CHND China Media Inc (CE)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended  December 31, 2018

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission file number:  333-150952

China Media Inc.

(Exact name of registrant as specified in its charter)

Registrant's telephone number, including area code:  (86) 298765-1114

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days    [X] Yes    [ ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-K (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [X] Yes    [ ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

[ ] Yes   [X] No

As of February 14, 2019, the registrant had 39,750,000 shares of common stock outstanding.

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Table of Contents

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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CHINA MEDIA INC.

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, 2018 and 2017.

Operating expenses

During the six months ended December 31, 2018, our total operating expenses were $848,465, an increase of $715,225 or 537% as compared to $133,240 for the six months ended December 31, 2017. The main increase was due to increase in impairment loss on film costs, which was offset by the decrease in payroll, transportation and hospitality expenses.

Net loss

For the six months ended December 31, 2018, we incurred a net loss of $861,997, as compared to a net loss of $144,354 for the six months ended December 31, 2017, an increase of $717,643 or 497%. This increase was primarily due to the increase in operating expenses.

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Comparison of the three months ended December 31, 2018 and 2017:

Revenue and Cost

We had no sales and cost for the three months ended December 31, 2018 and 2017.

Operating expenses

During the three months ended December 31, 2018, our total operating expenses were $789,257, a decrease of $715,141 or 965% as compared to $74,116 for the three months ended December 31, 2017. The main increase was due to increase in impairment loss on film costs, which was offset by the decrease in payroll, transportation and hospitality expenses.

Net loss

For the three months ended December 31, 2018, we incurred a net loss of $795,941, as compared to a net loss of $80,103 for the three months ended December 31, 2017, a decrease of $715,838 or 894%. This increase was primarily due to the increase in operating expenses.

As of December 31, 2018 we had cash of $3,565 in our bank accounts and a working capital deficit of $993,933.

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For the six months ended December 31, 2018, we used net cash of $81,112 in operating activities, compared to net cash used of $107,470 in operating activities during the same period of 2017. The decrease of $26,358 for net cash used in operating activities was mainly due to decrease in the changes in accrued liabilities and other payable.

During the six months ended December 31, 2018, we received net cash of $77,758 from financing activities, compared to net cash received of $100,446 in financing activities during the same period in fiscal year 2017. The decrease of $22,688 in net cash provided by financing activities was mainly due to decrease in proceeds received from a related party.

Our cash level decreased by $3,614 during the six months ended December 31, 2018, compared to a decrease of $6,621 in the same period of 2017. 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 2018 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, 2018.

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.