Changsheng International Group Ltd - Quarter Report: 2014 March (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

Anchorage International Holdings Corp.

(Exact name of registrant as specified in its charter)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [ ] Yes [X] 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.

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 938,880,000 as of May 20, 2014.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Our financial statements included in this Form 10-Q are as follows:

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended March 31, 2014 are not necessarily indicative of the results that can be expected for the full year.

ANCHORAGE INTERNATIONAL HOLDINGS CORP.

(fka GLOBAL KARAOKE NETWORK, INC.

(A Development Stage Company)

Balance Sheets

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

ANCHORAGE INTERNATIONAL HOLDINGS CORP.

(fka GLOBAL KARAOKE NETWORK, INC.

(A Development Stage Company)

Statements of Operations

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

ANCHORAGE INTERNATIONAL HOLDINGS CORP.

(fka GLOBAL KARAOKE NETWORK, INC.

(A Development Stage Company)

Statements of Cash Flows

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

ANCHORAGE INTERNATIONAL HOLDINGS CORP.

(fka GLOBAL KARAOKE NETWORK, INC.)

(A Development Stage Company)

Notes to the Unaudited Financial Statements

March 31, 2014

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Anchorage International Holdings Corp. (the "Company") was incorporated as MojoRepublik, Inc. in the state of Delaware on September 10, 2007. On October 1, 2008, the Company changed its name to Republik Media and Entertainment, Ltd. The Company conducted business through its two wholly-owned subsidiaries, MojoRepublik, LLC and LiveBrew.com, LLC. MojoRepublik, LLC, a wholly-owned subsidiary of the Company, was organized on June 14, 2007 in the State of Nevada. MojoRepublik, LLC was in the business of developing and promoting a website, www.mojorepublik.com. LiveBrew.com, LLC, a wholly-owned subsidiary of the Company, was organized on May 23, 2008 in the State of Nevada. LiveBrew.com, LLC was in the business of organizing and promoting live events.

As reported in the Form 8-K filed on August 4, 2011, effective August 3, 2011, and upon the prior approval of the Company’s board of directors and a majority of its shareholders, the Company’s corporate name was changed to "Global Karaoke Network, Inc." Contemporaneously with the name change, the Company decided to stop pursuing its former business plans.  

On September 26, 2011, the Company agreed to transfer all membership units owned in its two wholly-owned subsidiaries to a former officer of the Company who is also the Company’s former majority stockholder in exchange for the assumption of all liabilities relating to the subsidiaries and for the cancellation of outstanding promissory notes.

On November 17, 2011, the Company’s majority shareholder sold all of his shares in the Company to an individual who now holds 82.82% of the Company’s total issued and outstanding stock.

On May 21, 2012, the Company entered into a license and revenue sharing agreement for an exclusive worldwide license to access, use, market and promote the Internet website MeAndMic.com as further discussed in Note 8.

Effective August 26, 2013, the Company's name was changed to "Anchorage International Holdings Corp." Contemporaneously with the name change, the Company decided to stop pursuing its former business plans and agreed to a contract termination of its license and revenue sharing agreement related to the website MeAndMic.com.

The Company is currently evaluating alternative business plans.

NOTE 2 – BASIS OF PRESENTATION

In the opinion of management, the accompanying unaudited interim financial statements contain all adjustments (which include only normal recurring adjustments) and disclosures necessary to present fairly the Company's financial position, results of operations, and cash flows at March 31, 2014 and for all periods presented herein.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These unaudited financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2013, filed on October 15, 2013. The results of operations for the period ended March 31, 2014 are not necessarily indicative of the operating results for the full year.

The Company is currently in the development stage and has not realized significant sales through March 31, 2014. A development stage company is defined as one in which all efforts are devoted substantially to establishing a new business and even if planned principal operations have commenced, revenues are insignificant.

ANCHORAGE INTERNATIONAL HOLDINGS CORP.

(fka GLOBAL KARAOKE NETWORK, INC.)

(A Development Stage Company)

Notes to the Unaudited Financial Statements

March 31, 2014

NOTE 3 - GOING CONCERN

The Company's financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. The Company has incurred operating losses since inception. The Company has realized net losses from inception totaling $572,601 and has a working capital deficiency of $186,228 and is dependent on loans from its president to fund operations. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its operating expenses and seeking equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

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

NOTE 4 – DISCONTINUED OPERATIONS

On September 26, 2011, the Company agreed to transfer all membership units owned in its two wholly-owned subsidiaries, MojoRepublik, LLC and LiveBrew.com, LLC, to a former officer of the Company who is also the Company’s former majority stockholder, in consideration for the cancellation of all outstanding promissory notes held by the former officer and the assumption of other liabilities related to the subsidiaries. The former officer agreed to cancel and/or assume a total of $364,721 which included accounts payable, accrued interest and notes payable. The former officer also received fixed assets which had no carrying value on the date of sale as well as the bank account of one subsidiary with cash of $364. The Company did not recognize a gain on the transaction and recognized the net book deficiency of the subsidiaries sold as an increase in the Company’s additional paid-in-capital of $364,357.

On August 26, 2013, the Company made the decision to abandon the contract for the website MeAndMic.com. The operation pertaining to this business plan has been discontinued.

In accordance with ASC 205, "Presentation of Financial Statements," all results of operations related to the subsidiaries have been reclassified to loss from discontinued operations. Historical operations of the two subsidiaries have also been retroactively reclassified to loss from discontinued operations to be presented separately from results of operations from continuing operations. The statements of cash flows have been retroactively reclassified to separate cash flow activity into cash flows from continuing operations and cash flows from discontinued operations.

Loss from discontinued operations consisted of the following for the three and nine month periods ended March 31, 2014 and 2013 and for the period from inception through March 31, 2014:

ANCHORAGE INTERNATIONAL HOLDINGS CORP.

(fka GLOBAL KARAOKE NETWORK, INC.)

(A Development Stage Company)

Notes to the Unaudited Financial Statements

March 31, 2014

NOTE 5 – INTANGIBLE ASSET

The Company’s intangible asset was comprised of the following on March 31, 2014 and June 30, 2013:

Amortization expense for the periods ended March 31, 2014 ad 2013 was $0 and $340, respectively.

The parties to the license and revenue sharing agreement terminated the contract as of June 30, 2103, resulting in the impairment of the intangible asset. As a result of this, the Company realized an impairment expense on the intangible asset of $1,765 for the year ended June 30, 2013.

NOTE 6 – RELATED PARTY TRANSACTIONS

Various expenses of the Company as well as loans for operating purposes have been paid for or made by the Company's sole officer and director. Loan payable – related party totals $114,630 and $92,740 as of March 31, 2014 and June 30, 2013, respectively. The amounts do not bear interest, are due on demand and unsecured.

During the year, office space was provided by the Company’s sole officer and director. No rent is charged for the use of the space.

NOTE 7 – STOCKHOLDERS’ DEFICIT

Stock Splits

Effective August 3, 2011, the Company’s board of directors and a majority of the Company’s stockholders approved a 90 -for- 1 forward split of the Company’s common stock.

Effective August 11, 2013, the Company’s board of directors and a majority of the Company’s stockholders approved a 2 -for- 1 forward split of the Company’s common stock.

All share figures and results are reflected in the Company’s financial statements on a post-split basis.

Authorized Shares

Effective June 22, 2010, the Company’s board of directors and a majority of the Company’s stockholders approved an amendment to the Company’s Certificate of Incorporation to increase the total authorized common stock of the Company from 100,000,000 shares to 500,000,000 shares.

Effective June 1, 2012, the Company’s board of directors and a majority of the Company’s stockholders approved an amendment to the Company’s Certificate of Incorporation to increase the total authorized common stock of the Company from 500,000,000 shares to 1,000,000,000 shares.

Effective August 11, 2013, the Company's board of directors and a majority of the Company’s stockholders approved an amendment to the Company’s Certificate of Incorporation to increase the total authorized common stock of the Company from 1,000,000,000 shares to 2,000,000,000 shares.

Preferred Stock

The Company has designated 10,000,000 shares of the Company’s authorized capital stock as preferred stock with the Board of Directors authorized to fix the number of shares of any series of preferred stock and to determine the designation of any such series, including the authority to determine the designation of any such series, including the authority to determine the rights, preferences, privileges and restrictions on any such series of preferred stock.

ANCHORAGE INTERNATIONAL HOLDINGS CORP.

(fka GLOBAL KARAOKE NETWORK, INC.)

(A Development Stage Company)

Notes to the Unaudited Financial Statements

March 31, 2014

NOTE 7 – STOCKHOLDERS’ DEFICIT (Continued)

Issuances of Preferred Stock and Common Stock

On May 21, 2012, the Company entered into a license and revenue sharing agreement whereby it agreed to issue 182,400,000 shares of common stock. The shares were valued at $2,268 based on estimated fair market value of the shares on the date of issuance. Effective August 26, 2013, the agreement was terminated and the related shares were not issued.

NOTE 8 – SIGNIFICANT AGREEMENTS

On May 21, 2012, the Company entered into a license and revenue sharing agreement for an exclusive world-wide license to access, use, market and promote the Internet website MeAndMic.com. In consideration for this license, the Company had agreed to issue 182,400,000 shares of common stock. The license was valued at $2,268 per share based on the estimated fair market value of the shares on the date of issuance.

The parties to the agreement abandoned the contract. As a result, the 182,400,000 shares of common stock were not issued and the license was fully impaired.

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

Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements.” These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

Company Overview

We were incorporated as MojoRepublik, Inc. in the state of Delaware on September 10, 2007. On October 1, 2008, we changed our name to Republik Media and Entertainment, Ltd. (the “Company” or “Republik Media” or “Republik”). As Republik, we created two wholly-owned subsidiaries, MojoRepublik, LLC and LiveBrew.com, LLC. MojoRepublik, LLC, a wholly-owned subsidiary of the Company, was organized on June 14, 2007 in the State of Nevada. MojoRepublik, LLC was in the business of developing and promoting a website, www.mojorepublik.com. LiveBrew.com, LLC, a wholly-owned subsidiary of the Company, was organized on May 23, 2008 in the State of Nevada. LiveBrew.com, LLC was in the business of organizing and promoting live events.

As reported in the Form 8-K filed on August 4, 2011, effective August 3, 2011, and upon the prior approval of our board of directors and a majority of our shareholders, our corporate name was changed to “Global Karaoke Network, Inc.” Contemporaneously with the name change, we decided to stop pursuing our former business plans.

In furtherance of our decision to stop pursuing our prior business plans, on September 26, 2011, we entered into an Agreement of Conveyance, Transfer and Assignment of Membership Interests, Assumption of Obligations and Cancellation of Promissory Notes with Mr. David Woo. The foregoing agreement transferred all membership units owned in our two wholly-owned subsidiaries, MojoRepublik, LLC and LiveBrew.com, LLC to Mr. Woo in exchange for Mr. Woo assuming all liabilities relating to the subsidiaries and for the cancellation of all outstanding promissory notes.

On May 21, 2012, we entered into a license and revenue sharing agreement with GT Entertainment, Ltd., a British Columbia company (“GT”), Martin Fletcher, Mark Watkins and Far East Global Trading Ltd. (“Far East”) (the “Agreement”) for an exclusive world-wide license to access, use, market and promote the Internet website MeAndMic.com (“MeAndMic”, the “website”). In consideration for this license we agreed to issue to GT 182,400,000 shares of our common stock. This contract was ultimately abandoned by both parties prior to the issuance of the foregoing shares.

The parties abandoned the contract because our inability to raise sufficient funds for the business plan anticipated by the contract raised doubts as to the website’s commercial viability. As a result of this abandonment, management has been evaluating alternative business opportunities. As we will no longer be pursuing our prior business plan, we filed an amendment to our Certificate of Incorporation on August 26, 2013 changing our name to Anchorage International Holdings Corp.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations for the Nine Months Ended March 31, 2014 and 2013 and the Period from Inception (September 10, 2007) until March 31, 2014

As a result of the sale of MojoRepublik, LLC and LiveBrew.com, LLC, the entities under which we pursued our former business plans, and the abandonment of the contract for the website MeAndMic.com, our operations in the financial statements are now characterized between continuing operations and discontinued operations. The continuing operations reflect our current operations. The discontinued operations reflect the historical operations that we pursued under MojoRepublik, LLC and LiveBrew.com, LLC, the license agreement to operate the website MeAndMic.com and our prior business plans. Detailed below are the results from our continuing operations.

We reported no revenue for the three and nine months ended March 31, 2014 and 2013 and from our inception on September 10, 2007 through March 31, 2014.

Our operating expenses for the three months ended March 31, 2014 and 2013 and from our inception on September 10, 2007 through March 31, 2014, were $6,775, $5,778 and $378,647, respectively. The expenses for the three months ended March 31, 2014 consisted of professional fees of $6,620 and general and administrative expenses of $155. The expenses for the three months ended March 31, 2013 consisted of professional fees of $9,080 offset by a reversal of general and administrative expenses of $3,302 resulting from $3,550 of expenses incurred in the second quarter but identified as, and reclassified as discontinued operations during the third quarter. Our operating expenses from our continuing operations for the nine months ended March 31, 2014 and March 31, 2013 were $42,740 and $41,251, respectively. The expenses for the nine months ended March 31, 2014 consisted of professional fees of $40,667 and general and administrative expenses of $2,073. The expenses for the nine months ended March 31, 2013 consisted of professional fees of $40,147 and general and administrative expenses of $1,104. We suffered a loss of $42,740 and $41,251 from our continuing operations for the nine months ended March 31, 2014 and 2013, respectively. The expenses since our inception on September 10, 2007 through March 31, 2014 have consisted of professional fees of $369,408 and general and administrative expenses of $9,239. We incurred a net loss from continuing operations of $6,775 for the three months ended March 31, 2014, $5,778 for the three months ended March 31, 2013 and $378,647 from our inception on September 10, 2007 through March 31, 2014.

As of March 31, 2014, we have insufficient cash to operate our business at the current level for the next twelve months and insufficient cash to achieve our business goals. As a result of the abandonment of the contract for the MeAndMic.com website, we are currently evaluating alternative business plans. At such time as we decide upon an alternative business plan, we hope to obtain business capital through the use of private equity fundraising or shareholders loans. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all.

The results of our discontinued operations are contained in the financial statements. Additionally, the footnotes to the financial statements include a description of the facts and circumstances leading to the disposal, the manner and timing of that disposal and the carrying amounts of the major classes of assets and liabilities included as part of a disposal group.

Liquidity and Capital Resources

As of March 31, 2014, we had total current assets of $0. Our total current liabilities as of March 31, 2014 were $186,228. We had a working capital deficit of $186,228 as of March 31, 2014.

Cash used in continuing operating activities totaled $21,898 and was used to fund the loss for the period.

Financing Activities consisted primarily of proceeds from related party loans of $21,890 for the nine months ended March 31, 2014.

Based upon our current financial condition, we do not have sufficient cash to operate our business at the current level for the next twelve months. We intend to fund operations through debt and/or equity financing arrangements, which may be insufficient to fund expenditures or other cash requirements. We plan to seek additional financing in a private equity offering to secure funding for operations. There can be no assurance that we will be successful in raising additional funding. If we are not able to secure additional funding, the implementation of our business plan will be impaired. There can be no assurance that such additional financing will be available to us on acceptable terms or at all.

Off Balance Sheet Arrangements

As of March 31, 2014, there were no off balance sheet arrangements.

Going Concern

We have negative working capital, have incurred losses since inception, are dependent on financing from our president, and have not yet received revenues from sales of products or services. These factors create substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustment that might be necessary if we are unable to continue as a going concern.

Our ability to continue as a going concern is dependent on generating cash from the sale of our common stock and/or obtaining debt financing and attaining future profitable operations. Management’s plans include obtaining capital from management and significant shareholders and selling our equity securities and obtaining debt financing to fund our capital requirement and ongoing operations; however, there can be no assurance we will be successful in these efforts.

Item 3. Quantitative and Qualitative Disclosures About Market Risk 

A smaller reporting company is not required to provide the information required by this Item.

Item 4. Controls and Procedures

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2014. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer (who also serves as our Principal Financial and Accounting Officer).

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our Chief Executive Officer who also serves as our Principal Financial and Accounting Officer, to allow timely decisions regarding required disclosure.

Based upon that evaluation, including our Chief Executive Officer who also serves as our Principal Financial and Accounting Officer, we have concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this quarterly report.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934). Management has assessed the effectiveness of our internal control over financial reporting as of March 31, 2014 based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of this assessment, management concluded that, as of March 31, 2014, our internal control over financial reporting was not effective. Our management identified the following material weaknesses in our internal control over financial reporting, which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

We plan to take steps to enhance and improve the design of our internal control over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we hope to implement the following changes during our fiscal year ending June 30, 2014: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out in (i) and (ii) are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

Item 1A: Risk Factors

A smaller reporting company is not required to provide the information required by 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

Item 6. Exhibits

**Provided herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.