QHY GROUP - Quarter Report: 2011 June (Form 10-Q)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED June 30, 2011
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OR
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o
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______ TO ________.
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COMMISSION FILE NUMBER: 001-34210
RHINO PRODUCTIONS, INC.
(Exact Name of Registrant as Specified in its Charter)
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NEVADA
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42-1743094
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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Chaowai Street. Yi 12.
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Kuntai Center Commercial Street 01
Chaoyang District. Beijing China
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100020
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(Address of principal executive offices)
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(Zip code)
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Issuer's telephone number: 212 561-3604
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. Yes x No o
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 o
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.
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o (Do not check if a smaller reporting company)
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Smaller reporting company x
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No o
State the number of shares outstanding of each of the issuer's classes of common equity, for the period covered by this report and as at the latest practicable date:
At August 1, 2011, we had outstanding 3,809,600 shares of common stock.
(A Development Stage Enterprise)
CONTENTS
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FINANCIAL STATEMENTS
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1
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2
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3
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4-8
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9-12
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12
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PART II
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OTHER INFORMATION
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13
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13
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14
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FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RHINO PRODUCTIONS, INC.
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(A Development Stage Enterprise)
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Balance Sheets
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June 30,
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December 31,
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|||||||
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2011
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2010
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|||||||
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(Unaudited)
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||||||||
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ASSETS
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||||||||
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Current assets
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||||||||
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Cash
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$
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1
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$
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1
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||||
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Advance
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-
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12,810
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||||||
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Total current assets
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1
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12,811
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|||||
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Total assets
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$
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1
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$
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12,811
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||||
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LIABILITIES AND STOCKHOLDERS' DEFICIT
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||||||||
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Current liabilities
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||||||||
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Accounts payable
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$
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17,158
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$
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17,801
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Shareholder loan
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32,358
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28,847
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||||||
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Total current liabilities
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49,516
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46,648
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||||||
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Stockholders' Deficit
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||||||||
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Preferred stock, $0.001 par value; 5,000,000 shares authorized, no shares issued or outstanding
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-
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-
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||||||
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Common stock, $0.001 par value; 70,000,000 shares authorized, 3,809,600 shares issued and outstanding at June 30, 2011 and December 31, 2010
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3,810
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3,810
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||||||
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Additional paid in capital
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51,094
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51,094
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||||||
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Deficit accumulated during the development stage
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(104,419
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)
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(88,741
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)
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||||
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Total stockholders' deficit
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(49,515
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)
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(33,837
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)
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||||
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Total liabilities and stockholders' deficit
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$
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1
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$
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12,811
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||||
See accompanying notes to financial statements.
RHINO PRODUCTIONS, INC.
(A Development Stage Enterprise)
Statements of Operations (Unaudited)
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Three months ended June 30,
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Six months ended June 30,
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For the period from October 16, 2007 (inception)
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||||||||||||||||||
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2011
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2010
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2011
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2010
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to June 30, 2011
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||||||||||||||||
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Revenue
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$
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-
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$
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-
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$
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-
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$
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-
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$
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-
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||||||||||
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Expenses
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||||||||||||||||||||
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Professional fees and other
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3,778
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12,503
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15,528
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16,503
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104,119
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|||||||||||||||
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Taxes
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150
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150
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150
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150
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300
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|||||||||||||||
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Total expenses
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3,928
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12,653
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15,678
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16,653
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104,419
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Net loss
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$
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(3,928
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)
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$
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(12,653
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)
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$
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(15,678
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)
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$
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(16,653
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)
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$
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(104,419
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)
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Basic and diluted loss per common share
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$
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(0.00
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)
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$
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(0.00
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)
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$
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(0.00
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)
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$
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(0.00
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)
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||||||||
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Weighted average shares outstanding (basic & diluted)
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3,809,600
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3,809,600
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3,809,600
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3,809,600
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||||||||||||||||
See accompanying notes to financial statements
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RHINO PRODUCTIONS, INC.
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(A Development Stage Enterprise)
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||||||||||||
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Statements of Cash Flows (Unaudited)
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Six months ended
June 30,
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For the period of October 16, 2007 (inception)
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|||||||||||
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2011
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2010
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to June 30, 2011
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||||||||||
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Cash flows from operating activities
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||||||||||||
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Net loss
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$
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(15,678
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)
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$
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(16,653
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)
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$
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(104,419)
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||||
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Adjustments to reconcile net loss to net cash used in operating activities:
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||||||||||||
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Common stock issued for services
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-
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12,000
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Changes in operating assets and liabilities:
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Advance
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12,810
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-
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-
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Accounts payable
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(643)
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9,519
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17,158
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Net cash used in operating activities
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(3,511
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)
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(7,134
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)
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(75,261)
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Net cash used in investing activities
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-
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-
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-
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Cash flows from financing activities
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||||||||||||
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Proceeds from stockholder loans
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3,511
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5,425
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54,243
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Proceeds from shareholder contribution to paid-in capital
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-
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1,709
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1,709
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Proceeds from sale of stock
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-
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-
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19,310
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Net cash provided by financing activities
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3,511
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7,134
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75,262
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Net increase (decrease) in cash
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-
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-
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1
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Cash at beginning of period
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1
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1
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-
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|||||||||
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Cash at end of period
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$
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1
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$
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1
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$
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1
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||||||
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Supplemental disclosure of non-cash investing and financing activities:
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Issuance of 120,000 shares of common stock for professional services
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$
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-
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$
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-
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$
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12,000
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Issuance of 1,200,000 shares of common stock to retire $21,885 of a shareholder loan
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$
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-
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$
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-
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$
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21,885
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Supplemental Cash Flow Information:
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||||||||||||
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Cash paid for interest
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$
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-
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$
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-
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$
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-
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||||||
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Cash paid for income taxes
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$
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-
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$
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-
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$
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-
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||||||
See accompanying notes to financial statements
RHINO PRODUCTIONS, INC.
(A Development Stage Enterprise)
Notes to the Financial Statements (unaudited)
June 30, 2011
Note 1 – Nature of Business
Rhino Productions, Inc. (“Company”) was organized October 16, 2007 under the laws of the State of Nevada for the purpose of providing cost effective, high quality coffee and wine products, accessories and related equipment. The Company currently has no operations nor has it realized revenues from its planned principal business purpose and, in accordance with FASB ASC 915 “Development Stage Entities,” is considered a Development Stage Enterprise.
Note 2 – Significant Accounting Policies
Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash
For the Statements of Cash Flows, all highly liquid investments with maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of June 30, 2011 or December 31, 2010.
Income taxes
The Company accounts for income taxes under FASB ASC 740 "Income Taxes." Under the asset and liability method of FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. 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.
Share Based Expenses
FASB ASC 718 "Compensation - Stock Compensation" prescribes accounting and reporting standards for all stock-based payments awarded to employees, including employee stock options, restricted stock, employee stock purchase plans and stock appreciation rights, and may be classified as either equity or liabilities. The Company determines if a present obligation to settle the share-based payment transaction in cash or other assets exists. A present obligation to settle in cash or other assets exists if: (a) the option to settle by issuing equity instruments lacks commercial substance or (b) the present obligation is implied because of an entity's past practices or stated policies. If a present obligation exists, the transaction should be recognized as a liability; otherwise, the transaction should be recognized as equity. The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50 "Equity - Based Payments to Non-Employees." Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.
RHINO PRODUCTIONS, INC.
(A Development Stage Enterprise)
Notes to the Financial Statements (unaudited)
June 30, 2011
Note 2 – Significant Accounting Policies (continued)
Going Concern
The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s 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 plans to obtain such resources for the Company include (1) obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses, and (2) seeking out and completing a merger with an existing operating company. 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.
Recently Implemented Standards
During 2010, the FASB issued 29 Accounting Standards Codification Updates and through June 30, 2011 has issued seven further Updates. The Company has reviewed these Updates and determined that, to the extent appropriate, the guidance in these Updates is already reflected in our financial statements or does not apply to our operations. Management does not anticipate that those Updates that do not require adoption until a future date will have any material effect on our financial statements.
Note 3 – Advance
The Advance of $12,810 that was outstanding as of December 31, 2010 represented funds advanced by a shareholder to a representative of the Company in order to make future disbursements on behalf of the Company. There was no outstanding balance pertaining to this advance as of June 30, 2011. See Note 4.
Note 4 – Shareholder Loan
The Shareholder Loan of $32,358 that was outstanding as of June 30, 2011 represents funds provided to the Company by a shareholder of the Company. Additional loans were made by the shareholder during the six months ended June 30, 2011 by that shareholder resulting in an increase of this loan in the amount of $3,511 from the December 31, 2010 balance of $28,847. This loan is non-interest bearing and payable on demand.
RHINO PRODUCTIONS, INC.
(A Development Stage Enterprise)
Notes to the Financial Statements (unaudited)
June 30, 2011
Note 5 – Stockholders’ Equity (Deficit)
Preferred stock
The authorized preferred stock of the Company consists of 5,000,000 shares with a par value of $0.001. The Company has no preferred stock issued or outstanding.
Common stock
The authorized common stock of the Company consists of 70,000,000 shares with par value of $0.001. On October 23, 2007, the Company authorized the issuance of 2,350,000 shares of its $0.001 par value common stock in consideration of $5,350 in cash. During the year ended December 31, 2008, the Company issued 134,750 shares of its common stock for $13,475 of cash. Also during the year ended December 31, 2008, the Company issued 2,000 shares of common stock for a $200 subscription receivable which was collected in January 2009. During the year ended December 31, 2009, the Company issued 2,850 shares of common stock for $285 in cash and 120,000 shares of common stock for $12,000 of professional services. In conjunction with a change in control of the Company, the former officer received 1,200,000 shares of common stock in lieu of $21,885 in officer loans advanced to the Company. There were 3,809,600 common shares issued and outstanding as of June 30, 2011 and December 31, 2010.
Net loss per common share
Net loss per share is calculated in accordance with FASB ASC 260, “Earnings Per Share.” The weighted-average number of common shares outstanding during each period is used to compute basic loss per share. Diluted loss per share is computed using the weighted average number of shares and dilutive potential common shares outstanding. Dilutive potential common shares are additional common shares assumed to be exercised.
Basic net loss per common share is based on the weighted average number of shares of common stock outstanding during the period. As of June 30, 2011 and June 30, 2010 and since inception, the Company had no dilutive potential common shares.
Note 6 – Income Taxes
We did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses since inception. When it is more likely than not that a tax asset cannot be realized through future income the Company must allow for this future tax benefit. We provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carryforwards, because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carryforward period.
RHINO PRODUCTIONS, INC.
(A Development Stage Enterprise)
Notes to the Financial Statements (unaudited)
June 30, 2011
Note 6 – Income Taxes (continued)
The Company has not taken a tax position that, if challenged, would have a material effect on the financial statements for the three or six month periods ended June 30, 2011 and June 30, 2010, or during the prior three years applicable under FASB ASC 740. We did not recognize any adjustment to the liability for uncertain tax position and therefore did not record any adjustment to the beginning balance of accumulated deficit on the balance sheet. All tax returns have been appropriately filed by the Company.
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Income tax provision at the federal statutory rate
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35
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%
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||
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Effect of operating losses
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(35
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%)
|
||
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Effective tax rate
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0
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%
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Net deferred tax assets consist of the following:
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June 30,
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December 31,
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|||||||
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2011
|
2010
|
|||||||
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Net operating loss carry forward
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$
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36,547
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$
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31,059
|
||||
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Valuation allowance
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(36,547
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)
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(31,059
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)
|
||||
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Net deferred tax asset
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$
|
-
|
$
|
-
|
||||
A reconciliation of income taxes computed at the statutory rate is as follows:
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For the Six Months Ended
|
||||||||||||
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June 30, 2011
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June 30, 2010
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Since
Inception
|
||||||||||
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Taxes at statutory rate (35%)
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$
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5,487
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$
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5,829
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$
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36,547
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||||||
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Increase in valuation allowance
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(5,487
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)
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(5,829
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)
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(36,547
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)
|
||||||
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Net deferred tax asset
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$
|
-
|
$
|
-
|
$
|
-
|
||||||
The Company did not pay any income taxes during the six months ended June 30, 2011 or June 30, 2010.
The net federal operating loss carry forward will expire from 2027 through 2031. This carry forward may be limited upon the consummation of a business combination under IRC Section 381.
Note 7 – Related Party Transactions
The Company neither owns nor leases any real or personal property. An officer or resident agent of the corporation provides office services without charge. Such costs are immaterial to the financial statements and accordingly, have not been reflected therein. The officers and directors for the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interest. The Company has not formulated a policy for the resolution of such conflicts. See Note 4 regarding a shareholder loan.
RHINO PRODUCTIONS, INC.
(A Development Stage Enterprise)
Notes to the Financial Statements (unaudited)
June 30, 2011
Note 7 – Related Party Transactions (Continued)
The Company has received loans from a shareholder totaling $54,243 since inception. Of this amount, $3,511, $28,847, $19,125 and $2,760 were received during the six months ended June 30, 2011, and years ended December 31, 2010, 2009 and 2008, respectively. The shareholder received 1,200,000 shares of common stock in satisfaction of the shareholder loans made in 2009 and 2008. The loans made bear a 0% interest rate during the period they were due. Imputed interest has been considered but was determined to be immaterial to the financial statements.
Note 8 – Warrants and Options
There are no warrants or options outstanding to acquire any additional shares of common stock of the Company.
Note 9 – Subsequent Events
The Company has evaluated subsequent events through the date the financial statements were issued, and determined there are no events to disclose.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this Quarterly Report and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2010. The matters discussed herein contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, which involve risks and uncertainties. All statements other than statements of historical information provided herein may be deemed to be forward-looking statements. Without limiting the foregoing, the words "believes", "anticipates", "plans", "expects" and similar expressions are intended to identify forward-looking statements. Factors that could cause actual results to differ materially from those reflected in the forward-looking statements include, but are not limited to, those discussed under the heading "Risk Factors" and elsewhere in this report and the risks discussed in our other filings with the SEC. 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 herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis, judgment, belief or expectation only as of the date hereof. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
As used in this Quarterly Report, references to "our company," "Company," "we" or "us" refers to Rhino Productions, Inc., unless otherwise specifically stated or the context requires otherwise.
Introduction
We were incorporated under Nevada law on October 16, 2007. We are a development stage company that has not generated any revenue from operations since inception. We are a “shell company” (as that term is defined in Rule 12b-2 under the Exchange Act).
Plan of Operations
We will attempt to acquire other assets or business operations that will maximize shareholder value. No specific assets or businesses have been definitively identified and there is no certainty that any such assets or business will be identified or any transactions will be consummated.
We expect that we will need to raise funds in order to effectuate our business plan. We will seek to establish or acquire businesses or assets with funds raised either via the issuance of shares or debt. There can be no assurance that additional capital will be available to us. We may seek to raise the required capital by other means. We may have to issue debt or equity or enter into a strategic arrangement with a third party. We currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources. Since we have no such arrangements or plans currently in effect, our inability to raise funds will have a severe negative impact on our ability to remain a viable company. In pursuing the foregoing goals, we may seek to expand or change the composition of the Board or make changes to our current capital structure, including issuing additional shares or debt and adopting a stock option plan.
Results of Operations
|
Three months ended June 30,
|
For the period from
October 16, 2007
(inception)
|
|||||||||||
|
2011
|
2010
|
to June 30, 2011
|
||||||||||
|
Revenue
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
|
Expenses
|
||||||||||||
|
Professional fees and other
|
3,778
|
12,503
|
104,119
|
|||||||||
|
Taxes
|
150
|
150
|
300
|
|||||||||
|
Total expenses
|
3,928
|
12,653
|
104,419
|
)
|
||||||||
|
Net loss
|
$
|
(3,928
|
)
|
$
|
(12,653
|
)
|
$
|
(104,419)
|
||||
|
Basic and diluted loss per common share
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
||||||
|
Weighted average shares outstanding
|
3,809,600
|
3,809,600
|
||||||||||
|
Six months ended June 30,
|
||||||||
|
2011
|
2010
|
|||||||
|
Revenue
|
$
|
-
|
$
|
-
|
||||
|
Expenses
|
||||||||
|
Professional fees and other
|
15,528
|
16,503
|
||||||
|
Taxes
|
150
|
150
|
||||||
|
Total expenses
|
15,678
|
16,653
|
||||||
|
Net loss
|
$
|
(15,678
|
)
|
$
|
(16,653
|
)
|
||
|
Basic and diluted loss per common share
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
||
|
Weighted average shares outstanding
|
3,809,600
|
3,809,600
|
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We have had no revenues from inception through June 30, 2011. We had a cumulative net loss from inception through June 30, 2011 of $104,419 and a cumulative net loss from inception through June 30, 2010 of $72,536. We do not expect to generate any revenues over the next twelve months. Our principal business objective for the next twelve months will be to seek, investigate and, if such investigation warrants, engage in a business combination with a private entity whose business presents an opportunity for our shareholders.
During the next twelve months we anticipate incurring costs related to filing of Exchange Act reports, and costs relating to consummating an acquisition. We believe we will be able to meet these costs through use of funds in our treasury and additional amounts, as necessary, to be loaned by or invested in us by our stockholders, management or other investors. We have no specific plans, understandings or agreements with respect to the raising of such funds, and we may seek to raise the required capital by the issuance of equity or debt securities or by other means. Since we have no such arrangements or plans currently in effect, our inability to raise funds for the consummation of an acquisition may have a severe negative impact on our ability to become a viable company.
Financial Condition
Our auditor's going concern opinion for prior years and the notation in the financial statements indicate that we do not have significant cash or other material assets and that we are relying on advances from stockholders, officers and directors to meet limited operating expenses. We do not have sufficient cash or other material assets nor do we have sufficient operations or an established source of revenue to cover our operational costs that would allow us to continue as a going concern.
Since we have had no operating history nor any revenues or earnings from operations, with no significant assets or financial resources, we will in all likelihood sustain operating expenses without corresponding revenues, at least until the consummation of a business combination. This may result in our incurring a net operating loss which will increase continuously until we can consummate a business combination with a profitable business opportunity and consummate such a business combination.
We are dependent upon our principal stockholder and officer to meet any de minimis costs that we may incur.
Liquidity and Capital Resources
As of June 30, 2011, we had a stockholders’ deficit of $(49,515), as compared to $(33,837) as of December 31, 2010. A stockholder of the Company advanced funds totaling $21,885 for expenses of the Company since 2008 which has been retired by the issuance of 1,200,000 shares of common stock. Another shareholder provided $1,709 to the Company in the form of additional contributed capital, and $32,358 in the form of a non-interest bearing demand note.
The capital requirements relating to the acquisition of an operating business may be significant.
Management plans to rely on the proceeds from a debt or equity financing and the sale of shares held by it to finance its ongoing operations. During 2011, we intend to continue to seek additional capital in order to meet our cash flow and working capital. There is no assurance that we will be successful in achieving any such financing or raise sufficient capital to fund our operations and further development. We cannot assure you that financing will be available to us on commercially reasonable terms, if at all. If we are not successful in sourcing significant additional capital in the near future, we will be required to significantly curtail or cease ongoing operations and consider alternatives that would have a material adverse affect on our business, results of operations and financial condition.
Off-Balance Sheet Arrangements: None.
Critical Accounting Policies and Estimates
We prepare our financial statements in accordance with accounting principles generally accepted in the United States, and make estimates and assumptions that affect our reported amounts of assets, liabilities, revenue and expenses. We base our estimates on historical experience and other assumptions that we believe are reasonable in the circumstances. Actual results may differ from these estimates.
The following critical accounting policies affect our more significant estimates and assumptions used in preparing our financial statements.
Our financial statements have been prepared on the going concern basis, which assumes the realization of assets and liquidation of liabilities in the normal course of operations. If we were not to continue as a going concern, we would likely not be able to realize on our assets at values comparable to the carrying value or the fair value estimates reflected in the balances set out in the preparation of our financial statements. There can be no assurances that we will be successful in generating additional cash from equity or other sources to be used for operations. Our financial statements do not include any adjustments to the recoverability of assets and classification of assets and liabilities that might be necessary should we be unable to continue as a going concern.
Going Concern
The nature of our financial status makes us lack the characteristics of a going concern. This is because the company, due to its financial condition, may have to seek loans or the sale of its securities to raise cash to meet its cash needs. We have no revenue and no cash. The level of current operations does not sustain our expenses and we have no commitments for obtaining additional capital. These factors, among others, raise substantial doubt about our ability to continue as a going concern.
Critical Accounting Policies and Recent Accounting Pronouncements
See Note 2 - Significant Accounting Policies, in Item 1, Financial Statements, herein for a discussion of the Company’s critical accounting policies and the effect of recent accounting pronouncements.
(a) Evaluation of Disclosure Controls and Procedures.
Management of Rhino Productions, Inc. is responsible for maintaining disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. In addition, the disclosure controls and procedures must ensure that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required financial and other required disclosures.
At the end of the period covered by this report, an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13(a)-15(e) and 15(d)-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)) was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, Ya Kun Song. Based on her evaluation of our disclosure controls and procedures, she concluded that during the period covered by this report, such disclosure controls and procedures were not effective. This was due to our status as a shell company and our limited resources, including the absence of a financial staff with accounting and financial expertise and deficiencies in the design or operation of our internal control over financial reporting that adversely affected our disclosure controls and that may be considered to be “material weaknesses.”
We plan to designate individuals responsible for identifying reportable developments and to implement procedures designed to remediate the material weakness by focusing additional attention and resources in our internal accounting functions. However, the material weakness will not be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.
(b) Changes in Internal Control over Financial Reporting. There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) during our most recently completed fiscal quarter which is the subject of this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
There are inherent limitations in any system of internal control. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that its objectives are met. Further, the design of a control system must consider that resources are not unlimited and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgment in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls.
Item 1A – RISK FACTORS.
There have been no material changes in the risk factors previously disclosed in the Registrant's Form 10-K for the fiscal year ended December 31, 2010, which are incorporated by reference into this report.
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31.1
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Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
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32.1
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Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Statement of Operations for the three and six month periods ended June 30, 2011 and 2010, (ii) the Balance Sheet at June 30, 2011 and December 31, 2010, (iii) the Statement of Cash Flows for the six month periods ended June 30, 2011 and 2010 and (iv) the notes to the Condensed Consolidated Financial Statements.
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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.
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RHINO PRODUCTIONS, INC.
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Dated: August 11, 2011
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By:
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/s/ Ya Kun Song
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Ya Kun Song
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Chief Executive Officer, President and
Chief Financial Officer
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