CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE YEARS ENDING 12/31/2020 and 12/31/2019
TABLE OF CONTENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 1-2 |
CONSOLIDATED BALANCE SHEETS | 3 |
CONSOLIDATED STATEMENTS OF OPERATIONS | 4 |
CONSOLIDATED STATEMENTS OF CASH FLOWS | 5 |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY | 6 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | 7 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Hollywall Entertainment, Inc
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Hollywall Entertainment, Inc (the "Company") as of December 31, 2020 and 2019, and the related consolidated statements of operations, changes in stockholders' deficit and cash flows for the years then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Substantial Doubt about the Company's Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 5, the Company has incurred net losses and negative cash flow from operations since inception. These factors, and the need for additional financing in order for the Company to meet its business plans raises substantial doubt about the Company's ability to continue as a going concern. Our opinion is not modified with respect to that matter.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
3001 N. Rocky Point Dr., Suite 200 i Tampa, Florida 33607 i 813.367-3527
1
Impairment of Long-Lived Assets
As described in Note 3 to the Company's consolidated financial statements, when facts and circumstances indicate that the carrying value of long-lived assets may not be recoverable, management assesses the recoverability of the carrying value by preparing estimates of revenues and the resulting gross profit and cash flows. If the sum of the expected future cash flows is less than the carrying amount, an impairment loss is recognized for the amount by which the carrying amount of the asset exceeds fair value.
We identified the Company's application of impairment of long-lived assets as a critical audit matter. The principal considerations for our determination of this critical audit matter related to the high degree of subjectivity in the Company's judgments in determining the qualitative factors. Auditing these judgments and assumptions by the Company involves auditor judgment due to the nature and extent of audit evidence and effort required to address these matters.
The primary procedures we performed to address these critical audit matters included the following:
- We obtained management's cash flow and impairment analysis on the intangibles, as well as a third party valuation report, and performed the following procedures:
- Reviewed the cash flow analysis and third party valuation report.
- Had a second independent valuation firm review the Company's third party valuation report to assess the methods and assumptions used for reasonableness.
- Tested supporting documentation related to management's conclusion that the expected future cash flows is greater than the carrying value.
- Assessed the assumptions used by management and evaluated the appropriateness of management's application of their accounting policies, along with their use of estimates, in the determination that no impairment exists.
We have served as the Company's auditor since 2020.
Tampa, Florida
April 18, 2022
2
Hollywall Entertainment, Inc. and Subsidiaries
Consolidated Balance Sheets
As of | |||||
ASSETS | 12/31/2020 | 12/31/2019 | |||
(Restated) | |||||
Current Assets | |||||
Cash and Cash Equivalents | $ | 44,948 | $ | 3,945 | |
Total Current Assets | 44,948 | 3,945 | |||
Property and Equipment, net | 51,104 | 70,476 | |||
Intangibles, net | 21,588,889 | 26,055,556 | |||
TOTAL ASSETS | $ | 21,684,941 | $ | 26,129,977 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Current Liabilities | |||||
Accounts Payable | $ | 26,228 | $ | 52,207 | |
Accrued Expenses | - | 621,059 | |||
Convertible Notes Payable | - | 588,750 | |||
Total Current Liabilities | 26,228 | 1,262,016 | |||
TOTAL LIABILITIES | 26,228 | 1,262,016 | |||
Commitments and Contingencies (Note 13) | |||||
STOCKHOLDERS' EQUITY | |||||
Preferred Stock, $0.001 par value, 200,000 shares | |||||
authorized, 99,391 issued and outstanding | 99 | 99 | |||
Common Stock, $0.001 par value; 300,000,000 shares | |||||
authorized, 89,796,357 and 71,325,857 issued and | |||||
outstanding at December 31, 2020 and 2019, respectively | 89,796 | 71,325 | |||
Common Stock to be Issued | 881,358 | 2,068,250 | |||
Unearned Stock Compensation | (2,351,000) | (3,197,000) | |||
Treasury Stock | (7,000) | - | |||
Additional Paid-In Capital | 67,668,568 | 65,650,885 | |||
Accumulated Deficit | (44,623,108) | (39,725,598) | |||
Total Stockholders' Equity | 21,658,713 | 24,867,961 | |||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 21,684,941 | $ | 26,129,977 | |
THE ACCOMPANYING FOOTNOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS | 3 |
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Hollywall Entertainment Inc. published this content on 29 June 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 June 2022 17:11:35 UTC.