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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period Ended September 30, 2000
Commission File Number 001-15977
MEDIA COMMUNICATIONS GROUP, INC.
(Exact name of registrant as specified in its corporate charter)
Delaware 621405229
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
3152 Parkway, Suite 5 Pigeon Forge, TN 37863
(Address of principal executive offices)
(865) 428 - 8833
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
X Yes No
--- ---
State the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding as of November 30, 2000
----- -----------------------------------
Common Stock 54,286,664
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
MEDIA COMMUNICATIONS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
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MEDIA COMMUNICATIONS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED BALANCE SHEET
SEPTEMBER 30, 2000
(Unaudited)
ASSETS
Current Assets
Cash $ -
--------------
Total Assets $ -
==============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts Payable $ 4,237
----------------
Total Current Liabilities 4,237
----------------
Stockholders' Equity (Deficit)
Common stock, $.001 par value
100,000,000 shares authorized,
and 54,286,664 shares issued and
outstanding at September 30, 2000 54,287
Additional paid in capital 44,388
Deficit accumulated during the
development stage (102,912)
----------------
Net Stockholders' Equity (Deficit) (4,237)
----------------
Total Liabilities and Stockholders'
Equity (Deficit) $ -
================
See the accompanying notes to the condensed financial statements.
1
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MEDIA COMMUNICATIONS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
AND INCEPTION (SEPTEMBER 9, 1989) TO SEPTEMBER 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Inception
Three Months ended Nine Months ended Through
Sept. 30 Sept. 30, Sept. 30,
-------------------------- --------------------------- -----------
2000 1999 2000 1999 2000
--------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Expenses:
Professional Services $ 413 $ -- $ 16,286 $ 2,924 $ 102,701
Other general and admin-
istrative expenses 22 24 71 72 211
------------ ------------ ------------ ------------ ------------
435 24 16,357 2,996 102,912
------------ ------------ ------------ ------------ ------------
Net (Loss) (435) (24) (16,357) (2,996) (102,912)
Other Comprehensive Income
(Loss) -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Comprehensive (Loss) $ (435) $ (24) $ (16,357) $ (2,996) $ (102,912)
============ ============ ============ ============ ============
Net Loss per Share $ (0.000) $ (0.000) $ (0.000) $ (0.001) $ (0.022)
============ ============ ============ ============ ============
Weighted average shares
outstanding 54,286,664 2,386,664 54,286,664 2,386,664 4,662,084
============ ============ ============ ============ ============
</TABLE>
See the accompanying notes to the condensed financial statements.
2
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MEDIA COMMUNICATIONS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE PERIODS ENDED SEPTEMBER 30, 2000 AND 1999
AND INCEPTION (SEPTEMBER 9, 1989) TO SEPTEMBER 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Nine Months ended Inception
Sept. 30, Through
----------------------------------- Sept. 30,
2000 1999 2000
------------ ------------ ------------
<S> <C> <C> <C>
Cash Flows from/(for) Operating Activities:
Net income (loss) $ (16,357) $ (2,996) $ (102,912)
------------------ ---------------- ---------------
Adjustments to reconcile net loss to net cash used
by operating activities:
Increase (Decrease) in accounts payable 4,237 - 4,237
Increase in due to stockholders - 2,950 -
Stock issued for professional services rendered - - 56,200
------------------ ---------------- ---------------
Net Adjustments 4,237 2,950 60,437
------------------ ---------------- ---------------
Net Cash (Used) by Operating
Activities (12,120) (46) (42,475)
------------------ ---------------- ---------------
Cash Flows From Financing Activities:
Proceeds from sales of stock - - 42,475
------------------ ---------------- ---------------
Net Cash Provided by Financing
Activities - - 42,475
------------------ ---------------- ---------------
Net increase (decrease) in cash (12,120) (46) -
Cash at beginning of year 12,120 91 -
------------------ ---------------- ---------------
Cash at end of period $ - $ 45 $ -
================== ================ ===============
SUPPLEMENTAL DISCLOSURES
Amount paid for interest $ - $ - $ -
================== ================ ===============
Amount paid for income taxes $ - $ - $ -
================== ================ ===============
</TABLE>
See the accompanying notes to the condensed financial statements.
3
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MEDIA COMMUNICATIONS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2000
AND INCEPTION (SEPTEMBER 9, 1989) TO SEPTEMBER 30, 2000
(Unaudited)
NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES AND
BASIS OF PRESENTATION
Interim financial statements
In the opinion of management, the accompanying unaudited condensed
financial statements of Media Communications Group, Inc. reflect all
adjustments, consisting of normal recurring accruals, necessary to present
fairly their financial position as of September 30, 2000, and their results of
operations for the nine and three months ended September 30, 2000 and 1999, and
inception to September 30, 2000, and cash flows for the nine months ended
September 30, 2000 and 1999, and inception to September 30, 2000. Pursuant to
rules and regulations of the Securities and Exchange Commission (the "SEC"),
certain information and disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted from these condensed consolidated financial statements
unless significant changes have taken place since the end of the most recent
fiscal year. Accordingly, these unaudited condensed consolidated financial
statements should be read in conjunction with the audited financial statements,
notes to financial statements and the other information in the Annual Report on
Form 10-SB for the year ended December 31, 1999 (the "10-SB") previously filed
by Media Communications Group, Inc. with the SEC.
The results of operations for the nine and three months ended September
30, 2000 are not necessarily indicative of the results of operations for the
full year ending December 31, 2000.
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 since its inception, 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.
4
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MEDIA COMMUNICATIONS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2000
AND INCEPTION (SEPTEMBER 9, 1989) TO SEPTEMBER 30, 2000
(Unaudited)
NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES AND
BASIS OF PRESENTATION - Continued
In addition, the Company has suffered recurring losses since its
inception, and at September 30, 2000, has an accumulated deficit of $102,912.
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.
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.
5
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MEDIA COMMUNICATIONS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2000
AND INCEPTION (SEPTEMBER 9, 1989) TO SEPTEMBER 30, 2000
(Unaudited)
NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES AND
BASIS OF PRESENTATION - Continued
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.
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 issuable, such
as stock options, convertible preferred stock, and warrants, basic and diluted
earnings per share are the same.
6
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MEDIA COMMUNICATIONS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2000
AND INCEPTION (SEPTEMBER 9, 1989) TO SEPTEMBER 30, 2000
(Unaudited)
NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES AND
BASIS OF PRESENTATION - Continued
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.
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.
7
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MEDIA COMMUNICATIONS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2000
AND INCEPTION (SEPTEMBER 9, 1989) TO SEPTEMBER 30, 2000
(Unaudited)
Item 2. Management's Discussion and Analysis or Plan of Operation.
The following discussion and analysis provides information which management
believes is relevant to an assessment and understanding of the Company's results
of operations and financial condition. The discussion should be read in
conjunction with the financial statements and notes thereto.
Media Communications Group, Inc. is a development phase company. The
Company is a multi faceted company in that its business consists of the
production, marketing, distribution and offering of audio, video and print
publication products in the music, entertainment and education marketplaces.
The Company is in the process of completing development of its two
corporate websites www.mediawebcentral.com and www.getmusicmedia.com. These
websites will serve as the Company's medium for distribution of its products and
services via the Internet.
In November 2000, the company acquired 1,000 units of the "Platinum &
Gold all Top Hits(TM)" music collection from a surplus close-out and began a
marketing and distribution campaign for the "Platinum & Gold all Top Hits(TM)"
music collection. The "Platinum & Gold all Top Hits(TM)" collection is an eight
volume collection of favorite music hits from various artists throughout the
years.
Initially these units will be sold via traditional retail stores as
well as on the Company's two websites. Management is presently contemplating
other possible ways to advertise the product, including tabloid newspapers,
magazines and TV and Radio Infomercials.
The Company does not have sufficient funding to meet its anticipated
cash needs. The current officers and directors are presently contemplating
various funding sources to fund the costs of operating the Company, but no
decision has yet been made in this regard. There is no assurance that the
Company will be able to successfully generate sufficient cash flows through the
marketing and selling of its product to fund continuing operations or that, the
Company will be successful in raising additional funding.
At the November 15, 2000 Meeting of the Board of Directors, both the
President and Secretary of the Company resigned as
8
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MEDIA COMMUNICATIONS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2000
AND INCEPTION (SEPTEMBER 9, 1989) TO SEPTEMBER 30, 2000
(Unaudited)
Officers and Directors of the Company and Jonathan Landers a principle
shareholder in the Company was elected President, secretary and Director.
Landers is the beneficial owner of 4,550,000 shares or 8.4% of the issued and
outstanding common stock of the Company. At this point, the newly appointed
Officer and Director continued development and implementation of the Company's
Business Plan with the acquisition of 1,000 units of the "Platinum & Gold all
Top Hits(TM)" music collection.
Forward-Looking Statements
When used in this Form 10-Q or other filings by the Company with the
Securities and Exchange Commission, in the Company's press releases or other
public or shareholder communications, or in oral statements made with the
approval of an authorized officer of the Company's executive officers, the words
or phrases "would be", "will allow", "intends to", "will likely result", "are
expected to", "will continue", "is anticipated", "estimate", "project", or
similar expressions are intended to identify "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.
The Company cautions readers not to place undue reliance on any
forward-looking statements, which speak only as of the date made, and advises
readers that forward-looking statements involve various risks and uncertainties.
The Company does not undertake, and specifically disclaims any obligation to
update any forward-looking statements to reflect occurrences or unanticipated
events or circumstances after the date of such statement.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities and Use of Proceeds.
None
Item 3. Defaults Upon Senior Securities.
None.
9
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MEDIA COMMUNICATIONS GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2000
AND INCEPTION (SEPTEMBER 9, 1989) TO SEPTEMBER 30, 2000
(Unaudited)
Item 4. Submission of Matters to Vote of Security holders.
None.
Item 5. Other Information.
The Company is filing this report as a preliminary measure primarily to
inform shareholders of the change in control that has occurred.
Change in Control of Registrant.
On November 15, 2000, Cliff Fryar ("FRYAR") the President, Director and
shareholder as well as Dottie Snow ("SNOW") the Secretary and Director resigned
and Jonathan Landers was elected Sole officer and Director. Both Fryar and Snow
have served as Officers and Directors of the Company since September 1989 and
office terms were to expire on December 31, 2000. The Company also relocated its
corporate offices to 3152 Parkway Suite 5, Pigeon Forge, TN 37863.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits - None
(b) Reports on Form 8-K - None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant has
caused this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Media Communication Group, Inc.
By: /s/ Jonathan Landers
----------------------------------
Jonathan Landers, Pres. & Director
Date: November 30, 2000
10
