NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEARS ENDED APRIL 30, 2020 AND 2019
NOTE
1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
On
October 31, 2011 (the “Closing Date”), China Advanced Technology (an entity formed on February 16, 2010 in the State
of Nevada) acquired Goliath Film and Media International, a California corporation, by issuing 47,000,000 shares of its Common
Stock, constituting 70.1% of the outstanding shares after giving effect to their issuance and the cancellation of 15,619,816 shares
held by China Advanced Technology’s prior control person. Immediately following the Closing, 67,100,000 shares were issued
and outstanding. On the Closing Date, the name of China Advanced Technology was changed to Goliath Film and Media Holdings (“Goliath”
or “the Company”). All share numbers herein have been adjusted for an eight-for-1 forward stock split affected as
of the Closing Date. The forward stock split was reflected in the trading market on February 13, 2012. The transaction was accounted
for as a reverse acquisition in which Goliath Film and Media International is deemed to be the accounting acquirer, and the prior
operations of Goliath (formerly China Advanced Technology) are consolidated for accounting purposes. Since Goliath had no operations,
assets, or liabilities as of the Closing, no audit of that entity was required under the materiality thresholds of Regulation
S-X Rule 8-04.
Organization,
Nature of Business and Trade Name
The
Company is engaged in the production and distribution of motion pictures and television content. The Company has begun its planned
principal business purpose with revenue consisting of primarily film residuals.
Principles
of Consolidation
The
accompanying consolidated financial statements include the accounts of Goliath Film and Media Holdings and its subsidiary, Goliath
Film and Media International (“Goliath” or “the Company”). All intercompany accounts and transactions
have been eliminated.
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.
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.
Cash
and Cash Equivalents
For
purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of
three months or less to be cash equivalents.
GOLIATH
FILM AND MEDIA HOLDINGS
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEARS ENDED APRIL 30, 2020 AND 2019
Accounts
Receivable
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 receivable.
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.
Revenue
Recognition
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 adoption. Results
for the reporting periods beginning on January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted
and continue to be reported in accordance with accounting under ASC 605, Revenue Recognition. As a result of adopting ASC
606, amounts reported under ASC 606 were not materially different from amounts that would have been reported under the previous
revenue guidance of ASC 605, as such, there was no cumulative adjustment to retained earnings.
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 steps:
|
|
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 contract
|
|
|
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 transaction prices to the performance obligations.
The
Company provides for an allowance for doubtful account based history and experience considering economic and industry trends.
The Company does not have any off-Balance Sheet exposure related to its customers.
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 evaluates whether it is appropriate to record the gross amount of product sales and related costs or the net amount earned
as commissions. 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 records all revenue transactions at the gross sale price.
GOLIATH
FILM AND MEDIA HOLDINGS
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEARS ENDED APRIL 30, 2020 AND 2019
For
the year ended April 30, 2020 we had revenues of $13,954 compared to $13,660 for the year ended April 30, 2019. Revenues were
due to distribution fees paid to us by Mar Vista related to the motion picture “Girlfriends of Christmas Past”.
Advertising
Advertising
expenses are recorded as general and administrative expenses when they are incurred. There was no advertising expense for the
years ended April 30, 2020 and 2019.
Research
and Development
All
research and development costs are expensed as incurred. There was no research and development expense for the years ended April
30, 2020 and 2019.
Income
tax
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.
Fair
Value of Financial Instruments
The
Company follows the provisions of ASC 820. This Topic defines fair value, establishes a measurement framework and expands disclosures
about fair value measurements.
The
Company uses 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, the 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 value measurements.
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.
GOLIATH
FILM AND MEDIA HOLDINGS
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEARS ENDED APRIL 30, 2020 AND 2019
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, 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. As of April 30, 2020, the Company had less
than $1,000 in assets.
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 anti-dilutive.
The
total number of potential additional dilutive securities outstanding for the years ended April 30, 2020 and 2019 was none.
Concentrations,
Risks, and Uncertainties
The
Company’s business with suppliers or customers has entirely come from Mar Vista of the Company’s gross sales during
2020 and 2019.
Stock
Based Compensation
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. We have no stock based
compensation as of April 30, 2020.
Recently
Enacted Accounting Standards
The
Company does not expect the adoption of any recent accounting pronouncements to have a material impact on its financial statements.
NOTE
2 – COMMON STOCK
The
Company has authorized 1,000,000 shares of preferred stock, $0.001 par value, with such rights, preferences and designation and
to be issued in such series as determined by the Board of Directors. No shares of preferred stock are issued and outstanding at
April 30, 2020 or 2019.
GOLIATH
FILM AND MEDIA HOLDINGS
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEARS ENDED APRIL 30, 2020 AND 2019
The
Company has authorized 300,000,000 shares of par value $0.001 common stock, of which 138,964,917 and 138,964,917 shares are outstanding
at April 30, 2020 and 2019, respectively. No shares of common stock have been issued during the years ended April 30, 2020 and
2019.
On
December 5, 2018, the Company agreed to issue a total of 309,000 restricted common shares to Kevin Frawley, affiliate, in accordance
with Rule 144, in exchange for expenses paid on behalf of the Company for $3,090. The issuance was exempt from registration pursuant
to Section 4(2) of the Securities Act of 1933, and the investor was sophisticated and familiar with our operations at the time
of the issuance of the shares.
As
of April 30, 2020, the Company has not issued 38,153,269 common shares to a related party affiliate. These shares are reflected
in the above disclosures.
NOTE
3 - GOING CONCERN
The
Company’s financial statements are prepared using accounting principles generally accepted in the United States of America
applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course
of business. However, the Company does not have significant cash or other current assets, nor does it have an established source
of revenues sufficient to cover its operating costs, which raises substantial doubt about our ability to continue as a going concern
for a period of 12 months from the issuance of these financial statements.
Under
the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither
the intention nor the necessity of liquidation, ceasing trading, or seeking protection from creditors pursuant to laws or regulations.
Accordingly, assets and liabilities are recorded on the basis that the entity will be able to realize its assets and discharge
its liabilities in the normal course of business.
The
ability of the Company to continue as a going concern for one year from the issuance of these financial statements is dependent
upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually attain profitable operations.
The accompanying financial statements do not include any adjustments that may be necessary if the Company is unable to continue
as a going concern.
During
the next year, the Company’s foreseeable cash requirements will relate to continual development of the operations of its
business, maintaining its good standing and making the requisite filings with the Securities and Exchange Commission. The Company
may experience a cash shortfall and be required to raise additional capital.
Historically,
the Company has relied upon internally generated funds and funds from the sale of shares of stock to finance its operations and
growth. Management may raise additional capital through future public or private offerings of the Company’s stock or through
loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company’s
failure to do so could have a material and adverse effect upon its and its shareholders.
In
the past year, the Company funded operations by using cash proceeds received through loans from related parties. For the coming
year, the Company plans to continue to fund the Company through debt and securities sales and issuances, focus on a possible joint
venture or merger until the company generates revenues through the operations of such merged company or joint venture as stated
above.
NOTE
4 - RELATED PARTY TRANSACTIONS
During
the years ended April 30, 2020 and 2019, the Company made payments of $0 and $5,075, respectively, to C&R Films for film production
costs and reimbursement of various expenses. C&R paid expenses totaling $6,217 and $22,003 in the years ended April 30, 2020
and 2019, 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 $35,504 at April 30, 2020.
During
the years ended April 30, 2020 and 2019, the Company made no payments to Dos Cabezas for film production costs and reimbursement
of various expenses. Dos Cabezas paid expenses totaling $7,000 and $0 in the years ended April 30, 2020 and 2019, 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 $7,000 at April 30, 2020.
GOLIATH
FILM AND MEDIA HOLDINGS
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEARS ENDED APRIL 30, 2020 AND 2019
During
the years ended April 30, 2020 and 2019, Kevin Frawley, an affiliate, paid expenses totaling $13,090 and $6,090, respectively,
in operating expenses, including audit fees, on behalf of the Company. On December 5, 2018, the Company agreed to issue a total
of 309,000 restricted common shares to Kevin Frawley, affiliate, in accordance with Rule 144, in exchange for expenses paid on
behalf of the Company for $3,090 (see Note 2). The Company has a balance owed to Mr. Frawley of $16,090 at April 30, 2020.
During
the years ended April 30, 2020 and 2019, the Company made no payments to Mike Criscione, Director, for reimbursement of various
expenses. During the years ended April 30, 2020 and 2019, Mr. Criscione paid expenses totaling $6,180 and $2,575, respectively,
in operating expenses, including audit fees, on behalf of the Company. The Company has a balance owed to Mr. Criscione of $8,755
at April 30, 2020.
Related
party transactions have been disclosed in the other notes to these financial statements.
NOTE
5 – INCOME TAXES
As
of April 30, 2020, the Company had net operating loss carryforwards of approximately $1,055,000, which expire in varying amounts
between 2020 and 2037. Realization of this potential future tax benefit is dependent on generating sufficient taxable income prior
to expiration of the loss carryforward. The deferred tax asset related to this (and other) potential future tax benefits has been
offset by a valuation allowance in the same amount. The amount of the deferred tax asset ultimately realizable could be increased
in the near term if estimates of future taxable income during the carryforwards period are revised.
Deferred
income tax assets of approximately $295,000 at April 30, 2020, was offset in full by a valuation allowance.
The
approximate components of the Company’s net deferred tax assets, including a valuation allowance, are as follows:
|
Deferred Tax Assets
|
|
As of April 30, 2020
|
|
|
As of April 30, 2019
|
|
|
|
|
|
|
|
|
|
|
Net operating loss carryforwards
|
|
$
|
1,055,000
|
|
|
$
|
1,025,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Net deferred tax assets before valuation allowance
|
|
|
295,000
|
|
|
|
287,000
|
|
|
Less: Valuation allowance
|
|
|
(295,000
|
)
|
|
|
(287,000
|
)
|
|
Net deferred tax assets
|
|
$
|
0
|
|
|
$
|
0
|
|
A
reconciliation between the amounts of income tax benefit determined by applying the applicable U.S. and State statutory income
tax rate to pre-tax loss is as follows:
|
|
|
As of April 30, 2020
|
|
|
As of April 30, 2019
|
|
|
|
|
|
|
|
|
|
|
Statutory federal income tax
|
|
|
(21.0
|
)%
|
|
|
(21.0
|
)%
|
|
Statutory state income tax
|
|
|
(7.0
|
)%
|
|
|
(7.0
|
)%
|
|
Change in valuation allowance on deferred tax assets
|
|
|
(28.0
|
)%
|
|
|
(28.0
|
)%
|
|
Components of Income Tax Expense
|
|
|
For
the Years Ended
|
|
|
|
|
|
April
30, 2020
|
|
|
|
April
30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal U.S. Income Taxes
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
-
|
|
|
|
-
|
|
|
Deferred
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
State Income Taxes
|
|
|
|
|
|
|
|
|
|
Current
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Deferred
|
|
|
-
|
|
|
|
-
|
|
|
Total Income Tax Expense
|
|
$
|
-
|
|
|
$
|
-
|
|
Due
to the inherent uncertainty in forecasts and future events and operating results, the Company has provided for a valuation allowance
in an amount equal to gross deferred tax assets resulting in the above figures for the periods audited.
GOLIATH
FILM AND MEDIA HOLDINGS
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEARS ENDED APRIL 30, 2020 AND 2019
NOTE
6 – COMMITMENTS AND CONTINGENCIES
Legal
The
Company is not a party to or otherwise involved in any legal proceedings.
In
the ordinary course of business, from time to time the Company may be involved in various pending or threatened legal actions.
The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse
effect upon the Company’s financial condition and/or results of operations. However, in the opinion of management, other
than as set forth herein, matters currently pending or threatened against the Company are not expected to have a material adverse
effect on its financial position or results of operations.
Fee
Agreement
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. The Company had no revenue from these sources.
NOTE
7 – SUBSEQUENT EVENTS
There
were no events subsequent to April 30, 2020, and up to the date of this filing that would require disclosure.