U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

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

 

For the quarterly period ended June 30, 2015

 

Commission File No. 333-188401

 

SUCCESS ENTERTAINMENT GROUP INTERNATIONAL INC.

(Name of small business issuer in its charter)

 

Nevada		99-0385424
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

531 Airport North Office Park Fort Wayne, Indiana 46825

(Address of principal executive offices)

(260) 490-9990

(Issuer’s telephone number)

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Securities registered pursuant to Section 12(g) of the Act: None

 

Name of each exchange on which registered: N/A

 

Indicate by checkmark whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 x No ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 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 x No ¨

 

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

 

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x

 

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the most practicable date:

 

Class		Outstanding as of June 30, 2015
Common Stock, $0.001		10,360,000

 

 

 

SUCCESS ENTERTAINMENT GROUP INTERNATIONAL INC.

FORM 10-Q

FOR THE PERIOD ENDED JUNE 30, 2015

 

INDEX

 

			Page
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS			3
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements			4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations			5
Item 3.	Qualitative and Quantitative Disclosures About Market Risk			10
Item 4.	Controls and Procedures			10
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings			13
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds			13
Item 3.	Defaults Upon Senior Securities			13
Item 4.	Mine Safety Disclosure			13
Item 5.	Other information			13
Item 6.	Exhibits			14
SIGNATURES				15

 

2

 

Forward-Looking Information

 

This Quarterly Report on Form 10-Q (this “Report”) contains “forward-looking statements” within the meaning of the Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future operations, future cash needs, business plans and future financial results, and any other statements that are not historical facts.

 

From time to time, forward-looking statements also are included in our other periodic reports on Form 10-K, Forms 10-Q and 8-K, in our press releases, in our presentations, on our website and in other materials released to the public. Any or all of the forward-looking statements included in this Report and in any other reports or public statements made by us are not guarantees of future performance and may turn out to be inaccurate. These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and 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 Report.

 

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

 

3

 

ITEM 1. FINANCIAL STATEMENTS

 

INDEX TO FINANCIAL STATEMENTS

 

Balance Sheets		F-1
Statements of Operations (Unaudited)		F-2
Statements of Cash Flows (Unaudited)		F-3
Notes to Financial Statements (Unaudited)		F-4 - F-7

 

4

 

SUCCESS ENTERTAINMENT GROUP INTERNATIONAL, INC.

BALANCE SHEETS

 

		June 30,				December 31,
		2015				2014
		(Unaudited)
Assets
Total Assets		$	-			$	-
Liabilities and Stockholders' Equity (Deficit)
Current Libilities
Accrued expenses		$	4,125			$	-
Loan - related party			22,362				9,434
Total Current Liabilities			26,487				9,434
Total Liabilities			26,487				9,434
Commitments and Contingencies
Stockholders' Equity (Deficit)
Common stock,$0.001 par value,75,000,000 shares authorized; 10,360,000 shares issued and outstanding			10,360				10,360
Additional paid in capital			26,340				26,340
Accumulated deficit			(63,187	)			(46,134	)
Total stockholders' equity (deficit)			(26,487	)			(9,434	)
Total liabilities and stockholders' equity (deficit)		$	-			$	-

 

See Notes to Financial Statements

 

F-1

 

SUCCESS ENTERTAINMENT GROUP INTERNATIONAL, INC.

STATEMENTS OF OPERATIONS

(UNAUDITED)

 

		For the Three Months Ended								For the Six Months Ended
		June 30,								June 30,
		2015				2014				2015				2014
Revenue		$	-			$	-			$	-			$	-
Operating Expenses
General and administrative			7,638				14,678				17,053				22,698
Net Income (Loss) from Operation			(7,638	)			(14,678	)			(17,053	)			(22,698	)
Other Expenses			-				-				-				(1,620	)
Net Income (Loss) from Operation before Taxes			(7,638	)			(14,678	)			(17,053	)			(24,318	)
Provision for Income Taxes			-				-				-				-
Net Income (Loss)		$	(7,638	)		$	(14,678	)		$	(17,053	)		$	(24,318	)
Earnings (Loss) per common share-Basic and diluted		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.00	)
Weighted Average Number of Common Shares Outstanding Basic and diluted			10,360,000				10,360,000				10,360,000				10,185,635

 

See Notes to Financial Statements

 

F-2

 

SUCCESS ENTERTAINMENT GROUP INTERNATIONAL, INC.

STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

		For the Six Months Ended
		June 30,
		2015				2014
Operating Activities
Net loss of the period		$	(17,053	)		$	(24,318	)
Loss on equity deposit			-				1,620
Accounts payable increase (decrease)			-				750
Accrued expenses increase (decrease)			4,125				-
Net cash used in operating activities			(12,928	)			(21,948	)
Financing Activities
Proceeds from sales of common stock			-				9,600
Loans from related parties			12,928				1,600
Net cash provided by financing activities			12,928				11,200
Net increase (decrease) in cash and equivalents			-				(10,748	)
Cash and equivalents at beginning of the period			-				12,360
Cash and equivalents at end of the period		$	-			$	1,612
Supplemental cash flow information:
Interest paid		$	-			$	-
Income taxes paid		$	-			$	-

 

See Notes to Financial Statements

 

F-3

 

SUCCESS ENTERTAINMENT GROUP INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

 

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

 

Success Entertainment Group International, Inc. (“the Company”, ”we”, ”us”, or “our”) was incorporated in the State of Nevada on January 30, 2013 under the name Altimo Group Corp. and its initial business plan was to place and sell frozen yogurt making machines.

 

Effective July 14, 2014, there was a change in control of the Company.In accordance with the terms and provisions of a stock purchase agreement dated May 5, 2014 (the "Stock Purchase Agreement") by and among Marek Tomaszewski, the seller of an aggregate of 8,000,000 shares of common stock of the Company (the "Control Block Seller"), and Success Holding Group Corp. USA, a Nevada corporation (the "Control Block Purchaser"), the Control Block Purchaser purchased from the Control Block Seller all of the 8,000,000 shares of common stock held of record.

 

In accordance with the terms and provisions of the Stock Purchase Agreement, the Company accepted the resignations of its sole officer and director, Marek Tomaszewski as President, Chief Executive Officer, Secretary, Treasurer and Chief Financial Officer effective July 14, 2014. Simultaneously, the Board of Directors appointed the following individuals: (i) Steve Chen as a member of the Board of Directors and the Chief Executive Officer; and (ii) Brian Kistler as a member of the Board of Directors and the President, Secretary, Treasurer and Chief Financial Officer.

 

Effective July 14, 2014, our Board of Directors and majority shareholders approved an amendment to our articles of incorporation to change our name to "Success Entertainment Group International Inc." (the “Name Change Amendment”). The Name Change Amendment was approved by our Board of Directors to better reflect the new nature of our business operations. The Name Change Amendment was filed with the Secretary of State of Nevada on August 22, 2014 changing our name to "Success Entertainment Group International Inc."

 

Effective on July 15, 2014, the Board of Directors of Altimo Group Corp authorized and approved the execution of that certain general release and waiver of debt agreement (the "Release Agreement") with Marek Tomaszekwsi, the Company's prior President, Chief Executive Officer, Secretary, Treasurer and Chief Financial Officer (the "Creditor"), pursuant to which the Creditor agreed to waive and release the debt due and owing to him in the aggregate amount of $5,100 (the "Released Debt"). In accordance with the terms and provisions of the Release Agreement, the Creditor agreed to release, acquit, covenant not to sue and specifically release and waive any claims or rights it may have under common law and statutory law relating to the Released Debt.

 

Effective July 15, 2014, pursuant to the change in ownership described above, the focus and direction of the Company will now be the production and development of internet movies and training films.

 

On December 1, 2014, the Board of Directors of the Company authorized an amendment to its Bylaws to change the Company’s fiscal year end From March 31 to December 31.

 

On December 2, 2014, our Board of Directors accepted the resignation of Steven A. Chen as the Chief Executive Officer and appointed Chris (Chi Jui) Hong as the Chief Executive Officer and a member of the Board of Directors. Mr. Chen remained Chairman of the Board of Directors. Following these appointments, our Board of Directors consists of three members: (i) Steve A. Chen; (ii) Brian Kistler; and (iii) Chris (Chi Jui) Hong.

 

F-4

  

NOTE 2 – GOING CONCERN

 

The Company has incurred losses since Inception (January 30, 2013) resulting in an accumulated deficit of $63,187 as of June 30, 2015 and further losses are anticipated in the development of its business. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern.

 

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that could result from the outcome of this uncertainty.

 

The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and, or, obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.

 

Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

 

NOTE 3 – SUMMARY OF SIGNIFCANT ACCOUNTING POLICIES

 

Interim Financial Statements

 

The accompanying unaudited financial statements have been prepared in accordance with the instructions from Regulation S-X, promulgated under the Securities Act of 1933, as amended, and do not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. All adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim period(s), and to make the financial statements not misleading, have been made and are of a recurring nature unless otherwise disclosed herein. The results of operations for such interim period(s) are not necessarily indicative of operations for a full year.

 

Basis of Presentation

 

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles 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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had $0 of cash as of June 30, 2015 and December 31, 2014.

 

The Company’s bank accounts are set up with federally insured institutions. The funds are insured up to $250,000. At June 30, 2015 and December 31, 2014, the Company’s bank deposits did not exceed the insured amounts.

 

F-5

 

Fair Value of Financial Instruments

 

ASC 820 "Fair Value Measurements and Disclosures" establishes a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

 

These tiers include:

 

Level 1: defined as observable inputs such as quoted prices in active markets;

 

Level 2: defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

 

Level 3: defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

 

The Company’s financial instruments consist of a related party loan and a note payable related party. The carrying amount of these financial instruments approximates fair value due their short term maturity.

 

Income Taxes

 

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

 

Revenue Recognition

 

The Company will recognize revenue in accordance with ASC. 605, “Revenue Recognition”. ASC-605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.

 

Advertising Costs

 

The Company policy regarding advertising is to expense advertising when incurred. The Company incurred advertising expense of $0 during the six month periods ended June 30, 2015 and 2014.

 

Stock-Based Compensation

 

Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718.

 

As at June 30, 2015, the Company has not adopted a stock option plan and has not granted any stock options.

 

F-6

 

Basic and diluted Income (Loss)

 

Per Share Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. For the six month periods ended June 30, 2015 and 2014, there were no potentially dilutive securities issued or outstanding and any such shares would have been excluded from the computation because they would have been anti-dilutive as the Company incurred losses for these periods.

 

Recent Accounting Pronouncements

 

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial condition or the results of its operations.

 

NOTE 4 – LOAN PAYABLE – RELATED PARTY

 

Success Holdings Group Corp. USA, our parent company, paid certain operating costs on our behalf, which were booked as a loan to the Company. The total amount owed as at June 30, 2015 and December 31, 2014 are $22,362 and $9,434, respectively.

 

The loan is unsecured, non-interest bearing and due on demand.

 

NOTE 5 – COMMON STOCK

 

The Company has 75,000,000 shares of common stock, $0.001 par value, authorized.

 

On March 13, 2013, the Company issued 8,000,000 shares of common stock to a director for cash proceeds of $8,000 at $0.001 per share.

 

Between December 2013 and March 2014, the Company sold 2,360,000 shares of common stock for cash proceeds of $23,600 at $0.01 per share.

 

There were 10,360,000 shares of common stock issued and outstanding as of June 30, 2015 and December 31, 2014.

 

NOTE 6 – COMMITMENTS AND CONTINGENCIES

 

Contractual

 

The Company neither owns nor leases any real or personal property. An officer has provided officer services without charge. There is no obligation for the officer to continue this arrangement. Such costs are immaterial to the financial statements and accordingly are not reflected herein. The officers and directors are involved in other business activities and most likely will become involved in other business activities in the future.

 

Legal

 

We were not subject to any legal proceedings on June 30, 2015 and no legal proceedings are pending or threatened to the next of our knowledge or belief.

 

F-7

 

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

BACKGROUND

 

Success Entertainment Group International Inc. (“the Company”, “we”, “us” or “our”) was incorporated in the State of Nevada on January 30, 2013 (Inception) under the name Altimo Group Corp. to engage in the sale of frozen yogurt machines.

 

Our fiscal year end is December 31.

 

On May 5, 2014, Marek Tomaszewski, our former sole officer, director and majority shareholder entered into an agreement to sell 8,000,000 shares of our common stock, representing 77% of the common shares outstanding to Success Holding Group Corp. USA, a Nevada corporation ("Success Holding"), which resulted in a change of control of the Company effective July 14, 2014.

 

As a result of the change of control:

 

	·	Success Holding became our majority shareholder,
	·	Marek Tomaszewski, our then sole officer and director resigned and Success Holding appointed new officers and directors,
	·	Upon FINRA approval on September 26, 2014, we changed our name to Success Entertainment Group International Inc,
	·	Our trading symbol became "SEGN", and
	·	Our business became the commercialization of internet movies in China.

 

CURRENT BUSINESS OPERATIONS

 

Our majority shareholder, Success Holding is the majority shareholder of Success Entertainment Group International, Inc., a Nevada corporation, corporation engaged in the production of internet movies in China. We plan to produce non-series and internet inspirational movies that appeal to teens and young adults.

 

During fiscal year 2015, we plan to produce our first movie. We anticipate an operational budget of between $300,000 to $1,000,000 depending on production costs and available funding.

 

As of the date of this Quarterly Report, we have not commenced production.

 

5

 

RESULTS OF OPERATIONS

 

The following discussion should be read in conjunction with our unaudited financial statements and the related notes that appear elsewhere in this Quarterly Report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this Quarterly Report. Our reviewed financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

 

We are a development stage company and have not generated any revenue. We have incurred recurring losses since inception. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

 

We believe we will require additional capital to meet our long-term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

 

SUMMARY COMPARISON OF OPERATING RESULTS*

 

		For the Six Months Ended
		June 30,
		2015				2014
Revenue		$	-			$	-
Operating Expenses			17,053				22,698
Income (Loss) from Operations			(17,053	)			(22,698	)
Other Expenses			-				(1,620	)
Net Income (Loss)			(17,053	)			(24,318	)

 

Six Month Period Ended June 30, 2015 Compared to Six Month Period Ended June 30, 2014.

 

During the six month period ended June 30, 2015 and June 30, 2014, we did not generate any revenue. During the six month period ended June 30, 2015, we incurred operating expenses of $17,053 compared to $22,698 incurred during the six month period ended June 30, 2014, a decrease of $5,645. Operating expenses generally consisted of general and administrative of $17,053 and $22,698 for the six months ending June 30, 2015 and June 30, 2014, respectively. The decrease in operating expenses was primarily attributable to a decrease in general and administrative expenses. General and administrative expenses generally include corporate overhead, financial and administrative contracted services, marketing, and consulting costs.

 

During the six month period ended June 30, 2015, and June 30, 2014, we incurred $0 and $1,620 other expenses, respectively.

 

Our net loss for the six month period ended June 30, 2015 was $17,053 or $0.00 per share compared to a net loss of $24,318 or $0.00 per share during the six month period ended June 30, 2014, a decrease of $5,645 due to reduced administrative expenses during the six month period ended June 30, 2015. The weighted average number of shares outstanding was 10,360,000 and 10,108,635 for the six month periods ended June 30, 2015 and June 30, 2014, respectively.

 

6

 

Cash Flows from Operating Activities

 

For the six month period ended June 30, 2015, net cash used in operating activities was $12,928 compared to $21,948 for the six month period ended June 30, 2014. For the six months ended June 30, 2015, and June 30, 2014, net cash used in operating activities consisted primarily of a net loss of $17,053 and $24,318, respectively.

 

Cash Flows from Investing Activities

 

For the six month periods ended June 30, 2015 and June 30, 2014, net cash used in investing activities was $0.00.

 

Cash Flows from Financing Activities

 

For the six month period ended June 30, 2015, net cash provided by financing activities was $12,928 consisting of loans from related parties compared to net cash provided by financing activities of $11,200 for the six month period ended June 30, 2014, consisting of $9,600 in proceeds from sales of common stock and $1,600 in loans from related parties.

 

		For the Three Months Ended
		June 30,
		2015				2014
Revenue		$	-			$	-
Operating Expenses			7,638				14,678
Income (Loss) from Operations			(7,638	)			(14,678	)
Other Expenses			-				-
Net Income (Loss)			(7,638	)			(14,678	)

 

Three Month Period Ended June 30, 2015 Compared to Three Month Period Ended June 30, 2014.

 

During the three month period ended June 30, 2015 and June 30, 2014, we did not generate any revenue. During the three month period ended June 30, 2015, we incurred operating expenses of $7,638 compared to $14,678 incurred during the three month period ended June 30, 2014, a decrease of $7,040. Operating expenses generally consisted of general and administrative expenses of $7,638 and $14,678 for the three months ended June 30, 2015, and June 30, 2014, respectively. The decrease in operating expenses was primarily attributable to a decrease in general and administrative expenses. General and administrative expenses generally include corporate overhead, financial and administrative contracted services, marketing, and consulting costs.

 

During the three month period ended June 30, 2015, and June 30, 2014, we did not incur other expenses.

 

Our net loss for the three month period ended June 30, 2015 was $7,638 or $0.00 per share compared to a net loss of $14,678 or $0.00 per share during the three month period ended June 30, 2014, a decrease of $7,040 due to reduced administrative expenses during the three month period ended June 30, 2015. The weighted average number of shares outstanding was 10,360,000 for the three month periods ended June 30, 2015 and June 30, 2014, respectively.

 

7

  

LIQUIDITY AND CAPITAL RESOURCES

 

As of June 30, 2015

 

As of June 30, 2015, and December 31, 2014 our total current assets were $0 and our current liabilities were $26,487 compared to current liabilities of $9,434 at December 31, 2014. This resulted in a working capital deficit of $26,487 and $9,434, at June 30, 2015 and December 31, 2014, respectively. As of June 30, 2015, our current liabilities were $26,487 of which $22,362 represents a related party loan and $4,125 represents accrued expenses. As of December 31, 2014, our current liabilities were $9,434 representing a related party loan.

 

As of June 30, 2015, and December 31 2014, our total liabilities were $26,487 and $9,434 respectively comprised entirely of current liabilities. The increase in total liabilities as of June 30, 2015, compared to December 31, 2014, was primarily due to an increase in related party loans from $9,434 to $22,362.

 

Accumulated deficit increased from $46,134 at December 31, 2014 to $63,187 at June 30, 2015 due to the losses we incurred in the six month period ended June 30, 2015.

 

Stockholders' equity (deficit) decreased from ($9,434) at December 31, 2014 to ($26,487) at June 30, 2015.

 

We believe that further loans from related parties and private offerings of our shares will be sufficient to satisfy our upcoming working capital needs, capital asset purchases and other liquidity requirements associated with our operations over the next 12 months. To the extent we need additional capital, we may seek to raise additional funds through public or private equity offerings, debt financings, capital lease transactions, corporate collaborations or other means. We may seek to raise additional capital due to favorable market conditions or strategic considerations even if we have sufficient funds for planned operations. The sale of additional equity or convertible debt securities could result in dilution to our stockholders. Debt financing could require us to pledge certain assets and enter into covenants that could restrict certain business activities or our ability to incur further indebtedness, and may contain other terms that are not favorable to our stockholders or us. To the extent that we raise additional funds through collaborative arrangements, it may be necessary to relinquish some rights to our technologies or grant licenses on terms that are not favorable to us. We do not know whether additional funding will be available on acceptable terms, or at all. A failure to secure additional funding when needed may require us to curtail certain operational activities, including regulatory trials, sales and marketing, and international operations and would have a material adverse effect on our future business and financial condition.

 

Critical Accounting Policies and Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported in the financial statements, including the notes thereto, and related disclosures of commitments and contingencies, if any. We consider our critical accounting policies to be those that require more significant judgments and estimates in the preparation of financial statements, including the following:

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities 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 could differ from those estimates.

 

Fair Value of Financial Instruments

 

Our financial instruments consist of cash and cash equivalents, prepaid expenses, payables and accrued expenses. Fair value estimates are made at a specific point in time, based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. We consider the carrying values of our financial instruments in the consolidated financial statements to approximate fair value, due to their short-term nature.

 

8

  

Property and Equipment

 

Property and equipment are recorded at cost, less accumulated depreciation. Depreciation is provided for using straight-line methods over the estimated useful lives of the respective assets.

 

Valuation of Long-Lived Assets

 

We periodically evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If the estimated future cash flows (undiscounted and without interest charges) from the use of an asset were less than the carrying value, a write-down would be recorded to reduce the related asset to its estimated fair value.

 

Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements as defined in Regulation S-K Item 303(a)(4).

 

Recent Accounting Pronouncements

 

(See “Recently Issued Accounting Pronouncements” in Note 2c of Notes to the unaudited consolidated Financial Statements.)

 

PLAN OF OPERATIONS

 

Since our inception on January 30, 2013, through June 30, 2015, we incurred losses which resulted in an accumulated deficit of $63,187 and $46,134 as of June 30, 2015 and December 31, 2014, respectively. Further losses are anticipated in the development of our business. Accordingly, there is substantial doubt about our ability to continue as a going concern.

 

The ability to continue as a going concern is dependent upon us generating profitable operations in the future and, or, obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand, loans from directors and, or, the private placement of common stock.

 

Because of our history of losses, our independent auditors, in the reports on the financial statements for fiscal year ended March 31, 2014, and nine months ending December 31, 2014, expressed substantial doubt about our ability to continue as a going concern. The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of us as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that could result from the outcome of this uncertainty.

 

Management anticipates that we will be dependent, for the near future, on additional investment capital to fund operating expenses. We intend to position ourselves so that we may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that we will be successful in this or any of our endeavors or become financially viable and continue as a going concern.

 

MATERIAL COMMITMENTS

 

Related Party Payable

 

As of June 30, 2015, our majority shareholder and parent company has loaned us money to pay certain operating expenses on our behalf aggregating $22,362. This payable is unsecured, non-interest bearing and due on demand.

 

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PURCHASE OF SIGNIFICANT EQUIPMENT

 

We do not intend to purchase any significant equipment during the next twelve months.

 

OFF-BALANCE SHEET ARRANGEMENTS

 

As of the date of this Quarterly Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

 

GOING CONCERN

 

The independent auditor’s report for fiscal year ended March 31, 2014, and nine months ending December 31, 2014, accompanying our financial statements contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business. We have suffered recurring losses from operations, have a working capital deficit and are currently in default of the payment terms of certain note agreements. These factors raise substantial doubt about our ability to continue as a going concern.

 

RECENTLY ISSUED ACCOUNTING STANDARDS

 

We have reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial condition or the results of its operations other than in respect of the early adoption of the new regulations relating to Development Stage Entities as discussed in the footnotes to our financial statements.

 

OFF-BALANCE SHEET ARRANGEMENTS.

 

We have no off-balance sheet arrangements.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

As a "smaller reporting company" as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation Of Disclosure Controls And Procedures.

 

We maintain controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosures. Based upon their evaluation of those controls and procedures performed as of the end of the period covered by this report, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were not effective.

 

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Management’s Annual Report On Internal Control Over Financial Reporting.

 

Our Chief Executive Officer and our Chief Financial Officer are responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Securities Exchange Act of 1934, as amended, as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

 

	·	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
	·	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of management and our directors; and
	·	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

 

Because of its inherent limitations, our internal control over financial reporting may not prevent or detect misstatements or omissions. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

Our Chief Executive Officer and our Chief Financial Officer assessed the effectiveness of our internal control over financial reporting as of June 30, 2015. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control — Integrated Framework.

 

Based on our assessment, our Chief Executive Officer and our Chief Financial Officer believe that, as of June 30, 2015, our internal control over financial reporting is not effective based on those criteria, due to the following:

 

	·	Deficiencies in Segregation of Duties. Lack of proper segregation of functions, duties and responsibilities with respect to our cash and control over the disbursements related thereto due to our very limited staff, including our accounting personnel.
	·	Deficiencies in the staffing of our financial accounting department. The number of qualified accounting personnel with experience in public company SEC reporting and GAAP is limited. This weakness does not enable us to maintain adequate controls over our financial accounting and reporting processes regarding the accounting for non-routine and non-systematic transactions. There is a risk that a material misstatement of the financial statements could be caused, or at least not be detected in a timely manner, by this shortage of qualified resources.

 

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In light of this conclusion and as part of the preparation of this report, we have applied compensating procedures and processes, as necessary to ensure the reliability of our financial reporting. Accordingly, management believes, based on its knowledge, that (1) this report does not contain any untrue statement of a material fact or omit to state a material face necessary to make the statements made not misleading with respect to the period covered by this report, and (2) the financial statements, and other financial information included in this report, fairly present in all material respects our financial condition, results of operations and cash flows for the years and periods then ended.

 

This report does 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 the rules under the Sarbanes-Oxley Act of 2002 which permit us to provide only management’s report in this report.

 

Changes In Internal Control Over Financial Reporting.

 

There were no significant changes in our internal control over financial reporting during the first quarter of the year ended June 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

AUDIT COMMITTEE

 

Our board of directors has not established an audit committee. The respective role of an audit committee has been conducted by our board of directors. We intend to establish an audit committee during the fiscal year 2015. When established, the audit committee's primary function will be to provide advice with respect to our financial matters and to assist our board of directors in fulfilling its oversight responsibilities regarding finance, accounting, and legal compliance. The audit committee's primary duties and responsibilities will be to: (i) serve as an independent and objective party to monitor our financial reporting process and internal control system; (ii) review and appraise the audit efforts of our independent accountants; (iii) evaluate our quarterly financial performance as well as its compliance with laws and regulations; (iv) oversee management's establishment and enforcement of financial policies and business practices; and (v) provide an open avenue of communication among the independent accountants, management and our Board of Directors.

 

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PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.

 

ITEM 1A. RISK FACTORS

 

As a "smaller reporting company" as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

 

ITEM 2. UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS

 

No unregistered shares were sold during the three month period ended June 30, 2015.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

No senior securities were issued and outstanding during the three month period ended June 30, 2015.

 

ITEM 4. MINE SATEFY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

Not applicable.

 

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ITEM 6. EXHIBITS

 

The following exhibits are filed as part of this Quarterly Report

 

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

 

(a)	Financial Statements.

 

(b)	Exhibits required by Item 601.

 

31.1		Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act*
31.2		Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act*
32.1		Certification of Chief Executive Officer and Chief Financial Officer Under Section 1350 as Adopted Pursuant Section 906 of the Sarbanes-Oxley Act*

 

101.INS **		XBRL Instance Document
101.SCH **		XBRL Taxonomy Extension Schema Document
101.CAL **		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF **		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB **		XBRL Taxonomy Extension Label Linkbase Document
101.PRE **		XBRL Taxonomy Extension Presentation Linkbase Document

_________ 

* Filed herewith.

 

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 

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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.

 

	SUCCESS ENTERTAINMENT GROUP INTERNATIONAL INC.
	a Nevada corporation
August 19, 2015	By:	/s/ Chris Hong
		Chris Hong
	Its:	CEO (Principal Executive Officer)
August 19, 2015	By:	/s/ Brian Kistler
		Brian Kistler
	Its:	Chief Financial Officer, Secretary, Treasurer (Principal Financial and Accounting Officer)

 

 

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