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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
Media Communications Group, Inc.
(Name of Small Business Issuer in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
62-1405229
(I.R.S. Employer Identification No.)
3840 Dickerson Road Nashville, TN 37210
(Address of principle executive offices)(State, zip)
615-672-8645
(Issuer's telephone number)
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
N/A N/A
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Securities to be registered under Section 12(g) of the Act:
Common Stock, par value $0.001 per share
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(Title of Class)
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MEDIA COMMUNICATIONS GROUP, INC.
FORM 10-SB
TABLE OF CONTENTS
PART I
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Item 1. Description of Business.............................................................. 1
Item 2. Management's Discussion and Analysis or Plan of Operation............................ 3
Item 3. Description of Property.............................................................. 5
Item 4. Security Ownership of Certain Beneficial Owners
And Management................................................................... 6
Item 5. Directors, Executive Officers, Promoters
And Control Persons............................................................. 7
Item 6. Executive Compensation............................................................... 8
Item 7. Certain Relationships and Related Transactions....................................... 9
Item 8. Description of Securities............................................................ 9
PART II
Item 1. Market Price of and Dividends on the Registrant's
Common Equity and Other Shareholder Matters......................................... 10
Item 2. Legal Proceedings.................................................................... 11
Item 3. Changes in and Disagreements with Accountants........................................ 11
Item 4. Recent Sales of Unregistered Securities.............................................. 11
Item 5. Indemnification of Directors and Officers............................................ 12
PART F/S
Financial Statements................................................................. 14-25
PART III
Item 1. Index to Exhibits.................................................................... 26
Signatures........................................................................... 27
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To simplify the language in this Registration Statement Media Communications
Group, Inc. is referred to herein as "the Company" or "We". PART I
Item 1. Description of Business
Business Development
Media Communications Group, Inc. was duly incorporated in Delaware on September
9, 1989.
We have not been involved in any bankruptcy, receivership or similar proceeding.
We have not been involved in any material reclassification, merger
consolidation, or purchase or sale of a significant amount of assets not in the
ordinary course of business.
Business of Issuer
The Company's business consists of the production, marketing, distribution and
offering of audio, video and print publication products in the music,
entertainment and education marketplace.
The Company is presently reviewing and evaluating several companies for a
possible acquisition in the music industry and products that it feels would
reflect its interest in the music and educational areas. It is the intent of the
Company to acquire one of these companies under review since they already have
established proven artists and products. These companies are already established
as music production, publication and distribution companies in the music
entertainment industry.
Marketing Strategy
The Company's short-term marketing strategy is to set up a distribution channel
for sales through major retailers. The Company plans to promote its products and
brand names with the use of industry and consumer magazine advertising,
co-operative advertising campaigns with other dealers and distributors, as well
as an aggressive display and national trade show schedule.
Strategic alliances and licensing are a major plan of the Company's long-term
marketing strategy to enter new and existing markets making use of established
distribution and customer bases of the Company's partners and licensees.
Competition.
The Companies business activities are in a highly competitive field. In addition
to competing with individuals in the Companies field, with high level of
expertise greatly exceeding management's abilities, the Company will be
competing with numerous other entities, most of which are large, well
established companies with greater assets and financial reserves than the
Company possess. Consequently, we will be at a competitive disadvantage in
identifying possible business opportunities and successfully completing a
business opportunity. The Company is, and will be an insignificant factor in the
current competitive strata of the Marketing industry. We have no patents,
trademarks, licenses, concessions, franchises, royalty agreements, or labor
contracts.
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Government Regulation.
Although we will be subject to regulation under the Exchange Act, We believe we
will not be subject to regulation under the Investment Company Act of 1940,
insofar as we will not be engaged in the business of investing or trading in
securities.
We are registering a class of its securities on this Form 10-SB registration
statement on a voluntary basis. We have no obligation to file a Form 10-SB
registration statement pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). We believe that by filing this Form 10-SB and
being obligated to file reports subject to Section 13 of the Exchange Act, we
can attract a business opportunity candidate in the music entertainment and
education industry. We believe a business opportunity will involve a transaction
with a corporation not requiring cash or assets, but which desires to establish
both a public market for its common stock and the perceived advantages of status
as an Exchange Act registered corporation. There is no assurance that our
assumption is correct.
Section 13 and 15(d) of the Exchange Act, require companies subject thereto to
provide Certain information about significant acquisitions, including certified
financial statements for the company acquired, covering one, two or three years,
depending on the relative size of the acquisition. The time and additional costs
that may be incurred by some target entities to prepare such statements may
preclude our consummation of an otherwise desirable acquisition. Acquisition
prospects that do not have or are unable to obtain the required audited
financial statements may not be appropriate for acquisition so long as the
reporting requirements of the Exchange Act are applicable.
We have not conducted, nor have others made available to us, results of market
research indicating that market demand exists for the transactions contemplated
by us.
There are no collective bargaining agreements or employment agreements with
Clifford Fryar, our President and Director or with Dottie Snow our Vice
President and Secretary. Dottie Snow participates in the running of the Company
without compensation. We do not plan to make any change in the number of
employees of the Company to evaluate business opportunities. The need for
additional employees and their availability will be addressed in connection with
our decision of whether or not to pursue a business opportunity.
Employees
The Company has two employees. (See "Directors and Executive Officers.")
Offices
We currently operate without charge out of a 990 sq. ft space donated by the
Company's president, and sole Director, Clifford Fryar, at 3840 Dickerson Rd.
Nashville, TN 37210. The Company believes that the above facilities are adequate
for the foreseeable needs of the Company; however, eventually as the Company
expands its employee base, it anticipates adding additional office space.
Reports to Security Holders
The Company has elected December 31, year-end. Thereafter, the Company will
furnish its shareholders with annual reports containing audited financial
statements within 90 days after the Company's year-end.
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From time to time, the Company may also furnish its shareholders with such other
information, as it may deem appropriate, relative to the business operations of
the Company. Such information may include news of a change in the management,
purpose and control of the Company, or any material condition affecting the
Company.
In addition to receipt and examination of annual report and other information,
shareholders of record shall as required, be allowed to examine the books and
records of the company at a reasonable time upon written demand.
The public may read and copy any materials filed with the SEC at the SEC's
Public Reference Room located at 450 Fifth Street, N.W., Washington, D.C. 20549.
Information on the operations of the Public Reference Room can be obtained by
calling 1-800-SEC-0330. The SEC also maintains an Internet site that contains
reports, proxy and information statements, and other information regarding
issuers @ http://www.sec.gov.
Item 2. Plan of Operation
In the next twelve months, we plan to seek out business opportunity candidates.
We believe that this plan of operations can be conducted through the efforts of
current management and will not require any additional funds. We anticipate that
additional business opportunities will be available to us through the contacts
of Clifford Fryar, our President and sole Director and Dottie Snow our Vice
President and Secretary. The final evaluation of these specific business
opportunities and the negotiation, drafting and execution of relevant
agreements, and other instruments will be done by Clifford Fryar or under his
direction. We plan to investigate, to the extent believed reasonable by us,
these potential business opportunities. Due to our limited experience in
business analysis, we may not discover or adequately evaluate adverse facts
about the opportunity to be acquired.
We anticipate that we will incur nominal expenses in the implementation of our
business plan described herein. Because we have limited capital with which to
pay these expenses, our present management, which consists of Clifford Fryar,
will pay any additional charges with his personal funds, as interest free loans
to the Company. However, the only opportunity that we may have for repayment of
these loans will be from a business opportunity. The repayment of any loans made
on behalf of the Company will not impede, or be made conditional in any manner,
to consummation of a proposed transaction.
We have several business opportunities in mind and have not yet entered into any
negotiations regarding these business opportunities. None of our management,
affiliates or any promoters have engaged in any preliminary contact or
discussions with any representative of any other company regarding the
possibility of a business opportunity between us and such other Company as of
the date of this registration statement. We will not restrict our search to any
specific business, industry, or geographical location and we may participate in
a business opportunity of virtually any kind or nature. This discussion of the
proposed business is purposefully general and is not meant to be restrictive of
the Company's virtually unlimited discretion to search for and enter into
potential business opportunities. We anticipate that we will be able to
participate in only one potential business opportunity because we have no assets
and limited financial resources. To date, we have not developed any criteria for
the selection of business opportunities.
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We will seek to expand through acquisitions which are not currently identified
and which entail risks, which you will not have a basis to evaluate. We may seek
to expand our operations by acquiring companies in businesses that we believe
will complement or enhance our business. We cannot assure you that we will be
able to ultimately effect any acquisition, successfully integrate any acquired
business in our operations or otherwise successfully develop our operations. We
have not established any minimum criteria for any acquisition and our management
may have complete discretion in determining the terms of any acquisition.
Consequently, there is no basis for you to evaluate the specific merits or risks
of any potential acquisition that we may undertake.
We anticipate that Clifford Fryar the Company's President and sole Director will
investigate, to the extent believed necessary by him, these business
opportunities.
Due to general economic conditions, rapid technological advances being made in
some industries and shortages of available capital, we believe that there are
numerous firms seeking the perceived benefits of a fully reporting public
company. Such perceived benefits may include facilitating or improving the terms
on which additional equity financing may be sought, providing liquidity for
incentive stock options or similar benefits to key employees, providing
liquidity (subject to restrictions of applicable statutes) for all shareholders
and other factors.
Potentially, available business opportunities may occur in many different
industries and at various stages of development, all of which make the task of
comparative investigation and analysis of such business opportunities extremely
difficult and complex. We do not and will not have capital to provide the owners
of business opportunities with any significant cash or other assets. However, we
believe we can offer owners of acquisition candidates the opportunity to acquire
a controlling ownership interest in a publicly registered company without
incurring the cost and time required to become a fully reporting company or to
conduct an initial public offering. The owners of the business opportunities
will, however, incur significant legal and accounting costs in connection with
acquisition of a business opportunity, including the costs of preparing Form
8-Ks, 10-Ks or 10-KSBs, agreements and related reports and documents. The
Exchange Act specifically requires that any merger or acquisition candidate,
comply with all applicable reporting requirements, which include providing
audited financial statements to be included within the numerous filings relevant
to complying with the Exchange Act. Nevertheless, we have not conducted market
research and are not aware of statistical data, which would support the
perceived benefits for the owners of a business opportunity.
Prior to making a decision regarding a business opportunity, we plan to request
that we be provided with written materials regarding the business opportunity,
containing such items as a description of products, services and company
history, management resumes, financial information, available projections with
related assumptions upon which they are based, evidence of existing patents,
trademarks or services, marks or rights thereto, present and proposed forms of
compensation to management, a description of transactions between the
prospective entity and its affiliates during relevant periods, a description of
Present and required facilities, an analysis of risk and competitive conditions,
and, other information deemed relevant.
We do not plan to raise any capital at the present time, by private placement,
public offerings, pursuant to Regulation S promulgated under the Act, as
amended, or by any means whatsoever. Further, there are no plans, proposals,
arrangements or understandings with respect to the sale or issuance of
additional securities.
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We anticipate that any securities issued as a result of a business opportunity
will be issued in reliance upon exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of our transaction, we may agree to register all or a part of
such securities immediately after the transaction is consummated or at specified
times thereafter. Until such time as this occurs, we will not attempt to
register any additional securities. The issuance of substantial additional
securities and their potential sale into any trading market which may develop in
our securities may have a depressive effect on the value of our securities in
the future, if such a market develops, of which there is no assurance. The
completion of any business opportunity may result in a significant issuance of
shares and substantial dilution to our present stockholders.
We do not plan to make any changes in the number of employees of the Company.
Item 3. Description of Property
We currently have no material assets and we do not own or lease any real or
personal property. We currently operate without charge out of a 990 sq. ft space
donated by the Company's president, and sole Director, Clifford Fryar, at 3840
Dickerson Rd. Nashville, TN 37210 we believe that this space is sufficient for
us at this time.
We have no policy with respect to investments in real estate interests in real
estate and no policy with respect to investments in real estate mortgages.
Further, we have no policy with respect to investments in securities of or
interests in persons primarily engaged in real estate activities.
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Item 4. Security Ownership of Certain Beneficial Owners and Management
As of June 1, 2000 there were 54,236,664 Shares of our common stock, $0.001 par
value outstanding. The following tabulates holdings of our shares of common
stock by each person who, as of June 1, 2000, holds of record or is known by
management to own beneficially more than 5% of the Common Shares and, in
addition, by all Directors and officers of the Company individually and as a
group. Each named beneficial owner has sole voting and investment power with
respect to the shares set forth opposite his name.
Security Ownership of Beneficial Owners (1):
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Title of Class Name & Address Amount Nature Percent
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Common Stock Questco 4,550,000 Direct 8.4%
Route 1 Box 58
Idabel, OK 74745
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Common Stock Pillars of Fire 3,750,000 Direct 6.9%
PO Box 148
Broken Bow, OK 74728
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Security Ownership of Management (2):
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Title of Class Name & Address Amount Nature Percent
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Common Stock Clifford Fryar 1,005,000 1.85
328 Janette Pike
Goodlettsville, TN 37072
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Common Stock Dottie Snow 105,000 .01%
3840 Dickerson Rd
Nashville, TN
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(1) Pursuant to Rule 13-d-3 under the Securities Exchange Act of 1934, as
amended, beneficial ownership of a security consists of sole or shared voting
power (including the power to vote or direct the voting) and/or sole or shared
investment power (including the power to dispose or direct the disposition) with
respect to a security whether through a contract, arrangement, understanding,
relationship or otherwise. Unless otherwise indicated, each person indicated
above has sole power to vote, or dispose or direct the disposition of all shares
beneficially owned, subject to applicable unity property laws.
(2) This table is based upon information obtained from our stock records. Unless
otherwise indicated in the footnotes to the above table and subject to community
property laws where applicable, we believe that each shareholder named in the
above table has sole or shared voting and investment power with respect to the
shares indicated as beneficially owned.
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Change of Control.
There are currently no arrangements, which would result in a change of control
of the Company. A business opportunity involving the issuance of our common
shares will, in all likelihood, result in shareholders of a private company
obtaining a controlling interest in our Company. Any such business opportunity
may require our management to sell or transfer all or portions of our common
shares held by him, or resign as a member of our Board of Directors. The
resulting change in control of the Company could result in the removal of the
present management of the Company and a corresponding reduction or elimination
of their participation in the future affairs of the Company.
Item 5. Directors, Executive Officers, Promoters and Control Persons
The term of office of each director is one year and until his successor is
elected at the Company's annual shareholders' meeting and is qualified, subject
to removal by the shareholders. The term of office for each officer is for one
year and until a successor is elected at the annual meeting of the board of
directors and is qualified, subject to removal by the board of directors.
Clifford Fryar, 50 Years of age, is the President and sole Director of the
Company. Mr. Fryar has served as President and Director of the Company since
September 9, 1989 and his terms expire on December 31, 2000.
Mr. Fryar was raised in central California and moved to Tenessee in 1982. From
1973 to 1982 Mr. Fryar owned and operated a domestic appliances service
business. During this time he was also a disc jockey for KBOS/KGEN Radio,
Tulare, CA., and KBIF Radio, Fresno, CA., as well as an auxiliary police officer
for the Tulare, California, Police Department. In 1980 he expanded his business
into sales with the acquisition of a 13-year-old appliance business in
Porterville, California.
Mr. Fryar has organized and managed a country/variety band, as well as performed
package and front shows for major artists such as: George Jones, Charlie
Daniels, John Connelly and others.
Ms. Snow is the Secretary and Vice President of the Company. She resides in
Nashville Tennessee and has extensive background in administration and
organization and the Music and Entertainment industry. She holds a B.A. in
Television Production and special skills in set designer/set dresser, P.A., and
video.
Ms. Snow has been in over 24 films such as CBS/Koragen & Company, TNT movie
produced by Jane Fonda, L.A. Connections, The Voyage, Last Dance, Paper
Mansions/Dottie West Story, Crocodile Shoes and many more. She has also been in
over 36 Television Shows and 17 Theater Plays.
We currently have no significant employees other than the officers and we do not
anticipate hiring any in the near future. There are no family relationships
among directors, executive officers, or nominees for such positions. In the last
five years, no director, executive officer, promoter or control person of the
Company has been involved in any legal proceedings material to the evaluation of
the ability or integrity of any of the aforementioned persons.
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Item 6. Executive Compensation
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Name Position Year Salary Bonus Other Stock L/TP All Other
Options
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Clifford Fryar President 2000 0 0 0 0 0
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Dottie Snow Secretary 2000 0 0 0 0 0
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Options/SAR Grants in Last Fiscal Year
The Company has never granted options or stock appreciation rights.
Bonuses and Deferred Compensation
None.
Compensation Pursuant to Plans
The Company does not have any compensation or option plans.
Pension Table
Not Applicable
Compensation of Directors
Directors receive no compensation except for reimbursement for expenses
associated with attending a directors meeting.
Termination of Employment and Change of Control Arrangement
There are presently nor are there anticipated any agreements regarding change of
control of the Company.
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Item 7. Certain Relationships and Related Transactions
We have not and do not intend to enter into any transactions with our management
or any nominees for such positions. We have not and do not intend to enter into
any transactions with beneficial owners of the Company. We are not a subsidiary
of any parent company. Since inception, we have not entered into any
transactions with promoters. We have not entered into and do not intend to enter
into any transactions with beneficial owners of our Stock.
Item 8. Description of Securities
Qualification.
The following statements constitute brief summaries of our Articles of
Incorporation and Bylaws, as amended. Such summaries do not purport to be
complete and are qualified in their entirety by reference to the full text of
our Articles of Incorporation and Bylaws.
Common Stock.
Our Articles of Incorporation authorize us to issue up to 100,000,000 Common
Shares, $0.001 par value per Common Share. As of June 1, 2000, there are
54,236,664 shares of our Common Stock outstanding. All outstanding Common Shares
are legally issued, fully paid and non-assessable. We are not authorized to
issue preferred stock.
Liquidation Rights.
Upon our liquidation or dissolution, each outstanding Common Share will be
entitled to share equally in our assets legally available for distribution to
shareholders after the payment of all debts and other liabilities.
Dividend Rights.
We do not have limitations or restrictions upon the rights of our Board of
Directors to declare dividends, and we may pay dividends on our shares of stock
in cash, property, or our own shares, except when we are insolvent or when the
payment thereof would render us insolvent subject to the provisions of the
Delaware Statutes. We have not paid dividends to date, and we do not anticipate
that we will pay any dividends in the foreseeable future.
Voting and Other Rights
Holders of our Common Shares are entitled to cast one vote for each share held
of record at all shareholders meetings for all purposes.
Common Shares are not redeemable, have no conversion rights and carry no
preemptive or other rights to subscribe to or purchase additional Common Shares
in the event of a subsequent offering.
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There are no other material rights of the Common shareholders not included
herein. There is no provision in our charter or by-laws that would delay, defer
or prevent a change in control of us. We have not issued debt securities.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Shareholder Matters
The Company's Common stock cleared its request for an unpriced quotation on the
National Quotation Bureau pink sheets on January 29, 1999. There currently is a
bid price of $0.01 but no ask price for the securities quoted on the pink
sheets. None of the Company's Common stock is subject to outstanding options or
warrants to purchase shares of the Company. There is no established public
trading market for the securities of the Company.
There are 1,110,000 shares of the Common stock of the Company held by Mr. Fryar
and Ms. Snow, who are affiliated, all of these securities are restricted
securities as defined under Rule 144 of the Securities Act and may only be sold
under the Rule or otherwise under an effective registration statement or an
exemption from registration, if available. Rule 144 generally provides that a
person who has satisfied a one year holding period for the restricted securities
may sell, within any three month period subject to certain manner of resale
provisions, an amount of restricted securities which does not exceed the greater
of 1% of a company's outstanding common stock or the average weekly trading
volume in such securities during the four calendar weeks prior to such sale. All
1,110,000 shares of common stock outstanding are restricted shares for which the
one-year holding period has expired. A sale of shares by such security holders,
whether under Rule 144 or otherwise, may have a depressing effect upon the price
of our common stock in any market that might develop.
Under Rule 144, Directors, Executive Officers and persons or entities they
control or who control them and may sell shares of common stock in any
three-month period in an amount limited to the greater of 1% of our outstanding
shares of common stock or the average of the weekly trading volume in our common
stock during the four calendar weeks preceding a sale. Sales under Rule 144 must
also be made without violating the manner-of-sale provisions, notice
requirements, and the availability of public information about us.
Penny Stock Considerations
Broker-dealer practices in connection with transactions in penny stocks are
regulated by certain penny stock rules adopted by the Securities and Exchange
Commission. Penny stocks generally are equity securities with a price of less
than $5.00. Penny stock rules require a broker-dealer, prior to a transaction in
a penny stock not otherwise exempt from the rules, to deliver a standardized
risk disclosure document that provides information about penny stocks and the
risks in the penny stock market. The broker-dealer also must provide the
customer with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the transaction, and
monthly account statements showing the market value of each penny stock held in
the customer's account. In addition, the penny stock rules generally require
that prior to a transaction in a penny stock, the broker-dealer make a special
written determination that the penny stock is a suitable investment for the
purchaser and receive the purchaser's written agreement to the transaction.
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These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to the
penny stock rules. Our shares will likely be subject to such penny stock rules
and our shareholders will in all likelihood find it difficult to sell their
securities.
No market exists for our securities and there is no assurance that a regular
trading market will develop, or if developed will be sustained. A shareholder in
all likelihood, therefore, will not be able to resell the securities referred to
herein should he or she desire to do so. Furthermore, it is unlikely that a
lending institution will accept our securities as pledged collateral for loans
unless a regular trading market develops. There are no plans, proposals,
arrangements or understandings with any person with regard to the development of
a trading market in any of our securities.
As of the date of this registration, we had One Hundred Twenty Seven (127)
holders of record of our common Stock. We currently have one class of Common
Stock outstanding.
We have not paid any dividends since we were formed. There are no restrictions
that limit our ability to pay dividends, but we do not anticipate paying
dividends in the near future.
Item 2. Legal Proceedings
The Company is not, and has not been, involved in any legal proceedings.
Item 3. Changes in and Disagreements with Accountants
During the two most recent fiscal years and the subsequent interim period, the
Company has had no disagreement, resignation or dismissal of the principal
independent accountant for the Company. The accountant for the Company at this
time is Albright, Persing and Associates Ltd.
Item 4. Recent Sales of Unregistered Securities
During the period ended December 31, 1999, the Company commenced a private
offering, exempt from registration requirements under Rule 504 of Regulation D,
of 30,000,000 shares of common stock at $.001 per share. A total of 22,900,000
shares were purchased, resulting in proceeds to the Company of $22,900, and
7,100,000 shares were exchanged in return for services received with a fair
value of $7,100.
We have never utilized an underwriter for an offering of our securities. Other
than the securities mentioned above, we have not issued or sold any securities.
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Item 5. Indemnification of Directors and Officers
Section 145 of the Delaware Corporation Law provides in relevant parts as
follows:
(1) A corporation shall have power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative,
or investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee, or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against expenses (including attorneys'
fees), judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit, or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit, or proceeding by judgment, order, settlement,
conviction, or on a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(2) A corporation shall have power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending, or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the feet that he is or was a director,
officer, employee, or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation and except that no indemnification shall be
made in respect of any claim, issue, or matter as to which such person shall
have been adjudged to be liable for negligence or misconduct in the performance
of his duty to the corporation unless and only to the extent that the court in
which such action or suit was brought shall determine on application that,
despite the adjudication of liability but in view of all circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such
expenses which such court shall deem proper.
(3) To the extent that a director, officer, employee, or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit, or proceeding referred to in (1) or (2) of this subsection, or in
defense of any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(4) The indemnification provided by this section shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under any bylaws, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer, employee, or agent and shall
inure to the benefit of the heirs, executors, and administrators of such a
person.
12
<PAGE>
The foregoing discussion of indemnification merely summarizes certain aspects of
indemnification provisions and is limited by reference to the above-discussed
sections of the Delaware Corporation Law.
The Registrant's certificate of incorporation and bylaws provide that the
Registrant "may indemnify" to the full extent of its power to do so, all
directors, officers, employees, and/or agents. It is anticipated that the
Registrant will indemnify its officers and directors to the full extent
permitted by the above-quoted statute.
Insofar as indemnification by the Registrant for liabilities arising under the
Securities Act may be permitted to officers and directors of the Registrant
pursuant to the foregoing provisions or otherwise, the Registrant is aware that
in the opinion of the Securities and Exchange Commission, such indemnification
is against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
13
<PAGE>
PART F/S
Financial Statements
14
<PAGE>
TABLE OF CONTENTS
PAGE
----
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS
Balance Sheets 2
Statements of Operations 3
Statements of Cash Flows 4
Statements of Stockholders' Equity (Deficit) 5
Notes to Financial Statements 6-10
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors
Media Communications Group, Inc.
We have audited the accompanying balance sheets of Media Communications
Group, Inc. (a development stage company) as of December 31, 1999, and 1998, and
the related statements of operations, stockholders' equity (deficit) and cash
flows for the years ended December 31, 1999, 1998 and 1997 and for the period
from inception (September 9, 1989) to December 31, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Media Communications
Group, Inc. as of December 31, 1999, and 1998, and the results of its operations
and its cash flows for the years ended December 31, 1999, 1998 and 1997 and for
the period from inception (September 9, 1989) to December 31, 1999 in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company's ability to generate sufficient cash flows to
meet its obligations and sustain its operations, either through future revenues
and/or additional debt or equity financing, cannot be determined at this time.
These uncertainties raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans in regard to these matters are
also described in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Reno, Nevada
June 26, 2000
<PAGE>
MEDIA COMMUNICATIONS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
(See Independent Auditors' Report)
<TABLE>
<CAPTION>
ASSETS
December 31, December 31,
1999 1998
<S> <C> <C>
Current Assets
Cash $ 12,120 $ 91
-------- --------
Total Assets $ 12,120 $ 91
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts Payable $ -- $ 21,900
-------- --------
Total Current Liabilities -- 21,900
-------- --------
Stockholders' Equity (Deficit)
Common stock, $.001 par value
authorized 100,000,000 shares, issued and outstanding
54,286,664 shares at December 31, 1999 and 2,386,664 shares
at December 31, 1998 98,675 46,775
Deficit accumulated during the
development stage (86,555) (68,584)
-------- --------
Net Stockholders' Equity (Deficit) 12,120 (21,809)
-------- --------
Total Liabilities and Stockholders'
Equity (Deficit) $ 12,120 $ 91
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
MEDIA COMMUNICATIONS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE PERIODS ENDED DECEMBER 31, 1999, 1998 AND 1997
AND INCEPTION (SEPTEMBER 9, 1989) TO DECEMBER 31, 1999
(See Independent Auditors' Report)
<TABLE>
<CAPTION>
Inception through
Years ended
December 31, December 31,
1999 1998 1997 1999
------------- ----------- ---- ----
<S> <C> <C> <C> <C>
Expenses:
Professional Services $ 17,875 $ 38,615 $ - $ 86,415
Other general and administrative
expenses 96 44 - 140
----------------- ----------------- -------------- ---------------
17,971 38,659 - 86,555
----------------- ----------------- -------------- ---------------
Net (Loss) (17,971) (38,659) - (86,555)
Other Comprehensive Income (Loss) - - - -
---------------- ----------------- -------------- ---------------
Comprehensive (Loss) $ (17,971) $ (38,659) $ - $ (86,555)
================== ================== ============== ================
Net Loss per Share $ (.005) $ (.02) $ - $ (.08)
================== ================== ============== ================
Weighted average
shares outstanding 3,008,856 2,348,276 2,319,300 1,011,629
================= ================= ============== ===============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
MEDIA COMMUNICATIONS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE PERIODS ENDED DECEMBER 31, 1999, 1998 AND 1997
AND INCEPTION (SEPTEMBER 9, 1989) TO DECEMBER 31, 1999
(See Independent Auditors' Report)
<TABLE>
<CAPTION>
Inception through
Years ended
December 31, December 31,
1999 1998 1997 1999
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cash Flows from/(for) Operating Activities:
Net income (loss) $(17,971) $(38,659) $ -- $(86,555)
-------- -------- ---------------- --------
Adjustments to reconcile net loss to
net cash used by operating
activities:
Increase (Decrease) in
accounts payable (21,900) 21,900 -- --
Stock issued for professional
services rendered 29,000 -- -- 58,225
-------- -------- ---------------- --------
Net Adjustments 7,100 21,900 -- 58,225
-------- -------- ---------------- --------
Net Cash (Used) by
Operating Activities (10,871) (16,759) -- (28,330)
-------- -------- ---------------- --------
Cash Flows From Financing Activities:
Proceeds from sales of stock 22,900 16,850 -- 40,450
-------- -------- ---------------- --------
Net Cash Provided by
Financing Activities 22,900 16,850 -- 40,450
-------- -------- ---------------- --------
Net increase (decrease) in cash 12,029 91 -- 12,120
Cash at beginning of year 91 -- -- --
-------- -------- ---------------- --------
Cash at end of period $ 12,120 $ 91 $ -- $ 12,120
======== ======== ================ ========
SUPPLEMENTAL DISCLOSURES
Amount paid for interest $ -- $ -- $ -- $ --
======== ======== ================ ========
Amount paid for income taxes $ -- $ -- $ -- $ --
======== ======== ================ ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
MEDIA COMMUNICATIONS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE PERIODS ENDED DECEMBER 31, 1999, 1998 AND 1997
AND INCEPTION (SEPTEMBER 9, 1989) TO DECEMBER 31, 1999
(See Independent Auditors' Report)
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage Total
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Issuance of shares of common stock during
1989, for professional services
rendered 8,100 $ 2,025 $ -- $ -- $ 2,025
Issuance of shares of common stock for
cash on October 27, 1989 1,200 300 -- -- 300
Net loss for 1989 -- -- -- (2,325) (2,325)
---------- ---------- -------- ---------- ----------
Balance, December 31, 1989 9,300 2,325 -- (2,325) --
Issuance of shares of common stock during
1995, for professional services
rendered 2,270,000 27,200 -- -- 27,200
Issuance of shares of common stock for
cash on November 25, 1995 40,000 400 -- -- 400
Net loss for 1995 -- -- -- (27,600) (27,600)
---------- ---------- -------- ---------- ----------
Balance, December 31, 1995 2,319,300 29,925 -- (29,925) --
Issuance of shares of common stock for cash
on July 28, 1998 at $.25 per share 67,364 16,850 -- -- 16,850
Net loss for 1998 -- -- -- (38,659) (38,659)
---------- ---------- -------- ---------- ----------
Balance, December 31, 1998 2,386,664 46,775 -- (68,584) (21,809)
Issuance of shares of common stock during
1999, for professional services
rendered at $.001 per share 29,000,000 29,000 -- -- 29,000
Issuance of shares of common stock for cash
on December 31, 1999, at $.001 per
share 22,900,000 22,900 -- --
22,900
Net loss for 1999 -- -- -- (17,971) (17,971)
---------- ---------- -------- ---------- ----------
Balance, December 31, 1999 54,286,664 $ 98,675 $ -- $ (86,555) $ 12,120
========== ========== ======== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
MEDIA COMMUNICATIONS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997
AND INCEPTION (SEPTEMBER 9, 1989) TO DECEMBER 31, 1999
NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES
Business
Media Communications Group, Inc. (the "Company") a Delaware corporation
located in Nashville, Tennessee, was incorporated on September 9, 1989. The
Company was organized as a multimedia communications, production and
Distribution Company, offering audio, video, and print publication products in
the music and education markets.
The Company has been in the development stage since its formation. It is
primarily engaged in financial planning, raising capital, and developing its
planned business activities.
Risks and Uncertainties
The Company has not generated significant revenue during the years ended
December 31, 1999, 1998, and 1997, and has funded its operations primarily
through the issuance of equity. Accordingly, the Company's ability to accomplish
its business strategy and to ultimately achieve profitable operations is
dependent upon its ability to obtain additional financing and execute its
business plan. There can be no assurance that the Company will be able to obtain
additional funding, and if available, that the funding will be obtained on terms
favorable to or affordable by the Company. The Company's management is exploring
several funding options and expects to raise additional capital through private
placements to continue to develop the Company's operations around its business
plan. Ultimately, however, the Company will need to achieve profitable
operations in order to continue as a going concern.
In addition, the Company has suffered recurring losses since its
inception, and at December 31, 1999, has an accumulated deficit of $86,555.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern. The financial statements do not include any
adjustments to reflect the possible future effects on the recoverability and
classification of liabilities that may result from the outcome of this
uncertainty.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash balances and instruments with
maturities of three months or less at the time of purchase.
6
<PAGE>
MEDIA COMMUNICATIONS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997
AND INCEPTION (SEPTEMBER 9, 1989) TO DECEMBER 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BUSINESS ACTIVITY -
Continued
Concentrations of Credit Risk
The Company maintains cash balances at one bank located in Hendersonville,
Tennessee. Accounts at this institution are insured by the Federal Deposit
Insurance Corporation up to $100,000. The Company's cash balances, at times, may
exceed federally insured limits.
Fair Value of Financial Instruments
Effective December 30, 1995, the Company adopted Statement of Financial
Accounting Standards No. 107, "Disclosures about Fair Value of Financial
Instruments" ("SFAS No. 107"). The carrying amounts reported in the balance
sheet for cash and cash equivalents approximate those assets' fair values.
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
disclosures 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 these estimates.
Income Taxes
In February 1992, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes
("SFAS No. 109"). SFAS No. 109 required a change from the deferred method of
accounting for income taxes of APB Opinion 11, to the asset and liability method
of accounting for income taxes. Under the asset and liability method of SFAS No.
109, deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
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 SFAS No. 109, the
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date. The Company
adopted SFAS No. 109 effective January 1, 1993.
7
<PAGE>
MEDIA COMMUNICATIONS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997
AND INCEPTION (SEPTEMBER 9, 1989) TO DECEMBER 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BUSINESS ACTIVITY -
Continued
Net Loss per Share
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, Earnings per Share ("SFAS No. 128").
SFAS No. 128 simplifies the standards for computing earnings per share ("EPS")
and was effective for financial statements issued for periods ending after
December 15, 1997, with earlier application not permitted. The Company adopted
SFAS No. 128 effective December 30, 1997.
Basic EPS is determined using net income divided by the weighted average
shares outstanding during the period. Diluted EPS is computed by dividing net
income by the weighted average shares outstanding, assuming all dilutive
potential common shares were issued.
Since the Company has no common shares that are potentially issueable,
such as stock options, convertible preferred stock, and warrants, basic and
diluted earnings per share are the same.
New Accounting Standards
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, Reporting Comprehensive Income ("SFAS
130"). SFAS No. 130 establishes standards for reporting and presentation of
comprehensive income and its components in a full set of general-purpose
financial statements. This statement does not, however, require a specific
format for the disclosure, but requires the Company to display an amount
representing total comprehensive income for the period in its financial
statements. Comprehensive income is determined by adjusting net income by other
items not included as a component of net income, such as the unrealized gain
(loss) on certain marketable securities. During the periods presented, the
Company had no additional components that were not a part of net income (loss);
therefore, comprehensive income and net income are the same amount.
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, Disclosures about Segments of an
Enterprise and Related Information ("SFAS No. 131"). SFAS No. 131 establishes
standards for the manner in which public business enterprises report information
about operating segments in annual financial statements and requires that those
enterprises report selected information about operating segments in interim
financial reports issued to shareholders. This statement also requires that a
public business enterprise report financial and descriptive information about
its reportable operating segments. The Company is currently not in formal
business operations and does not have any reportable operating segments.
8
<PAGE>
MEDIA COMMUNICATIONS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997
AND INCEPTION (SEPTEMBER 9, 1989) TO DECEMBER 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BUSINESS ACTIVITY -
Continued
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities. However, the effective date for this pronouncement was
delayed for one year from the original effective date of fiscal years beginning
after June 15, 1999. Since the Company does not deal in derivative instruments
or hedging activities, it is anticipated that this pronouncement will have no
impact on the Company's financial statements.
NOTE 2 - INCOME TAXES
As discussed in Note 1, the Company adopted SFAS No. 109 effective January
1, 1993. One of the provisions of SFAS 109 enables companies to record deferred
tax assets for the benefit to be derived from the utilization of net operating
loss carryforwards and certain deductible temporary differences. At December 31,
1999, 1998 and 1997, the tax effects of temporary differences that give rise to
significant portions of deferred tax assets are presented below:
<TABLE>
<CAPTION>
1999 1998 1997
--------------------------------------------------------------
<S> <C> <C> <C>
Net operating loss carryforwards $ 12,983 $ 10,288 $ 4,489
Less: valuation allowance (12,983) (10,288) (4,489)
-------------------- ------------------- ------------------
$ - $ - $ -
=================== =================== ==================
</TABLE>
As of December 31, 1999, the Company has net operating loss carryforwards
of approximately $86,555 for Federal income tax return purposes, which expire
through 2019. The future tax benefits are dependent upon the Company's ability
to generate future earnings.
In addition, the Company has not filed any income tax returns since its
inception. As such, it is unclear whether expenses for services rendered in
exchange for common stock could be deducted under current federal tax law.
Assuming the providers of such services included the fair value of their
services in income on their personal tax returns, the Company should be able to
deduct such losses. However, due to the uncertainty of this inclusion, coupled
with the judgment involving the realizability of any net operating loss
carryforward due to the lack of revenues by the Company, a deferred income tax
valuation allowance has been recorded for the full amount of the deferred tax
asset attributable to the net operating loss carryforward.
9
<PAGE>
MEDIA COMMUNICATIONS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997
AND INCEPTION (SEPTEMBER 9, 1989) TO DECEMBER 31, 1999
NOTE 3 - STOCKHOLDERS' EQUITY
During the period ended December 31, 1999, the Company commenced a private
offering, exempt from registration requirements under Rule 504 of Regulation D,
of 30,000,000 shares of common stock at $.001 per share. A total of 22,900,000
shares were purchased, resulting in proceeds to the Company of $22,900, and
7,100,000 shares were exchanged in return for services received with a fair
value of $7,100.
10
<PAGE>
PART III
ITEM 1. INDEX TO EXHIBITS
Copies of the following documents are included as exhibits to this Form 10-SB
pursuant to item 601 of regulation S-B.
Exhibit
No. Title of Document
1 Articles of Incorporation of the Company and related
Amendments
2 Bylaws of the Company
3 Specimen Stock Certificate
26
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this registration statement to be signed on its behalf by the
undersigned, there under duly authorized.
Media Communications Group, Inc.
/s/ Clifford Fryar
-----------------------------
By: Clifford Fryar, President
27
