U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-------------------------------------
FORM 10-QSB
(mark one)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13
OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File No. 0-16355
----------------------------------
PRINCETON MEDIA GROUP, INC.
(Name of Small Business Issuer in its Charter)
Ontario, Canada 98-0082860
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
214 Brazilian Avenue, Suite 300, Palm Beach, Florida 33480
(Address of principal executive offices)
561/659-0121
(Issuer's telephone number)
-----------------------------------------
Securities registered under Section 12(b) of the Act: None.
Securities registered under Section 12(g) of the Exchange Act as of March 31,
1999:
Common Stock, no par value.
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 [ ]
The number of shares outstanding of the issuer's common stock, no par value,
as of May 20, 1999 was 4,178,722.
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [ X ]
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
All financial information is expressed in United States dollars.
INDEX TO FINANCIAL STATEMENTS
Balance Sheet as of March 31,
1999
Consolidated Statements of Operations and Accumulated Deficit
for the Three Months Ended March 31, 1999 and
1998
Consolidated Statements of Cash Flows
for the Three Months Ended March 31, 1999 and
1998
Notes to Consolidated Financial
Statements
Item 2. Management's Discussion and Analysis
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Signatures
PAGE
<PAGE>
<TABLE>
PRINCETON MEDIA GROUP, INC.
Balance Sheet
March 31, 1999
(Unaudited)
<S>
<C>
Assets
Current assets
Cash
$ 796
Marketable securities
7,850
Total current assets
8,646
Property and equipment, cost
43,408
Less accumulated depreciation
(12,105)
Property and equipment, net
31,303
Total assets $
39,949
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $
261,691
Accrued expenses
50,000
Note payable on demand
81,526
Note payable on demand
250,000
Total current liabilities
643,217
Shareholders' equity (deficit):
Series A Preference Shares
28,923
Series C Preference Shares
739,696
Common Stock
21,297,570
Deficit
(22,669,457)
Total shareholders' equity (
603,268)
Total liabilities and shareholders' equity $
39,949
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
PRINCETON MEDIA GROUP, INC.
Consolidated Statements of Operations and Accumulated
Deficit
For the Three Months Ended March 31, 1999 and
1998
(Unaudited)
1999 1998
<S> <C>
<C>
Discontinued
Operations
Distribution, circulation, and other income $ - $
3,098,985
Advertising income
- - 691,451
Printing income
- - 509,053
Net revenues -
4,299,489
Costs and operating expenses:
Cost of sales -
3,001,892
Selling and administrative 3,203
1,449,676
Income (loss) from operations ( 3,203)
( 152,079)
Other income (expense)
Interest income
- - 11,681
Interest expense -
( 250,492)
Gain on reduction of guaranteed note payable
72,055 -
Net income (loss) 68,852
( 390,890)
Accumulated deficit - December 31, 1998 and 1997 ( 22,738,309) (
14,972,142)
Accumulated deficit - end of period $ ( 22,669,457) $(
15,363,032)
Basic and diluted loss per share: $ ( .01) $
( .11)
See accompanying notes to consolidated financial
statements.
</TABLE>
PAGE
<PAGE>
<TABLE>
PRINCETON MEDIA GROUP, INC.
Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 1999 and 1998
(Unaudited)
1999 1998
<C> <C>
Cash flows from discontinued operating activities:
Net income (loss) $ 68,852 $( 390,890)
Adjustments to reconcile net loss
to net cash used in
operating activities
Depreciation 2,170
81,543
Gain on reduction of guaranteed note (72,055)
- -
Amortization -
92,013
Stock issued for consulting services -
46,371
Changes in assets and liabilities
(Increase) decrease in:
Accounts receivable - (
404,085)
Inventories -
184,378
Prepaid expenses -
4,102
Deferred acquisition costs - (
28,007)
Accrued interest receivable - (
8,272)
Deposits -
9,481
Increase (decrease) in:
Accounts payable 1,829
171,810
Accrued expenses -
66,706
Deferred revenue -
956
Accrued interest - (
1,672)
Net cash provided by (used in)
operating activities 796 (
175,566)
Cash flows from investing activities:
Capital expenditures - (
30,753)
Advances on note receivable - related party - (
264,022)
Net cash used in
investing activities - (
294,775)
(continued)
PAGE
<PAGE>
Cash flows from financing activities:
Proceeds from exercise of stock options -
379,850
Payments of principal on line of credit - (
85,000)
Payments of principal on long-term debt - (
248,381)
Net cash provided by
financing activities -
46,469
Net increase (decrease) in cash 796 (
423,872)
Cash, December 31, 1998 and 1997 -
616,558
Cash, March 31, 1999 and 1998 $ 796 $
192,686
Supplemental disclosures of cash flow information:
1999
1998
Interest paid $ - $
252,164
Noncash investing and financing Activities:
Trademarks acquired for advertising credits in
1998 of $100,000 and in 1997 of $300,000
and accrued expense of $100,000 $ - $
100,000
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
PRINCETON MEDIA GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis for Presentation
The accompanying unaudited interim financial statements include the accounts
of Princeton Media Group, Inc. ("Princeton") and, in the prior year,
consolidate the accounts of its wholly owned subsidiaries. On October 27,
1998, Princeton Publishing, Inc. and Firestone Publishing, Inc., wholly-owned
subsidiaries of Princeton Media Group, Inc., and Kingston Press, Inc., a
wholly-owned subsidiary of Princeton Publishing, Inc., each filed an
Assignment for the Benefit of Creditors (the Assignment(s)), a proceeding
governed under the laws of the State of Florida. The Assignments were filed
with the Court of the 11th Judicial Circuit in and for Miami-Dade County,
Florida on October 27, 1998. The Assignment proceeding gives creditors the
opportunity to file proofs of claims. The Assignments were filed in order to
expedite an orderly sale and disposition of the assets of the entities and pay
claims in order of priority.
As of the end of 1998, Princeton had no operations. All amounts shown for the
period ended March 31, 1998 represent discontinued operations. In the prior
year, all significant intercompany transactions and balances have been
eliminated in consolidation. In the opinion of management, the accompanying
unaudited interim consolidated financial statements contain all adjustments
(consisting only of normal recurring accruals) necessary to present fairly the
financial position as of March 31, 1999, and the results of their operations
in 1999 and discontinued operations of 1998 and their cash flows for the three
months ended March 31, 1999 and 1998. The results of operations for the three
months ended March 31, 1999 are not necessarily indicative of the results to
be expected for the full year. These statements should be read in conjunction
with the Company's annual report on Form 10-KSB for the year ended December
31, 1998.
2. Basic and Dilutive Loss Per Share
Net loss per share is computed using the weighted average number of shares of
common stock outstanding. Common equivalent shares from stock options and
warrants, and additional shares assuming the conversion of debentures and
preferred shares, are excluded from the computation as their effect is
antidilutive.
For the three months ended March 31, 1999, cumulative dividends of $11,000
related to preferred Series C have been added to net loss in the loss per
share
computation.
The following table sets forth the computation of basic and diluted loss per
share as of March 31, 1999 and 1998:
1999 1998
Net loss before extraordinary item $( 3,203) $( 390,890)
Preferred dividends ( 11,000) ( 11,000)
Net loss to common shareholders
before extraordinary item ( 14,203) ( 401,890)
Extraordinary item:
Gain on reduction of guaranteed note 72,055 -
Net income (loss) $ 57,852 $( 401,890)
Weighted average common shares outstanding 4,178,722 3,565,451
Basic and diluted loss per share:
Before extraordinary item $( .00) $( .11)
Gain on reduction of guaranteed note .01 -
Basic income (loss) per share $ .01 $( .11)
<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Forward-looking Statements
Statements contained in this Form 10-QSB regarding the Company's future
prospects or profitability constitute forward-looking statements and as such,
must be considered with caution and with the understanding that various
factors could cause actual results to differ materially from those in such
forward-looking statements. Such factors include but are not limited to
failure of pending or anticipated acquisitions to be consummated.
General
Year 2000 Reporting
On August 4, 1998, the SEC issued expanded requirements for disclosure
regarding the international computer programming problems whereby certain
computer programs will not be able to properly recognize the date in the year
2000. Management believes the Company has no material exposure from the year
2000 problem. The Company's management information systems department reports
that because the Company's system was originally designed to be unaffected by
year 2000 problem, the Company has no exposure to the problem within its own
system. Because the Company has discontinued operations, the Company has no
vendors and suppliers whose non-compliance with correction of the problem
could cause material damage to the Company.
CURRENT PLANS
During 1999, management of the Company intends to pursue a plan of attempting
to identify an acquisition that could provide stable operations in order to
restore shareholder value.
Results of Operations
The Company has discontinued operations. Net loss for the period consists of
minor office expenses and depreciation.
The quarter ended March 31, 1999 compared to the quarter ended March 31, 1998:
Revenues for the quarter ended March 31, 1998 amounted to $4,299,489 compared
to $-0- for the quarter ended March 31, 1999. The decrease in revenues
reflected for the quarter ended March 31, 1999 is a result of the assignment
of all of the Company's operating subsidiaries.
Costs and expenses of revenues for the quarter ended March 31, 1998 were
$4,451,568 compared to $3,203 for the quarter ended March 31, 1999. The
decrease in expenses is a result of the assignment of all of the Company's
operating subsidiaries.
The Company had guaranteed a note related to the operations of the assigned
subsidiaries. Per the terms of the note, the note was reduced by receipts to
the holder of the note from publications of the subsidiaries of Princeton.
During the three months ended March 31, 1999, the note was reduced by $72,055
from proceeds of publications of the former subsidiaries of Princeton.
Net loss for the quarter ended March 31, 1998 from discontinued operations was
$390,890. Net income for the quarter ended March 31, 1999 was $68,852
consisting of the extraordinary item of gain from reduction of guaranteed note
of $72,055 and loss from operations of $3,203.
Liquidity and Capital Resources
During the quarter ended March 31, 1998, $250,492 in interest expense was
charged to operations compared to $-0- in interest expense for the quarter
ended March 31, 1999. The interest expense of the prior year period was
accrued primarily pursuant to two promissory notes delivered by Princeton and
Firestone in connection with the purchases of the magazine publishing assets
in March and September of 1996.
Liquidity and capital resources are discussed in three broad categories:
operating activities, investing activities and financing activities.
Cash increased $796 to $796 at March 31, 1999 from $-0- at December 31, 1998.
Net cash provided by operating activities was $796 during the quarter ended
March 31, 1999 compared to cash used by operating activities of $175,566
during the quarter ended March 31, 1998. The decrease in net cash used in
operating activities in the first quarter of 1999 compared to the first
quarter of 1998 is a result of the assignment of all of the Company's
operating subsidiaries.
During the quarter ended March 31, 1998, net cash used in investing activities
was $294,775 compared with $-0- used in investing activities during the
quarter ended March 31, 1999. The decrease is a result of the assignment of
all of the Company's operating subsidiaries.
During the quarter ended March 31, 1998, net cash provided by financing
activities was $46,469 compared to $-0- from net cash provided by financing
activities during the quarter ended March 31, 1999 as a result of the
assignment of all of the Company's operating subsidiaries.
PART II. OTHER INFORMATION
Item 5: Certain Relationships and Related Transactions
The Company shares corporate headquarters office space with Celebrity.
Item 6: Exhibits and Reports on Form 8-K.
(a) Exhibits - None.
(b) Reports on Form 8-K: None.
SIGNATURES
In accordance with Section 13 and 15 (d) of the Exchange Act of 1934,
the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date: May 20, 1999
PRINCETON MEDIA GROUP, INC.
/s/ James J. McNamara
By: James J. McNamara,
Chairman of the Board and
Acting Chief Executive Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 796
<SECURITIES> 7,850
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 8,646
<PP&E> 43,408
<DEPRECIATION> 12,105
<TOTAL-ASSETS> 39,949
<CURRENT-LIABILITIES> 643,217
<BONDS> 0
768,619
0
<COMMON> 21,297,570
<OTHER-SE> (22,669,457)
<TOTAL-LIABILITY-AND-EQUITY> 39,949
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 3,203
<OTHER-EXPENSES> (72,055)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 68,852
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 68,852
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
