UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-QSB/A
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL QUARTER ENDED DECEMBER 31, 1997
Commission File Number 0-8164
MICRO-MEDIA SOLUTIONS, INC.
FORMERLY MOUNTAIN STATES RESOURCES CORPORATION
(Exact name of registrant as specified in charter)
UTAH 87-0280886
State or other jurisdiction of (IRS Employer I.D. No.)
Incorporation or organization
501 Waller St., Austin, Texas 78702
(Address of principal executive offices)
Issuer's telephone number, including area code (512) 476-6925
Securities registered pursuant to section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None N/A
Securities registered pursuant to section 12(g) of the Act:
Title of each class Name of each exchange on which registered
Common Stock, None
Par Value $.10
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.
(1) Yes ( ) No (X) (2) Yes (X) No ( )
Number of shares of common stock outstanding at December 31, 1997:
10,764,733
Part I: Financial Information Item 1:
Consolidated Financial Statements
Index to Consolidated Financial Statements Page
Consolidated Balance Sheets 3
Consolidated Statements of Operation 4
Consolidated Statements of Cash Flows 5
Consolidated Statements of Stockholders' Equity 6
Notes to Consolidated Financial Statements 7
MICRO-MEDIA SOLUTIONS, INC.
FORMERLY MOUNTAIN STATES RESOURCES CORPORATION
Consolidated Balance Sheets - (restated)
December 31 March 31
1997 1997
(unaudited) (audited)
ASSETS
Current Assets
Cash and Cash Equivalents $ 19,696 $ 18,112
Accounts Receivable - Trade 576,852 983,352
Inventory 346,521 181,060
Other Receivables - Advances 174,905 127,971
Total Current Assets 1,117,974 1,310,495
Property, Plant, and Equipment
(at cost) net 691,881 784,039
Long Term Notes Receivable 434,796 419,774
TOTAL ASSETS $ 2,244,651 $ 2,514,308
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities
Accounts Payable - Trade $ 653,766 $ 875,734
Bank Line of Credit 204,765 725,000
Other Accrued Expenses 24,000 113,185
Current Maturities of
Long-term Debt 174,026 174,026
Current Portion of Obligations
Under Capital Leases 41,097 41,097
Total Current Liabilities 1,097,654 1,929,042
Long Term Notes
Notes Payable 389,874 506,806
Obligations under Capital
Leases For Equipment 81,902 182,044
Senior Convertible Notes 371,000
Other Long Term Liabilities 685,450
Total Long Term Notes 1,528,226 688,850
Stockholders Equity
Preferred stock, Series B, $5.30 2,226,000
stated value; 420,000 authorized,
issued and outstanding
Common stock at $.10 par value; 1,076,473 1,076,473
Authorized 50,000,000 shares;
10,764,733 shares issued
and outstanding
Additional paid-in capital (1,454,058) (1,046,058)
Accumulated Deficit (2,229,644) ( 133,999)
Total Stockholders Equity ( 381,229) ( 103,584)
TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY $ 2,244,651 $ 2,514,308
The accompanying notes are an integral part of these financial statements.
MICRO-MEDIA SOLUTIONS, INC.
FORMERLY MOUNTAIN STATES RESOURCES CORPORATION
Consolidated Statements of Operation - (restated)
(UNAUDITED)
For the Nine Months For the Three Months
Ended December 31 Ended December 31
1997 1996 1997 1996
Net Revenues:
Hardware, Software & Peripherals $1,350,810 $ 320,035 $ 212,013 $ 107,264
Service, Support & Integration 702,915 266,794 188,298 79,936
Network Installation 685,771 2,394,663 319,950 641,604
2,739,496 2,981,492 720,261 828,804
Cost of Goods Sold
Hardware, Software & Peripherals 885,989 254,249 204,926 75,085
Service, Support & Integration 456,896 173,415 122,394 51,958
Network Installation 509,405 1,556,532 255,301 417,043
1,852,290 1,984,196 582,621 544,086
Gross Margin 887,206 997,296 137,640 284,718
Selling, General & Administrative 2,620,639 1,200,271 1,234,852 341,811
Operating Income (Loss) (1,733,433) ( 202,975) (1,097,212) ( 57,093)
Other Income (Expense) ( 362,212) ( 33,385) ( 256,811) 66,508
Net Income (Loss) (2,095,645) ( 236,360) (1,354,023) 9,415
Earnings (Loss) Per Share $ (0.195) $ (0.024) $ (0.126) $ (0.000)
Weighted average number of shares
Outstanding used in earnings
(loss) per share calculation 10,764,733 9,784,733 10,764,733 9,784,733
The accompanying notes are an integral part of these financial statements.
MICRO-MEDIA SOLUTIONS, INC.
FORMERLY MOUNTAIN STATES RESOURCES CORPORATION
Consolidated Statements of Stockholders' Equity - (restated)
For the Year Ended March 31, 1997 (Audited)
and Nine Months Ended December 31, 1997 (unaudited)
Preferred Additional
Stock; Series B Common Stock paid in Accumulated
Shares Amount Shares Amount Capital Deficit Total
Balance
March 31,
1996 9,784,733 978,473(1,046,058) 348,386 280,801
Common stock
issued for
services 500,000 50,000 50,000
Common stock
options
exercised 480,000 48,000 48,000
Net Loss for
the year
ended
March 31,
1997 ( 482,385)( 485,385)
Balance
March 31,
1997 10,764,733 1,076,473(1,046,058)( 133,999)( 103,584)
Preferred
Stock issued:
Private Placement
420,000 2,226,000 ( 508,000) 1,718,000
Stock option for
Compensation 100,000 100,000
Net loss
for the
Nine months
ended
December 31,
1997 (2,095,645)(2,095,645)
Balance
December 31,
1997 420,000 2,226,000 10,764,733 1,076,473(1,454,058)(2,229,644)( 381,229)
The accompanying notes are an integral part of these financial statements.
MICRO-MEDIA SOLUTIONS, INC.
FORMERLY MOUNTAIN STATES RESOURCES CORPORATION
Consolidated Statements of Cash Flow (restated)
For the Nine Months Ended December 31
(UNAUDITED)
1997 1996
Cash Flows from Operating
Activities:
Net (Loss) $(2,095,645) $( 236,360)
Adjustments to reconcile net income
to net cash, provided by operating
activities:
Depreciation expense 148,587 86,096
Change in accounts receivable 359,566 ( 224,423)
Change in inventory ( 165,461) 270,519
Change in accounts payable ( 221,968) ( 120,429)
Change in accrued expenses ( 89,185) 24,795
Net Cash Provided by
Operating Activities (2,064,106) 41,056
Cash Flows from Investment Activities:
Investment in property & equipment ( 56,429) ( 367,270)
Investment in other assets ( 15,022) ( 428,082)
Net Cash provided by (Used by)
Investing Activities ( 71,451) ( 795,352)
Cash Flows from Financing Activities:
Proceeds from Line of Credit ( 520,235) 275,000
Change in long term debt ( 116,932) 493,037
Proceeds from other notes receivable 685,450
Change in capital lease obligations ( 100,142)
Proceeds from Private Placement 1,818,000
Proceeds from Senior Convertible Debt 371,000
Net Cash Provided by (Used by)
Financing Activities 2,137,141 768,037
Net Increase in Cash 1,584 13,741
Cash at Beginning of Period 18,112 9,104
Cash at End of Period $ 19,696 $ 22,845
Supplemental disclosures:
Cash paid for interest $ 81,891 $ 70,200
Supplemental schedule of non-cash investing and financing activities:
Preferred stock issued for:
Underwriting Fees $ 106,000
The accompanying notes are an integral part of these financial statements.
MICRO-MEDIA SOLUTIONS, INC.
FORMERLY MOUNTAIN STATES RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Restated)
December 31, 1997
(unaudited)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation:
The accompanying unaudited interim financial statements have been
prepared in accordance with generally accepted accounting
principals and the rules of the Securities and Exchange Commission
(the SEC), and should be read in conjunction with the audited
financial statements and notes thereto contained in the Company's
latest annual Report filed with the SEC on Form 10-KSB/A. In the
opinion of management, all adjustments consisting of normal
recurring adjustments, necessary for the fair presentation of
financial position and the results of operations for the interim
periods presented have been reflected here in. The results of
operation are not necessarily indicative of the results to be
expected for the full year. Notes to the financial statements
which would substantially duplicate the disclosure contained in
the audited financial statements for the year ended March 31,
1997, as reported in the Form 10-KSB/A have been omitted.
Nature of Business and Organization
Micro-Media Solutions, Inc. (formerly Mountain States Resources
Corporation, ("MSRC")), was organized under the laws of the State
of Utah on April 15, 1969. MSRC began operations in April 15, 1969,
as a mining, mineral extraction and oil and gas exploration company.
MSRC discontinued its operations in 1993 and became a development
stage company as described in the Statement of Financial Accounting
Standards No.7, "Accounting and Reporting by Development Stage
Enterprises". On June 23, 1997, the then shareholders of Micro-Media
Solutions, Inc.,(MSI-Texas), entered into an agreement and plan of
reorganization with MSRC whereby MSRC acquired all of the issued and
outstanding stock of MSI-Texas in exchange for 9,310,000 shares of Common
Stock of MSRC. The transaction was accounted for as a recapitalization.
As part of the reorganization, MSRC changed its name to Micro-Media
Solutions, Inc., (a Utah Corporation), ("MSI") (the "Company").
MSI-Texas is an Austin, Texas, based technology corporation formed
to provide computer hardware, software programming, system installation and
support, maintenance, media duplication, and kitting to the public and private
sectors. In addition, MSI-Texas is certified by the State of Texas
as a Historically Underutilized Business (HUB).
MICRO-MEDIA SOLUTIONS, INC.
FORMERLY MOUNTAIN STATES RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Restated)
December 31, 1997
(Continued)
Principles of Consolidation
The consolidated financial statements for the years ended March 31,
1998 and 1997, include the accounts and transactions of MSI and
MSI-Texas. All significant inter-company accounts and transactions
have been eliminated in the accompanying consolidated financial
statements. MSI, however, did not have any material asset or
liability accounts or account balances. With the exception of
MSI's equity accounts, the significant account balances belong
to MSI-Texas.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with
an original maturity of three months or less to be cash
equivalents.
Earnings (Loss) Per Share
The earnings (loss) per share is computed on the basis of the
weighted average number of shares outstanding during the period.
All historical per share data has been restated to reflect stock
splits and the effect of the merger transaction of Micro-Media
Solutions, Inc.
Use of Estimates and Certain Concentrations
Management of the Company has made a number of estimates and
assumptions relating to the valuation and reporting of assets and
liabilities and the disclosure of contingent assets and
liabilities to prepare these consolidated financial statements in
conformity with generally accepted accounting principles.
Although actual results could differ from those estimates,
Management believes its estimates are reasonable. Certain
components, subassemblies and software included in the Company's
computer systems are obtained from sole suppliers or limited
number of suppliers. The company relies, to a certain extent, upon
its suppliers' abilities to enhance existing products in a timely
and cost-effective manner, to develop new products to meet
changing customer needs and to respond to emerging standards and
other technological developments in the computer industry. The
Company's reliance on a limited number of suppliers involves
several risks, including the possibility of shortages and/or
increases in costs of components and subassemblies, and the risk
of reduced control over delivery schedules.
The computer and telecommunications industries. The Company has a
large number of customers on which it performs ongoing credit
evaluations and generally does not require collateral from its
customers. Historically, the Company has not experienced
significant losses related to receivables from individual
customers or groups of customers in any particular industry of
geographic area.
MICRO-MEDIA SOLUTIONS, INC.
FORMERLY MOUNTAIN STATES RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Restated)
December 31, 1997
(Continued)
Restated Financial Statements
The accompanying financial statements have been restated from the
statements originally issued. These statements have been restated to
report the transaction between MSRC and MSI-Texas as a recapitalization.
The original financial statements reported the transaction as a purchase.
Changes in the financial statements are as follows:
December 31, 1997 March 31, 1997
Balance Sheet: As Reported As Restated As Reported As Restated
Goodwill $ 707,521 $ -0- $ 751,329 $ -0-
Additional paid-in capital 6,986,652 (1,454,058) 5,600,652 (1,046,058)
Preferred Stock Series B 840,000 2,226,000 -0- -0-
Accumulated deficit (8,576,833) (2,229,644) (5,746,125) ( 133,999)
For the Nine For the Three
Months Ended Three Months Ended
December 31, 1997 March 31, 1997
Statement of Operation As Reported As Restated As Reported As Restated
Selling, General &
Administrative $ 2,573,293 $ 2,620,639 $ 686,953 $ 1,234,852
Net Loss (2,830,708) (2,095,645) (1,064,584) (1,354,023)
Earnings (Loss) Per Share (.220) (.195) (.083) (.126)
Weighted average number of
shares outstanding used in
earnings (loss) per share
calculation 12,895,845 10,764,733 12,895,845 10,764,733
Certain amounts previously reported have been reclassified for
presentation purposes in the restated financial statements. These amount
are not material to the financial statements. Restated financial statements and
Form 10KSB/A for March 31, 1997 have previously been filed with the SEC.
NOTE 2. SHORT-TERM BORROWINGS.
The Company has two outstanding promissory notes in the total
amount of $200,000 payable to a third party. These notes bear
interest at a rate of 20% per anum. The Company has refused to
make payment on theses notes due to a number of disputes among the
Company, the third party, and a former consultant to the Company.
The third party filed suit against the Company to enforce the
notes. The Company filed an answer and denies liability. The
Company also filed a separate lawsuit against both the third party
and the former consultant in connection with the global dispute
among the parties. The Company intends to defend vigorously the
third party's claim under the notes and to pursue vigorously its
own claims against the third party and the former consultant.
MICRO-MEDIA SOLUTIONS, INC.
FORMERLY MOUNTAIN STATES RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Restated)
December 31, 1997
(Continued)
The Company had a secured credit agreement with Bank One providing
for borrowings of up to $725,000, based on the amount of the
Company's eligible receivables. As of December 31, 1997 the
Company owed $205,000 on the line of credit. Under the agreement,
the Company is subject to certain financial and other covenants
including certain financial ratios.
The credit agreement matured on August 18, 1997 and Bank One
notified the Company that they would not renew the credit line.
The Company has working agreements with two other banking
institutions.
NOTE 3. CAPITAL TRANSACTIONS
On November 18, 1997, the Company received gross proceeds of
$2,120,000 from the Private Placement (Phase I) of 400,000 shares
of Series B, 5% Cumulative Convertible Non-Voting Preferred Stock,
Stated value $5.30 per share. The Company issued 20,000 shares of
the Series B Preferred Stock as agreed for payment of commission
fees of the Private Placement (Phase I). Each share of Preferred B
stock is initially convertible into ten shares of the Company's
Common Stock. Each Preferred B share was issued six Class A
Warrants exercisable for a two year period beginning January 31
1998. The exercise price for each warrant is $1.50 per share and
will entitle the holder to one share of the Company's Common
Stock. Total expenses of the Private Placement including broker
fees, commissions, and legal and accounting expenses totaled
$408,000.
The Company received $371,000 in October 1997 from two individuals
under Senior Convertible Debt (the "Senior Convertible Debt")
secured by common stock.
NOTE 4. SUBSEQUENT EVENTS
On February 4, 1998, the Company received $1,000,000 completing
the Private Placement (Phase II) of 94,340 shares of Series C, 6%
Cumulative Convertible Non-Voting Preferred Stock for a purchase
price of 10.60 per share. The Company issued 4,717 shares of
Series C, 6% Cumulative Convertible Non-Voting Preferred Stock as
agreed for payment of commission fees of the Private Placement
(Phase II). Each share of Preferred C stock is initially
convertible into ten shares of the Company's Common Stock. Total
expense of the Private Placement including broker fees,
commissions, and legal and accounting fees totaled $180,000.
MICRO-MEDIA SOLUTIONS, INC.
FORMERLY MOUNTAIN STATES RESOURCES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Restated)
December 31, 1997
(Continued)
The holders of the Senior Convertible Debt have requested
conversion of the debt into 420,000 Class A Warrants and 70,000
shares of Series B, 5% Cumulative Convertible Non-Voting Preferred
Stock, Stated value $5.30 per share. The Class A Warrants will be
exercisable at a price of $0.795 per share. Accrued interest on
the Senior Convertible Debt will be paid through the issuance of
10,286 shares of Common Stock.
On February 5, 1998, the Company arranged for a line of credit in
the amount of $750,000 from Compass Bank. This credit facility is
secured by deposits at Compass Bank. An additional line of credit
in the amount of $500,000 is being requested and will be secured
by receivables.
NOTE 5. CONTINGENCIES AND LEGAL MATTERS
MSI is engaged in various litigation and has a number of
unresolved claims pending. While the amounts claimed are not
material and the ultimate liability in respect to such litigation
and claims cannot be determined at this time, MSI is of the
opinion that such liability is not to be of material importance in
relation to its accounts.
NOTE 6. GOING CONCERN
As shown in the accompanying consolidated financial statements,
the Company has incurred a net loss in the current quarter of
$1,460,023 and as of that date, the Company's current assets
exceeded its current liabilities by $20,320. At December 31, 1997,
the Company owes accounts payable with dates due in excess of
ninety (90)days. These factors create an uncertainty about the
Company's ability to continue as a going concern. The ability
of the Company to continue as a going concern is dependent on the
Company's attaining additional financing to fund the expenses
related to operations and capital improvements. The Company
received a net $2,189,000 from capital transactions during the
quarter ending December 31, 1997. An additional net $870,000 has
been received in the first quarter of 1998. The Company has signed
a letter of intent for up to an additional $ 5,000,000 under a
debt instrument to be receive no later than April 30, 1998. In
addition, the Company plans a secondary offering during fiscal
calendar 1998. The financial statements do not include any
adjustments that might be necessary if the Company is unable to
continue as a gong concern.
Part I: Financial Information Item 2: Management's Discussion
and analysis of financial condition and results of operations.
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.
This discussion should be read in conjunction with the
Consolidated Financial Statements appearing in Item 1.
GENERAL
Micro-Media Solutions, Inc. (formerly Mountain States Resources
Corporation, ("MSRC")), was organized under the laws of the State
of Utah on April 15, 1969. MSRC began operations in April 15, 1969,
as a mining, mineral extraction and oil and gas exploration company.
MSRC discontinued its operations in 1993 and became a development
stage company as described in the Statement of Financial Accounting
Standards No.7, "Accounting and Reporting by Development Stage
Enterprises". On June 23, 1997, the then shareholders of Micro-Media
Solutions, Inc.,(MSI-Texas), entered into an agreement and plan of
reorganization with MSRC whereby MSRC acquired all of the issued and
outstanding stock of MSI-Texas in exchange for 9,310,000 shares of Common
Stock of MSRC. The transaction was accounted for as a recapitalization.
As part of the reorganization, MSRC changed its name to Micro-Media
Solutions, Inc., (a Utah Corporation), ("MSI") (the "Company").
MSI-Texas is an Austin, Texas, based technology corporation formed
to provide computer hardware, software programming, system installation and
support, maintenance, media duplication, and kitting to the public and private
sectors. In addition, MSI-Texas is certified by the State of Texas
as a Historically Underutilized Business (HUB).
Among the principal cost to market and sell the Company's products are
advertising and promotion cost, salaries and commissions, general and
administrative expenses. The Company's operation results may be subject to
fluctuations on a quarterly and an annual basis as a result of various factors,
including, but not limited to, fluctuating market pricing for computer and
semiconductor memory products, industry competition, seasonal government
purchasing cycles, and working capital restrictions on manufacturing and
production. Therefore, the operating results for any particular period are not
necessarily indicative of the results that may occur in any future period.
The Company's revenues consist of hardware sales, software sales and the
delivery of technical services, including installing and maintaining network
systems. The technical service sales of the Company typically yield a higher
gross margin than the hardware and software sales of the Company. This is due,
in part, to the intense competition in the hardware and software sales sector
from Original Equipment Manufactures and distributors. As a result, the Company,
is attempting to strategically reposition itself from emphasizing hardware sales
to intensifying sales of technical services.
RESULTS OF OPERATIONS
Three Months Ended December 31, 1997 Compared to Three Months
Ended December 31, 1996
Net sales for the 1997 fiscal Third Quarter were $720,261 versus
$828,804 for the 1996 fiscal Third Quarter. A decrease of 13
percent. The decrease is primarily due as a result of the completion of a large
network installation project without any new projects cued to follow.
Cost of sales was $582,621 resulting in a gross margin of 19% in the 1997 third
quarter versus sales of $544,086 resulting in a gross margin of 34% in the 1996
third quarter, a decrease of 15 percent. The decrease was the result of lower
net sales and increase in service related sales which typically have a higher
margin.
Selling general and administrative expenses increased to $1,340,852
in the 1997 third quarter from $341,811 in the 1996 third quarter,
an increase of more two fold percent. This increase is primarily due to
additional management personnel.
Nine Months Ended December 31, 1997 Compared to Nine Months Ended
December 31, 1996.
Net sales for the 1997 Nine months ended December 31, 1997 were
$2,739,496 versus $2,981,492 for the Nine months ended December 31, 1996.
A decrease of 8 percent. The decrease is primarily due as a result of the
completion of a large network installation project without any new projects
cued to follow.
Cost of sales was $1,852,290 in the Nine months ended December 31,
1997 versus $1,984,196 in the Nine months ended December 31, 1996,
a decrease of 7 percent. The decrease reflect the decrease in net sales
in 1997.
The Company's gross margin in the Nine months ended December 31,
1997 was 32% versus 33% in the Nine months ended December 31,
1996, a decrease of 1 percent.
Selling general and administrative expenses increased to
$2,726,639 in the Nine months ended December 31, 1997 from
$1,200,271 in the Nine months ended December 31, 1996, an increase
of 1.27 percent. This increase is primarily due to additional
management personnel and an increase in interest expense and late fees.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1997, the Company had a working capital of $20,320
compared to working capital deficit of $363,599 at December 31,
1996. This increase in the Company's working capital was primarily
due to decrease in borrowings and payables.
The Company received $3,282,450 in proceeds from outsiders in the
form of a private placement, bridge financing and issuing senior
convertible debt during the three months ended December 31, 1997.
Additional funding of $870,000 was received through February 4,
1998.
The company has financed its operations primarily through
borrowings. As of December 31, 1997, the Company's sources of
internal financing were limited. It is not expected that internal
sources of liquidity will improve until net cash is provided by
operating activities which is expected in early 1998, and until
such time, the company will rely upon external sources for
liquidity.
The Company has signed a letter of intent with an investment
banking firm for a debt offering of $3 to $5 million beginning on
or before April 30, 1998.
PART II: Other Information
Item 2: Changes in Securities
On November 17, 1997, the Company completed the private placement
(Phase I) (The "private Placement") of 420,000 shares of Series B
Preferred Stock, Stated Value $5.30 per share (the "Series B
Preferred Stock"), all to "accredited Investors" as that term is
defined in rule 501(a) of Regulation D Promulgated under the
Securities Act of 1933, as amended.
On February 4, 1998, the Company completed the private placement
of 99,057 Shares of Series C, 6% Cumulative Convertible Non-Voting
Preferred Stock, all to "accredited investors" as that term is
defined in rule 501(a) of Regulation D promulgated under the
Securities Act of 1933, as amended.
The Company plans to use the proceeds from the sale of the Shares
for working capital, repayment of indebtedness and hiring of new
personnel for recently received new contracts. Based upon those
contracts in place at December 31, 1997 and the successful
completion of the private placement-funding, revenues for fiscal
year 1999 should exceed $15,000,000.
The company is obligated to issue up to 1,500,000 shares of common
stock to employees and consultants.
Item 4: Submission of matters to a vote of the security holders
On September 26,1997, a special meeting of the security holders of
the Company was held to change the name of the company to Micro-
Media Solutions, Inc.
Item 5: Other Matters
The Company has retained the firm of Novokov, Davidson & Flynn,
Dallas, Texas as corporate legal counsel to represent the Company
in all matters except for items relating to the private placement.
The firm of Vial, Hamilton, Koch & Knox represents the Company in
the private placement.
The Company is now listed on Standard & Poor's Market Access
Service as of December 1997 which prominently displays the
investment merit of over the counter (OTC) bulletin board
companies in some of the most widely distributed information
vehicles in the financial and investment communities.
PR Newswire has been selected as the firm for dissemination of
news releases. PR Newswire is the world's leader in the electronic
distribution of full Text corporate, association, and
institutional news releases to the media and financial community
The Board of Directors at its February meeting will be adding two
new members to the board as required by the private placement
agreement.
Ernesto M Chavarria, President of ITBR, Inc. has 25 years
experience in international business development.
Blandida Cardenas, Associate Professor at LBJ Institute,
University of Texas, Former Commissioner of United States
Commission of Civil Rights and Former Director Of Office of
Minorities in Higher Education.
The Company has entered into Employment agreements with its senior
executive officers for a period ending on March 31, 2001 subject
to two(2) one year extensions. These agreements grant the executives stock
options to purchase an aggregate of 150,000 shares at a price ranging from
$1.50 to $2.25 per share. These agreements also included specific
bonus plans based on performance, revenues and common stock value.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date 10/20/98 By /S/ Jose G. Chavez
Jose G. Chavez, President
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of this Registrant and in the capacities and on the
dates indicated.
Signature Capacity Date
/s/ Jose G. Chavez 10/20/98
Jose G. Chavez President and Chairman
of the Board of Directors
/s/ Mitchell Kettrick 10/20/98
Mitchell Kettrick Vice-President and
Director
/s/ David Hill 10/20/98
David Hill Chief Financial Officer
/s/ Ernesto Chavarria 10/20/98
Ernesto Chavarria Director
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<PERIOD-TYPE> 9-MOS 3-MOS
<FISCAL-YEAR-END> MAR-31-1998 MAR-31-1998
<PERIOD-END> DEC-31-1998 DEC-31-1998
<CASH> 19,696 19,696
<SECURITIES> 0 0
<RECEIVABLES> 576,852 576,852
<ALLOWANCES> 0 0
<INVENTORY> 346,521 346,521
<CURRENT-ASSETS> 1,117,974 1,117,974
<PP&E> 1,039,265 1,039,265
<DEPRECIATION> 347,384 347,384
<TOTAL-ASSETS> 2,244,651 2,244,651
<CURRENT-LIABILITIES> 1,097,654 1,097,654
<BONDS> 0 0
0 0
2,226,000 2,226,000
<COMMON> 1,076,473 1,076,473
<OTHER-SE> (3,683,702) (3,683,702)
<TOTAL-LIABILITY-AND-EQUITY> 2,244,651 2,244,651
<SALES> 2,739,496 720,261
<TOTAL-REVENUES> 2,739,496 720,261
<CGS> 1,852,290 582,621
<TOTAL-COSTS> 1,852,290 582,621
<OTHER-EXPENSES> 2,982,851 1,491,663
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (2,095,645) (1,354,023)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (2,095,645) (1,354,023)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (2,095,645) (1,354,023)
<EPS-PRIMARY> (.195) (.126)
<EPS-DILUTED> (.195) (.126)
</TABLE>
