SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
[ X ] Annual report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1999
[ ] Transition report under section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ___________________ to ______________
Commission File Number 2-71164
WESTERN MEDIA GROUP CORPORATION
(Name of small business issuer in its charter)
Minnesota 41-1311718
(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
11900 Wayzata Blvd., Suite 100, Hopkins, MN 55305
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code 612-512-1851
Securities registered pursuant to Section 12(b) of the Exchange
Act: None
Securities registered under Section 12(g) of the Exchange Act:
None
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 report(s), and (2) has been subject to such
filing requirements for the past 90 days. Yes [ ] No [ X ]
Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B is contained in this form, and no
disclosure will be contained, to the best of the registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this form 10-KSB or any
amendment to this Form 10-KSB. [ X ]
The issuer's revenue for its most recent fiscal year was: $ -0-
The aggregate market value of the issuer's voting stock held as
of June 1, 2000, by non-affiliates of the issuers was $0.
As of June 1, 2000, the issuer had 24,993,100 shares of its $0.01
par value common stock outstanding.
Transitional Small Business Format: Yes [ ] No [ X ]
Documents incorporated by reference: None
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PART I
Item 1. Description of Business.
Western Media Group Corporation (the "Company") was
organized as Ionic Controls, Inc., a Minnesota corporation,
("Ionics") in July 1977 as a successor to a sole proprietorship
engaged in the graphics business. Ionics participated in the oil
industry through its subsidiary, Ionic Energy Corporation,
participated in the audiophile record business through its
subsidiary, Audio Encores, Inc., and medical devices through its
subsidiary, Dia-Med, Inc. Ionics effected a four-for-one stock
split in July 1978 and a five-for-one stock split in February
1981. On November 6, 1981 Ionics registered and sold 719,850
units ("1981 Units") consisting of one share of Common Stock, one
Two-Year Warrant that expired September 30, 1990, and one Three-
Year Warrant that expired March 31, 1991. The 1981 Units were
sold at an offering price of $0.75.
Ionics had limited operations from 1981 forward. Ionics oil
operations consisted of a limited number of fractional working
interests in low volume producing wells in Texas. The interests
were fully amortized and the Company received little income from
these properties prior to their liquidation. Ionics audiophile
quality record business was adversely affected by the development
of stereo cassette and compact disk recordings. Ionics
liquidated its inventory of records and in 1987 liquidated Audio
Encores, Inc. Ionics was unable to effectively obtain FDA
approval for its medical device, Dia-Med, or to develop the
interest of any medical manufacturer to further develop,
manufacture and market the device. Ionics liquidated Dia-Med,
Inc. in 1987.
Ionics acquired in December 1982, 98.7% of the outstanding
common shares of Sioux City Iron Company ("SCIC"). SCIC was
engaged in the business of wholesale distribution of heavy
hardware to primarily the agricultural industry. Adverse
agricultural economic conditions forced SCIC in October 1987 to
seek protection under the Bankruptcy Code. In July 1988 pursuant
to the order of the Bankruptcy Court all the assets of SCIC were
sold and Ionics was released from liability of its long-term debt
to the seller of SCIC. SCIC was dissolved in December 1988.
In November 1988, the Company's name was changed to Western
Media Group Corporation. The change of name coincided with the
Board of Directors' determination to focus the Company's business
on the acquisition, owning and operating of radio and television
broadcasting and printed media properties.
In April 1989, the Company acquired substantially all the
assets of Carmel Broadcast Associates, a New York corporation
which operated radio broadcast stations KXDC-AM and FM for
$2,650,000. The Company financed the acquisition with proceeds
from a loan provided by Thomas K. Scallen, a former officer and
director. Operation of the radio stations was unsuccessful, and
the Company sold the radio stations in July 1991 for $200,000 in
cash a note receivable in the principal amount of $900,000. The
$1,100,000 received from the sale of the stations was paid and
transferred to Mr. Scallen in complete satisfaction of
liabilities owed by the Company to Mr. Scallen in the amount of
$5,156,139. Consequently, since July 1991, the Company has had
no meaningful assets or operations.
At the present time, the Company intends to seek,
investigate, and if warranted, acquire an interest in a business
opportunity. The Company does not propose to restrict its search
for a business opportunity to any particular industry or
geographical area and may, therefore, engage in essentially any
business in any industry. The Company has unrestricted
discretion in seeking and participating in a business
opportunity, subject to the availability of such opportunities,
economic conditions and other factors.
The selection of a business opportunity in which to
participate is complex and extremely risky and will be made by
management in the exercise of its business judgment. There is no
assurance that the Company will be able to identify and acquire
any business opportunity which will ultimately prove to be
beneficial to the Company and its shareholders.
The activities of the Company are subject to several
significant risks which arise primarily as a result of the fact
that the Company has no specific business and may acquire or
participate in a business opportunity based on the decision of
management which will, in all probability, act without the
consent, vote, or approval of the Company=s shareholders.
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Sources of Opportunities
It is anticipated that business opportunities may be
available to the Company from various sources, including its
officers and directors, professional advisers, securities broker-
dealers, venture capitalists, members of the financial community,
and others who may present unsolicited proposals.
The Company will seek a potential business opportunity from
all known sources, but will rely principally on personal contacts
of its officers and directors as well as indirect associations
between them and other business and professional people.
Although the Company does not anticipate engaging professional
firms specializing in business acquisitions or reorganizations,
if management deems it in the best interests of the Company, such
firms may be retained. In some instances, the Company may
publish notices or advertisements seeking a potential business
opportunity in financial or trade publications.
Criteria
The Company will not restrict its search to any particular
business, industry or geographical location. The Company may
acquire a business opportunity or enter into a business in any
industry and in any stage of development. The Company may enter
into a business or opportunity involving a start-up or new
company. The Company may acquire a business opportunity in
various stages of its operation.
In seeking a business venture, the decision of management of
the Company will not be controlled by an attempt to take
advantage of an anticipated or perceived appeal of a specific
industry, management group, or product or industry, but will be
based upon the business objective of seeking long-term capital
appreciation in the real value of the Company.
In analyzing prospective business opportunities, management
will consider such matters as the available technical, financial
and managerial resources; working capital and other financial
requirements; the history of operations, if any; prospects for
the future; the nature of present and expected competition; the
quality and experience of management services which may be
available and the depth of the management; the potential for
further research, development or exploration; the potential for
growth and expansion; the potential for profit; the perceived
public recognition or acceptance of products, services, trade or
service marks, name identification; and other relevant factors.
Generally, the Company will analyze all available factors in
the circumstances and make a determination based upon a composite
of available facts, without reliance upon any single factor as
controlling.
Methods of Participation of Acquisition
Specific business opportunities will be reviewed and, on the
basis of that review, the legal structure or method of
participation deemed by management to be suitable will be
selected. Such structures and methods may include, but are not
limited to, leases, purchase and sale agreements, licenses, joint
ventures, other contractual arrangements, and may involve a
reorganization, merger or consolidation transaction. The Company
may act directly or indirectly through an interest in a
partnership, corporation, or other form of organization.
Procedures
As part of the Company's investigation of business
opportunities, officers and directors may meet personally with
management and key personnel of the firm sponsoring the business
opportunity, visit and inspect material facilities, obtain
independent analysis or verification of certain information
provided, check references of management and key personnel, and
conduct other reasonable measures.
The Company will generally request that it be provided with
written materials regarding the business opportunity containing
such items as a description of product, service and company
history; management resumes; financial information; available
projections with related assumptions upon which they are based;
an explanation of proprietary products and services; evidence of
existing patents, trademarks or service marks or rights thereto;
present and proposed forms of compensation to management; a
description of transactions between the prospective
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entity and its affiliates; relevant analysis of risks and
competitive conditions; a financial plan of operation and
estimated capital requirements; and other information deemed
relevant.
Competition
The Company expects to encounter substantial competition in
its efforts to acquire a business opportunity. The primary
competition is from other companies organized and funded for
similar purposes, small venture capital partnerships and
corporations, small business investment companies and wealthy
individuals.
Employees
The Company does not currently have any employees but relies
upon the efforts of its officers and directors to conduct the
business of the Company.
Item 2. Description of Property.
The Company does not own any property. The Company
currently utilizes office space, free of charge, provided by
officers and directors of the Company.
Item 3. Legal Proceedings.
None.
Item 4. Submission of Matters to a Vote of Securities Holders.
No matters were submitted during the fourth quarter of the
fiscal year covered by this report to a vote of security holders.
PART II
Item 5. Market for Common Equity and Related Stockholder
Matters.
There has been no public trading market for the Company's
common stock for the past two calendar years or from the
beginning of the current calendar year to the present. Following
the filing of this report, the Company will attempt to seek out
one or more stock brokerage firms to make a market in the
Company's common stock and submit an application for quotation of
the Company's common stock on the OTC Bulletin Board operated by
the National Association of Securities Dealers, Inc., or the
"Pink Sheets" operated by the National Quotation Bureau. There
is no assurance that a trading market in the common stock will be
established in the future.
Since its inception, no dividends have been paid on the
Company's common stock. The Company intends to retain any
earnings for use in its business activities, so it is not
expected that any dividends on the common stock will be declared
and paid in the foreseeable future. On June 1, 2000, there were
approximately 964 holders of record of the Company's Common
Stock.
Item 6. Management's Discussion and Analysis or Plan of
Operation.
Results of Operations
Years Ended December 31, 1999 and 1998
The Company had no revenue and no expenses during the years
ended December 31, 1999 and 1998. Consequently, the Company
realized no gain or loss for those years. From operations prior
to 1998, the Company carries a retained deficit of $985,785. The
Company does not expect to generate any revenue unless and until
it acquires an interest in an operating company.
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Liquidity and Capital Resources
At December 31, 1999, the Company had working capital
deficit of $128,540. In February 2000, the Company sold
12,000,000 shares of common stock to a private investor for
$36,000 in cash. In addition, the Company settled in March 2000,
all of its outstanding liabilities at calendar year end through
the issuance of 1,000,000 shares of common stock valued at
$10,000 and payment of $32,500 in cash. As a result of this
subsequent financing and reduction in liabilities, management
believes that the Company has sufficient cash to fund its limited
operations through the next calendar year. The Company's current
plan is to handle the administrative and reporting requirements
of a public company; and search for potential businesses,
products, technologies and companies for acquisition. At
present, the Company has no understandings, commitments or
agreements with respect to the acquisition of any business,
product, technology or company and there can be no assurance that
the Company will identify any such business, product, technology
or company suitable for acquisition in the future. Further,
there can be no assurance that the Company would be successful in
consummating any acquisition on favorable terms or that it will
be able to profitably manage the business, product, technology or
company it acquires.
Item 7. Financial Statements.
The financial statements of the Company appear at the end of
this report beginning with the Index to Financial Statements on
page F-1.
Item 8. Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure.
None.
PART III
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange Act.
The following tables sets forth as of June 1, 2000, the
name, age, and position of each executive officer and director
and the term of office of each director of the Company.
Name Age Position Director or Officer Since
George W. Fredericks 71 President and Director March 2000
Patrick L. Riggs 31 Vice President and Director March 2000
All Directors hold their positions for one year or until
their successors are duly elected and qualified. All officers
holds their positions at the will of the Board of Directors.
Set forth below is certain biographical information
regarding each of the Company's executive officers and directors:
George W. Fredericks, President and Director. Mr.
Fredericks is the founder and President of Financial
Communication Services, which structures financing and consults
for early stage companies. Mr. Fredericks has been a consultant
in the areas of mergers, acquisitions, and early stage financing
since 1996. In April 1997, Mr. Fredericks became president and a
director of Assisted Care Corporation, a publicly held Minnesota
corporation, which was a holding company for seven subsidiaries
engaged in the business of managing assisted living facilities.
In January 1998, one of the subsidiaries of Assisted Care filed
for protection under Chapter 11 of the United States Bankruptcy
Code, and was subsequently liquidated under Chapter 7 in January
1999. The remaining subsidiaries of Assisted Care liquidated
their assets and are inactive. Consequently, Assisted Care is an
inactive corporation seeking a new business venture in which to
participate.
Patrick L. Riggs, Vice President and Director. Mr. Riggs is
the founder and President of Riggs Capital, Inc., which
structures financing and consults for early stage companies. Mr.
Riggs has been a consultant in the areas
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of mergers, acquisitions, and early stage financing since 1996.
For four years prior to February 1997, Mr. Riggs was employed as
a registered representative with Protective Group Securities, an
investment banking firm in Minneapolis Minnesota. In April 1997,
Mr. Riggs became the vice president of finance, chief financial
officer and a director of Assisted Care Corporation, a publicly
held Minnesota corporation, which was a holding company for seven
subsidiaries engaged in the business of managing assisted living
facilities. In January 1998, one of the subsidiaries of Assisted
Care filed for protection under Chapter 11 of the United States
Bankruptcy Code, and was subsequently liquidated under Chapter 7
in January 1999. The remaining subsidiaries of Assisted Care
liquidated their assets and are inactive. Consequently, Assisted
Care is an inactive corporation seeking a new business venture in
which to participate.
Item 10. Executive Compensation.
No compensation has been paid to any officer or director of
the Company in the past three years. There are no compensatory
plans or arrangements, including payments to be received from the
Company, with respect to any officers or directors of the Company
which would in any way result in payments to any such person
because of his resignation, retirement, or other termination of
such person's employment with the Company, or any change in
control of the Company, or a change in the person's
responsibilities following a change in control of the Company.
Item 11. Security Ownership of Certain Beneficial Owners and
Management.
The following table sets forth as of June 1, 2000, the
number and percentage of the outstanding shares of common stock
which, according to the information supplied to the Company, were
beneficially owned by (i) each person who is currently a director
of the Company, (ii) each executive officer, (iii) all current
directors and executive officers of the Company as a group and
(iv) each person who, to the knowledge of the Company, is the
beneficial owner of more than 5% of the outstanding common stock.
Except as otherwise indicated, the persons named in the table
have sole voting and dispositive power with respect to all shares
beneficially owned, subject to community property laws where
applicable.
Common Percent of
Shares Class
Name and Address
George W. Fredericks (1) -0- -0-
11900 Wayzata Blvd., Suite 100
Hopkins, MN 55305
Patrick L. Riggs (1) 12,000,000 48.0
11900 Wayzata Blvd., Suite 100
Hopkins, MN 55305
All Executive officers and 12,000,000 48.0
Directors as a Group (2 persons)
(1) Messrs. Fredericks and Riggs are all of the officers and
directors of the Company.
Item 12. Certain Relationships and Related Transactions.
At March 16, 2000, the Company was indebted to Thomas K.
Scallen, a former officer and director of the Company, in the
amount of $41,391, which represented advances made to or on
behalf of the Company from 1991 through 1999. The Company
settled the debt through a cash payment of $10,000 and the
issuance of 1,000,000 shares of common stock to Mr. Scallen
valued at $0.01 per share or $10,000.
In February 2000, Patrick L. Riggs purchased 12,000,000
shares of common stock from the Company for $0.03 per share or
$36,000. At the time of the transaction, Mr. Riggs was not an
officer, director, or stockholder of the Company. The stock was
sold to provide funds necessary to settle outstanding
liabilities, bring the Company current in
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its reporting obligations under the Securities Exchange Act of
1934, and to keep the Company current in its reporting
obligations while it seeks a new business venture in which to
participate.
There are no other proposed transactions and no transactions
during the past two years to which the Company was a party and in
which any officer, director, or principal stockholder, or their
affiliates or associates, was also a party.
Item 13. Exhibits and Reports on Form 8-K.
Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the
last calendar quarter of 1999.
Exhibits
Copies of the following documents are included as exhibits
to this report pursuant to Item 601 of Regulation S-B.
Exhibit SEC Ref Title of Document Location
No. No.
1 (3)(i) Articles of Incorporation, as Amended Attached
2 (3)(ii) By Laws Attached
3 (10) Settlements and Mutual Releases between
the Company and Thomas K. Scallen Attached
4 (10) Subscription Agreement between the Company
and Patrick L. Riggs Attached
5 (27) Financial Data Schedule Attached
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act,
the registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
WESTERN MEDIA GROUP CORPORATION
Date: June 12, 2000 By: /s/ George W. Fredericks, President
Chief Executive Officer
Date: June 12, 2000 By: /s/ Patrick L. Riggs, Vice President
Chief Financial Officer
In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.
Date: June 12, 2000 /s/ George W. Fredericks, Director
Date: June 12, 2000 /s/ Patrick L. Riggs, Director
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WESTERN MEDIA GROUP CORPORATION
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999 AND 1998
TABLE OF CONTENTS
Page
Independent Auditors' Report F-2
Financial Statements:
Balance Sheets F-3
Statements of Operations and Accumulated Deficit F-4
Statements of Cash Flows F-5
Notes to Financial Statements F-6
F-1
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Callahan, Johnston & Associates, LLC
Certified Public Accountants and Consultants
INDEPENDENT AUDITORS' REPORT
Stockholders and Board of Directors
Western Media Group Corporation
Minneapolis, Minnesota
We have audited the accompanying balance sheets of Western Media
Group Corporation as of December 31, 1999 and 1998, and the
related statements of operations and accumulated deficit, and
cash flows for the years then ended. 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 misstatements. 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 Western Media Group Corporation as of December 31, 1999 and
1998 and the results of operations and cash flows for the years
then ended, 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 2 to the financial statements, the Company has no viable
operations or significant assets and is dependent upon
shareholders to provide sufficient working capital to maintain
the integrity of the corporate entity. These circumstances
create substantial doubt the Company's ability to continue as a
going concern and are discussed in Note 2. The financial
statements do not contain any adjustments that might result from
the outcome of these uncertainties.
/s/ Callahan, Johnston & Associates, LLC
CALLAHAN, JOHNSTON & ASSOCIATES, LLC
Minneapolis, Minnesota
June 8, 2000
7850 Metro Parkway, Suite 207, Minneapolis, MN 55425
Telephone: (952)858-7207 Fax: (952)858-7202
Email: [email protected]
F-2
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WESTERN MEDIA GROUP CORPORATION
BALANCE SHEETS
December 31,
1999 1998
ASSETS
Total current assets and
total assets $ - $ -
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 87,149 $ 87,149
Note payable and accrued interest -
related party 18,681 18,681
Amount due to officer 22,710 22,710
Total current liabilities 128,540 128,540
Stockholders' equity (deficit):
Common stock: $.01 par value; 25,000,000
shares authorized; issued and outstanding
11,993,100 shares 119,931 119,931
Additional paid-in capital 737,314 737,314
Accumulated deficit (985,785) (985,785)
Total stockholders' equity (deficit) (128,540) (128,540)
Total liabilities and
stockholders' equity (deficit) $ - $ -
The accompanying notes are an integral part of
these financial statements.
F-3
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WESTERN MEDIA GROUP CORPORATION
STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
Years Ended December 31,
1999 1998
Revenues $ - $ -
Administrative expenses - -
Income tax expense (benefit) - -
Net income (loss) - -
Other comprehensive income (loss) - -
Comprehensive income (loss) $ - $ -
Basic earnings (loss) per share $ - $ -
Weighted average number of
shares outstanding 11,993,100 11,993,100
Accumulated deficit:
Beginning of year $ (985,785) $ (985,785)
Net income (loss) - -
$ (985,785) $ (985,785)
The accompanying notes are an integral part of
these financial statements.
F-4
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WESTERN MEDIA GROUP CORPORATION
STATEMENTS OF CASH FLOWS
Increase (Decrease) In Cash
Years Ended December 31,
1999 1998
Cash flows from operating activities:
Net income (loss) $ - $ -
Adjustments to reconcile net income
(loss) to cash flows from
operating activities:
Accounts payable and other
current liabilities - -
Cash flows from operating activities - -
Cash flows from financing activities - -
Cash flows from investing activities - -
Increase (decrease) in cash - -
Cash:
Beginning of year - -
End of year $ - $ -
Supplemental cash flow information:
Interest paid $ - $ -
Income taxes paid $ - $ -
Summary of non cash activity:
None.
The accompanying notes are an integral part of
these financial statements.
F-5
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WESTERN MEDIA GROUP CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
The Company was incorporated on July 26, 1977, under the laws of
the State of Minnesota. On November 17, 1988, the Company
changed its name to Western Media Group Corporation. Formerly
the Company was known as Ionic Controls, Inc.
On July 31, 1991, the Company sold substantially all of its
operations, KXDC-AM and FM in Monterey, California for
$1,100,000. Proceeds from this sale were assigned to the
Company's chief executive officer in settlement of $5,156,139
owed to this individual. The Company recorded a gain on debt
forgiveness of $4,056,139 on this transaction as reported in its
September 30, 1991 Form 10-Q.
The Company's only remaining operations at that date were 100%
working interests in two oil leases in Bugai - Guadolupe County,
Texas owned through the Company's wholly-owned subsidiary, Ionic
Energy Corporation. These leases were without value and the
Company ultimately abandoned these interests in 1992. The
Company further allowed Ionic Energy Corporation to be
statutorially dissolved on August 1, 1997.
The Company currently has no operations.
Risks, Estimates and Uncertainties
Use of 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 disclosure of contingent
assets and liabilities at the date of the financial statements
and reported amounts of revenues and expenses during the
reporting period.
F-6
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WESTERN MEDIA GROUP CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Earnings Per Share
The Company implemented FASB 128: Earnings Per Share. FASB 128
replaces the presentation of primary EPS with basic EPS. Basic
EPS excludes dilution and is computed by dividing net income by
the weighted-average number of common shares outstanding for the
year. Diluted EPS reflects the potential dilution from stock
options and warrants and is computed using the treasury stock
method. Under the treasury stock method stock options are
assumed to have been exercised at the beginning of the period if
the exercise price exceeds the average market price during the
period. The computation of diluted EPS does not assume
conversion or exercise of securities that would have an
antidilutive effect on earnings per share.
There are not outstanding stock options or warrants.
Income Taxes
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes" which requires the use of the "liability
method" of accounting for income taxes.
The Company's net operating loss carryforwards are fully allowed
for due to questions regarding the Company's ability to utilize
these losses before they expire.
Deferred tax asset relating to net operating
loss carryforwards $ 340,000
Valuation allowance (340,000)
Net deferred tax asset $ -
F-7
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WESTERN MEDIA GROUP CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999 AND 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income Taxes (Continued)
At December 31, 1999, the Company has carryforwards as follows:
Federal State
2007 $1,137,000 $ 12,000
NOTE 2 - CONTINUED EXISTENCE
The Company is fully dependent upon the support of certain
stockholder(s) for the maintenance of its corporate status and to
provide all working capital support for the Company. These
stockholder(s) intend to continue to fund necessary expenses to
sustain the Company. The Company is presently seeking a merger
candidate and feels it will be successful in finding such a
candidate.
Failure of the Company to find a merger candidate and achieve
profitable operations or the failure of its stockholder(s) to
fund necessary expenses of the Company could result in the
Company being unable to continue as a going concern.
NOTE 3 - SUBSEQUENT EVENTS
Note Payable and Accrued Interest - Related party /
Amount Due to Officer
These obligations were settled March 16, 2000 for $20,000
($10,000 in cash; 1,000,000 shares of common stock with a stated
value of $10,000) resulting in $21,391 in debt forgiveness.
Accounts Payable
Subsequent to year end the $87,149 in accounts payable were
settled for $22,500 resulting in debt forgiveness of $64,649.
Stock Issuance
On March 16, 2000, the Company approved the issuance of
12,000,000 shares of common stock at $.003 a share. These
monies were collected in 2000.
F-8
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