UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

FORM 10-Q

 

 

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

 

For the quarterly period ended January 31, 2016

 

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

 

For the transition period from                   to

Commission File Number 000-18945

 

GOLIATH FILM AND MEDIA HOLDINGS

(Exact name of registrant as specified in its charter)

 

Nevada		84-1055077
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

 

4640 Admiralty Way, Suite 500, Marina del Rey, California		90292
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number: (909)612-1708

 

Indicate by check mark whether registrant (1) has filed all reports 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. [X] Yes [  ] 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [X] Yes [  ] No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. 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 (Do not check if smaller reporting company)	[  ]	Smaller reporting company	[X]

 

Indicate by check mark 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 latest practicable date.

 

There were 151,313,917 shares of common stock issued and outstanding as March 18, 2016.

 

 

 

GOLIATH FILM AND MEDIA HOLDINGS

 

		Page(s)
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements		3
Condensed Consolidated Balance Sheets as of January 31, 2016 (unaudited) and April 30, 2015		4
Condensed Consolidated Statements of Operations for the three and nine month periods ended January 31, 2016 and 2015 (unaudited)		5
Condensed Consolidated Statements of Cash Flows for the nine month periods ended January 31, 2016 and 2015 (unaudited)		6
Notes to the Condensed Consolidated Financial Statements (unaudited)		7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		16
Item 3. Quantitative and Qualitative Disclosures About Market Risk		24
Item 4. Controls and Procedures		24
PART II – OTHER INFORMATION
Item 1. Legal Proceedings		25
Item 1A. Risk Factors		25
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		25
Item 3. Defaults Upon Senior Securities		25
Item 4. Mine Safety Disclosures		25
Item 5. Other Information		25
Item 6. Exhibits		25
Signatures		26

 

 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions for Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

 

In the opinion of management, the financial statements contain all material adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented.

 

The results for the periods ended January 31, 2016 and 2015 are not necessarily indicative of the results of operations for the full year.

 

 

GOLIATH FILM AND MEDIA HOLDINGS

CONDENSED CONSOLIDATED BALANCE SHEETS

 

		January 31, 2016				April 30, 2015
		(unaudited)
ASSETS
Current assets
Cash and cash equivalents		$	283			$	579
Prepaid expenses			299				299
Total current assets			582				878
Long-term assets
Other assets			15,000				—
Film production costs			311,719				—
Total long-term assets			326,719				—
Total assets		$	327,301			$	878
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable		$	30,856			$	30,385
Accounts payable - related party			9,000				9,000
Notes payable – current portion			15,000				—
Cash Overdraft			16,489				—
Total current liabilities			71,345				39,385
Long-term liabilities
Notes payable			60,000				—
Advance for film production costs			253,700				—
Total long-term liabilities			313,700				—
Total liabilities			385,045				39,385
Stockholders’ Deficit
Preferred stock, $.001 par value, 1,000,000 shares authorized; no shares issued and outstanding at January 31, 2016 and April 30, 2015			—				—
Common stock, $.001 par value, 300,000,000 shares authorized; 151,313,917 and 138,964,917 shares issued and outstanding, at January 31, 2016 and April 30, 2015			151,314				138,965
Additional paid in capital			562,641				451,500
Accumulated deficit			(771,699	)			(628,972	)
Total stockholders’ deficit			(57,744	)			(38,507	)
Total liabilities and stockholders’ deficit		$	327,301			$	878

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

 

GOLIATH FILM AND MEDIA HOLDINGS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

		For the Nine Months Ended								For the Three Months Ended
		January 31,								January 31,
		2016				2015				2016				2015
Operating expenses
Sales and marketing			—				31,020				—				1,810
General and administrative			141,737				180,916				69,757				45,093
Total operating expenses			141,737				211,936				69,757				46,903
Loss from operations			(141,737	)			(211,936	)			(69,757	)			(46,903	)
Loss before income tax			(141,737	)			(211,936	)			(69,757	)			(46,903	)
Provision for income taxes			990				870				330				330
Net loss		$	(142,727	)		$	(212,806	)		$	(70,087	)		$	(47,233	)
Net loss per share of common stock:
Basic and diluted		$	(0.00	)		$	(0.00	)		$	(0.00	)			(0.00	)
Weighted average shares
Outstanding – basic and diluted			146,711,884				131,726,619				151,197,159				135,609,700

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

 

GOLIATH FILM AND MEDIA HOLDINGS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

		For the Nine Months Ended,
		January 31, 2016				January 31, 2015
Cash flows from operating activities
Net loss		$	(142,727	)		$	(212,806	)
Adjustments to reconcile net loss to net cash used in operating expenses
Amortization of prepaid expenses			—				102,000
Changes in operating assets and liabilities:
Prepaid assets			—				4,786
Accounts payable			471				(129	)
Net cash used in operating activities			(142,256	)			(106,149	)
Cash flows from investing activities
Investment in film costs			(311,719	)			—
Investment in films			(15,000	)			—
Net cash provided by investing activities			(326,719	)			—
Cash flows from financing activities
Advance for film production costs			253,700				—
Proceeds from issuance of common stock			123,490				108,815
Cash overdraft			16,489				(1,894	)
Proceeds from notes payable			85,000				—
Repayment of note payable			(10,000	)			—
Net cash provided by financing activities			468,679				106,921
Net change in cash and cash equivalent			(296	)			772
Cash and cash equivalent at beginning of period			579				—
Cash and cash equivalent at end of period		$	283			$	772
Supplemental Disclosure of non-cash investing and financing activities:
Common stock issued for services		$	—			$	136,000
Supplemental Disclosure of cash flow Information:
Cash paid for interest		$	—			$	—
Cash paid for taxes		$	—			$	—

 

See accompanying notes to unaudited condensed consolidated financial statements

 

 

GOLIATH FILM AND MEDIA HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2016 AND 2015

(Unaudited)

 

NOTE 1 – CONDENSED FINANCIAL STATEMENTS

 

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results and operations and cash flows at January 31, 2016 and for all periods presented herein, have been made.

 

Certain information and footnote 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. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s April 30, 2015 and 2014 audited financial statements filed on Form 10K on August 13, 2015. The results of operations for the periods ended January 31, 2016 and 2015 are not necessarily indicative of the operating results for the full years.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Organization, Nature of Business and Trade Name

 

On October 31, 2011 (the “Closing Date”), China Advanced Technology acquired Goliath Film and Media International, a California corporation, by issuing 47,000,000 shares of its Common Stock, constituting 70.1% of the outstanding shares after giving effect to their issuance and the cancellation of 15,619,816 shares held by China Advanced Technology’s prior control person. Immediately following the Closing, 67,100,000 shares were issued and outstanding, including the 100,000 shares sold. On the Closing Date, the name of China Advanced Technology was changed to Goliath Film and Media Holdings (“Goliath”, “GFMH”, or “the Company”). All share numbers herein have been adjusted for an eight-for-1 forward stock split affected as of the Closing Date. The forward stock split was reflected in the trading market on February 13, 2012. The transaction was accounted for as a reverse acquisition in which Goliath Film and Media International is deemed to be the accounting acquirer, and the prior operations of Goliath (formerly China Advanced Technology) are consolidated for accounting purposes. Since Goliath had no operations, assets, or liabilities as of the Closing Date, no audit of that entity was required under the materiality thresholds of Regulation S-X Rule 8-04.

 

The Company is engaged in the production and distribution of motion pictures and digital content.

 

Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of the Company and its subsidiary. All intercompany accounts and transactions have been eliminated.

 

Basis of Presentation

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that (1) recorded transactions are valid; (2) all valid transactions are recorded and (3) transactions are recorded in the period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the company for the respective periods being presented.

 

Use of Estimates

 

The preparation of financial statements in accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. A change in managements’ estimates or assumptions could have a material impact on the Company’s financial condition and results of operations during the period in which such changes occurred.

 

 

GOLIATH FILM AND MEDIA HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2016 AND 2015

(Unaudited)

 

Actual results could differ from those estimates. The Company’s financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented.

 

Accounts Receivable

 

Accounts receivable, if any are carried at the expected net realizable value. The allowance for doubtful accounts, when determined, will be based on management’s assessment of the collectability of specific customer accounts and the aging of the accounts receivables. If there were a deterioration of a major customer’s creditworthiness, or actual defaults were higher than historical experience, our estimates of the recoverability of the amounts due to us could be overstated, which could have a negative impact on operations.

 

The Company currently does not have any accounts receivable. The above accounting policies will be adopted upon the Company carrying accounts receivable.

 

Intangible Assets

 

The Company’s intangible assets consist of intellectual property, principally comprised of costs to produce films. The Company periodically reviews its long lived assets to ensure that their carrying value does not exceed their fair market value.

 

Revenue Recognition

 

We will recognize revenues in accordance with the guidelines of the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104 “Revenue Recognition”.

 

Under SAB 104, four conditions must be met before revenue can be recognized: (i) there is persuasive evidence that an arrangement exists, (ii) delivery has occurred or service has been rendered, (iii) the price is fixed or determinable, and (iv) collection is reasonably assured. The Company provides for an allowance for doubtful account based history and experience considering economic and industry trends. The Company does not have any off-Balance Sheet exposure related to its customers.

 

Goliath Film and Media International, intends to develop, produce and license for distribution quality motion picture and television content. Revenue is recognized when the company receives a contract for the license of its content and its content is delivered to the customer.

 

The Company currently does not have a means for generating revenue. Revenue and cost recognition procedures will be implemented based on the type of properties required and sale contract specifications.

 

Advertising

 

Advertising expenses are recorded as general and administrative expenses when they are incurred. There was no advertising expense for the three and nine months ended January 31, 2016 and 2015, respectively.

 

Research and Development

 

All research and development costs are expensed as incurred. There was no research and development expense for the three and nine months ended January 31, 2016 and 2015, respectively.

 

Income tax

 

We account for income taxes under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 740, Income Taxes (“ASC 740”). Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

 

GOLIATH FILM AND MEDIA HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2016 AND 2015

(Unaudited)

 

Non-Cash Equity Transactions

 

Shares of equity instruments issued for non-cash consideration are recorded at the fair value of the consideration received based on the market value of services to be rendered, or at the value of the stock given, considered in reference to contemporaneous cash sale of stock.

 

Fair Value Measurements

 

Effective beginning second quarter 2010, the FASB ASC Topic 825, Financial Instruments, requires disclosures about fair value of financial instruments in quarterly reports as well as in annual reports. For the Company, this statement applies to certain investments and long-term debt. Also, the FASB ASC Topic 820, Fair Value Measurements and Disclosures , clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements.

 

Various inputs are considered when determining the value of the Company’s investments and long-term debt. The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in these securities. These inputs are summarized in the three broad levels listed below.

 

●	Level 1 – observable market inputs that are unadjusted quoted prices for identical assets or liabilities in active markets.
●	Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.).
●	Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments).

 

The Company’s adoption of FASB ASC Topic 825 did not have a material impact on the Company’s consolidated financial statements.

 

The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. The Company had no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. The Company had no financial assets and/or liabilities carried at fair value on a recurring basis at January 31, 2016, assets and liabilities approximate fair value due to their short term nature.

 

The availability of inputs observable in the market varies from instrument to instrument and depends on a variety of factors including the type of instrument, whether the instrument is actively traded, and other characteristics particular to the transaction. For many financial instruments, pricing inputs are readily observable in the market, the valuation methodology used is widely accepted by market participants, and the valuation does not require significant management discretion. For other financial instruments, pricing inputs are less observable in the market and may require management judgment. As of January 31, 2016, the Company had no assets other than prepaid expenses and cash.

 

Basic and diluted earnings per share

 

Basic earnings per share are based on the weighted-average number of shares of common stock outstanding. Diluted Earnings per share is based on the weighted-average number of shares of common stock outstanding adjusted for the effects of common stock that may be issued as a result of the following types of potentially dilutive instruments:

 

●

Warrants,

 

 

GOLIATH FILM AND MEDIA HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2016 AND 2015

(Unaudited)

 

●	Employee stock options, and
●	Other equity awards, which include long-term incentive awards.

 

The FASB ASC Topic 260, Earnings Per Share, requires the Company to include additional shares in the computation of earnings per share, assuming dilution.

 

Diluted earnings per share is based on the assumption that all dilutive options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options are assumed to be exercised at the time of issuance, and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

 

Basic and diluted earnings per share are the same as there were no potentially dilutive instruments for the three and nine months ended January 31, 2016 and 2015, respectively.

 

Concentrations, Risks, and Uncertainties

 

The Company did not have a concentration of business with suppliers or customers constituting greater than 10% of the Company’s gross sales during 2016 and 2015.

 

Stock Based Compensation

 

In accordance with ASC No. 718, Compensation – Stock Compensation (“ASC 718”), we measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. We apply this statement prospectively. Equity instruments (“instruments”) issued to other than employees are recorded on the basis of the fair value of the instruments, as required by ASC 718. ASC No. 505, Equity Based Payments to Non-Employees (“ASC 505”) defines the measurement date and recognition period for such instruments. In general, the measurement date is (a) when a performance commitment, as defined, is reached or (b) when the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the ASC 505.

 

Accounting for Derivative Financial Instruments

 

We evaluate financial instruments using the guidance provided by ASC 815 and apply the provisions thereof to the accounting of items identified as derivative financial instruments not indexed to our stock.

 

Accounting for Film Costs

 

Motion picture production costs include the unamortized costs of motion pictures in progress which are being produced by the Company.

 

For motion pictures produced by the Company, capitalized costs include all direct production and post-production costs, and production and post-production overhead.

 

Costs of producing motion pictures are amortized using the individual-motion picture forecast method, whereby these costs are amortized and participations and residuals costs are accrued in the proportion that current year’s revenue bears to management’s estimate of ultimate revenue at the beginning of the current year expected to be recognized from the exploitation, exhibition or sale of the motion pictures Ultimate revenue includes estimates over a period not to exceed ten years following the date of initial release of the motion picture.

 

Motion picture production costs are stated at the lower of amortized cost or estimated fair value. The valuation of motion picture production costs are reviewed on a title-by-title basis, when an event or change in circumstances indicates that the fair value of a motion picture is less than its unamortized cost. During the three and nine months ended January 31, 2016 and 2015, the Company recorded no impairment charges.

 

 

GOLIATH FILM AND MEDIA HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2016 AND 2015

(Unaudited)

 

NOTE 3 - RECENTLY ENACTED ACCOUNTING STANDARDS

 

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

 

NOTE 4 – INTANGIBLE ASSETS

 

Film Production Costs

 

On September 18, 2015 GFMH signed a distribution agreement with Mar Vista Entertainment, LLC to distribute a feature length motion picture currently in post-production by GFMH. Per the agreement, GMFH will receive $125,000 in advance payments per an agreed delivery schedule for providing distribution rights on the motion picture “Merry Exes” a Christmas holiday movie being produced by GFMH to Mar Vista Entertainment LLC. Additionally, Mar Vista Entertainment, LLC will receive 35% of the gross proceeds for a period of 25 years on the motion picture. During the nine months ended January 31, 2015, the Company received $78,700 from Mar Vista Entertainment, LLC to offset certain production costs of the motion picture “Merry Exes.” During the nine months ended January 31, 2016 the Company incurred a total of approximately $160,000 in production costs for the motion picture “ Merry Exes.”

 

On May 20, 2015 GFMH signed a distribution agreement with Mar Vista Entertainment, LLC to distribute a feature length motion picture currently completed and being licensed by Mar Vista Entertainment, LLC. Per the agreement, GMFH received $175,000 in advance payments per an agreed delivery schedule for providing distribution rights on the motion picture “Terror Birds” a science fiction movie produced and completed by GFMH to Mar Vista Entertainment LLC. Additionally, Mar Vista Entertainment, LLC will receive 30% of the gross proceeds for a period of 25 years on the motion picture During the nine months ended January 31, 2016, the Company received $175,000 from Mar Vista Entertainment, LLC to offset certain production costs of the motion picture “Terror Birds.” During the nine months ended January 31, 2016 the Company incurred a total of approximately $149,000 in production costs for the motion picture “Terror Birds.”

 

Other Assets

 

On April, 1, 2015 GFMH signed an agreement whereby the Company agreed to invest $15,000 with KKO Productions to produce a feature length motion picture known as “Forgiven”. Per the agreement GFMH will receive 15% of adjusted gross proceeds after its initial investment has been entirely recouped through adjusted gross proceeds. Additionally, the Company will receive two on screen credits as Executive Producer as well as receiving credit on all advertising, publicity and packaging of the motion picture. The investment of $15,000 presented in other assets on the balance sheet has not yet been repaid, due to the fact that no revenues will be generated until this motion picture is released.

 

NOTE 5 – NOTE PAYABLE

 

On November 30, 2015, GFMH received $15,000 from a non-affiliated, non-related party in the form of a promissory note with a due date of May 1, 2016 bearing an interest rate of five percent for the purposes of working capital on the feature length holiday motion picture “Merry Exes”.

 

On November 25, 2015, GFMH received $60,000 from a non-affiliated, non-related party in the form of a promissory note with a due date of May 1, 2017 bearing an interest rate of five percent for the purposes of working capital on the feature length holiday motion picture “Merry Exes”.

 

On November 17, 2015, GFMH received $10,000 from a non-affiliated, non-related party in the form of a promissory note with a due date of March 31, 2016 bearing an interest rate of five percent for the purposes of working capital on the feature length holiday motion picture “Merry Exes”. The note was repaid in January 2016.

 

 

GOLIATH FILM AND MEDIA HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2016 AND 2015

(Unaudited)

 

NOTE 6 – COMMON STOCK

 

The Company has authorized 1,000,000 shares of preferred stock, $0.001 par value, with such rights, preferences and designation and to be issued in such series as determined by the Board of Directors. No shares of preferred stock are issued and outstanding at January 31, 2016.

 

The Company has authorized 300,000,000 shares of par value $0.001 common stock, of which 151,313,917 and 138,964,917 shares are outstanding at January 31, 2016 and April 30, 2015, respectively.

 

During the nine months ended January 31, 2016, the Company entered into separate private placement memorandums with an affiliate shareholder under which we issued 12,349,000 shares of our common stock, restricted in accordance with Rule 144, in exchange for $123,490. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was sophisticated and familiar with our operations at the time of the issuance of the shares.

 

During the year ended April 30, 2015, the Company entered into separate private placement memorandums with an affiliate shareholder under which we issued 11,603,250 shares of our common stock, restricted in accordance with Rule 144, in exchange for $136,365. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was sophisticated and familiar with our operations at the time of the issuance of the shares.

 

On February 26, 2013, the Company filed a Certificate of Amendment to its Restated Certificate of Incorporation with the Secretary of State of the State of Nevada to increase the number of authorized common shares from 149 million to 300 million. The resolution to increase the number of shares was adopted by unanimous written consent of the board of directors.

 

NOTE 7 – GOING CONCERN

 

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company does not have significant cash or other current assets, nor does it have an established source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern.

 

Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading, or seeking protection from creditors pursuant to laws or regulations. Accordingly, assets and liabilities are recorded on the basis that the entity will be able to realize its assets and discharge its liabilities in the normal course of business.

 

Management expects to seek potential business opportunities for merger or acquisition of existing companies. Currently the Company has yet to locate any merger or acquisition candidates. Management is not currently limiting their search for merger or acquisition candidates to any industry or locations. Management, while not especially experienced in matters relating to public company management, will rely upon their own efforts and, to a much lesser extent, the efforts of the Company’s shareholders, in accomplishing the business purposes of the Company.

 

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern.

 

During the next year, the Company’s foreseeable cash requirements will relate to continual development of the operations of its business, maintaining its good standing and making the requisite filings with the Securities and Exchange Commission, and the payment of expenses associated with reviewing or investigating any potential business ventures. The Company may experience a cash shortfall and be required to raise additional capital.

 

Historically, the Company has relied upon internally generated funds and funds from the sale of shares of stock to finance its operations and growth. Management may raise additional capital through future public or private offerings of the Company’s stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company’s failure to do so could have a material and adverse effect upon its and its shareholders.

 

In the past year, the Company funded operations by using cash proceeds received through the issuance of common stock. For the coming year, the Company plans to continue to fund the Company through debt and securities sales and issuances, focus on a possible joint venture or merger until the company generates revenues through the operations of such merged company or joint venture as stated above.

 

 

GOLIATH FILM AND MEDIA HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2016 AND 2015

(Unaudited)

 

NOTE 8 - RELATED PARTY TRANSACTIONS

 

During the nine months ended January 31, 2016, the Company sold 12,349,000 (11,603,250 shares in the year ended April 30, 2015) restricted common shares to an affiliate shareholder pursuant to a private placement memorandum in exchange for $123,490 ($136,365 in the year ended April 30, 2015). During the nine months ended January 31, 2015, the Company sold 8,848,250 restricted common shares to an affiliate shareholder pursuant to a private placement memorandum in exchange for $108,815.

 

In nine months ended January 31, 2016 and 2015, the Company paid C&R Film for consulting and reimbursement of various expenses of $42,191 and $3,300, respectively. C&R Film is controlled by Lamont Robert, CEO and Acting CFO of the Company.

 

Further, Mike Criscione, Director of the Company received payments for consulting and reimbursement of various expenses of $46,145 and $4,200 in nine months ended January 31, 2016 and 2015, respectively.

 

The Company issued 5,000,000 restricted common shares to its Chief Financial Officer pursuant to his consulting contract dated May 1, 2014, valued at $20,000 (based on the estimated value of the services) and amortized over the one-year term of the consulting contract. The Company also issued 2,000,000 restricted common shares for professional services per consulting contracts dated May 1, 2014, valued at $8,000 (based on the estimated value of the services) and amortized over the one-year term of the consulting contract.

 

The Company issued 2,000,000 restricted common shares to its President and Chief Executive Officer, pursuant to his consulting contract dated May 1, 2014, valued at $8,000 (based on the estimated value of the services) and amortized over the one-year term of the consulting contract. Further, the Company issued 25,000,000 restricted common shares to a Director of the Company and to manage sales and marketing activities for the Company pursuant to his consulting contract dated May 1, 2014, valued at $100,000 (based on the estimated value of the services) and amortized over the one-year term of the consulting contract.

 

Related party transactions have been disclosed in the other notes to these financial statements.

 

NOTE 9 - COMMITMENTS AND CONTINGENCIES

 

Production Agreements

 

On September 18, 2015 GFMH signed a distribution agreement with Mar Vista Entertainment, LLC to distribute a feature length motion picture currently in post-production by GFMH. Per the agreement, GMFH will receive $125,000 in advance payments per an agreed delivery schedule for providing distribution rights on the motion picture “Merry Exes” a Christmas holiday movie being produced by GFMH to Mar Vista Entertainment LLC. Additionally, Mar Vista Entertainment, LLC will receive 35% of the gross proceeds for a period of 25 years on the motion picture. As of January 31, 2016, the Company has received $78,700 of the advance payments.

 

On May 20, 2015 GFMH signed a distribution agreement with Mar Vista Entertainment, LLC to distribute a feature length motion picture currently completed by GFMH and being licensed by Mar vista Entertainment, LLC.. Per the agreement, the Company will receive $175,000 in advance payments per an agreed delivery schedule for providing distribution rights on the motion picture “Terror Birds” a science fiction movie produced by GFMH to Mar Vista Entertainment LLC. Additionally, Mar Vista Entertainment, LLC will receive 30% of the gross proceeds for a period of 25 years on the film. As of January 31, 2016, the Company has received the entire $175,000 of the advance payments.

 

On April, 1, 2015 GFMH signed an agreement whereby the Company agreed to invest $15,000 to KKO Productions to produce a feature length motion picture known as “Forgiven”. Per the agreement GFMH will receive 15% of adjusted gross proceeds after its initial investment has been entirely recouped through adjusted gross proceed. Additionally, the Company will receive two on screen credits as Executive Producer as well as receiving credit on all advertising, publicity and packaging of the motion picture. The investment of $15,000 presented in other assets on the balance sheet has not yet been repaid, due to the fact that no revenues will be generated until this motion picture is released.

 

 

GOLIATH FILM AND MEDIA HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2016 AND 2015

(Unaudited)

 

Distribution Agreements

 

The Company has the following distribution rights:

 

On December 9, 2014 GFMH signed a distribution agreement with Runaway Production for the distribution of two full length motion pictures, “Halloween Party” and “Wedding Video Nightmare”. No revenue had been recognized. This distribution agreement was cancelled on January 29, 2016.

 

On December 8, 2014 GFMH signed a distribution agreement with CJ Creative Productions for the distribution of three full length motion pictures, “Sharp Teeth”, “Vampire Dentist”, and “Marina Monster”. Goliath Film and Media Holding will receive 25% of gross proceeds. Goliath Film and Media Holding will have both North America and foreign distribution rights for a term of 36 months from December 8, 2014. No revenue had been recognized. This distribution agreement was cancelled on November 30, 2015.

 

On December 8, 2014 GFMH signed a distribution agreement with Brightfilm Productions for the distribution of the full length motion pictures, “I Wish You Love”. Goliath Film and Media Holding will receive 25% of gross proceeds. Goliath Film and Media Holding will have both North America (excluding Canada) and foreign distribution rights for a term of 36 months from December 8, 2014. No revenue has been recognized to date. This distribution agreement was cancelled on January 15, 2015.

 

On March 9, 2015 GFMH signed a non-exclusive license to sell the feature length motion pictures: “Farewell”, “Buddies” and “The Pit.” The term is for one year expiring on March 9, 2016 with compensation to Goliath of 25% of gross proceeds from the sales of each of these films. No revenue has been recognized to date.

 

On October 22, 2014 GFMH will distribute all foreign rights for the motion picture “Virus X,” “Film” starring Sybil Danning with some of the key terms as follows:

 

1. Time frame (Term) – 18 months with ability to renew at same terms for another 18 months if agreed by both parties by end of the 18 month term. Term begins October 22, 2014

 

2. Markets – In all foreign media known and unknown

 

3. Compensation to GFMH- 15% of gross proceeds on all foreign territories. Said 15% (of 100%) is inclusive and includes, but not limited to, all payments, fees and reimbursements of any and all kinds made and/or incurred by GFMH through the exploitation of the Film. No revenue has been recognized to date.

 

4. Renewals - when the contract is renewed by a particular territory, GFMH will be the entity of record to effectuate the renewals, yet only after notification is made to and approved verbally or written by Empire Films.

 

On October 29, 2014, GFMH entered into a Distribution and Sales Agreement with EMILIO ROSO (“Producer”) granting all domestic and foreign distribution rights, excluding digital streaming for the motion pictures “Day of Redemption,” “On Borrowed Time” and “Tumbleweed,” with some of the major terms as follows:

 

1. Time frame (Term) – 18 months. Term began October 29, 2014. This contract will not automatically renew.

 

2. Markets – In all domestic and foreign media known and unknown and all domestic and foreign territories.

 

3. Compensation to Goliath Film and Media Holdings - 25% of gross proceeds on all domestic and foreign territories, except digital streaming. Said 25% (of 100%) is inclusive and includes, but not limited to, all payments, fees and reimbursements of any and all kinds made and/or incurred by Goliath Film and Media Holdings through the exploitation of the motion pictures. No revenue has been recognized to date.

 

 

GOLIATH FILM AND MEDIA HOLDINGS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2016 AND 2015

(Unaudited)

 

On February 13, 2012 the company announced that it has acquired the distribution rights to the following motion pictures: Seducing Spirits, The Perfect Argument, Marina Murders, Film Struggle, Divorce in America, A Wonderful Summer, The Truth About Layla, Living with Cancer, and The Biggest Fan. Under the distribution agreements, Goliath will receive 30% of the gross revenues for each picture it distributes. In general, the Company’s distribution contracts cover both domestic and international licensing agreements; however, for the picture The Biggest Fan, the Company obtained limited distribution rights. No revenue has been recognized to date.

 

Legal

 

The Company is not a party to or otherwise involved in any legal proceedings.

 

In the ordinary course of business, from time to time the Company may be involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon the Company’s financial condition and/or results of operations. However, in the opinion of management, other than as set forth herein, matters currently pending or threatened against the Company are not expected to have a material adverse effect on its financial position or results of operations.

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

Forward Looking Statement Notice

 

Certain statements made in this Quarterly Report on Form 10-Q are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of Goliath Film and Media Holdings, (“we”, “us”, “our” or the “Company”) to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. The Company’s plans and objectives are based, in part, on assumptions involving the continued expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance the forward-looking statements included in this Quarterly Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.

 

Description of Business

 

The Company was incorporated in Nevada on February 16, 2010 under the name “China Advanced Technology” as the successor by merger to Vitalcare Diabetes Treatment Centers, Inc. (“Vitalcare”). In February and March 2010, Vitalcare underwent a holding company reorganization under Delaware law, pursuant to which it became a wholly-owned subsidiary of Vitalcare Holding Corporation, and Vitalcare, together with its assets and liabilities, was sold to a non-affiliated third party. Vitalcare Holding Corporation subsequently reincorporated in Nevada by merger into China Advanced.

 

Vitalcare was in the business of administering medical clinics specializing in diabetes treatment. It was the successor to Network Financial Services, Inc. (“Network”), which went public in an underwritten offering in 1987. Network was engaged in mortgage origination, and changed its name to Westmark Group Holdings (“Westmark”) in 1993 in connection with the acquisition of Westmark Mortgage from Primark Corporation. Westmark ceased operations at some time in 2006, and in 2006 ceased filing reports under the Securities Exchange Act of 1934. The corporate entity was thereafter known as Viking Consolidated, Inc. (2006), Tailor Aquaponics World Wide, Inc. (2007) and Diversified Acquisitions (2007) until it entered the medical clinic business in early 2008. The Company has no information regarding any business activities from 2006 after the mortgage origination business closed, to early 2008.

 

On October 25, 2011, Goliath Film and Media International, a California corporation, entered into an Agreement and Plan of Reorganization (the “Exchange Agreement”), pursuant to which Goliath Film and Media International was acquired by China Advanced Technology. Prior to the acquisition, our principal operations consisted of internet marketing, and were conducted through a wholly owned subsidiary, Live Wise, Inc. Live Wise was disposed of on October 31, 2011 for cancellation of debt and shares described below. At the Closing Date, there were no assets or liabilities on China Advanced Technology’s balance sheets.

 

The transaction closed on October 31, 2011 (the “Closing Date”). On the Closing Date China Advanced Technology acquired Goliath Film and Media International by issuing 47,000,000 shares of its Common Stock, constituting 70.1% of the outstanding shares after giving effect to their issuance and the cancellation of 15,619,816 shares held by China Advanced Technology’s prior control person. Immediately following the Closing, 67,100,000 shares were issued and outstanding. On the Closing Date, the name of China Advanced Technology was changed to Goliath Film and Media Holdings. All share numbers herein have been adjusted for an eight-for-1 forward stock split affected as of the Closing Date. The forward stock split was reflected in the trading market on February 13, 2012.

 

Overview

 

Goliath Film and Media Holdings (“Goliath”, “GFMH”, or the “Company”), through its wholly-owned subsidiary Goliath Film and Media International, intends to develop, produce and license for distribution, domestically and internationally, quality digital content with an emphasis on “niche” markets of the feature moton picture and television content segments of the entertainment industry, such as, without limitation, education, faith-based, horror and socially responsible minority content. Goliath does not intend to engage in domestic theatrical distribution of motion pictures to any significant extent.

 

 

In qualified cases, Goliath will develop screenplays that will be outsourced to an independent entity for production, but will be licensed for distribution through the Company. Also, in certain cases Goliath will produce content that is tied to working with an established distributor that provides an advance or minimum guarantee for the production of a project that will be licensed by the participating distributor. Goliath plans to produce content and to distribute domestically and internationally, through a wide distribution network which includes major international theatrical exhibitors, and other distributors and television networks. We plan to utilize corporate sponsorships as a means of reducing the costs of advertising and marketing in distribution. Further, we may augment our marketing efforts with a limited and strategically focused advertising campaign in traditional “print” media with press releases targeted specifically toward standard entertainment industry trade journals and publications on an “as needed” basis as well as the inclusion of targeted “social media” campaigns.

 

Goliath’s revenue model includes receiving revenue from distribution fees. A limited number of its content properties include projects developed and produced by Goliath and those produced by an independent third party production entity.

 

Questions and Answers

 

What is your business?

 

We develop, produce and distribute motion pictures and digital content. . At this time we do not intend to engage in theatrical releases of motion pictures, due to the high up- front costs of advertising and marketing theatrically. However, in some specific cases the company will consider theatrical releases based upon a “four wall, “ limited release delivery that will be focused on targeted niche audiences..

 

Distribution Rights

 

The Company has the following distribution rights:

 

On December 9, 2014 GFMH signed a distribution agreement with Runaway Production for the distribution of two full length motion pictures, “Halloween Party” and “Wedding Video Nightmare”. No revenue has been recognized to date.

This distribution agreement was cancelled on January 29, 2016.

 

On December 8, 2014 GFMH signed a distribution agreement with CJ Creative Productions for the distribution of three full length motion pictures, “Sharp Teeth”, “Vampire Dentist”, and “Marina Monster”. Goliath Film and Media Holding will receive 25% of gross proceeds. Goliath Film and Media Holding will have both North America and foreign distribution rights for a term of 36 months from December 8, 2014. No revenue has been recognized to date. This distribution agreement was cancelled on November, 30, 2015.

 

On December 8, 2014 GFMH signed a distribution agreement with Brightfilm Productions for the distribution of the full length motion pictures, “I Wish You Love”. Goliath Film and Media Holding will receive 25% of gross proceeds. Goliath Film and Media Holding will have both North America (excluding Canada) and foreign distribution rights for a term of 36 months from December 8, 2014. No revenue has been recognized to date. This distribution agreement was cancelled on October 15, 2015.

 

On March 9, 2015 GFMH signed a non-exclusive license to sell the feature length motion pictures: “Farewell”, “Buddies” and “The Pit.” The term is for one year expiring on March 9, 2016 with compensation to Goliath of 25% of gross proceeds from the sales of each of these films. No revenue has been recognized to date.

 

On October 22, 2014 GFMH will distribute all foreign rights for the motion picture “Virus X,” “Film” starring Sybil Danning with some of the key terms as follows:

 

1. Time frame (Term) – 18 months with ability to renew at same terms for another 18 months if agreed by both parties by end of the 18 month term. Term begins October 22, 2014

 

2. Markets – In all foreign media known and unknown

 

 

3. Compensation to GFMH- 15% of gross proceeds on all foreign territories. Said 15% (of 100%) is inclusive and includes, but not limited to, all payments, fees and reimbursements of any and all kinds made and/or incurred by GFMH through the exploitation of the Film. No revenue has been recognized to date.

 

4. Renewals - when the contract is renewed by a particular territory, GFMH will be the entity of record to effectuate the renewals, yet only after notification is made to and approved verbally or written by Empire Films.

 

On October 29, 2014, GFMH entered into a Distribution and Sales Agreement with EMILIO ROSO (“Producer”) granting all domestic and foreign distribution rights, excluding digital streaming for the motion pictures “Day of Redemption,” “On Borrowed Time” and “Tumbleweed,” with some of the major terms as follows:

 

1. Time frame (Term) – 18 months. Term began October 29, 2014. This contract will not automatically renew.

 

2. Markets – In all domestic and foreign media known and unknown and all domestic and foreign territories.

 

3. Compensation to Goliath Film and Media Holdings - 25% of gross proceeds on all domestic and foreign territories, except digital streaming. Said 25% (of 100%) is inclusive and includes, but not limited to, all payments, fees and reimbursements of any and all kinds made and/or incurred by Goliath Film and Media Holdings through the exploitation of the motion pictures. No revenue has been recognized to date.

 

On February 13, 2012 the company announced that it has acquired the distribution rights to the following motion pictures: Seducing Spirits, The Perfect Argument, Marina Murders, Film Struggle, Divorce in America, A Wonderful Summer, The Truth About Layla, Living with Cancer, and The Biggest Fan. Under the distribution agreements, Goliath will receive 30% of the gross revenues for each picture it distributes. In general, the Company’s distribution contracts cover both domestic and international licensing agreements; however, for the picture The Biggest Fan, the Company obtained limited distribution rights. No revenue has been recognized to date.

 

Production Agreements

 

On September 18, 2015 GFMH signed a distribution agreement with Mar Vista Entertainment, LLC to distribute a feature length motion picture currently in post-production by GFMH. Per the agreement, GMFH will receive $125,000 in advance payments per an agreed delivery schedule for providing distribution rights on the motion picture “Merry Exes” a Christmas holiday movie being produced by GFMH to Mar Vista Entertainment LLC. Additionally, Mar Vista Entertainment, LLC will receive 35% of the gross proceeds for a period of 25 years on the motion picture. As of January 31, 2016, the Company has received $78,700 of the advance payments.

 

On May 20, 2015 GFMH signed a distribution agreement with Mar Vista Entertainment, LLC to distribute a feature length motion picture currently completed by GFMH and being licensed by Mar vista Entertainment, LLC.. Per the agreement, the Company will receive $175,000 in advance payments per an agreed delivery schedule for providing distribution rights on the motion picture “Terror Birds” a science fiction movie produced by GFMH to Mar Vista Entertainment LLC. Additionally, Mar Vista Entertainment, LLC will receive 30% of the gross proceeds for a period of 25 years on the film. As of January 31, 2016, the Company has received $175,000 of the advance payments.

 

On April, 1, 2015 GFMH signed an agreement whereby the Company agreed to invest $15,000 to KKO Productions to produce a feature length motion picture known as “Forgiven”. Per the agreement GFMH will receive 15% of adjusted gross proceeds after its initial investment has been entirely recouped through adjusted gross proceed. Additionally, the Company will receive two on screen credits as Executive Producer as well as receiving credit on all advertising, publicity and packaging of the motion picture. The investment of $15,000 presented in other assets on the balance sheet has not yet been repaid, due to the fact that no revenues will be generated until this motion picture s released.

 

What is the timeline for your activities during the next 12 months?

 

Over the next 90 days to one year, our efforts will be concentrated on developing and producing content with distributors for licensing by them of at least three projects..

 

What is this going to cost you?

 

We expect that producing the aforementioned content will cost approximately $100,000 per project, however licensing and distribution will be handled by an experienced distributor for a fee of anywhere from 30 – 35% and the costs of advertising and marketing will be handled by them and charged against gross distribution licensing proceeds..

 

 

Why are these motion pictures not being distributed already?

 

The motion pictures that are being produced by the Company and distributed by Mar Vista Entertainment, LLC take anywhere from six to nine months from completion of production and delivery to obtain licensing agreements.

 

Generically, the main reason why good, quality motion pictures are not distributed is that the production of a motion picture requires money and creativity, and marketing a motion picture requires an entirely different set of skills. Many people dream of making a movie; few aspire to distribute them. We estimate that there are in excess of 10,000 such motion pictures “gathering dust.” There also have been and continue to be substantial tax incentives for motion picture production in many States and international Territories, so that many producers do not need to depend on successful marketing in order to find investors for their projects. A secondary factor is the difficulty of finding a reputable distributor. We think that our management has an excellent reputation in the industry and we will be able to obtain distribution rights for content. Finally, many distributors as well as buyers do not have an interest in niche market films, because they see the market as limited. Goliath sees the problem to be, rather, there is no market merely because no one has assembled a critical mass of films for these niches. Most participants in the motion picture industry are based in “Hollywood” and the major coastal metropolitan areas. Our “faith-based” films especially are targeted toward the “Bible Belt” and the “Flyover Country”: places that the industry has consistently overlooked.

 

Why are you able to identify and acquire these motion pictures and educational videos?

 

After attending all the major content acquisition markets around the world over the last three years, our Staff has developed relationships with numerous quality filmmakers who need assistance in marketing and distributing their product. Goliath has also developed vital relationships with many of the major content distributors and networks. Many of the filmmakers have requested the Company’s assistance in marketing and distributing their product. Goliath will continue to pursue the marketing and distribution of product that is demanded in the marketplace and desired by major aggregators, distributors, networks and studios.

 

So how are you different than Netflix, Blockbuster and Hulu, to name a few? How can you compete with them? They have a lot of money and name recognition. Why wouldn’t they jump into your niches?

 

As a content provider we are not competing with these entities but rather are working on providing them with quality content. As an example, NETFLIX has such a high demand for programming content, they are spending $5 billion this year for the acquisition of completed programming as well as for the development of original content by them. Therefore, as is mentioned, part of their resources are directed toward acquiring content and part is targeting in-house” and joint venture production of quality content. This content will be targeted to their subscription base on domestic and international levels.

 

There are a number of quality content producers that work with the major networks and content distributors, Goliath is moving toward becoming one of these content providers. We believe there exists significant opportunities for our company in that the demand for programming is increasing almost exponentially. Irrespective of the platform for viewing by the consumer/subscriber, the demand for quality content is continuing to expand. As an example there are currently, approximately 416 original scripted programs being aired in the entire television universe – a cancellation rate of 10% reflects a number that represents the entire programming universe in the late 1990’s and early 2000’s.. The upward trend is ongoing, which is where we see an opportunity for Goliath to provide product to reach a component of the market.

 

Don’t cable and satellite networks already offer specialty channels like TBN (for faith based) and BET (Black Entertainment Television (for the African-American Community)?

 

As mentioned above about NETFLIX, even though these channels maybe in niche markets they must expand the type, genre and format of the content that they are showing in order to remain viable, therefore the opportunity to assist them by providing quality programming is ongoing and expanding..

 

What other niches are you looking at entering?

 

We believe that there is an increasing and ongoing trend in home entertainment in servicing niches. Many viewers have cable or satellite service with hundreds of channels, but view only a few channels that cater to their particular interests. One significant type of niche we are targeting are the numerous immigrant groups in the United States. Other than Spanish speaking immigrants, coverage is scarce. The last official data (2004) from the US Census Bureau is that 34.2 million persons in the US are foreign born, with 54% from Latin America, 25% from Asia and 14% from Europe. Foreign-born immigrants like to watch movies from their home countries.

 

 

There are many interest groups that might be interested in specialty movies or programming. In Southern California, for instance, Surfing is quite popular, and there exists a huge body of surfing films which would be of interest.

 

What about ancillary markets?

 

We plan to incorporate advertising and marketing through social media and traditional outlets to the highest degree possible.

 

What films do you have now in inventory?

 

We presently have acquired the distribution rights to the following motion pictures: , Seducing Spirits, The Perfect Argument, Marina Murders, Film Struggle, Divorce in America, A Wonderful Summer, The Truth About Layla, Living with Cancer, The Biggest Fan, Days of Redemption, On Borrowed Time, Tumbleweed, Virus X, Farewell, Buddies, and The Pit. Under the distribution agreements Goliath will receive 30% of the gross revenues for each of the pictures we distribute. In general, our distribution contracts cover both domestic and international licensing agreements; however, for the picture The Biggest Fan we obtained limited distribution rights.

 

How do these distribution rights work?

 

We enter into a Distribution Agreement for each motion picture. Terms may be perpetual or limited by years. The motion pictures that we are acquiring with the proceeds of this offering will have a term of five years. We will generally obtain a fee of 20% to 30% of gross revenues. Licensing will be flexible for usage applications on a yearly or multi-year basis. Most markets, especially foreign territories have a tendency to continuously renew content licensing.

 

How many employees do you have? Do you have an office?

 

We have just 3 employees and we believe that is sufficient during the development, production and “content aggregation” phase of our development. Our administrative office is in Marina del Rey.

 

Do you have a website?

 

Our website is www.goliathfilmandmediainternational.com. We have a mirror site at www.goliathfilmandmedia.com.

 

Plan of Operations

 

We have not yet recognized any revenues. The Company incurred a net loss of $142,727 for the nine months ended January 31, 2016 compared to a net loss of $212,806 for the nine months ended January 31, 2015. These factors create substantial doubt about the Company’s ability to continue as a going concern. The Company’s management plan to continue as a going concern revolves around its ability to execute its business strategy of distributing films, as well as raising the necessary capital to pay ongoing general and administrative expenses of the Company.

 

During the nine months ended January 31, 2016, we entered into separate private placement memorandums with an affiliate shareholder under which we issued 12,349,000 shares of our common stock, restricted in accordance with Rule 144, in exchange for $123,490.

 

The issuances were exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was sophisticated and familiar with our operations at the time of the issuance of the shares.

 

Results of Operations

 

Three Months Ended January 31, 2016 Compared to Three Months Ended January 31, 2015

 

Revenue

 

For the three months ended January 31, 2016 and 2015, we have not generated any revenues.

 

 

Operating expenses

 

Operating expenses increased by $22,854, or 48.7%, to $69,757 in the three months ended January 31, 2016 from $46,903 in the three months ended January 31, 2015 primarily due to increases in consulting services costs and travel costs, offset primarily by increases in stock based compensation expenses, and marketing costs.

 

Operating expenses for the three months ended January 31, 2016 were comprised primarily of $61,612 in consulting services costs; travel costs of $3,820, rent of $597, and $3,728 of other operating expenses.

 

Operating expenses for the three months ended January 31, 2015 were comprised primarily of $7,109 in consulting services costs; travel costs of $3,072, stock based compensation expense of $34,000, marketing costs of $1,510, and $1,212 of other operating expenses.

 

Net loss before income taxes

 

Net loss before income taxes for the three months ended January 31, 2016 totaled $69,757 primarily due to consulting services costs, travel costs, and rent compared to $46,903 for the three months ended January 31, 2015 primarily due to consulting services costs, travel costs, stock based compensation expenses, marketing costs, office rent, and professional fees.

 

Assets and Liabilities

 

Total assets were $327,301 as of January 31, 2016 compared to $878 as of April 30, 2015, or an increase of $326,423, primarily the result of increase in investment in film costs totaling $311,719 and other assets of $15,000. Total liabilities as of January 31, 2016 were $385,045 compared to $39,385 as of April 30, 2015, or an increase of $345,660. The increase was the result of increases in advance for film production costs of $328,700, and cash overdrafts of $16,489.

 

Stockholders’ Deficit

 

Stockholders’ deficit was $57,744 as of January 31, 2016. Stockholder’s deficit consisted primarily of shares issued for cash in the amount of $520,205, and stock issued for services rendered of $193,750, offset primarily by the accumulated deficit of $771,699.

 

Nine months Ended January 31, 2016 Compared to Nine months Ended January 31, 2015

 

Revenue

 

For the nine months ended January 31, 2016 and 2015, we have not generated any revenues.

 

Operating expenses

 

Operating expenses decreased by $70,199, or 33.1%, to $141,737 in the nine months ended January 31, 2016 from $211,936 in the nine months ended January 31, 2015 primarily due to decreases in stock based compensation expense, travel costs, professional fees, and marketing costs, offset primarily by increases consulting services costs and rent.

 

Operating expenses for the nine months ended January 31, 2016 were comprised primarily of rent of $1,592, $127,986 in consulting services costs, travel costs of $6,827, and $5,332 of other operating expenses.

 

Operating expenses for the nine months ended January 31, 2015 were comprised primarily of rent of $1,045, $54,289 in consulting services costs, travel costs of $13,749, audit costs and other professional fees of $7,763, stock based compensation expense of $102,000, marketing costs of $28,245, and $4,845 of other operating expenses.

 

Net loss before income taxes

 

Net loss before income taxes for the nine months ended January 31, 2016 totaled $141,737 primarily due to rent, consulting services costs, and travel costs, compared to $211,936 for the nine months ended January 31, 2015 primarily due to rent, consulting services costs, audit costs and other professional fees, travel costs, marketing costs, and stock based compensation expense.

 

 

Liquidity and Capital Resources

 

General – Overall, we had a decrease in cash flows of $296 in the nine months ended January 31, 2016 resulting from cash provided by financing activities of $468,679, offset partially by cash used in operating activities of $142,256 and cash used in investing activities of $326,719.

 

The following is a summary of our cash flows provided by (used in) operating, investing, and financing activities during the periods indicated:

 

		Nine months Ended January 31,
		2016				2015
Cash at beginning of period		$	579			$	—
Net cash used in operating activities			(142,256	)			(106,149	)
Net cash used in investing activities			(326,719	)			—
Net cash provided by financing activities			468,679				106,921
Cash at end of period		$	283			$	772

 

Net cash used in operating activities was $142,256 for the nine months ended January 31, 2016 compared to net cash used in operations for the nine months ended January 31, 2015 of $106,149 primarily due to a net loss of $142,727 for the nine months ended January 31, 2016, offset primarily by the change in operating assets and liabilities of $471.

 

Net cash provided by investing activities was $326,719 for the nine months ended January 31, 2016, compared to net cash provided by investing activities of $0 for the nine months ended January 31, 2015 primarily as the result of the investment in intangible assets for production costs.

 

Net cash provided by financing activities was $468,679 for the nine months ended January 31, 2016, compared to net cash provided by financing activities of $106,921 for the nine months ended January 31, 2015 primarily as the result of the issuance of stock for cash of $123,490 the advance for film production costs of $253,700, proceeds from notes payable of $85,000, and an advance from bank of $16,489.

 

Our cash needs in the year ending April 30, 2016 are estimated to be $200,000. This budget is based on the assumption that we will carry out one project at a time for which we will need about $50,000 in working capital; general and administrative expenses of $150,000 for the costs related to being public, and miscellaneous office expenses. We sold 12,349,000 shares for net proceeds of $123,490 in offerings conducted in fiscal year 2016. As we move forward with our business plan we will need to raise additional capital either through the sale of stock or funding from shares and or officers and directors to cover our cash needs through the end of the 2016 fiscal year.

 

Information included in this report includes forward looking statements, which can be identified by the use of forward-looking terminology such as may, expect, anticipate, believe, estimate, or continue, or the negative thereof or other variations thereon or comparable terminology. The statements in “Risk Factors” and other statements and disclaimers in this report constitute cautionary statements identifying important factors, including risks and uncertainties, relating to the forward-looking statements that could cause actual results to differ materially from those reflected in the forward-looking statements.

 

Since we have not yet generated any revenues, we are a development stage company as that term is defined in Section 915 - Development Stage Entities, of the FASB Accounting Standards Codification. Our activities have mostly been devoted to seeking capital; seeking supply contracts and development of a business plan. Our auditors have included an explanatory paragraph in their report on our financial statements, relating to the uncertainty of our business as a going concern, due to our lack of operating history or current revenues, its nature as a start up business, management’s limited experience and limited funds. We do not believe that conventional financing, such as bank loans, is available to us due to these factors. We have no bank line of credit available to us. Management believes that it will be able to raise the required funds for operations from one or more future offerings, in order to affect our business plan.

 

Our future operating results are subject to many factors including:

 

	●	our success in obtaining contracts for our services;
	●	the success of any joint marketing agreements;

 

 

	●	our ability to obtain additional financing; and
	●	other risks which we identify in future filings with the SEC.

 

Any or all of our forward looking statements in this filing and in any other public statements we make may turn out to be wrong. They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. Consequently, no forward looking statement can be guaranteed. In addition, we undertake no responsibility to update any forward-looking statement to reflect events or circumstances which occur after the date of this prospectus.

 

Equity Financing

 

During the nine months ended January 31, 2016, we sold 12,349,000 restricted common shares to an affiliate shareholder pursuant to a private placement memorandum in exchange for $123,490. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was sophisticated and familiar with our operations at the time of the issuance of the shares.

 

During the nine months ended January 31, 2015, we sold 8,848,250 restricted common shares to an affiliate shareholder pursuant to a private placement memorandum in exchange for $108,815. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investor was sophisticated and familiar with our operations at the time of the issuance of the shares.

 

During the year ended April 30, 2015, we entered into private placement memorandums with an affiliate under which we issued 11,603,250 shares of our common stock, restricted in accordance with Rule 144, in exchange for $136,365. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investors were sophisticated and familiar with our operations at the time of the issuance of the shares.

 

During the year ended April 30, 2014, we entered into private placement memorandums with an affiliate under which we issued 2,096,333 shares of our common stock, restricted in accordance with Rule 144, in exchange for $39,000 and debt of $24,750. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investors were sophisticated and familiar with our operations at the time of the issuance of the shares.

 

We issued 5,000,000 restricted common shares to our Chief Financial Officer pursuant to his consulting contract dated May 1, 2014, valued at $20,000 (based on the estimated value of the services) and amortized over the one-year term of the consulting contract. We also issued 2,000,000 restricted common shares for professional services per consulting contracts dated May 1, 2014, valued at $8,000 (based on the estimated value of the services) and amortized over the one-year term of the consulting contract.

 

We issued 2,000,000 restricted common shares to our President and Chief Executive Officer, pursuant to his consulting contract dated May 1, 2014, valued at $8,000 (based on the estimated value of the services) and amortized over the one-year term of the consulting contract. Further, we issued 25,000,000 restricted common shares to a Director of the Company and to manage sales and marketing activities for the Company pursuant to his consulting contract dated May 1, 2014, valued at $100,000 (based on the estimated value of the services) and amortized over the one-year term of the consulting contract.

 

Notes Payable

 

On November 30, 2015, GFMH received $15,000 from a non-affiliated, non-related party in the form of a promissory note with a due date of May 1, 2016 bearing an interest rate of five percent for the purposes of working capital on the feature length holiday motion picture “Merry Exes”. The note bears annual interest of 5 percent and is due on May 1, 2016.

 

On November 25, 2015 GFMH signed a promissory note in the amount of $60,000 with a non affiliated, non related party for the purposes of working capital for the production of the Christmas holiday motion picture, “Merry Exes.” The note bears annual interest of 5 percent and is due on May 1, 2017.

 

On November 17, 2015 GFMH signed a promissory note in the amount of $10,000 with a non affiliated, non related party for the purposes of working capital for the production of the Christmas holiday motion picture, “Merry Exes”. The note bears annual interest of 5 percent and is due on March 31, 2016. The note was repaid in January 2016.

 

 

Contractual Obligations and Off-Balance Sheet Arrangements

 

We do not have any contractual obligations or 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, the Company is not required to provide information required by this Item.

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

Disclosure Controls and Procedures. We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized, and reported accurately, in accordance with U.S. Generally Accepted Accounting Principles and within the required time periods, and that such information is accumulated and communicated to our management, including our Chief Executive Officer, who is also our acting Chief Financial Officer, as appropriate, to allow for timely decisions regarding disclosure. As of the end of the period covered by this report (January 31, 2016), we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer, and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)). Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that as of the end of the period covered by this Quarterly Report on Form 10-Q our disclosure controls and procedures were not effective to enable us to accurately record, process, summarize and report certain information required to be included in the Company’s periodic SEC filings within the required time periods, and to accumulate and communicate to our management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

 

Changes in Internal Controls

 

There have been no changes in our internal controls over financial reporting during the quarter ended January 31, 2016 that have materially affected or are reasonably likely to materially affect our internal controls.

 

 

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

We are not a party to or otherwise involved in any legal proceedings.

 

In the ordinary course of business, we are from time to time involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations. However, in the opinion of our management, other than as set forth herein, matters currently pending or threatened against us are not expected to have a material adverse effect on our financial position or results of operations.

 

Item 1A. Risk Factors.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

During the three months ended January 31, 2016, the Company sold 1,125,000 restricted common shares to an affiliate shareholder pursuant to a private placement memorandum in exchange for $11,250. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the investors were sophisticated and familiar with our operations at the time of the issuance of the shares.

 

Item 3. Defaults Upon Senior Securities.

 

There have been no events which are required to be reported under this Item.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

Item 5. Other Information.

 

None.

 

Item 6. Exhibits.

 

31. Certification of CEO and CFO.

32. Certification pursuant to 18 U.S.C. Section 1350 of CEO and CFO

 

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.

** In accordance with Regulation S-T, the XBRL-formatted interactive data files that comprise Exhibit 101 in this Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed”.

 

 

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.

 

	GOLIATH FILM AND MEDIA HOLDINGS
Dated: March 21, 2016	By:	/s/ Mike Criscione
		Mike Criscione
		COO and Vice Chairman of the Board
	By:	/s/ Lamont Roberts
		Lamont Roberts
		CEO, Secretary, and Director (duly authorized officer)