UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)


[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
for the quarterly period ended: September 30, 2014.

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
for the transition period from ____________ to _____________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  þ  No  o

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or 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.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  o  No  þ

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TABLE OF CONTENTS

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PART I – FINANCIAL INFORMATION

ChinAmerica Andy Movie Entertainment Media Co.

CONDENSED BALANCE SHEETS

(All Amounts Shown in US Dollars)

The accompanying footnotes are an integral part of these condensed unaudited financial statements.

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CONDENSED STATEMENTS OF OPERATIONS

(All Amounts Shown in US Dollars)

 

		Nine Months Ended September 30								Three Months Ended September 30
		2014 (unaudited)				2013 (unaudited)				2014 (unaudited)				2013 (unaudited)
Revenue:
Consulting Revenue		$	1,306,480			$	-			$	323,150			$	-
Operating Expenses:
General and Administrative – related party			156,048				-				51,365				-
General and Administrative			111,721				24,089				61,583				8,588
Total Operating Expenses			267,769				24,089				112,948				8,588
Profit (Loss) from Operations			1,038,711				(24,089	)			210,202				(8,588	)
Other Income			2,630				-				1,664				-
(Loss) Income Before Tax			1,041,341				(24,089	)			211,866				(8,588	)
Income Tax Expense			(391,400	)			-				(178,600	)			-
Net Income (Loss)		$	649,941			$	(24,089	)		$	33,266			$	(8,588	)
Basic and Diluted Net Income (Loss) per share:
Basic and Diluted		$	0.01			$	(0.00	)*		$	0.00	*		$	(0.00	)*
Weighted average shares outstanding: Basic and Diluted			125,136,825				11,010,136				125,513,617				15,948,557

 * denotes income (loss) of less than $0.01 per share.

The accompanying footnotes are an integral part of these condensed unaudited financial statements.

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 ChinAmerica Andy Movie Entertainment Media Co.

CONDENSED STATEMENTS OF CASH FLOWS

(All Amounts Shown in US Dollars)

 

		Nine Months Ended September 30,
		2014 (unaudited)				2013 (unaudited)
Cash Flows from Operating Activities
Net Income (Loss)		$	649,941			$	(24,089	)
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operations:1
Marketing Expense paid in shares of common stock			60,000				-
Changes in Operating Assets and Liabilities:
Prepaid Expenses			(277	)			-
Accounts Payable			7,292				528
Accrued taxation			391,400				-
Related Party Receivable			(8,056	)			-
Net Cash  Provided by (Used In) Operating Activities			1,100,301				(23,561	)
Cash Flows From Investing Activities:
Net Cash (Used In) Provided By Investing Activities			-				-
			-				-
Cash Flows From Financing Activities:
Loans from (repayment to) Shareholders			(24,616	)			11,616
Issuance of Common Stock			-				199,384
Net Cash (Used In) Provided By Financing Activities			(24,616	)			211,000
Net Change in Cash and Cash Equivalents:			1,215,069				187,439
Cash and Cash Equivalents, beginning of period			286,383				3,641
Cash and Cash Equivalents, end of period		$	1,501,452			$	191,080
Supplemental Disclosure:
Cash paid for interest		$	-			$	-
Cash paid for income taxes		$	-			$	-
Non-Cash Financing Activities:
Issuance of Common Stock for converted debt		$	20,500			$	149,384

The accompanying footnotes are an integral part of these condensed unaudited financial statements.

 

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ChinAmerica Andy Movie Entertainment Media Co.

Notes to Condensed Financial Statements

For the Three and Nine Months Ended September 30, 2014 and 2013

 (Unaudited)

Organization

ChinAmerica Andy Movie Entertainment Media Co. ("CAME" or the "Company")  was incorporated under the laws of the State of Florida on September 26, 2002. On October 11, 2012, the Company changed its operations to focus on movie, entertainment and media.

The Company's headquarters are located in Clearwater, Florida.

Basis of Presentation

The accompanying unaudited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation have been included. In the opinion of management there have been no changes to the Company's significant accounting policies, referred to in the audited consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission on March 20, 2014.

In the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair statement of (a) the result of operations for the nine month period ended September 30, 2014 and 2013; (b) the financial position at September 30, 2013; and (c) cash flows for the nine month period ended September 30, 2014 and 2013, have been made. Management believes that these estimates are reasonable and have been discussed with the Board of Directors; however, actual results could differ from those estimates.

 

Our financial statements may not be comparable to companies that comply with public company effective dates.  Due to our election  not to opt out of the extended transition period that allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. All Amounts referenced in these Financial Statements and this Report are in US Dollars ("USD") unless otherwise stated. Operating results for the three and nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the year ended December 31, 2014.

Cash and Cash Equivalents

The majority of cash is maintained with a major financial institution in Shanghai, China. Generally, these deposits may be redeemed on demand and, therefore, bear minimal risk.  The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Foreign Currency Translation.  

The Company addressed the effect of the exchange rate differences resulting from the translation for currency transferred to the Company for consulting services from an account held by AF Ocean Shanghai in China, by using the current day exchange rate from ¥CNY to $USD conversion.  The accumulated exchange rate for the nine month period ended September 30, 2014 was a net loss of ($5,328).  The effect of the foreign currency translation is recorded in income in the general and administrative expense line item.   

Because of fluctuations (including possible devaluations) in currency exchange rates between ¥CNY and $USD or the imposition of limitations on conversion of foreign currencies into $USD, we are subject to currency translation exposure on the profits of our operations. Although the rates have remained relatively stable over the last year, this is not indicative of future changes or the related translation risk. Currently the Company does not hedge against foreign currency or interest rate risk, and as such significant changes in either can have adverse effects on our operations.

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Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Accounting for Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

The Company accounts for taxes in accordance with ASC 740-10, "Accounting for Uncertain Income Tax Positions." When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained.  In accordance with ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any.  Tax positions taken are not offset or aggregated with other positions.  Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority.  The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. 

The Company believes its tax positions are all highly certain of being upheld upon examination.  As such, the Company has not recorded a liability for unrecognized tax benefits.  As of September 30, 2014, tax years 2013, 2012, 2011 and 2010 remain open for IRS audit.  The Company has received no notice of audit from the IRS for any of the open tax years.

 

Revenue Recognition

The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.

Consulting Revenue recognized to date consists of pre-production research and strategizing, introduction of American talents and potential partners, training and global market consulting, especially regarding distribution and production in the United States.  Revenue is not related to final film production or licensing and therefore is not subject to FASB ASC 926 – Films revenue recognition guidance.

Stock-Based Compensation

The Company accounts for stock-based instruments issued to employees in accordance with ASC Topic 718.  ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees.  The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method. The Company accounts for non-employee share-based awards in accordance with the measurement and recognition provisions ASC Topic 505-50.  The Company estimates the fair value of stock options at the grant date by using the Black-Scholes option-pricing model.

 

Recent Accounting Pronouncements

We have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the Company financial statements.

 

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We had a net income before income taxes of $1,041,341 for the nine month period ended September 30, 2014. We have accrued an estimated tax liability in the amount of $391,400 at an effective tax rate of 38%.  All net operating carry forwards have been utilized.

 

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Stock Options and Warrants

The Company had no options or warrants issued or outstanding during the three and nine months ended September 30, 3014 and 2013.

 

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The following discussion should be read in conjunction with our financial statements and the notes thereto.

Forward-Looking Statements

This quarterly report contains forward-looking statements relating to us that are based on the beliefs of our management as well as assumptions made by, and information currently available to, our management. When used in this Report, the words "anticipate", "believe", "estimate", "expect", "intend", "plan" and similar expressions, as they relate to us or our management, are intended to identify forward-looking statements. These statements reflect management's current view of us concerning future events and are subject to certain risks, uncertainties and assumptions, including among many others; changes in domestic and foreign laws, regulations and taxes, changes in economic conditions, a general economic downturn, a downturn in the securities markets, Securities and Exchange Commission regulations which affect trading in the securities of "penny stocks," and other risks and uncertainties. Should any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this Report as anticipated, estimated or expected.

Use of Certain Defined Terms

Except as otherwise indicated by the context, references in this report to "ChinAmerica" "we," "us,"  "our" and the "Company" are references to the business of ChinAmerica Andy Movie Entertainment Media Co.

Use of GAAP Financial Measures

We use GAAP financial measures in the section of this quarterly report captioned "Management's Discussion and Analysis and Results of Operation." All of the GAAP financial measures used by us in this report relate to the inclusion of financial information.

Overview

 

Employees

As of September 30, 2014, there is one (1) officer who oversees our operations.

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Critical Accounting Policies

The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the 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.  Our actual results could differ from those estimates.

We use historical data to assist in the forecast of our future results.  Deviations from our projections are addressed when our financials are reviewed on a monthly basis.  This allows us to be proactive in our approach to managing our business.  It also allows us to rely on proven data rather than having to make assumptions regarding our estimates.

Management does not believe that our actual results are related to any sensitivity in estimates made by management.  The year-end consistency of our results has shown that our prior year's historical data is the best projector of our future results.

Consulting Revenue and Film Industry Accounting

Consulting Revenue recognized to date consists of pre-production research and strategizing, introduction of American talents and potential partners, training and global market consulting, especially regarding distribution and production in the United States.  Revenue is not related to final film production or licensing and therefore is not subject to FASB ASC 926 – Films revenue recognition guidance.

The Company may enter into arrangements with third parties to co-produce many of its theatrical productions. These arrangements, which are referred to as co-financing arrangements, take various forms. The parties to these arrangements could include studio and non-studio entities, both domestic and foreign. In several of these agreements, other parties control certain distribution rights. The Filmed Entertainment segment records the amounts received for the sale of an economic interest as a reduction of the cost of the film, as the investor assumes full risk for that portion of the film asset acquired in these transactions. The substance of these arrangements is that the third-party investors own an interest in the film and, therefore, receive a participation based on the respective third-party investor's interest in the profits or losses incurred on the film. Consistent with the requirements of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 926 "Entertainment-Films" ("ASC 926"), the estimate of a third-party investor's interest in profits or losses on the film is based on total estimated ultimate revenues.

926-20-35-12 Unamortized film costs shall be tested for impairment whenever events or changes in circumstances indicate that the fair value of the film may be less than its unamortized costs. The following are examples of events or changes in circumstances that indicate that an entity shall assess whether the fair value of a film (whether completed or not) is less than its unamortized film costs:

·	An adverse change in the expected performance of a film prior to release

·	Actual costs substantially in excess of budgeted costs

·	Substantial delays in completion or release schedules, Changes in release plans, such as a reduction in the initial release pattern.

·	Insufficient funding or resources to complete the film and to market it effectively

·	Actual performance subsequent to release failing to meet that which had been expected prior to release.

At this time, no final films have been produced by the Company.  Once production has been completed the Company will recognize all film related revenue separate from consulting revenue and in accordance with ASC 926.

Income Taxes

We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. In the event we were to determine that we would be able to realize our deferred income tax assets in the future in excess of their net recorded amount, we would make an adjustment to the valuation allowance, which would reduce the provision for income taxes.

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Share-based Compensation 

The Company may issue stock options whereby all share-based payments to employees, including grants of employee stock options are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). The Company had no common stock options or common stock equivalents granted or outstanding for all periods presented.

The Company accounts for stock-based instruments issued to employees in accordance with ASC Topic 718.  ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees.  The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method.  The Company accounts for non-employee share-based awards in accordance with the measurement and recognition provisions ASC Topic 505-50.  The Company estimates the fair value of stock options at the grant date by using the Black-Scholes option-pricing model.

The Company may issue restricted stock for various business and administrative services.  Cost for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete.

 

		For the Nine Months Ended September 30,
		2014				2013				% Change
Revenue		$	1,306,480			$	-				100	%
General and Administrative Expense-Related Party			156,048			$	-				100	%
General and Administrative			111,721				24,089				361	%
Total General and Administrative Expenses			267,769				24,089				100	%
Income (Loss) from Operations			1,038,711			$	(24,089	)			(4412	%)
Interest Income			2,630			$	-				100	%
Tax provision			(391,400	)		$	-				(100	%)
Net Income (Loss)		$	649,941			$	(24,089	)			(2798	%)

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		Three Months Ended September 30,
		2014				2013				% Change
Revenue		$	323,150			$	-				100	%
General and Administrative – Related Party			51,365				-				100	%
General and Administrative Expense			61,583				8,588				617	%
Total General and Administrative Expenses			112,948				(8,588	)			100	%
Interest Income			1,664				-				100	%
Income (Loss) from Operations		$	211,866			$	(8,588	)			(2567	%)
Income Tax Expense			(178,600	)			-				(100	%)
Net Income (Loss)		$	33,266			$	(8,588	)			(487	)%

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Inflation

Inflation currently does not materially affect our business or the results of our operations, however inflation in either the current US or Chinese economies could advrsly affect our cash flows and ability to operate.

Recent Accounting Pronouncements

We have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the Company financial statements.

Off-Balance Sheet Arrangements

We do not have any off-balance arrangements.

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

 

 

Disclosure Controls and Procedures.

 

The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) that are designed to ensure that information required to be disclosed in the Company's Securities Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to the Company's management, as appropriate, to allow timely decisions regarding required disclosure.

The Company's management, with the participation of our principal executive and principal financial officer evaluated the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, our principal executive and principal financial officer  concluded that, as of the end of the period covered by this report, the Company's disclosure controls and procedures were not effective.

Changes in Internal Controls over Financial Reporting

There was no change in the Company's internal control over financial reporting during the quarterly period covered by this report that has materially affected or is reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II – OTHER INFORMATION

 

We were not subject to any legal proceedings during the three month period ended September 30, 2014, nor to the best of our knowledge and belief are any threatened or pending.

We did not sell any unregistered equity securities during the three month period ended September 30, 2014.

  

No senior securities were issued and outstanding during the three month period ended September 30, 2014.

  

Not applicable to our Company.

None.

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.