10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED: December 31, 2018

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: ________________

ALMOST NEVER FILMS INC.

(Exact name of registrant as specified in its charter)

Nevada	26-1665960
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

8605 Santa Monica Blvd #98258, West Hollywood, CA 90069-4109

 (Address of principal executive offices, Zip Code)

(213) 296-3005

(Registrant’s telephone number, including area code)

_____________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

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

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.

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ¨

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

The number of shares of registrant’s common stock outstanding as of February 15, 2019 was 5,778,765.

FORM 10-Q

ALMOST NEVER FILMS INC.

(F/K/A SMACK SPORTSWEAR)

December 31, 2018

TABLE OF CONTENTS

		Page No.
PART I. - FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	4
	Condensed Consolidated Balance Sheets as of December 31, 2018 (Unaudited) and June 30, 2018	4
	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended December 31, 2018 and December 31, 2017	5
	Unaudited Condensed Consolidated Statements of Cash Flows for the three and six months Ended December 31, 2018 and December 31, 2017	6
	Notes to Condensed Consolidated Financial Statements	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	22
Item 4.	Controls and Procedures	22
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	23
Item 1A	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	23
Item 4.	Mine Safety Disclosures	23
Item 5.	Other Information	23
Item 6.	Exhibits	24
	Signature	25

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FORWARD LOOKING STATEMENTS

This report contains forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and similar expressions or variations of such words are intended to identify forward-looking statements, but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this report. Additionally, statements concerning future matters are forward-looking statements.

Although forward-looking statements in this report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the headings "Risks Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our report on Form 8-K which was filed with the SEC on January 20, 2017 (the "Super 8-K"), in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Form 10-Q and information contained in other reports that we file with the SEC. You are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this report.

We file reports with the SEC. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us. You can also read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549. You can obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, except as required by law. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this quarterly report, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

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PART I. FINANCIAL INFORMATION

 Almost Never Films Inc. and Subsidiaries

Consolidated Balance Sheets

	December 31,			June 30,
	2018			2018
	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	98,115		$	270,826
Prepaid expenses and deposits		104,946			218,658
Loan receivable		32,000			32,000
Total Current Assets		235,061			521,484
Deferred assets		259,729			137,083
Film costs		3,019,335			2,535,359
TOTAL ASSETS	$	3,514,125		$	3,193,926
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accrued liabilities	$	73,545		$	87,237
Due to related party		12,000			-
Deferred film revenue		2,082,720			1,799,471
Interest payable		92,023			50,182
Other Payable		55,000			55,000
Promissory Note Payable		480,000			480,000
Promissory note payable - related party		350,000			-
Total Current Liabilities		3,145,288			2,471,890
Long-term Liabilities
Promissory note payable - related party		-			350,000
TOTAL LIABILITIES		3,145,288			2,821,890
Stockholders' Equity
Preferred stock: no par value, 5,000,000 authorized; Series A Preferred stock: 2,000,000 authorized; No shares issued and outstanding		-			-
Common stock: 25,000,000 authorized; $0.001 par value 5,778,765 and 5,328,765 shares issued and outstanding respectively.		5,779			5,329
Additional paid in capital		1,880,506			1,655,956
Accumulated deficit		(1,517,448	)		(1,289,249	)
Total Stockholders' Equity		368,837			372,036
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	3,514,125		$	3,193,926

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

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Almost Never Films Inc. and Subsidiaries

Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2018			2017			2018			2017
Revenues	$	-			-		$	-		$	-
Operating Expenses
General and administration expenses		111,913			25,130			153,681			47,106
Professional fees		12,997			35,558			32,677			55,261
Total operating expenses		124,910			60,688			186,358			102,367
Loss from operations		(124,910	)		(60,688	)		(186,358	)		(102,367	)
Other (Expense) Income
Interest income		-			-			-			4,841
Interest expense		(21,489	)		(14,702	)		(41,841	)		(22,540	)
Total other income (expense)		(21,489	)		(14,702	)		(41,841	)		(17,699	)
Net loss before income taxes		(146,399	)		(75,390	)		(228,199	)		(120,066	)
Provision for income taxes		-			-			-			-
Net loss	$	(146,399	)		(75,390	)	$	(228,199	)	$	(120,066	)
Net Loss Per Common Share – Basic and Diluted	$	(0.03	)		(0.02	)	$	(0.04	)	$	(0.03	)
Weighted Average Common Shares Outstanding - Basic and Diluted		5,700,504			4,670,049			5,513,630			4,672,359

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

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Almost Never Films Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended
	December 31,
	2018			2017
Cash Flows from Operating Activities:
Net loss	$	(228,199	)	$	(120,066	)
Adjustments to reconcile net loss to net cash used in operating activities:
Consulting expense		102,352			-
Changes in operating assets and liabilities:
Interest receivable		-			5,159
Prepaid expenses and deposits		113,712			(15,916	)
Film costs		(483,976	)		(414,937	)
Accrued liabilities		(13,689	)		18,933
Deferred film revenue		283,249			-
Interest payable		41,841			12,540
Net Cash Used in Operating Activities		(184,711	)		(514,287	)
Cash Flows from Investing Activities:
Issuance of promissory note receivable		-			(350,000	)
Collection of promissory note receivable		-			400,000
Loan receivable		-			(12,000	)
Net Cash Provided by Investing Activities		-			38,000
Cash Flows from Financing Activities:
Borrowing from related party		12,000			-
Proceeds from issuance of promissory note payable		-			800,000
Payment of promissory note payable		-			(200,000	)
Payment of promissory note payable - related party		-			(200,000	)
Proceeds from common stock subscribed		-			386,000
Retirement of common Stock		-			(20,000	)
Net Cash Provided By Financing Activities		12,000			766,000
Net Increase in Cash and Cash Equivalents		(172,711	)		289,713
Cash and Cash Equivalents, beginning of period		270,826			91,590
Cash and Cash Equivalents, end of period	$	98,115		$	381,303
Supplemental Disclosure Information:
Cash paid for interest	$	-		$	10,000
Cash paid for income taxes	$	-		$	-
Supplemental Non-cash Disclosure:
Deferred consulting expense paid in restricted stock	$	225,000		$	-

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

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Almost Never Films Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2018

(Unaudited) 

NOTE 1 – ORGANIZATION AND OPERATIONS

Nature of the Business

Almost Never Films Inc. (the “Company”) was originally incorporated in Nevada in October 2007 as Smack Sportswear (“Smack”), which originally manufactured and sold performance and lifestyle based indoor and sand volleyball apparel and accessories. The Company is now an independent film company focused on film production, finance and production related services for movies under budgets of $35 million. The Company’s common stock are currently traded on QTC Markets under the symbol of “HLWD.”

Share Exchange and Recapitalization

On January 15, 2016, Smack entered into a share exchange agreement with Almost Never Films Inc., a private company incorporated in Indiana on July 8, 2015, and its two shareholders, Danny Chan and Derek Williams.

Pursuant to the agreement, Smack issued 1,000,000 shares of our Series A Convertible Preferred Stock to Mr. Chan and Mr. Williams in exchange for all 2,500,000 shares of issued and outstanding common stock of Almost Never Films Inc. (Indiana). As a result of the share exchange, Almost Never Films Inc. (Indiana) became Smack’s wholly-owned subsidiary, and Mr. Chan and Mr. Williams acquired a controlling interest in the Company.

The share exchange was accounted for as a “reverse acquisition,” and resulted in a recapitalization. Almost Never Films Inc. (Indiana) is deemed to be the acquirer for accounting purposes. The assets acquired and liabilities assumed were $6,566 and $598,869, respectively. Consequently, the assets and liabilities and the historical operations that will be reflected in the financial statements prior to the share exchange will be those of Almost Never Films Inc. (Indiana) and will be recorded at the historical cost basis of Almost Never Films Inc. (Indiana), and the combined financial statements after completion of the share exchange include the assets and liabilities of Almost Never Films Inc. (Indiana), historical operations of Almost Never Films Inc. (Indiana), and operations of Almost Never Films Inc. (Indiana) from the closing date of the share exchange. As a result of the issuance of the shares of our Series A Convertible Preferred Stock pursuant to the share exchange, a change in control of the Company occurred as of the date of consummation of the share exchange. All share and per share information in the accompanying consolidated financial statements and footnotes has been retroactively restated to reflect the recapitalization. The Company has not yet generated any revenue since inception.

On February 29, 2016, the stockholders of Smack voted to amend the Articles of Incorporation of the Company to (i) increase the authorized capital of the Company to 5,000,000 shares of common stock and (ii) to change the name of the Company to “Almost Never Films Inc.” which took effect on March 2, 2016.

On August 9, 2017, the Company has approved a 1 for 40 reverse split of its issued and outstanding common stock. The common stock accounts and all share related balances have been be applied retroactively for all periods presented.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Team Sports Superstore (Inactive) and Almost Never Films Inc. (Indiana) and FWIL, LLC (Indiana), and its 90 % owned subsidiaries, One HLWD KY LLC (Kentucky), Two HLWD KY LLC (Kentucky) and Three HLWD KY (Kentucky), LLC, as well as the following entities, which are 100 % owned: Virginia Christmas, LLC (New York), Christmas Camp, LLC (New York), and Country Christmas, LLC (Ohio). All significant intercompany transactions and balances have been eliminated in consolidation.

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Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, these condensed financial statements do not include all of the information and footnotes required for audited annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the financial statements not misleading have been included.

The unaudited condensed consolidated financial statements included herein should be read in conjunction with the audited financial statements and the notes thereto that are included in the Company’s audited June 30, 2018 financial statements that was filed with the SEC on October 15, 2018. The results of operations for the six months ended December 31, 2018, are not necessarily indicative of the results to be expected for the full year.

Use of Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the U.S requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the financial statement date, and reported amounts of revenue and expenses during the reporting period. Significant estimates are used in valuing the fair value of common stock issued for services, film costs, among others. Actual results could differ from these estimates.

Cash

Cash includes demand deposits with banks or other financial institutions. All cash balances are hold by major banking institutions.

Concentration of Risk

The Company maintains its cash with a financial institution, and at times, amounts may exceed federally insured limits. Currently the FDIC insurance coverage limit is $250,000, and the Company is potentially exposed to no un-insured cash balances. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash.

Film Costs

The Company records film costs in accordance with ASC – 926 - Entertainment – Films. Film costs include direct production costs, production overhead and acquisition costs for both motion picture and television productions and are stated at the lower of unamortized cost or estimated fair value and classified as noncurrent assets. Estimates used in calculating the fair value of the film costs are based upon assumptions about future demand and market conditions and are reviewed on a periodic basis.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including our own credit risk.

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In addition to defining fair value, the standard expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. 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. Each fair value measurement is reported in one of the three levels which are determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

Level 1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.

Level 2 – inputs are based upon significant observable inputs other than quoted prices included in Level 1, such as quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

As of December 31, 2018, the balance reported for cash approximates its fair value because of its short maturities. Notes payable are recorded at agreed values. Debt balances are stated at historical amounts less principal payments, which approximate fair market value. Promissory notes receivable and payable are stated at historical amounts less principal payments. The Company believes interest rates in its debt agreements are commensurate with lender risk profiles for similar companies.

Revenue Recognition

In May 2014, the FASB issued new accounting guidance related to revenue from contracts with customers. The core principle of the Standard is that recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new guidance requires that companies disclose the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company has chosen to early adopt and apply the standards beginning in the fiscal year ended June 30, 2018, using the modified retrospective approach, which applies the new standard to contracts that are not completed as of the date of adoption. The Company concluded that no adjustment to the opening balance of retained earnings was required upon the adoption of the new standard.

The Company recognizes revenue from its contracts with customers in accordance with ASC 606 – Revenue from Contracts with Customers. The Company recognizes revenues when we satisfy the performance obligation of the associated contract that reflects the consideration expected to be received based on the terms of the contract.

Revenue related to contracts with customers is evaluated utilizing the following steps: (i) Identify the contract, or contracts, with a customer; (ii) Identify the performance obligations in the contract; (iii) Determine the transaction price; (iv) Allocate the transaction price to the performance obligations in the contract; (v) Recognize revenue when the Company satisfies a performance obligation.

When the Company enters into a contract, the Company analyses the services required in the contract in order to identify the required performance obligations which would indicate the Company has met and fulfilled its obligations. For the current contracts in place, the Company has identified performance obligations as one single event, the sign-off by both parties that production is completed and the product (film) is ready for distribution. To appropriately identify the performance obligations, the Company considers all of the services required to be satisfied per the contract, whether explicitly stated or implicitly implied. The Company allocates the full transaction price to the single performance obligation being satisfied.

The Company recognizes revenue when the customer confirms to the Company that all of the terms and conditions of the contract has been met, and the sign-off of the project has been completed. The Company derives its revenues the follows:

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Production Service Agreement Revenue is related to films where the Company has been engaged as an independent contractor to provide production services and other elements related to production for individual film projects. Based on the analysis performed, the Company determined that the performance obligations as of December 31, 2018 had not been satisfied, and therefore the Company did not recognize any revenues associated with the Production Service Agreements.

Revenue from self-produced films is related to films where the Company has self-produced certain films along with a third party, with the expectation that these films will be distributed in the future. Based on the analysis performed, the Company determined that the performance obligations as of December 31, 2018 had not been satisfied, and therefore the Company did not recognize any revenues associated with the self-produced films.

The Company analyses whether gross sales, or net sales should be recorded, has control over establishing price, and has control over the related costs with earning revenues. The Company has recorded all revenues at the gross price.

Cash payments received are recorded as deferred revenue until the conditions, stated above, of revenue recognition have been met, specifically all obligations have been met as specified in the related customer contract.

Stock Repurchase and Cancellation

During the year ended June 30, 2018, the Company repurchased and cancelled 85,475 shares of common stock. The Company accounted for the transaction in accordance with ASC 505 – Equity – 30 Treasury Stock, Purchase of Treasury Shares or Stock Rights.

Stock Subscription Receivable

The Company has accounted for Stock Subscription Receivable in accordance with ASC – 505 – Equity – 10, and has included the Stock Subscription Receivable balance in equity.

Loss per Share Calculations

Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares available. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company’s diluted loss per share is the same as the basic loss per share for the three and six months ended December 31, 2018, and 2017, as there are no potential shares outstanding that would have a dilutive effect.

Recently Issued Accounting Pronouncements

In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, or ASU 2018-07. Under this ASU, the accounting for awards issued to nonemployees will be similar to the accounting for employee awards. This includes allowing for the measurement of awards at the grant date and recognition of awards with performance conditions when those conditions are probable, both of which are earlier than under current guidance for nonemployee awards. The Company has early adopted this guidance, specifically related to the tax calculations of consulting services compensation.

Management has considered all recent accounting pronouncements issued since the last audit of our financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

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Going Concern

The accompanying unaudited financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. The accompanying consolidated financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. During the six months ended December 31, 2018, the Company had a net loss from operations of $186,358 and net cash outflows from operating activities of $184,711. As of December 31, 2018, the Company has an accumulated deficit of $1,517,448. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

The ability of the Company to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, an additional cash infusion and an identification of new business opportunities.

The Company plans on raising the required funds through completion of film projects resulting in revenues, and further potential equity and debt offerings. However, there is no assurance that the Company will be successful in this or any of its endeavors or become financially viable to continue as a going concern.

NOTE 3 – PROMISSORY NOTES RECEIVABLE

On June 7, 2017, the Company entered into an agreement for a 2.5% promissory note in exchange for lending $200,000 to a third party. The principal of $200,000 was due to the Company forty-five (45) days from receipt of the funds. The principal and $5,000 interest receivable was received on July 17, 2017.

On June 12, 2017, the Company entered into an agreement for a 2.5% promissory note in exchange for lending $200,000 to a third party. The principal of $200,000 was due to the Company forty-five (45) days from receipt of the funds. The principal and $5,000 interest receivable was received on July 26, 2017.

During the six months ended December 31, 2018 and 2017, a total amount of $0 and $4,841, respectively was recorded as interest income related to the two $200,000 notes.

NOTE 4 – FILM COSTS

Film costs are comprised of the following:

	December 31, 2018		June 30, 2018
Independent Self-Produced Film Costs	$	1,022,514	$	982,175
Capitalized Film Costs covered under Production Service Agreements		1,996,821		1,553,184
Total Film Costs	$	3,019,335	$	2,535,359

Film costs include salaries and wages, and all other direct costs associated with the motion pictures and television productions.

As of December 31, 2018, the Company performed fair value measurements related to film costs and determined that there were no indicators of impairment. During the six months ended December 31, 2018, the Company did not recognize impairment loss.

On November 10, 2017 the Company executed a First Amendment Agreement to its 6x picture Production and Distribution Agreement between Big Film Factory LLC (“Big Film” or “Prodco”) and Pure Flix Entertainment LLC (“PFE”), (the “Agreement”). The Agreement memorializes the understanding with respect to the development, packaging, production, post-production and worldwide distribution of the films intended for initial and primary worldwide exhibition. The Company, will be added as a party to the initial agreement by and between Big Film and PFE, wherever Big Film is referenced in connection with providing production services in conjunction with Big Film as well as providing production capital and cash following each of the first six (6) films produced under the Agreement (“6 Pictures”). Both Prodco and PFE agree to expand the defined role of “Prodco” in the Agreement, to add the Company to that definition, and grant the Company equally the same role and responsibilities heretofore only held by Big Film in connection with the 6 Pictures.

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NOTE 5 – DEFERRED FILM REVENUE

On March 27, 2018, the Company entered into a Production Services Agreement with MVE Productions, LLC to provide production services for a film. In relation to the film, the Company created a Limited Liability Corporation, ‘Christmas Camp LLC.’ The Production Services Agreement was planned to run from April 9, 2018 to August 27, 2018. As of the date of this filing, the Production Service Agreement is still ongoing. The Company has not recognized any film revenue for the three and six months ended December 31, 2018. As of December 31, 2018, the Company has recorded $843,317 of deferred revenue in relation to this film.

On March 27, 2018, the Company entered into a Production Services Agreement with MVE Productions, LLC to provide production services for a film. In relation to the film, the Company created a Limited Liability Corporation, ‘Last Vermont Christmas LLC.’ The Production Services Agreement was planned to run from April 9, 2018 to September 28, 2018. As of the date of this filing the Production Service Agreement is still ongoing. The Company has not recognized any film revenue for the three and six months ended December 31, 2018. As of December 31, 2018, the Company has recorded $871,684 of deferred revenue in relation to this film.

On June 19, 2018, the Company entered into a Production Services Agreement with MVE Productions, LLC to provide production services for a film. In relation to the film, the Company created a Limited Liability Corporation, ‘Country Christmas LLC.’ The Production Services Agreement will run from June 25, 2018 to October 15, 2018. The agreement is still ongoing as of the date of this filing. The Company has not recognized any film revenue for the three and six months ended December 31, 2018. As of December 31, 2018, the Company has recorded $367,719 of deferred revenue in relation to this film.

NOTE 6 – PROMISSORY NOTES PAYABLE

On October 11, 2017, the Company issued a $150,000 Promissory Note in exchange for receiving $150,000 proceeds. The principal of $150,000 is due fourteen (14) months from the receipt of the funds, and a total interest charge of ten percent, or $15,000 is to be recorded over the term of the loan. An interest payable of $16,808 has been recorded as of December 31, 2018. During the three months and six months ended December 31, 2018, interest expense of $4,349 and $7,561 was recorded, respectively. During the three months and six months ended December 31, 2017, interest expense of $2,859 and $2,859 was recorded, respectively. The proceeds were used by the Company to fund the motion picture known as One HLWD KY LLC. The note is currently in default. Upon default on December 11, 2018, the note accrues interest at 22% per annum.

On January 4, 2018, the Company issued a $80,000 Promissory Note in exchange for receiving $80,000 proceeds. The principal of $80,000 is due twelve (12) months from the receipt of the funds, and bears interest at 10% per annum. An interest payable of $7,912 has been recorded as of December 31, 2018. During the three months and six months ended December 31, 2018, interest expense of $2,016 and $4,033 was recorded, respectively. The proceeds were used by the Company to fund the motion picture known as River Runs Red. The note is currently in default.

On February 6, 2018, the Company issued a $100,000 Promissory Note in exchange for receiving $100,000 proceeds. The principal of $100,000 is due twelve (12) months from the receipt of the funds, and bears interest at 10% per annum. An interest payable of $8,986 has been recorded as of December 31, 2018. During the three months and six months ended December 31, 2018, interest expense of $2,521 and $5,042 was recorded, respectively. The proceeds were used by the Company to fund the motion picture known as River Runs Red. The note is currently in default.

On February 7, 2018, the Company issued a $150,000 Promissory Note in exchange for receiving $150,000 proceeds. The principal of $150,000 is due twelve (12) months from the receipt of the funds, and bears interest at 10% per annum. An interest payable of $13,438 has been recorded as of December 31, 2018. During the three months and six months ended December 31, 2018, interest expense of $3,781 and $7,562 was recorded, respectively. The proceeds were used by the Company to fund the motion picture known as River Runs Red. The note is currently in default.

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NOTE 7 – RELATED PARTY TRANSACTIONS

On September 19, 2017 the company issued a 10% Promissory Note in exchange for receiving $350,000 from Kruse Farms, LP., a Company owned by one of the Company’s principle owners, to fund the production of a motion picture. The principal of $350,000 is due in twenty-four (24) months from receipt of the funds. An interest payable of $44,877 has been recorded as of December 31, 2018. During the six months ended December 31, 2018 and 2017, interest expense was $17,644 and $9,877, respectively. During the three months ended December 31, 2018 and 2017, interest expense was $8,822 and $8,822, respectively.

As of December 31, 2018, the Company has advanced $12,000 as a loan to its employee, which bears no interest and is due on demand.

As of December 31, 2018, the Company has advanced $20,000 as a loan to the Company’s Chief Creative Officer.

During the six months ended December 31, 2018, the Company borrowed a $12,000 from a related party. The amounts are due on demand and non-interest bearing.

During the six months ended December 31, 2018, and 2017, the Company paid $25,640, and $0, respectively to the Chief Creative Officer for fees related to production and managing movie services. During the three months ended December 31, 2018, and 2017, the Company paid $0 and $0 respectively to the Chief Creative Officer for fees related to production and managing of movie services.

NOTE 8 – NOTE PAYABLE

In August 2015, Smack entered into an unsecured promissory note agreement with an individual. The agreement allowed Smack to borrow up to $66,613 at an interest rate of 10 percent per year. This $66,613 note was assumed by the Company during the recapitalization. During the year ended June 30, 2018, the Company settled the principal amount of $66,613 and interest payable of $17,209 for a total of $83,822 through issuance of 83,822 common shares. For the six months ended December 31, 2018, and 2017, interest expense of $0, and $3,358 were recorded, respectively.

NOTE 9 – SHARE CAPITAL

Common Stock

On July 5, 2017, the Company repurchased and cancelled 85,475 shares of common stock of the company for $20,000.

On August 9, 2017, the Company has approved a 1 for 40 reverse split of its issued and outstanding common stock. The common stock accounts and all share related balances have been applied retroactively for all periods presented.

On September 11, 2017, the Company amended the Articles of Incorporation to decrease the authorized capital to 25,000,000 shares of common stock.

During the year ended June 30, 2018, the Company entered into four share purchase agreements with four investors for 406,000 common shares at $1 per share. The shares were issued during the year ended June 30, 2018.

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During the year ended June 30, 2018, the Company issued 83,822 common shares to settle $132,437 of principal note payable and accrued interest.

During the year ended June 30, 2018, the Company issued 43,894 common shares to settle $69,352 of accounts payable.

During the year ended June 30, 2018, the Company issued 125,000 common shares for consulting services, valued at $140,000.

On October 17, 2018, the Company issued 250,000 and 200,000 common shares at $0.50 for consulting services, to two individuals, valued at $125,000, and $100,000, respectively.

NOTE 10 – COMMITMENTS AND CONTINGENCIES

The Company neither owns nor leases any real or personal property. The Company’s officers have provided office 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.

On December 12, 2016, the Company entered into an agreement with Saisam Entertainment, LLC to develop, finance, and produce a motion picture project. Per the terms of the agreement, the Company will provide or source equity financing for the project in the amount of approximately $1,300,000. Per the terms of the agreement, the Company and Saisam Entertainment, LLC will create an LLC or other entity for the project currently entitled “Love is not Easy”. Saisam Entertainment, LLC owns and controls the rights to the screenplay, and will assign all rights in and to the project, pursuant to the terms of an option purchase agreement between the two parties, which includes an initial option fee of $10,000 for an option period of 18 months, a lien for all of the Company’s out of pocket costs, and will assist in additional funding. The Company will make or source financial contributions in accordance with the terms of the agreement, assist in the raising of additional financing, and will participate in the development and production. The Company and Saisam Entertainment, LLC will own an undivided 50% interest in the LLC or entity that is formed. The Company will be the managing member of the LLC or entity. The approved budget for the project is approximately $2,000,000. In consideration, the Company will receive a return of 20% of its investment, and will subsequently receive its portion of the net profits per the terms of the agreement. The LLC or entity has not been formed to date.

NOTE 11 – INCOME TAXES

The Company provides for income taxes under ASC 740, “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.

On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”), was signed into law. The Tax Act includes numerous changes to tax laws impacting business, the most significant being a permanent reduction in the federal corporate income tax rate from 34% to 21%. The rate reduction took effect on January 1, 2018. As the Company’s 2018 fiscal year ended on June 30, 2018, the Company’s federal blended corporate tax rate for fiscal year 2018 is 26.9%, based on the applicable tax rates before and after the Tax Act and the number of days in the fiscal year to which the two different rates applied.

14

The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 21% and 34% to the net loss before provision for income taxes for the following reasons:

	Six Months Ended December 31,
	2018			2017
Federal Income Tax benefits (expenses) attributable to
Current Operation	$	47,922		$	25,214
Less: Valuation Allowance		(47,922	)		(25,214	)
Net Provision for Federal Income Taxes	$	-		$	-

Net deferred tax assets consist of the following components as of:

	December 31,			June 30,
	2018			2018
Deferred tax assets	$	224,551		$	176,629
Less: valuation allowance		(224,551	)		(176,629	)
Deferred tax assets, net	$	-		$	-

In accordance with Income Tax laws of United States of America, net operating loss carry forwards of $1,151,090 which expire commencing in fiscal 2036, for federal income tax reporting purposes are subject to annual limitations. When a change in ownership occurs, net operating loss carry forwards may be limited as to use in future years.

NOTE 12 – SUBSEQUENT EVENTS

Management has evaluated subsequent events through the date the consolidated financial statements were issued. Based on our evaluation no events have occurred that require disclosure.

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

Business Development

Almost Never Films Inc. (the “Company”) was originally incorporated in Nevada in October 2007 as Smack Sportswear (“Smack”), which originally manufactured and sold performance and lifestyle based indoor and sand volleyball apparel and accessories. The Company is now an independent film company focused on film production and production related services in connection with genre specific motion pictures with production costs in the $5.0 million to $50.0 million range.

On January 15, 2016, pursuant to the share exchange agreement, among Almost Never Films Inc. f/k/a Smack Sportswear (the “Company”, “we,” “our” or “us”), Almost Never Films Inc. (“ANF”), an Indiana corporation, and the two shareholders of ANF (the “ANF Shareholders”), we issued to the ANF Shareholders, 1,000,000 shares of our Series A Convertible Preferred Stock (the “Series A Preferred Stock”), par value $0.001 per share in exchange for all 100,000,000 shares of the issued and outstanding common stock of ANF (the “Share Exchange”). As a result of the Share Exchange, ANF became our wholly-owned subsidiary, and our business has become the business of ANF, effective January 15, 2017.

The share exchange was accounted for as a "reverse acquisition," and resulted in a recapitalization. Almost Never Films Inc. (Indiana) is deemed to be the acquirer for accounting purposes. The assets acquired and liabilities assumed were $6,566 and $598,869, respectively. Consequently, the assets and liabilities and the historical operations that will be reflected in the financial statements prior to the share exchange will be those of Almost Never Films Inc. (Indiana) and will be recorded at the historical cost basis of Almost Never Films Inc. (Indiana), and the combined financial statements after completion of the share exchange include the assets and liabilities of Almost Never Films Inc. (Indiana), historical operations of Almost Never Films Inc. (Indiana), and operations of Almost Never Films Inc. (Indiana) from the closing date of the share exchange. As a result of the issuance of the shares of our Series A Convertible Preferred Stock pursuant to the share exchange, a change in control of the Company occurred as of the date of consummation of the share exchange. All share and per share information in the accompanying consolidated financial statements and footnotes has been retroactively restated to reflect the recapitalization. The Company has not yet generated any revenue since the reverse acquisition.

On February 29, 2016, the stockholders of Smack voted to amend the Articles of Incorporation of the Company to (i) increase the authorized capital of the Company to 200,000,00 shares of common stock and (ii) to change the name of the Company to “Almost Never Films Inc.” which took effect on March 2, 2017.

The Company has 5,000,000 authorized preferred shares with no par value.

Smack issued 1,000,000 shares of our Series A Convertible Preferred Stock to the Mr. Chan and Mr. Williams in exchange for all 100,000,000 shares of issued and outstanding common stock of Almost Never Films Inc. (Indiana), with a value of $10,000.

On March 4, 2016, all 1,000,000 preferred shares were converted into 100,000,000 common shares.

There were no shares of preferred stock issued and outstanding as of June 30, 2018.

On March 8, 2016, the Company executed a Stock Purchase Agreement with a shareholder. Pursuant to the Stock Purchase Agreement, the Company sold, and said shareholder purchased, an aggregate of 49,720,000 shares of the Company’s Common Stock at a price of $0.005 per share in exchange for the cancellation of and discharge of certain promissory notes issued by the Company and payable to said shareholder. The foregoing issuance was deemed to be exempt from registration under Section 4(a)(2) of the Securities Act as not involving any public offering and/or Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws.

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In March through November 2016, the Company entered into four share purchase agreements with four investors for 12,500,000 common shares at $0.02 per share for total proceeds of $250,000

On November 16, 2016, the company entered into a collaboration agreement (the “KBM Agreement”) with Konwiser Brothers Media (“KBM”, and together with ANF, the “Parties). Pursuant to the Agreement, the Parties will create an LLC or other entity (the “Company”), for the purpose of developing, producing and exploiting proposed motion picture project currently entitled “Field Trip” (the “Picture”). KBM will contribute its development and producing services to the Company and all rights to the Screenplay, and ANF will make financial contributions, assist in the raising of additional financing and participate in the development and production process as set forth more fully herein. The Company will own 100% of the copyright to the Picture and all other ancillary and related rights, and each of KBM and ANF will own an undivided 50% interest in the Company. KBM will be the managing member of the Company. The operating agreement for the Company will be consistent with the terms of this Agreement. This transaction, and the ones mentioned below, removed the Company from its prior shell status. On September 27, 2017, KBM informed the Company of its intent to terminate the KBM Agreement.

On December 1, 2016, the Company filed a registration statement on Form S-1, registering 10,000,000 shares for certain selling shareholders. The Form S-1 was declared effective on December 9, 2016.

On December 12, 2016, the Company entered into a collaboration agreement (the “SAE Agreement”) with Saisam Entertainment, LLC (“SAE”, and together with the Company, the “Parties). Pursuant to the Agreement, the Parties will create an LLC or other entity (the “Company”), for the purpose of developing, producing and exploiting proposed motion picture project currently entitled “Love is not Easy” (the “Picture”). The Company owns and controls the rights to the screenplay for the Picture.

On June 6, 2017, the Company issued a 2.5% promissory note (the “ANF Note”) to Weirong Zhang (the “Investor”). Pursuant to the ANF Note, the Company received $200,000, which was due to the Lender ninety (90) days from the date the purchase price of $200,000 was paid. The ANF Note accrues interest at 2.5% per 90 days. Thereafter, on June 7, 2017, The Money Pool, LLC (“Money Pool”) issued a non-transferable promissory note to the Company for $200,000 (the “Money Pool Note”). The Company funded the Money Pool Note with the funds received from the Investor. Money Pool shall use the funds from the Money Pool Note, along with its own funds, in order to provide a bridge loan to Blue Rider San Juan, LLC (“Blue Rider”), in connection with the production of a motion picture known as “Speed Kills”. Blue Rider is the international sales agent for “Speed Kills.” The Money Pool Notes accrues interest of a flat 2.5% for the first 45 days from funding. In the event the Money Pool Note is not paid in full within 45 days, the flat interest rate will increase to 3.5% for each 45-day period any balance or accrued interest remains unpaid. The principal and interest shall be payable by Money Pool to the Company from payments made by Blue Rider on the bridge loan provided by Money Pool. On June 9, 2017, the Company issued a 2.5% promissory note (the “Kruse Note”) to William R. Kruse (the “Kruse”). Pursuant to the Kruse Note, the Company received $200,000, which is due to Kruse ninety (90) days from the date the purchase price of $200,000 was paid. The Kruse Note accrues interest at 2.5% per annum. Thereafter, on June 12, 2017, Money Pool issued a non-transferable promissory note to the Company for $200,000 (the “Pool Note”). The Company shall fund the Pool Note with the funds received from Kruse. Money Pool shall use the funds from the Pool Note, along with its own funds, in order to provide a bridge loan to Blue Rider, in connection with the production of a motion picture known as “Ana”. Blue Rider is the international sales agent for “Ana.” The Pool Notes accrues interest of a flat 2.5% for the first 45 days from funding. In the event the Pool Note is not paid in full within 45 days, the flat interest rate will increase to 3.5% for each 45-day period any balance or accrued interest remains unpaid. The principal and interest shall be payable by Money Pool to the Company from payments made by Blue Rider on the bridge loan provided by Money Pool.

On August 2, 2017, Derek Williams presented the Board of Directors of the Company with his resignation as Chief Operating Officer and a member of the Board of Directors of the Company. Mr. William’s decision to resign was not due to any disagreement with the Company.

On August 24, 2017, the Board of Directors of the Company appointed Daniel Roth as Chief Creative Officer of the Corporation and Damiano Tucci as Chief Operating Officer of the Corporation.

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On September 13, 2017, the Company completed a 1 for 40 reverse stock split and changed the authorized capital of the Company to 25,000,000 shares of common stock, par value $.001 per share.

On November 10, 2017 the Company executed a First Amendment Agreement to its 6x picture Production and Distribution Agreement between Big Film Factory LLC (“Big Film” or “Prodco”) and Pure Flix Entertainment LLC (“PFE”), (the “Agreement”). The Agreement memorializes the understanding with respect to the development, packaging, production, post-production and worldwide distribution of the films intended for initial and primary worldwide exhibition. The Company, a Nevada corporation, will be added as a party to the initial agreement by and between Big Film and PFE, wherever Big Film is referenced in connection with providing production services in conjunction with Big Film as well as providing production capital and cash following each of the first six (6) films produced under the Agreement (“6 Pictures”). Both Prodco and PFE agree to expand the defined role of “Prodco” in the Agreement, to add the Company to that definition, and grant the Company equally the same role and responsibilities heretofore only held by Big Film in connection with the 6 Pictures.

The Company will be accorded a company credit and producer credits equal to those of Big Film. Furthermore, Prodco will provide the Company, Big Film and PFE with Producer’s E & O Insurance for a term of not less than three (3) years from delivery of any such Picture to PFE, and with limits of $1 million/$3 million/ $25K SIR as are common to the television/SVOD industry.

On April 26, 2018, the Company filed a registration statement on Form S-1, registering 514,822 shares for certain selling shareholders. The Form S-1 was declared effective on May 10, 2018.

Criteria

The Company was originally incorporated in Nevada in October 2007 as Smack Sportswear (“Smack”), which originally manufactured and sold performance and lifestyle based indoor and sand volleyball apparel and accessories. The Company is now an independent film company focused on film production and production related services in connection with genre specific motion pictures with production costs in the $5.0 million to $50.0 million range.

History

As described above, we were incorporated in Nevada in October 2007 under the name SMACK Sportswear under which we manufactured and sold performance and lifestyle based indoor and sand volleyball apparel and accessories. As a result of the sale of certain inventory from the Company to Mr. Sigler in July 2015, the Company became a “shell company” (as such term is defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended). As a result of the Share Exchange, we acquired the proposed business of Almost Never.

Almost Never, our wholly-owned subsidiary upon the closing of Share Exchange, was incorporated in the State of Indiana on July 8, 2015. As a result of the Share Exchange, the Company amended its Articles of Incorporation to change its name from “Smack Sportswear” to “Almost Never Films Inc.” to more accurately reflect its new business. We also request changed the Company’s trading symbol to "HLWD"

We currently have authorized 30,000,000 shares of capital stock, consisting of (i) 25,000,000 shares of Common Stock, and (ii) 5,000,000 shares designated as preferred stock containing such rights, privileges and designations as our Board of directors may, from time to time, determine. As of the date of this Report, an aggregate of 5,778,765 shares of our Common Stock and no shares of our Series A Convertible Preferred Stock are issued and outstanding.

On March 4, 2017, all previously authorized 1,000,000 preferred shares were converted into 2,500,000 common shares. In March through November 2017, the Company entered into four share purchase agreements with three investors for 312,500 common shares at $0.08 per share for total proceeds of $250,000

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On March 8, 2017, the Company executed a Stock Purchase Agreement with a shareholder. Pursuant to the Stock Purchase Agreement, the Company sold, and said shareholder purchased, an aggregate of 1,243,000 shares of the Company’s Common Stock at a price of $0.005 per share in exchange for the cancellation of and discharge of certain promissory notes issued by the Company and payable to said shareholder. The foregoing issuance was deemed to be exempt from registration under Section 4(a)(2) of the Securities Act as not involving any public offering and/or Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws.

On September 13, 2017, the Company completed a 1 for 40 reverse stock split and changed the authorized capital of the Company to 25,000,000 shares of common stock, par value $.001 per share.

Our principal executive office is located at 8605 Santa Monica Blvd #98258, West Hollywood, California 90069-4109.

Our Business

We are an independent film company focused on film production and production related services in connection with genre specific motion pictures with production costs in the $5.0 million to $50.0 million range.

Our business is to facilitate relationships (and as such, provide production related services) between creative talent (including writers, actors and directors) and companies who produce, finance and distribute motion pictures. We intend to acquire or license rights to materials upon which we believe motion pictures can be based (screenplays, books, short stories etcetera, which are referred to within the entertainment industry as the “underlying property”). We may further develop an underlying property by contracting for additional writing services and/or by bringing in new writers to perform “polishes” or “rewrites” on a particular underlying property.

If we are satisfied with the creative state of the underlying property, we then intend to make offers to directors and/or actors, to perform services in connection with a particular motion picture based on that underlying property. These offers are very often contingent and subject to the satisfaction of certain production elements, such as financier approval of the screenplay and the financier’s selection of a start date for principal photography.

If a director or actors accepts one of our offers, the director or actors are said to be “attached” to the motion picture project. Armed with the underlying property and the attached creative element(s) (these elements are often called the “package” in Hollywood), we may then approach third party financiers seeking financing as well as distribution for the potential motion picture. Another approach that we may take is to contact the financiers first, seeking first to produce the film, and then with a finished (or nearly finished) motion picture product, obtain distribution for the picture.

Critical accounting policies and estimates

Our condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, 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. We continually evaluate our estimates and judgments, our commitments to strategic alliance partners and the timing of the achievement of collaboration milestones. We base our estimates and judgments on historical experience and other factors that we believe to be reasonable under the circumstances. All estimates, whether or not deemed critical, affect reported amounts of assets, liabilities, revenues and expenses, as well as disclosures of contingent assets and liabilities. These estimates and judgments are also based on historical experience and other factors that are believed to be reasonable under the circumstances. Materially different results can occur as circumstances change and additional information becomes known, even for estimates and judgments that are not deemed critical.

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Going Concern

The accompanying financial statements have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern. The Company has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. These conditions raise substantial doubt as to our ability to continue as a going concern.

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.

Results of Operations

For the three months ended December 31, 2018 compared to December 31, 2017

During the three months ended December 31, 2018, the Company had no revenue and incurred $111,913 on general and administrative expenses and $12,997 on professional fees. During the three months ended December 31, 2017, the Company had no revenue and incurred $25,130 on general and administrative expenses and $35,558 on professional fees. The increase in general and administrative expenses was due to the increased overall operations of the Company and consulting fees during the three months ended December 31, 2018 compared to 2017.

Other Expense

During the three months ended December 31, 2018, the Company incurred interest expenses of $21,489, relating to unsecured promissory notes payable. During the three months ended December 31, 2017, the Company incurred interest expenses of $14,702, relating to an unsecured promissory notes payable.

Net Loss

The Company’s net loss for the three months ended December 31, 2018 was $146,399. The Company’s net loss for the three months ended December 31, 2017 was $75,390.

For the six months ended December 31, 2018 compared to December 31, 2017

During the six months ended December 31, 2018, the Company had no revenue and incurred $153,681 on general and administrative expenses and $32,677 on professional fees. The Company’s professional fees were primarily for ongoing regulatory requirements. During the six months ended December 31, 2017, the Company had no revenue and incurred $47,106 on general and administrative expenses and $55,261 on professional fees. The increase in general and administrative expenses was due to the increased overall operations of the Company and consulting fees during the six months ended December 31, 2018 compared to 2017. The Company’s professional fees were primarily for ongoing regulatory requirements.

Other Expense

During the six months ended December 31, 2018, the Company incurred interest expenses of $41,841. During the six months ended December 31, 2017, the Company incurred interest expenses of $22,540, relating to an unsecured promissory note payable.

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Net Loss

The Company’s net loss for the six months ended December 31, 2018 was $228,199. The Company’s net loss for the six months ended December 31, 2017 was $120,066.

Liquidity and Capital Resources

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures.

As of December 31, 2018, we had a cash balance of $98,115. As of June 30, 2018, we had a cash balance of $270,826. We do not have sufficient funds to operate for the next twelve months. There can be no assurance that additional capital will be available to the Company. We currently have no agreements, arrangements or understandings with any person or entity to obtain funds through bank loans, lines of credit or any other sources. Since the Company has no such arrangements or plans currently in effect, its inability to raise funds for the above purposes will have a severe negative impact on its ability to remain a viable company.

Financing Activities

During the six months ended December 31, 2018, the Company received $12,000 from a related party.

Going Concern Consideration

The accompanying condensed consolidated financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. The accompanying condensed consolidated financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. During the six months ended December 31, 2018, the Company incurred a net loss from continuing operations of $228,199 and cash used in operating activities was $184,711. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

The ability of the Company to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, an additional cash infusion and an identification of new business opportunities. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on operations, in the case of debt financing, or cause substantial dilution for our stock holders, in case of equity financing.

We do not have any material commitments for capital expenditures during the next twelve months. Although our proceeds from the issuance of debt and our offering of shares of common stock is currently sufficient to fund our operating expenses, we anticipate we will need to raise additional funds in the future so that we can expand our operations. Therefore, our future operations are dependent on our ability to secure additional financing. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the trading price of our common stock and a downturn in the U.S. equity and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. Furthermore, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. The inability to obtain additional capital may restrict our ability to grow and may reduce our ability to continue to conduct business operations. If we are unable to obtain additional financing, we may have to curtail our marketing and development plans and possibly cease our operations.

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Off-balance sheet arrangements

During the six months ended December 31, 2018, we did not have any "off-balance sheet arrangements" (as that term is defined in Item 303(a)(4)(ii) of Regulation S-K).

Recent accounting pronouncements

Management has considered all recent accounting pronouncements issued since the last audit of our financial statements. The Company's management believes that these recent pronouncements will not have a material effect on the Company's financial statements. 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e)) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Pursuant to Rule 13a-15(b) under the Exchange Act, the Company carried out an evaluation with the participation of the Company's management, including the Company's Chief Executive Officer ("CEO") and the Company's Chief Financial Officer ("CFO"), of the effectiveness of the Company's disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of December 31, 2018. Based upon that evaluation, the Company's CEO and CFO concluded that the Company's disclosure controls and procedures were not effective as of December 31, 2018 due to the Company’s limited internal resources and lack of ability to have multiple levels of transaction review.

Management is in the process of determining how best to change our current system and implement a more effective system to insure that information required to be disclosed in the reports that we file or submit under the Exchange Act have been recorded, processed, summarized and reported accurately. Our management intends to develop procedures to address the current deficiencies to the extent possible given limitations in financial and manpower resources. While management is working on a plan, no assurance can be made at this point that the implementation of such controls and procedures will be completed in a timely manner or that they will be adequate once implemented.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting that occurred during the quarter ended December 31, 2018, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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PART II

ITEM 1. LEGAL PROCEEDINGS

There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.

ITEM 1A. RISK FACTORS

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

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

			Incorporated by Reference			Filed
Exhibit No.	Description	Form	SEC File No.	Exhibit	Filing Date	Herewith
3.1	Articles of Incorporation of the Company	SB2	333-148510	3.1	1/7/2008
3.2	Amendment to Articles of Incorporation of the Company	8-K	000-53049	3.2	4/13/2012
3.3	Amendment to Articles of Incorporation of the Company	8-K	000-53049	3.1	2/29/2017
3.4	Bylaws of the Company	SB2	333-148510	3.2	1/7/2008
4.1	Certificate of Designation of Series A Convertible Preferred Stock	8-K	000-53049	4.1	1/18/2017
10.1	Share Exchange Agreement dated January 15, 2017 by and among SMACK Sportswear, Inc., Almost Never Films Inc., and the Shareholders of Almost Never Films Inc.	8-K	000-53049	2.1	1/18/2017
31.1	Certification by Chief Executive Officer and Chief Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act					x
31.2	Certification by Chief Executive Officer and Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code					x
101.INS	XBRL Instance Document.*
101.SCH	XBRL Taxonomy Extension Schema.*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase.*
101.DEF	XBRL Taxonomy Extension Definition Linkbase.*
101.LAB	XBRL Taxonomy Extension Label Linkbase.*
101.PRE	XBRL Extension Presentation Linkbase.*

_________

* Attached as Exhibit 101 to this report are the following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2018 formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheet, (ii) the Condensed Consolidated Statement of Operations, (iii) the Condensed Consolidated Statement of Cash Flows, and (iv) Notes to Combined Financial Statements.

24

SIGNATURE

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.

	ALMOST NEVER FILMS INC.
Date: February 19, 2019	By:	/s/ Danny Chan
		Danny Chan, Chief Executive Officer and Chief Financial Officer (principal executive officer and principal financial and accounting officer)

25

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Danny Chan, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of ALMOST NEVER FILMS INC. for the quarter ended December 31, 2018;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

(a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others, particularly during the period in which this report is being prepared;
(b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
(c)	evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 19, 2019	/s/ Danny Chan
	Danny Chan
	Chief Executive Officer and Chief Financial Officer (principal executive officer and principal financial and accounting officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of ALMOST NEVER FILMS INC. (the “Company”) on Form 10-Q for the quarter ended December 31, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Danny Chan, Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Date: February 19, 2019	/s/ Danny Chan
	Danny Chan
	Chief Executive Officer and Chief Financial Officer (principal executive officer and principal financial and accounting officer)

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	6 Months Ended
	Dec. 31, 2018	Feb. 15, 2019
Document and Entity Information [Abstract]
Entity Registrant Name	Almost Never Films Inc.
Entity Central Index Key	0001422768
Trading Symbol	hlwd
Current Fiscal Year End Date	--06-30
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		5,778,765
Document Type	10-Q
Document Period End Date	Dec. 31, 2018
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Entity Small Business	true
Entity Emerging Growth Company	false

XML

Consolidated Balance Sheets - USD ($)	Dec. 31, 2018	Jun. 30, 2018
Current Assets
Cash and cash equivalents	$ 98,115	$ 270,826
Prepaid expenses and deposits	104,946	218,658
Loan receivable	32,000	32,000
Total Current Assets	235,061	521,484
Deferred assets	259,729	137,083
Film costs	3,019,335	2,535,359
TOTAL ASSETS	3,514,125	3,193,926
Current Liabilities
Accrued liabilities	73,545	87,237
Due to related party	12,000
Deferred film revenue	2,082,720	1,799,471
Interest payable	92,023	50,182
Other Payable	55,000	55,000
Promissory Note Payable	480,000	480,000
Promissory note payable - related party	350,000
Total Current Liabilities	3,145,288	2,471,890
Long-term Liabilities
Promissory note payable - related party		350,000
TOTAL LIABILITIES	3,145,288	2,821,890
Stockholders' Equity
Preferred stock: no par value, 5,000,000 authorized; Series A Preferred stock: 2,000,000 authorized; No shares issued and outstanding
Common stock: 25,000,000 authorized; $0.001 par value 5,778,765 and 5,328,765 shares issued and outstanding respectively.	5,779	5,329
Additional paid in capital	1,880,506	1,655,956
Accumulated deficit	(1,517,448)	(1,289,249)
Total Stockholders' Equity	368,837	372,036
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 3,514,125	$ 3,193,926

XML

Consolidated Balance Sheets (Parentheticals) - $ / shares	Dec. 31, 2018	Jun. 30, 2018
Preferred stock, no par value (in dollars per share)	$ 0	$ 0
Preferred stock, shares authorized	5,000,000	5,000,000
Common stock, shares authorized	25,000,000	25,000,000
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares issued	5,778,765	5,328,765
Common stock, shares outstanding	5,778,765	5,328,765
Series A Preferred stock
Preferred stock, shares authorized	2,000,000	2,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0

XML

Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Income Statement [Abstract]
Revenues	$ 0	$ 0	$ 0	$ 0
Operating Expenses
General and administration expenses	111,913	25,130	153,681	47,106
Professional fees	12,997	35,558	32,677	55,261
Total operating expenses	124,910	60,688	186,358	102,367
Loss from operations	(124,910)	(60,688)	(186,358)	(102,367)
Other (Expense) Income
Interest income				4,841
Interest expense	(21,489)	(14,702)	(41,841)	(22,540)
Total other income (expense)	(21,489)	(14,702)	(41,841)	(17,699)
Net loss before income taxes	(146,399)	(75,390)	(228,199)	(120,066)
Provision for income taxes	0	0	0	0
Net loss	$ (146,399)	$ (75,390)	$ (228,199)	$ (120,066)
Net Loss Per Common Share - Basic and Diluted (in dollars per share)	$ (0.03)	$ (0.02)	$ (0.04)	$ (0.03)
Weighted Average Common Shares Outstanding - Basic and Diluted (in shares)	5,700,504	4,670,049	5,513,630	4,672,359

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Cash Flows from Operating Activities:
Net loss	$ (228,199)	$ (120,066)
Adjustments to reconcile net loss to net cash used in operating activities:
Consulting expense	102,352
Changes in operating assets and liabilities:
Interest receivable		5,159
Prepaid expenses and deposits	113,712	(15,916)
Film costs	(483,976)	(414,937)
Accrued liabilities	(13,689)	18,933
Deferred film revenue	283,249
Interest payable	41,841	12,540
Net Cash Used in Operating Activities	(184,711)	(514,287)
Cash Flows from Investing Activities:
Issuance of promissory note receivable		(350,000)
Collection of promissory note receivable		400,000
Loan receivable		(12,000)
Net Cash Provided by Investing Activities		38,000
Cash Flows from Financing Activities:
Borrowing from related party	12,000
Proceeds from issuance of promissory note payable		800,000
Payment of promissory note payable		(200,000)
Payment of promissory note payable - related party		(200,000)
Proceeds from common stock subscribed		386,000
Retirement of common Stock		(20,000)
Net Cash Provided By Financing Activities	12,000	766,000
Net Increase in Cash and Cash Equivalents	(172,711)	289,713
Cash and Cash Equivalents, beginning of period	270,826	91,590
Cash and Cash Equivalents, end of period	98,115	381,303
Supplemental Disclosure Information:
Cash paid for interest		10,000
Cash paid for income taxes	0	$ 0
Supplemental Non-cash Disclosure:
Deferred consulting expense paid in restricted stock	$ 225,000

XML

ORGANIZATION AND OPERATIONS

6 Months Ended

Dec. 31, 2018

Organization, Operations and Basis of Accounting [Abstract]

ORGANIZATION AND OPERATIONS

NOTE 1 – ORGANIZATION AND OPERATIONS

Nature of the Business

Almost Never Films Inc. (the “Company”) was originally incorporated in Nevada in October 2007 as Smack Sportswear (“Smack”), which originally manufactured and sold performance and lifestyle based indoor and sand volleyball apparel and accessories. The Company is now an independent film company focused on film production, finance and production related services for movies under budgets of $35 million. The Company’s common stock are currently traded on QTC Markets under the symbol of “HLWD.”

Share Exchange and Recapitalization

On January 15, 2016, Smack entered into a share exchange agreement with Almost Never Films Inc., a private company incorporated in Indiana on July 8, 2015, and its two shareholders, Danny Chan and Derek Williams.

Pursuant to the agreement, Smack issued 1,000,000 shares of our Series A Convertible Preferred Stock to Mr. Chan and Mr. Williams in exchange for all 2,500,000 shares of issued and outstanding common stock of Almost Never Films Inc. (Indiana). As a result of the share exchange, Almost Never Films Inc. (Indiana) became Smack’s wholly-owned subsidiary, and Mr. Chan and Mr. Williams acquired a controlling interest in the Company.

The share exchange was accounted for as a “reverse acquisition,” and resulted in a recapitalization. Almost Never Films Inc. (Indiana) is deemed to be the acquirer for accounting purposes. The assets acquired and liabilities assumed were $6,566 and $598,869, respectively. Consequently, the assets and liabilities and the historical operations that will be reflected in the financial statements prior to the share exchange will be those of Almost Never Films Inc. (Indiana) and will be recorded at the historical cost basis of Almost Never Films Inc. (Indiana), and the combined financial statements after completion of the share exchange include the assets and liabilities of Almost Never Films Inc. (Indiana), historical operations of Almost Never Films Inc. (Indiana), and operations of Almost Never Films Inc. (Indiana) from the closing date of the share exchange. As a result of the issuance of the shares of our Series A Convertible Preferred Stock pursuant to the share exchange, a change in control of the Company occurred as of the date of consummation of the share exchange. All share and per share information in the accompanying consolidated financial statements and footnotes has been retroactively restated to reflect the recapitalization. The Company has not yet generated any revenue since inception.

On February 29, 2016, the stockholders of Smack voted to amend the Articles of Incorporation of the Company to (i) increase the authorized capital of the Company to 5,000,000 shares of common stock and (ii) to change the name of the Company to “Almost Never Films Inc.” which took effect on March 2, 2016.

On August 9, 2017, the Company has approved a 1 for 40 reverse split of its issued and outstanding common stock. The common stock accounts and all share related balances have been be applied retroactively for all periods presented.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Dec. 31, 2018

Summary of Significant Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Team Sports Superstore (Inactive) and Almost Never Films Inc. (Indiana) and FWIL, LLC (Indiana), and its 90 % owned subsidiaries, One HLWD KY LLC (Kentucky), Two HLWD KY LLC (Kentucky) and Three HLWD KY (Kentucky), LLC, as well as the following entities, which are 100 % owned: Virginia Christmas, LLC (New York), Christmas Camp, LLC (New York), and Country Christmas, LLC (Ohio). All significant intercompany transactions and balances have been eliminated in consolidation.

Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, these condensed financial statements do not include all of the information and footnotes required for audited annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the financial statements not misleading have been included.

The unaudited condensed consolidated financial statements included herein should be read in conjunction with the audited financial statements and the notes thereto that are included in the Company’s audited June 30, 2018 financial statements that was filed with the SEC on October 15, 2018. The results of operations for the six months ended December 31, 2018, are not necessarily indicative of the results to be expected for the full year.

Use of Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the U.S requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the financial statement date, and reported amounts of revenue and expenses during the reporting period. Significant estimates are used in valuing the fair value of common stock issued for services, film costs, among others. Actual results could differ from these estimates.

Cash

Cash includes demand deposits with banks or other financial institutions. All cash balances are hold by major banking institutions.

Concentration of Risk

The Company maintains its cash with a financial institution, and at times, amounts may exceed federally insured limits. Currently the FDIC insurance coverage limit is $250,000, and the Company is potentially exposed to no un-insured cash balances. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash.

Film Costs

The Company records film costs in accordance with ASC – 926 - Entertainment – Films. Film costs include direct production costs, production overhead and acquisition costs for both motion picture and television productions and are stated at the lower of unamortized cost or estimated fair value and classified as noncurrent assets. Estimates used in calculating the fair value of the film costs are based upon assumptions about future demand and market conditions and are reviewed on a periodic basis.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including our own credit risk.

In addition to defining fair value, the standard expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. 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. Each fair value measurement is reported in one of the three levels which are determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

Level 1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.

Level 2 – inputs are based upon significant observable inputs other than quoted prices included in Level 1, such as quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

As of December 31, 2018, the balance reported for cash approximates its fair value because of its short maturities. Notes payable are recorded at agreed values. Debt balances are stated at historical amounts less principal payments, which approximate fair market value. Promissory notes receivable and payable are stated at historical amounts less principal payments. The Company believes interest rates in its debt agreements are commensurate with lender risk profiles for similar companies.

Revenue Recognition

In May 2014, the FASB issued new accounting guidance related to revenue from contracts with customers. The core principle of the Standard is that recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new guidance requires that companies disclose the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company has chosen to early adopt and apply the standards beginning in the fiscal year ended June 30, 2018, using the modified retrospective approach, which applies the new standard to contracts that are not completed as of the date of adoption. The Company concluded that no adjustment to the opening balance of retained earnings was required upon the adoption of the new standard.

The Company recognizes revenue from its contracts with customers in accordance with ASC 606 – Revenue from Contracts with Customers. The Company recognizes revenues when we satisfy the performance obligation of the associated contract that reflects the consideration expected to be received based on the terms of the contract.

Revenue related to contracts with customers is evaluated utilizing the following steps: (i) Identify the contract, or contracts, with a customer; (ii) Identify the performance obligations in the contract; (iii) Determine the transaction price; (iv) Allocate the transaction price to the performance obligations in the contract; (v) Recognize revenue when the Company satisfies a performance obligation.

When the Company enters into a contract, the Company analyses the services required in the contract in order to identify the required performance obligations which would indicate the Company has met and fulfilled its obligations. For the current contracts in place, the Company has identified performance obligations as one single event, the sign-off by both parties that production is completed and the product (film) is ready for distribution. To appropriately identify the performance obligations, the Company considers all of the services required to be satisfied per the contract, whether explicitly stated or implicitly implied. The Company allocates the full transaction price to the single performance obligation being satisfied.

The Company recognizes revenue when the customer confirms to the Company that all of the terms and conditions of the contract has been met, and the sign-off of the project has been completed. The Company derives its revenues the follows:

Production Service Agreement Revenue is related to films where the Company has been engaged as an independent contractor to provide production services and other elements related to production for individual film projects. Based on the analysis performed, the Company determined that the performance obligations as of December 31, 2018 had not been satisfied, and therefore the Company did not recognize any revenues associated with the Production Service Agreements.

Revenue from self-produced films is related to films where the Company has self-produced certain films along with a third party, with the expectation that these films will be distributed in the future. Based on the analysis performed, the Company determined that the performance obligations as of December 31, 2018 had not been satisfied, and therefore the Company did not recognize any revenues associated with the self-produced films.

The Company analyses whether gross sales, or net sales should be recorded, has control over establishing price, and has control over the related costs with earning revenues. The Company has recorded all revenues at the gross price.

Cash payments received are recorded as deferred revenue until the conditions, stated above, of revenue recognition have been met, specifically all obligations have been met as specified in the related customer contract.

Stock Repurchase and Cancellation

During the year ended June 30, 2018, the Company repurchased and cancelled 85,475 shares of common stock. The Company accounted for the transaction in accordance with ASC 505 – Equity – 30 Treasury Stock, Purchase of Treasury Shares or Stock Rights.

Stock Subscription Receivable

The Company has accounted for Stock Subscription Receivable in accordance with ASC – 505 – Equity – 10, and has included the Stock Subscription Receivable balance in equity.

Loss per Share Calculations

Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares available. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company’s diluted loss per share is the same as the basic loss per share for the three and six months ended December 31, 2018, and 2017, as there are no potential shares outstanding that would have a dilutive effect.

Recently Issued Accounting Pronouncements

In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, or ASU 2018-07. Under this ASU, the accounting for awards issued to nonemployees will be similar to the accounting for employee awards. This includes allowing for the measurement of awards at the grant date and recognition of awards with performance conditions when those conditions are probable, both of which are earlier than under current guidance for nonemployee awards. The Company has early adopted this guidance, specifically related to the tax calculations of consulting services compensation.

Management has considered all recent accounting pronouncements issued since the last audit of our financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

Going Concern

The accompanying unaudited financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. The accompanying consolidated financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. During the six months ended December 31, 2018, the Company had a net loss from operations of $186,358 and net cash outflows from operating activities of $184,711. As of December 31, 2018, the Company has an accumulated deficit of $1,517,448. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

The ability of the Company to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, an additional cash infusion and an identification of new business opportunities.

The Company plans on raising the required funds through completion of film projects resulting in revenues, and further potential equity and debt offerings. However, there is no assurance that the Company will be successful in this or any of its endeavors or become financially viable to continue as a going concern.

XML

PROMISSORY NOTES RECEIVABLE

6 Months Ended

Dec. 31, 2018

Receivables [Abstract]

PROMISSORY NOTES RECEIVABLE

NOTE 3 – PROMISSORY NOTES RECEIVABLE

On June 7, 2017, the Company entered into an agreement for a 2.5% promissory note in exchange for lending $200,000 to a third party. The principal of $200,000 was due to the Company forty-five (45) days from receipt of the funds. The principal and $5,000 interest receivable was received on July 17, 2017.

On June 12, 2017, the Company entered into an agreement for a 2.5% promissory note in exchange for lending $200,000 to a third party. The principal of $200,000 was due to the Company forty-five (45) days from receipt of the funds. The principal and $5,000 interest receivable was received on July 26, 2017.

During the six months ended December 31, 2018 and 2017, a total amount of $0 and $4,841, respectively was recorded as interest income related to the two $200,000 notes.

XML

FILM COSTS

6 Months Ended

Dec. 31, 2018

Film Costs [Abstract]

FILM COSTS

NOTE 4 – FILM COSTS

Film costs are comprised of the following:

	December 31, 2018		June 30, 2018
Independent Self-Produced Film Costs	$	1,022,514	$	982,175
Capitalized Film Costs covered under Production Service Agreements		1,996,821		1,553,184
Total Film Costs	$	3,019,335	$	2,535,359

Film costs include salaries and wages, and all other direct costs associated with the motion pictures and television productions.

As of December 31, 2018, the Company performed fair value measurements related to film costs and determined that there were no indicators of impairment. During the six months ended December 31, 2018, the Company did not recognize impairment loss.

On November 10, 2017 the Company executed a First Amendment Agreement to its 6x picture Production and Distribution Agreement between Big Film Factory LLC (“Big Film” or “Prodco”) and Pure Flix Entertainment LLC (“PFE”), (the “Agreement”). The Agreement memorializes the understanding with respect to the development, packaging, production, post-production and worldwide distribution of the films intended for initial and primary worldwide exhibition. The Company, will be added as a party to the initial agreement by and between Big Film and PFE, wherever Big Film is referenced in connection with providing production services in conjunction with Big Film as well as providing production capital and cash following each of the first six (6) films produced under the Agreement (“6 Pictures”). Both Prodco and PFE agree to expand the defined role of “Prodco” in the Agreement, to add the Company to that definition, and grant the Company equally the same role and responsibilities heretofore only held by Big Film in connection with the 6 Pictures.

XML

DEFERRED FILM REVENUE

6 Months Ended

Dec. 31, 2018

Deferred Film Revenue [Abstract]

DEFERRED FILM REVENUE

NOTE 5 – DEFERRED FILM REVENUE

On March 27, 2018, the Company entered into a Production Services Agreement with MVE Productions, LLC to provide production services for a film. In relation to the film, the Company created a Limited Liability Corporation, ‘Christmas Camp LLC.’ The Production Services Agreement was planned to run from April 9, 2018 to August 27, 2018. As of the date of this filing, the Production Service Agreement is still ongoing. The Company has not recognized any film revenue for the three and six months ended December 31, 2018. As of December 31, 2018, the Company has recorded $843,317 of deferred revenue in relation to this film.

On March 27, 2018, the Company entered into a Production Services Agreement with MVE Productions, LLC to provide production services for a film. In relation to the film, the Company created a Limited Liability Corporation, ‘Last Vermont Christmas LLC.’ The Production Services Agreement was planned to run from April 9, 2018 to September 28, 2018. As of the date of this filing the Production Service Agreement is still ongoing. The Company has not recognized any film revenue for the three and six months ended December 31, 2018. As of December 31, 2018, the Company has recorded $871,684 of deferred revenue in relation to this film.

On June 19, 2018, the Company entered into a Production Services Agreement with MVE Productions, LLC to provide production services for a film. In relation to the film, the Company created a Limited Liability Corporation, ‘Country Christmas LLC.’ The Production Services Agreement will run from June 25, 2018 to October 15, 2018. The agreement is still ongoing as of the date of this filing. The Company has not recognized any film revenue for the three and six months ended December 31, 2018. As of December 31, 2018, the Company has recorded $367,719 of deferred revenue in relation to this film.

XML

PROMISSORY NOTES PAYABLE

6 Months Ended

Dec. 31, 2018

Promissory Notes Payable [Abstract]

PROMISSORY NOTES PAYABLE

NOTE 6 – PROMISSORY NOTES PAYABLE

On October 11, 2017, the Company issued a $150,000 Promissory Note in exchange for receiving $150,000 proceeds. The principal of $150,000 is due fourteen (14) months from the receipt of the funds, and a total interest charge of ten percent, or $15,000 is to be recorded over the term of the loan. An interest payable of $16,808 has been recorded as of December 31, 2018. During the three months and six months ended December 31, 2018, interest expense of $4,349 and $7,561 was recorded, respectively. During the three months and six months ended December 31, 2017, interest expense of $2,859 and $2,859 was recorded, respectively. The proceeds were used by the Company to fund the motion picture known as One HLWD KY LLC. The note is currently in default. Upon default on December 11, 2018, the note accrues interest at 22% per annum.

On January 4, 2018, the Company issued a $80,000 Promissory Note in exchange for receiving $80,000 proceeds. The principal of $80,000 is due twelve (12) months from the receipt of the funds, and bears interest at 10% per annum. An interest payable of $7,912 has been recorded as of December 31, 2018. During the three months and six months ended December 31, 2018, interest expense of $2,016 and $4,033 was recorded, respectively. The proceeds were used by the Company to fund the motion picture known as River Runs Red. The note is currently in default.

On February 6, 2018, the Company issued a $100,000 Promissory Note in exchange for receiving $100,000 proceeds. The principal of $100,000 is due twelve (12) months from the receipt of the funds, and bears interest at 10% per annum. An interest payable of $8,986 has been recorded as of December 31, 2018. During the three months and six months ended December 31, 2018, interest expense of $2,521 and $5,042 was recorded, respectively. The proceeds were used by the Company to fund the motion picture known as River Runs Red. The note is currently in default.

On February 7, 2018, the Company issued a $150,000 Promissory Note in exchange for receiving $150,000 proceeds. The principal of $150,000 is due twelve (12) months from the receipt of the funds, and bears interest at 10% per annum. An interest payable of $13,438 has been recorded as of December 31, 2018. During the three months and six months ended December 31, 2018, interest expense of $3,781 and $7,562 was recorded, respectively. The proceeds were used by the Company to fund the motion picture known as River Runs Red. The note is currently in default.

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RELATED PARTY TRANSACTIONS

6 Months Ended

Dec. 31, 2018

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 7 – RELATED PARTY TRANSACTIONS

On September 19, 2017 the company issued a 10% Promissory Note in exchange for receiving $350,000 from Kruse Farms, LP., a Company owned by one of the Company’s principle owners, to fund the production of a motion picture. The principal of $350,000 is due in twenty-four (24) months from receipt of the funds. An interest payable of $44,877 has been recorded as of December 31, 2018. During the six months ended December 31, 2018 and 2017, interest expense was $17,644 and $9,877, respectively. During the three months ended December 31, 2018 and 2017, interest expense was $8,822 and $8,822, respectively.

As of December 31, 2018, the Company has advanced $12,000 as a loan to its employee, which bears no interest and is due on demand.

As of December 31, 2018, the Company has advanced $20,000 as a loan to the Company’s Chief Creative Officer.

During the six months ended December 31, 2018, the Company borrowed a $12,000 from a related party. The amounts are due on demand and non-interest bearing.

During the six months ended December 31, 2018, and 2017, the Company paid $25,640, and $0, respectively to the Chief Creative Officer for fees related to production and managing movie services. During the three months ended December 31, 2018, and 2017, the Company paid $0 and $0 respectively to the Chief Creative Officer for fees related to production and managing of movie services.

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NOTE PAYABLE

6 Months Ended

Dec. 31, 2018

Short-term Debt [Abstract]

NOTE PAYABLE

NOTE 8 – NOTE PAYABLE

In August 2015, Smack entered into an unsecured promissory note agreement with an individual. The agreement allowed Smack to borrow up to $66,613 at an interest rate of 10 percent per year. This $66,613 note was assumed by the Company during the recapitalization. During the year ended June 30, 2018, the Company settled the principal amount of $66,613 and interest payable of $17,209 for a total of $83,822 through issuance of 83,822 common shares. For the six months ended December 31, 2018, and 2017, interest expense of $0, and $3,358 were recorded, respectively.

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SHARE CAPITAL

6 Months Ended

Dec. 31, 2018

Equity [Abstract]

SHARE CAPITAL

NOTE 9 – SHARE CAPITAL

Common Stock

On July 5, 2017, the Company repurchased and cancelled 85,475 shares of common stock of the company for $20,000.

On August 9, 2017, the Company has approved a 1 for 40 reverse split of its issued and outstanding common stock. The common stock accounts and all share related balances have been applied retroactively for all periods presented.

On September 11, 2017, the Company amended the Articles of Incorporation to decrease the authorized capital to 25,000,000 shares of common stock.

During the year ended June 30, 2018, the Company entered into four share purchase agreements with four investors for 406,000 common shares at $1 per share. The shares were issued during the year ended June 30, 2018.

During the year ended June 30, 2018, the Company issued 83,822 common shares to settle $132,437 of principal note payable and accrued interest.

During the year ended June 30, 2018, the Company issued 43,894 common shares to settle $69,352 of accounts payable.

During the year ended June 30, 2018, the Company issued 125,000 common shares for consulting services, valued at $140,000.

On October 17, 2018, the Company issued 250,000 and 200,000 common shares at $0.50 for consulting services, to two individuals, valued at $125,000, and $100,000, respectively.

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Dec. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 10 – COMMITMENTS AND CONTINGENCIES

The Company neither owns nor leases any real or personal property. The Company’s officers have provided office 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.

On December 12, 2016, the Company entered into an agreement with Saisam Entertainment, LLC to develop, finance, and produce a motion picture project. Per the terms of the agreement, the Company will provide or source equity financing for the project in the amount of approximately $1,300,000. Per the terms of the agreement, the Company and Saisam Entertainment, LLC will create an LLC or other entity for the project currently entitled “Love is not Easy”. Saisam Entertainment, LLC owns and controls the rights to the screenplay, and will assign all rights in and to the project, pursuant to the terms of an option purchase agreement between the two parties, which includes an initial option fee of $10,000 for an option period of 18 months, a lien for all of the Company’s out of pocket costs, and will assist in additional funding. The Company will make or source financial contributions in accordance with the terms of the agreement, assist in the raising of additional financing, and will participate in the development and production. The Company and Saisam Entertainment, LLC will own an undivided 50% interest in the LLC or entity that is formed. The Company will be the managing member of the LLC or entity. The approved budget for the project is approximately $2,000,000. In consideration, the Company will receive a return of 20% of its investment, and will subsequently receive its portion of the net profits per the terms of the agreement. The LLC or entity has not been formed to date.

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INCOME TAXES

6 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 11 – INCOME TAXES

The Company provides for income taxes under ASC 740, “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.

On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”), was signed into law. The Tax Act includes numerous changes to tax laws impacting business, the most significant being a permanent reduction in the federal corporate income tax rate from 34% to 21%. The rate reduction took effect on January 1, 2018. As the Company’s 2018 fiscal year ended on June 30, 2018, the Company’s federal blended corporate tax rate for fiscal year 2018 is 26.9%, based on the applicable tax rates before and after the Tax Act and the number of days in the fiscal year to which the two different rates applied.

The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 21% and 34% to the net loss before provision for income taxes for the following reasons:

	Six Months Ended December 31,
	2018			2017
Federal Income Tax benefits (expenses) attributable to
Current Operation	$	47,922		$	25,214
Less: Valuation Allowance		(47,922	)		(25,214	)
Net Provision for Federal Income Taxes	$	-		$	-

Net deferred tax assets consist of the following components as of:

	December 31,			June 30,
	2018			2018
Deferred tax assets	$	224,551		$	176,629
Less: valuation allowance		(224,551	)		(176,629	)
Deferred tax assets, net	$	-		$	-

In accordance with Income Tax laws of United States of America, net operating loss carry forwards of $1,151,090 which expire commencing in fiscal 2036, for federal income tax reporting purposes are subject to annual limitations. When a change in ownership occurs, net operating loss carry forwards may be limited as to use in future years.

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SUBSEQUENT EVENTS

6 Months Ended

Dec. 31, 2018

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 12 – SUBSEQUENT EVENTS

Management has evaluated subsequent events through the date the consolidated financial statements were issued. Based on our evaluation no events have occurred that require disclosure.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Dec. 31, 2018

Summary of Significant Accounting Policies [Abstract]

Basis of Consolidation

Basis of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Team Sports Superstore (Inactive) and Almost Never Films Inc. (Indiana) and FWIL, LLC (Indiana), and its 90 % owned subsidiaries, One HLWD KY LLC (Kentucky), Two HLWD KY LLC (Kentucky) and Three HLWD KY (Kentucky), LLC, as well as the following entities, which are 100 % owned: Virginia Christmas, LLC (New York), Christmas Camp, LLC (New York), and Country Christmas, LLC (Ohio). All significant intercompany transactions and balances have been eliminated in consolidation.

Basis of Presentation

Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, these condensed financial statements do not include all of the information and footnotes required for audited annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the financial statements not misleading have been included.

The unaudited condensed consolidated financial statements included herein should be read in conjunction with the audited financial statements and the notes thereto that are included in the Company’s audited June 30, 2018 financial statements that was filed with the SEC on October 15, 2018. The results of operations for the six months ended December 31, 2018, are not necessarily indicative of the results to be expected for the full year.

Use of Estimates

Use of Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the U.S requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the financial statement date, and reported amounts of revenue and expenses during the reporting period. Significant estimates are used in valuing the fair value of common stock issued for services, film costs, among others. Actual results could differ from these estimates.

Cash

Cash

Cash includes demand deposits with banks or other financial institutions. All cash balances are hold by major banking institutions.

Concentration of Risk

Concentration of Risk

The Company maintains its cash with a financial institution, and at times, amounts may exceed federally insured limits. Currently the FDIC insurance coverage limit is $250,000, and the Company is potentially exposed to no un-insured cash balances. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash.

Film Costs

Film Costs

The Company records film costs in accordance with ASC – 926 - Entertainment – Films. Film costs include direct production costs, production overhead and acquisition costs for both motion picture and television productions and are stated at the lower of unamortized cost or estimated fair value and classified as noncurrent assets. Estimates used in calculating the fair value of the film costs are based upon assumptions about future demand and market conditions and are reviewed on a periodic basis.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including our own credit risk.

In addition to defining fair value, the standard expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. 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. Each fair value measurement is reported in one of the three levels which are determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

Level 1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.

Level 2 – inputs are based upon significant observable inputs other than quoted prices included in Level 1, such as quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

As of December 31, 2018, the balance reported for cash approximates its fair value because of its short maturities. Notes payable are recorded at agreed values. Debt balances are stated at historical amounts less principal payments, which approximate fair market value. Promissory notes receivable and payable are stated at historical amounts less principal payments. The Company believes interest rates in its debt agreements are commensurate with lender risk profiles for similar companies.

Revenue Recognition

Revenue Recognition

In May 2014, the FASB issued new accounting guidance related to revenue from contracts with customers. The core principle of the Standard is that recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new guidance requires that companies disclose the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company has chosen to early adopt and apply the standards beginning in the fiscal year ended June 30, 2018, using the modified retrospective approach, which applies the new standard to contracts that are not completed as of the date of adoption. The Company concluded that no adjustment to the opening balance of retained earnings was required upon the adoption of the new standard.

The Company recognizes revenue from its contracts with customers in accordance with ASC 606 – Revenue from Contracts with Customers. The Company recognizes revenues when we satisfy the performance obligation of the associated contract that reflects the consideration expected to be received based on the terms of the contract.

Revenue related to contracts with customers is evaluated utilizing the following steps: (i) Identify the contract, or contracts, with a customer; (ii) Identify the performance obligations in the contract; (iii) Determine the transaction price; (iv) Allocate the transaction price to the performance obligations in the contract; (v) Recognize revenue when the Company satisfies a performance obligation.

When the Company enters into a contract, the Company analyses the services required in the contract in order to identify the required performance obligations which would indicate the Company has met and fulfilled its obligations. For the current contracts in place, the Company has identified performance obligations as one single event, the sign-off by both parties that production is completed and the product (film) is ready for distribution. To appropriately identify the performance obligations, the Company considers all of the services required to be satisfied per the contract, whether explicitly stated or implicitly implied. The Company allocates the full transaction price to the single performance obligation being satisfied.

The Company recognizes revenue when the customer confirms to the Company that all of the terms and conditions of the contract has been met, and the sign-off of the project has been completed. The Company derives its revenues the follows:

Production Service Agreement Revenue is related to films where the Company has been engaged as an independent contractor to provide production services and other elements related to production for individual film projects. Based on the analysis performed, the Company determined that the performance obligations as of December 31, 2018 had not been satisfied, and therefore the Company did not recognize any revenues associated with the Production Service Agreements.

Revenue from self-produced films is related to films where the Company has self-produced certain films along with a third party, with the expectation that these films will be distributed in the future. Based on the analysis performed, the Company determined that the performance obligations as of December 31, 2018 had not been satisfied, and therefore the Company did not recognize any revenues associated with the self-produced films.

The Company analyses whether gross sales, or net sales should be recorded, has control over establishing price, and has control over the related costs with earning revenues. The Company has recorded all revenues at the gross price.

Cash payments received are recorded as deferred revenue until the conditions, stated above, of revenue recognition have been met, specifically all obligations have been met as specified in the related customer contract.

Stock Repurchase and Cancellation

Stock Repurchase and Cancellation

During the year ended June 30, 2018, the Company repurchased and cancelled 85,475 shares of common stock. The Company accounted for the transaction in accordance with ASC 505 – Equity – 30 Treasury Stock, Purchase of Treasury Shares or Stock Rights.

Stock Subscription Receivable

Stock Subscription Receivable

The Company has accounted for Stock Subscription Receivable in accordance with ASC – 505 – Equity – 10, and has included the Stock Subscription Receivable balance in equity.

Loss per Share Calculations

Loss per Share Calculations

Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares available. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company’s diluted loss per share is the same as the basic loss per share for the three and six months ended December 31, 2018, and 2017, as there are no potential shares outstanding that would have a dilutive effect.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, or ASU 2018-07. Under this ASU, the accounting for awards issued to nonemployees will be similar to the accounting for employee awards. This includes allowing for the measurement of awards at the grant date and recognition of awards with performance conditions when those conditions are probable, both of which are earlier than under current guidance for nonemployee awards. The Company has early adopted this guidance, specifically related to the tax calculations of consulting services compensation.

Management has considered all recent accounting pronouncements issued since the last audit of our financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

Going Concern

Going Concern

The accompanying unaudited financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. The accompanying consolidated financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. During the six months ended December 31, 2018, the Company had a net loss from operations of $186,358 and net cash outflows from operating activities of $184,711. As of December 31, 2018, the Company has an accumulated deficit of $1,517,448. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

The ability of the Company to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, an additional cash infusion and an identification of new business opportunities.

The Company plans on raising the required funds through completion of film projects resulting in revenues, and further potential equity and debt offerings. However, there is no assurance that the Company will be successful in this or any of its endeavors or become financially viable to continue as a going concern.

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FILM COSTS (Tables)

6 Months Ended

Dec. 31, 2018

Film Costs [Abstract]

Schedule of Film costs

	December 31, 2018		June 30, 2018
Independent Self-Produced Film Costs	$	1,022,514	$	982,175
Capitalized Film Costs covered under Production Service Agreements		1,996,821		1,553,184
Total Film Costs	$	3,019,335	$	2,535,359

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INCOME TAXES (Tables)

6 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Schedule of provision for income taxes differs from the amounts

	Six Months Ended December 31,
	2018			2017
Federal Income Tax benefits (expenses) attributable to
Current Operation	$	47,922		$	25,214
Less: Valuation Allowance		(47,922	)		(25,214	)
Net Provision for Federal Income Taxes	$	-		$	-

Schedule of Net deferred tax assets

	December 31,			June 30,
	2018			2018
Deferred tax assets	$	224,551		$	176,629
Less: valuation allowance		(224,551	)		(176,629	)
Deferred tax assets, net	$	-		$	-

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ORGANIZATION, OPERATIONS AND BASIS OF ACCOUNTING (Detail Textuals)	Aug. 09, 2017 shares	Jan. 15, 2016 USD ($) Shareholder shares	Dec. 31, 2018 USD ($) shares	Jun. 30, 2018 shares	Sep. 11, 2017 shares	Feb. 29, 2016 shares
Organization Operations And Basis Of Accounting [Line Items]
Film production costs			$ 35,000,000
Assets acquired		$ 6,566
Liabilities assumed		$ 598,869
Common stock, shares authorized | shares	25,000,000		25,000,000	25,000,000	25,000,000	5,000,000
Description of common stock reverse stock split	1 for 40
Share exchange agreement | Smack Sportswear ("Smack") | Mr. Chan and Mr. Williams
Organization Operations And Basis Of Accounting [Line Items]
Number of shareholders | Shareholder		2
Share exchange agreement | Smack Sportswear ("Smack") | Mr. Chan and Mr. Williams | Series A Convertible Preferred Stock
Organization Operations And Basis Of Accounting [Line Items]
Number of preferred stock converted | shares		1,000,000

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals) - USD ($)		3 Months Ended		6 Months Ended
	Jul. 05, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Jun. 30, 2018
Summary of Significant Accounting Policies [Abstract]
Percentage of subsidiaries				90.00%
FDIC insurance uninsured amount		$ 250,000		$ 250,000
Stock repurchased and forfeited shares during the period	85,475
Loss from operations		(124,910)	$ (60,688)	(186,358)	$ (102,367)
Net cash outflows from operating activities				(184,711)	$ (514,287)
Accumulated deficit		$ (1,517,448)		$ (1,517,448)		$ (1,289,249)

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PROMISSORY NOTES RECEIVABLE (Detail Textuals)			6 Months Ended
	Jun. 12, 2017 USD ($)	Jun. 07, 2017 USD ($)	Dec. 31, 2018 USD ($) Promissory_Note	Dec. 31, 2017 USD ($)	Jul. 26, 2017 USD ($)	Jul. 17, 2017 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of notes receivable | Promissory_Note			2
Interest income				$ 4,841
Promissory note agreement
Accounts, Notes, Loans and Financing Receivable [Line Items]
Interest income			$ 0	$ 4,841
Promissory Notes Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Promissory notes receivable					$ 5,000	$ 5,000
Third Party One | Promissory Notes Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of promissory note		2.50%
Promissory notes receivable		$ 200,000
Term of promissory note receivable		45 days
Third Party Two | Promissory Notes Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of promissory note	2.50%
Promissory notes receivable	$ 200,000
Term of promissory note receivable	45 days

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FILM COSTS (Details) - USD ($)	Dec. 31, 2018	Jun. 30, 2018
Film Costs [Abstract]
Independent Self-Produced Film Costs	$ 1,022,514	$ 982,175
Capitalized Film Costs covered under Production Service Agreements	1,996,821	1,553,184
Total Film Costs	$ 3,019,335	$ 2,535,359

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DEFERRED FILM REVENUE (Detail Textuals)	6 Months Ended
	Dec. 31, 2018 USD ($)
Deferred Revenue Arrangement [Line Items]
Deferred film revenue	$ 283,249
Production services agreement with MVE productions | Christmas Camp LLC
Deferred Revenue Arrangement [Line Items]
Deferred film revenue	843,317
Production services agreement with MVE productions | Last Vermont Christmas LLC
Deferred Revenue Arrangement [Line Items]
Deferred film revenue	871,684
Production services agreement with MVE productions | Country Christmas LLC
Deferred Revenue Arrangement [Line Items]
Deferred film revenue	$ 367,719

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PROMISSORY NOTES PAYABLE (Detail Textuals) - USD ($)					3 Months Ended		6 Months Ended
	Feb. 07, 2018	Feb. 06, 2018	Jan. 04, 2018	Oct. 11, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 11, 2018	Jun. 30, 2018
Short-term Debt [Line Items]
Promissory note payable					$ 480,000		$ 480,000			$ 480,000
Proceeds from issuance of promissory note payable								$ 800,000
Interest payable					92,023		92,023			$ 50,182
Promissory note on October 11, 2017
Short-term Debt [Line Items]
Percentage of notes payable				10.00%
Promissory note payable				$ 150,000
Proceeds from issuance of promissory note payable				$ 150,000
Term of promissory note payable				14 months
Recorded interest over term of loan				$ 15,000
Interest expense					4,349	$ 2,859	7,561	$ 2,859
Interest payable					16,808		16,808
Percentage of accrued interest									22.00%
Promissory note on January 4, 2018
Short-term Debt [Line Items]
Percentage of notes payable			10.00%
Promissory note payable			$ 80,000
Proceeds from issuance of promissory note payable			$ 80,000
Term of promissory note payable			12 months
Interest expense					2,016		4,033
Interest payable					7,912		7,912
Promissory note on February 6, 2018
Short-term Debt [Line Items]
Percentage of notes payable		10.00%
Promissory note payable		$ 100,000
Proceeds from issuance of promissory note payable		$ 100,000
Term of promissory note payable		12 months
Interest expense					2,521		5,042
Interest payable					8,986		8,986
Promissory note on February 7, 2018
Short-term Debt [Line Items]
Percentage of notes payable	10.00%
Promissory note payable	$ 150,000
Proceeds from issuance of promissory note payable	$ 150,000
Term of promissory note payable	12 months
Interest expense					3,781		7,562
Interest payable					$ 13,438		$ 13,438

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RELATED PARTY TRANSACTIONS (Detail Textuals) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Sep. 19, 2017
Related Party Transaction [Line Items]
Interest expense	$ 21,489	$ 14,702	$ 41,841	$ 22,540
Production and managing movie services fees		0
Advanced loan to employee	12,000		12,000
Amount borrowed from related party			12,000
Chief Creative Officer
Related Party Transaction [Line Items]
Advances of loan	20,000		20,000
Production and managing movie services fees	0	0	25,640	0
Kruse Farms, LP | Promissory note
Related Party Transaction [Line Items]
Promissory note receivable					$ 350,000
Percentage of promissory note					10.00%
Promissory note interest payable	8,822	$ 8,822	17,644	$ 9,877
Advances of loan	$ 44,877		$ 44,877

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NOTE PAYABLE (Detail Textuals) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Jun. 30, 2018	Aug. 31, 2015
Debt Instrument [Line Items]
Outstanding balance of notes payable					$ 66,613
Interest expense	$ 21,489	$ 14,702	$ 41,841	$ 22,540
Unsecured promissory note
Debt Instrument [Line Items]
Outstanding balance of notes payable					$ 83,822
Interest expense			$ 0	$ 3,358
Number of common stock issued					83,822
Interest payable					$ 17,209
Smack Sportswear ("Smack") | Unsecured promissory note
Debt Instrument [Line Items]
Maximum borrowing capacity of unsecured debt						$ 66,613
Note payable interest rate						10.00%

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SHARE CAPITAL (Detail Textuals)			1 Months Ended	12 Months Ended
	Aug. 09, 2017 shares	Jul. 05, 2017 USD ($) shares	Oct. 17, 2018 USD ($) $ / shares shares	Jun. 30, 2018 USD ($) Agreement $ / shares shares	Dec. 31, 2018 shares	Sep. 11, 2017 shares	Feb. 29, 2016 shares
Schedule of Capitalization, Equity [Line Items]
Stock repurchased and forfeited shares during the period		85,475
Stock repurchased and forfeited during the period | $		$ 20,000
Description of common stock reverse stock split	1 for 40
Common stock, shares authorized	25,000,000			25,000,000	25,000,000	25,000,000	5,000,000
Share Purchase Agreements
Schedule of Capitalization, Equity [Line Items]
Number of agreements | Agreement				4
Number of share purchase				406,000
Share price of stock purchase in agreement | $ / shares				$ 1
Common Stock
Schedule of Capitalization, Equity [Line Items]
Common shares issued to settle note payable and accrued interest | $				$ 132,437
Common shares issued to settle note payable and accrued interest (in shares)				83,822
Common shares issued to settle accounts payable | $				$ 69,352
Common shares issued to settle accounts payable (in shares)				43,894
Common shares issued for consulting services | $				$ 140,000
Common shares issued for consulting services (in shares)				125,000
First individual
Schedule of Capitalization, Equity [Line Items]
Shares issued price per share (in dollars per share) | $ / shares			$ 0.50
Common shares issued for consulting services | $			$ 125,000
Common shares issued for consulting services (in shares)			250,000
Second individual
Schedule of Capitalization, Equity [Line Items]
Shares issued price per share (in dollars per share) | $ / shares			$ 0.50
Common shares issued for consulting services | $			$ 100,000
Common shares issued for consulting services (in shares)			200,000

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COMMITMENTS AND CONTINGENCIES (Detail Textuals) - Saisam Entertainment LLC	Dec. 12, 2016 USD ($)
Commitments And Contingencies [Line Items]
Project contractual obligation	$ 1,300,000
Initial option fee of project	$ 10,000
Initial option validity period	18 months
Undivided rights hold	50.00%
Total cost of the project	$ 2,000,000
Percentage of return on investment	20.00%

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INCOME TAXES (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Federal Income Tax benefits (expenses) attributable to
Current Operation			$ 47,922	$ 25,214
Less: Valuation Allowance			(47,922)	(25,214)
Net Provision for Federal Income Taxes	$ 0	$ 0	$ 0	$ 0

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INCOME TAXES (Details 1) - USD ($)	Dec. 31, 2018	Jun. 30, 2018
Deferred tax asset attributable to:
Deferred tax assets	$ 224,551	$ 176,629
Less: Valuation Allowance	(224,551)	(176,629)
Deferred tax assets, net	$ 0	$ 0

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INCOME TAXES (Detail Textuals)	6 Months Ended
	Dec. 31, 2018 USD ($)
Income Tax Disclosure [Line Items]
Statutory federal income tax rate	26.90%
Net operating loss carry forwards	$ 1,151,090
Earliest tax year
Income Tax Disclosure [Line Items]
Statutory federal income tax rate	34.00%
Latest tax year
Income Tax Disclosure [Line Items]
Statutory federal income tax rate	21.00%