10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q 

(Mark One)

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

FOR THE QUARTERLY PERIOD ENDED: March 31, 2020

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

For the transition period from __________ to __________

Commission File Number: 000-53049

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)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	N/A	N/A

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 ☐ 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 ☒

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	☒
		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 ☒

The number of shares of registrant’s common stock outstanding as of August 12, 2021 was 5,798,765.

FORM 10-Q

ALMOST NEVER FILMS INC.

March 31, 2020

TABLE OF CONTENTS

		Page No.
PART I. - FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets as of March 31, 2020 (Unaudited) and June 30, 2019	4
	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months and nine months ended March 31, 2020 and 2019.	5
	Unaudited Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the three months and nine months ended March 31, 2020 and 2019.	6
	Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended March 31, 2020 and March 31, 2019.	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	26
Item 1A	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	26
Item 4.	Mine Safety Disclosures	26
Item 5.	Other Information	26
Item 6.	Exhibits	27
	Signature	28

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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, 2016 (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.

3

Almost Never Films Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

	March 31,			June 30,
	2020			2019
	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	62,849		$	57,154
Accounts receivable		394,382			583,333
Loan receivable		20,000			32,000
Total Current Assets		477,231			672,487
Deferred assets		14,583			103,898
Film costs		85,496			428,731
TOTAL ASSETS	$	577,310		$	1,205,116
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable and accrued expenses	$	66,399		$	41,813
Due to related party		12,500			12,000
Deferred film revenue		-			354,398
Interest payable		94,766			117,716
Promissory note payable		135,000			230,000
Promissory note payable - related party		400,000			320,000
Total Current Liabilities		708,665			1,075,927
TOTAL LIABILITIES		708,665			1,075,927
Stockholders' Equity (Deficit)
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		5,799			5,779
5,798,765 and 5,778,765 shares issued and outstanding respectively.
Additional paid-in capital		1,895,486			1,880,506
Accumulated deficit		(2,031,006	)		(1,755,486	)
Total shareholders' equity attributable to Almost Never Films Inc. shareholders		(129,721	)		130,799
Non-controlling interest		(1,634	)		(1,610	)
Total shareholders' equity (deficit)		(131,355	)		129,189
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$	577,310		$	1,205,116

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

4

Almost Never Films Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2020			2019			2020			2019
Revenues	$	-			1,784,846		$	343,256		$	1,784,846
Cost of Revenues		-			1,762,700			343,256			1,762,700
Gross Profit		-			22,146			-			22,146
Operating Expenses
General and administration expenses		56,612			109,993			171,627			263,674
Professional fees		11,912			6,559			63,896			39,236
Total operating expenses		68,524			116,552			235,523			302,910
Loss from operations		(68,524	)		(94,406	)		(235,523	)		(280,764	)
Other (Expense) Income
Interest expense		(13,613	)		(31,583	)		(47,803	)		(73,424	)
Gain (loss) on modification of debt		-			-			19,782			-
Bad debt for loan receivable		-			-			(12,000	)		-
Total other income (expense)		(13,613	)		(31,583	)		(40,021	)		(73,424	)
Net loss before income taxes		(82,137	)		(125,989	)		(275,544	)		(354,188	)
Provision for income taxes		-			-			-			-
Net loss	$	(82,137	)		(125,989	)	$	(275,544	)	$	(354,188	)
Net loss attributable to:
Almost Never Films Inc.		(82,137	)		(125,989	)		(275,520	)		(354,188	)
Non-controlling interest		-			-			(24	)		-
Comprehensive Loss	$	(82,137	)		(125,989	)	$	(275,544	)		(354,188	)
Net Income (Loss) per share attributable to Common stockholders
of the Company -Basic and Diluted	$	(0.01	)	$	(0.02	)	$	(0.05	)	$	(0.06	)
Weighted Average Common Shares Outstanding - Basic and Diluted		5,798,765			5,778,765			5,792,533			5,739,205

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

5

Almost Never Films Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(Unaudited) 

	Common Stock				Additional								Total
	Number of Shares		Amount		Paid-in Capital		Accumulated Deficit			Non-controlling Interest			Stockholders' Equity  (Deficit)
Balance - June 30, 2019		5,778,765	$	5,779	$	1,880,506	$	(1,755,486	)	$	(1,610	)	$	129,189
Common shares issued to settle interest of note payable		20,000		20		14,980		-			-			15,000
Net loss		-		-		-		(102,653	)		(17	)		(102,670	)
Balance - September 30, 2019		5,798,765		5,799		1,895,486		(1,858,139	)		(1,627	)		41,519
Net loss		-		-		-		(90,730	)		(7	)		(90,737	)
Balance - December 31, 2019		5,798,765		5,799		1,895,486		(1,948,869	)		(1,634	)		(49,218	)
Net loss		-		-		-		(82,137	)		-			(82,137	)
Balance - March 31, 2020		5,798,765	$	5,799	$	1,895,486	$	(2,031,006	)	$	(1,634	)	$	(131,355	)

	Common Stock				Additional							Total
	Number of Shares		Amount		Paid-in Capital		Accumulated Deficit			Non-controlling Interest		Stockholders' Equity (Deficit)
Balance - June 30, 2018		5,328,765	$	5,329	$	1,655,956	$	(1,289,249	)	$	-	$	372,036
Net loss		-		-		-		(81,800	)		-		(81,800	)
Balance - September 30, 2018		5,328,765		5,329		1,655,956		(1,371,049	)		-		290,236
Common shares issued for consulting services		450,000		450		224,550		-					225,000
Net loss								(146,399	)		-		(146,399	)
Balance - December 31, 2018		5,778,765		5,779		1,880,506		(1,517,448	)		-		368,837
Net loss		-		-		-		(125,989	)		-		(125,989	)
Balance - March 31, 2019		5,778,765	$	5,779	$	1,880,506	$	(1,643,437	)	$	-	$	242,848

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

6

Almost Never Films Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended
	March 31,
	2020			2019
Cash Flows from Operating Activities:
Net loss	$	(275,544	)	$	(354,188	)
Adjustments to reconcile net loss to net cash used in operating activities:
Consulting expense		89,315			201,102
Gain on modification of debt		(19,782	)		-
Bad debt for loan receivable		12,000			-
Changes in operating assets and liabilities:
Accounts receivable		188,951			-
Prepaid expenses and deposits		-			218,658
Film costs		343,235			1,134,111
Accounts payable and accrued expenses		24,467			(31,799	)
Deferred film revenue		(354,398	)		(1,431,752	)
Interest payable		41,951			73,424
Other payable		-			(51,500	)
Net Cash Provided by (Used in) Operating Activities		50,195			(241,944	)
Cash Flows from Investing Activities:
Net Cash Provided by Investing Activities		-			-
Cash Flows from Financing Activities:
Borrowing from related party		500			12,000
Repayment of note payable		(45,000	)		-
Net Cash Provided by (Used in) Financing Activities		(44,500	)		12,000
Net Increase (Decrease) in Cash and Cash Equivalents		5,695			(229,944	)
Cash and Cash Equivalents, beginning of period		57,154			270,826
Cash and Cash Equivalents, end of period	$	62,849		$	40,882
Supplemental Disclosure Information:
Cash paid for interest	$	(35,000	)	$	-
Cash paid for income taxes	$	-		$	-
Supplemental Non-cash Disclosure:
Deferred consulting expense paid in restricted stock	$	-		$	225,000
Promissory note issued to related party for settlement of loan arrangement	$	50,000		$	-
Conversion of debt into common stock	$	15,000		$	-

The accompanying notes are an integral part of these condensed consolidated financial statements

7

Almost Never Films Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2020

(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 focusing 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 Pink 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 would be reflected in the financial statements prior to the share exchange would be those of Almost Never Films Inc. (Indiana) and would be recorded at the historical cost basis of Almost Never Films Inc. (Indiana), and the combined financial statements after completion of the share exchange included 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 (a) 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.

8

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), Almost Never Films Inc. (Indiana), FWIL, LLC (Indiana), Virginia Christmas, LLC (New York), Christmas Camp, LLC (New York), and Country Christmas, LLC (Ohio). Its 90% owned subsidiaries are One HLWD KY LLC (Kentucky), Two HLWD KY LLC (Kentucky) and Three HLWD KY (Kentucky), LLC. All significant intercompany transactions and balances have been eliminated in consolidation.

The Company dissolved FWIL, LLC on September 16, 2019 and Country Christmas, LLC (CXA) on October 5, 2019.

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”) and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, these condensed financial statements do not include all 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, 2019 financial statements that was filed with the SEC on October 15, 2019. The results of operations for the nine months ended March 31, 2020, 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 few financial institutions, 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.

The Company’s accounts receivable from customer individually accounts for more than 10% of total receivable are as follows:

	March 31,		June 30,
	2020		2019
Accounts receivable - PureFlex’s	$	394,382	$	583,333

9

The Company’s revenue from customer individually accounts for more than 10% of total revenue are as follows:

	Nine Months Ended
	March 31,
	2020		2019
MVE Productions	$	343,256	$	1,784,846

Film Costs, Net

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. The Company qualifies for certain government programs that provide incentives earned in regard to expenditures on qualifying film production activities. The incentives are recorded as an offset to the related asset balance. 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 March 31, 2020, the balance reported for cash and accounts receivable approximates its fair value because of their 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, loan receivable and promissory notes 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.

10

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 satisfying 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 from the following sources:

· 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.

· 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.

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.

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 nine months ended March 31, 2020, and 2019, as there are no potential shares outstanding that would have a dilutive effect.

11

Recently Issued Accounting Pronouncements

In March 2019, the FASB issued new guidance on film production costs ASU 2019-02, Entertainment Films- Other Assets – Film Costs (Subtopic 926-20). The new guidance is effective for fiscal years beginning after December 15, 2019 (for the year ended June 30, 2021 for the Company) and interim periods within those fiscal years and may be early adopted. The new guidance aligns the accounting for the production costs of an episodic series with those of a film by removing the content distinction for capitalization. It also addresses presentation, requires new disclosures for produced and licensed content and addresses cash flow classification for license agreements to better reflect the economics of an episodic series. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

In March 2019, the FASB issued ASU No. 2019-02, Entertainment-Films-Other Assets-Film Costs (Subtopic 926-20) and Entertainment-Broadcasters Intangibles-Goodwill and Other (Subtopic 920-350). The update aligns the accounting for production costs of an episodic television series with the accounting for production costs of films by removing the content distinction for capitalization. The amendments also require that an entity reassess estimates of the use of a film in a film group and account for any changes prospectively. The amendments in this update require that an entity test a film or license agreement for program material within the scope of Subtopic 920-350 for impairment at a film group level when the film or license agreement is predominantly monetized with other films and/or license agreements. For public business entities, the amendments in this update are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Under this guidance, lessees will be required to recognize on the balance sheet a lease liability and a right-of-use asset for all leases, with the exception of short-term leases. The lease liability represents the lessee s obligation to make lease payments arising from a lease and will be measured as the present value of the lease payments. The right-of-use asset represents the lessee’s right to use a specified asset for the lease term, and will be measured at the lease liability amount, adjusted for lease prepayment, lease incentives received and the lessee s initial direct costs. The standard also requires a lessee to recognize a single lease cost allocated over the lease term, generally on a straight-line basis. The new guidance is effective for fiscal years beginning after December 15, 2018. ASU 2016-02 is required to be applied using the modified retrospective approach for all leases existing as of the effective date and provides for certain practical expedients. Early adoption is permitted. The Company does not have any leases and does not have any material impact related to the new guidance.

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.

COVID-19

In early 2020, the World Health Organization declared the rapidly spreading coronavirus disease (“COVID-19”) outbreak a pandemic. This pandemic has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. The Company considered the impact of COVID-19 on the assumptions and estimates used and determined that there were no retroactive material adverse impacts on the Company’s results of operations and financial position at March 31, 2020. The full extent of the future impacts of COVID-19 on the Company’s operations is uncertain. A prolonged outbreak could have a material adverse impact on financial results and business operations of the Company in the future. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the date of issuance of these condensed consolidated financial statements. These estimates may change, as new events occur and additional information is obtained.

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Going Concern

These 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 consolidated financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. During the nine months ended March 31, 2020 the Company reported a net loss of $275,544. As of March 31, 2020, the Company has an accumulated deficit of $2,031,006 and a working capital deficit of $231,434. 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 – FILM COSTS, NET

Film costs are comprised of the following:

	March 31,		June 30,
	2020		2019
Independent Self-Produced Film Costs, Net	$	85,496	$	85,475
Capitalized Film Costs covered under Production Service Agreements, Net		-		343,256
Total Film Costs, Net	$	85,496	$	428,731

Film costs include salaries and wages, and all other direct costs associated with the motion pictures and television productions. In addition, the Company qualifies for certain government programs that provide incentives earned in regard to expenditures on qualifying film production activities. The incentives are recorded as an offset to the related asset balance.

The Company performs fair value measurements related to film costs on an annual basis to evaluate and review indicators of impairment. During the nine months ended March 31, 2020 and 2019, the Company did not recognize an 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”). In accordance with the Agreement, 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.

On July 16, 2019, the Company received notice that Country Christmas Album has been confirmed as completed and delivered in accordance with the agreement terms.

During the nine months ended March 31, 2020 and 2019, $343,256 and $1,762,700, respectively, of capitalized film costs were expensed as cost of revenues.

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NOTE 4 – 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 February 28, 2019, all criteria had been met in order for the Company to recognize 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, ‘Last Vermont Christmas LLC.’ The Production Services Agreement was planned to run from April 9, 2018 to September 28, 2018. As of March 18, 2019, all criteria had been met in order for the Company to recognize revenue.

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 was planned to run from June 25, 2018 to October 15, 2018. On July 16, 2019, the Company received notice that Country Christmas Album has been confirmed as completed and delivered in accordance with the agreement terms and therefore the Company has recorded $343,256 revenues during the period of nine months ended March 31, 2020.

NOTE 5 – PROMISSORY NOTES PAYABLE

(i)	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. The proceeds were used by the Company to fund the motion picture known as One HLWD KY LLC. During the year ended June 30, 2019, the Company paid principal of $100,000 and $15,000 of interest payable. On September 24, 2019, the Company signed amendment agreement with lender for the balance of principal note of $50,000 with new maturity date of June 30, 2020. During the nine months ended March 31, 2020, and 2019, interest expense of $3,767 and $15,698 was recorded, respectively. As of March 31, 2020, and June 30, 2019, an interest payable of $11,726 and $7,959 has been recorded, respectively. Due to change of maturity date of the loan agreement to June 30, 2020, the default interest at 22% recorded in the previous, adjusted to 10% and the effect of change recognized as of gain on modification of debt.
(ii)	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. The proceeds were used by the Company to fund the motion picture known as River Runs Red. On September 24, 2019, the Company signed amendment agreement with lender for the principal note of $80,000 with new maturity date of June 30, 2020. During the nine months ended March 31, 2020, and 2019, interest expense of $6,027 and $8,417 was recorded, respectively. As of March 31, 2020, and June 30, 2019, an interest payable of $9,797 and $3,770 has been recorded, respectively Due to change of maturity date of the loan agreement to June 30, 2020, the default interest at 22% recorded in the previous, adjusted to 10% and the effect of changing recognized as of gain on gain on modification of debt.
(iii)	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. The proceeds were used by the Company to fund the motion picture known as River Runs Red. On September 24, 2019, the Company signed amendment agreements with lender with maturity date of June 30, 2020, transferred the principal of note and interest payable equally to two new lenders. An interest payable of $16,328 has been recorded as of date of transfer. During the nine months ended March 31, 2020 and 2019, interest expenses of $2,521 and $9,237 was recorded, respectively. According to amendment agreement, the default interest at 22% recorded in the previous, adjusted to 10% and the effect of change recognized as of gain on modification of debt. On September 24, 2019, the principal balance of the loan was transferred to a new lender [see note 5(v)] who assumed $50,000 of the outstanding principal balance and the Company’s Chief Executive Officer [see note 6(i)] who assumed the remaining $50,000 outstanding principal balance.

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(iv)

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. The proceeds were used by the Company to fund the motion picture known as River Runs Red. During the year ended June 30, 2019, the Company paid $150,000 of principal and $15,000 of interest payable. On September 24, 2019, the Company singed general and mutual release agreement with lender, to pay $15,000 the balance of due via issuance of 20,000 shares of common stock of the Company. As of September 24, 2019, unpaid interest of $15,000 was due. During the nine months ended March 31, 2020 and 2019, interest expenses of $4,955 and $13,798 was recorded, respectively. According to general and mutual release agreement, the default interest at 22% recorded in the previous, adjusted to 10% and the effect of change recognized as of gain on modification of debt.

(v)

On September 24, 2019, the company issued a $50,000 Promissory Note in exchange of settlement loan agreement of February 06, 2018 with another lender for replacing $50,000 proceeds. The principal of $50,000 is due on June 30, 2020, and bears interest at 10% per annum. As of September 24, 2019, unpaid interest of $8,164 was due and transferred to a new lender. During the nine months ended March 31, 2020, the Company paid $45,000 of principal note payable and $5,000 of interest payable. During the nine months ended March 31,2020, interest expenses of $722 was recorded. As of March 31, 2020, unpaid principal note of $5,000 and interest of $3,886 was due.

NOTE 6 – RELATED PARTY TRANSACTIONS

(i)	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. On September 24, 2019, the Company and the lender have extended the maturity date to June 30, 2020. During the nine months ended March 31, 2020, and 2019, interest expense of $26,370 and $26,274 was recorded, respectively. As of March 31, 2020, and June 30, 2019, interest payable of $58,603 and $32,233 was due, respectively. As of March 31, 2020, the principal balance of note is $350,000.
(ii)	On September 24, 2019, the company issued a $50,000 Promissory Note to the Company’s Chief Executive Officer in exchange of settlement loan agreement of February 06, 2018 with another lender for replacing $50,000 proceeds. The principal of $50,000 is due on June 30, 2020, and bears interest at 10% per annum. As of September 24, 2019, unpaid interest of $8,164 was due and transferred to lender. During the nine months ended March 31, 2020, $2,589 interest expenses was recorded. As of March 31, 2020, unpaid principal and interest of $50,000 and $10,753 was due, respectively.
(iii)	As of March 31, 2020, and June 30, 2019, the Company borrowed a $12,000 from an individual related to the Company’s Chief Creative Officer. The amounts are due on demand and non-interest bearing.
(iv)	During the nine months ended March 31, 2020, and 2019, the Company paid $0 and $25,640, respectively to the Chief Creative Officer for fees related to production and managing movie services.
(v)	During the nine months ended March 31, 2020, the Company’s officer paid $500 operating expenses on behalf of the Company.

NOTE 7 – SHARE CAPITAL

Common Stock

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.

On September 24, 2019, the Company issued 20,000 common shares at $0.001 par value for settlement of $15,000 interest payable of notes

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NOTE 8 – 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.

NOTE 9 – 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.

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

	Nine Months Ended
	March 31,
	2020			2019
Federal Income Tax benefits (expenses) attributable to
Current Operation	$	30,084		$	74,380
Less: Valuation Allowance		(30,084	)		(74,380	)
Net Provision for Federal Income Taxes	$	-		$	-

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

	March 31,			June 30,
	2020			2019
Deferred tax assets	$	330,420		$	300,336
Less: valuation allowance		(330,420	)		(300,336	)
Deferred tax assets, net	$	-		$	-

At March 31, 2020, the Company had $1,573,428 of the U.S. net operating losses (the “U.S. NOLs”), which begin to expire beginning in 2037. NOLs generated in tax years prior to June 30, 2018, can be carryforward for twenty years, whereas NOLs generated after June 30, 2019 can be carryforward indefinitely.

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NOTE 10 – SUBSEQUENT EVENTS

(i)	Subsequent to March 31, 2020, on June 12, 2021, the Company repaid $50,000 outstanding to the holder of the promissory note disclosed in note 5(i) on August 12, 2021, the holder of the note waived all remaining interest owing.
(ii)	Subsequent to March 31, 2020, the Company repaid $22,000 of the outstanding principal balance to the holder of the promissory note described in note 5(ii). On June 30, 2020, the maturity date was reached and the remaining $58,000 principal balance was in default. As a result of the default, the loan bears interest at 22% per annum.
(iii)	Subsequent to March 31, 2020, on June 30, 2020, the maturity date was reached with the promissory note disclosed in note 5(v) and the principal balance of $5,000 was in default. As a result of the default, the loan bears interest at 22% per annum.
(iv)	Subsequent to March 31, 2020, the Company repaid $290,000 of the outstanding principal balance to the holder of the promissory note described in note 6(i). On June 30, 2020, the maturity date was reached and the remaining $60,000 principal balance was in default. As a result of the default, the loan bears interest at 22% per annum.
(v)	Subsequent to March 31, 2020, on June 30, 2020, the maturity date was reached with the promissory note disclosed in note 6(ii) and the principal balance of $50,000 was in default. As a result of the default, the loan bears interest at 22% per annum. The Company repaid the $50,000 principal balance to the holder on April 7, 2021.

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

Business Development

SMACK Sportswear (“SMACK or the Company”) was originally incorporated in Nevada in October 2007. Through June 30, 2016, we were a manufacturer and seller of performance and lifestyle based indoor and sand volleyball apparel and accessories. As of July 31, 2015, we completed the disposition of certain assets of the Company to William Sigler, a former director of the Company; in connection with said transactions Mr. Sigler resigned and agreed to sell all his shares of common stock in the Company. As a result of the sale of certain inventory from the Company to Mr. Sigler, the Company was considered a “shell company” (as such term is defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended).

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, 2016.

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, 2016.

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 March 31, 2020.

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.

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.

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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 March 31, 2019. 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

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.

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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.

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.

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.

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Results of Operations

For the three months ended March 31, 2020 compared to March 31, 2019

	Three Months Ended
	March 31,						Change
	2020			2019			Amount
Revenue	$	-		$	1,784,846		$	(1,784,846	)
Cost of revenue		-			1,762,700			(1,762,700	)
Operating expenses		68,524			116,552			(48,028	)
Other expense		(13,613	)		(31,583	)		17,970
Net loss	$	(82,137	)	$	(125,989	)	$	43,852

Revenue and cost of revenue. During the three months ended March 31, 2020 and 2019, the Company had $0 and $1,784,846 revenue, respectively. Revenue and cost of revenue during the three months ended March 31, 2019 was associated with two films completed under Production Service Agreements.

Operating Expenses. Operating expenses were $68,524 and $116,552 for the three months ended March 31, 2020, and 2019, respectively. Operating expenses mainly consisted of professional fees of $11,912 and $6,559 and general administrative expenses of $56,612 and 109,993 for the three months ended March 31, 2020 and 2019, respectively. The decrease in operating expenses resulted primarily from the decrease in general and administrative expenses.

Other Expense. During the three months ended March 31, 2020, the Company incurred interest expenses of $13,613, relating to unsecured promissory notes payable. During the three months ended March 31, 2019, the Company incurred interest expenses of $31,583, relating to an unsecured promissory note payable. 

Net Loss. For the three months ended March 31, 2020, and 2021, we incurred a loss from operations of $82,137 and $125,989, respectively. The decrease in loss from operations was attributable to the decrease in our professional fees and interest expenses.

For the nine months ended March 31, 2020 compared to March 31, 2019

	Nine Months Ended
	March 31,						Change
	2020			2019			Amount
Revenue	$	343,256		$	1,784,846		$	(1,441,590	)
Cost of revenue		343,256			1,762,700			(1,419,444	)
Operating expenses		235,523			302,910			(67,387	)
Other expense		(40,021	)		(73,424	)		33,403
Net loss	$	(275,544	)	$	(354,188	)	$	78,644

Revenue and cost of revenue. During the nine months ended March 31, 2020 and 2019, the Company had $343,256 and $1,784,846 revenue, respectively. Revenue during the nine months ended March 31, 2020 was associated with one film completed under a Production Service Agreement. Revenue during the nine months ended March 31, 2019 was associated with two films completed under Production Service Agreements.

Operating Expense. Operating expenses were $235,523 and $302,910 for the nine months ended March 31, 2020, and 2019, respectively. Operating expenses mainly consisted of professional fees of $63,896 and $39,236 and general administrative expenses of $171,627 and $263,674 for the nine months ended March 31, 2020 and 2019, respectively. The decrease in operating expenses resulted primarily from the decrease in general and administrative expenses offset by an increase in professional fees.

22

Other Expense. During the nine months ended March 31, 2020, the Company incurred interest expenses of $47,803, relating to unsecured promissory notes payable, bad debt expenses for loan receivable of $12,000 and gain on modification debt of $19,782. During the nine months ended March 31, 2019, the Company incurred interest expenses of $73,424, relating to an unsecured promissory note payable.

Net Loss. For the nine months ended March 31, 2020, and 2021, we incurred a loss from operations of $275,544 and $354,188, respectively. The decrease in loss from operations was attributable to the decrease in our general administrative expenses and interest expenses.

Liquidity and Capital Resources

Working Capital

	March 31,			June 30,			Change
	2020			2019			Amount
Cash	$	62,849			57,154			5,695
Current Assets	$	477,231		$	672,487		$	(195,256	)
Current Liabilities		708,665			1,075,927			(367,262	)
Working Capital	$	(231,434	)	$	(403,440	)	$	172,006

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 March 31, 2020 and June 30, 2019, we had a cash balance of $62,849 and $57,154, respectively. 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.

As of March 31, 2020, we had a working capital deficit of $231,434 as compared to working capital deficit of $403,440 as of June 30, 2019. The decrease in working capital deficit was mainly due to a decrease in promissory notes payable, deferred film revenue, accounts receivable, deferred asset and film cost.

Cash Flows

	Nine Months Ended
	March 31,						Change
	2020			2019			Amount
Net Cash Provided by (Used in) Operating Activities	$	50,195		$	(241,944	)	$	292,139
Cash used in Investing Activities	$	-			-			-
Net Cash Provided by (Used in) Financing Activities	$	(44,500	)	$	12,000			(56,500	)
Net Increase (Decrease) in Cash and Cash Equivalents	$	5,695		$	(229,944	)	$	235,639

23

Cash Flows from (used in) Operating Activities

During the nine months ended March 31, 2021, net cash provided by operating activities was $50,195, compared to $241,944 net cash used in operating activities for the nine months ended March 31, 2019. The increase in net cash provided in operating activities was mainly due an decrease in accounts receivable, increase in accounts payable and accrued liabilities and timing of recognition of deferred revenue and reduction of other payable in the prior year, offset by a decrease in add-backs for adjustments to reconcile net loss to net cash used in operating activities, film costs, prepaids and interest payable.

Cash Flows from (used in) Financing Activities 

During the nine months ended March 31, 2020, net cash used in financing activities was $44,500, compared to $12,000 net cash provided by financing activities for the nine months ended March 31, 2019. During the nine months ended March 31, 2020 and 2019, the Company paid $45,000 and $0 for settlement of notes payable, respectively. During the nine months ended March 31, 2020 and 2019, the Company received $500 and $12,000 from a related party, respectively.  

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 consolidated financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. During the nine months ended March 31, 2020 the Company reported a net loss of $275,544. As of March 31, 2020, the Company has an accumulated deficit of $2,031,006 and a working capital deficit of $231,434. 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 stockholders, 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.

24

Off-balance sheet arrangements

During the nine months ended March 31, 2020, 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 March 31, 2020. Based upon that evaluation, the Company's CEO and CFO concluded that the Company's disclosure controls and procedures were not effective as of March 31, 2020 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 March 31, 2020, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

25

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.

26

ITEM 6. EXHIBITS

			Incorporated by Reference
Exhibit No.	Description	Form	SEC File No.	Exhibit	Filing Date	Filed 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	2/29/2016
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	1/18/2016
10.1	Share Exchange Agreement dated January 15, 2016 by and among SMACK Sportswear, Inc., Almost Never Films Inc., and the Shareholders of Almost Never Films Inc.	8-K	000-53049	2.1	1/18/2016
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					☒
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					☒
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 March 31, 2020 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.

27

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: August 20, 2021	By:	/s/ Danny Chan
		Danny Chan, Chief Executive Officer and Chief Financial Officer (principal executive officer and principal financial and accounting officer)

28

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 March 31, 2020;
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: August 20, 2021	/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 March 31, 2020 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: August 20, 2021	/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

Cover - shares	9 Months Ended
	Mar. 31, 2020	Aug. 12, 2021
Cover [Abstract]
Entity Registrant Name	ALMOST NEVER FILMS INC
Entity Central Index Key	0001422768
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--06-30
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Mar. 31, 2020
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2020
Entity Common Stock Shares Outstanding		5,798,765
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	000-53049
Entity Incorporation State Country Code	NV
Entity Tax Identification Number	26-1665960
Entity Address Address Line 1	8605 Santa Monica Blvd #98258
Entity Address City Or Town	West Hollywood
Entity Address State Or Province	CA
Entity Address Postal Zip Code	90069-4109
City Area Code	213
Local Phone Number	296-3005
Entity Interactive Data Current	No

XML

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2020	Jun. 30, 2019
Current Assets
Cash and cash equivalents	$ 62,849	$ 57,154
Accounts receivable	394,382	583,333
Loan receivable	20,000	32,000
Total Current Assets	477,231	672,487
Deferred assets	14,583	103,898
Film costs	85,496	428,731
TOTAL ASSETS	577,310	1,205,116
Current Liabilities
Accounts payable and accrued expenses	66,399	41,813
Due to related party	12,500	12,000
Deferred film revenue	0	354,398
Interest payable	94,766	117,716
Promissory note payable	135,000	230,000
Promissory note payable - related party	400,000	320,000
Total Current Liabilities	708,665	1,075,927
TOTAL LIABILITIES	708,665	1,075,927
Stockholders' Equity (Deficit)
Preferred stock: no par value, 5,000,000 authorized; Series A Preferred stock: 2,000,000 authorized; No shares issued and outstanding	0	0
Common stock: 25,000,000 authorized; $0.001 par value 5,798,765 and 5,778,765 shares issued and outstanding respectively.	5,799	5,779
Additional paid in capital	1,895,486	1,880,506
Accumulated deficit	(2,031,006)	(1,755,486)
Total shareholders' equity attributable to Almost Never Films Inc. shareholders	(129,721)	130,799
Non-controlling interest	(1,634)	(1,610)
Total shareholders' equity (deficit)	(131,355)	129,189
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$ 577,310	$ 1,205,116

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2020	Jun. 30, 2019
Stockholders' Equity (Deficit)
Preferred stock, shares authorized	5,000,000	5,000,000
Common stock, shares authorized	25,000,000	25,000,000
Common stock, shares par value	$ 0.001	$ 0.001
Common stock, shares issued	5,798,765	5,778,765
Common stock, shares outstanding	5,798,765	5,778,765
Series A Preferred Stock [Member]
Stockholders' Equity (Deficit)
Preferred stock, shares authorized	2,000,000	2,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0

XML

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)
Revenues	$ 0	$ 1,784,846	$ 343,256	$ 1,784,846
Cost of Revenues	0	1,762,700	343,256	1,762,700
Gross Profit	0	22,146	0	22,146
Operating Expenses
General and administration expenses	56,612	109,993	171,627	263,674
Professional fees	11,912	6,559	63,896	39,236
Total operating expenses	68,524	116,552	235,523	302,910
Loss from operations	(68,524)	(94,406)	(235,523)	(280,764)
Other (Expense) Income
Interest expense	(13,613)	(31,583)	(47,803)	(73,424)
Gain (loss) on modification of debt	0	0	19,782	0
Bad debt for loan receivable	0	0	(12,000)	0
Total other income (expense)	(13,613)	(31,583)	(40,021)	(73,424)
Net loss before income taxes	(82,137)	(125,989)	(275,544)	(354,188)
Provision for income taxes	0	0	0	0
Net loss	(82,137)	(125,989)	(275,544)	(354,188)
Net loss attributable to:
Almost Never Films Inc.	(82,137)	(125,989)	(275,520)	(354,188)
Non-controlling interest	0	0	(24)	0
Comprehensive Loss	$ (82,137)	$ (125,989)	$ (275,544)	$ (354,188)
Net Income (Loss) per share attributable to Common stockholders of the Company -Basic and Diluted	$ (0.01)	$ (0.02)	$ (0.05)	$ (0.06)
Weighted Average Common Shares Outstanding - Basic and Diluted	5,798,765	5,778,765	5,792,533	5,739,205

XML

Condensed Consolidated Statements of Stockholders Equity (Deficit) (Unaudited) - USD ($)	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Non-controlling Interest [Member]
Balance, shares at Jun. 30, 2018		5,328,765
Balance, amount at Jun. 30, 2018	$ 372,036	$ 5,329	$ 1,655,956	$ (1,289,249)	$ 0
Net loss	(81,800)	$ 0	0	(81,800)	0
Balance, shares at Sep. 30, 2018		5,328,765
Balance, amount at Sep. 30, 2018	290,236	$ 5,329	1,655,956	(1,371,049)	0
Balance, shares at Jun. 30, 2018		5,328,765
Balance, amount at Jun. 30, 2018	372,036	$ 5,329	1,655,956	(1,289,249)	0
Net loss	(354,188)
Balance, shares at Mar. 31, 2019		5,778,765
Balance, amount at Mar. 31, 2019	242,848	$ 5,779	1,880,506	(1,643,437)	0
Balance, shares at Sep. 30, 2018		5,328,765
Balance, amount at Sep. 30, 2018	290,236	$ 5,329	1,655,956	(1,371,049)	0
Net loss	(146,399)			(146,399)	0
Common shares issued for consulting services, shares		450,000
Common shares issued for consulting services, amount	225,000	$ 450	224,550	0
Balance, shares at Dec. 31, 2018		5,778,765
Balance, amount at Dec. 31, 2018	368,837	$ 5,779	1,880,506	(1,517,448)	0
Net loss	(125,989)	$ 0	0	(125,989)	0
Balance, shares at Mar. 31, 2019		5,778,765
Balance, amount at Mar. 31, 2019	242,848	$ 5,779	1,880,506	(1,643,437)	0
Balance, shares at Jun. 30, 2019		5,778,765
Balance, amount at Jun. 30, 2019	129,189	$ 5,779	1,880,506	(1,755,486)	(1,610)
Net loss	(102,670)	$ 0	0	(102,653)	(17)
Common shares issued to settle interest of note payable, shares		20,000
Common shares issued to settle interest of note payable, amount	15,000	$ 20	14,980	0	0
Balance, shares at Sep. 30, 2019		5,798,765
Balance, amount at Sep. 30, 2019	41,519	$ 5,799	1,895,486	(1,858,139)	(1,627)
Balance, shares at Jun. 30, 2019		5,778,765
Balance, amount at Jun. 30, 2019	129,189	$ 5,779	1,880,506	(1,755,486)	(1,610)
Net loss	(275,544)
Balance, shares at Mar. 31, 2020		5,798,765
Balance, amount at Mar. 31, 2020	(131,355)	$ 5,799	1,895,486	(2,031,006)	(1,634)
Balance, shares at Sep. 30, 2019		5,798,765
Balance, amount at Sep. 30, 2019	41,519	$ 5,799	1,895,486	(1,858,139)	(1,627)
Net loss	(90,737)	$ 0	0	(90,730)	(7)
Balance, shares at Dec. 31, 2019		5,798,765
Balance, amount at Dec. 31, 2019	(49,218)	$ 5,799	1,895,486	(1,948,869)	(1,634)
Net loss	(82,137)	$ 0	0	(82,137)	0
Balance, shares at Mar. 31, 2020		5,798,765
Balance, amount at Mar. 31, 2020	$ (131,355)	$ 5,799	$ 1,895,486	$ (2,031,006)	$ (1,634)

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash Flows from Operating Activities:
Net loss	$ (275,544)	$ (354,188)
Adjustments to reconcile net loss to net cash used in operating activities:
Consulting expense	89,315	201,102
Gain on modification of debt	(19,782)	0
Bad debt for loan receivable	12,000	0
Changes in operating assets and liabilities:
Accounts receivable	188,951	0
Prepaid expenses and deposits	0	218,658
Film costs	343,235	1,134,111
Accounts payable and accrued expenses	24,467	(31,799)
Deferred film revenue	(354,398)	(1,431,752)
Interest payable	41,951	73,424
Other payable	0	(51,500)
Net Cash Provided by (Used in) Operating Activities	50,195	(241,944)
Cash Flows from Investing Activities:
Net Cash Provided by Investing Activities	0	0
Cash Flows from Financing Activities:
Borrowing from related party	500	12,000
Repayment of note payable	(45,000)	0
Net Cash Provided by (Used in) Financing Activities	(44,500)	12,000
Net Increase (Decrease) in Cash and Cash Equivalents	5,695	(229,944)
Cash and Cash Equivalents, beginning of period	57,154	270,826
Cash and Cash Equivalents, end of period	62,849	40,882
Supplemental Disclosure Information:
Cash paid for interest	(35,000)	0
Cash paid for income taxes	0	0
Supplemental Non-cash Disclosure:
Deferred consulting expense paid in restricted stock	0	225,000
Promissory note issued to related party for settlement of loan arrangement	50,000	0
Conversion of debt into common stock	$ 15,000	$ 0

XML

ORGANIZATION AND OPERATIONS

9 Months Ended

Mar. 31, 2020

ORGANIZATION AND OPERATIONS

NOTE 1 - 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 focusing 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 Pink 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 would be reflected in the financial statements prior to the share exchange would be those of Almost Never Films Inc. (Indiana) and would be recorded at the historical cost basis of Almost Never Films Inc. (Indiana), and the combined financial statements after completion of the share exchange included 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 (a) 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

9 Months Ended

Mar. 31, 2020

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 - 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), Almost Never Films Inc. (Indiana), FWIL, LLC (Indiana), Virginia Christmas, LLC (New York), Christmas Camp, LLC (New York), and Country Christmas, LLC (Ohio). Its 90% owned subsidiaries are One HLWD KY LLC (Kentucky), Two HLWD KY LLC (Kentucky) and Three HLWD KY (Kentucky), LLC. All significant intercompany transactions and balances have been eliminated in consolidation.

The Company dissolved FWIL, LLC on September 16, 2019 and Country Christmas, LLC (CXA) on October 5, 2019.

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”) and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, these condensed financial statements do not include all 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, 2019 financial statements that was filed with the SEC on October 15, 2019. The results of operations for the nine months ended March 31, 2020, 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 few financial institutions, 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.

The Company’s accounts receivable from customer individually accounts for more than 10% of total receivable are as follows:

	March 31,		June 30,
	2020		2019
Accounts receivable - PureFlex’s	$	394,382	$	583,333

The Company’s revenue from customer individually accounts for more than 10% of total revenue are as follows:

	Nine Months Ended
	March 31,
	2020		2019
MVE Productions	$	343,256	$	1,784,846

Film Costs, Net

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. The Company qualifies for certain government programs that provide incentives earned in regard to expenditures on qualifying film production activities. The incentives are recorded as an offset to the related asset balance. 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 March 31, 2020, the balance reported for cash and accounts receivable approximates its fair value because of their 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, loan receivable and promissory notes 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 satisfying 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 from the following sources:

· 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.

· 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.

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.

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 nine months ended March 31, 2020, and 2019, as there are no potential shares outstanding that would have a dilutive effect.

Recently Issued Accounting Pronouncements

In March 2019, the FASB issued new guidance on film production costs ASU 2019-02, Entertainment Films- Other Assets – Film Costs (Subtopic 926-20). The new guidance is effective for fiscal years beginning after December 15, 2019 (for the year ended June 30, 2021 for the Company) and interim periods within those fiscal years and may be early adopted. The new guidance aligns the accounting for the production costs of an episodic series with those of a film by removing the content distinction for capitalization. It also addresses presentation, requires new disclosures for produced and licensed content and addresses cash flow classification for license agreements to better reflect the economics of an episodic series. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

In March 2019, the FASB issued ASU No. 2019-02, Entertainment-Films-Other Assets-Film Costs (Subtopic 926-20) and Entertainment-Broadcasters Intangibles-Goodwill and Other (Subtopic 920-350). The update aligns the accounting for production costs of an episodic television series with the accounting for production costs of films by removing the content distinction for capitalization. The amendments also require that an entity reassess estimates of the use of a film in a film group and account for any changes prospectively. The amendments in this update require that an entity test a film or license agreement for program material within the scope of Subtopic 920-350 for impairment at a film group level when the film or license agreement is predominantly monetized with other films and/or license agreements. For public business entities, the amendments in this update are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Under this guidance, lessees will be required to recognize on the balance sheet a lease liability and a right-of-use asset for all leases, with the exception of short-term leases. The lease liability represents the lessee s obligation to make lease payments arising from a lease and will be measured as the present value of the lease payments. The right-of-use asset represents the lessee’s right to use a specified asset for the lease term, and will be measured at the lease liability amount, adjusted for lease prepayment, lease incentives received and the lessee s initial direct costs. The standard also requires a lessee to recognize a single lease cost allocated over the lease term, generally on a straight-line basis. The new guidance is effective for fiscal years beginning after December 15, 2018. ASU 2016-02 is required to be applied using the modified retrospective approach for all leases existing as of the effective date and provides for certain practical expedients. Early adoption is permitted. The Company does not have any leases and does not have any material impact related to the new guidance.

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.

COVID-19

In early 2020, the World Health Organization declared the rapidly spreading coronavirus disease (“COVID-19”) outbreak a pandemic. This pandemic has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. The Company considered the impact of COVID-19 on the assumptions and estimates used and determined that there were no retroactive material adverse impacts on the Company’s results of operations and financial position at March 31, 2020. The full extent of the future impacts of COVID-19 on the Company’s operations is uncertain. A prolonged outbreak could have a material adverse impact on financial results and business operations of the Company in the future. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the date of issuance of these condensed consolidated financial statements. These estimates may change, as new events occur and additional information is obtained.

Going Concern

These 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 consolidated financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. During the nine months ended March 31, 2020 the Company reported a net loss of $275,544. As of March 31, 2020, the Company has an accumulated deficit of $2,031,006 and a working capital deficit of $231,434. 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, NET

9 Months Ended

Mar. 31, 2020

FILM COSTS, NET

NOTE 3 - FILM COSTS, NET

NOTE 3 – FILM COSTS, NET

Film costs are comprised of the following:

	March 31,		June 30,
	2020		2019
Independent Self-Produced Film Costs, Net	$	85,496	$	85,475
Capitalized Film Costs covered under Production Service Agreements, Net		-		343,256
Total Film Costs, Net	$	85,496	$	428,731

Film costs include salaries and wages, and all other direct costs associated with the motion pictures and television productions. In addition, the Company qualifies for certain government programs that provide incentives earned in regard to expenditures on qualifying film production activities. The incentives are recorded as an offset to the related asset balance.

The Company performs fair value measurements related to film costs on an annual basis to evaluate and review indicators of impairment. During the nine months ended March 31, 2020 and 2019, the Company did not recognize an 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”). In accordance with the Agreement, 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.

On July 16, 2019, the Company received notice that Country Christmas Album has been confirmed as completed and delivered in accordance with the agreement terms.

During the nine months ended March 31, 2020 and 2019, $343,256 and $1,762,700, respectively, of capitalized film costs were expensed as cost of revenues.

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DEFERRED FILM REVENUE

9 Months Ended

Mar. 31, 2020

DEFERRED FILM REVENUE

NOTE 4 - DEFERRED FILM REVENUE

NOTE 4 – 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 February 28, 2019, all criteria had been met in order for the Company to recognize 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, ‘Last Vermont Christmas LLC.’ The Production Services Agreement was planned to run from April 9, 2018 to September 28, 2018. As of March 18, 2019, all criteria had been met in order for the Company to recognize revenue.

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 was planned to run from June 25, 2018 to October 15, 2018. On July 16, 2019, the Company received notice that Country Christmas Album has been confirmed as completed and delivered in accordance with the agreement terms and therefore the Company has recorded $343,256 revenues during the period of nine months ended March 31, 2020.

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PROMISSORY NOTES PAYABLE

9 Months Ended

Mar. 31, 2020

PROMISSORY NOTES PAYABLE

NOTE 5 - PROMISSORY NOTES PAYABLE

NOTE 5 – PROMISSORY NOTES PAYABLE

(i)	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. The proceeds were used by the Company to fund the motion picture known as One HLWD KY LLC. During the year ended June 30, 2019, the Company paid principal of $100,000 and $15,000 of interest payable. On September 24, 2019, the Company signed amendment agreement with lender for the balance of principal note of $50,000 with new maturity date of June 30, 2020. During the nine months ended March 31, 2020, and 2019, interest expense of $3,767 and $15,698 was recorded, respectively. As of March 31, 2020, and June 30, 2019, an interest payable of $11,726 and $7,959 has been recorded, respectively. Due to change of maturity date of the loan agreement to June 30, 2020, the default interest at 22% recorded in the previous, adjusted to 10% and the effect of change recognized as of gain on modification of debt.
(ii)	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. The proceeds were used by the Company to fund the motion picture known as River Runs Red. On September 24, 2019, the Company signed amendment agreement with lender for the principal note of $80,000 with new maturity date of June 30, 2020. During the nine months ended March 31, 2020, and 2019, interest expense of $6,027 and $8,417 was recorded, respectively. As of March 31, 2020, and June 30, 2019, an interest payable of $9,797 and $3,770 has been recorded, respectively Due to change of maturity date of the loan agreement to June 30, 2020, the default interest at 22% recorded in the previous, adjusted to 10% and the effect of changing recognized as of gain on gain on modification of debt.
(iii)	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. The proceeds were used by the Company to fund the motion picture known as River Runs Red. On September 24, 2019, the Company signed amendment agreements with lender with maturity date of June 30, 2020, transferred the principal of note and interest payable equally to two new lenders. An interest payable of $16,328 has been recorded as of date of transfer. During the nine months ended March 31, 2020 and 2019, interest expenses of $2,521 and $9,237 was recorded, respectively. According to amendment agreement, the default interest at 22% recorded in the previous, adjusted to 10% and the effect of change recognized as of gain on modification of debt. On September 24, 2019, the principal balance of the loan was transferred to a new lender [see note 5(v)] who assumed $50,000 of the outstanding principal balance and the Company’s Chief Executive Officer [see note 6(i)] who assumed the remaining $50,000 outstanding principal balance.

(iv)

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. The proceeds were used by the Company to fund the motion picture known as River Runs Red. During the year ended June 30, 2019, the Company paid $150,000 of principal and $15,000 of interest payable. On September 24, 2019, the Company singed general and mutual release agreement with lender, to pay $15,000 the balance of due via issuance of 20,000 shares of common stock of the Company. As of September 24, 2019, unpaid interest of $15,000 was due. During the nine months ended March 31, 2020 and 2019, interest expenses of $4,955 and $13,798 was recorded, respectively. According to general and mutual release agreement, the default interest at 22% recorded in the previous, adjusted to 10% and the effect of change recognized as of gain on modification of debt.

(v)

On September 24, 2019, the company issued a $50,000 Promissory Note in exchange of settlement loan agreement of February 06, 2018 with another lender for replacing $50,000 proceeds. The principal of $50,000 is due on June 30, 2020, and bears interest at 10% per annum. As of September 24, 2019, unpaid interest of $8,164 was due and transferred to a new lender. During the nine months ended March 31, 2020, the Company paid $45,000 of principal note payable and $5,000 of interest payable. During the nine months ended March 31,2020, interest expenses of $722 was recorded. As of March 31, 2020, unpaid principal note of $5,000 and interest of $3,886 was due.

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RELATED PARTY TRANSACTIONS

9 Months Ended

Mar. 31, 2020

RELATED PARTY TRANSACTIONS

NOTE 6 - RELATED PARTY TRANSACTIONS

NOTE 6 – RELATED PARTY TRANSACTIONS

(i)	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. On September 24, 2019, the Company and the lender have extended the maturity date to June 30, 2020. During the nine months ended March 31, 2020, and 2019, interest expense of $26,370 and $26,274 was recorded, respectively. As of March 31, 2020, and June 30, 2019, interest payable of $58,603 and $32,233 was due, respectively. As of March 31, 2020, the principal balance of note is $350,000.
(ii)	On September 24, 2019, the company issued a $50,000 Promissory Note to the Company’s Chief Executive Officer in exchange of settlement loan agreement of February 06, 2018 with another lender for replacing $50,000 proceeds. The principal of $50,000 is due on June 30, 2020, and bears interest at 10% per annum. As of September 24, 2019, unpaid interest of $8,164 was due and transferred to lender. During the nine months ended March 31, 2020, $2,589 interest expenses was recorded. As of March 31, 2020, unpaid principal and interest of $50,000 and $10,753 was due, respectively.
(iii)	As of March 31, 2020, and June 30, 2019, the Company borrowed a $12,000 from an individual related to the Company’s Chief Creative Officer. The amounts are due on demand and non-interest bearing.
(iv)	During the nine months ended March 31, 2020, and 2019, the Company paid $0 and $25,640, respectively to the Chief Creative Officer for fees related to production and managing movie services.
(v)	During the nine months ended March 31, 2020, the Company’s officer paid $500 operating expenses on behalf of the Company.

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SHARE CAPITAL

9 Months Ended

Mar. 31, 2020

SHARE CAPITAL

NOTE 7 - SHARE CAPITAL

NOTE 7 – SHARE CAPITAL

Common Stock

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.

On September 24, 2019, the Company issued 20,000 common shares at $0.001 par value for settlement of $15,000 interest payable of notes

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Mar. 31, 2020

COMMITMENTS AND CONTINGENCIES

NOTE 8 - COMMITMENTS AND CONTINGENCIES

NOTE 8 – 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.

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INCOME TAXES

9 Months Ended

Mar. 31, 2020

INCOME TAXES

NOTE 9 - INCOME TAXES

NOTE 9 – 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.

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

	Nine Months Ended
	March 31,
	2020			2019
Federal Income Tax benefits (expenses) attributable to
Current Operation	$	30,084		$	74,380
Less: Valuation Allowance		(30,084	)		(74,380	)
Net Provision for Federal Income Taxes	$	-		$	-

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

	March 31,			June 30,
	2020			2019
Deferred tax assets	$	330,420		$	300,336
Less: valuation allowance		(330,420	)		(300,336	)
Deferred tax assets, net	$	-		$	-

At March 31, 2020, the Company had $1,573,428 of the U.S. net operating losses (the “U.S. NOLs”), which begin to expire beginning in 2037. NOLs generated in tax years prior to June 30, 2018, can be carryforward for twenty years, whereas NOLs generated after June 30, 2019 can be carryforward indefinitely.

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SUBSEQUENT EVENTS

9 Months Ended

Mar. 31, 2020

SUBSEQUENT EVENTS

NOTE 10 - SUBSEQUENT EVENTS

NOTE 10 – SUBSEQUENT EVENTS

(i)	Subsequent to March 31, 2020, on June 12, 2021, the Company repaid $50,000 outstanding to the holder of the promissory note disclosed in note 5(i) on August 12, 2021, the holder of the note waived all remaining interest owing.
(ii)	Subsequent to March 31, 2020, the Company repaid $22,000 of the outstanding principal balance to the holder of the promissory note described in note 5(ii). On June 30, 2020, the maturity date was reached and the remaining $58,000 principal balance was in default. As a result of the default, the loan bears interest at 22% per annum.
(iii)	Subsequent to March 31, 2020, on June 30, 2020, the maturity date was reached with the promissory note disclosed in note 5(v) and the principal balance of $5,000 was in default. As a result of the default, the loan bears interest at 22% per annum.
(iv)	Subsequent to March 31, 2020, the Company repaid $290,000 of the outstanding principal balance to the holder of the promissory note described in note 6(i). On June 30, 2020, the maturity date was reached and the remaining $60,000 principal balance was in default. As a result of the default, the loan bears interest at 22% per annum.
(v)	Subsequent to March 31, 2020, on June 30, 2020, the maturity date was reached with the promissory note disclosed in note 6(ii) and the principal balance of $50,000 was in default. As a result of the default, the loan bears interest at 22% per annum. The Company repaid the $50,000 principal balance to the holder on April 7, 2021.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Mar. 31, 2020

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), Almost Never Films Inc. (Indiana), FWIL, LLC (Indiana), Virginia Christmas, LLC (New York), Christmas Camp, LLC (New York), and Country Christmas, LLC (Ohio). Its 90% owned subsidiaries are One HLWD KY LLC (Kentucky), Two HLWD KY LLC (Kentucky) and Three HLWD KY (Kentucky), LLC. All significant intercompany transactions and balances have been eliminated in consolidation.

The Company dissolved FWIL, LLC on September 16, 2019 and Country Christmas, LLC (CXA) on October 5, 2019.

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”) and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, these condensed financial statements do not include all 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, 2019 financial statements that was filed with the SEC on October 15, 2019. The results of operations for the nine months ended March 31, 2020, 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 few financial institutions, 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.

The Company’s accounts receivable from customer individually accounts for more than 10% of total receivable are as follows:

	March 31,		June 30,
	2020		2019
Accounts receivable - PureFlex’s	$	394,382	$	583,333

The Company’s revenue from customer individually accounts for more than 10% of total revenue are as follows:

	Nine Months Ended
	March 31,
	2020		2019
MVE Productions	$	343,256	$	1,784,846

Film Costs, Net

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. The Company qualifies for certain government programs that provide incentives earned in regard to expenditures on qualifying film production activities. The incentives are recorded as an offset to the related asset balance. 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 March 31, 2020, the balance reported for cash and accounts receivable approximates its fair value because of their 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, loan receivable and promissory notes 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 satisfying 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 from the following sources:

· 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.

· 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.

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.

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 nine months ended March 31, 2020, and 2019, as there are no potential shares outstanding that would have a dilutive effect.

Recently Issued Accounting Pronouncements

In March 2019, the FASB issued new guidance on film production costs ASU 2019-02, Entertainment Films- Other Assets – Film Costs (Subtopic 926-20). The new guidance is effective for fiscal years beginning after December 15, 2019 (for the year ended June 30, 2021 for the Company) and interim periods within those fiscal years and may be early adopted. The new guidance aligns the accounting for the production costs of an episodic series with those of a film by removing the content distinction for capitalization. It also addresses presentation, requires new disclosures for produced and licensed content and addresses cash flow classification for license agreements to better reflect the economics of an episodic series. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

In March 2019, the FASB issued ASU No. 2019-02, Entertainment-Films-Other Assets-Film Costs (Subtopic 926-20) and Entertainment-Broadcasters Intangibles-Goodwill and Other (Subtopic 920-350). The update aligns the accounting for production costs of an episodic television series with the accounting for production costs of films by removing the content distinction for capitalization. The amendments also require that an entity reassess estimates of the use of a film in a film group and account for any changes prospectively. The amendments in this update require that an entity test a film or license agreement for program material within the scope of Subtopic 920-350 for impairment at a film group level when the film or license agreement is predominantly monetized with other films and/or license agreements. For public business entities, the amendments in this update are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Under this guidance, lessees will be required to recognize on the balance sheet a lease liability and a right-of-use asset for all leases, with the exception of short-term leases. The lease liability represents the lessee s obligation to make lease payments arising from a lease and will be measured as the present value of the lease payments. The right-of-use asset represents the lessee’s right to use a specified asset for the lease term, and will be measured at the lease liability amount, adjusted for lease prepayment, lease incentives received and the lessee s initial direct costs. The standard also requires a lessee to recognize a single lease cost allocated over the lease term, generally on a straight-line basis. The new guidance is effective for fiscal years beginning after December 15, 2018. ASU 2016-02 is required to be applied using the modified retrospective approach for all leases existing as of the effective date and provides for certain practical expedients. Early adoption is permitted. The Company does not have any leases and does not have any material impact related to the new guidance.

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.

COVID-19

In early 2020, the World Health Organization declared the rapidly spreading coronavirus disease (“COVID-19”) outbreak a pandemic. This pandemic has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. The Company considered the impact of COVID-19 on the assumptions and estimates used and determined that there were no retroactive material adverse impacts on the Company’s results of operations and financial position at March 31, 2020. The full extent of the future impacts of COVID-19 on the Company’s operations is uncertain. A prolonged outbreak could have a material adverse impact on financial results and business operations of the Company in the future. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the date of issuance of these condensed consolidated financial statements. These estimates may change, as new events occur and additional information is obtained.

Going Concern

These 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 consolidated financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. During the nine months ended March 31, 2020 the Company reported a net loss of $275,544. As of March 31, 2020, the Company has an accumulated deficit of $2,031,006 and a working capital deficit of $231,434. 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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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Mar. 31, 2020

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of accounts receivable and revenue from customer individually accounts for more than 10% of total receivable and total revenue

	March 31,		June 30,
	2020		2019
Accounts receivable - PureFlex’s	$	394,382	$	583,333

	Nine Months Ended
	March 31,
	2020		2019
MVE Productions	$	343,256	$	1,784,846

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FILM COSTS, NET (Tables)

9 Months Ended

Mar. 31, 2020

FILM COSTS, NET

Schedule of film costs

	March 31,		June 30,
	2020		2019
Independent Self-Produced Film Costs, Net	$	85,496	$	85,475
Capitalized Film Costs covered under Production Service Agreements, Net		-		343,256
Total Film Costs, Net	$	85,496	$	428,731

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INCOME TAXES (Tables)

9 Months Ended

Mar. 31, 2020

INCOME TAXES

Schedule of net loss before provision for income taxes

	Nine Months Ended
	March 31,
	2020			2019
Federal Income Tax benefits (expenses) attributable to
Current Operation	$	30,084		$	74,380
Less: Valuation Allowance		(30,084	)		(74,380	)
Net Provision for Federal Income Taxes	$	-		$	-

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

	March 31,			June 30,
	2020			2019
Deferred tax assets	$	330,420		$	300,336
Less: valuation allowance		(330,420	)		(300,336	)
Deferred tax assets, net	$	-		$	-

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ORGANIZATION, OPERATIONS AND BASIS OF ACCOUNTING (Details Narrative) - USD ($)			9 Months Ended
	Aug. 09, 2017	Jan. 15, 2016	Mar. 31, 2020	Feb. 29, 2016
Budget amount			$ 35,000,000
Assets acquired		$ 6,566
Liabilities assumed		$ 598,869
Common stock, shares authoriziation		2,500,000		5,000,000
Description of common stock reverse stock split	1-for-40
Exchange Agreement [Member]
Series A convertible preferred stock issued		1,000,000
Common stock exchange shares		$ 2,500,000

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	Mar. 31, 2020	Jun. 30, 2019
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounts receivable - Pureflix	$ 394,382	$ 583,333

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($)	9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
MVE Productions	$ 343,256	$ 1,784,846

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	9 Months Ended
	Mar. 31, 2020	Jun. 30, 2019
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Net loss from operation	$ 275,544
Working capital deficit	(231,434)
FDIC insurance coverage limit	250,000
Accumulated deficit	$ (2,031,006)	$ (1,755,486)

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FILM COSTS, NET (Details) - USD ($)	Mar. 31, 2020	Jun. 30, 2019
FILM COSTS, NET
Independent Self-Produced Film Costs, Net	$ 85,496	$ 85,475
Capitalized Film Costs covered under Production Service Agreements, Net	0	343,256
Total Film Costs, Net	$ 85,496	$ 428,731

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FILM COSTS, NET (Details Narrative)	9 Months Ended
	Mar. 31, 2020 USD ($)
FILM COSTS, NET
Capitalized film costs expensed as cost of revenues	$ 343,256

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DEFERRED FILM REVENUE (Details Narrative) - USD ($)	9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
DEFERRED FILM REVENUE
Revenues	$ 343,256	$ 1,784,846

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PROMISSORY NOTES PAYABLE (Details Narrative) - USD ($)					1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Feb. 07, 2018	Feb. 06, 2018	Jan. 04, 2018	Oct. 11, 2017	Sep. 24, 2019	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019	Jun. 30, 2019	Jun. 30, 2020
Interest payable						$ 11,726		$ 11,726
Interest expense						13,613	$ 31,583	47,803	$ 73,424
Repayment of notes payable								45,000	0
Promissory note payable						135,000		135,000		$ 230,000
Two new lender [Member]
Interest payable					$ 16,328
Interest expense								2,521	9,237
Settlement Loan Agreement [Member]
Interest payable					$ 8,164
Interest expense								722
Promissory note interest payable								5,000
Repayment of notes payable								45,000
Percentage of accrued interest					10%
Promissory note payable					$ 50,000	50,000		$ 50,000			$ 50,000
Proceeds from issuance of promissory note payable					50,000
January 4, 2018 [Member]
Interest rate description								Due to change of maturity date of the loan agreement to June 30, 2020, the default interest at 22% recorded in the previous, adjusted to 10% and the effect of changing recognized as of gain on gain on modification of debt
February 6, 2018 [Member]
Interest rate description								According to amendment agreement, the default interest at 22% recorded in the previous, adjusted to 10% and the effect of change recognized as of gain on modification of debt
February 7, 2018 [Member]
Interest rate description								According to general and mutual release agreement, the default interest at 22% recorded in the previous, adjusted to 10% and the effect of change recognized as of gain on modification of debt
October 11, 2017 [Member]
Interest rate description								Due to change of maturity date of the loan agreement to June 30, 2020, the default interest at 22% recorded in the previous, adjusted to 10% and the effect of change recognized as of gain on modification of debt
September 24, 2019 [Member] | Settlement Loan Agreement [Member]
Interest payable										7,959
Promissory note					80,000	50,000		$ 50,000
September 24, 2019 [Member] | Settlement Loan Agreement [Member]
Interest payable					$ 15,000
Interest expense								4,955	13,798
Number of shares issued for conversion of debt					20,000
Value of stock issued for conversion of stock					$ 15,000
Promissory Note [Member]
Interest payable						$ 9,797		9,797		3,770
Unpaid principle								5,000	3,886
Interest expense								6,027	8,417
Promissory note interest payable	$ 15,000									15,000
Repayment of notes payable	$ 150,000									$ 100,000
Recorded interest over term of loan				$ 15,000
Percentage of accrued interest	10%	10%	10%
Promissory note payable	$ 150,000	$ 100,000	$ 80,000	150,000							$ 50,000
Proceeds from issuance of promissory note payable	$ 150,000	$ 100,000	$ 80,000	$ 150,000
Promissory Note One [Member]
Interest expense								$ 3,767	$ 15,698

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RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	1 Months Ended		9 Months Ended
	Sep. 24, 2019	Sep. 19, 2017	Mar. 31, 2020	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
Operating expenses to related party			$ 500
Advanced loan to employee			12,000
Accured interest			11,726
Chief Creative Officer [Member]
Production and managing movie services fees			0	$ 25,640
Promissory Note [Member]
Accured interest			9,797			$ 3,770
Chief Executive Officer [Member] | Promissory Note [Member]
Promissory note	$ 50,000		50,000		$ 50,000
Proceeds fro issuance of promissory note	50,000
Accured interest	$ 8,164		10,753
Percentage of promissory note	10%
Interest expense			2,589
Kruse Farm [Member] | Notes Payable, Other Payables [Member]
Promissory note		$ 350,000	350,000
Proceeds fro issuance of promissory note		$ 350,000
Accured interest			58,603			$ 32,233
Interest expense			$ 26,370	$ 26,274
Percentage of notes payable		10%

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SHARE CAPITAL (Details Narrative) - USD ($)	1 Months Ended
	Sep. 24, 2019	Oct. 17, 2018
Shares issued price per share (in dollars per share)	$ 0.001
Common stock issued for settlement interest payable of notes	$ 15,000
Common stock issued for settlement interest payable of notes (in shares)	20,000
Second Individual [Member]
Shares issued price per share (in dollars per share)		$ 0.50
Common shares issued for consulting services (in shares)		250,000
Amount of common shares issued for consulting services		$ 125,000
First Individual [Member]
Shares issued price per share (in dollars per share)		$ 0.50
Common shares issued for consulting services (in shares)		200,000
Amount of common shares issued for consulting services		$ 100,000

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INCOME TAXES (Details) - USD ($)	9 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Federal Income Tax benefits (expenses) attributable to Current Operation
Federal Income Tax benefits (expenses) attributable to Current Operation	$ 30,084	$ 74,380
Less: Valuation Allowance	(30,084)	(74,380)
Net Provision for Federal Income Taxes	$ 0	$ 0

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INCOME TAXES (Details 1) - USD ($)	Mar. 31, 2020	Jun. 30, 2019
Deferred tax assets, generated from net operating loss at statutory rates
Deferred tax assets	$ 330,420	$ 300,336
Less: Valuation Allowance	(330,420)	(300,336)
Deferred tax assets, net	$ 0	$ 0

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INCOME TAXES (Details Narrative)	9 Months Ended
	Mar. 31, 2020 USD ($)
INCOME TAXES
Net operating loss carry forwards	$ 1,573,428
NOL expiration description	net operating losses (the “U.S. NOLs”), which begin to expire beginning in 2037
Statutory federal income tax rate	21%

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SUBSEQUENT EVENTS (Details Narrative) - USD ($)		3 Months Ended	9 Months Ended
	Jun. 12, 2020	Jun. 30, 2020	Mar. 31, 2020	Mar. 31, 2019
Repayment of promissory note			$ 45,000	$ 0
Subsequent Event [Member] | Promissory Note 5 (i) [Member]
Repayment of promissory note	$ 50,000
Subsequent Event [Member] | Promissory Note 6 (i) [Member]
Repayment of promissory note		$ 290,000
Principal in default		$ 60,000
Loan bearing interest after default		22%
Subsequent Event [Member] | Promissory Note 5 (ii) [Member]
Repayment of promissory note		$ 22,000
Principal in default		$ 58,000
Loan bearing interest after default		22%
Subsequent Event [Member] | Promissory Note 6 (ii) [Member]
Repayment of promissory note		$ 50,000
Principal in default		$ 50,000
Loan bearing interest after default		22%
Subsequent Event [Member] | Promissory Note 5 (v) [Member]
Principal in default		$ 5,000
Loan bearing interest after default		22%