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EX-5 - GME INNOTAINMENT, INC.exhibit5.htm
As filed with the Securities and Exchange Commission on August 14, 2014 Registration No. 333-
 
FORM S-1

SECURITIES AND EXCHANGE COMMISSION
 
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
 
GREAT CHINA MANIA HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
 
Florida
(State or other jurisdiction of
incorporation or organization)
2750
(Primary Standard Industrial Classification Code Number)
59-2318378
(I.R.S. Employer
Identification No.)
 
Rm. 1902, 19/F, Kodak House II
321 Java Road, North Point
Hong Kong
(852) 3543 1208
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
 
Copies to:
Harrison Law, P.A.
8955 US Highway 301 North, No. 203
Parrish, Florida 34219
(941) 723-7564
(Name, address, including zip code, and telephone number, including area code, of agent for service) 

 Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement as determined by the registrant.
 
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: x
 
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
 
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
 
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):
 
Large accelerated filer ¨
 
Accelerated filer ¨
Non-accelerated filer ¨
 
Smaller reporting company x
(Do not check if a smaller reporting company)
   
 
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 
 

 

CALCULATION OF REGISTRATION FEE
 
Title of Each Class of Securities to be Registered
Amount to be registered(1)(3)
Proposed maximum offering price per unit(2)
Proposed Maximum Aggregate Offering Price(2)
Amount of Registration Fee(2)(3)
Common Stock par value $0.01
5,714,285
$0.35
$2,000,000
$46.99
Total
5,714,285
 
$2,000,000
$46.99
(1)Pursuant to Rule 416 of the Securities Act of 1933, as amended, the shares of Common Stock offered hereby also include such presently indeterminate number of shares of our Common Stock as shall be issued by us to the selling stockholders as a result of stock splits, stock dividends or similar transactions.
(2)Pursuant to Rule 457(p) the dollar amount of the filing fee of $46.99 previously paid is offset against the currently due filing fee.  The prior registration statement was filed by Great China Mania Holdings, Inc. on March 12, 2013, registration number 333-187235.
 
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
 
SUBJECT TO COMPLETION, DATED November __, 2014
 
PRELIMINARY PROSPECTUS

GREAT CHINA MANIA HODINGS, INC.
 
5,714,285 Shares of Common Stock, par value $0.01
 
This prospectus relates to the offering from time to time of up to 5,714,285 shares of the common stock of Great China Mania Holdings, Inc., a Florida corporation (“GMEC”, “we”, “our”, “us”, or “Company”). GMEC is selling 5,714,285 shares of common stock in a primary offering.  We are offering the shares on a best efforts basis by our Officers and Directors.  There is no minimum number of shares to be sold up to a maximum of 5,714,285 shares of common stock to be sold.

Our Officers and Directors are “underwriters” within the meaning of the Securities Act of 1933, as amended.
 
The common stock will be offered at the fixed price of $.35 per share.   GMEC will pay the expenses of registering these shares.
  
Our common stock is quoted on the Over-the-Counter Markets (“OTCBB” and “OTCQB”) under the symbol “GMEC”. The last reported sale price of our common stock on the OTCBB on August 13, 2014 was $0.44 per share.
 
Investing in our securities involves a high degree of risk. Before deciding whether to invest in our securities, you should consider carefully the risks that we have described on page 3 of this prospectus under the caption “Risk Factors.”

Neither the Securities and Exchange Commission nor any state commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Nor have they made, nor will they make, any determination as to whether anyone should buy these securities. Any representation to the contrary is a criminal offense. 
 
The date of this prospectus is           , 2014.

 
 

 


 
 
Page
 
 
 

 
This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or SEC, utilizing a registration process. Under this registration process, we may offer shares of our common stock with a total value of up to $2,000,000. This prospectus provides you with a general description of the securities we may offer. Each time we offer a type or series of securities under this prospectus, we will provide a prospectus supplement that will contain specific information about the terms of that offering.
 
This prospectus does not contain all of the information included in the registration statement. For a more complete understanding of the offering of the securities, you should refer to the registration statement, including its exhibits. The prospectus supplement may also add, update or change information contained in this prospectus. However, no prospectus supplement will offer a security that is not registered and described in this prospectus at the time of its effectiveness. This prospectus, together with the applicable prospectus supplements, includes all material information relating to the offering of securities under this prospectus. You should carefully read this prospectus and any applicable prospectus supplement before making an investment decision. 
 
You should rely only on the information contained in this prospectus or in any free-writing prospectus we may authorize to be delivered or made available to you. We have not authorized anyone to provide you with additional or different information. We are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted. The information in this prospectus or any free-writing prospectus is accurate only as of its date, regardless of its time of delivery or of any sale of shares of our common stock. Our business, financial condition, results of operations and prospects may have changed since that date.
 
For investors outside the United States: We have not done anything that would permit this offering, or possession or distribution of this prospectus, in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of common stock and the distribution of this prospectus outside of the United States. 

This prospectus may not be used to consummate sales of our securities, unless it is accompanied by a prospectus supplement where necessary. To the extent there are inconsistencies between any prospectus supplement, this prospectus and the document with the most recent date will control.
 
Unless the context otherwise requires, “Great China Mania Holdings, Inc.,” “the Company,” “we,” “us,” “our” and similar terms refer to GMEC.
 

 
The following is a summary of what we believe to be the most important aspects of our business and the offering of our securities under this prospectus. We urge you to read this entire prospectus, including the more detailed consolidated financial statements, notes to the consolidated financial statements and other information incorporated by reference from our other filings with the SEC or included in any applicable prospectus supplement. Investing in our securities involves risks. Therefore, carefully consider the risk factors set forth in any prospectus supplements and in our most recent annual and quarterly filings with the SEC, as well as other information in this prospectus and any prospectus supplements and the documents incorporated by reference herein or therein, before purchasing our securities. Each of the risk factors could adversely affect our business, operating results and financial condition, as well as adversely affect the value of an investment in our securities.
 
The Corporation 
 
Our Business
The Company was incorporated in Florida on July 8, 1983, and underwent various changes in business names and operations since then, changing its name to Great China Mania Holdings, Inc. and its business strategy on February 28, 2011.
Due to the change of business strategy and focus, GMEC sold the assets and operations of GCG and GCM on April 23, 2013 and May 6, 2013, respectively. GMEC has since focused on developing and maintaining the business of entertainment, artist management, movie production, movie acquisition and movie distribution in order to capture the growing business opportunities in Hong Kong, China and the Asia-Pacific region. In January, 2014, GMEC formed a subsidiary, GME Distribution Workshop Limited (“GMED”) to manage and maintain the movie related business in Asia.
Current Corporate Structure
The Company owns one wholly owned subsidiary named Super China Global Limited, a British Virgin Islands (BVI) company. Super China Global Limited has four (4) subsidiaries: 1) GMEH, a Hong Kong company incorporated on February 18, 2011; 2) GMEV, a Hong Kong company incorporated on June 1, 2011, 3) 3A Pictures Limited F/K/A Number 5 Asia Management Limited (“#5”), a Hong Kong company incorporated on December 30, 2013 and amended on May 30, 2014 and 4) GMED, a Hong Kong company incorporated on January 24, 2014.  The following diagram provides a clear picture of our corporate structure.
 
 
 
GMEC is an artist management and entertainment company headquartered in Hong Kong with talent located all over Asia. GMEC’s major businesses include artist management, event management, movie production, movie distribution, music publishing, show business and merchandising licensing. We believe we have built a trusted brand in the entertainment industry that creates high-quality commercial entertainment. GMEC’s businesses operate from Hong Kong, providing our services throughout China and Asia-Pacific countries.
GMEC’s main business segment is GMEH, an artist management company. Since 2013, GMEC has participated in movie production and distribution for the action movie “Kick Ass Girls”. In order to manage the movie business efficiently and effectively, GMEC established a new business unit, GMED, to focus on the operation of movie-related businesses. On January 14, 2014, to synergize with and leverage on GMEC’s existing businesses, GMEC entered into an agreement with C&M Film Workshop Limited (“C&M”). According to the agreement, GMEC acquired from C&M all of its overseas distribution agreements giving GMEC rights to distribute those movies overseas. To maintain the continuous growth of the movie business, GMEC has also appointed Mr. Charlie Wong, one of the top movie producers and distributors in Hong Kong to head the new business.
To capture the growing opportunities of artist management and movie businesses in the region, GMEC has positioned GMEH and GMED as its main business segments.
Our State of Organization
Great China Mania Holdings, Inc. was incorporated on July 8, 1983, under the Laws of the State of Florida.  Our principal address is Rm. 1902, 19/F, Kodak House II, 321 Java Road, North Point, Hong Kong.  Our registered agent’s address is 8955 U.S. Highway 301 N., No. 203, Parrish, Florida.

The Offering
 
 
Number of Shares Being Offered
We are offering to sell up to 5,714,285 shares of common stock.
Number of Shares Outstanding After the Offering
25,974,317 shares of our common stock are issued and outstanding. We have no other securities issued.  In the event all of the 5,714,285 shares being registered in this offering are sold we will have 31,688,602 shares issued and outstanding.
Use of proceeds
We will receive all of the proceeds from the sale of shares of common stock sold.  The proceeds will be used for general operating capital and for future acquisitions.
Plan of Distribution
The Offering is being made by us on a best effort, self-underwritten basis.  Our Officers and Directors are underwriters as defined in the Securities Act of 1933, as amended.
Risk Factors
You should carefully consider all the information in this Prospectus including the information set forth in the section of the Prospectus entitled “Risk Factors” beginning on page 3 before deciding whether to invest in our common stock.
Lack of Liquidity in our common stock
Our common stock is presently traded on the OTCBB, under the trading symbol “GMEC.OB”.  The last reported sale price of our common stock on the OTCBB on August 13, 2014 was $.44 per share.
  
The following table provides a summary of our current financial position as of June 30, 2014, unaudited.

Total Assets
Intangible Assets
Total Liabilities
Accumulated Deficit
$1,257,510
$180,000
$1,049,448
($9,459,721)


 
Investing in our securities involves significant risk. Prior to making a decision about investing in our securities, you should carefully consider the specific factors set forth below, together with all of the other information contained in this prospectus. You should also consider the risks, uncertainties and assumptions discussed under the heading “Risk Factors” included in our most recent annual report on Form 10-K, as revised or supplemented by our subsequent quarterly reports on Form 10-Q or our current reports on Form 8-K on file with the SEC, all of which are available at www.sec.gov, and which may be amended, supplemented or superseded from time to time by other reports we file with the SEC in the future. The risks and uncertainties we have described are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our operations.
 
Risks Associated with the Business Operating Units
 
Competition in this industry could result in us losing market share and charging lower prices for services, which could reduce our revenue.
 
We predominately compete in the fashion model management industry with numerous competitors, from large multi-national companies to local and boutique agencies.  We also compete in the general talent management industry. “Talent” means any model, entertainer, artist, athlete or other talent or celebrity.  We endeavor to secure product endorsement contracts from branded consumer products companies for talent represented by us.
 
In many of our markets, our competitors may possess greater resources, greater name recognition, greater geographic reach and longer operating histories than us, which may give competitors an advantage in obtaining future clients and attracting qualified models and other talent in their markets.  Increased competition may lead to, among other things, loss of business and market share and pricing pressures that could negatively impact our business.
 
In addition, because one of our principal assets is people, and freedom of entry into the model management business is almost unlimited, a small agency may, on occasion, be able to develop business with our clients, particularly if the small agency is successful in recruiting other successful talent.
 
Our prospects and financial results may be adversely affected if we fail to identify, sign and retain quality talent.
 
We are dependent on identifying, signing and retaining models and other talent who are well received by clients and are likely to generate repeat business.  Our competitive position is dependent on our continuing ability to attract and develop talent whose work can achieve a high degree of client acceptance.  Our financial results may be adversely affected if we are unable to identify, sign and/or retain such talent under terms that are economically attractive to us.  Our business would be adversely affected by any of the following:
 
           •           inability to recruit new models;
 
           •           the loss of popularity of models among clients;
 
           •           increased competition to maintain existing relationships with models;
 
           •           non-renewals of current agreements with models; and
 
           •           poor performance or negative publicity of models.
 
In addition, the fashion model industry is a youthful business, and models’ careers are inherently limited in length.  The loss or maturing of talent, particularly key talent responsible for significant gross billings, negatively impacts us. If we are unable to replace lost talent, including by successfully recruiting or developing new talent, our business will suffer. New talent is also important for us to continually show talent alternatives to clients, who regularly seek new “looks”.
 
 
We have relied upon our ability to enforce contracts entered into by models and other talent we represent.  If we are unable to protect and enforce our contractual rights, we may suffer a loss of revenue.
 
Our success depends, to a large degree, on our current talent under management and, in the future, scouting new talent and entering into new contracts.  To protect our contractual rights, we have traditionally vigorously defended our contractual rights vis-à-vis models and other talent, as well as other agencies and companies, for both financial reasons and to encourage ongoing strict adherence to contracts by all models and other talent.  Such strict enforcement through litigation and other legal means could result in substantial costs and diversion of resources and the potential loss of contractual rights, which could impair our results of operations and financial condition.
 
If we are unable to retain key management personnel or hire additional skilled personnel, we may not be able to successfully manage our business in the future.
 
Our key management personnel and their skills and relationships with clients are among our most important assets.  An important aspect of our competitiveness is our ability to attract and retain key management personnel, and our future success depends upon the continued service or involvement of key management personnel.  If we lose the services of one or more of our key management personnel, or if one or more of them decides to join a competitor or otherwise compete directly or indirectly with us, we may not be able to successfully manage our business or achieve our business objectives.  The loss of the services of any of our key management personnel or other key employees could have a material adverse effect on our business, prospects, financial condition and results of operations.
 
In addition to retaining key existing management personnel, our future success may also depend on our ability to identify, attract, hire, train, and motivate other highly skilled management, agents and administrative personnel.  Competition for such personnel is intense, and there can be no assurance that we will be able to successfully attract, assimilate or motivate sufficiently qualified personnel.  The failure to attract and retain the necessary personnel could have a material adverse effect on our business.
 
If we are unable to maintain our professional reputation and brand name, our business will be harmed.
 
We strongly depend on our overall reputation and brand name recognition, which we believe is strong in the industry, to secure new engagements and to sign qualified talent.  Our success also depends on the individual reputations of the talent that we represent.  In addition, any adverse effect on our reputation might negatively impact our businesses, which is driven largely by the value of the Company’s brand.  If any client is dissatisfied with our services, this may adversely affect our ability to secure new engagements.
 
If any factor, including poor performance, hurts our reputation, we may experience difficulties in competing successfully for both new client engagements and qualified talent.  Failing to maintain our professional reputation and the goodwill associated with our brand name could seriously harm our business.
 
Our revenue and net income may be affected by adverse economic conditions.
 
Recessions may impact gross billings for modeling services.  An important segment of the modeling industry is advertising, with advertising assignments typically generating amongst the highest daily fees in the business.  Because advertising expenditures are viewed by companies as discretionary and are curtailed during economic downturns, agency gross billings may also decline over recessionary periods.  There can be no assurance that current economic conditions will improve or even remain stable.  Our business, financial condition and results of operations could suffer if economic conditions weaken.
 
If some of our clients experience financial distress, their weakened financial position could negatively affect our financial position and results.
 
We have a diverse client base, and at any given time, one or more of our clients may experience financial distress, file for bankruptcy protection or go out of business.  If any client with whom we have a substantial amount of business experiences financial difficulty, it could delay or jeopardize the collection of accounts receivable, may result in significant reductions in services provided by us and may have a material adverse effect on our financial position, results of operations and liquidity.
 
 
We may undertake acquisitions to expand our business, which may dilute the ownership of existing stockholders.
 
As we pursue our business plan, we may pursue acquisitions of businesses, both domestic and international. International acquisitions in particular would permit us to expand our global footprint. To finance any acquisitions however, it may be necessary for us to raise additional funds through public or private financings. Additional funds may not be available on favorable terms or at all, and, in the case of equity financings, would result in additional dilution to existing stockholders. If we acquire any business and are unable to integrate the newly acquired entities effectively, our business and results of operations may suffer. The time and expense associated with finding suitable and compatible businesses or services could also disrupt our ongoing business and divert management’s attention. Future acquisitions by us could result in large and immediate write-offs or assumptions of debt and contingent liabilities, any of which could substantially harm our business and results of operations.
 
Any acquisitions that we attempt or complete could prove difficult to integrate or require a substantial commitment of management time and other resources.
 
Any strategy of acquiring other businesses involves a number of unique risks including:  (i) completing due diligence successfully, (ii) exposure to unforeseen liabilities of acquired companies and (iii) increased risk of costly and time-consuming litigation, including stockholder lawsuits.  If we pursue acquisitions, we may be unable to address these problems successfully.  Moreover, our future operating results will depend to a significant degree on our ability to integrate acquisitions (if any) successfully and manage operations while also controlling our expenses.  Integrating newly acquired businesses or services is likely to be expensive and time consuming.  We may be unable to select, manage or absorb or integrate any future acquisitions successfully, particularly acquisitions of large companies.  Any acquisition, even if effectively integrated, may not benefit our stockholders.
 
We may need additional debt or equity to sustain growth, but we do not have commitments for such funds.
 
We may need to finance future growth through a combination of borrowings, cash flow from operations, and equity financing.  Our ability to continue growing at the pace we have recently grown could depend in part on our ability to obtain either additional debt or equity financing.  The terms on which debt and equity financing is available to us varies from time to time and is influenced by our performance and by external factors, such as the economy generally and developments in the market, which are beyond our control.  If we are unable to obtain additional debt or equity financing on acceptable terms, we may have to curtail our growth by delaying new initiatives.  While we maintain a credit facility, our efforts to secure significant funds through debt financing have not been successful and, given the cautiousness of banks following the 2008 downturn, do not look likely in the foreseeable future.
 
Third parties may claim that we are infringing their intellectual property, and we could suffer significant litigation or licensing expenses or be prevented from selling products or services as a result.
 
We are not aware of any claims of infringement or challenges to our right to use any of our trademarks in the U.S.  Nevertheless, we could be subject to claims that we are misappropriating or infringing intellectual property or other proprietary rights of others.  Given that proprietary rights to photography, artwork and similar intellectual property rights are a fundamental part of marketing in the fashion and technology industry, we may be exposed at times to claims with respect to such rights.  Such claims, even if not meritorious, can be expensive to defend and divert management’s attention from our operations.  If we become liable to third parties for infringing these rights, we could be required to pay a substantial damage award and cease displaying, offering or selling works, products or services that use or contain the infringing intellectual property.  We may be unable to develop non-infringing products or services or obtain a license on commercially reasonable terms.  We may also be required to indemnify licensees and customers if they become subject to third-party claims relating to intellectual property that they license or otherwise provide to them, which could be costly.
 
We may not be able to adequately protect our media rights (including any intellectual property rights we have or may acquire).
 
Portions of our business rely on media and intellectual property. Protecting these rights is difficult. Piracy may adversely affect our revenue, particularly in countries where laws are less protective of such rights. Further, reductions in the legal protection for intellectual property rights could adversely affect revenue.  Our future results could be materially adversely affected if it is found to have infringed on intellectual property rights.
 
 
Technology companies, including many of our subsidiaries’ competitors, frequently enter into litigation based on allegations of patent infringement or other violations of intellectual property rights. In addition, patent holding companies seek to monetize patents they have purchased or otherwise obtained. Although we have not encountered any intellectual property rights claims against it, as the Company grows, the intellectual property rights claims against it may increase.
 
Regardless of the scope or validity of such claims by potential or actual litigants, we may have to engage in litigation. If we are found to infringe any patents, it may be required to pay substantial damages. If there is a temporary or permanent injunction prohibiting us from marketing or selling certain products or a successful claim of infringement against us requiring it to pay royalties to a third-party, its financial condition and operating results could be materially adversely affected, regardless of whether it can develop non-infringing technology. In certain cases, we may consider the desirability of entering into licensing agreements, although no assurance can be given that such licenses can be obtained on acceptable terms or that litigation will not occur. These licenses may also significantly increase our operating expenses.
 
We may experience outages, data loss, and disruptions with the technology related to our services.
 
Inefficiencies or operational failures, including temporary or permanent loss of customer data, could diminish the quality of our products, services, and user experience resulting in contractual liability, claims by customers and other third parties, damage to our reputation and loss of current and potential customers, each of which may harm our operating results and financial condition.
 
Investment in new business strategies and initiatives could disrupt our ongoing business and present risks not originally contemplated.
 
We have invested, and in the future may invest, in new business strategies or acquisitions. Such endeavors may involve significant risks and uncertainties, including distraction of management from current operations, insufficient revenue to offset liabilities assumed and expenses associated with the strategy, inadequate return of capital, and unidentified issues not discovered in the Company’s due diligence. These new ventures are inherently risky and may not be successful. They may materially adversely affect our financial condition and operating results.
 
Our auditors have issued a going concern regarding our business.
 
As of June 30, 2014 the Company has accumulated deficits of $9,459,721 a negative working capital of $56,017, and also recorded a net loss from the continuing operations of $69,368 for the six months then ended.
 
As of June 30, 2014, the Company may need additional cash resources to operate during the upcoming 12 months, and the continuation of the Company may dependent upon the continuing financial support of investors, directors and/or stockholders of the Company. The Company intends to attempt to acquire additional operating capital through private equity offerings to the public and existing investors to fund its business plan. However, there is no assurance that equity or debt offerings will be successful in raising sufficient funds to assure the eventual profitability of the Company. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
 
Risks Relating to Business in Hong Kong
 
Substantially all of our assets are located in Hong Kong and substantially all of our revenues are derived from our operations in Hong Kong. Accordingly, our business, financial condition, results of operations and prospects are subject, to a significant extent, to economic, political and legal developments in Hong Kong.
 
The economic, political and social conditions, as well as governmental policies, could affect the financial markets in Hong Kong and our liquidity and access to capital and our ability to operate our business.
 
 
The Hong Kong economy differs from the economies of most countries in many respects, including the amount of government involvement, level of development, growth rate, control of foreign exchange, and allocation of resources. While the Hong Kong economy has experienced significant growth over the past, growth has been uneven, both geographically and among various sectors of the economy. The Hong Kong government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures benefit the overall Hong Kong economy, but may also have a negative effect on us. This may encourage foreign advertising companies with more experience, greater technological know-how and larger financial resources than we have to compete against us and limit the potential for our growth. Moreover, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations that are applicable to us.
 
The Hong Kong legal system embodies uncertainties which could limit the legal protections available to you and us.
 
The Hong Kong legal system is a civil law system based on written statutes. The overall effect of legislation over the past 26 years has significantly enhanced the protections afforded to various forms of foreign investment in Hong Kong. However, these laws, regulations and legal requirements change frequently, and their interpretation and enforcement involve uncertainties. For example, we may have to resort to administrative and court proceedings to enforce the legal protection that we enjoy either by law or contract. However, since Hong Kong administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy than in more developed legal systems. For example, these uncertainties may impede our ability to enforce the contracts we have entered into. In addition, such uncertainties, including the inability to enforce our contracts, could materially and adversely affect our business and operation. In addition, intellectual property rights and confidentiality protections in Hong Kong may not be as effective as in the United States or other countries. Accordingly, we cannot predict the effect of future developments in the Hong Kong legal system, particularly with regard to the advertising industry, including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof, or the preemption of local regulations by national laws. These uncertainties could limit the legal protections available to us, including our ability to enforce our agreements with our suppliers.
 
 If tax benefits currently available to us in Hong Kong were no longer available, our effective income tax rates for our Hong Kong operations could increase.
 
We generate a substantial portion or all our net income from our Hong Kong operations.  Our net income could be adversely affected by any change in the current tax laws in Hong Kong.
 
The Hong Kong tax authorities may require us to pay additional taxes in connection with our acquisitions of offshore entities that conducted their Hong Kong operations through their affiliates in the United States.
 
Our operations and transactions are subject to review by the Hong Kong tax authorities pursuant to relevant Hong Kong laws and regulations. However, these laws, regulations and legal requirements change frequently, and their interpretation and enforcement involve uncertainties. For example, in the case of some of our future acquisitions of offshore entities that conduct their Hong Kong operations through their affiliates in the United States, we cannot assure you that the Hong Kong tax authorities will not require us to pay additional taxes in relation to such acquisitions, in particular where the Hong Kong tax authorities take the view that the previous taxable income of the Hong Kong affiliates of the acquired offshore entities needs to be adjusted and additional taxes be paid. In the event that the sellers failed to pay any taxes required under Hong Kong law in connection with these transactions, the Hong Kong tax authorities might require us to pay the tax, together with late-payment interest and penalties.
 
Hong Kong rules on mergers and acquisitions may subject us to sanctions, fines and other penalties and affect our future business growth through acquisition of complementary business.
 
We cannot assure you that the relevant Hong Kong government agency approval required for any issuance of our stock will be deemed legal. We may face sanctions by the Hong Kong regulatory agencies. In such event, this regulatory agency may impose fines and penalties on our operations in the Hong Kong, limit our operating privileges in the Hong Kong, delay or restrict the repatriation of the proceeds from any future sales of our stock into Hong Kong, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects.
 
 
Complying with the requirements of rules to complete such transactions could be time-consuming, and any required approval processes, including obtaining approval from the appropriate securities agency, may delay or inhibit the completion of such transactions, which could affect our ability to expand our business or maintain our market share.
 
Restrictions on currency exchange may limit our ability to utilize our revenues effectively.
 
Substantially all of our revenues and operating expenses are denominated in Hong Kong dollars. Since a significant amount of our future revenues will be denominated in Hong Kong dollars, any existing and future restrictions on currency exchange may limit our ability to utilize revenues generated in United States dollars (“USD”) to fund our business activities outside Hong Kong, if any, or expenditures denominated in foreign currencies. This could affect our ability to obtain foreign exchange through debt or equity financing, including by means of loans.
 
Fluctuations in exchange rates could result in foreign currency exchange losses.
 
Appreciation or depreciation in the value of the Hong Kong dollar relative to the U.S. dollar would affect our financial results reported in U.S. dollar terms without giving effect to any underlying change in our business or results of operations. The Hong Kong dollar may appreciate or depreciate significantly in value against the U.S. dollar in the long term, depending on the fluctuation of the basket of currencies against which it is currently valued or it may be permitted to enter into a full float, which may also result in a significant appreciation or depreciation of the Hong Kong dollar against the U.S. dollar. Fluctuations in the exchange rate will also affect the relative value of any dividend we issue in the future which will be exchanged into U.S. dollars and earnings from and the value of any U.S. dollar-denominated investments we make in the future.
 
Any future outbreak of severe acute respiratory syndrome or avian flu in Hong Kong, or similar adverse public health developments, may severely disrupt our business and operations.
 
From December 2002 to June 2003, Hong Kong and other countries experienced an outbreak of a new and highly contagious form of atypical pneumonia now known as severe acute respiratory syndrome, or SARS. On July 5, 2003, the World Health Organization declared that the SARS outbreak had been contained. Since September 2003, however, a number of isolated new cases of SARS have been reported, most recently in central Hong Kong in April 2004. During May and June of 2003, many businesses in Hong Kong were closed by the Hong Kong government to prevent transmission of SARS. In addition, many countries, including Hong Kong, have encountered incidents of the H5N1 strain of bird flu, or avian flu. This disease, which is spread through poultry populations, is capable in some circumstances of being transmitted to humans and is often fatal. A new outbreak of SARS or an outbreak of avian flu may result in health or other government authorities requiring the closure of our distributor’s offices or other businesses, including office buildings, retail stores and other commercial venues, which comprise the primary locations where we provide our digital out-of-home advertising services. Any recurrence of the SARS outbreak, an outbreak of avian flu or a development of a similar health hazard in Hong Kong, may deter people from congregating in public places, including a range of commercial locations such as office buildings and retail stores. Such occurrences would severely impact the value of our digital out-of-home advertising networks to advertisers, significantly reduce the advertising time purchased by advertisers and severely disrupt our business and operations.
 
Risks Associated with Our Stock
 
Our shares are listed for trading on the OTC Bulletin Board, and our shares will likely be classified as a “penny stock” as that term is generally defined in the Securities Exchange Act of 1934 to mean equity securities with a price less than $5.00.  Our shares will be subject to rules that impose sales practice and disclosure requirements on broker-dealers who engage in certain transactions involving a penny stock.
 
We are subject to the penny stock rules adopted by the Securities and Exchange Commission that require brokers to provide extensive disclosure to its customers prior to executing trades in penny stocks. These disclosure requirements may cause a reduction in the trading activity of our common stock, which in all likelihood would make it difficult for our stockholders to sell their securities.
 
Under the penny stock regulations, a broker-dealer selling a penny stock to anyone other than an established customer or accredited investor must make a special suitability determination regarding the purchaser and must receive the purchaser’s written consent to the transaction prior to the sale, unless the broker-dealer is otherwise exempt. Generally, an individual with a net worth in excess of $1,000,000, or annual income exceeding $200,000 individually, or $300,000 together with his or her spouse, is considered an accredited investor. In addition, under the penny stock regulations the broker-dealer is required to:
 
 
•           Deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the Securities and Exchange Commission relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt;
 
•           Disclose commissions payable to the broker-dealer and our registered representatives and current bid and offer quotations for the securities;
 
•           Send monthly statements disclosing recent price information pertaining to the penny stock held in a customer’s account, the account’s value and information regarding the limited market in penny stocks;
 
•           Make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction, prior to conducting any penny stock transaction in the customer’s account.
 
Because of these regulations, broker-dealers may encounter difficulties in their attempt to sell shares of our common stock, which may affect the ability of selling stockholders or other holders to sell their shares in the secondary market and have the effect of reducing the level of trading activity in the secondary market. These additional sales practice and disclosure requirements could impede the sale of our securities. In addition, the liquidity for our securities may be decreased, with a corresponding decrease in the price of our securities. Our shares in all probability will be subject to such penny stock rules and our stockholders will, in all likelihood, find it difficult to sell their securities.
 
We do not anticipate paying dividends on our common stock in the foreseeable future, which may limit investor demand.
 
We do not anticipate paying any dividends on our common stock in the foreseeable future.  Such lack of dividend prospects may have an adverse impact on the market demand for our common stock as certain institutional investors may invest only in dividend-paying equity securities or may operate under other restrictions that may prohibit or limit their ability to invest in our common stock.
 
Our common stock is subject to price volatility unrelated to our operations.
 
The market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting us or our competitors.  In addition, the stock market is subject to extreme price and volume fluctuations.  This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock.
 
Sales of substantial amounts of our common stock in the public market could depress the market price of our common stock.
 
The sale of a substantial amount of common stock in the public market, or the perception that such sales may occur, could cause the market price of our common stock to decline.
 
The OTC Bulletin Board, or the OTCBB, is a quotation system, not an issuer listing service, market or exchange.  Therefore, buying and selling stock on the OTCBB is not as efficient as buying and selling stock through an exchange.  As a result, it may be difficult for you to sell your common stock or you may not be able to sell your common stock for an optimum trading price.
 
The OTCBB is a regulated quotation service that displays real-time quotes, last sale prices and volume limitations in over-the-counter securities.  Our common stock is traded on the OTC QX Marketplace, or OTCQX, which is the trading tier on the OTCBB with the most demanding listing standards.  Nevertheless, because trades and quotations on the OTCBB involve a manual process, the market information for such securities cannot be guaranteed.  In addition, quote information, or even firm quotes, may not be available.  The manual execution process may delay order processing and intervening price fluctuations may result in the failure of a limit order to execute or the execution of a market order at a significantly different price.  Execution of trades, execution reporting and the delivery of legal trade confirmations may be delayed significantly.  Consequently, one may not be able to sell shares of our common stock at the optimum trading prices.
 
 
When fewer shares of a security are being traded on the OTCBB, volatility of prices may increase and price movement may outpace the ability to deliver accurate quote information.  Lower trading volumes in a security may result in a lower likelihood of an individual’s orders being executed, and current prices may differ significantly from the price one was quoted by the OTCBB at the time of the order entry.  Orders for OTCBB securities may be canceled or edited like orders for other securities.  All requests to change or cancel an order must be submitted to, received and processed by the OTCBB.  Due to the manual order processing involved in handling OTCBB trades, order processing and reporting may be delayed, and an individual may not be able to cancel or edit his order.  Consequently, one may not be able to sell shares of common stock at the optimum trading prices.
 
The dealer’s spread (the difference between the bid and ask prices) may be large and may result in substantial losses to the seller of securities on the OTCBB if the common stock or other security must be sold immediately.  Further, purchasers of securities may incur an immediate “paper” loss due to the price spread.  Moreover, dealers trading on the OTCBB may not have a bid price for securities bought and sold through the OTCBB.  Due to the foregoing, demand for securities that are traded through the OTCBB may be decreased or eliminated.
 
Financial Industry Regulatory Authority, or FINRA, sales practice requirements may also limit a stockholder’s ability to buy and sell our common stock.
 
FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must, after conducting a thorough due diligence review of a customer’s financial condition, have reasonable grounds for believing that the investment is suitable for that customer.  Special rules on recommending speculative low priced securities to non-institutional customers require broker-dealers to make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other relevant financial information.  Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers.  These FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and may have an adverse effect on the market for our shares.
 
There has been no independent valuation of the stock, which means that the stock may be worth less than the purchase price.
 
 
This valuation of our stock is highly speculative and arbitrary. There is no relation to the market value, book value, or any other established criteria. We did not obtain an independent appraisal opinion on the valuation of the shares.
 
Investors may never receive cash distributions which could result in an investor receiving little or no return on his or her investment.
 
Distributions are payable at the sole discretion of our board of directors. We do not know the amount of cash that we will generate, if any, once we have more productive operations. Cash distributions are not assured, and we may never be in a position to make distributions.
 
Even if a market develops for our shares, our shares may be thinly traded with wide share price fluctuations, low share prices and minimal liquidity.
 
If a market for our shares develops, the share price may be volatile with wide fluctuations in response to several factors, including: potential investors’ anticipated feeling regarding our results of operations; •increased competition; our ability or inability to generate future revenues; and market perception of the future of development of wood product manufacturing.
 
In addition, if our shares are quoted on the OTCBB, our share price may be affected by factors that are unrelated or disproportionate to our operating performance. Our share price might be affected by general economic, political, and market conditions, such as recessions, interest rates, or international currency fluctuations. In addition, even if our stock is approved for quotation by a market maker through the OTCBB, stocks traded over this quotation system are usually thinly traded, highly volatile and not followed by analysts. These factors, which are not under our control, may have a material effect on our share price.
 
 
We anticipate the need to sell additional authorized shares in the future.  This will result in a dilution to our existing shareholders and a corresponding reduction in their percentage ownership in the Company.
 
We may seek additional funds through the sale of our common stock. This will result in a dilution effect to our shareholders whereby their percentage ownership interest in the Company is reduced. The magnitude of this dilution effect will be determined by the number of shares we will have to issue in the future to obtain the funds required.  The sale of additional stock to new shareholders will reduce the ownership position of the current shareholders.  The price of each share outstanding common share may decrease in the event we sell additional shares.
 
Since our securities are subject to penny stock rules, you may have difficulty reselling your shares.
 
Our shares are “penny stocks” and are covered by Section 15(d) of the Securities Exchange Act of 1934 which imposes additional sales practice requirements on broker/dealers who sell our securities including the delivery of a standardized disclosure document; disclosure and confirmation of quotation prices; disclosure of compensation the broker/dealer receives; and, furnishing monthly account statements. For sales of our securities, the broker/dealer must make a special suitability determination and receive from its customer a written agreement prior to making a sale. The imposition of the foregoing additional sales practices could adversely affect a shareholder's ability to dispose of his stock.


The SEC has adopted penny stock regulations which apply to securities traded over-the- counter. These regulations generally define penny stock to be any equity security that has a market price of less than $5.00 per share or an equity security of an issuer with net tangible assets of less than $5,000,000 as indicated in audited financial statements, if the corporation has been in continuous operations for less than three years. Subject to certain limited exceptions, the rules for any transaction involving a penny stock require the delivery, prior to the transaction, of a risk disclosure document prepared by the SEC that contains certain information describing the nature and level of risk associated with investments in the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Monthly account statements must be sent by the broker-dealer disclosing the estimated market value of each penny stock held in the account or indicating that the estimated market value cannot be determined because of the unavailability of firm quotes. In addition, the rules impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established clients and institutional accredited investors (generally institutions with assets in excess of $5,000,000). These practices require that, prior to the purchase, the broker-dealer determined that transactions in penny stocks were suitable for the purchaser and obtained the purchaser's written consent to the transaction. Our shares are “penny stock.”

Trading in our common stock will be subject to the “penny stock” rules in Section 15(d) of the Securities Exchange Act of 1934 which imposes additional sales practice requirements on broker/dealers who sell our securities including the delivery of a standardized disclosure document; disclosure and confirmation of quotation prices; disclosure of compensation the broker/dealer receives; and, furnishing monthly account statements.  For sales of our securities, the broker/dealer must make a special suitability determination and receive from its customer a written agreement prior to making a sale.
 
 
This prospectus contains forward-looking statements. Forward-looking statements are those that do not relate solely to historical fact. They include, but are not limited to, any statement that may predict, forecast, indicate or imply future results, performance, achievements or events. They may contain words such as “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “target,” “project,” “likely,” “will,” “would,” “could”, “may”, “should”, and words or phrases of similar meaning. They may relate to, among other things:
 
•           a reduction in consumer and/or business spending in our market due to business layoffs or budget reductions, negative consumer sentiment, access to consumer credit, events or occurrences affecting the securities and/or financial markets, occurrences affecting our common stock, housing values, changes in federal, state, foreign and/or local tax levels or other factors;
 
•           risks relating to the business industry and our business, including competition, changes in consumer tastes and preferences, risks associated with expanding our business, increases in energy costs, demographic trends, traffic patterns, weather conditions, independent contractor availability, benefits and cost increases, litigation judgments or, government regulation, our ability to maintain adequate financing facilities, our liquidity and capital resources, prevailing interest rates and legal and regulatory matters;
 
 
•           public health issues, including, without limitation risks relating to the spread of pandemic diseases;
 
•           legal proceedings and regulatory matters; and
 
•           other risks detailed in “Risk Factors” herein and in our reports filed from time to time with the SEC.
 
Additionally, our ability to expand our business is dependent upon various factors, such as the availability of capital on favorable terms, the ability to obtain various government permits and licenses, and the recruitment and training of skilled management and business employees.
 
All forward-looking statements involve risks and uncertainties, including, but not limited to, economic, competitive and governmental factors outside of our control, that may cause actual results to differ materially from trends, plans or expectations set forth in the forward-looking statements. These risks and uncertainties may include those discussed in “Risk Factors.” Given these risks and uncertainties, we urge you to read this prospectus completely with the understanding that actual future results may be materially different from what we plan or expect. These factors and the other risk factors described in this prospectus are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could harm our results. Consequently, there can be no assurance that actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us. Given these uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements.
 
All future written and verbal forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking statements made in this prospectus may not prove to be correct.
  
 
We will receive the proceeds from the sale of the common stock offered through this prospectus.  We will incur all costs associated with this registration statement and prospectus.  There is no minimum amount of shares that must be sold during this offering.  All proceeds will be used for working capital and the costs associated with any business combination we may pursue in the future.

 
The offering price for the shares is based on the closing sale price on August 13, 2014 of $.44 per share.  Management determined that offering the shares at 80% of the most recent price, or $.35 per share would provide an incentive for investors.


The issuance of further shares will dilute our common stock and may lower the price of our common stock. If you invest in our common stock, your interest may be diluted to the extent of the difference between the price per share you pay for the common stock in this offering and the market price per share of our common stock at the time of sale.  You may incur an immediate increase or decrease in the value of your shares due to the volatility of the market price.

 
The Company is not registering any shares for sale other than those being offered by the company in our primary offering.

 
General Plan of Distribution
 
Our Officers and Directors are “underwriters” within the meaning of the Securities Act of 1933, as amended. They will be selling shares of our common stock being offered under this prospectus on a best effort, no minimum basis.  The price to the public will be fixed at $.35 for the duration of the offering.
 
 
With respect to underwritten public offerings, negotiated transactions and block trades, we will provide in the applicable prospectus supplement information regarding any compensation we pay to underwriters, dealers or agents in connection with the offering of the securities, and any discounts, concessions or commissions allowed by underwriters to participating dealers. Underwriters, dealers and agents participating in the distribution of the securities may be deemed to be underwriters within the meaning of the Securities Act of 1933, as amended, or the Securities Act, and any discounts and commissions received by them and any profit realized by them on resale of the securities may be deemed to be underwriting discounts and commissions. We may enter into agreements to indemnify underwriters, dealers and agents against civil liabilities, including liabilities under the Securities Act, or to contribute to payments they may be required to make in respect thereof.
 
If so indicated in the applicable prospectus supplement, we will authorize underwriters or other persons acting as our agents to solicit offers by certain institutions to purchase securities from us pursuant to delayed delivery contracts providing for payment and delivery on the date stated in the prospectus supplement. Each contract will be for an amount not less than, and the aggregate amount of securities sold pursuant to such contracts shall not be less nor more than, the respective amounts stated in the prospectus supplement. Institutions with whom the contracts, when authorized, may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and other institutions, but shall in all cases be subject to our approval. Delayed delivery contracts will not be subject to any conditions except that:

 
·
the purchase by an institution of the securities covered under that contract shall not at the time of delivery be prohibited under the laws of the jurisdiction to which that institution is subject; and
 
·
if the securities are also being sold to underwriters acting as principals for their own account, the underwriters shall have purchased such securities not sold for delayed delivery. The underwriters and other persons acting as our agents will not have any responsibility in respect of the validity or performance of delayed delivery contracts
 
If sales of shares offered under this prospectus are made to broker-dealers as principals, we would be required to file a post-effective amendment to the registration statement of which this prospectus is a part. In the post-effective amendment, we would be required to disclose the names of any participating broker-dealers and the compensation arrangements relating to such sales.
 
Our Officers and Directors and any broker-dealers or agents that are involved in selling the shares offered under this prospectus are deemed to be "underwriters" within the meaning of the Securities Act in connection with these sales. Commissions received by these broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Any broker-dealers or agents that are deemed to be underwriters may not sell shares offered under this prospectus unless and until we set forth the names of the underwriters and the material details of their underwriting arrangements in a supplement to this prospectus or, if required, in a replacement prospectus included in a post-effective amendment to the registration statement of which this prospectus is a part.
 
Our Officers and Directors and any other persons participating in the sale or distribution of the shares offered under this prospectus will be subject to applicable provisions of the Exchange Act and the rules and regulations under that act, including Regulation M. These provisions may restrict activities of and limit the timing of purchases and sales of any of the shares. Furthermore, under Regulation M, persons engaged in a distribution of securities are prohibited from simultaneously engaging in market making and other activities with respect to those securities for a specified period of time prior to the commencement of such distributions, subject to specified exceptions or exemptions. All of these limitations may affect the marketability of the shares.
 
If any of the shares of common stock offered for sale pursuant to this prospectus are transferred other than pursuant to a sale under this prospectus, then subsequent holders could not use this prospectus until a post-effective amendment or prospectus supplement is filed, naming such holders.
 
Under the securities laws of certain states, the shares of common stock may be sold in such states only through registered or licensed brokers or dealers. In addition, in certain states the shares of common stock may not be sold unless the shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.
 
We will pay the expenses incident to the registration, offering and sale of the shares of common stock to the public hereunder other than commissions, fees and discounts of brokers, dealers and agents. We estimate that the expenses of the offering to be borne by us will be approximately $52,682. The estimated offering expenses consist of: a SEC registration fee of $682, accounting fees of $10,000, legal fees of $40,000 and printing miscellaneous expenses of $2,000.
 
Shares of our common stock sold pursuant to the registration statement of which this prospectus is a part will be authorized for trading on the OTCBB. The applicable prospectus supplement will contain information, where applicable, as to any other listing, if any, on the OTCBB or any securities market or other securities exchange of the securities covered by the prospectus supplement. We can make no assurance as to the liquidity of or the existence of trading markets for any of the securities.
 
 
In order to facilitate the offering of the securities, certain persons participating in the offering may engage in transactions that stabilize, maintain or otherwise affect the price of the securities. This may include over-allotments or short sales of the securities, which involve the sale by persons participating in the offering of more securities than we sold to them. In these circumstances, these persons would cover such over-allotments or short positions by making purchases in the open market or by exercising their over-allotment option. In addition, these persons may stabilize or maintain the price of the securities by bidding for or purchasing the applicable security in the open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating in the offering may be reclaimed if the securities sold by them are repurchased in connection with stabilization transactions. The effect of these transactions may be to stabilize or maintain the market price of the securities at a level above that which might otherwise prevail in the open market. These transactions may be discontinued at any time.
 
In compliance with the guidelines of the Financial Industry Regulatory Authority, Inc., or FINRA, the maximum consideration or discount to be received by any FINRA member or independent broker dealer may not exceed 8% of the aggregate amount of the securities offered pursuant to this prospectus and any applicable prospectus supplement.
 
The underwriters, dealers and agents may engage in other transactions with us, or perform other services for us, in the ordinary course of their business.

 
The following is a summary of our capital stock and provisions of our restated certificate of incorporation and restated by-laws, as they are in effect as of the date of this prospectus. For more detailed information, please see our restated certificate of incorporation and restated bylaws, which are filed with the Securities and Exchange Commission as exhibits to the registration statement of which this prospectus forms a part.
 
We are authorized to issue 375,000,000 shares of common stock, par value $0.01 per share, and a blank check class of preferred stock, none of which has been authorized in the form of par value or in the form of a specific rate of return or in any other manner created and issued and outstanding.  As of August 13, 2014, we had 25,974,317 shares of common stock outstanding held of record by 59 stockholders.
 
Common Stock
 
Holders of common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders, and do not have cumulative voting rights. Subject to preferences that may be applicable to any outstanding shares of preferred stock, holders of common stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by our board of directors out of funds legally available for dividend payments. All shares of common stock outstanding as of the date of this prospectus are fully paid and non-assessable. The holders of common stock have no preferences or rights of conversion, exchange, pre-emption or other subscription rights. There are no redemption or sinking fund provisions applicable to the common stock. In the event of any liquidation, dissolution or winding-up of our affairs, holders of common stock will be entitled to share ratably in our assets that are remaining after payment or provision for payment of all of our debts and obligations and after liquidation payments to holders of outstanding shares of preferred stock, if any.
 
Transfer Agent and Registrar
 
The transfer agent and registrar for our common stock is Island Stock Transfer of Clearwater, Florida.
 
Preferred Stock
 
Our board of directors has the authority, without action by our stockholders, to designate and issue a blank check class of preferred stock in one or more series and to designate the rights, preferences, and limitations of all such series, any or all of which may be superior to the rights of our common stock. It is not possible to state the actual effect of the issuance of any shares of preferred stock upon the rights of the holders of common stock until our board of directors determines the specific rights of the holders of preferred stock. However, effects of the issuance of preferred stock include restricting dividends on our common stock, diluting the voting power of our common stock, impairing the liquidation rights of our common stock, and making it more difficult for a third party to acquire us, which could have the effect of discouraging a third party from acquiring, or deterring a third party from paying a premium to acquire, a majority of our outstanding voting stock. We have no present plans to issue any shares of our preferred stock.
 

INTRODUCTION

We were incorporated on July 8, 1983.  From July 8, 1983 through March 20, 2008 we were in the business of providing specialty printing services to the commercial printing industry.

The Great China Mania Holdings, Inc. (“GMEC or the “Company”) was incorporated in Florida on July, 1983. In February, 2011, three new subsidiaries of GMEC were formed in Hong Kong. These subsidiaries are Great China Media limited (“GCM”), Great China Game Limited (“GCG”), and GME Holdings Limited (“GMEH”) (which operates an artist and artist management business). In June 2011, a new subsidiary GMEC Ventures Limited (“GMEV”), a Hong Kong company, was formed and maintained for holding future investments.
 
 
Due to the change of business strategy and focus, GMEC sold the assets and operations of GCG and GCM on April 23, 2013 and May 6, 2013, respectively. GMEC has since focused on developing and maintaining the business of entertainment, artist management, movie productions, movie acquisitions and movie distributions in order to capture the growing business opportunities in Hong Kong, China and the Asia-Pacific region. In January, 2014, GMEC formed a subsidiary, GME Distribution Workshop Limited (“GMED”), to manage and maintain the movie-related businesses in Asia.

Current Corporate Structure
 
As of the date of this filing, the corporate structure is as follows:
 
The Company owns one wholly owned subsidiary named Super China Global Limited, a British Virgin Islands (BVI) company. Super China Global Limited has four (4) subsidiaries: 1) GMEH, a Hong Kong company incorporated on February 18, 2011; 2) GMEV, a Hong Kong company incorporated on June 1, 2011, 3) 3A Pictures Limited F/K/A Number 5 Asia Management Limited (“#5”) a Hong Kong company incorporated on December 30, 2013 and amended on May 30, 2014, and 4) GMED, a Hong Kong company incorporated on January 24, 2014.  The following diagram presents a clear picture of our corporate structure.


General Description of Current Business
 
 
GMEC is an artist management and entertainment company headquartered in Hong Kong with talent located all over Asia. GMEC’s major business concentrations include artist management, event management, movie production, movie distribution, movie acquisition, music publishing, TV series production, show business and merchandising licensing. GMEC has built a trusted brand in the entertainment industry that creates high-quality commercial entertainment. GMEC’s businesses are geographically diverse throughout Hong Kong, China and other Asia-Pacific countries. GMEC has appointed sales representatives in Beijing (China), Guangzhou (China) and Malaysia to expand and manage our business coverage.
 
 
GMEC consists of two main business segments: 1) GMEH, an artist management company and 2) GMED, a movie production, distribution and acquisition company. Since 2013, GMEC has participated in movie production and distribution for the action movie named “Kick Ass Girls”. In order to manage the movie business efficiently and effectively, GMEC established a new business unit, GMED, to focus on the operations of movie-related businesses. On January 14, 2014, to synergize with and leverage on GMEC’s existing businesses, GMEC entered into an agreement with C&M Film Workshop Limited (“C&M”). According to the agreement, GMEC acquired from C&M all of its overseas distribution agreements giving GMEC the rights to distribute movies overseas. To maintain the continuous growth of the movie business, GMEC has also engaged Mr. Charlie Wong, a movie producer and distributor in Hong Kong, to head the new business unit over the next 5 years.
 
To capture the growing opportunities of artist management and movie business in the region, GMEC has positioned GMEH and GMED as its main business segments.
 
Products and Services
 
GMEH
 
GMEH currently manages 18 female artists and 7 male artists in Hong Kong, China, Malaysia and Australia.
 
The artists GMEH currently manages:
 
Female:
 
Chrissie Chau
Jeana Ho
Mia Chan
Cheuk Wan Chi
Dada Lo
Hidy Yu
Coco Yuen
Waye
Kabby Hui
Suki Wong
Anna Kay
Hailey C
Emily Lim
Chris Tong
Bao
Lok Yan Ming
Lok Yan Wa
Cathryn Lee

Male:
 
Alex To
Dominic Ho
La Ying
Kit J
Ben Yeung
King Chiu
Frank Fan
 

During 2013, GMEH had its artists participate in the following:
 
 
Movie Participation

GMEH’s artists were involved in a variety of major movie projects all over the Asia-Pacific area.
           
 
‘Kick Ass Girls’ By Chrissie Chau, Cheuk Wan Chi, Hidy Yu and Dada Lo
 
'Journey to The West ' by Chrissie Chau
 
‘Mr. & Mrs. Player’ by Chrissie Chau
 
“Break Up 100” by Chrissie Chau
 
‘Lan Kwai Fong 3’ by Jeana Ho
 
‘May We Chat’ by Kabby Hui
 
TV Series Participation

            'X-Girls' By Chrissie Chau
 

Promotional Events

GMEH has accumulated experience in hosting and producing concerts and live shows.
 
 
The Chippendales Asia Tour HK 2013
Opening Ceremony of Kowloon Watch Co. at i-Square by Chrissie Chau
Hong Kong Jockey Club Racing Specialist by Chrissie Chau
San Miguel Light Beer Promotion event by Chrissie Chau
San Miguel Light Beer Promotion event by Jeana Ho and Mia Chan
Comedy show ‘One night Stand’ by Cheuk Wan Chi
 
 
Spokesperson

Chrissie Chau was chosen as the spokesperson of Hong Kong's largest electronics retailers “Citylink”.
Chrissie Chau was chosen as the spokesperson of “LA MIU” a brand of women’s underwear and consumer goods in China.
Chrissie Chau was chosen as the sole spokesperson of Kentucky Fried Chicken ("KFC") and its signature "Japanese Burger" in Hong Kong.
Cheuk Wan Chi was chosen as the spokesperson of the energy drink “Shark” in Hong Kong.
 
 
Artist  Related Merchandising

A crossover series of women’s underwear named “Chrissie Series” by Chrissie Chau and “LA MIU” a women’s underwear brand was launched

Music and Record Productions

GMEC has a division for music projects. We have gathered creative solo singers and groups from Hong Kong and China to introduce fresh elements to the local music industry.
 
MV ‘Dream” Lok Yan Ming and Lok Yan Wa
Live concerts in Hong Kong by Alex To (August 2014)
World Tour live concerts by Alex To (1st & 2nd quarter 2015)

GMED
 
Movie Production
 
Filmmaking involves a number of discrete stages including an initial story, idea, or commission, through scriptwriting, casting, shooting, editing, and screening the finished product before an audience that may result in a film release and exhibition.  GMED has created the ability to produce movies under contract.
 
Movie Distribution
 
This task may be accomplished locally and overseas in a variety of ways; for example, with a theatrical release, a home entertainment release (in which the movie is made available on DVD Video or Blu-ray Disc) or a television program for broadcast syndication and may include digital distribution. For commercial projects, film distribution is usually accompanied by film promotion.
 
GMEC has participated in various movie projects targeting the Chinese-speaking markets. The collaboration with Malaysia’s leading cinema exhibitor and distributor, Golden Screen Cinemas Sdn Bhd, has opened one of the largest Chinese speaking markets for GMEC’s movie business. Success of the movie “Kick Ass Girls” provides GMEC the opportunity to enter the Asia-Pacific movie market.
 
Movie Projects in 2013 and 2014
 
We have two (2) movies that have been produced and have either been released or will be in the fourth quarter of 2014.

“Kick Ass Girls” (2013)
 
 
“Girls Police Academy” (scheduled to be shown in the fourth quarter of 2014)
 
GMED will receive shared revenue from these films in several revenue areas:
 
1.          Movie Box office receipts.
2.          Movie production fees.
3.
Royalty rights from various distribution channels (includes selling of VCD’s/DVD’s, broadcasting by free television, pay television online platforms and airline platforms)
4.          Merchandise sales derived from GMED’s movies.
5.          Advertising income by offering product placements and sponsorship opportunities in GMED’s movies.

Target customers
 
GMEH
 
Since the majority of its artists appeal to teens and the young generation, GMEH’s target customers are:
 
           1.           Teens and young adults; and
           2.           Brand owners and institutional customers who target teens and young adults as their end customers

The selected list of institutional clients of GMEH in 2013 included:
 
1.           KFC
2.           Bossini
3.           LA MIU
4.           Giordano
5.           Citylink
6.           Funamedia
7.           Mega-Vision Pictures Limited
8.           China 3D Digital Entertainment Limited

Industry and Market Environment
 
Entertainment
 
We expect China's entertainment and media income to grow annually in the next few years. The growth of China's entertainment and media sector in the next few years will be pushed by China's economic expansion, government support as well as the injection of industry funds hoping to cash in on increasing consumer spending. Artists or celebrities help to attract more audiences towards advertisements, brands, products, or promotional events. Artist management companies can offer artist or celebrities with various talents to the brands and companies targeting the huge China’s market. Also, driven by the growth in entertainment industry (including movies, media, theme parks etc.) in China, there is huge demand for talent and artists in the Asia-Pacific market.
 
Movies
 
Hong Kong has a dynamic film entertainment industry. Its film talent and professionals have managed to make their names known in both Eastern and Western movie markets. Hong Kong is one of the world's leading action film exporters. In 2013, 42 locally produced films were released. In addition to the foreign films released, Hong Kong cinemas had recorded total box office receipts of approximately $209 million. Hong Kong's film industry as a whole is reliant on overseas revenues, given the limited size of the domestic market. Asia accounts for the majority of the foreign sales income. In recent years, the Chinese mainland has become a vital market for Hong Kong movies.
 
Major Competitors
 
The Company has two major prevailing competitors in Hong Kong, specifically: China 3D Digital Entertainment Limited (“China 3D”) and Pegasus Entertainment Holdings Limited (“Pegasus”).
 
China 3D is a publicly trading company listed on the Growth Enterprise Market of The Hong Kong Stock Exchange (“GEM”).
 
 
The focus of China 3D is the production of movies, acquisition of movie rights and distribution.  Looking forward in 2014, they will continue to develop their businesses of entertainment and movie productions for the Hong Kong and China markets. They are in direct competition with GMEC’s movie business as we plan to enter into the movie production and distribution rights business segment in 2014.
 
Pegasus is also a publicly trading company listed GEM stock.  Pegasus has an established brand name in the China movie market concentrating in the comedy genre. They have successfully acquired the theatrical distribution rights and arranged the showing in Hong Kong and Macau for "Lost in Thailand", a comedy that has gross box office receipts over $190 million USD in China, setting the highest record for China box office receipts by a Chinese language movie. They are also in direct competition with GMEC on the movie production and movie distribution rights business in Hong Kong and China market.

Competitive Advantages
 
Our management has identified several factors that we believe makes us competitive in the industry:
 
           1.           Management experience.
           2.           Business relationships in the industry.
           3.           Client relationships.
           4.           Relationships with theater networks within the region.
           5.           Solid experience in movie production and distribution.

GMEC believes its management team has competitive advantages over its main competitors:
 
 
1.
GMEC’s CEO and his management team have over 13 years’ experience in this industry including over 10 years working at the largest entertainment company in Hong Kong.
 
2.
GMEC’s management team has an excellent relationship with TV channels, print media, electronic media operators and theater network operators.
 
3.
GMEC’s CEO and his team have over 10 years’ experiences in establishing client relationships to organize and handle promotional events.
 
4.
GMEC’s management team has over 10 years’ working relationships with 2 major theater chain operators in Hong Kong to distribute movies in Hong Kong.
 
Business Development
 
GMEC hopes to expand through its movie production and movie distribution related businesses and acquisitions beginning in the fourth quarter of 2014.
 
Movie Production and Distribution
 
We plan to expand our current movie production and movie distribution businesses through a division established to specifically manage and operate all the projects related to movie production and distribution. The new subsidiary company, GMED will be the business unit for movie-related projects and business.
 
Acquisitions
 
The Company is trying to develop plans to acquire businesses that can synergize with our existing operations. Potential targets in the following business segments include:
 
           1.           Talent and artist management companies in China and Asia.
           2.           Movie production and distribution companies in China.
           3.           Theater management companies in China

Employees

The following table summarizes the employees of GMEC and their operations of GMEH and its other subsidiaries.  As a holding company GMEC does not have any paid employees.  Our executive officers and directors receive any cash compensation from our subsidiary GMEH in accordance with Hong Kong law.
 
 
Table 1.0

 
GMEC
GMEH
ALL OTHER SUBSIDIARIES
Total
CEO
1
0
0
1
General & Administration
 
10
1
10
Total
1
10
1
12


At July 31, 2014, our directors and executive officers are as follows:
 
Name
 
Age
 
Position
Kwong Kwan Yin Roy
 
38
 
Chief Executive Officer, Chief Financial Officer  and Director
Yum Ka Yan
 
36
 
Director
Wong Wing Fung Charlie
 
37
 
Director GMED (a subsidiary of GMEC)
 
On January 14, 2013 Mr. Kwong Kwan Yin Roy was appointed as CEO and Chief Financial Officer (CFO) and is also our Chairman of the Board of Directors.  He was appointed as a director on January 28, 2011.  Mr. Kwong is the sole director of our subsidiaries except GMED where Wong Wing Fung Charlie is the other director.

Mr. Kwong Kwan Yin Roy, age 38, received his education at Poly University Hong Kong. He joined Hong Kong Television Broadcasts Limited in 1997, where he was responsible for variety and music shows and became familiar with the operation of the electronic media. He joined Hong Kong Emperor Entertainment in 2000, where he was responsible for corporate promotion of music, film, and production. Mr. Kwong has experience in advertising, corporate matters and brand building. In 2004, he successfully formed an alliance between California Red Group (a karaoke operator) with NEWAY (a karaoke operator) and Emperor Group. During his experience at Emperor Group, Mr. Kwong organized a number of large-scale publicity projects including work for the top artist in Hong Kong and China. Mr. Kwong was appointed as CEO and CFO and Chairman of the Board of Directors of the company since January 14, 2013.

Ms. Yum Ka Yan, age 36, received her education at University of Hong Kong. Ms. Yum joined Edko Films Limited in 2005, where she was responsible for marketing and promotion of movies and cinema opening.  She joined Emperor Motion Pictures in 2007 where she was promoted to Assistant Marketing Manager.  She was responsible for marketing and promotion planning of movie production. Ms. Yum has experience in advertising, marketing and publicity planning. She participated in marketing and publicity campaigns in various blockbuster titles: Lust, Caution (2007); Spider Man 3 (2007); Curse of Golden Flower (2006); and Brokeback Mountain (2005). She joined the company on March 1, 2011 as Senior Marketing Manager and was promoted on April 1, 2011 to Assistant General Manager and was appointed as director on January 14, 2013.

Mr. Wong Wing Fung Charlie, age 37, was appointed as a Director of GMED, a subsidiary of the company, on January 24, 2014.  He has been a movie Producer and the Founder of Lion Rock Pictures Limited, Pineapple Animation Limited and C&M Film Workshop Limited.  Charlie started his film business career in 1999 after graduating from UK’s Leicester University with a BSc Business Economic degree.  He joined China Star Entertainment Group in 1999 as a Distribution Executive. While working at China Star, he participated in most of the international film festivals and markets, including the American Film Market; Cannes Film Festival; Milan Film Festival; Pusan Film Festival; Berlin Film Festival and Hong Kong Filmart. In 2003, Charlie joined Film Workship Limited responsible for film production, post-production and distribution. In 2007, Mr. Wong joined T-Films Limited. At the same time, he was invited by Puzzle Animation Studio (based in China), to become the Distribution and Marketing Director of the company. Meanwhile, Mr. Wong founded C&M Film Workshop Limited mainly to distribute independent movies to Hong Kong and Mainland China. Mr. Wong founded Lion Rock Pictures Limited in 2012 aiming to produce movies which have high quality and value for international distribution. In 2014, Mr. Wong was appointed as the director of GMED to head the company to develop its movie business.
 
 

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", "the Company believes", "management believes" and similar language. The forward-looking statements are based on the current expectations of the Company and are subject to certain risks, uncertainties and assumptions, including those set forth in the discussion under "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this registration statement. The actual results may differ materially from results anticipated in these forward-looking statements. We base the forward-looking statements on information currently available to us.

Except as otherwise indicated by the context, references in this Registration Statement to “we”, “us”, “our”, the Registrant, our Company or the Company are to Great China Mania Holdings, Inc., a Florida corporation and its consolidated subsidiaries. Unless the context otherwise requires, all references to (i) “BVI” are to British Virgin Islands; (ii) “PRC” and “China” are to the People’s Republic of China; (iii) “U.S. dollar”, “$” and “US$” are to United States dollars; (iv) “HKD” are to the Hong Kong Dollar; (v) “Securities Act” are to the Securities Act of 1933, as amended; and (vi) “Exchange Act” are to the Securities Exchange Act of 1934, as amended.

Critical Accounting Policies and Estimates

Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States ("US GAAP"). US GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expenses amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

We believe the following is among the most critical accounting policies that impact our consolidated financial statements. We suggest that our significant accounting policies, as described in our consolidated financial statements in the Summary of Significant Accounting Policies, be read in conjunction with this Management's Discussion and Analysis of Financial Condition and Results of Operations.

We recognize revenue in accordance with Staff Accounting Bulletin ("SAB") No. 104. All of the following criteria must exist in order for us to recognize revenue:

1. Persuasive evidence of an arrangement exists;
2. Delivery has occurred;
3. The seller's price to the buyer is fixed or determinable; and
4. Collectability is reasonably assured.

Revenue recognition policies for each of the major products and services of continuing operations are illustrated as follows:

(i)
Revenue from provision of artist management, event management, and promotion for its clients is recognized when services are rendered.
(ii)
Revenue from artist-related merchandising is recognized when receipt is confirmed by clients according to the relating predetermined agreements.
(iii)
Revenue from intellectual property rights on CD, DVD and video products is recognized upon delivery of products to customers.

Based on these factors, the Company believes that it can apply the provisions of SAB 104 with minimal subjectivity.

Our estimate of the reliability of the deferred tax assets will change as the Company becomes more profitable.

Recent Accounting Pronouncements
 

The Company does not expect that the adoption of any recent accounting pronouncements will have any material impact on its financial statements.

Results of Continuing Operations – Three Months Ended June 30, 2014 as Compared to Three Months Ended June 30, 2013.

The following summarizes the results of our continuing operations during the three-month period ended June 30, 2014 and 2013, and provides information regarding the dollar and percentage increase / (decrease) from the three-month period ended June 30, 2013 to the three-month period ended June 30, 2014.

   
Three months ended June 30,
   
Increase/
       
   
2014
   
2013
    (decrease)    
% Change
 
                         
Revenue
  $ 531,820     $ 613,389     $ (81,569 )     (13.30 %)
Cost of sales
    336,655       418,204       (81,549 )     (19.50 %)
Gross profit
    195,165       195,185       (20 )     0.01 %
Sales & marketing
    11,240       8,409       2,831       33.67 %
General & administrative
    178,787       452,023       (273,236 )     (60.45 %)
Income /(Loss) from operations
    5,138       (265,247 )     270,385       (101.94 %)
Other expense
    25,479       (38,325 )     63,804       (166.48 %)
Income tax expenses
    -       -       -       N/A  
Net income/(loss) from continuing operations
  $ 30,617     $ (303,572 )   $ 334,189       101.14 %

Revenues

Revenues decreased by $81,569 to $531,820 for the three months ended June 30, 2014 as compared to $613,389 for the same period in 2013, representing a 13.30% decrease. The decrease in revenue was mainly due to the loss of a material sales contract with a value of $120,312 in 2014 offset the increase of revenue generated in overseas in by $38,743 in aggregate.

Cost of sales

Cost of sales decreased by $81,549 to $336,655 for the three months ended June 30, 2014 as compared to $418,204 for the same period in 2013, representing a 19.50% decrease. The decreases were mainly due to the decrease of artists fees by $121,265 offset the increase of agency fee by $260 and other direct cost by $39,456 in aggregate.

Gross margin

Gross margin decreased by $20 to $195,165 for the three months ended June 30, 2014 as compared to $195,185 for the same period in 2013, representing a 0.01% decrease. The gross margin remains stable in both periods.

Sales & marketing expenses

Sales & marketing expenses increased by $2,831 to $11,240 for the three months ended June 30, 2014 as compared to $8,409 for 2013 representing a 33.67% increase. The increase was mainly due to the increase of advertising expenses by $4,901 offset the decrease of other sales & marketing expenses by $2,070 in aggregate.

General and administrative

The following table summarizes general and administrative expenses during the three-month period ended June 30, 2014 and 2013, and provides information regarding the dollar and percentage increase / (decrease) from the three-month period ended June 30, 2013 to the three-month period ended June 30, 2014:

   
Three months ended June 30,
   
Increase
       
   
2014
   
2013
    (decrease)     % Change  
                         
Payroll cost
    123,391       106,916       16,475       15.41 %
Rental expenses
    24,850       27,008       (2,158 )     (7.99 %)
Legal and professional fee
    13,528       306,990       (293,462 )     (95.59 %)
Miscellaneous
    17,018       11,109       5,909       53.19 %
      178,787       452,023       (273,236 )     (60.45 %)
 
 
Payroll cost increased by $16,475 to $123,391 for the three months ended June 30, 2014 as compared to $106,916 for the same period in 2013, representing a 15.41% increase. The increase was mainly due to the salary adjustment of employees newly recruited in the first quarter of 2014.

Rental expenses decreased by $2,158 to $24,850 for the three months ended June 30, 2014 as compared to $27,008 for the same period in 2013, representing a 7.99% decrease. The decrease was mainly due to rent saved by the relocation of Guangzhou office in December 2013.

Legal and professional fee decreased by $293,462 to $13,528 for the three months ended June 30, 2014 as compared to $306,990 for the same period in 2013, representing a 95.59% decrease. The decrease was mainly due to the saving of 1.) a business development consultation fee $236,000, 2.) legal costs relating to the of acquisition of assets $3,634, 3.) press release expenses by $46,962 4.) legal cost relating to a convertible note $2,500 and 4.) legal expenses related disbursement by $4,366 in aggregate.

Miscellaneous expenses increased by $5,909 to $17,018 for the three months ended June 30, 2014 as compared to $11,109 for the same period in 2013, representing a 53.19% increase. The increase was mainly due to the increase of amortization expense $10,000 offset by the decrease of all other expenses of $4,091 in aggregate.

Net income / (loss) from continuing operations

Net income from continuing operations increased by $334,189 to $30,617 for the three months ended June 30, 2014 as compared to a net loss of $303,572 for the same period in 2013.

Results of Continuing Operations – Six Months Ended June 30, 2014 as Compared to Six Months Ended June 30, 2013.

The following summarizes the results of our continuing operations during the six-month period ended June 30, 2014 and 2013, and provides information regarding the dollar and percentage increase / (decrease) from the six-month period ended June 30, 2013 to the six-month period ended June 30, 2014.

   
Six Months ended June 30,
   
Increase
       
   
2014
   
2013
   
(decrease)
   
% Change
 
                         
Revenue
  $ 819,630       984,780       (165,150 )     (16.77 %)
Cost of sales
    498,137       586,473       (88,336 )     (15.06 %)
Gross profit
    321,493       398,307       (76,814 )     (19.29 %)
Sales & marketing
    22,251       21,829       422       1.93 %
General & administrative
    383,339       737,852       (354,513 )     (48.05 %)
Loss from operations
    (84,097 )     (361,374 )     277,277       (76.73 %)
Other income (expense)
    14,729       (74,509 )     89,238       (119.77 %)
Provision for taxation
    -       -       -       N/A  
Net loss from continuing operations
  $ (69,368 )   $ (435,883 )   $ 366,515       (84.09 %)

Revenues

Revenues decreased by $165,150 to $819,630 for the six months ended June 30, 2014 as compared to $984,780 for the same period in 2013. The decrease in revenue was mainly due to the loss of a material sales contract valued at $120,312 in the second quarter of 2014 and the decrease of overseas promotion events revenue by $44,838 in aggregate.

Cost of sales

Cost of sales decreased by $88,336 to $498,137 for the six months ended June 30, 2014 as compared to $586,473 for the same period in 2013. The decreases were mainly due to the increase of other direct cost by $31,922 in aggregate offset by the decrease of artists fees by $120,258.
 

Gross margin

Gross margin decreased by $76,814 to $321,493 for the six months ended June 30, 2014 as compared to $398,307 for the same period in 2013. The decreases were mainly due to 1.) the loss of a single spoke person with a contract valued at $120,312 in the second quarter of 2014, 2.) a decrease of overseas promotion events revenue by $44,838 in aggregate, 3.) Increase of other direct costs by $31,922 in aggregate offset by 4.) a decrease in artists fees by $120,258.

Sales & marketing expenses

Sales & marketing expenses increased by $422 to $22,251 for the six months ended June 30, 2014 as compared to $21,829 for the same period in 2013. The sales & marketing expenses remain stable in both periods

General and administrative

The following summarizes general and administrative expenses during the six-month period ended June 30, 2014 and 2013, and provides information regarding the dollar and percentage increase / (decrease) from the six-month period ended June 30, 2013 to the six-month period ended June 30, 2014.

   
Six Months ended
June 30,
   
Increase
       
   
2014
   
2013
    (decrease)     % Change  
                         
Payroll cost
    274,574       246,427       28,147       11.42 %
Rental expenses
    51,731       59,024       (7,293 )     (12.36 %)
Legal and professional fee
    21,305       416,739       (395,434 )     (94.89 %)
Miscellaneous
    35,729       15,662       20,067       128.13 %
      383,339       737,852       (354,513 )     (48.05 %)

Payroll cost increased by $28,147 to $274,574 for the six months ended June 30, 2014 as compared to $246,427 for the same period in 2013, representing an 11.42% increase. The increase was mainly due to the salary adjustment of employees newly recruited in the first quarter of 2014.

Rental expenses decreased by $7,293 to $51,731 for six months ended June 30, 2014 as compared to $59,024 for the same period in 2013, representing a 12.36% decrease. The decrease was mainly due to rent saved by the relocation of Guangzhou office in December 2013.

Legal and professional fees decreased by $395,434 to $21,305 for the six months ended June 30, 2014 as compared to $416,739 for the same period in 2013, representing a 94.89% decrease. The decrease was mainly due to the saving of 1.) a business development consultation fee by $306,000, 2.) legal consultation fees by $18,000, 3.) legal costs relating to a convertible note by $5,000, 4.) press releasing expenses by $62,359, and 5.) legal costs related disbursement by $4,075 in aggregate.

Miscellaneous expenses increased by $20,067 to $35,729 for the six months ended June 30, 2014 as compared to $15,662 for the same period in 2013, representing a 128.13% increase. The increase was mainly due to the increase of amortization expense $20,000 and all other expenses of $67 in aggregate.

Net loss from continuing operations

Net loss from continuing operations decreased by $366,515 to a net loss of $69,368 for the six months ended June 30, 2014 as compared to $435,883 for the same period in 2013.

Liquidity and Capital Resources

Cash

Our cash balance as of June 30, 2014 was $581,350, representing a decrease of $59,033 as compared to $640,383 as of December 31, 2013.

Cash flow
 

Operating Activities

Net cash used in operating activities for the six months ended June 30, 2014 amounted to $173,648 compared to net cash provided by operating activities of $47,705 in the same period of 2013. The change of $221,641 was mainly due to a decrease of: 1.) $897,010 in trade and other payables; 2.) $61,477 in net interest payable; 3.) $154,800 in share based payment; 4.) $5,000 in gain on disposal of assets offset by a decrease of; 5.) $355,497 in net loss; 6.) $186,706 in trade and other receivables and an increase of  7.) $334,731 in unearned revenues and 8.) $20,000 in amortization expense.

Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2014 amounted to $114,615 compared to net cash used in financing activities of $364,603 in the same period of 2013. The change of $249,988 was primarily due to the net proceeds from the short term receivable $113,883 and the issuance of 73,336 shares by $732 for the six months ended March 31, 2014 in compared to the net proceeds from subscription receivable by $390,462 offset by the net repayment of convertible loan by $25,859 in the same period of 2013.

Working capital

Our net current liabilities decreased by $56,232 to $56,017 June 30, 2014 from $112,249 as of June 30, 2013.

As of June 30, 2014, the Company may need additional cash resources to operate during the upcoming 12 months, and the continuation of the Company may dependent upon the continuing financial support of investors, directors and/or stockholders of the Company. The Company intends to attempt to acquire additional operating capital through private equity offerings to the public and existing investors to fund its business plan. However, there is no assurance that equity or debt offerings will be successful in raising sufficient funds to assure the eventual profitability of the Company. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

Off-Balance Sheet Arrangements

We do not have any off balance sheet arrangements

Inflation

Inflation does not have a material impact on our business and we do not expect inflation to have an impact on our business in the near future

Currency Exchange Fluctuations

All of the Company’s revenues and a majority of its expenses in the six months ended June 30, 2014 were denominated in HKD and were converted into US dollars at the exchange rate of 7.8 to 1. There can be no assurance that HKD-to-U.S. dollar exchange rates will remain stable. A devaluation of HKD relative to the U.S. dollar would adversely affect our business, consolidated financial condition and results of operations. We do not engage in currency hedging.


Results of Continued Operations For The Years Ended December 31, 2013 And 2012.

The following  summarizes the results of our continued operations during the year ended December 31, 2013 and 2012, and provides information regarding the dollar and percentage increase or (decrease) from the year ended December 31, 2012 to the year ended December 31, 2013.

   
2013
   
2012
   
Increase (decrease)
   
% Change
 
                         
Revenue
 
$
2,310,329
   
$
1,931,005
   
$
379,324
     
19.64
%
Cost of sales
   
1,562,252
     
1,282,555
     
279,697
     
21.81
%
Gross profit
   
748,077
     
648,450
     
99,627
     
15.36
%
Sales & marketing
   
51,330
     
43,182
     
8,148
     
18.87
%
General & administrative
   
1,648,016
     
986,138
     
661,878
     
67.12
%
Loss of impairment of asset
   
15,000
     
-
     
15,000
     
100.00
%
Loss from operations
   
(966,269
)
   
(380,870
)
   
(585,399
)
   
153.70
%
Other income (expense)
   
(162,098
)
   
(50,027
)
   
(112,071
)
   
224.02
%
Provision for taxation
   
-
     
-
     
-
     
N/A
 
Net loss from continuing operations
 
$
(1,128,367
)
 
$
(430,897
)
 
$
(697,470
)
   
161.86
%
 

Revenues

Sales revenue increased by $379,324 to $2,310,329 for the year ended December 31, 2013 as compared to $1,931,005 for 2012 representing a 19.64% increase. The increase in revenue was mainly due to the increase of $454,779 by the artists’ performances in promotional events for brands and institutional customers and $8,978 by artist-related merchandising and shared profit of intellectual property rights offset by the decrease of $84,433 by the artists’ performances in TV shows.

Cost of sales

Cost of sales increased by $279,697 to $1,562,252 for the year ended December 31, 2013 as compared to $1,282,555 for 2012, representing a 21.81% increase. The increase was mainly due to the increase of artist fee by $24,040; events promotion expenses by $151,798; agency fees by $36,146; and other direct costs by $67,713.

Gross margin

Gross margin increased by $99,627 to $748,077 for the year ended December 31, 2013 as compared to $648,450 for 2012 representing a 15.36% increase. The increase was mainly due to the increase of the institutional promotion events.

Sales & marketing expenses

Sales & marketing expenses increased by $8,148 to $51,330 for the year ended December 31, 2013 as compared to $43,182 for 2012 representing an 18.87% increase. The increase was mainly due to the increase of advertising expenses by $6,090 and entertainment expenses by $12,034 offset by the decrease of travelling expenses by $9,976.

General and administrative

The following summarizes general and administrative expenses during the year ended December 31, 2013 and 2012 and provides information regarding the dollar and percentage (increase) / decrease from the year ended December 31, 2012 to the year ended December 31, 2013.

   
2013
   
2012
   
(Increase) decrease
   
%Change
 
                         
Payroll cost
   
473,495
     
471,854
     
1,641
     
0.35
%
Rental expenses
   
119,842
     
140,774
     
(20,932
)
   
(14.87
%)
Legal and professional fee
   
1,007,548
     
334,255
     
673,293
     
201.43
%
Miscellaneous
   
47,131
     
39,255
     
7,876
     
20.06
%
     
1,648,016
     
986,138
     
661,878
     
67.12
%

Payroll cost increased by $1,641 to $473,495 for the year ended December 31, 2013 as compared to $471,854 for 2012, representing a 0.35% increase. Our payroll cost remained stable in both 2012 and 2013.

Rental expenses decreased by $20,932 to $119,842 for the year ended December 31, 2013 as compared to $140,774 for 2012 representing a 14.87% decrease. The decrease was mainly due to savings from the closure of our Beijing office in September 2012.

Legal and professional fees increased by $673,293 to $1,007,548 for the year ended December 31, 2013 as compared to $334,255 for 2012 representing a 201.43% increase. The increase was mainly due to an increase of 1) a business development consultation fee of $653,900 2) legal consultation fees of $8,965 and 3) legal related disbursements of $10,428. During the year ended December 31, 2013 legal and professional fees included a non-cash expense totaling $833,900. The non-cash expenses included a business development consultation fee of $653,900, legal consultation fees of $40,000 and investor relations expenses of $140,000.

Miscellaneous expenses increased by $7,876 to $47,131 for the year ended December 31, 2013 as compared to $39,255 for 2012 representing a 20.06% increase. The increase was mainly due to the increase of accounts receivable write off of $6,434 and other general expenses by $1,442 in aggregate.

Net loss from continuing operations

Our net loss from continuing operations increased by $697,470 to a net loss of $1,128,367 for the year ended December 31, 2013 as compared to $430,807 for 2012.

Liquidity and Capital Resources

Cash

Our cash balance as of December 31, 2013 was $640,383, representing an increase of $465,722 as compared to $174,661as of December 31, 2012.

Cash flow

Operating Activities

Net cash provided by operating activities for the year ended December 31, 2013 amounted to $22,876 compared to net cash used in $108,988 in the same period of 2012. The change of $131,874 was mainly due to an increase of 1.) accrued expenses and other payables by $183,585, 2.) accrued interest expense of convertible notes by $29,168 and, 3.) prepaid expense by $4,940, offset by the increase of accounts receivable by $87,866.

Investing Activities

Net cash used in investing activities for the year ended December 31, 2013 amounted to $85,760 compared to net cash used in investing activities of $0 for 2012. The change of $85,760 was primarily due to the purchase of other assets of $115,380 offset by the repayment of a short-term loan receivable by $29,620.
 
Financing Activities

Net cash provided by financing activities for the year ended December 31, 2013 amounted to $528,606 compared to net cash provided by financing activities of $54,837 for 2012. The change of $473,767 was mainly due to an increase in settlement of subscription receivables of $474,350 offset by the decrease of net proceeds from convertible notes $6,540.

Working capital

Our net assets increased by $1,100,270 to $607,998 as of December 31, 2013 from net current liabilities of $492,272 as of December 31, 2012.

As of December 31, 2013 the Company may need additional cash resources to operate during the upcoming 12 months, and the continuation of the Company may dependent upon the continuing financial support of investors, directors and/or stockholders of the Company. The Company intends to attempt to acquire additional operating capital through private equity offerings to the public and existing investors to fund its business plan. However, there is no assurance that equity or debt offerings will be successful in raising sufficient funds to assure the eventual profitability of the Company. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

Results of Discontinued Operations For The Years Ended December 31, 2013 And 2012.

The following summarizes the results of our discontinued operations during the year ended December 31, 2013 and 2012, and provides information regarding the dollar and percentage increase or (decrease) from the year ended December 31, 2012 to the year ended December 31, 2013.

   
2013
   
2012
   
Increase (decrease)
   
% Change
 
Revenue
                       
GCM
   
524,020
     
2,238,117
     
(1,714,097
)
   
(76.59
%)
GCG
   
-
     
643,473
     
(643,473
)
   
(100.00
%)
     
524,020
     
2,881,590
     
(2,357,570
)
   
(81.81
%)
Cost of sales
                               
GCM
   
497,389
     
1,475,726
     
(978,337
)
   
(66.30
%)
GCG
   
-
     
593,818
     
(593,818
)
   
(100.00
%)
     
497,389
     
2,069,544
     
(1,572,155
)
   
(75.97
%)
Gross profit
                               
GCM
   
26,631
     
762,391
     
(735,760
)
   
(96.51
%)
GCG
   
-
     
49,655
     
(49,655
)
   
(100.00
%)
     
26,631
     
812,046
     
(785,415
)
   
(96.72
%)
General & administrative
   
501,571
     
913,409
     
(411,838
)
   
(45.09
%)
Loss from operations
   
(474,940
)
   
(101,363
)
   
(373,577
)
   
368.55
%
Other income (expense)
   
(2,304
)
   
(2,227
)
   
(77
)
   
3.46
%
Provision for taxation
   
-
     
-
     
-
     
N/A
 
   
Net (loss)/income from continuing operations
 
   
GCM
   
(473,153
)
   
(51,730
)
   
(421,423
)
   
814.66
%
GCG
   
(4,091
)
   
(51,860
)
   
47,769
     
(92.13
%)
   
$
(477,244
)
 
$
(103,590
)
 
$
(373,654
)
   
360.30
%
 
Revenues

Revenues decreased by $2,357,570 to $524,020 for the year ended December 31, 2013 as compared to $2,881,590 for 2012. The decrease was due to the decrease in revenues from our GCM and GCG operations.

Sales revenue of GCM decreased by $1,714,097 to $524,020 for the year ended December 31, 2013 as compared to $2,238,117 for 2012 representing a 76.59% decrease. The decrease in revenue was mainly due to the fact that GCM was disposed of on May 6, 2013 and therefore there were only 4 months of revenue in 2013 as compared to 12 months of revenue in 2012.

Sales revenue of GCG decreased by $643,473 to $0 for the year ended December 31, 2013 as compared to $643,473 for 2012 representing a 100.00% decrease. The decrease in revenue was due to the closure of a retail shop in December 2012.

Cost of sales

Cost of sales decreased by $1,572,155 to $497,389 for the year ended December 31, 2013 as compared to $2,069,544 for 2012. The decrease was mainly due to the decreases in cost of sales from the GCM and GCG operations.

Cost of sales of GCM decreased by $978,337 to $497,389 for the year ended December 31, 2012 as compared to$1,475,726 for 2012 representing a 66.30% decrease. The decrease was due to the disposal of GCM on May 6, 2013 and therefore there were only 4 months of cost of sales in 2013 as compared to 12 months of cost of sales in 2012.

Cost of sales of GCG decreased by $593,818 to $0 for the year ended December 31, 2013 as compared to $593,818 for 2012 representing a 100.00% decrease. The decrease in cost of sales was due to the closure of a retail shop in December 2012.
 

Gross margin

Our gross margin increased by $785,415 to $26,631 for the year ended December 31, 2013 as compared to $812,046 for 2012. The increases were mainly due to decreases of gross margin from GCM and GCG operations.

Gross margin of GCM decreased by $735,760 to $26,631 for the year ended December 31, 2013 as compared to $762,391 for 2012 representing a 96.51% decrease. The decrease was mainly due to the fact that GCM was disposed of on May 6 2013 and therefore there were only 4 months gross margin in 2013 as compared to 12 months gross margin in 2012.

Gross margin of GCG decreased by $49,655 to $0 for the year ended December 31, 2013 as compared to $49,655 for 2012 representing a 100.00% decrease. The decrease was mainly due to the closure of a retail shop in December 2012.

General and administrative

The following summarizes general and administrative expenses during the year ended December 31, 2013 and 2012, and provides information regarding the dollar and percentage (increase) / decrease from the year ended December 31, 2012 to the year ended December 31, 2013.

   
2013
   
2012
   
(Increase) decrease
   
%Change
 
                         
Payroll cost
   
463,001
     
719,992
     
(256,991
)
   
(35.69
%)
Rental expenses
   
25,640
     
127,338
     
(101,698
)
   
(79.86
%)
Legal and professional fee
   
212
     
2,050
     
(1,838
)
   
(89.66
%)
Miscellaneous
   
12,718
     
64,029
     
(51,311
)
   
(80.13
%)
     
501,571
     
913,409
     
(411,838
)
   
(45.09
%)

Payroll cost decreased by $256,991 to $463,001 for the year ended December 31, 2013 as compared to $719,992 for 2012 representing a 35.69% decrease. The decrease was mainly due to the fact that GCM and GCG were disposed of on May 6, 2013 and April 23, 2013 respectively therefore there was only a 4 month payroll cost in 2013 as compared to 12 months of payroll in 2012.

Rental expenses decreased by $101,698 to $25,640 for the year ended December 31, 2013 as compared to $127,338 for 2012 representing a 79.86% decrease. The decrease was mainly due to the fact that GCM and GCG were disposed on May 6, 2013 and April 23, 2013 respectively therefore there were only 4 months of rental expense in 2013 as compared to 12 months of rental expenses in 2012.

Miscellaneous expenses decreased by $55,765 to $12,718 for the year ended December 31, 2013 as compared to $64,029 for 2012 representing an 80.13% decrease. The decrease was mainly due to the fact that GCM and GCG were disposed on May 6, 2013 and April 23, 2013 respectively therefore there were only 4 months miscellaneous expense in 2013 as compared to 12 months of miscellaneous expenses in 2012.

Net loss from discontinued operations

The net loss from discontinued operations decreased by $373,564 to a net loss of $477,244 for the year ended December 31, 2013 as compared to $103,590 for 2012.

Off-Balance Sheet Arrangements

We do not have any off balance sheet arrangements
 
Inflation

Inflation has not had a material impact on our business and we do not expect inflation to have an impact on our business in the near future.
 


The following tables set forth certain information as of July 31, 2014 regarding the beneficial ownership of our Common Stock, by (i) each person or entity who, to our knowledge, owns more than 5% of our Common Stock; (ii) our executive officers; (iii) each director; and (iv) all of our executive officers and directors as a group.

Unless otherwise indicated in the footnotes to the following table, each person named in the table has sole voting and investment power. Shares of Common Stock subject to options, warrants, or other rights currently exercisable or exercisable within 60 days of July 31, 2014, are deemed to be beneficially owned and outstanding for computing the share ownership and percentage of the stockholder holding such options, warrants or other rights, but are not deemed outstanding for computing the percentage of any other stockholder.

Beneficial Ownership
 
Name and Address of Beneficial Owner
Shares Beneficially Owned
Percentage Total Voting Power1
Kwong Kwan Yin Roy
10,305,932
39.68%
Wong Wing Fung Charlie
10,000,000
38.50%
Total Officers and Directors as a Group
20,305,932
78.18%
Holders of 5% or more of our Common Stock
   
1 Based upon 25,974,317 shares of our Common Stock outstanding.
   


At the present time Kwong Kwan Yin Roy is the sole executive that receives cash compensation for his services. We do not have an employment agreement with Mr. Kwan or Mr. Wong. The following table sets forth information concerning the annual and long-term compensation of our Officers and Directors, and the most highly compensated employee and/or executive Officers.  The listed individuals shall be hereinafter referred to as the "Named Executive Officer."

Summary Compensation
 
Name and principal position
Year
Salary
($)
Bonus
($)
Stock Awards
($)
Option Awards
($)
Non-Equity Incentive Plan Compensation ($)
Non-Qualified Deferred Compensation Earnings
($)
All Other Compensation
($)
Total
($)
Kwong Kwan Yin Roy1
2014
51,536
-0-
-0-
-0-
-0-
-0-
-0-
51,536
Yum Ka Yan1
2014
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
Wong Wing Fung Charlie1
2014
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
Kwong Kwan Yin Roy
2013
70,766
-0-
-0-
-0-
-0-
-0-
32,3062
103,072
Yum Ka Yan
2013
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
Wong Wing Fung Charlie
2013
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
Kwong Kwan Yin Roy
2012
70,766
-0-
-0-
-0-
-0-
-0-
32,3062
103,072
Yum Ka Yan
2012
0
0
0
0
0
0
0
0
Wong Wing Fung Charlie
2012
-0-
-0-
-0-
-0-
-0-
-0-
-0-
-0-
1 There is no employment contract with any of our Executive Officers and Directors.   
2  The  “All Other Compensation” for Kwong Kwan Yin Roy is a housing allowance.

Outstanding equity awards for 2013

There are no outstanding equity awards as of the fiscal year ended December 31, 2013.


Compensation Committee Interlocks and Insider Participation

We do not have a standing compensation committee.  Mr. Kwong, Ms. Yum and Mr. Wong have their compensation determined by the Board of Directors.  There are no compensation committee interlocks to disclose.

Compensation of Directors

Pursuant to our By Laws, Directors will not be compensated for their services in their capacity as directors. If and when the Company has net profits, after all expenses are paid prior to any income tax being considered, director compensation for actual attendance at each regular or special meeting of the Board may be authorized. At this time, Directors are not paid for meetings attended.  All travel and lodging expenses associated with corporate matters are reimbursed by us, if and when incurred.

As of the fiscal year ended December 31, 2014, our Directors had received no compensation. Our Directors will not be compensated for their services in their capacity as directors, but may, by resolution of the board, be paid a fixed sum and expenses for actual attendance at each regular or special meeting of the Board.  At this time, Directors’ meeting expenses are not paid.  In the future, such payment will be revisited as the Company’s performance and income improves.  There can be no guarantee that we will ever have profits from which our Directors may receive payment.


In addition to the transactions detailed elsewhere in these financial statements, the Company and its subsidiaries entered into the following material transactions with the related parties for the year ended December 31, 2013:
 
   
2013
   
2012
 
             
From discontinuing operations
               
China Culture Limited
               
Rental charges paid by Company for offices premises
 
$
25,640
   
$
92,305
 
 
China Culture Limited is a related party as it is a company owned by Mr. Chan Wing Hing, a former director that resigned on April 30, 2013.
 
In the opinion of our directors the above transaction was entered into by the company in the normal course of business.


In April, 2012, the Jumpstart Our Business Startups Act ("JOBS Act") was enacted into law. The JOBS Act provides, among other things:

Exemptions for emerging growth companies from certain financial disclosure and governance requirements for up to five years and provides a new form of financing to small companies;

Amendments to certain provisions of the federal securities laws to simplify the sale of securities and increase the threshold number of record holders required to trigger the reporting requirements of the Securities Exchange Act of 1934;

Relaxation of the general solicitation and general advertising prohibition for Rule 506 offerings;

Adoption of a new exemption for public offerings of securities in amounts not exceeding $50 million; and

Exemption from registration by a non-reporting company of offers and sales of securities of up to $1,000,000 that comply with rules to be adopted by the SEC pursuant to Section 4(6) of the Securities Act and exemption of such sales from state law registration, documentation or offering requirements.

In general, under the JOBS Act a company is an emerging growth company if its initial public offering ("IPO") of common equity securities was effected after December 8, 2011 and the company had less than $1 billion of total annual gross revenues during its last completed fiscal year. A company will no longer qualify as an emerging growth company after the earliest of

 
(i)
the completion of the fiscal year in which the company has total annual gross revenues of $1 billion or more,
 
 
 
(ii)
the completion of the fiscal year of the fifth anniversary of the company's IPO;
 
        (iii)
the company's issuance of more than $1 billion in nonconvertible debt in the prior three-year period, or

        (iv)
the company becoming a "larger accelerated filer" as defined under the Securities Exchange Act of 1934.

The JOBS Act provides additional new guidelines and exemptions for non-reporting companies and for non-public offerings. Those exemptions that impact the Company are discussed below.

Financial Disclosure. The financial disclosure in a registration statement filed by an emerging growth company pursuant to the Securities Act of 1933 will differ from registration statements filed by other companies as follows:

 
(i)
audited financial statements required for only two fiscal years;

 
(ii)
selected financial data required for only the fiscal years that were audited;

       (iii)
executive compensation only needs to be presented in the limited format now required for smaller reporting companies. (A smaller reporting company is one with a public float of less than $75 million as of the last day of its most recently completed second fiscal quarter)

However, the requirements for financial disclosure provided by Regulation S-K promulgated by the Rules and Regulations of the SEC already provide certain of these exemptions for smaller reporting companies. The Company is a smaller reporting company. Currently a smaller reporting company is not required to file as part of its registration statement selected financial data and only needs audited financial statements for its two most current fiscal years and no tabular disclosure of contractual obligations.
 
The JOBS Act also exempts the Company's independent registered public accounting firm from complying with any rules adopted by the Public Company Accounting Oversight Board ("PCAOB") after the date of the JOBS Act's enactment, except as otherwise required by SEC rule.

The JOBS Act also exempts an emerging growth company from any requirement adopted by the PCAOB for mandatory rotation of the Company's accounting firm or for a supplemental auditor report about the audit.

Internal Control Attestation. The JOBS Act also provides an exemption from the requirement of the Company's independent registered public accounting firm to file a report on the Company's internal control over financial reporting, although management of the Company is still required to file its report on the adequacy of the Company's internal control over financial reporting. Section 102(a) of the JOBS Act exempts emerging growth companies from the requirements in §14A(e) of the Securities Exchange Act of 1934 for companies with a class of securities registered under the 1934 Act to hold shareholder votes for executive compensation and golden parachutes.

Other Items of the JOBS Act. The JOBS Act also provides that an emerging growth company can communicate with potential investors that are qualified institutional buyers or institutions that are accredited to determine interest in a contemplated offering either prior to or after the date of filing the respective registration statement. The Act also permits research reports by a broker or dealer about an emerging growth company regardless if such report provides sufficient information for an investment decision. In addition the JOBS Act precludes the SEC and FINRA from adopting certain restrictive rules or regulations regarding brokers, dealers and potential investors, communications with management and distribution of a research reports on the emerging growth company IPO.

Section 106 of the JOBS Act permits emerging growth companies to submit 1933 Act registration statements on a confidential basis provided that the registration statement and all amendments are publicly filed at least 21 days before the issuer conducts any road show. This is intended to allow the emerging growth company to explore the IPO option without disclosing to the market the fact that it is seeking to go public or disclosing the information contained in its registration statement until the company is ready to conduct a roadshow.

Election to Opt Out of Transition Period. Section 102(b) (1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a 1933 Act registration statement declared effective or do not have a class of securities registered under the 1934 Act) are required to comply with the new or revised financial accounting standard.
 

The JOBS Act provides a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of the transition period pursuant to Section 107(b).

FOR SECURITIES ACT LIABILITIES
 
Our Articles of Incorporation do include a provision for indemnifying a director, officer or control person of the corporation or its stockholders for any liability asserted against him and liability and expenses incurred by him in his capacity as a director, officer, employee or agent, or arising out of his status as such.
 
Our By-Laws, Article XIV, Section 3, permit us to indemnify any director, officer, agent or employee as to those liabilities and on those terms and conditions as appropriate and to purchase and maintain insurance on behalf of any such persons whether or not the corporation would have the power to indemnify such person against the liability insured against.
 
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, and controlling persons of Great China Mania Holdings, Inc., pursuant to the foregoing provisions, we have been informed that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is unenforceable.

 
Market for Common Equity and Related Shareholder Matters
 
Our common stock is quoted on the Over-the-Counter Bulletin Market under the symbol “GMEC.OB”. The table below sets forth the high and low prices for the Company’s Common Stock for the quarters included within 2012 and 2013. Quotations reflect inter-dealer prices, without retail mark-up, mark-down commission, and may not represent actual transactions. Since the Company's common stock trades sporadically, there is not an established active public market for its common stock. No assurance can be given that an active market will exist for the Company's common stock and the Company does not expect to declare dividends in the foreseeable future since the Company intends to utilize its earnings, if any, to finance its future growth, including possible acquisitions.  The following table shows our high and low sales for each of the quarters for the full years 2012 and 2013 and the first and second quarters of 2014.  The company had a reverse stock split of 1:20 on January 7, 2014.  We have presented the table so that the stock split price is shown retroactive as well as the actual market price for the years 2012 and 2013.
 
Table 2.0
Year
Quarter
High
Low
Retroactive
High
Low
2012
First
0.45
0.04
First Quarter
9.00
0.80
2012
Second
0.65
0.15
Second Quarter
13.00
3.00
2012
Third
0.40
0.10
Third Quarter
8.00
2.00
2012
Fourth
0.37
0.04
Fourth Quarter
7.40
0.80
2013
First
0.11
0.02
First Quarter
2.20
0.40
2013
Second
0.08
0.01
Second Quarter
1.60
0.20
2013
Third
0.09
0.05
Third Quarter
1.80
1.00
2013
Fourth
0.07
0.05
Fourth Quarter
1.40
1.00
2014
First
1.35
0.97
First Quarter
1.35
0.97
2014
Second
1.00
0.49
Second Quarter
1.00
0.49


We are not presently a party to any material litigation, nor to the knowledge of management is any litigation threatened against us, which may materially affect us.  We have settled the civil lawsuit naming Great China Mania Holdings, Inc. as a defendant in the action CMF Investments Inc. v Huang Jian Nan and Great China Mania Holdings, Inc.  The suit was filed in the United States District Court for the Southern District Case No. 12 CV 7008 in an action arising from a dispute between Huang Jian Nan and CMF Investments Inc. on a stock purchase agreement.  We settled this matter for $65,000 on October 20, 2013.


 
Certain of the financial statements of Great China Mania Holdings, Inc. included in this prospectus and elsewhere in the registration statement, to the extent and for the periods indicated in their reports, have been audited or reviewed by DKM Certified Public Accountants, independent certified public accountant, whose reports thereon appear elsewhere herein and in the registration statement.
 
Harrison Law, P.A., Parrish, Florida, will pass upon the validity of the issuance of the securities offered by this prospectus.  The fees for said service are being paid in cash and not on a contingent basis.


We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed by us in reports that we file under the Exchange Act is recorded, processed, summarized and reported as specified in the SEC’s rules and forms and that such information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and our Principal Accounting Officer, to allow timely decisions regarding required disclosure. Management, with the participation of our Chief Executive Officer, Chief Financial Officer, and Principal Accounting Officer, performed an evaluation of the effectiveness of our disclosure controls and procedures as of December 31, 2013. Our management, including our Chief Executive Officer, Chief Financial Officer, and Principal Accounting Officer, concluded that our disclosure controls and procedures were not effective as of December 31, 2013.


Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f).  Under the supervision and with the participation of our management, including our chief executive officer, chief financial officer, and principal accounting officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. In connection with management's assessment of our internal control over financial reporting, we identified the following material weakness in our internal control over financial reporting as of December 31, 2013:
 
 
1.
Insufficient accounting personnel with the appropriate level of accounting knowledge, experience and training in the application of accounting principles generally accepted in the United States commensurate with financial statement reporting requirements.
 
As a result, we have concluded that our internal controls over financial reporting are not effective as of December 31, 2013.
 
Remediation of Material Weakness in Internal Control

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can only provide reasonable assurances with respect to financial statement preparation and presentation. In addition, any evaluation of effectiveness for future periods is subject to the risk that controls may become inadequate because of changes in conditions in the future.

Our annual report did not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in our annual report.

To remediate the material weakness surrounding this, we have performed and are continuing to perform, among others, the following actions:

additional training of our accounting personnel by our independent accountants of the proper format and compilation of data for US GAAP financial statements; and
additional coordination with our local accountants and auditors to strengthen our controls in an attempt to supplement the additional training of our employees.
 
 
Changes in Internal Control over Financial Reporting
 
There were no significant changes made in our internal controls over financial reporting during the year ended December 31, 2013 that have materially affected or are reasonably likely to materially affect these controls. Thus, no corrective actions with regard to significant deficiencies or material weaknesses were necessary.

 
We will be subject to the informational requirements of the Securities Exchange Act of 1934, and in accordance therewith files reports, or information statements and other information with the Securities and Exchange Commission. Such reports and other information can be inspected and copied at the public reference facilities maintained by the Commission at 100 F Street N. E., Washington, D.C. 20549, at prescribed rates. In addition, the Commission maintains a web site that contains reports, proxy and information statements, and other information regarding registrants that file electronically with the Commission. The address of the Commission’s web site is http://www.sec.gov.
 
Great China Mania Holdings, Inc. has filed with the Commission a registration statement on Form S-1 under the Securities Act of 1933 with respect to the common stock being offered hereby. As permitted by the rules and regulations of the Commission, this prospectus does not contain all the information set forth in the registration statement and the exhibits and schedules thereto, but does include the material provisions, if any, of any contract or document filed as an exhibit or schedule. For further information with respect to Great China Mania Holdings, Inc., and the common stock offered hereby, reference is made to the registration statement, and such exhibits and schedules. A copy of the registration statement, and the exhibits and schedules thereto, may be inspected without charge at the public reference facilities maintained by the Commission at the addresses set forth above, and copies of all or any part of the registration statement may be obtained from such service fleets upon payment of the fees prescribed by the Commission. In addition, the registration statement may be accessed at the Commission’s web site. Statements contained in this prospectus as to the contents of any contract or other document are not necessarily complete within the Form S-1 and, in each instance, reference is made to the copy of such contract or document filed as an additional exhibit to the registration statement filed with the Securities and Exchange Commission, each such statement being qualified in all respects by such reference. 

We also maintain a website at www.greatchinamania.com, through which you can access our SEC filings. The information set forth on, or accessible from, our website is not part of this prospectus.

 
34

 

CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2014

 


 
F-1

 

 
 
 
2451 N. McMullen Booth Road
Suite.308
Clearwater, FL 33759
 
: 855.334.0934 Toll free
 
 
 

To the Board of Directors and
Stockholders of Great China Mania Holdings, Inc.

We have reviewed the accompanying balance sheets of Great China Mania Holdings, Inc. as of June 30, 2014, and the related statements of operations and retained earnings, and cash flows for the six months ended June 30, 2014 and 2013. These financial statements are the responsibility of the company’s management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying financial statements, the Company has significant net losses and cash flow deficiencies. Those conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding those matters are described in Note 14. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.


/s/ DKM Certified Public Accountants

DKM Certified Public Accountants
Clearwater, Florida
August 6, 2014

 
F-2

 
 
 
GREAT CHINA MANIA HOLDINGS, INC. AND SUBSIDIARIES

   
June 30, 2014
(Unaudited)
   
December 31,
2013
 (Audited)
 
ASSETS
           
CURRENT ASSETS
           
Cash and cash equivalents
  $ 581,350     $ 640,383  
Accounts receivable
    125,841       288,195  
Short term loan receivable
    -       113,883  
Prepaid expenses and other receivables
    254,939       185,235  
Assets held for disposal
    -       495,000  
                 
Total current assets
    962,130       1,722,696  
Property, plant and equipment
    -       -  
Intangible asset
    180,000       -  
Other assets
    115,380       115,380  
                 
TOTAL ASSETS
  $ 1,257,510     $ 1,838,076  
                 
LIABILITIES AND EQUITY
               
LIABILITIES
               
CURRENT LIABILITIES
               
Accounts payable
    377,032       759,126  
Accrued expenses and other payables
    21,087       183,874  
Unearned revenue
    468,348       123,648  
Short-term borrowings
    63,347       64,079  
Convertible note payable
    88,333       99,351  
Total current liabilities
    1,018,147       1,230,078  
                 
LONG-TERM LIABILITIES
               
Long-term Convertible note
    31,301       31,301  
      31,301       31,301  
                 
TOTAL LIABILITIES
  $ 1,049,448     $ 1,261,379  
                 
SHAREHOLDERS’ EQUITY
               
Common stock, par value $0.01; 375,000,000 shares authorized; 25,193,357 and 5,619,926 shares issued and outstanding as of June 30, 2014 and December 31, 2013, respectively
    251,932       56,199  
Additional paid in capital
    9,414,359       9,909,359  
Accumulated deficits
    (9,459,721 )     (9,390,353 )
Accumulated other comprehensive income
    1,492       1,492  
                 
TOTAL SHAREHOLDERS’ EQUITY
    208,062       576,697  
                 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
  $ 1,257,510     $ 1,838,076  

See accompanying notes to condensed consolidated financial statements.


AND COMPREHENSIVE INCOME (UNAUDITED)

   
Three months ended June 30,
   
Six months ended June 30,
 
   
2014
   
2013
   
2014
   
2013
 
CONTINUING OPERATIONS
                       
REVENUES
  $ 531,820     $ 613,389     $ 819,630     $ 984,780  
                                 
COST OF SALES
    336,655       418,204       498,137       586,473  
                                 
GROSS PROFIT
    195,165       195,185       321,493       398,307  
                                 
EXPENSES
                               
Sales & marketing expenses
    11,240       8,409       22,251       21,829  
General and administrative
    178,787       452,023       383,339       737,852  
TOTAL OPERATING EXPENSES
    190,027       460,432       405,590       759,681  
                                 
INCOME/(LOSS) FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES
    5,138       (265,247 )     (84,097 )     (361,374 )
                                 
OTHER INCOME/(EXPENSE)
                               
Other income
    26,379       2,979       26,966       5,193  
Interest expense
    -       (33,476 )     -       (65,722 )
Other expenses
    (900 )     (7,828 )     (12,237 )     (13,980 )
TOTAL OTHER EXPENSE
    25,479       (38,325 )     14,729       (74,509 )
                                 
NET LOSS BEFORE PROVISION FOR INCOME TAXES
    30,617       (303,572 )     (69,368 )     (435,883 )
                                 
PROVISION FOR INCOME TAXES
    -       -       -       -  
                                 
NET INCOME / (LOSS) FROM CONTINUING OPERATIONS
  $ 30,617     $ (303,572 )   $ (69,368 )   $ (435,883 )
                                 
DISCONTINUED OPERATIONS
                               
Net loss
    -       (328,017 )     -       (501,965 )
Gain on disposal of discontinued operations
    -       697,649       -       697,649  
                                 
NET INCOME / (LOSS) FROM DISCONTINUED OPERATIONS
  $ -     $ 369,632     $ -     $ 195,684  
                                 
NET INCOME / (LOSS) FOR THE PERIOD
  $ 30,617     $ 66,060     $ (69,368 )   $ (240,199 )
                                 
OTHER COMPREHENSIVE INCOME
    -       -       -       -  
                                 
TOTAL COMPREHENSIVE INCOME / (LOSS) FOR THE PERIOD
                               
Arising from continuing operations
    30,617       (303,572 )     (69,368 )     (435,883 )
Arising from discontinued operations
    -       369,632       -       195,684  
    $ 30,617     $ 66,060     $ (69,368 )   $ (240,199 )
BASIC INCOME / LOSS PER SHARE – CONTINUING OPERATIONS
  $ (0.00 )   $ (0.00 )   $ (0.00 )     (0.00 )
                                 
BASIC WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
    25,660,390       3,483,800       23,892,480       3,483,800  
                                 
DILUTED INCOME / LOSS PER SHARE – CONTINUING OPERATIONS
  $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )
                                 
DILUTED WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
    26,111,068       3,483,800       23,892,480       3,483,800  
 
See accompanying notes to condensed consolidated financial statements.



   
For the six months ended June 30,
 
   
2014
   
2013
 
Cash flows from operating activities
           
Net loss from continuing operations
  $ (69,368 )   $ (435,883 )
Amortization of discount on Convertible Note
    -       36,707  
Amortization of intangible asset
    20,000       -  
Net gain on asset hold for disposal
    (5,000 )     -  
Gain on conversion of debt notes into shares
    (11,018 )     -  
Accrued interest expense
    -       29,015  
Share based payments
    -       154,800  
Changes in operating assets and liabilities:
               
Decrease / (Increase) in accounts receivable
    162,354       (59,287 )
Increase in prepaid expenses and other receivables
    (69,704 )     (39,014 )
(Decrease) / Increase in accounts payable
    (382,094 )     167,865  
Increase in unearned revenue
    344,700       9,969  
Increase / (Decrease) in accrued expenses and other payables
    (163,518 )     183,533  
Net cash provided by continuing operating activities
    (173,648 )     47,705  
Net cash used in discontinued operating activities
    -       (370,745 )
Net cash (used in) / provided by operating activities
    (173,648 )     (323,040 )
                 
Cash flows from investing activities
               
Net cash used in continuing investing activities
    -       -  
Net cash used in discontinued investing activities
    -       (1,282 )
Net cash used in investing activities
    -       (1,282 )
                 
Cash flows from financing activities
               
Decrease in subscription receivable
    -       390,462  
Proceed from short-term loan receivable
    113,883       -  
Issuance of convertible note
    -       100,000  
Issuance of shares capital
    732       -  
Repayment of convertible note
    -       (125,859 )
Net cash provided by / (used in) continuing financing activities
    114,615       364,603  
Net cash provided by / (used in) discontinued financing activities
    -       327,915  
Net cash provided by / (used in) financing activities
    114,615       692,518  
                 
Net increase / (decrease) in cash and cash equivalents
               
Continuing operations
    (59,033 )     412,308  
Discontinued operations
    -       (44,112 )
      (59,033 )     368,196  
Cash and cash equivalents at beginning of period
               
Continuing operations
    640,383       174,661  
Discontinued operations
    -       44,112  
      640,383       218,773  
Cash and cash equivalents at end of period
               
Continuing operations
    581,350       586,969  
Discontinued operations
    -       -  
    $ 581,350     $ 586,969  
Supplemental disclosure of cash flows information:
               
Non cash financing activities:
               
Conversion of debt to shares
  $       $ 128,965  
Shares cancelled for disposal of asset
    (500,000 )     (54,000 )
Issuance of shares for acquisition of asset
    200,000       -  

See accompanying notes to condensed consolidated financial statements.


GREAT CHINA MANIA HOLDINGS, INC. AND SUBSIDIARIES
JUNE 30, 2014

NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES

Great China Mania Holdings, Inc. (“GMEC” or the “Company”) was incorporated in Florida on July 8, 1983 and adopted the current name on March 16, 2011. In February 2011, the Company formed a subsidiary GME Holdings Limited (“GMEH”)  that specialized in artist and project management services operation. In June 2011, the Company formed another subsidiary GMEC Ventures Limited (“GMEV”), a Hong Kong company, and maintained for holding future investment if any. In January 2014, the Company formed another subsidiary GME Distribution Workshop Limited (“GMED”), a Hong Kong company, and specialized in distribution of movies. The company held those subsidiaries though a wholly-owned BVI companies known as Super China Global Limited (SCGL).

On May 21, 2014, the Company entered into a letter of intent with Concept X Limited (“Concept X”) for the proposed acquisition of its 100% equity interest. The closing of this proposed acquisition is subject to the Company’s due diligence review, audit review and the signing of definitive agreement.

NOTE 2 – PRINCIPLES OF CONSOLIDATION

The unaudited interim financial statements of the Company and the Company’s subsidiaries (see Note 1) for the three and six months ended June 30, 2014 and 2013 have been prepared pursuant to the rules & regulations of the SEC. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the following disclosures are adequate to make the information presented not misleading.  All significant intercompany balances and transactions have been eliminated. The functional currency for the majority of the Company’s operations is the Hong Kong Dollar (HKD) for three and six months ended June 30, 2014 and 2013, while the reporting currency is the US Dollar.

In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments, consisting only of normal recurring accruals, necessary for a fair presentation of the Company’s financial position as of June 30, 2014, the results of its operations and cash flows for the three and six months ended for June 30, 2014 and 2013.

The results of operations for the three and six months ended June 30, 2014 are not necessarily indicative of the results for a full year period.

The accompanying unaudited consolidated financial statements and the following notes should be read in conjunction with the audited consolidated financial statements and the notes thereto in the Company’s Form 10-K for the year ended December 31, 2013.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)
Economic and political risk

The Company’s continuing operations are conducted in Hong Kong. Accordingly, the political, economic, and legal environments in Hong Kong may influence the Company’s business, financial condition, and results of operations.

The Company’s major operations in Hong Kong are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic, and legal environment. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, and rates and methods of taxation, among other things.

(b)
Cash and cash equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.  The Company’s continued operations maintain bank accounts in Hong Kong. The Company’s discontinued operations maintain bank accounts in Hong Kong.
 
 
GREAT CHINA MANIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 2014 (CONTINUED)
(c)      Income tax

Income taxes are based on pre-tax financial accounting income. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. The Company periodically assesses the need to establish valuation allowances against its deferred tax assets to the extent the Company no longer believes it is more likely than not that the tax assets will be fully utilized.

The Company evaluates a tax position to determine whether it is more likely than not that the tax position will be sustained upon examination, based upon the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is subject to a measurement assessment to determine the amount of benefit to recognize and the appropriate reserve to establish, if any. If a tax position does not meet the more-likely-than-not recognition threshold, no benefit is recognized.

In accordance with the relevant tax laws and regulations of Hong Kong, the applicable corporation income tax rate was 16.5% on assessable profits, if any, for the three and six months ended June 30, 2014 and 2013, respectively.

(d)      Fair value of financial instruments

The Company’s financial instruments primarily consist of cash and cash equivalents, amount due from a related company, prepaid expenses and other receivables, accounts payable, accrued expenses and other payables, receipt in advance, taxes payable and amount due to a related party.

The estimated fair value amounts have been determined by the Company, using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange.

As of the balance sheet dates, the estimated fair values of the financial instruments were not materially different from their carrying values as presented, due to the short maturities of these instruments and the fact that the interest rates on the borrowings approximate those that would have been available for loans of similar remaining maturity and risk profiles at respective year ends.

(e)      Revenue recognition

Revenue represents the invoiced value of goods sold or services rendered during the year, net of sales discounts and returns. Generally revenue is recognized when all of the following criteria are met:

-
Persuasive evidence of an arrangement exists,
-
Delivery has occurred or services have been rendered,
-
The seller’s price to the buyer is fixed or determinable, and
-
Collectability is reasonably assured

Revenue recognition policies for each of the major products and services of continuing operations are illustrated as follows:
 (i)
Revenue from provision of artist management, event management, and promotion for its clients is recognized when services are rendered.
(ii)
Revenue from artist-related merchandising is recognized when receipt is confirmed by clients according to the relating predetermined agreements.
(iii)
Revenue from intellectual property rights on CD, DVD and video products is recognized upon delivery of products to customers.

 
(f)
Earnings per share

Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional
 
 
GREAT CHINA MANIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 2014 (CONTINUED)
common shares were dilutive. As of June 30, 2014 and 2013, there were 450,678 shares and 0 shares of dilutive securities outstanding separately.

(g)      Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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. Actual results may differ from those estimates.

(h)      Comprehensive income

Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other financial statements.  Comprehensive income includes net income and the foreign currency translation gain, net of tax.

(i)      Foreign currency translation

The accompanying consolidated financial statements are presented in United States Dollars (US$). The functional currency of the Company is Hong Kong Dollar (HKD). Capital accounts of the consolidated financial statements are translated into United States dollars from HKD at their historical exchange rates when the capital transactions occurred. Assets and liabilities are translated at the exchange rates as of balance sheet date. Income and expenditures are translated at the average exchange rate of the period. The translation rates are as follows:

   
June 30, 2014
   
December 31, 2013
   
June 30, 2013
 
                   
Period end HKD : US$ exchange rate
    0.1282       0.1282       0.1282  
Average for the period HKD : US$ exchange rate
    0.1282       0.1282       0.1282  

(j)      Recent accounting pronouncements

The Company reviews new accounting standards as issued. No new standards had any material effect on these financial statements. The accounting pronouncements issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these consolidated financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these consolidated financial statements as presented and does not anticipate the need for any future restatement of these consolidated financial statements because of the retro-active application of any accounting pronouncements issued subsequent to June 30, 2014 through the date these financial statements were issued.

NOTE 4 – SHORT-TERM LOAN RECEIVABLE

On May 2, 2014, the short term loan to a third party was fully repaid in cash. This short term loan was bearing interest at 6% per annum with no fixed payment terms. Interest income in conjunction with this short term loan for the six months ended June 30, 2014 and 2013 was $561 and $4,246, respectively.
 
 
GREAT CHINA MANIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 2014 (CONTINUED)
NOTE 5  – DEPOSITS, PREPAID EXPENSES AND OTHER RECEIVABLES

As of June 30, 2014, the Company’s deposits, prepaid expenses and other receivables are summarized as follows:
   
June 30, 2014
   
December 31, 2013
 
             
Prepaid expenses
    181,668       108,779  
Other receivables
    70,665       70,665  
Deposits paid
    2,606       5,791  
Total deposits, prepaid expenses and other receivables
  $ 254,939     $ 185,235  
 
NOTE 6 – PROPERTY, PLANT AND EQUIPMENT

As of June 30, 2014, the Company’s property, plant and equipment are summarized as follows:

   
June 30,2014
   
December 31, 2013
 
At cost:
           
Computer
    9,989       9,989  
Less: Accumulated depreciation
    9,989       9,989  
Property, plant and equipment, net
  $ -     $ -  

No depreciation expense attributable to the property, plant and equipment of both continuing operations and discontinued operations for the six months ended June 30, 2014 and 2013 respectively.

NOTE 7 – INTANGIBLE ASSET

As of June 30, 2014, the Company’s intangible asset is summarized as follows:

   
March 31,2014
   
December 31, 2013
 
At cost:
           
Movie and entertainment distribution agreements
    200,000       -  
Less: Accumulated amortization
    (20,000 )     -  
Intangible asset, net
  $ 180,000     $ -  

On January 14, 2014, the Company purchased certain overseas movie and entertainment distribution agreements with a consideration of 20,000,000 shares of restricted common stock to a non affiliate individual. This contractual interest stated at par value of $0.01 and valued at $200,000. No impairment loss was recognized for the six months ended June 30, 2014. Amortization expense attributable to the intangible asset of continuing operations for the six months ended June 30, 2014 and 2013 was $20,000 and $0 respectively.

NOTE 8 – OTHER ASSET

The Company acquired a 4.5% entity interest of a restaurant that operated in Hong Kong by a non affiliate corporation with a cash consideration of $115,380 on September 25, 2013. This entity interest stated at cost and no impairment losses was recognized for the six months ended June 30, 2014.

NOTE 9 – ASSET HOLD FOR DISPOSAL

On June 25, 2013, the Company cancelled 500,000 shares of the Company common stock from a non affiliate shareholder to reverse a licensing right granted. A gain of $5,000 was recorded for the six month ended June 30, 2014.
 
 
GREAT CHINA MANIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 2014 (CONTINUED)

NOTE 10 – SHORT TERM BORROWINGS

The short-term borrowings are unsecured, interest free advances from a non affiliate individual with no fixed repayment term. On July 7, 2014, the Company converted a total of $63,096 short term borrowings into 630,960 shares of common stock of the Company.

NOTE 11 – UNEARNED REVENUE

As of June 30, 2014, the Company’s unearned revenue is summarized as follows:

   
June 30, 2014
   
December 31, 2013
 
             
Receipt in advance for future artist performance
    465,829       113,425  
Presales of artist related merchandise
    2,519       10,223  
Total unearned revenue
  $ 468,348     $ 123,648  

 
No amortization expense attributable to the unearned revenue of continuing operations for the six months ended June 30, 2014 and 2013 respectively.

NOTE 12  – CONVERTIBLE NOTES

On June 1, 2011, the Company issued a non-interest bearing convertible note in the amount of $256,400 ( “Note 1”) to a third party note holder (“Holder 1”),which matures on May 31, 2016. On September 30, 2011, the first installment of $128,200 was received. Note 1 bears a call back option exercisable by Holder 1 on the unused portion of Note 1 after 12 months from the date of Note 1. Note 1 can be converted into common stock of the Company by Holder 1 under certain conditions. During the year, a total of $0 was repaid by the Company. As of December 31, 2013, Note 1 did not qualify to be converted under those conditions and is therefore not dilutive.

On April 22, 2013, the Company issued another 12% convertible note in the amount of $50,000 (“Note 6”) to Holder 3. Note 6 matured on January 22, 2014 and was fully received on June 14, 2013. The outstanding principal balance plus any accrued interest under Note 6 is convertible into common stock of the Company after 180 days from the date of issued with a 40% discount over the convertible price upon the option of Holder 3. The conversion price is determined by the average prices of the 5 days prior to the Conversion Date. As of June 30, 2014, fair value adjustment on option amounted to $35,333 and unamortized debt discount amount to $0. Debt discount is being amortized using effective interest method over the life of Note 6. For the six months ended June 30, 2014, the amortization of debt discount of $0 was charged to Statement of Operations. Accrued interest expense of Note 6 for the six months ended June 30, 2014 was $0. As of June 30, 2014, Note 6 qualified to be converted 450,678 shares of common stock under the conditions of Note 6 and is therefore dilutive.

Total interest expense in connection with other fully repaid convertible notes for the six months ended June 30, 2014 and 2013 were $0 and $27,865 respectively.

The convertible notes as of the balance sheet date are summarized as follows:

   
June 30, 2014
   
December 31, 2013
 
Noncurrent liabilities:
           
Non-interest bearing convertible note
  $ 31,301     $ 31,301  
                 
Current liabilities:
               
12% convertible note 5, net
    -       11,018  
12% convertible note 6, net (including fair value adjustment on option $ 35,333, accrued interest expense $3,000)
    88,333       88,333  
      88,333       99,351  
                 
Total note outstanding
  $ 119,634     $ 130,652  
 
 
GREAT CHINA MANIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 2014 (CONTINUED)
NOTE 13 – COMMON STOCK ANDWEIGHTED AVERAGE NUMBER OF SHARES FOR EARNINGS PER SHARE CALCULATION

On January 7, 2014 the Company issued 95 shares of common stock to round up the variance raised form the reverse split executed.

On January 12, 2014 the Company issued 39,721 shares of common stock at the par value of $0.01 for a cash consideration of $397.

On January 17, 2014 the Company issued 20,000,000 shares of common stock to pursuant to an Agreement valued $200,000 with C&M Film Workshop Limited.

On March 17, 2014 the Company issued 33,615 shares of common stock at the par value of $0.01 for a cash consideration of $335.

On June 25, 2014, the Company cancelled 500,000 shares of common stock from a non affiliate shareholder in exchange of an asset held for disposal.

The calculation of common stock as at June 30, 2014 and weighted average number of shares for the six months ended June 30, 2014 is illustrated as follows:
 
   
Number
of shares
   
Weighted average number of shares
 
             
Issued and outstanding as of January 1, 2014
    5,619,926       5,619,926  
Issuance of share on January 7, 2013 for reverse split executed
    95       92  
Issuance of share on January 12, 2013 for cash consideration of $397
    39,721       37,307  
Issuance of share on January 17, 2013 for pursuant to a sales and purchase agreement
    20,000,000       18,232,044  
Issuance of share on March 17, 2013 for cash consideration of $335
    33,615       19,686  
Forfeiture of shares on June 25, 2013 for disposal of asset
    (500,000 )     (16,575 )
                 
Issued and outstanding as of June 30, 2014
    25,193,357       23,892,480  

NOTE 14 – INTEREST EXPENSES

Interest expenses for the six months ended June 30, 2014 and 2013 are summarized as follows:

   
2014
   
2013
 
             
Amortization on discount of convertible note
  $ -     $ 36,707  
Accrued interest on convertible note
    -       29,015  
Total
  $ -     $ 65,722  
 
 
GREAT CHINA MANIA HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 2014 (CONTINUED)

NOTE 15  – CONTINGENCIES AND COMMITMENTS

On May 21, 2014, the Company committed to issuing 500,000 shares of common for 100% of the equity interests in Concept X Limited. The parties have agreed to a due diligence period and are still negotiating the acquisition. At the date of this filing, the terms have not been finalized.

At June 30, 2014, the expected annual lease payments under the Company and its subsidiaries’ operating leases are as follows:

For the year ended December 31,
     
2014
  $ 47,184  
2015
    96,564  
Total operating leases commitment
  $ 143,748  

NOTE 16- GOING CONCERN

As of June 30, 2014 the Company has accumulated deficits of $9,459,721 a negative working capital of $56,017, and also recorded a net loss from the continuing operations of $69,368 for the six months then ended.

As of June 30, 2014, the Company may need additional cash resources to operate during the upcoming 12 months, and the continuation of the Company may dependent upon the continuing financial support of investors, directors and/or stockholders of the Company. The Company intends to attempt to acquire additional operating capital through private equity offerings to the public and existing investors to fund its business plan. However, there is no assurance that equity or debt offerings will be successful in raising sufficient funds to assure the eventual profitability of the Company. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

NOTE 17- SUBSEQUENT EVENTS
 
On July 7, 2014, the Company converted a total of $63,096 short term borrowings into 630,960 shares of common stock of the Company.

On August 1, 2014, the Company terminated the proposed acquisition of 100% equity interest in Phaedra Media Group Limited (“PMG”) that entered into a letter of intent dated June 12, 2014 by giving one month notice in writing to PMG without other consideration.
 
 
     
   
PCAOB Registered
   
AICPA Member


GREAT CHINA MANIA HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS FOR THE
YEARS ENDED DECEMBER 31, 2013 and 2012

 

 
 

 
 
 
The Board of Directors and Stockholders
Great China Mania Holdings, Inc.
 
We have audited the accompanying balance sheet of Great China Mania Holdings, Inc. as of December 31, 2013, and the related statement of operations, stockholders’ deficit, and cash flows for the year then ended.   These financial statements are the responsibility of the Company’s management.   Our responsibility is to express an opinion on these financial statements based on our audit.   The financial statements as of and for December 31, 2012 were audited by another firm which issued an unqualified opinion on the statements on March 27, 2013.
 
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.  Accordingly, we express no such opinion.   An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provide a reasonable basis for our opinion.
 
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Great China Mania Holdings, Inc. as of December 31, 2013 and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
 
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.   As shown in the accompanying financial statements, the Company has significant net losses and cash flow deficiencies.  Those conditions raise substantial doubt about the Company’s ability to continue as a going concern.  Management’s plans regarding those matters are described in Note 17. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.



/s/ DKM Certified Public Accountants
DKM Certified Public Accountants
Clearwater, Florida
April 11, 2014

 
ALBERT WONG & CO.
CERTIFIED PUBLIC ACCOUNTANTS
7th Floor, Nan Dao Commercial Building
359-361 Queen’s Road Central
Hong Kong
Tel : 2851 7954
Fax: 2545 4086
 
ALBERT WONG
B.Soc., Sc., ACA., LL.B., C.P.A.(Practising)
 

To the Board of Directors and Shareholders of Great China Mania Holdings, Inc. and subsidiaries
Hong Kong

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have audited, before the effects of the adjustments to retrospectively apply the change in accounting described in Note 2 and Note 3, the consolidated balance sheet of Great China Mania Holdings, Inc. and subsidiaries (the Company) as of December 31, 2012, and the related consolidated statements of operations, stockholders’ deficit and comprehensive income and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

We were not engaged to examine management’s assertion about the effectiveness of the Company’s internal control over financial reporting as of December 31, 2012 included in the Company’s Item 9A “Controls and Procedures” in the Annual Report on Form 10-K and, accordingly, we do not express an opinion thereon.

In our opinion, the consolidated financial statements of the Company as of December 31, 2012 and for the year then ended, before the effects of the adjustments to retrospectively apply the change in accounting described in Note 2 and Note 3, present fairly, in all material respects, the financial position of the Company as of December 31, 2012, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles in the United States of America.

We were not engaged to audit, review, or apply any procedures to the adjustments to retrospectively apply the change in accounting described in Note 2 and Note 3, and, accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied. Those adjustments were audited by DKM Certified Public Accountants.

The accompanying consolidated financial statements as of and for the year ended December 31, 2012 had been prepared assuming that the Company will continue as a going concern. As discussed in Note 17 to the consolidated financial statements, the Company continuously has suffered recurring losses from operations and has a significant accumulated deficit. On the other hand, the Company experience negative cash flows from operations for the year ended December 31, 2012. These factors raise substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements as of and for the year ended December 31, 2012 do not include any adjustments that might result from the outcome of this uncertainty.



/s/Albert Wong & Co. CPA
Albert Wong & Co. CPA
April 11, 2014
Hong Kong, China
 

CONSOLIDATED BALANCE SHEETS
December 31, 2013

   
2013
   
2012
 
ASSETS
           
CURRENT ASSETS
           
Cash and cash equivalents
  $ 640,383       218,773  
Accounts receivable
    288,195       353,122  
Inventories      -       10,438  
Short term loan receivable
    113,883       140,495  
Deposits, prepaid expenses and other receivables
    185,235       165,932  
Asset held for disposal
    495,000       -  
Total current assets
    1,722,696       888,760  
Property, plant and equipment
    -       -  
Other assets
    115,380       -  
TOTAL ASSETS
  $ 1,838,076     $ 888,760  
                 
LIABILITIES AND EQUITY
               
LIABILITIES
               
CURRENT LIABILITIES
               
Accounts payable
  $ 759,126     $ 997,911  
Accrued expenses and other payables
    183,874       84,720  
Unearned revenue
    123,648       27,691  
Amount due to related parties     -       38,128  
Short-term borrowings
    64,079       63,656  
Convertible notes
    99,351       168,926  
Liabilities held by discontinued operations
    -       -  
Total current liabilities
    1,230,078       1,381,032  
                 
LONG-TERM LIABILITIES
               
Convertible note
    31,301       31,301  
      31,301       31,301  
                 
TOTAL LIABILITIES
  $ 1,261,379     $ 1,412,333  
                 
SHAREHOLDERS’ EQUITY
               
Common stock, Par value $0.01; 375,000,000 shares authorized; 5,619,926 and 3,943,801 shares issued and outstanding as of December 31, 2013 and 2012, respectively
  $ 56,199     $ 39,438  
Additional paid in capital
    9,909,359       8,389,941  
Accumulated deficits
    (9,390,353 )     (8,457,669 )
Accumulated other comprehensive income
    1,492       1,492  
Less: Subscription receivable
    -       (496,775 )
                 
TOTALSHAREHOLDERS’ EQUITY
  $ 576,697     $ (523,573 )
                 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
  $ 1,838,076     $ 888,760  

See accompanying notes to consolidated financial statements
 

CONSOLIDATED STATEMENTS OF OPERATIONS
Year ended December 31, 2013

   
2013
   
2012
 
CONTINUING OPERATIONS
           
             
REVENUES
  $ 2,310,329     $ 1,931,005  
                 
COST OF SALES
    1,562,252       1,282,555  
                 
GROSS PROFIT
    748,077       648,450  
                 
EXPENSES
               
Sales & marketing expenses
    51,330       43,182  
General and administrative expenses
    1,648,016       986,138  
Loss on impairment of assets
    15,000       -  
      1,714,346       1,029,320  
                 
LOSS FROM CONTINUING OPERATIONS
    (966,269 )     (380,870 )
                 
OTHER INCOME/(EXPENSE)
               
Interest income
    3,008       12,682  
Interest expenses
    (102,564 )     (54,116 )
Other income
    22,238       6,167  
Other expenses
    (84,780 )     (14,760 )
      (162,098 )     (50,027 )
NET LOSS BEFORE PROVISION FOR INCOME TAXES
    (1,128,367 )     (430,897 )
                 
PROVISION FOR INCOME TAXES
    -       -  
                 
NET LOSS FROM CONTINUING OPERATIONS
  $ (1,128,367 )   $ (430,897 )
                 
DISCONTINUED OPERATIONS
               
Net loss from discontinued operations
    (477,244 )     (103,590 )
Gain on disposal of discontinued operations
    672,927       -  
NET INCOME FROM DISCONTINUED OPERATIONS
    195,683       (103,590 )
                 
NET LOSS FOR THE YEAR
  $ (932,684 )   $ (534,487 )
                 
TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR
 
- Arising from continuing operations
    (1,128,367 )     (430,897 )
- Arising from discontinued operations
    195,683       (103,590 )
    $ (932,684 )   $ (534,487 )
BASIC LOSSPER SHARE–
               
- Arising from continuing operations
    (0.24 )     (0.13 )
- Arising from discontinued operations
    0.04       (0.03 )
    $ (0.20 )   $ (0.16 )
DILUTED LOSSPER SHARE
               
- Arising from continuing operations
    (0.24 )     (0.13 )
- Arising from discontinued operations
    0.04       (0.03 )
    $ (0.20 )   $ (0.16 )
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
               
Basic
    4,562,360       3,442,672  
Diluted
    4,562,360       3,442,672  

See accompanying notes to consolidated financial statements


CONSOLIDATED STATEMENTS OF STOCKHOLDER’S DEFICIT
Year ended December 31, 2013

                                     
   
Common Stock
   
Additional
paid in
capital
   
(Accumulated deficits)/ retained earnings
   
Accumulated other comprehensive income
   
Subscription receivable
   
Total
equity
 
 
Number
of shares
   
Amount
 
Balance at January 1, 2012
    1,418,300     $ 14,183     $ 7,311,563     $ (7,923,182 )   $ 1,492       -     $ (595,944 )
                                                         
Comprehensive loss
 
- Net loss for the year
    -       -       -       (534,487 )     -       -       (534,487 )
      -       -       -       (534,487 )     -       -       (534,487 )
                                                         
Share-based payment
    115,000       1,150       228,850       -       -       -       230,000  
Settlement of debt to shares
    959,750       9,598       324,145       -       -       -       333,743  
Settlement of convertible note to shares
    25,751       257       20,433                               20,690  
Issue of shares
    1,425,000       14,250       504,950                       (496,775 )     22,425  
                                                         
Balance at December 31, 2012 and January 1, 2013
    3,943,801       39,438       8,389,941       (8,457,669 )     1,492       (496,775 )     (523,573 )
                                                         
Comprehensive loss from continuing operations
 
Net loss for the year
    -       -       -       (1,128,367 )     -       -       (1,128,367 )
      -       -       -       (1,128,367 )     -       -       (1,128,367 )
Comprehensive loss from discontinued operations
 
- Net loss for the year
    -       -       -       (477,244 )     -       -       (477,244 )
- Foreign currency translation adjustments
    -       -       -       -       -       -       -  
- Gain on disposal
    -       -       -       672,927       -       -       672,927  
      -       -       -       195,683       -       -       195,683  
                                                         
Settlement of subscription receivables
    -       -       -       -       -       496,775       496,775  
Share based payment
    976,984       9,770       864,130       -       -       -       873,900  
Shares issued for acquisition of New Era
    500,000       5,000       505,000                               510,000  
Settlement of debt to shares
    206,250       2,063       57,937       -       -       -       60,000  
Settlement of convertible note to shares
    142,891       1,429       144,851       -       -       -       146,280  
Cancellation of shares
    (150,000 )     (1,500 )     (52,500 )     -       -       -       (54,000 )
                                                         
Balance at December 31, 2013
    5,619,926       56,199       9,909,359       (9,390,353 )     1,492       -       576,697  

See accompanying notes to consolidated financial statements


GREAT CHINA MANIA HOLDINGS, INC. AND SUBSIDIARIES
Years ended December 31, 2013
 
   
2013
   
2012
 
Cash flows from operating activities
           
Net loss continuing operating activities
  $ (1,128,367 )   $ (430,897 )
Adjustments to reconcile net income to net cash flows
used in operating activities for:
               
Impairment loss of asset held for disposal
    15,000       -  
Amortization of discount on Convertible Notes
    70,666       51,386  
Accrued interest expense on Convertible Notes
    31,898       2,730  
Interest income receivable
    (3,008     (12,682 )
Share-based payments
    833,900       230,000  
Changes in operating assets and liabilities:
               
Increase in accounts receivable
    (107,367 )     (19,501 )
Increase in prepaid expenses
    (19,739 )     (24,679 )
Increase in unearned revenue
    95,957       7,103  
Increase in accounts payable
    59,577       96,779  
(Decrease)/increase in accrued expenses and other payables
    174,359       (9,227 )
Net cash used in continuing operating activities
    22,876       (108,988 )
Net cash used in discontinued operating activities
    (370,745 )     90,481  
Net cash used in operating activities
    (347,869 )     (18,507 )
Cash flows from investing activities
               
Cash flows from continuing investing activities
    -       -  
Increase in other assets
    (115,380 )     -  
Repayment of short-term loan receivable
    29,620       -  
Net cash used in continuing investing activities
    (85,760 )     -  
Net cash used in discontinued investing activities
    (1,282 )     -  
Net cash used in investing activities
    (87,042 )     -  
Cash flows from financing activities
               
Cash flows from continuing financing activities
               
Issue of convertible note
    100,000       135,500  
Repayment of convertible note
    (125,859 )     (96,899 )
Advance to short-term loan receivable
    -       (127,813 )
Proceeds from short-term borrowings
    57,690       121,624  
Conversion of subscription receivable
    496,775       22,425  
Net cash (used in)/provided by continuing financing activities
    528,606       54,837  
Net cash provided by discontinued financing activities
    327,915       (122,769 )
Net cash (used in)/provided by financing activities
    856,521       (67,932 )
Net (decrease)/increase in cash and cash equivalents
               
- Continuing operations
    465,722       (54,151 )
- Discontinued operations
    (44,112 )     (32,288 )
      421,610       (86,439 )
Effect of foreign exchange rate changes on cash and cash equivalents
               
- Continuing operations
    -       -  
- Discontinued operations
    -       -  
      -       -  
Cash and cash equivalents at beginning of year
               
- Continuing operations
    174,661       293,988  
- Discontinued operations
    44,112       11,224  
      218,773       305,212  
Cash and cash equivalents at end of year
               
- Continuing operations
    640,383       174,661  
- Discontinued operations
    -       44,112  
    $ 640,383     $ 218,773  
Non-cash financing activities
               
- Issue of shares unpaid
    -       496,775  
- Shares issued for acquisition of New Era
    510,000       -  
- Conversion of note to shares
    146,280       20,690  
- Conversion of debt to shares
    60,000       333,743  
- Cash paid for interest
  $ 40,359     $ -  
- Cash paid for income taxes
    -       -  
See accompanying notes to consolidated financial statements

 
Notes to Consolidated Financial Statements
December 31, 2013

NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES

Great China Mania Holdings, Inc. (“GMEC” or the “Company”) was incorporated in Florida on July 8, 1983. In February 2011, three subsidiaries of the Company were formed in Hong Kong and have since maintained operations. These subsidiaries are GME Holdings Limited (“GMEH”), Great China Games Limited (“GCG”) and Great China Media Limited (“GCM”). In June 2011, the Company formed another subsidiary GMEC Ventures Limited (“GMEV”) in Hong Kong. The company held those subsidiaries though two wholly-owned BVI companies known as Sharp Achieve Holdings Limited (“Sharp Achieve”) and Super China Global Limited (SCGL).

On March 16, 2011, the Company amended its Articles of Incorporation and changed the name of the Company from “Great East Bottles & Drinks (China) Holdings, Inc.” to “Great China Mania Holdings, Inc.”

On April 23, 2013, the Company disposed the entire interest in GCG to a non affiliate shareholder in exchange of the shareholder assuming the liabilities of GCG and returning 150,000 shares of the Company common stock back to the Company.

On May 6, 2013, the Company disposed the entire interest in Sharp Achieve and GCM to Mr. Yau Wai Hung, a former CEO and director who resigned on April 30 2013, in exchange of his assuming the liabilities of both Sharp Achieve and GCM.

After the above disposals, the Company only specializes in artist and project management services operation in Hong Kong, China and the Asia-Pacific region.

NOTE 2 – PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of the Company and the Company’s subsidiaries. The consolidated financial statements are prepared in accordance with generally accepted accounting principles used in the United States of America, and all significant intercompany balances and transactions have been eliminated.

The functional currency for the majority of the Company’s continuing and discontinued operations is the Hong Kong Dollar (“HKD”), while the reporting currency is the US Dollar.

In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments, consisting only of normal recurring accruals, necessary for a fair presentation of the Company’s financial position as of December 31, 2013, the results of its operations and cash flows for the year ended for December 31, 2013 and 2012.

In the opinion of the management, the comparative figures for the year ended December 31, 2012 were reclassified to current presentation because the balances shown in previous filings included the discontinued operations of GCG and GCM were not relevant to the current operations.

NOTE 3 – DISPOSAL OF SUBSIDIARIES

On April 23, 2013, the Company disposed its entire interest of GCG to a non affiliate shareholder in exchange of the shareholder assuming the liabilities of GCG and returning 150,000 shares of the Company common stock back to the Company. GCG ceased to become a consolidating subsidiary of the Company on May 6, 2013 when the transaction completed. All the operating losses of GCG from January 1, 2012 to April 23, 2013 are recorded as net loss from discontinued operations.

On May 6, 2013, the Company disposed its entire interest of Sharp Achieve and GCM to Mr. Yau Wai Hung, our former CEO and director who resigned on April 30 2013, in exchange for his assuming the liabilities of both Sharp Achieve and GCM. GCM ceased to become a consolidating subsidiary of the Company on the same date. All the operating losses of GCM from January 1, 2012 to May 6, 2013 are recorded as net loss from discontinued operations.

By disposal of above subsidiaries, the Company sold its video games and accessories retail operation and magazine and related electronic content publishing operation. A summary of the balance sheet, income statement and gain on disposal of above subsidiaries upon the date of disposal is presented as follow:

 
 

GREAT CHINA MANIA HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and 2012 (Continued)
 
(i) Summary of balance sheet
   
May 6, 2013 (Date of disposal)
   
December 31, 2012 (Audited)
 
   
GCG
   
GCM
   
Total
   
GCG
   
GCM
   
Total
 
Assets
                                   
Current assets
                                   
Cash and cash equivalents
  $ -     $ 1,282     $ 1,282     $ 38,343     $ 5,769     $ 44,112  
Accounts receivable
    -       33,101       33,101       -       172,294       172,294  
Inventory
    3,643       -       3,643       3,643       6,795       10,438  
Other receivables and deposit
    -       -       -       436       -       436  
Total current assets
    3,643       34,383       38,026       42,422       184,858       227,280  
Liabilities
                                               
Current liabilities
                                               
Accounts payable
    -       -       -       2,325       296,037       298,362  
Accrued expenses and other payables
    -       681,676       681,676       2,327       74,137       76,464  
Total current liabilities
    -       681,676       681,676       4,652       370,174       374,826  
                                                 
Net assets / (liabilities)
    3,643       (647,293 )     (643,650 )     37,770       (185,316 )     (147,546 )

(ii)Summary of income statement
         
2013
               
2012
       
   
GCG
   
GCM
   
Total
   
GCG
   
GCM
   
Total
 
Revenue
    -       15,233       15,233       643,473       2,238,117       2,881,590  
Gross margin
    -       1,910       1,910       49,655       762,391       812,046  
Loss before provision for income taxes
    (4,091 )     (473,153 )     (477,244 )     (51,860 )     (51,730 )     (103,590 )
Net loss after non-controlling interest
    (4,091 )     (473,153 )     (477,244 )     (51,860 )     (51,730 )     (103,590 )

(iii)Summary of gain on disposal
   
GCG
   
GCM
   
Total
 
Net (assets) / liabilities of the subsidiaries
    (3,643 )     647,293       643,650  
Amount due from/(to) the subsidiaries
    133,277       (50,000 )     83,277  
Less: Fair value of the shares received
    (54,000 )     -       (54,000 )
Net gain of the disposal
    75,634       597,293       672,927  

NOTE 4– SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)Economic and political risk

The Company’s continuing operations and discontinued operations are conducted in Hong Kong. Accordingly, the political, economic, and legal environments in the Hong Kong may influence the Company’s business, financial condition, and results of operations.

The Company’s major operations in the Hong Kong are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic, and legal environment. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, and rates and methods of taxation, among other things.
 

GREAT CHINA MANIA HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and 2012 (Continued)

(b)Cash and cash equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.  The Company’s continued operations maintain bank accounts in Hong Kong and China. The Company’s discontinued operations maintain bank accounts in Hong Kong.

(c)Income tax

Income taxes are based on pre-tax financial accounting income. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. The Company periodically assesses the need to establish valuation allowances against its deferred tax assets to the extent the Company no longer believes it is more likely than not that the tax assets will be fully utilized.
 
The Company evaluates a tax position to determine whether it is more likely than not that the tax position will be sustained upon examination, based upon the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is subject to a measurement assessment to determine the amount of benefit to recognize and the appropriate reserve to establish, if any. If a tax position does not meet the more-likely-than-not recognition threshold, no benefit is recognized

In accordance with the relevant tax laws and regulations of Hong Kong, the applicable corporation income tax rate was 16.5% on assessable profits, if any, for the years ended December 31, 2013 and 2012, respectively.

(d)Fair value of financial instruments

The Company’s financial instruments primarily consist of cash and cash equivalents, amount due from a related company, prepaid expenses and accounts receivables, other receivables, accounts payable, accrued expenses and other payables, unearned revenue, short term borrowings, convertible note and amount due to related parties.

The estimated fair value amounts have been determined by the Company, using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange.

As of the year-end dates, the estimated fair values of the financial instruments were not materially different from their carrying values as presented, due to the short maturities of these instruments and the fact that the interest rates on the borrowings approximate those that would have been available for loans of similar remaining maturity and risk profiles at respective year ends.

(e)Long-Lived Assets

Property and equipment is stated at cost.  Depreciation is computed by the straight-line method over estimated useful lives (2-7 years).  Intellectual property assets are stated at their fair value acquisition cost. Amortization of intellectual property assets is calculated by the straight line method over their estimated useful lives. Historical costs are reviewed and evaluated for their net realizable value of the assets.  The carrying amount of all long-lived assets is evaluated periodically to determine if adjustment to the depreciation and amortization period or the unamortized balance is warranted. Based upon its most recent analysis, the Company believes that no impairment of property and equipment existed at December 31, 2013.

Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable.  When required impairment losses on assets to be held and used are recognized based on the fair value of the asset.  The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required.  If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset.  When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets.  We did not recognize any impairment losses for any periods presented.

(f)Revenue recognition
 

GREAT CHINA MANIA HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and 2012 (Continued)
Revenue represents the invoiced value of goods sold or services rendered during the year, net of sales discounts and returns. Generally revenue is recognized when all of the following criteria are met:

-
Persuasive evidence of an arrangement exists,
-
Delivery has occurred or services have been rendered,
-
The seller’s price to the buyer is fixed or determinable, and
-
Collectability is reasonably assured

Revenue recognition policies for each of the major products and services of continuing operations are illustrated as follows:

(i)
Revenue from provision of artist management, event management, and promotion for its clients is recognized when services are rendered.
(ii)
Revenue from artist-related merchandising is recognized when receipt is confirmed by clients according to the relating predetermined agreements.
(iii)
Revenue from intellectual property rights on CD, DVD and video products is recognized upon delivery of products to customers.
   

For discontinued operations, the Company recognizes revenue when the following criteria are met:

(i)
Revenue from electronic content sales like iPhone and Android applications is recognized when receipt is confirmed by service providers.
(ii)
Revenue from traditional paper magazines sales is recognized when magazines are sold to customers, net of sales return.
(iii)
Revenue from the provision of advertising services is recognized when services are rendered.
(iv)
Revenue from retail sales of video games and accessories is recognized upon delivery of goods to customers.

(g)Earnings per share

Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. For the years ended December 31, 2013, there are a total of 99,371 shares of common stock included in the calculation of diluted weighted average number of shares outstanding. They are not included in the calculation of diluted (loss) / earnings per share because they are considered anti dilutive when computing diluted (loss) / earnings per share.

(h)Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 year. Actual results may differ from those estimates.

(i)Comprehensive income

Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other financial statements.  Comprehensive income includes net income and the foreign currency translation gain, net of tax.
 

GREAT CHINA MANIA HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and 2012 (Continued)
 
(j)Foreign currency translation

The accompanying consolidated financial statements are presented in United States Dollars (US$). The functional currency of the Company is the Hong Kong Dollar (HK$). Capital accounts of the consolidated financial statements are translated into United States dollars from HK$ at their historical exchange rates when the capital transactions occurred. Assets and liabilities are translated at the exchange rates as of balance sheet date. Income and expenditures are translated at the average exchange rate of the year.  The translation rates are as follows:

   
December 31, 2013
   
December 31, 2012
 
             
Year end HK$ : US$ exchange rate
    0.1282       0.1282  
Average period/yearly HK$ : US$ exchange rate
    0.1282       0.1282  

This translation rates are referenced to the linked rate of HK$ and US$ guaranteed by Government of Hong Kong.

(k)Stock-based compensation

The Company recognizes compensation expense for all stock-based payment awards made to employees, contractors and non-employee directors. Stock-based compensation expense is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is generally the vesting period.

During the year ended December 31, 2013, the Company issued 147,684 shares in aggregate for services rendered to the Company. The fair value of $833,900, which is determined with refer to closing stock price on the dates of issue, was charged to operation as general and administrative expenses for the year then ended.

During the year ended December 31, 2012, the Company issued 115,000 shares in aggregate for services rendered to the Company. The fair value of $230,000, which is determined with refer to closing stock price on the dates of issue, was charged to operation as general and administrative expenses for the year then ended.

(l) Recent accounting pronouncements

The Financial Accounting Standards Board and other entities issued new or modifications to, or interpretations of, existing accounting guidance during 2013.  Management has carefully considered the new pronouncements that altered generally accepted accounting principles and does not believe that any other new or modified principles will have a material impact on the Company’s reported financial position or operations in the near term.

The Company reviews new accounting standards as issued. No new standards had any material effect on these financial statements. The accounting pronouncements issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these consolidated financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these consolidated financial statements as presented and does not anticipate the need for any future restatement of these consolidated financial statements because of the retro-active application of any accounting pronouncements issued subsequent to December 31, 2013 through the date these financial statements were issued.

NOTE 5 – SHORT TERM LOAN RECEIVABLE

The Company retained a short term loan amount of $113,883 and $140,495 to a third party company at 6% interest per annum with no fixed payment terms as to December 31, 2013 and 2012 separately. Interest income in conjunction with this short term loan for the year ended December 31, 2013 and 2012 was $3,008 and $12,682, respectively.
 

GREAT CHINA MANIA HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and 2012 (Continued)
 
NOTE 6 –DEPOSITS, PREPAID EXPENSES AND OTHER RECEIVABLES

As of the year-end dates, the Company’s deposits, prepaid expenses and other receivables accrued expenses and other payables are summarized as follows:
   
2013
   
2012
 
             
Prepaid expenses
    108,779       116,648  
Other receivables
    70,665       45,663  
Deposits paid
    5,791       3,621  
Total deposits, prepaid expenses and other receivables
  $ 185,235     $ 165,932  

NOTE 7 – PROPERTY, PLANT AND EQUIPMENT

As of the year-end dates, the Company’s property, plant and equipment are summarized as follows:

   
2013
   
2012
 
At cost:
           
Computer
    9,989       -  
Less: Accumulated depreciation
    9,989       -  
Property, plant and equipment, net
  $ -     $ -  

Depreciation expense attributable to the property, plant and equipment of both continuing operations and discontinued operations for the years ended December 31, 2013 and 2012 was $9,989 and $0, respectively.

NOTE 8 – OTHER ASSET

The Company acquired a 4.5% entity interest of a restaurant that operated in Hong Kong by a non affiliate corporation with a cash consideration of $115,380 on September 25, 2013. This entity interest stated at cost and no impairment losses was recognized for the years ended December 31, 2013.

NOTE 9 – ACCRUED EXPENSES AND OTHER PAYABLES

As of the year-end dates, the Company’s accrued expenses and other payables are summarized as follows:

   
2013
   
2012
 
             
Accrued expenses
    144,508       -  
Customer deposits received
    39,366       84,720  
Total Accrued expenses and other payables
  $ 183,874     $ 84,720  
 
NOTE 10 – AMOUNT DUE TO RELATED PARTIES
 
As of the year-end dates, the Company’s current accounts with relatted companies are summarized as follows:
 
   
2013
   
2012
 
China Culture Limited (CCL)
    -       38,128  
 
The amount due to CCL is a temporary advance to the Company for working capital purposes.  The balance is unsecured, interest free and has no fixed repayment term.  CCL is 100% owned by one of the Company's former directors.
 

GREAT CHINA MANIA HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and 2012 (Continued)
 
NOTE 11 – SHORT-TERM BORROWINGS

As of the year-end dates, the Company’s short-term borrowings are summarized as follows:

   
2013
   
2012
 
Balance as at January 1,
    63,656       275,775  
Proceeds from short-term borrowings
    57,690       121,624  
Reclassification for discontinued operations
    2,733       -  
Conversion of debt to shares
    (60,000 )     (333,743 )
Total Accrued expenses and other payables
  $ 64,079       63,656  

The short-term borrowings are unsecured, interest free advances from one (2012: three) non affiliate individual(s) with no fixed repayment term. During the years ended December 31, 2013, those individuals converted a portion of the short term borrowings of $60,000 into 206,250 shares of Company’s common stock.

NOTE 12 – CONVERTIBLE NOTES

On June 1, 2011, the Company issued a non-interest bearing convertible note in the amount of $256,400 ( “Note 1”) to a third party note holder (“Holder 1”),which matures on May 31, 2016. On September 30, 2011, the first installment of $128,200 was received. Note 1 bears a call back option exercisable by Holder 1 on the unused portion of Note 1 after 12 months from the date of Note 1. Note 1 can be converted into common stock of the Company by Holder 1 under certain conditions. During the year, a total of $0 was repaid by the Company. As of December 31, 2013, Note 1 did not qualify to be converted under those conditions and is therefore not dilutive.

On February 20, 2013, the Company issued another 12% convertible note in the amount of $50,000 (“Note 5”) to another third party note holder (“Holder 3”). Note 5 mature on November 20, 2013 and was fully received on March 4, 2013. The outstanding principal balance plus any accrued interest under Note 5 is convertible into common stock of the Company after 180 days from the date of issued with a 40% discount over the convertible price upon the option of Holder 3. The conversion price is determined by the average of the lowest 3 closing bid prices out of the 10 days prior to the Conversion Date. As of December 31, 2013, fair value adjustment on option amounted to $35,333 and unamortized debt discount amount to $0. Debt discount is being amortized using effective interest method over the life of Note 5. For the year ended December 31, 2013, the amortization of debt discount of $35,333 was charged to Statement of Operations. Accrued interest expense of Note 5 for the year ended December 30, 2013 was $3,000. On September 10, 2013, part of the note of $7,415 was converted into 8,000 shares of common stock by the holder. On October 2, 2013, part of the note of $42,586 was converted into 53,769 shares of common stock by the holder. The gross outstanding balance of Note 5 at December 31, 2013 was $11,018 after deducting the partial settlement of $77,315 by shares. As of December 31, 2013, Note 5 qualified to be converted 11,038 shares of common stock under the conditions of Note 5 and is therefore dilutive.

On April 22, 2013, the Company issued another 12% convertible note in the amount of $50,000 (“Note 6”) to Holder 3. Note 6 mature on January 22, 2014 and was fully received on June 14, 2013. The outstanding principal balance plus any accrued interest under Note 6 is convertible into common stock of the Company after 180 days from the date of issued with a 40% discount over the convertible price upon the option of Holder 3. The conversion price is determined by the average prices of the 5 days prior to the Conversion Date. As of December 31, 2013, fair value adjustment on option amounted to $35,333 and unamortized debt discount amount to $0. Debt discount is being amortized using effective interest method over the life of Note 6. For the year ended December 31, 2013, the amortization of debt discount of $35,333 was charged to Statement of Operations. Accrued interest expense of Note 6 for the year ended December 30, 2013 was $3,000. As of December 31, 2013, Note 6 qualified to be converted 88,333 shares of common stock under the conditions of Note 6 and is therefore dilutive.

Total interest expense in connection with Note 2, Note 3 and Note 4 for the year ended December 31, 2013 and 2012 were $25,898 and $54,116, respectively. Total interest expenses in connection with all Convertible Notes for the year ended December 31, 2013 and 2012 amounted to $102,564 and $54,116 respectively.
 

GREAT CHINA MANIA HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and 2012 (Continued)
 
The convertible notes as of the year-end dates are summarized as follows:

   
2013
   
2012
 
Noncurrent liabilities:
           
Non-interest bearing convertible note
  $ 31,301     $ 31,301  
                 
Current liabilities:
               
8% convertible note 2, net
    -       68,965  
8% convertible note 3, net
    -       42,524  
8% convertible note 4, net
    -       57,437  
12% convertible note 5, net (including fair value adjustment on option $ 35,333, accrued interest expense $3,000)
    11,018       -  
12% convertible note 6, net (including fair value adjustment on option $ 35,333, accrued interest expense $3,000)
    88,333       -  
      99,351       168,926  
                 
Total convertible note outstanding
  $ 130,652     $ 200,227  

NOTE 13 – EQUITY

On January 2, 2013 the Company issued 34,247 shares of common stock to a convertible note holder for partial settlement of a convertible note totaling $20,000.

On January 14, 2013 the Company issued 31,250 shares of common stock to a convertible note holder for partial settlement of a convertible note totaling $15,000.

On January 18, 2013 the Company issued 15,625 shares of common stock to a convertible note holder for partial settlement of a convertible note totaling $5,000.

On April 9, 2013 the Company converted $23,000 short-term borrowings into115,000 shares of common stock of the Company.

On April 23, 2013, the Company cancelled 150,000 shares of common stock from a non-affiliate shareholder in exchange of disposing the entire interest of GCG.

On April 26, 2013, the Company issued to two consultants 350,000 shares of common stock in exchange for professional services rendered. Based on the share price of $0.32 per share on the grant date, the fair value of these issued shares was $112,000.

On April 30, 2013 the Company converted $12,000 short-term borrowings into 60,000 shares of common stock of the Company.

On May 7, 2013, the Company issued to two consultants 83,350 shares of common stock in exchange for professional services rendered. Based on the share price of $0.24 per share on the grant date, the fair value of these issued shares was $20,000.

On June 6, 2013, the Company converted $25,000 short-term borrowings into 31,250 shares of common stock of the Company.

On June 7, 2013, the Company issued to two consultants 14,493 shares of common stock in exchange for professional services rendered. Based on the share price of $1.38 per share on the grant date, the fair value of these issued shares was $20,000.

On September 3, 2013, the Company issued 25,000 shares to the Company’s previous legal counsel for prior legal services rendered. Based on the share price of $1.60 per share on the grant date, the fair value of these issued shares was $40,000.On the same day, the Company issued 34,700 shares to another consultant in exchange for professional services rendered. Based on the share price of $1.15 per share on the grant date, the fair value of these issued shares was $40,000.

On September 10, 2013, the Company issued 8,000 shares of common stock to a convertible note holder for partial settlement of a convertible note totaling $7,415.
 

GREAT CHINA MANIA HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and 2012 (Continued)

On September 17, 2013, the Company issued to a consultant 12,500 shares of common stock in exchange for professional services rendered. Based on the share price of $1.60 per share on the grant date, the fair value of these issued shares was $20,000.

On September 25, 2013, the Company issued to two consultants 400,000 shares of common stock in exchange for professional services rendered. Based on the share price of $1.36 per share on the grant date, the fair value of these issued shares was $544,000.
 
On October 1, 2013, the Company also issued 25,000 shares of common stock to legal counsel for legal services rendered.

On October 2, 2013, the Company issued a total of 53,769 shares common stock to an investor in full settlement of a convertible note totaling $42,586.

On October 12, the Company issued 14,992 shares of common stock to a consultant for services rendered. Based on the share price of $1.34 per share on the grant date, the fair value of these issued shares was $20,000.

On November 26, 2013, the Company issued 500,000 shares of common stock pursuant to an Agreement with New Era Global Enterprises Limited.

On December 13, 2013, the Company issued to a consultant 16,949 shares of common stock in exchange for professional services rendered. Based on the share price of $1.18 per share on the grant date, the fair value of these issued shares was $20,000.

The calculation of weighted average number of shares for the year ended December 31, 2013is illustrated as follows:
 
   
2013
 
   
Number
of shares
   
Weighted average
number of shares
 
             
At January 1, 2013
    3,943,801       3,943,801  
Shares issued on January 2, 2013 for note conversion
    34,247       34,153  
Shares issued on January 14, 2013 for note conversion
    31,250       30,137  
Shares issued on January 18, 2013 for note conversion
    15,625       14,897  
Shares issued on April 9, 2013 for debt conversion
    115,000       84,123  
Share based payment made on April 26, 2013
    350,000       242,603  
Forfeiture of shares on April 23, 2013 for disposal of GCG
    (150,000 )     (103,973 )
Shares issued on April 30, 2013 for debt conversion
    60,000       40,438  
Share based payment made on May 7, 2013
    83,350       54,577  
Shares issued on June 6, 2013 for debt conversion
    31,250       17,894  
Share based payment made on June 7, 2013
    14,493       8,259  
Share based payment made on September 3, 2013
    25,000       8,219  
Share based payment made on September 3, 2013
    34,700       11,408  
Shares issued on September 10, 2013 for note conversion
    8,000       2,477  
Share based payment made on September 17, 2013
    12,500       3,630  
Share based payment made on September 25, 2013
    200,000       53,699  
Share based payment made on October 1, 2013
    200,000       53,699  
Shares issued on October 2, 2013 for note conversion
    53,769       13,406  
Share based payment made on October 4, 2013
    25,000       6,301  
Share based payment made on October 12, 2013
    14,992       3,327  
Share based payment made on November 26, 2013
    500,000       38,356  
Share based payment made on December 12, 2013
    16,949       929  
                 
At December 31, 2013
    5,619,926       4,562,360  
                 
 

GREAT CHINA MANIA HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and 2012 (Continued)
 
NOTE 14– RELATED PARTY TRANSACTION
  
In addition to the transactions detailed elsewhere in these financial statements, the Company and its subsidiaries entered into the following material transactions with the related parties for the year ended December 31, 2013:
 
   
2013
   
2012
 
             
From discontinuing operations
               
China Culture Limited                
Rental charges paid by Company for offices premises   $ 25,640     $ 92,305  
 
China Culture Limited is a related party as it is a company owned by Mr. Chan Wing Hing, a Company former director resigned on April 30, 2013.
 
In the opinion of directors, the above transaction was entered into by the company in the normal course of business.
 
NOTE 15– INTEREST EXPENSES

Interest expenses for the year ended December 31 2013 and 2012 are summarized as follows:

   
2013
   
2012
 
             
Amortization on discount of convertible note
  $ 70,666     $ 51,386  
Accrued interest on convertible note
    31,898       2,730  
Total
  $ 102,564     $ 54,116  

NOTE 16– CONTINGENCIES AND COMMITMENTS

As of December 31, 2013, the expected annual lease payments under operating leases are as follows:
       
For the year ending December 31,
     
2014
    48,643  
Total
    48,643  

NOTE 17- GOING CONCERN

As of December 31, 2013 the Company has accumulated deficits of $9,375,353, a positive working capital of $492,618, and also recorded a net loss from the continuing operations of $1,113,367 for the year then ended.
 
As of December 31, 2013 the Company may need additional cash resources to operate during the upcoming 12 months, and the continuation of the Company may dependent upon the continuing financial support of investors, directors and/or stockholders of the Company. The Company intends to attempt to acquire additional operating capital through private equity offerings to the public and existing investors to fund its business plan. However, there is no assurance that equity or debt offerings will be successful in raising sufficient funds to assure the eventual profitability of the Company. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

NOTE 18 - SUBSEQUENT EVENTS

On January 7, 2014, the Company executed a one-for-twenty (1:20) reverse stock split of the Company’s common stock. This change was approved by the Company’s shareholders on November 25, 2013.
 
 
F-29


GREAT CHINA MANIA HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2013 and 2012 (Continued)

On January 12, 2014, the Company issued 39,721 shares to an investor relations firm as compensation.

On January 14, 2014, the Company entered into a Purchase and Assignment Agreement (the “Agreement”) with C&M Film Workshop Limited (“C&M”) whereby C&M is the legal and beneficial owner of certain overseas movie and entertainment distribution agreements. According to the terms of the Agreement, C&M assigned the rights to distribute all movies purchased overseas to the Company in consideration of 20,000,000 shares of restricted common stock paid to Mr. Wong Wing Fung Charlie, C&M’s sole shareholder. As a result, he owned 78.06% of the issued and outstanding shares of the Company’s common stock and held as an officer or director of the Company on the date of this filing.
 
 
PART II
 
 
 
The following table sets forth an itemization of the various expenses, all of which we will pay, in connection with the issuance and distribution of the securities being registered.  All of the amounts shown are estimated except the SEC Registration Fee
 
SEC Registration Fee
  $ 47  
Legal Fees and Expenses
    40,000  
Accounting Fees and Expenses
    10,000  
Miscellaneous
    2,000  
Total
  $ 52,080  
 
 
The amended and restated articles of incorporation of the Company provides that all directors, officers, employees and agents of the registrant shall be entitled to be indemnified by the Company to the fullest extent permitted by Florida law.
 
Article IX of the Company’s amended and restated certificate of incorporation provides: “The Corporation shall have the power to indemnify any officer, director, or former officer or director, to the fullest extent permitted by law.”
 
Pursuant to the Company’s bylaws Article X Section 3, the directors and officers of the Company shall, to the fullest extent permitted by the Florida Statutes, also have the right to maintain a directors’ and officers’ insurance policy which insures the Company and any of its directors, officers, employees, agents or other entities, against expense, liability or loss asserted against such persons in such capacity whether or not the Company would have the power to indemnify such person under Florida law.  At the present time the company does not maintain a separate officer and director liability insurance policy
 
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to the Company’s directors, officers, and controlling persons pursuant to the foregoing provisions, or otherwise, the Company has been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment of expenses incurred or paid by a director, officer or controlling person in a successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to the court of appropriate jurisdiction the question whether such indemnification by the Company is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
 
At present, there is no pending litigation or proceeding involving any of our directors or executive officers as to which indemnification is required or permitted, and we are not aware of any threatened litigation or proceeding that may result in a claim for indemnification.
 
Any underwriting agreements that we may enter into will likely provide for the indemnification of us, our controlling persons, our directors and certain of our officers by the underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended.
 
The foregoing discussion of our certificate of incorporation, bylaws, indemnification agreements, and Florida law is not intended to be exhaustive and is qualified in its entirety by such certificate of incorporation, bylaws, indemnification agreements, or law.
 

The information below lists all of the securities sold, for other than cash consideration, by us during the past three years which were not registered under the Securities Act.  Each shareholder acquired their shares relying on the exemption from registration under Regulation S and Section 4(2) of the Securities Act of 1933, as amended.
 

On January 2, 2013 the Company issued 34,247 shares of common stock to Asher Enterprises, Inc. for a convertible note holder for partial settlement of a convertible note totaling $20,000.  Asher is controlled by Curt Kramer, President.

On January 14, 2013 the Company issued 31,250 shares of common stock to Asher Enterprises, Inc. for a convertible note holder for partial settlement of a convertible note totaling $15,000.  Asher is controlled by Curt Kramer, President.

On January 18, 2013 the Company issued 15,625 shares of common stock to Asher Enterprises, Inc. for a convertible note holder for partial settlement of a convertible note totaling $5,000.  Asher is controlled by Curt Kramer, President.

On April 9, 2013 the Company converted $23,000 of short-term borrowings from Amanda Anderson into 115,000 shares of common stock of the Company.

On April 26, 2013, the Company issued to two consultants, Tam Kin Pong (175,000) and Zeng Zhi Jian (175,000) 350,000 shares of common stock in exchange for professional services rendered. Based on the share price of $0.32 per share on the grant date, the fair value of these issued shares was $112,000.

On April 30, 2013 the Company converted $12,000 of short-term borrowings from Amanda Anderson into 60,000 shares of common stock of the Company.

On May 7, 2013, the Company issued to a consultant ChineseInvestors.com 83,350 shares of common stock in exchange for professional services rendered. Based on the share price of $0.24 per share on the grant date, the fair value of these issued shares was $20,000.  ChineseInvestors.com is controlled by Warren Wei Wang, CEO.

On June 6, 2013, the Company converted $25,000 of short-term borrowings from Amanda Anderson into 31,250 shares of common stock of the Company.

On June 7, 2013, the Company issued ChineseInvestors.com 14,493 shares of common stock in exchange for professional services rendered. Based on the share price of $1.38 per share on the grant date, the fair value of these issued shares was $20,000.  ChineseInvestors.com is controlled by Warren Wei Wang, CEO.

On September 3, 2013, the Company issued 25,000 shares to the Company’s previous legal counsel, Vincent & Rees for prior legal services rendered. Based on the share price of $1.60 per share on the grant date, the fair value of these issued shares was $40,000. On the same day, the Company issued 34,700 shares to another consultant, ChineseInvestors.com, in exchange for professional services rendered. Based on the share price of $1.15 per share on the grant date, the fair value of these issued shares was $40,000.  ChineseInvestors.com is controlled by Warren Wei Wang, CEO.

On September 10, 2013, the Company issued 8,000 shares of common stock to a convertible note holder, Evolution Capital Fund, L.L.P. for partial settlement of a convertible note totaling $7,415.  Evolution is managed by Scott R. DeBo.

On September 17, 2013, the Company issued to ChineseInvestors.com 12,500 shares of common stock in exchange for professional services rendered. Based on the share price of $1.60 per share on the grant date, the fair value of these issued shares was $20,000.  ChineseInvestors.com is controlled by Warren Wei Wang, CEO.

On September 25, 2013, the Company issued to two consultants Tam Kin Pong (200,000) and Zeng Zhi Jian (200,000) 400,000 shares of common stock in exchange for professional services rendered. Based on the share price of $1.36 per share on the grant date, the fair value of these issued shares was $544,000.
 
On October 1, 2013, the Company also issued 25,000 shares of common stock to legal counsel, Brunson, Chandler & Jones for legal services rendered.

On October 2, 2013, the Company issued a total of 53,769 shares common stock to Evolution Capital Fund, L.L.P. in full settlement of a convertible note totaling $42,586.  Evolution is managed by Scott R. DeBo.

On October 12, the Company issued 14,992 shares of common stock to ChineseInvestors.com for services rendered. Based on the share price of $1.34 per share on the grant date, the fair value of these issued shares was $20,000.  ChineseInvestors.com is controlled by Warren Wei Wang, CEO.

On November 26, 2013, the Company issued 500,000 shares of common stock pursuant to an Agreement with New Era Global Enterprises Limited.  New Era is controlled by Peter Smith, Director.
 

On December 13, 2013, the Company issued to a consultant 16,949 shares of common stock to ChineseInvestors.com in exchange for professional services rendered. Based on the share price of $1.18 per share on the grant date, the fair value of these issued shares was $20,000.  ChineseInvestors.com is controlled by Warren Wei Wang, CEO.

On August 8, 2014 Ip Ching Fung Rick subscribed to 150,000 shares at the value of $.10 per share for a total of $15,000.

 
The exhibits to this registration statement are listed in the Exhibit Index to this registration statement, which Exhibit Index is hereby incorporated by reference. 

 
(a)
The undersigned registrant hereby undertakes:

 
(1)
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
 
(i)
To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
 
(ii)
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
 
(iii)
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
 
(2)
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
 
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
 
(4)
That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
 
(i)
Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
 
(ii)
Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
 
(5)
That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
 
(i)
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
 
(ii)
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
 
(iii)
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
 
(iv)
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
 
 
II-3

 
(b)
The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c)
The undersigned registrant hereby undertakes to deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim financial information required to be presented by Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information. 

 
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Hong Kong, on August 14, 2014.
 
 
GREAT CHINA MANIA HOLDINGS, INC.
   
 
By
 
   
Kwong Kwan Yin Roy
Chief Executive Officer and Director
 
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the dates indicated.
 
Signature
 
Title
 
Date
   
Chief Executive Officer and Director,
Chief Financial Officer
 
August 14, 2014
Kwong Kwan Yin Roy
       
         


EXHIBIT INDEX
 
Exhibit
   
Number
 
Description
3.1
 
Articles of Amendment, dated December 16, 2013
Filed herewith
3.2*
 
Second Amended and Restated Articles of Incorporation, dated July 8, 2009
Filed on March 13, 2013 as Exhibit 3.1 to the issuer’s Registration Statement on Form S-1 (File No. 333-187235) and incorporated herein by reference.
3.3*
 
Articles of Amendment and Name Change, dated March 16, 2011
Filed on March 13, 2013 as Exhibit 3.2 to the issuer’s Registration Statement on Form S-1 (File No. 333-187235) and incorporated herein by reference.
3.4*
 
Bylaws
Filed on November 29, 2006 as Exhibit 3.ii to the issuer’s Registration Statement on Form SB-2 (File No. 333-139008) and incorporated herein by reference.
5.1
 
Opinion of Harrison Law, P.A. with respect to the legality of the securities being registered.
Filed herewith
23.1
 
Consent of DKM Certified Public Accountants, Independent Registered Public Accounting Firm
Filed herewith
*Previously filed