ALMOST NEVER FILMS INC. |
(Exact name of registrant as specified in its charter) |
Nevada | 26-1665960 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on whichregistered | ||
None | N/A | N/A |
Large accelerated filer | ¨ | Accelerated filer | ¨ |
Non-accelerated filer | ¨ | Smaller reporting company | x |
Emerging growth company | ¨ |
Page No. | ||||
PART I. - FINANCIAL INFORMATION | ||||
Item 1. | Condensed Consolidated Financial Statements (Unaudited) | 4 | ||
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2 |
3 |
Almost Never Films Inc. and Subsidiaries Condensed Consolidated Balance Sheets As of December 31, 2019 and June 30, 2019 |
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| December 31, |
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| June 30, |
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| 2019 |
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| 2019 |
| |||
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| (Unaudited) |
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| ||||
ASSETS |
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Current Assets |
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|
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Cash and cash equivalents |
|
| $ | 7,871 |
|
| $ | 57,154 |
| |
Accounts receivable |
|
|
| 487,715 |
|
|
| 583,333 |
| |
Loan receivable |
|
|
| 20,000 |
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|
| 32,000 |
| |
Total Current Assets |
|
|
| 515,586 |
|
|
| 672,487 |
| |
|
|
|
|
|
|
|
|
|
| |
Deferred assets |
|
|
| 32,083 |
|
|
| 103,898 |
| |
Film costs |
|
|
| 85,496 |
|
|
| 428,731 |
| |
|
|
|
|
|
|
|
|
|
| |
TOTAL ASSETS |
|
| $ | 633,165 |
|
| $ | 1,205,116 |
| |
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LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
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Current Liabilities |
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Accounts payable and accrued expenses |
|
| $ | 53,956 |
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| $ | 41,813 |
| |
Due to related party |
|
|
| 12,000 |
|
|
| 12,000 |
| |
Deferred film revenue |
|
|
| - |
|
|
| 354,398 |
| |
Interest payable |
|
|
| 81,427 |
|
|
| 117,716 |
| |
Promissory note payable |
|
|
| 135,000 |
|
|
| 230,000 |
| |
Promissory note payable - related party |
|
|
| 400,000 |
|
|
| 320,000 |
| |
Total Current Liabilities |
|
|
| 682,383 |
|
|
| 1,075,927 |
| |
|
|
|
|
|
|
|
|
|
| |
TOTAL LIABILITIES |
|
|
| 682,383 |
|
|
| 1,075,927 |
| |
|
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|
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Stockholders’ Equity (Deficit) |
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| |
Preferred stock: no par value, 5,000,000 authorized; Series A Preferred stock: 2,000,000 authorized; No shares issued and outstanding |
|
|
| - |
|
|
| - |
| |
Common stock: 25,000,000 authorized; $0.001 par value 5,798,765 and 5,778,765 shares issued and outstanding respectively. |
|
|
| 5,799 |
|
|
| 5,779 |
| |
Additional paid in capital |
|
|
| 1,895,486 |
|
|
| 1,880,506 |
| |
Accumulated deficit |
|
|
| (1,948,869 | ) |
|
| (1,755,486 | ) | |
Total shareholders’ equity attributable to Almost Never Films Inc. shareholders |
|
|
| (47,584 | ) |
|
| 130,799 |
| |
Non-controlling interest |
|
|
| (1,634 | ) |
|
| (1,610 | ) | |
|
|
|
|
|
|
|
|
|
| |
Total shareholders’ equity (deficit) |
|
|
| (49,218 | ) |
|
| 129,189 |
| |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
|
| $ | 633,165 |
|
| $ | 1,205,116 |
|
The accompanying notes are an integral part of these unaudited financial statements.
4 |
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| Three Months Ended |
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| Six Months Ended |
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| December 31, |
|
| December 31, |
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| 2019 |
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| 2018 |
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| 2019 |
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| 2018 |
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Revenues |
| $ | - |
|
|
| - |
|
| $ | 343,256 |
|
| $ | - |
|
Cost of Revenues |
|
| - |
|
|
| - |
|
|
| 343,256 |
|
|
| - |
|
Gross Profit |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
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|
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Operating Expenses |
|
|
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|
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General and administration expenses |
|
| 46,764 |
|
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| 111,913 |
|
|
| 115,015 |
|
|
| 153,681 |
|
Professional fees |
|
| 17,543 |
|
|
| 12,997 |
|
|
| 51,984 |
|
|
| 32,677 |
|
Total operating expenses |
|
| 64,307 |
|
|
| 124,910 |
|
|
| 166,999 |
|
|
| 186,358 |
|
|
|
|
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|
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|
|
|
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Loss from operations |
|
| (64,307 | ) |
|
| (124,910 | ) |
|
| (166,999 | ) |
|
| (186,358 | ) |
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Other (Expense) Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Interest expense |
|
| (14,430 | ) |
|
| (21,489 | ) |
|
| (34,190 | ) |
|
| (41,841 | ) |
Gain (loss) on modification of debt |
|
| - |
|
|
| - |
|
|
| 19,782 |
|
|
| - |
|
Bad debt for loan receivable |
|
| (12,000 | ) |
|
| - |
|
|
| (12,000 | ) |
|
| - |
|
Total other income (expense) |
|
| (26,430 | ) |
|
| (21,489 | ) |
|
| (26,408 | ) |
|
| (41,841 | ) |
|
|
|
|
|
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|
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Net loss before income taxes |
|
| (90,737 | ) |
|
| (146,399 | ) |
|
| (193,407 | ) |
|
| (228,199 | ) |
Provision for income taxes |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Net loss |
| $ | (90,737 | ) |
|
| (146,399 | ) |
| $ | (193,407 | ) |
| $ | (228,199 | ) |
|
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Net loss attributable to: |
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|
|
|
|
|
|
Almost Never Films Inc. |
|
| (90,730 | ) |
|
| (146,399 | ) |
|
| (193,383 | ) |
|
| (228,199 | ) |
Non-controlling interest |
|
| (7 | ) |
|
| - |
|
|
| (24 | ) |
|
| - |
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Comprehensive Loss |
| $ | (90,737 | ) |
|
| (146,399 | ) |
| $ | (193,407 | ) |
|
| (228,199 | ) |
|
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| |
Net loss per share attributable to Common stockholders of the Company -Basic and Diluted |
| $ | (0.02 | ) |
|
| (0.03 | ) |
| $ | (0.03 | ) |
| $ | (0.04 | ) |
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Weighted Average Common Shares Outstanding - Basic and Diluted |
|
| 5,798,765 |
|
|
| 5,700,504 |
|
|
| 5,789,468 |
|
|
| 5,513,630 |
|
5 |
Condensed Consolidated Statements of Stockholders’ Equity (Deficit)
For six months ended December 31, 2019 and December 31, 2018
Additional | Total | |||||||||||||||||||||||
Common Stock | Paid in | Accumulated | Non-controlling | Stockholders’s | ||||||||||||||||||||
Number of Shares | Amount | Capital | Deficit | Interest | Equity | |||||||||||||||||||
Balance - June 30, 2019 | 5,778,765 | $ | 5,779 | $ | 1,880,506 | $ | (1,755,486 | ) | $ | (1,610 | ) | $ | 129,189 | |||||||||||
Common shares issued to settle interest of note payable | 20,000 | 20 | 14,980 | - | - | 15,000 | ||||||||||||||||||
Net loss | - | - | - | (102,653 | ) | (17 | ) | (102,670 | ) | |||||||||||||||
Balance - September 30, 2019 | 5,798,765 | $ | 5,799 | $ | 1,895,486 | $ | (1,858,139 | ) | $ | (1,627 | ) | $ | 41,519 | |||||||||||
Net loss | - | - | - | (90,730 | ) | (7 | ) | (90,737 | ) | |||||||||||||||
Balance - December 31, 2019 | 5,798,765 | $ | 5,799 | $ | 1,895,486 | $ | (1,948,869 | ) | $ | (1,634 | ) | $ | (49,218 | ) |
Additional | Total | |||||||||||||||||||||||
Common Stock | Paid in | Accumulated | Non-controlling | Stockholders’ | ||||||||||||||||||||
Number of Shares | Amount | Capital | Deficit | Interest | Equity | |||||||||||||||||||
Balance - June 30, 2018 | 5,328,765 | $ | 5,329 | $ | 1,655,956 | $ | (1,289,249 | ) | $ | - | $ | 372,036 | ||||||||||||
Net loss | - | - | - | (81,800 | ) | - | (81,800 | ) | ||||||||||||||||
Balance - September 30, 2018 | 5,328,765 | $ | 5,329 | $ | 1,655,956 | $ | (1,371,049 | ) | $ | - | $ | 290,236 | ||||||||||||
Common shares issued for consulting services | 450,000 | 450 | 224,550 | - | 225,000 | |||||||||||||||||||
Net loss | - | - | - | (146,399 | ) | - | (146,399 | ) | ||||||||||||||||
Balance - December 31, 2018 | 5,778,765 | $ | 5,779 | $ | 1,880,506 | $ | (1,517,448 | ) | $ | - | $ | 368,837 |
6 |
|
| Six Months Ended |
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|
| December 31, |
| |||||
|
| 2019 |
|
| 2018 |
| ||
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Cash Flows from Operating Activities: |
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Net loss |
| $ | (193,407 | ) |
| $ | (228,199 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: |
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|
|
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|
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|
Consulting expense |
|
| 71,815 |
|
|
| 102,352 |
|
Gain on modification of debt |
|
| (19,782 | ) |
|
| - |
|
Bad debt for loan receivable |
|
| 12,000 |
|
|
|
|
|
Changes in operating assets and liabilities: |
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|
|
|
|
|
|
|
Accounts receivable |
|
| 95,618 |
|
|
| - |
|
Prepaid expenses and deposits |
|
| - |
|
|
| 113,711 |
|
Film costs |
|
| 343,235 |
|
|
| (483,976 | ) |
Accounts payable and accrued expenses |
|
| 12,143 |
|
|
| (13,689 | ) |
Deferred film revenue |
|
| (354,398 | ) |
|
| 283,249 |
|
Interest payable |
|
| 28,493 |
|
|
| 41,841 |
|
Other payable |
|
| - |
|
|
| - |
|
Net Cash Provided by (Used in) Operating Activities |
|
| (4,283 | ) |
|
| (184,711 | ) |
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Cash Flows from Investing Activities: |
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Net Cash Provided by Investing Activities |
|
| - |
|
|
| - |
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Cash Flows from Financing Activities: |
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|
|
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|
|
|
Borrowing from related party |
|
| - |
|
|
| 12,000 |
|
Payment of note payable |
|
| (45,000 | ) |
|
| - |
|
Net Cash Provided by (Used in) Financing Activities |
|
| (45,000 | ) |
|
| 12,000 |
|
|
|
|
|
|
|
|
|
|
Net Increase (Decrease) in Cash and Cash Equivalents |
|
| (49,283 | ) |
|
| (172,711 | ) |
Cash and Cash Equivalents, beginning of period |
|
| 57,154 |
|
|
| 270,826 |
|
Cash and Cash Equivalents, end of period |
| $ | 7,871 |
|
| $ | 98,115 |
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Supplemental Disclosure Information: |
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Cash paid for interest |
| $ | (35,000 | ) |
| $ | - |
|
Cash paid for income taxes |
| $ | - |
|
| $ | - |
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|
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Supplemental Non-cash Disclosure: |
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Deferred consulting expense paid in restricted stock |
| $ | - |
|
| $ | 225,000 |
|
Conversion of debt into common stock |
| $ | 15,000 |
|
| $ | - |
|
7 |
8 |
December 31, | June 30, | |||||||
2019 | 2019 | |||||||
Accounts receivable - Pureflix | $ | 487,715 | $ | 583,333 |
9 |
Six Months Ended | ||||||||
December 31, | ||||||||
2019 | 2018 | |||||||
MVE Productions | $ | 343,256 | $ | - |
10 |
· | Production Service Agreement Revenue is related to films where the Company has been engaged as an independent contractor to provide production services and other elements related to production for individual film projects. |
· | Revenue from self-produced films is related to films where the Company has self-produced certain films along with a third party, with the expectation that these films will be distributed in the future. |
11 |
12 |
December 31, | June 30, | |||||||
2019 | 2019 | |||||||
Independent Self-Produced Film Costs, Net | $ | 85,496 | $ | 85,475 | ||||
Capitalized Film Costs covered under Production Service Agreements, Net | $ | - | $ | 343,256 | ||||
Total Film Costs, Net | $ | 85,496 | $ | 428,731 |
13 |
14 |
15 |
NOTE 9 – INCOME TAXES
The Company provides for income taxes under ASC 740, “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.
On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”), was signed into law. The Tax Act includes numerous changes to tax laws impacting business, the most significant being a permanent reduction in the federal corporate income tax rate from 34% to 21%. The rate reduction took effect on January 1, 2018.
The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 21% and 27.5% to the net loss before provision for income taxes for the following reasons:
|
| Six Months Ended |
| |||||
|
| December 31, |
| |||||
|
| 2019 |
|
| 2018 |
| ||
Federal Income Tax benefits (expenses) attributable to |
|
|
|
|
|
| ||
Current Operation |
| $ | 40,610 |
|
| $ | 47,922 |
|
Less: Valuation Allowance |
|
| (40,610 | ) |
|
| (47,922 | ) |
Net Provision for Federal Income Taxes |
| $ | - |
|
| $ | - |
|
Net deferred tax assets consist of the following components as of:
|
| December 31, |
|
| June 30, |
| ||
| 2019 |
| 2019 |
| ||||
|
|
|
|
|
|
| ||
Deferred tax assets |
| $ | 340,946 |
|
| $ | 300,336 |
|
Less: valuation allowance |
|
| (340,946 | ) |
|
| (300,336 | ) |
Deferred tax assets, net |
| $ | - |
|
| $ | - |
|
At December 31, 2019, the Company had $1,948,869 of the U.S. net operating losses (the “U.S. NOLs”), which begin to expire beginning in 2036. NOLs generated in tax years prior to June 30, 2018, can be carryforward for twenty years, whereas NOLs generated after June 30, 2019 can be carryforward indefinitely.
NOTE 12 – SUBSEQUENT EVENTS
Management has evaluated subsequent events through the date the consolidated financial statements were issued. Based on our evaluation, no events have occurred that require disclosure or recognition.
16 |
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24 |
Incorporated by Reference | Filed | |||||||||||
Exhibit No. | Description | Form | SEC File No. | Exhibit | Filing Date | Herewith | ||||||
SB2 | 333-148510 | 3.1 | 1/7/2008 | |||||||||
8-K | 000-53049 | 3.2 | 4/13/2012 | |||||||||
8-K | 000-53049 | 3.1 | 2/29/2017 | |||||||||
SB2 | 333-148510 | 3.2 | 1/7/2008 | |||||||||
4.1 | Certificate of Designation of Series A Convertible Preferred Stock | 8-K | 000-53049 | 4.1 | 1/18/2017 | |||||||
10.1 | Share Exchange Agreement dated January 15, 2017 by and among SMACK Sportswear, Inc., Almost Never Films Inc., and the Shareholders of Almost Never Films Inc. | 8-K | 000-53049 | 2.1 | 1/18/2017 | |||||||
x | ||||||||||||
x | ||||||||||||
101.INS | XBRL Instance Document.* | |||||||||||
101.SCH | XBRL Taxonomy Extension Schema.* | |||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase.* | |||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase.* | |||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase.* | |||||||||||
101.PRE | XBRL Extension Presentation Linkbase.* |
* | Attached as Exhibit 101 to this report are the following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2019 formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheet, (ii) the Condensed Consolidated Statement of Operations, (iii) the Condensed Consolidated Statement of Cash Flows, and (iv) Notes to Combined Financial Statements. |
25 |
ALMOST NEVER FILMS INC. | |||
Date: February 14, 2020 | By: | /s/ Danny Chan | |
Danny Chan, Chief Executive Officer and Chief Financial Officer (principal executive officer and principal financial and accounting officer) |
26 |