Forward Looking Statements

This quarterly report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology including "could", "may", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential" and the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this report.







Results of Operations

Comparison of the nine months ended March 31, 2020 and 2019:






                                                      For Nine Months Ended
                                                            March 31,
                                                       2020           2019

      Operating expenses
      Selling, general and administrative expenses  $   154,287   $    153,152
      Impairment loss                                         -        732,944
      Total operating expenses                          154,287        886,096

      Other expense:
         Interest expense                                21,819         19,664
            Total other expense                          21,819         19,664

      Net loss before income taxes                    (176,106)      (905,760)
      Income taxes                                            -              -
      Net loss                                     $  (176,106)   $  (905,760)




Revenue and Cost

We had no sales and cost for the nine months ended March 31, 2020 and 2019.





Operating expenses

During the nine months ended March 31, 2020, our total operating expenses were $154,287, a decrease of $731,809 or 83% as compared to $886,096 for the nine months ended March 31, 2019. The decrease was primarily due to decrease in impairment loss on film costs.





Net loss

For the nine months ended March 31, 2020, we incurred a net loss of $176,106, as compared to a net loss of $905,760 for the nine months ended March 31, 2019, a decrease of $729,654 or 81%. This decrease was primarily due to the decrease in operating expenses.

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Comparison of the three months ended March 31, 2020 and 2019: --------------------------------------------------------------------------------



                                                      For Three Months Ended
                                                            March 31,
                                                        2020          2019

       Operating expenses
       Selling, general and administrative expenses  $    35,846    $   33,688
       Impairment loss                                         -         3,943
       Total operating expenses                           35,846        37,631

       Other expense:
          Interest expense                                 6,299         6,132
             Total other expense                           6,299         6,132

       Net loss before income taxes                     (42,145)      (43,763)
       Income taxes                                            -             -
       Net loss                                     $   (42,145)   $  (43,763)






Revenue and Cost

We had no sales and cost for the three months ended March 31, 2020 and 2019.





Operating expenses

During the three months ended March 31, 2020, our total operating expenses were $35,846, a decrease of $1,785 or 5% as compared to $37,631 for the three months ended March 31, 2019. The decrease was primarily due to decrease in impairment loss on film costs which was offset by the increase in payroll expense.





Net loss

For the three months ended March 31, 2020, we incurred a net loss of $42,145, as compared to a net loss of $43,763 for the three months ended March 31, 2019, a decrease of $1,618 or 4%. This decrease was primarily due to the decrease in operating expenses.

Liquidity and Capital Resources





The following table sets forth a summary of our cash flows for the periods
indicated:




                                                          For the Nine Months Ended
                                                                  March 31,
                                                             2020             2019

Net cash used in operating activities                   $    (100,951)      $ (93,468)
Net cash provided by financing activities                       94,805          89,742
Effect of exchange rate changes on cash and cash
equivalents                                                      5,425           (162)
NET CHANGE IN CASH AND CASH EQUIVALENTS                          (721)         (3,888)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                 2,603           7,179
CASH AND CASH EQUIVALENTS AT END OF PERIOD              $        1,882     $     3,291

As of March 31, 2020, we had cash of $1,882 in our bank accounts and a working capital deficit of $1,217,158.

For the nine months ended March 31, 2020, we used net cash of $100,951 in operating activities, compared to net cash used of $93,468 in operating activities during the same period of 2019. The increase of $7,483 for net cash used in

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operating activities was mainly due to the decrease in the change in accrued liabilities and other payable and accounts payable in this period.

During the nine months ended March 31, 2020, we received net cash of $94,805 from financing activities, compared to net cash received of $89,742 in financing activities during the same period in fiscal year 2019. The increase of $5,063 in net cash provided by financing activities was due to the increase in loan from a related party.

Our cash level decreased by $721 during the nine months ended March 31, 2020, compared to a decrease of $3,888 in the same period of 2019. The changes in cash were a result of the factors described above.

We anticipate that we will meet our ongoing cash requirements through equity or debt financing. We plan to cooperate with various individuals and institutions to acquire the financing required to produce and distribute our products and anticipate this will continue until we accrue sufficient capital reserves to finance all of our productions independently.

We intend to meet our cash requirements for the next 12 months through a combination of debt financing and equity financing and partnerships with finance groups on television and movie projects.





Impact of COVID-19 Pandemic

Our business could be affected by the recent outbreak of the COVID-19 disease. With an aim to contain the COVID-19 outbreak, the PRC government has imposed various strict measures across the PRC including, but not limited to, travel restrictions, mandatory quarantine requirements, and postponed resumption of business operations. Considering the features of our business in the media industries, we experienced business disruption as a result of those measures to contain the COVID-19 outbreak. Additionally, as COVID-19 continues to evolve into a worldwide health crisis, it has adversely affected the global economy and financial markets. If the COVID-19 outbreak is not effectively controlled in a short period of time, our business and results of operations could be adversely affected to the extent the COVID-19 outbreak harms the China or world economy generally. The extent to which the COVID-19 outbreak impacts our financial condition and results of operations for the full year of 2020 cannot be reasonably estimated at this time and will depend on future developments that currently cannot be predicted, including new information which may emerge concerning the severity of the COVID-19 outbreak and the actions to contain the COVID-19 outbreak or treat its impact.

Critical Accounting Policies and Estimates

Please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2019 10-K for disclosures regarding our critical accounting policies and estimates. The interim financial statements follow the same accounting policies and methods of computations as those for the year ended June 30, 2019.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.





Inflation

The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.





Audit Committee

The functions of the audit committee are currently carried out by our Board of Directors, who has determined that we do not have an audit committee financial expert on our Board of Directors to carry out the duties of the audit committee. The Board of Directors has determined that the cost of hiring a financial expert to act as a director and to be a member

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of the audit committee or otherwise perform audit committee functions outweighs the benefits of having a financial expert on the audit committee.

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