SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20509
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
October 7, 1999
Date of Report
(Date of Earliest Event Reported)
MEGAMEDIA NETWORKS, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-26801 87-0633630
(State or other juris- (Commission File No.) (IRS Employer
diction of incorporation) I.D. No.)
57 West Pine Street
Orlando, Florida 32801
(Address of Principal Executive Offices)
407-245-3636
Registrant's Telephone Number
AMALGAMATED ENTERTAINMENT, INC.
5525 South 900 East, #110
Salt Lake City, UT 84117
----------------------
(Former Name and Address of Principal Executive Offices)
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Financial Statements of Businesses Acquired.
<PAGE>
MEGAMEDIA NETWORKS, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
(With The Accompanying Independent Accountants' Compilation Report)
For The Period Ended September 30, 1999
<PAGE>
<TABLE>
MEGAMEDIA NETWORKS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
September 30, 1999
<CAPTION>
ASSETS
<S> <C>
CURRENT ASSETS
Cash $ 40,942
Prepaid expenses 10,196
Total current assets 51,138
PREPAID EXPENSES 14,584
EQUIPMENT, net of accumulated depreciation 108,346
DEPOSITS 8,642
Total assets $ 182,710
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable $ 32,283
Convertible debt 425,000
Total current liabilities 457,283
STOCKHOLDERS' DEFICIT:
Common stock, $.01 par value, 10,000 shares authorized,
7,500 shares issued and outstanding 75
Paid-in capital 74,925
Deficit accumulated during the development stage (349,573)
Total stockholders' deficit (274,573)
Total liabilities and stockholders' deficit $ 182,710
</TABLE>
<TABLE>
MEGAMEDIA NETWORKS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
Period From May 27, 1999 (Date of Inception), To September 30, 1999
<CAPTION>
<S> <C>
REVENUES $
EXPENSES:
Advertising 1,508
Automobile 1,419
Depreciation 1,527
Dues and subscriptions 1,454
Employee leasing 140,850
Equipment rentals 6,892
Insurance 6,406
Licenses and permits 2,900
Marketing 3,984
Miscellaneous 4,521
Office 7,443
Parking and tolls 3,085
Postage 683
Professional development 16,154
Professional fees 60,246
Rent 23,520
Repairs and maintenance 7,139
Supplies 9,803
Telephone 11,951
Travel 36,703
Utilities 1,385
Total expenses 349,573
LOSS BEFORE INCOME TAXES (349,573)
INCOME TAXES
NET LOSS $ (349,573)
</TABLE>
<TABLE>
MEGAMEDIA NETWORKS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' DEFICIT
Period From May 27, 1999 (Date of Inception), To September 30, 1999
<CAPTION>
Deficit
Accumulated
During the Total
Common Paid-in Development Stockholders'
Stock Capital Stage Deficit
<S> <C> <C> <C> <C>
BALANCE - May 27, 1999 $ $ $ $
Issuance of common stock 75 74,925 75,000
Net loss (349,573) (349,573)
BALANCE - September 30 , 1999 $ 75 $74,925 $(349,573) $ (274,573)
</TABLE>
<TABLE>
<PAGE>
MEGAMEDIA NETWORKS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
Period From May 27, 1999 (Date of Inception), To September 30, 1999
<CAPTION>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash paid to suppliers $ (265,543)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of equipment (109,873)
Payments of security deposits (8,642)
Net cash flows from investing activities (118,515)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of convertible debt 425,000
Net cash flows from financing activities 425,000
NET CHANGE IN CASH AND CASH EQUIVALENTS 40,942
CASH AND CASH EQUIVALENTS - Beginning of period
CASH AND CASH EQUIVALENTS - End of period $ 40,942
RECONCILIATION OF NET LOSS TO NET CASH FLOWS
FROM OPERATING ACTIVITIES:
Net loss $ (349,573)
Adjustments to reconcile net loss to net cash flows from operating
activities:
Depreciation 1,527
Noncash professional fees 75,000
Change in prepaid expenses (24,780)
Change in accounts payable 32,283
NET CASH FLOWS FROM OPERATING ACTIVITIES $ (265,543)
</TABLE>
NONCASH FINANCING ACTIVITIES:
During the period from May 27, 1999 (date of inception) to September 30,
1999, the Company issued 7,500 shares of common stock in exchange for
professional services received valued at $75,000.
<PAGE>
MEGAMEDIA NETWORKS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
September 30, 1999
NOTE A - NATURE OF OPERATIONS
MegaMedia Networks, Inc. is a Nevada corporation headquartered in
Orlando, Florida. The Company provides users of the internet with an online
environment for purchasing specialized on-demand or live pay-per-view events,
music, videos, concerts and services.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Development stage operations: The Company was incorporated May 27, 1999.
Operations to date have been devoted primarily to raising capital, obtaining
financing, establishing supplier affiliations and strategic alliance
arrangements, establishing the corporate headquarters, and administrative
functions. The Company also expects to merge with an existing public company
before November 1, 1999.
Cash and cash equivalents: For purposes of the statement of cash flows,
the Company considers all highly liquid investments purchased with original
maturities of three months or less to be cash equivalents.
Equipment: Equipment is stated at cost. Depreciation is computed using
the straight-line method over the estimated useful lives of the related
assets.
Deferred income taxes: Deferred income taxes result from the tax effects
of net operating loss carryforwards. A valuation allowance of $118,855 has
been provided for the deferred tax asset balance based on the Company's
assessment of the likelihood of realization.
Use of estimates: Management uses estimates and assumptions in preparing
financial statements. Those estimates and assumptions affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities, and reported revenues and expenses.
Advertising costs: Advertising costs are expensed as incurred.
NOTE C - CONCENTRATION OF CREDIT RISK
The Company maintains its cash in a bank account which, at times, may
exceed federally insured limits. The Company has not experienced any losses
in such accounts and believes it is not exposed to any significant credit risk
related to cash.
NOTE D - PREPAID EXPENSES
Prepaid expenses include $22,917 of costs paid to an internet traffic
consolidator who is providing the Company with pre-qualified internet
traffic. The costs of this agreement are being amortized using the
straight-line method over 36 months, the term of this agreement.
<PAGE>
MEGAMEDIA NETWORKS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
September 30, 1999
NOTE E - EQUIPMENT
Equipment consists of the following:
Category Cost
Office furniture and equipment $ 3,231
Computer equipment 31,642
Software development in process 75,000
Total equipment 109,873
Less: Accumulated depreciation (1,527)
Net equipment $ 108,346
At September 30, 1999, the Company is in the process of having an outside
third party develop specialized computer software for the Company's internal
use. The software is expected to cost approximately $180,000, of which
$75,000 had been paid as of September 30, 1999.
NOTE F - CONVERTIBLE DEBT
Convertible debt consists of loans payable to a corporation that are
convertible into common stock of a publicly-held corporation which acquires
at least a 51% interest in the Company. The $425,000 of loans payable will
be converted into 212,500 shares of common stock of this publicly-held
corporation. If the loans are not converted into common stock by November1,
1999, the loans will become due December 15, 1999 with interest on the
principal amount due from the date the funds were received by the Company
until repaid at an interest rate of 8% per annum.
NOTE G - COMMITMENTS AND CONTINGENCIES
The Company is the lessee under operating lease agreements for its office
facility, other premises and for certain furniture and equipment. Total
lease expense under these leases amounted to approximately $30,400 for the
period from May 27, 1999 (date of inception), to September 30, 1999. Future
minimum lease payments under these operating leases as of September 30,
1999, are as follows:
Year Ending
September 30,
2000 $77,115
2001 75,143
2002 40,799
NOTE H - SUBSEQUENT EVENT RELATED TO REORGANIZATION
Subsequent to the balance sheet date, the Company expects to enter into an
agreement and plan of reorganization with Amalgamated Entertainment, Inc.
("Amalgamated") a public company. Under this agreement Amalgamated shall
acquire, and the Company's stockholders shall exchange, 100% of the
outstanding common stock of the Company. The sole consideration for 100%
interest in the Company shall be the exchange of 10,461,367 shares of $0.01
par value common stock of Amalgamated. In addition, prior to or
simultaneously with the closing of this agreement, Amalgamated shall change
its name to "MegaMedia Networks, Inc.".
<PAGE>
<PAGE>
MEGAMEDIA NETWORKS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
September 30, 1999
NOTE I - SUBSEQUENT EVENT RELATED TO REISSUANCE OF REPORT
Subsequent to originally issuing the accompanying financial statements, it
was discovered that the 7,500 shares of common stock issued during the
period from May 27, 1999 (date of inception) to September 30, 1999 were
incorrectly valued. The accompanying financial statements have been
restated to reflect the correct valuation of these shares at $75,000.
<PAGE>
(b) Pro Forma Financial Information.
None.
Exhibits
None.
Item 8. Change in Fiscal Year.
None; not applicable.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by
the undersigned hereunto duly authorized.
MEGAMEDIA NETOWRKS, INC.
Date: By:
William A. Mobley,
President, Secretary and Director
