UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended June 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________to______________
Commission file number _____________________________
MediaComm Broadcasting Systems, Inc.
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(Exact name of small business issuer as specified in its charter)
Colorado 84-147484
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(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
925 W. Kenyon Ave. #15
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(Address of principal executive offices)
303-762-6444
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(Issuer's telephone number)
Not applicable
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes[X] No[ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes[ ] No[ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
7,800,000 shares of common stock as of August 1, 2000
Transitional Small Business Disclosure Format (Check one): Yes[ ] No[X]
<PAGE>
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.(1)
Mediacomm Broadcasting Systems, Inc.
(a development stage company)
Balance Sheet
Unaudited
June 30, March 31,
2000 2000
--------- ---------
<S> <C> <C>
ASSETS
Current Assets:
Cash $ 7,323 $ 32,463
Accounts Receivable 804 804
Escrowed Funds 0 499
--------- ---------
Total Current Assets 8,127 33,766
--------- ---------
Property and Equipment 5,151 5,151
Accumulated Depreciation (1,828) (1,399)
--------- ---------
Net Property and Equipment 3,323 3,752
--------- ---------
Other Assets - Prepaid Finance Fees (net of
amortization of $99,830 and $35,065) 18,970 48,670
--------- ---------
TOTAL ASSETS $ 30,420 $ 86,188
--------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Portion Notes Payable and Accrued Interest $ 243,908 $ 238,282
Accounts Payable 5,650 6,412
--------- ---------
Total Current Liabilities 249,558 244,694
--------- ---------
Long-Term Liabilities 0 0
--------- ---------
Total Liabilities 249,558 244,694
--------- ---------
Shareholders' Equity
Preferred Stock, no par value, 5,000,000 shares authorized
0 shares issued and outstanding 0 0
Common Stock, no par value, 50,000,000 shares
authorized, 7,800,000 shares issued and outstanding 168,810 168,810
Options and warrants to purchase 1,950,000 shares
of common stock 79,800 79,800
Deferred Compensation (10,200) (10,200)
Accumulated (Deficit) (457,548) (396,916)
--------- ---------
Total Shareholders' Equity (219,138) (158,506)
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 30,420 $ 86,188
--------- ---------
See the accompanying notes to these unaudited financial statements
--------
(1) The accompanying financial statements are not covered by any
independent Certified Public Accounts' report.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Mediacomm Broadcasting, Inc.
(a development stage company)
Unaudited Statement of Operations
August 20,
3 Month 3 Month 1998 (inception)
Period Ended Period Ended through
June 30, June 30, June 30,
2000 1999 2000
----------- ----------- -----------
<S> <C> <C> <C>
Revenue $ 16,871 $ 8,084 $ 40,934
----------- ----------- -----------
Cost of Goods Sold 26,436 18,869 38,744
----------- ----------- -----------
Gross Profit (9,565) (10,785) 2,190
----------- ----------- -----------
General & Administartive 15,868 18,790 342,856
----------- ----------- -----------
(Loss) from Operations (25,433) (29,575) (340,666)
----------- ----------- -----------
Other Income (Expense)
Interest Income 126 0 1,855
Interest Expense (35,325) 0 (118,737)
----------- ----------- -----------
Total Other Income (Expense) (35,199) 0 (116,882)
----------- ----------- -----------
Net (Loss) ($ 60,632) ($ 29,575) ($ 457,548)
----------- ----------- -----------
Basic (Loss) Per Share ($ 0.01) $ 0.00
Weighted Average Common Shares Outstanding 7,800,000 6,000,000
----------- -----------
See the accompanying notes to these unaudited financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Mediacomm Broadcasting, Inc.
(a development stage company)
Unaudited Statement of Cash Flows
August 20, 1998
3 Month 3 Month (inception)
Period Ended Period Ended through
June 30, June 30, June 30,
2000 1999 2000
--------- --------- ---------
<S> <C> <C> <C>
Net (Loss) ($ 60,632) ($ 29,575) ($457,548)
Adjustments to reconcile net (loss) to net cash
used in operating activities:
Amortization 29,700 0 99,830
Depreciation 429 180 1,829
Deferred compensation 0 0 10,200
Writeoff of deferred offering costs 9,748
Stock issued for services 4,410
(Increase) in accounts receivable 0 (40) (804)
(Increase) Decrease in escrowed funds 500 0 0
(Increase) in Deferred offering costs 0 (2,700) 0
Increase (Decrease) in accounts payable (762) (5,406) 5,650
Increase in other accrued expenses 0 426 0
Increase in accrued interest 5,625 0 18,907
--------- --------- ---------
Net Cash (Used) in Operations (25,140) (37,115) (307,778)
--------- --------- ---------
Cash Flows from Investing Activities:
Purchase of equipment & furniture (5,151)
Net Cash Flows (Used) in Investing Activities 0 0 (5,151)
--------- --------- ---------
Cash Flows from Financing Activities:
Sale of common stock 105,000
Offering costs deferred (9,748)
Shareholder advance 1,500
Shareholder repayment (1,500)
Proceeds from bridge financing 225,000
Net Cash Flows from Financing Activities 0 0 320,252
--------- --------- ---------
Net (decrease) in cash and cash equivalents (25,140) (37,115) 7,323
Cash and cash equivalents at beginning of period 32,463 60,236 0
--------- --------- ---------
Cash and cash equivalents at end of period $ 7,323 $ 23,121 $ 7,323
--------- --------- ---------
Supplementary Disclosure of Cash Flow Information:
Interest paid $ 0 $ 0 $ 0
--------- --------- ---------
1,800,000 shares of common stock issued for
debt issue costs $ 0 $ 0 $ 59,400
--------- --------- ---------
Common stock issued for services $ 0 $ 0 $ 4,410
--------- --------- ---------
See the accompanying notes to these unaudited financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MEDIACOMM BROADCASTING SYSTEMS, INC.
(a development stage company)
Statement of Shareholders' Equity/Deficit
August 20, 1998 (inception) Through March 31, 2000
Preferred Stock Common Stock
------------------- ----------------------
Shares Amount Shares Amount
------- --------- --------- ---------
<S> <C> <C> <C> <C>
Balance, August 20, 1998,
(Inception) -- $ -- -- $ --
December 1, 1998, sale of
common stock -- -- 3,060,000* 25,000
December 22, 1998, issuance of
common stock in exchange for
services, valued at cost -- -- 540,000* 4,410
December 22, 1998, sale of
common stock -- -- 750,000* 25,000
December 31, 1998, sale of
common stock -- -- 750,000* 25,000
February 17, 1999, sale of
common stock -- -- 900,000* 30,000
Net loss for the period -- -- -- --
------- --------- --------- ---------
BALANCE, MARCH 31, 1999 -- -- 6,000,000* 109,410
August 6, 1999, issuance of common stock
in exchange for finance charges
valued at $.033 per share -- -- 1,080,000 35,640
August 6, 1999, issuance of warrants to
purchase 1,080,000 shares of common
stock in exchange for finance charges
valued at $.033 per share -- -- -- --
September 1, 1999, issuance of common stock
in exchange for finance charges
valued at $.033 per share -- -- 360,000 11,880
September 1, 1999, issuance of warrants to
purchase 360,000 shares of common
stock in exchange for finance charges
valued at $.033 per share -- -- -- --
September 30, 1999, issuance of common stock
in exchange for finance charges
valued at $.033 per share -- -- 360,000 11,880
September 30, 1999, issuance of warrants to
purchase 360,000 shares of common
stock in exchange for finance charges
valued at $.033 per share -- -- -- --
September 30, 1999, grant of options to
purchase 150,000 shares of common -- -- -- --
Deferred compensation (Note C) -- -- -- --
Net loss for the year -- -- -- --
------- --------- --------- ---------
BALANCE, MARCH 31, 2000 -- 0 7,800,000* 168,810
======= ========= ========= =========
Net loss for the year -- -- -- --
BALANCE, JUNE 30, 2000 -- $ -- 7,800,000* $ 168,810
======= ========= ========= =========
* Restated
Table continues on following page.
<PAGE>
MEDIACOMM BROADCASTING SYSTEMS, INC.
(a development stage company)
Statement of Shareholders' Equity/Deficit
August 20, 1998 (inception) Through March 31, 2000
(Continued)
Outstanding Deficit
Common Accumulated
Stock During the Total
Options and Deferred Development Shareholders'
Warrants Compensation Stage Deficit
--------- ------------ --------- ---------
Balance, August 20, 1998,
(Inception) $ -- $ -- $ -- $ --
December 1, 1998, sale of
common stock -- -- -- 25,000
December 22, 1998, issuance of
common stock in exchange for
services, valued at cost -- -- -- 4,410
December 22, 1998, sale of
common stock -- -- -- 25,000
December 31, 1998, sale of
common stock -- -- -- 25,000
February 17, 1999, sale of
common stock -- -- -- 30,000
Net loss for the period -- -- (44,968) (44,968)
--------- --------- --------- ---------
BALANCE, MARCH 31, 1999 -- -- (44,968) 64,442
August 6, 1999, issuance of common stock
in exchange for finance charges
valued at $.033 per share -- -- -- 35,640
August 6, 1999, issuance of warrants to
purchase 1,080,000 shares of common
stock in exchange for finance charges
valued at $.033 per share 35,640 -- -- 35,640
September 1, 1999, issuance of common stock
in exchange for finance charges
valued at $.033 per share -- -- -- 11,880
September 1, 1999, issuance of warrants to
purchase 360,000 shares of common
stock in exchange for finance charges
valued at $.033 per share 11,880 -- -- 11,880
September 30, 1999, issuance of common stock
in exchange for finance charges
valued at $.033 per share -- -- -- 11,880
September 30, 1999, issuance of warrants to
purchase 360,000 shares of common
stock in exchange for finance charges
valued at $.033 per share 11,880 -- -- 11,880
September 30, 1999, grant of options to
purchase 150,000 shares of common 20,400 -- -- 20,400
Deferred compensation (Note C) -- (10,200) -- (10,200)
Net loss for the year -- -- (351,948) (351,948)
--------- --------- --------- ---------
BALANCE, MARCH 31, 2000 79,800 (10,200) (396,916) (158,506)
========= ========= ========= =========
Net loss for the year -- -- (60,632) (60,632)
BALANCE, JUNE 30, 2000 $ 79,800 $ (10,200) $(457,548) $(219,138)
========= ========= ========= =========
* Restated
See accompanying notes to these unaudited financial statements
</TABLE>
<PAGE>
Mediacomm Broadcasting, Inc.
(a development stage company)
Notes To Unaudited Financial Statements
For The Three Month Period Ended June 30, 2000
----------------------------------------------
Note 1 - Unaudited Financial Information
----------------------------------------
The unaudited financial information included for the three month interim period
ended June 30, 2000 were taken from the books and records without audit.
However, such information reflects all adjustments (consisting only of normal
recurring adjustments, which are of the opinion of management, necessary to
reflect properly the results of interim period presented). The results of
operations for the three month period ended June 30, 2000 are not necessarily
indicative of the results expected for the fiscal year ended March 31, 2001.
Note 2 - Financial Statements
-----------------------------
Management has elected to omit substantially all footnotes relating to the
condensed financial statements of the Company included in the report. For a
complete set of footnotes, reference is made to the Company's Annual Report on
Form 10KSB for the year ended March 31, 2000 as filed with the Securities and
Exchange Commission and the audited financial statements included therein
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operations.
We commenced operating our website Shopbiz.com in October 1999. Our gross
revenues from inception to June 30, 2000 amounted to $40,934. Our net loss for
that period was $457,598. Our gross revenue for the three months ended June 30,
2000 were $16,871. Our net loss for that period was $60,632.
We are currently engaged in a registered offering of our common stock
seeking to raise from $410,000 to $860,000 net proceeds.
In August and September of 1999 we borrowed an aggregate of $225,000. Of
that amount $135,000 plus interest is in default. The remainder of $90,000 is
due on September 1, 2000 as to $45,000 plus interest and on September 30, 2000
as to $45,000 plus interest.
We, presently, are entirely dependent upon proceeds of the aforesaid
offering to retire the aforesaid debt. We currently have no plans to obtain
capital from any other source with which to satisfy that debt. However, we are
attempting to negotiate with the lenders a re-structuring of these loan
obligations.
At the date hereof we have sold no shares through the aforesaid offering
which will expire on September 7, 2000. Accordingly, if we are unable to raise
the minimum proceeds from the aforesaid offering, or negotiate a restructuring
of our loan obligations amounting to approximately $247,000, there is serious
doubt that we will be able to satisfy the aforesaid debt, with our current level
of revenues, and continue operations as a going concern for the 12 months
following the date of this report.
PART II-OTHER INFORMATION
Item 1. Legal Proceedings.
There is no legal proceeding pending in which the registrant is a party or
in which its property is the subject. The registrant is unaware of any
proceeding involving the registrant that is being contemplated by any
governmental agency.
<PAGE>
Item 2. Changes in Securities and Use of Proceeds
(a) not applicable
(b) not applicable
(c) One June 15, 2000 the registrant granted to Pat Rife, a merchandising
consultant, options to purchase 30,000 shares of registrant's common stock
at $0.30 per share. The options granted vest on June 15, 2001 and the
exercise period expires on June 15, 2006. The options were granted under
the terms of the registrant's Stock Grant and Option Plan.
The options were granted to Pat Rife without registration under the
Securities Act of 1933 under the exemption from registration afforded by
Rule 701 promulgated by the Securities and Exchange Commission.
(d)
(1) On May 12, 2000 a registration statement covering an offering of a
minimum of 450,000 and a maximum of 900,000 shares of common stock of
the registrant at $1.00 per share, on Form SB-2, File No. 333-90241
became effective.
(2) The offering has not, in fact, commenced because the registrant
believes there is not an adequate market for its securities at this
precise time, principally because, registrant believes, market
interest in start-up e-commerce companies has substantially declined.
Moreover, the registrant is not offering its registered shares because
the fact of its default in payment of the loans discussed herein in
Item 3 has not been disclosed in its registration statement on Form
SB-2, File No. 333-90241.
(3) There have been no sales of shares in the offering; but, the
offering has not terminated.
(4)
(i) The offering has not been terminated.
(ii) The offering is a self underwriting by the registrant. There
is no underwriter.
(iii) The securities registered are common shares.
(iv) The securities registered are a minimum of 450,000 and a
maximum of 900,000 shares of common stock on behalf of the
registrant.
No securities are registered for any selling securities holders.
The aggregate offering price is: $900,000.
<PAGE>
No shares have been sold as of the date hereof.
(v) From March 31, 2000 to June 30, 2000 the expenses incurred in
connection with the offering of the registered securities was
$267.00 for the following purposes:
(a) underwriters discounts and commissions $ -0-
(b) finders fees -0-
(c) Expenses paid to or for underwriters -0-
(d) Other expenses 267.00
------
Total $267.00
=======
(A) No direct or indirect payments were made to directors or officers or
their associates, of the registrant, nor to owners of 10 percent or more of
any class of securities of the registrant, nor to affiliates of the
registrant.
(B) The registrant paid $-0- to others.
(vi) There are no net or gross offering proceeds
(vii) not applicable
(A) not applicable
(B) not applicable
(viii) not applicable
Item 3. Defaults Upon Senior Securities.
(a) (1) On August 6, 2000, the registrant defaulted by failing to make
payments due on four convertible promissory notes aggregating $135,000 of
principal and interest thereon in the amount of $13,500 which were due and
payable on that date.
(a) (2) On September 1, 2000 and September 30, 2000 convertible promissory
notes each in the amount of $45,000 together with interest thereon in the
amount of 10 percent per annum will become due and payable.
The registrant anticipates that it will default in payment of both of these
promissory notes in the aggregate principal sum of $90,000 plus accrued
interest in the amount of $9,000. Accordingly, as of October 1, 2000 the
registrant expects to be in default of its obligation on all of these
promissory notes totaling $247,000 and interest which will thereafter
accrue after default. As discussed above under Item 2, the registrant is
currently attempting to negotiate with the lenders a restructuring of its
debt obligations under all of the above discussed loans.
<PAGE>
(b) not applicable
Item 4. Submission of Matters to a Vote of Security Holders.
(a) (b) (c) (d) not applicable
Item 5. Other Information.
(a) not applicable
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibit Index
-----------------
Exhibit No.
(27) Financial Data Schedule
(b) The registrant has not filed any Form 8-K Reports up to the date of
this report.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
MediaComm Broadcasting Systems, Inc.
------------------------------------
(Registrant)
Date: August 11, 2000 By: /s/ Don E. Montague
--------------------- -----------------------
Don E. Montague, CEO
and Chief Financial Officer
Date: August 11, 2000 By: /s/ Steven S. Montague
--------------------- --------------------------
Steven S. Montague, President
