights system.
The Company will evaluate whether it is appropriate to record the gross amount
of product sales and related costs or the net amount earned as commissions when
revenues are achieved. Generally, when the Company is primarily obligated in a
transaction, are subject to inventory risk, have latitude in establishing prices
and selecting suppliers, or have several but not all of these indicators,
revenue is recorded at the gross sale price. The Company generally records the
net amounts as commissions earned if we are not primarily obligated and do not
have latitude in establishing prices. The Company recognizes revenue from the
distribution of its films on a net revenue basis as MarVista distributes the
films to MarVista's end customers.
For the fiscal years ended April 30, 2021 and 2020, the Company had $38,366 and
$13,954, respectively, of recorded revenue.
Accounts receivable, if any are carried at the expected net realizable value.
The allowance for doubtful accounts, when determined, will be based on
management's assessment of the collectability of specific customer accounts and
the aging of the accounts receivable. If there were a deterioration of a major
customer's creditworthiness, or actual defaults were higher than historical
experience, our estimates of the recoverability of the amounts due to us could
be overstated, which could have a negative impact on operations.
The Company currently does not have any accounts receivable. The above
accounting policies will be adopted upon the Company carrying accounts
Films and Television Costs
The Company capitalizes production costs for films produced in accordance with
ASC 926-20, "Entertainment-Films - Other Assets - Film Costs". Accordingly,
production costs are capitalized at actual cost and then charged against revenue
quarterly as a cost of production based on the relative fair value of the
film(s) delivered and recognized as revenue. The Company evaluates its
capitalized production costs annually and limits recorded amounts by its ability
to recover such costs through expected future sales.
We account for income taxes under the Financial Accounting Standards Board
("FASB") Accounting Standards Codification ("ASC") No. 740, Income Taxes ("ASC
740"). Under ASC 740, deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. Under ASC
740, the effect on deferred tax assets and liabilities of a change in tax rates
is recognized in income in the period that includes the enactment date.
In accordance with ASC No. 718, Compensation - Stock Compensation ("ASC 718"),
we measure the compensation costs of share-based compensation arrangements based
on the grant-date fair value and recognize the costs in the financial statements
over the period during which employees are required to provide services.
Share-based compensation arrangements include stock options, restricted share
plans, performance-based awards, share appreciation rights and employee share
purchase plans. As such, compensation cost is measured on the date of grant at
their fair value. Such compensation amounts, if any, are amortized over the
respective vesting periods of the option grant. We apply this statement
prospectively. Equity instruments ("instruments") issued to other than employees
are recorded on the basis of the fair value of the instruments, as required by
ASC 718. ASC No. 505, Equity Based Payments to Non-Employees ("ASC 505") defines
the measurement date and recognition period for such instruments. In general,
the measurement date is (a) when a performance commitment, as defined, is
reached or (b) when the earlier of (i) the non-employee performance is complete
or (ii) the instruments are vested. The measured value related to the
instruments is recognized over a period based on the facts and circumstances of
each particular grant as defined in the ASC 505.
Fair Value of Financial Instruments
We follow the provisions of ASC 820. This Topic defines fair value, establishes
a measurement framework and expands disclosures about fair value measurements.
We use fair value measurements for determining the valuation of derivative
financial instruments payable in shares of its common stock. This primarily
involves option pricing models that incorporate certain assumptions and
projections to determine fair value. These require management's judgment.
Fair Value Measurements
FASB ASC Topic 825, Financial Instruments, requires disclosures about fair value
of financial instruments in quarterly reports as well as in annual reports. For
the Company, this statement applies to certain investments and long-term debt.
Also, FASB ASC Topic 820, Fair Value Measurements and Disclosures, clarifies the
definition of fair value for financial reporting, establishes a framework for
measuring fair value and requires additional disclosures about the use of fair
Various inputs are considered when determining the value of the Company's
investments and long-term debt. The inputs or methodologies used for valuing
securities are not necessarily an indication of the risk associated with
investing in these securities. These inputs are summarized in the three broad
levels listed below.
? Level 1 - observable market inputs that are unadjusted quoted prices for
identical assets or liabilities in active markets.
? Level 2 - other significant observable inputs (including quoted prices for
similar securities, interest rates, credit risk, etc.).
? Level 3 - significant unobservable inputs (including the Company's own
assumptions in determining the fair value of investments).
The Company's adoption of FASB ASC Topic 825 did not have a material impact on
the Company's consolidated financial statements.
The carrying value of financial assets and liabilities recorded at fair value is
measured on a recurring or nonrecurring basis. Financial assets and liabilities
measured on a non-recurring basis are those that are adjusted to fair value when
a significant event occurs. The Company had no financial assets or liabilities
carried and measured on a nonrecurring basis during the reporting periods.
Financial assets and liabilities measured on a recurring basis are those that
are adjusted to fair value each time a financial statement is prepared. The
Company had no financial assets and/or liabilities carried at fair value on a
recurring basis at April 30, 2021 and 2020. Assets and liabilities approximate
fair value due to their short term nature.
The availability of inputs observable in the market varies from instrument to
instrument and depends on a variety of factors including the type of instrument,
whether the instrument is actively traded, and other characteristics particular
to the transaction. For many financial instruments, pricing inputs are readily
observable in the market, the valuation methodology used is widely accepted by
market participants, and the valuation does not require significant management
discretion. For other financial instruments, pricing inputs are less observable
in the market and may require management judgment.
Basic and diluted earnings per share
Diluted earnings (loss) per share are computed on the basis of the weighted
average number of common shares (including common stock subject to redemption)
plus dilutive potential common shares outstanding for the reporting period. In
periods where losses are reported, the weighted-average number of common stock
outstanding excludes common stock equivalents, because their inclusion would be
The total number of potential additional dilutive securities outstanding for the
years ended April 30, 2021 and 2020 was none since the Company had net losses
and any additional potential common shares would have an anti-dilutive effect.
Concentrations, Risks, and Uncertainties
The Company did not have a concentration of business with suppliers constituting
greater than 10% of the Company's expenses during 2021 or 2020. In fiscal years
2021 and 2020, all of its revenues were from Mar Vista Entertainment LLC.
Recent Accounting Pronouncements
We have evaluated new accounting pronouncements that have been issued and are
not yet effective for us and determined that there are no such pronouncements
expected to have an impact on our future financial statements.
Plan of Operations
The Company had a net income of $2,227 and a net loss of $30,671 for the years
ended April 30, 2021 and 2020, respectively, and historical losses totaling
$1,053,194. These factors create substantial doubt about the Company's ability
to continue as a going concern. The Company's management plan to continue as a
going concern revolves around its ability to execute its business strategy of
distributing digital content, as well as raising the necessary capital to pay
ongoing general and administrative expenses of the Company.
Results of Operations
Fiscal Year Ended April 30, 2021 Compared to Fiscal Year Ended April 30, 2020
For the year ended April 30, 2021 we had revenues of $38,366 compared to $13,954
for the year ended April 30, 2020. Revenues were due to distribution fees paid
to us by Mar Vista related to the motion pictures "Merry Ex's" and "Bridal Boot
Camp in FY 2021 and "Merry Ex's" in FY 2020.
Cost of Sales
For the fiscal years ended April 30, 2021 and 2020, we had no cost of sales.
Operating expenses decreased by $8,486, or 19.0%, to $36,139 in the year ended
April 30, 2021 from $44,625 in the year ended April 30, 2020 primarily due to
decreases in professional fees and consulting costs.
Operating expenses for the year ended April 30, 2021 were comprised primarily of
office rent of $2,388, professional fees of $30,635, consulting costs of $3,000,
and $116 of other general and administration costs.
Operating expenses for the year ended April 30, 2020 were comprised primarily of
travel costs of $272, office rent of $2,388, professional fees of $33,517,
consulting costs of $8,000, and $448 of other general and administration costs.
Income (loss) before income taxes
Net income before income taxes for the year ended April 30, 2021 totaling $2,227
is primarily due to revenue of $38,366 offset partially by consulting services
costs, professional fees, and rent compared to net loss for the year ended April
30, 2020 totaling $30,671 is primarily due to revenue of $13,954 offset
partially by consulting services costs, professional fees, and rent.
Assets and Liabilities
Total assets were $14,833 as of April 30, 2021 compared to $454 as of April 30,
2020, or an increase of $14,379, is primarily the result of an increase in cash
of $14,379. Total liabilities as of April 30, 2021 were $96,029 compared to
$83,877 as of April 30, 2020, or an increase of $12,152. The increase was
primarily the result of an increase in accounts payable - related party of
$14,560 offset partially by a decrease in accounts payable of $2,408.
Liquidity and Capital Resources
General - Overall, we had a increase in cash flows of $14,379 in the year ended
April 30, 2021 resulting from cash provided by operations of $14,379.
The following is a summary of our cash flows provided by (used in) operating,
investing, and financing activities during the periods indicated:
Year Ended April 30,
Cash at beginning of period $ 155 $ 822
Net cash provided by (used in) operating activities 14,379 (667 )
Net cash used in investing activities - -
Net cash provided by financing activities - -
Cash at end of period $ 14,534 $ 155
Net cash provided by operations was $14,379 for the year ended April 30, 2021
compared to net cash used in operations for the year ended April 30, 2020 of
$667 primarily due to a net profit of $2,227 for the year ended April 30, 2021,
$29,560 in expenses that were paid by others on behalf of the Company, offset
primarily by the change in accounts payable - related party of $15,000 and the
change in accounts payable of $2,408.
Net cash used in operations was $667 for the year ended April 30, 2020 was
primarily due to net loss of $30,671 for the year ended April 30, 2020, $32,487
in expenses that were paid by others on behalf of the Company and the change in
accounts payable of $2,483.
Net cash used in investing activities was $0 and $0 for the years ended April
30, 2021 and 2020, respectively.
Net cash used in financing activities was $0 and $0 for the years ended April
30, 2021 and 2020, respectively.
Our cash needs in the year ended April 30, 2022 are estimated to be $200,000.
This budget is based on the assumption that we will carry out one project at a
time for which we will need about $50,000 in working capital; general and
administrative expenses of $150,000 for the costs related to being public, and
miscellaneous office expenses. We sold no shares in fiscal years 2021 and 2020.
As we move forward with our business plan, we will need to raise additional
capital either through the sale of stock or funding from shares and or officers
and directors to cover our cash needs through the end of the 2022 fiscal year.
Information included in this report includes forward looking statements, which
can be identified by the use of forward-looking terminology such as may, expect,
anticipate, believe, estimate, or continue, or the negative thereof or other
variations thereon or comparable terminology. The statements in "Risk Factors"
and other statements and disclaimers in this report constitute cautionary
statements identifying important factors, including risks and uncertainties,
relating to the forward-looking statements that could cause actual results to
differ materially from those reflected in the forward-looking statements.
During fiscal years 2021 and 2020, the Company has not issued 38,153,269 common
shares to three shareholders (a total of 32,153,269 to related parties and
6,000,000 to a third party). These shares are reflected in the above
In January 2019, the Company entered into an agreement with a third party
whereby the Company would pay a 10% fee of any gross revenues as a result of any
licensing agreements brought to the Company.
During the years ended April 30, 2021 and 2020, the Company made payments of
$15,000 and $0, respectively, to C&R Films for film production costs and
reimbursement of various expenses. C&R paid expenses totaling $12,591 and $6,217
in the years ended April 30, 2021 and 2020, respectively, in operating expenses
including rent, filing expenses, and accounting costs on behalf of the Company.
C&R Films is controlled by Lamont Roberts, CEO and acting CFO of the Company.
The Company has a balance owed to C&R Films of $33,096 at April 30, 2021.
During the years ended April 30, 2021 and 2020, the Company made no payments to
Dos Cabezas for film production costs and reimbursement of various expenses. Dos
Cabezas paid expenses totaling $7,394 and $7,000 in the years ended April 30,
2021 and 2020, respectively, in operating expenses including accounting costs on
behalf of the Company. Dos Cabezas is controlled by Lamont Roberts, CEO and
acting CFO of the Company. The Company has a balance owed to Dos Cabezas of
$14,394 at April 30, 2021.
During the years ended April 30, 2021 and 2020, Kevin Frawley, an affiliate,
paid expenses totaling $0 and $13,090, respectively, in operating expenses,
including audit fees, on behalf of the Company. The Company has a balance owed
to Mr. Frawley of $16,090 at April 30, 2021.
During the years ended April 30, 2021 and 2020, the Company made no payments to
Mike Criscione, Director, for reimbursement of various expenses. During the
years ended April 30, 2021 and 2020, Mr. Criscione paid expenses totaling $9,575
and $6,180, respectively, in operating expenses, including audit fees, on behalf
of the Company. The Company has a balance owed to Mr. Criscione of $18,330 at
April 30, 2021.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on its financial condition, revenues
or expenses, results of operations, liquidity, capital expenditures or capital
resources that are material to investors.
Management believes that inflation has not had a material effect on the
Company's results of operations.
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