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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-23462
ASIA MEDIA COMMUNICATIONS, LTD.
(Exact name of registrant as specified in its charter)
NEVADA 88-0207089
(State or other jurisdiction (IRS employer
of incorporation or organization) Identification No.)
712 FIFTH AVENUE, 7TH FLOOR
NEW YORK, NY 10019
(Address of principal executive offices)
(212) 582-3400
Registrant's telephone number, including area code
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS: NAME OF EACH EXCHANGE ON WHICH REGISTERED
- -------------------- -----------------------------------------
common stock None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
common stock
(Title of Class)
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
-----
Check if there is no disclosure of delinquent filers pursuant to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB. [X]
State issuer's revenues for its most recent fiscal year: issuer was
inactive during its most recent fiscal year.
State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at which the
common equity was sold, or the average bid and asked price of such common
equity, as of a specified date within the past 60 days. (See definition of
affiliate in Rule 12b-2 of the Exchange Act.) $76,341,057 as of March 15, 1999.
ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS
Check whether the issuer has 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 X No
----- -----
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APPLICABLE ONLY TO CORPORATE REGISTRANTS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of March 15 1999: 9,495,356 shares of common stock, par
value $.01 per share.
Transitional Small Business Disclosure Format (check one):
Yes No X
----- -----
DOCUMENTS INCORPORATED BY REFERENCE
Part III-Certain exhibits Included in prior filings made
Listed in response to Item 13(a) under the Exchange Act.
================================================================================
2
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PART I
ITEM 1. BUSINESS
Asia Media Communications, Ltd. (the "Registrant" or the "Company") was
incorporated under the laws of the State of Nevada on February 20, 1985 under
the name Sperzel-NV Inc. On May 21, 1992, the Company filed a petition for
relief under Chapter 11 of the Federal bankruptcy laws in the United States
Bankruptcy Court for the District of Nevada. On January 31, 1994, the Company's
reorganization plan was confirmed by the Bankruptcy Court. Pursuant thereto, the
Company purchased the net assets of Asia Media Communications Ltd., which
consisted primarily of a video library that was intended to be distributed in
the Far East, and changed its name to reflect such acquisition. The video
library proved commercially unexploitable and during calendar 1995 and until
March, 1996 the Company's principal activity consisted of seeking opportunities
in other business ventures.
On March 18, 1996, the Company completed a merger (the "Merger") with
Kremlyovskaya Group, Inc., a privately held Delaware corporation ("KGI"). KGI,
through a wholly owned subsidiary in Belgium, was a distributor of vodka and
other products in foreign markets, primarily Russia. In August 1996, the Company
and the former shareholders of KGI, by mutual consent, rescinded the Merger as
of the effective date thereof.
On October 30, 1996, certain shareholders of the Company entered into a
stock purchase agreement with D-Vine Investment Partners, a Delaware general
partnership between Edward Tobin and Christopher F. Brown (the "Partnership"),
pursuant to which the Partnership purchased an aggregate of 3,656,667 shares of
the Company's common stock (the "Purchased Shares"), representing approximately
76.4% of the Company's total issued and outstanding capital stock on such date.
The purchase price for the Purchased Shares was $150,000 (approximately $.04 per
share). Immediately following such transaction, the Company entered into a
Consulting Agreement with Ian Rice, the former Chairman of the Company and the
sole shareholder of one of the selling shareholders, pursuant to which Mr. Rice
agreed to assist the Company for a period of 90 days in identifying and locating
suitable acquisitions for the Company. In consideration of such services, the
Company issued to Mr. Rice an aggregate of 750,000 shares of the Company's
common stock.
On December 31, 1996, the Company, through its wholly owned subsidiary,
AMC International Holdings Ltd., a British Virgin Islands corporation ("AMC
Holdings"), purchased from IPC Corporation, Ltd., a Singaporean corporation (the
"Vendor"), effective as of January 1, 1996, all of the issued and outstanding
capital stock of IPC Corporation (Australia) Pty Ltd., an Australian corporation
("IPC Australia"). The consideration paid was $1.00 in cash plus the issuance to
the Vendor of 25 preference shares of AMC Holdings (the "Preference Shares"),
each having a stated value of $1,000,000 (the "Stated Value"). The Preference
Shares are exchangeable at any time and from time to time at the option of the
holder into shares of the Company's common stock, on the basis of one share of
common stock for each $2.00 of the Stated Value of each Preference Share or part
thereof so exchanged (subject to adjustment under certain circumstances,
including stock splits and recapitalizations). The Preference Shares are also
redeemable at any time and from time to time at the option of the Company upon
payment of the Stated Value of each Preference Share or part thereof so
redeemed. In addition, the Vendor assigned to AMC Holdings all of the
indebtedness of IPC Australia to the Vendor which was approximately $25,000,000.
In order to effect the exchange of the Preference Shares for shares of the
Company's common stock, the Company granted an option to AMC Holdings to
acquire, for no consideration, such number of shares of its common stock as may
be required to effect the exchange of all of the Preference Shares. In April
1997, the Company and the Vendor executed an agreement pursuant to which the
Vendor agreed, subject to certain
3
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terms and conditions, never to exercise its rights, as holder, to exchange the
Preference Shares for shares of the Company's common stock. The Company is
uncertain whether such agreement would be binding upon an innocent purchaser for
value of the Preference Shares.
On August 1, 1997, the Company sold a warrant to purchase 1,000,000
shares of its common stock (the "Warrant") to Ocean Strategic Holdings, Limited,
an unrelated third party ("OSHL"), for $50,000 in cash. The exercise price of
the Warrant is $.01 per share, provided that both the exercise price per share
and the number of shares issuable upon exercise of the Warrant are subject to
adjustment upon the happening of certain events, except for a reverse stock
split in which case no adjustment is to be made. The Warrant is exercisable at
any time and from time to time on and after August 1, 1998 until August 1, 2001.
On September 1, 1997, the Company sold, for nominal cash consideration,
all of the capital stock of AMC Holdings to an unrelated party effective as of
December 31, 1996, the date of the acquisition of the capital stock of IPC
Australia. The purchaser assumed all of the Company's obligations under the
agreement pursuant to which AMC Holdings acquired the capital stock of IPC
Australia. The effect of the foregoing transaction was to completely negate the
acquisition of IPC Australia, except with respect to the possible exchange of
the Preference Shares. However, as a result of the one for 100 reverse split of
the Company's outstanding common stock effected on February 23, 1999, as
discussed below, the Preference Shares on and after such date will be
exchangeable into 125,000 shares of the Company's common stock (subject to
further adjustment under certain circumstances).
Following the sale of the capital stock of AMC Holdings, the Company's
principal activity was to seek opportunities in other business ventures.
On February 23, 1999, the Company effected a one for 100 reverse split
of its outstanding common stock so that each 100 shares of common stock issued
and outstanding on such date was deemed to be one share of common stock (the
"Reverse Split"). No change was effected in the par value of each share of
common stock as a result of the Reverse Split. Except as indicated, all
historical share and per share data herein has not been adjusted to reflect the
reverse split.
On February 24, 1999, the Company acquired 100% of the issued and
outstanding capital stock of TecnoChannel Sdn. Bhd., a privately held Malaysian
corporation ("TSB"), in exchange for the issuance of an aggregate of 8,500,000
shares of common stock. In connection with such acquisition, the Company issued
an aggregate of 440,000 shares of its common stock to GEM Ltd. for its services
as financial advisor to the Company.
TSB, which was formed in April 1997 and operates under the trade name
"My Web," has developed with Philips Consumer Electronics ("Philips") set-top
boxes that enable Internet access via the television set. The boxes are marketed
and sold by Philips and include software developed by TBS and Sun Microsystems.
Approximately 15,000 of the boxes are installed in Malaysia and Singapore. In
addition, TSB has developed and provides enabling technologies to manufacturers
and Internet service providers serving non-personal computer devices (such as
the set-top boxes) to enhance the functionalities of such devices. TSB also
operates the My Web Online Service which is an Internet portal providing
interactive applications, such as e-commerce, to both personal computer users
and set-top box users.
On February 25, 1999, OSHL exercised its rights under the Warrant to
purchase 500,000 shares of common stock.
4
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ITEM 2. PROPERTIES
The Company does not own or lease any real property. The Company
presently operates from offices on a rent-free basis utilized by the Chairman.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(a) (1) Market Information
Until February 24, 1999, the Company was inactive. Although its common
stock was included for quotation on the OTC Bulletin Board under the symbol
"ASMC" during fiscal 1997 and 1998, there was essentially no trading in the
common stock during that period. From February 23, 1999 until March 23, 1999,
the Company's common stock traded on the OTC Bulletin Board under the symbol
"ASMC(D)" to reflect the Reverse Split. On March 15, 1999, the closing bid price
of the common stock on the OTC Bulletin Board was $13.00.
(b) Holders
As of March 15, 1999, there were approximately 180 holders of record of
the Company's common stock.
(c) Dividends
The Company did not declare any cash dividends on its common stock
during the most recent two fiscal years. It is the present policy of the Company
not to pay cash dividends on the common stock but to retain earnings, if any, to
fund growth and expansion. Any payment on cash dividends on the common stock in
the future will be dependent upon the company's financial condition, results of
operations, current and anticipated cash requirements, plans for expansion, as
well as other factors that the Board of Directors deems relevant.
(d) Recent Sales of Unregistered Securities
No securities that were not registered under the Securities Act of
1933, as amended (the "Act"), have been issued or sold by the Company during the
past three years, except as described below.
1. On March 18, 1996, the Company issued an aggregate of 89,125,000
shares of its common stock to 14 parties in connection with the merger of
Kremlyovskaya Group, Inc. with and into a wholly owned
5
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subsidiary of the Company. All of such parties were sophisticated investors and
the shares were offered and sold in reliance upon the exemption provided by
Section 4(2) of the Act. On August 15, 1996, the merger was rescinded and all of
the shares were returned to the Company.
2. On December 26, 1996, the Company granted an option for no
consideration to its wholly owned subsidiary, AMC International Holdings, Ltd.
("AMC Holdings"), to acquire, for no consideration, such number of shares of the
Company's common stock as may be required to effect the exchange of preference
shares to be issued to AMC Holdings. On December 31, 1996, AMC Holdings issued
25 preference shares to IPC Corporation, a publicly traded company in Singapore,
in connection with the acquisition of a wholly owned subsidiary of IPC
Corporation. The option was granted in reliance upon the exemption provided in
Section 4 (2) of the Act.
3. On August 1, 1997, the Company sold a warrant to purchase 1,000,000
shares of its common stock (the "Warrant") to Ocean Strategic Holdings, Limited,
a Guernsey corporation, for $50,000 in cash. The exercise price of the Warrant
is $.01 per share, provided that both the exercise price per share and the
number of shares issuable upon exercise of the Warrant are subject to adjustment
upon the happening of certain events, except for a reverse stock split in which
case no adjustment is to be made. The Warrant is exercisable at any time and
from time to time on and after August 1, 1998 until August 1, 2001. The Warrant
was offered and sold in reliance upon the exemption provided in Regulation S.
4. On February 24, 1999, the Company issued an aggregate of 8,500,000
shares of common stock to 20 parties in connection with the acquisition of 100%
of the capital stock of TecnoChannel Bhd. Sdn., a Malaysian corporation. On such
date the Company also issued an aggregate of 440,000 shares of common stock to
GEM Ltd. in consideration of their services as financial advisor to the Company
with regard to the acquisition. All of the former shareholders of TecnoChannel
and GEM are accredited investors and the shares were issued in reliance upon the
exemption provided in Section 4 (2) of the Act and Regulation D promulgated
thereunder.
5. On February 25, 1999, Ocean Strategic Holdings, Limited exercised
its rights under the Warrant to purchase an aggregate of 500,000 shares of
common stock at an exercise price of $.01 per share. The shares issued upon
exercise of the Warrant were issued pursuant to the exemption provided in
Regulation S.
ITEM 6. PLAN OF OPERATION
From September 1, 1997 until February 24, 1999, the Company was
inactive and its business plan during that period was primarily to seek one or
more potential businesses which, in the opinion of management, warranted the
Company's involvement. On February 24, 1999, the Company acquired 100% of the
capital stock of TecnoChannel Bhd, Sdn., a private Malaysian corporation.
Management currently intends to devote substantially all of its time and
resources to the business of TecnoChannel.
ITEM 7. FINANCIAL STATEMENTS
The following financial statements of Asia Media Communications, Ltd.
are included in Item 7.
Balance Sheet at December 31, 1998.
Statements of Operations for the Years Ended December 31, 1998 and
1997.
6
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Statements of Stockholders' Equity for the Years ended December 31,
1998 and 1997.
Statements of Cash Flows for the Years ended December 31, 1998 and 1997
Notes to Financial Statements
7
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INDEPENDENT AUDITORS REPORT
To the Board of Directors
Asia Media Communications, Ltd.
New York, New York
We have audited the accompanying balance sheet of Asia Media Communications,
Ltd. (a corporation), as of December 31, 1998 and the related statements of
operations, stockholders' equity and cash flows for the years ended December 31,
1998 and 1997. These financial statements are the responsibility of management.
Our responsibility is to express an opinion of 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 audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. 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 audit and the report of other auditors provide a reasonable
basis for our opinion.
In our opinion, based on our audit, the financial statements referred to above
present fairly, in all material respects, the financial position of Asia Media
Communications, Ltd., as of December 31, 1998 and the results of its operations
and its cash flows for the years ended December 31, 1998 and 1997 in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 6, the Company has no
substantial assets and it is uncertain, as of December 31, 1998, whether the
Company will be able to pay its liabilities in the normal course of the
business. The accompanying financial statements do not include any adjustments
to reflect the possible
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future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability of
the Company to continue as a going concern.
Wlosek & Braverman, L.L.C.
Certified Public Accountants
March 29, 1999
Clifton, New Jersey
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ASIA MEDIA COMMUNICATIONS, LTD.
BALANCE SHEET
DECEMBER 31, 1998
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current Assets:
Cash $ 10,848
---------
Total Assets $ 10,848
=========
LIABILITIES AND DEFICIT IN STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 10,848
---------
Commitments and Contingencies (Notes 8 & 9)
Deficit in Stockholders' Equity:
Common stock, $.01 par value, 100,000,000
shares authorized; 5,535,586 shares issued
and outstanding 55,356
Additional paid-in capital 798,825
Deficit in retained earnings (120,460)
---------
733,721
Less: Treasury stock (Note 4) (733,721)
---------
Total Deficit in Stockholders' Equity --
---------
Total Liabilities and Deficit in Stockholders' Equity $ 10,848
=========
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
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ASIA MEDIA COMMUNICATIONS, LTD.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Years Ended
December 31,
1998 1997
--------- ---------
<S> <C> <C>
Revenues $ -- $ --
--------- ---------
Costs and Expenses:
Cost of Sales -- --
Selling, general and administrative expenses:
Legal and other fees 27,954 --
Other expenses 7,598 --
--------- ---------
Total Costs and Expenses 35,552 --
--------- ---------
Loss before Income Tax Benefit (35,552) --
Income Tax (Benefit)
Current (5,333) --
Deferred 5,333 --
--------- ---------
Total Income Tax (Benefit) -- --
--------- ---------
Net Loss $ (35,552) $ --
========= =========
Income (Loss) Per Common Share $ (0.01) $ 0.00
========= =========
Average weighted number of common
shares outstanding 5,535,586 5,465,919
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements
11
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ASIA MEDIA COMMUNICATIONS, LTD.
STATEMENTS OF DEFICIT IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
Retained
Additional Earnings Total
Number Common Paid-in (Accumulated Treasury Stockholders'
Of Shares Stock Capital Deficit) Stock Equity
--------- --------- ---------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balances, January 1, 1997 5,535,586 $ 55,356 $ 748,825 $ (84,908) $(733,721) $ (14,448)
Sale of common stock purchase
warrant -- -- 50,000 -- -- 50,000
Net Income -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Balances, December 31, 1997 5,535,586 $ 55,356 $ 798,825 $ (84,908) $(733,721) $ 35,552
Net Loss, year ended
December 31, 1998 -- -- -- (35,552) -- (35,552)
--------- --------- --------- --------- --------- ---------
Balances, December 31, 1998 5,535,586 $ 55,356 $ 798,825 $(120,460) $(733,721) $ --
========= ========= ========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
12
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ASIA MEDIA COMMUNICATIONS, LTD.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Years Ended
December 31,
1998 1997
-------- --------
<S> <C> <C>
Net Loss $(35,552) $ --
-------- --------
Adjustments to reconcile net loss to net cash
provided by operating activities:
Shareholder debt forgiveness (14,448) --
Changes in assets and liabilities:
Increase in accounts payable 10,848 --
Decrease in advances from stockholder -- --
-------- --------
Total Adjustments (3,600) --
-------- --------
Net Cash used in Operating Activities (39,152) --
-------- --------
Cash Flows from Financing Activities:
Sale of common stock purchase warrant -- 50,000
-------- --------
Net (decrease) increase in cash and cash
equivalents (39,152) 50,000
Cash and cash equivalents, beginning 50,000 --
-------- --------
Cash and cash equivalents, end $ 10,848 $ 50,000
======== ========
</TABLE>
DISCLOSURE OF ACCOUNTING POLICY
For purposes of the statement of cash flows, the Company considers all
short-term investments with an original maturity of three months or less to be
cash equivalents.
The accompanying notes are an integral part of these financial statements.
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ASIA MEDIA COMMUNICATIONS, LTD.
NOTES TO FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation:
The accompanying balance sheet includes the accounts of Asia Media
Communications, Ltd., a corporation purchased by Sperzel-NV, Inc. on
January 31, 1994. On the same date, Sperzel-NV, Inc. changed its name
to Asia Media Communications, Ltd. As Asia Media Communications, Ltd.,
the Company had attempted to acquire the licensing rights for
distribution of videos in the Far East. However, the acquisition was
never completed and the Company is seeking opportunities in other
business ventures. The Company also had acquisition and merger
agreements relating to the distribution of vodka and other products,
primarily in Russia as well as an Australian company which distributes
computer equipment in the Far East. All acquisition and merger
agreements were effectively rescinded as of their respective effective
dates, and accordingly, no transactions related thereto are included in
the accompanying financial data.
Income taxes:
The Company has adopted the Statement of Financial Accounting Standard
No. 109 (FAS 109), Accounting for Income Taxes, from its inception. FAS
109 requires an asset and liability approach that recognizes deferred
tax assets and liabilities for the expected future tax consequences of
events that have been recognized in the Company's financial statements
or tax returns. In estimating future tax consequences, FAS 109
generally considers all expected future events other than enactments of
changes in the tax law or rates.
Business activity:
The Company, a Nevada corporation, with its administrative office now
located in New York, was incorporated on February 20, 1985. At December
31, 1998, the Company had no operations, and was actively attempting to
acquire a business operation, or obtain one through merger with a
privately-held company seeking public status, (see Note 10).
14
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ASIA MEDIA COMMUNICATIONS, LTD.
NOTES TO FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
Income (Loss) per Share:
The computation of income (loss) per share of common stock is based on
the weighted average number of shares outstanding during the periods
presented.
Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Company to make estimates
and assumptions that affect (1) the reported amounts of assets and
liabilities, (2) disclosure of contingent assets and liabilities at the
date of the financial statements, and (3) reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
NOTE 2 REORGANIZATION
On January 31, 1994, the Company's reorganization plan was confirmed by
the United States Bankruptcy Court, District of Nevada. Pursuant
thereto, the Company acquired Asia Media Communications, Ltd. and
changed its name accordingly. The Company accounted for its
reorganization using "fresh start" reporting, thereby restating assets
and liabilities at reorganizing values, which approximates fair market
at the reorganization date. The Asia Media Communications, Ltd. balance
sheet as of January 31, 1994, (date of reorganization) follows: Assets
<TABLE>
<S> <C>
Current Assets
Cash $ 6,445
Property and equipment:
Assets held for disposal 501
Other Assets
Deposits 5,900
-------
$12,846
=======
</TABLE>
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ASIA MEDIA COMMUNICATIONS, LTD.
NOTES TO FINANCIAL STATEMENTS
NOTE 2: REORGANIZATION - Continued
Asia Media Communications, Ltd. balance sheet as of January 31, 1994
(date of reorganization) - Continued:
Liabilities and Stockholders' Equity (Deficit)
----------------------------------------------
<TABLE>
<S> <C>
Current Liabilities:
Accounts payable $ 6,443
Accrued liabilities 25,500
Advances from Stockholders 17,943
--------
Total Current Liabilities 49,886
--------
Stockholders' Equity (Deficit):
Common stock 160,132
Additional paid-in capital 536,549
Retained earnings --
--------
696,681
Less: Treasury stock 733,721
--------
Total Stockholders' Equity (Deficit) (37,040)
--------
$ 12,846
========
</TABLE>
NOTE 3: ADVANCES FROM STOCKHOLDERS
During 1996, a new shareholder paid accounts payable aggregating
$14,448 on behalf of the Company. The payments were substantially for
professional fees rendered. The indebtedness was non-interest bearing
and had no specific repayment terms. In 1998, the shareholder forgave
the indebtedness, (see Note 7), and the balance was credited to
professional fee cost.
NOTE 4: TREASURY STOCK
Treasury stock is shown at cost and consists of 771,290 shares of
common stock. The shares held in the treasury were adjusted for the
effects of a reverse 1 to 10 stock split.
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ASIA MEDIA COMMUNICATIONS, LTD.
NOTES TO FINANCIAL STATEMENTS
NOTE 5: INCOME TAXES
Since the Company has not generated any taxable income since its
emergence from bankruptcy, no provision for income tax has been made.
Temporary differences giving rise to the deferred tax asset consist of
potential net operating loss carryforwards for both financial and tax
reporting purposes. However, Statement of Financial Accounting Standard
No. 109, Accounting for Income Taxes, allows the establishment of a
valuation allowance to offset any deferred tax asset that may result
from the recording of potential future net operating loss
carryforwards. Since it is unclear at this time whether any income tax
benefit will be realized in the future for the recognition of the
Company's net operating loss carryforward, an allowance was establish
to reduce the deferred tax asset as follows:
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Deferred tax asset for future benefits
of net operating loss carryforward $ 34,053 $ 28,720
Less: valuation allowance to
recognize possible non-realization
of net operating loss carryforward (34,053) (28,720)
-------- --------
$ -- $ --
======== ========
</TABLE>
The following temporary differences gave rise to the deferred tax
assets at December 31:
<TABLE>
<CAPTION>
For the Year Ended
December 31
1998 1997
-------- ---------
<S> <C> <C>
Tax benefit of net operating loss
carryforward $ 34,053 $ 28,720
Valuation allowance for judgement
of realizability of net operating loss
carryforward in future years $(34,053) $(28,720)
</TABLE>
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ASIA MEDIA COMMUNICATIONS, LTD.
NOTES TO FINANCIAL STATEMENTS
NOTE 5: INCOME TAXES - Continued
A reconciliation of income tax expenses at the statutory rate to the
Company's effective rate is as follows:
<TABLE>
<CAPTION>
For the Year Ended
December 31
1998 1997
-------- --------
<S> <C> <C>
Computed at the expected
statutory rate -- --
Less: Tax benefit, current -- --
-------- --------
Income tax expense computed
At effective rate $ -- $ --
======== ========
</TABLE>
The Company can carry forward its $189,689 net operating loss as
follows:
<TABLE>
<CAPTION>
Year of
Expiration
----------
<S> <C>
2007 $106,561
2008 71,048
2009 12,080
--------
Total $189,689
========
</TABLE>
NOTE 6: GOING CONCERN CONTINGENCY
The Company reported losses from January 31, 1994, (date of
reorganization), through 1996. There was no operating activity in 1997.
In 1997, the Company sold a warrant for $50,000, (see Note 9), in order
to generate cash for operations; however, the Company reported a loss
of $35,552 in 1998 and the Company's ability to continue as a going
concern will depend upon management's acquiring profitable operations
and the ability to develop a sufficient cash flow to meet its
obligations as they become due.
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ASIA MEDIA COMMUNICATIONS, LTD.
NOTES TO FINANCIAL STATEMENTS
NOTE 7: RELATED PARTY TRANSACTIONS
The Company presently operates from offices on a rent-free basis
utilized by the chairman and director. Actual space utilization is
deminimus in nature and is non-reimbursable. There are no pending lease
arrangements at the present time. In addition, the Company received a
debt forgiveness on prior working capital advances of $14,448. The debt
reduction was credited to operating expenses in the current period.
NOTE 8: CERTAIN TRANSACTIONS
Acquisition of K.G.I.:
In March 1996, the Company acquired Kremlyovskaya Group, Inc.,
(K.G.I.), a privately-held Delaware corporation. K.G.I., through a
wholly owned subsidiary in Belgium, distributes vodka and other product
in foreign markets, primarily Russia. Subsequent thereto, the Company
and K.G. I., by mutual consent, rescinded the merger acquisition as of
the acquisition date in 1996. Accordingly, the accompanying financial
statements report no transaction relative thereto, except the
cancellation of the shareholder indebtedness, (see Note 3).
Acquisition I.P.C. Australia:
On December 31, 1996, (the "Effective Date"), the Company, through its
newly formed, wholly owned subsidiary, AMC International Holdings Ltd.,
a British Virgin Islands corporation, ("AMC Holdings"), purchased from
I.P.C. Corporation, Ltd., a Singaporean corporation (the "Vendor"),
effective as of January 1, 1996, all of the issued and outstanding
capital stock of I.P.C. Corporation (Australia) Pty Ltd., an Australian
corporation ("IPC Australia"). The consideration paid was $1.00 in cash
plus the issuance to I.P.C. of 25 preference shares of AMC Holdings
(the "Preference Shares"), each having a stated value of $1,000,000,
(the "Stated Value"). The Preference Shares are exchangeable at any
time and from time to time at the option of the holder into shares of
the Company's common stock, par value $.01 per share, (the "Common
Stock"), on the basis of one share of Common Stock for each $2.00 of
the Stated Value of each share or part thereof of a Preference Share so
exchanged (subject to adjustment under certain circumstances including
stock splits and recapitalizations). The Preference Shares are also
redeemable at any time and from time to time at the option of the
Company upon payment of the Stated Value of each Preference Share or
part thereof so redeemed. In addition, I.P.C. assigned to AMC Holdings
all of the indebtedness of I.P.C. Australia to I.P.C. which on the
Effective Date was approximately $25,000,000.
19
<PAGE>
<PAGE>
ASIA MEDIA COMMUNICATIONS, LTD.
NOTES TO FINANCIAL STATEMENTS
NOTE 8: CERTAIN TRANSACTIONS - Continued
Acquisition I.P.C. Australia - continued:
The Company granted an option to AMC Holdings in order to effect the
exchange of Preference Shares for common shares as described above. In
1997, the Company and I.P.C. Corporation, Ltd. executed an agreement
that, subject to certain terms and conditions, I.P.C. agreed never to
exercise the option to exchange the Preference Shares pursuant to the
option agreement. Management is presently uncertain as to the legal
binding effect of the forbearance agreement upon an innocent purchaser
for value and, accordingly, reports the contingent commitment to honor
this option agreement, (See Note 9).
On September 1, 1997, the Company sold, for nominal cash, the capital
stock of AMC Holdings effective December 31, 1996 (date of
acquisition). The effect of this sale transaction, (which carried the
same terms and conditions as the purchase agreement of the same date),
was to completely negate the acquisition of I.P.C. Australia
effectively creating a rescinded purchase. The Company was thereby
restored to its same condition prior to the I.P.C. Australia purchase,
with the exception of the contingent obligations.
NOTE 9: COMMITMENTS AND CONTINGENCIES
Option Agreement:
Pursuant to the I.P.C. Australia acquisition described in Note 8, the
Company granted its newly formed subsidiary, AMC Holdings, an option to
acquire 12,500,000 shares of the Company's common stock (subject to
adjustment in the event of stock splits, recapitalizations, etc.) in
order to effect the exchange provision related to the preference
shares. Further, as described in Note 8, the agreement of forbearance
with respect to the option may not be binding upon a purchaser for
value. Accordingly, the Company may be forced to issue 12,500,000
shares of its common stock (subject to adjustment) to such a purchaser
and are thereby reserved. The reverse split of the Company's
outstanding stock effected February 23, 1999, reduced this contingency
to 125,000 shares of common stock. (See Note 10).
Sale of Warrant:
In August 1997, the Company sold a warrant to purchase 1,000,000 shares
of its common stock to Ocean Strategic Holdings, Limited, (holder), at
an exercise price of $.01 per share. The Company received $50,000 as
consideration for the warrant. Under the terms of the warrant, the
holder's share rights may be adjusted to reflect certain capital
transactions that the Company may establish; however, in the event of a
stock split, the exercise price and number of shares shall not be
adjusted. The warrant is exercisable as of August 1, 1998 and expires
August 1, 2001. As of December 31, 1998, no shares had been issued
pursuant to the warrant and the Company had reserved 1,000,000 shares
of its common stock. In February,
20
<PAGE>
<PAGE>
1999, the holder exercised a purchase of 500,000 shares under the
warrant, at the exercise price of $.01 or an aggregate of $5,000.
Accordingly, the Company currently has 500,000 common shares reserved.
NOTE 10: SUBSEQUENT EVENTS
On February 23, 1999, the Company effected a one for 100 reverse split
of its outstanding common stock. No adjustment has been made in the
accompanying financial statements and the notes thereto to reflect such
reverse split.
On February 24, 1999, the Company acquired 100% of the issued and
outstanding capital stock of of TecnoChannel Sdn BHd, a Malaysian
Corporation, ("TSB"), in exchange for an aggregate of 8,500,000 shares
of common stock. In connection with such acquisition, the Company
issued an aggregate of 440,000 shares of its common stock to GEM Ltd.
for its services as financial advisor to the Company.
TecnoChannel, which was formed in April, 1997 and operates under the
trade name, "My Web", has developed with Philips Consumer Electronics
set-top boxes that enable Internet access via the television set. The
boxes are marketed and sold by Philips and include software developed
by TecnoChannel and Sun Microsystems. Approximately 15,000 of the boxes
are installed in Malaysia and Singapore. In addition, TecnoChannel has
developed and provides enabling technologies to manufacturers and
Internet service providers serving non-personal computer devices, (such
as the set-top boxes), to enhance the functionalities of such devices.
TecnoChannel also operates the My Web Online Service which is an
Internet portal providing interactive applications, such as e-commerce,
to both personal computer users and set-top box users.
21
<PAGE>
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
On December 23,1998, the Company dismissed Albright, Persing &
Associates, Ltd. ("APA"), its independent accountants that had audited the
Company's financial statements for the for the year ended December 31, 1995 and
the 11 month period ended December 31, 1994. The report of APA on the Company's
financial statements for each of such periods did not contain an adverse opinion
or a disclaimer of opinion, nor was it qualified or modified as to uncertainty,
audit scope, or accounting principles, except that it expressed an uncertainty
as to the Company's ability to continue as a going concern. The dismissal of APA
was approved by the Company's Board of Directors. During the year ended December
31, 1995 and the 11 month period ended December 31, 1994 and during the interim
period preceding the dismissal of APA, there were no disagreements with APA on
any matter of accounting principles or practice, financial statement disclosure,
or auditing scope or procedure. No "reportable events" within the meaning of
Item 304(a)(1)(v) of Regulation S-K promulgated under the Securities Exchange
Act of 1934, occurred during either the year ended December 31, 1995 or the 11
month period ended December 31, 1994 or during the interim period preceding the
dismissal of APA.
On December 24, 1998, the Company engaged Wlosek & Braverman L.L.C. as
the principal accountant to audit the Company's financial statements for its
fiscal year ended December 31, 1996.
22
<PAGE>
<PAGE>
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
<TABLE>
<CAPTION>
Name and Address Age Capacities
- ---------------- --- ----------
<S> <C> <C>
Edward Tobin 42 Director, Chairman and Secretary(1)
712 Fifth Avenue
New York, NY 10019
Christopher F. Brown 37 Director(2)
712 Fifth Avenue, 7th Floor
New York, NY 10019
Thomas Tuttle 32 Director(2)
712 Fifth Avenue, 7th Floor
New York, NY 10019
Victor Ng 51 Director(3)
Incubator 2, Lot 63
Technology Park Malaysia
57000 Kuala Lumpur
T. S. Wong 28 Director, President, Chief Operating
Incubator 2, Lot 63 Executive and Chief Financial Offier(3)
Technology Park Malaysia
57000 Kuala Lumpur
</TABLE>
- -----------------------------------
(1) Resigned as President, Chief Executive Officer and Chief Financial Offer
and elected Chairman and Secretary effective February 24, 1999.
(2) Resigned effective February 24, 1999.
(3) Elected effective February 24, 1999.
BACKGROUND INFORMATION
Edward Tobin - From 1996 to the present, Mr. Tobin has been a director of GEM
Ventures Ltd., an investment banking firm. From 1991 to 1996, Mr. Tobin was a
director of Lincklaen Partners, a private investment firm.
Christopher F. Brown - From 1994 to the present, Mr. Brown has been the
president of Global Emerging Markets N.A., a financial consulting firm. From
1987 until 1993, Mr. Brown was a financial representative with Shearson Lehman
Brothers.
Thomas Tuttle - From 1995 to the present, Mr. Tuttle has been the president of
GEM Investment Advisors, Inc., a financial consulting firm. Prior to 1995, Mr.
Tuttle held various positions with Morgan Stanley & Co. and McKinsey & Co.
Victor Ng - From 1989 until the present, Mr. Ng has been the general manager
(institutional sales) of J.M. Sassoon, an investment banking firm in Singapore.
From 1997 until the present, Mr. Ng has been a director of TecnoChannel Sdn.
Bhd. Mr. Ng holds a Bachelor of Science (economics) degree and a Masters of
Science (economics) degree from the University of London.
23
<PAGE>
<PAGE>
T.S. Wong - From 1997 to the present, Mr. Wong has been a director and the chief
executive officer of TecnoChannel Sdn. Bhd. From 1996 until 1997, Mr. Wong was
the executive director of Cybersource Pte. Ltd., a private internet consulting
firm. In 1996, Mr. Wong graduated from the National University of Singapore with
a Bachelor of Electrical Engineering degree
ITEM 10. EXECUTIVE COMPENSATION
During calendar 1998, none of the officers or directors were
compensated for their services as the Registrant was inactive.
24
<PAGE>
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding beneficial
ownership of Registrant's common stock as of the date of this report by all
shareholders who own 5% or more of Registrant's common stock. Beneficial
ownership has been determined for purposes herein in accordance with Rule 13d-3
of the Securities Exchange Act of 1934 as amended, under which a person is
deemed to be the beneficial owner of securities if such person has or shares
voting power or investment power in respect of such securities or has the right
to acquire beneficial ownership within 60 days.
<TABLE>
<CAPTION>
Amount and Nature of Percent
Name and Address Title of Class Beneficial Ownership of Class
- ---------------- ---------------- -------------------- --------
<S> <C> <C>
Dr. Ahman Mustaffa Babjee Common 850,000 8.96%
Incubator 2, Unit G3, Technology Park Indirect(1)
Malaysia
Lebuhraya Puchong-Sungei Besi, Bukit Jalil
57000 Kuala Lumpur
Cheach Meng Fui Common 850,000 8.96%
Incubator 2, Unit G3, Technology Park Indirect(2)
Malaysia
Lebuhraya Puchong-Sungei Besi, Bukit Jalil
57000 Kuala Lumpur
Doris Poh Heem Huang Common 789,550 8.32%
612 Telok Blangah Road Indirect(3)
#01-03 Fairways Condominium
Singapore 102096
Chew Gaik Sim Common 850,000 8.96%
Incubator 2, Unit 63, Technology Park Indirect(4)
Malaysia
Lebuhraya Puchong-Sungei Besi, Bukit Jalil
57000 Kuala Lumpur
T.S. Wong Common 2,675,950 28.20%
Incubator 2, Unit G3, Technology Park Indirect(5)
Malaysia
Lebuhraya Puchong-Sungei Besi, Bukit Jalil
57000 Kuala Lumpur
</TABLE>
- --------
(1) Owned of record by Ambang Dinamik Sdn. Bhd.
(2) Owned of record by Jerisle Ltd.
(3) Owned of record by Free Earth Investments Ltd. Mrs. Huang is the wife of
Victor Ng, a director of the Company, and Mr. Ng disclaims beneficial
ownership of these shares.
(4) Owned of record by Neutron Enterprises Inc.
(5) Owned of record by Star Channel Systems Sdn. Bhd. of which Mr. Wong owns
82.3% of the outstanding stock.
25
<PAGE>
<PAGE>
The following table lists, as of the date hereof, the number and
percentage of each class of equity shares of Registrant or any of its
subsidiaries beneficially owned, directly or indirectly, by each officer and
director, and by all directors and officers of Registrant, as a group:
<TABLE>
<CAPTION>
Name of Amount and Nature Percent
Title Beneficial of of
of Class Owner Beneficial Ownership Class
- -------- ---------- -------------------- -------
<S> <C> <C> <C>
Common Victor Ng 789,950 Indirect(1) 8.3%
Common Edward Tobin 36,567 Indirect(2) *
Common T.S. Wong 2,203,170 Indirect(3) 23.2%
Common All officers and 3,029,687 31.5%
directors as a group(3)
</TABLE>
- ------------------
* Less than 1%.
(1) Owned of record by Free Earth Investments Ltd., a corporation owned by Mr.
Ng's wife, Doris Poh Heem Huang. Mr. Ng disclaims beneficial ownership of
these shares.
(2) Owned of record by D-Vine Investment Partners, a Delaware general
partnership between Mr. Tobin and Christopher F. Brown, a director of the
Company until February 24, 1999.
(3) Owned of record by Star Channel Systems Sdn. Bhd., a corporation of which
Mr. Wong owns 82.3% of the outstanding capital stock.
Registrant does not know of any arrangements, the operation of which
may, at a subsequent date, result in a change in control of registrant.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
PART IV
ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Number Description
- ------ -----------
<S> <C>
2. Plan of Reorganization incorporated by reference to Registrant's
Report on Form 10-SB as filed with the Commission on February 16,
1994.
3.1 Registrant's Certificate of Incorporation, as amended, incorporated
by reference to Registrant's Report on Form 10-SB as filed with the
Commission on February 16, 1994.
3.2 Registrant's By-laws incorporated by reference to Registrant's
Report on Form 10-SB as filed with the Commission on February 16,
1994.
10.1 Agreement and Plan of Merger, dated March 18, 1996, by and among
Asia Media Communications, Ltd., AMC Merger Co., Inc.,
Kremlyovskaya Group, Inc., Riccardo
</TABLE>
26
<PAGE>
<PAGE>
<TABLE>
<S> <C>
Franchini and Richard Gaspar incorporated by reference to
Registrant's Report on Form 8K as filed with the Commission on
April 3, 1996.
10.2 Rescission Agreement, dated as of August 15, 1996, by and among
Asia Media Communications, Ltd., Kremlyovskaya Group Inc.,
Kremlyovskaya Group NV, Riccardo Franchini, Richard Gaspar, Yakov
Tillman, Tadeus Tonley, Valentin Kassatkine, Guerman Liberman,
Youri Bykhovski, Wengen Investments Ltd., Redwatch Investments Inc.
SA, Safine A.G., Wallflower Investments Inc., SA, Able Investments
Ltd., Whitehall Investments Company Inc. and Merton Trustees
Limited, incorporated by reference to Registrant's report on Form
8-K filed with the Commission on October 15, 1996.
10.3 Consulting Agreement, dated as of October 30, 1996, between Asia
Media Communications, Ltd. and Ian Rice, incorporated by reference
to Registrant's report on Form 8-K filed with the Commission on
November 7, 1996.
10.4 Option Agreement, dated as of December 26, 1996, between Asia Media
Communications, Ltd. and AMC International Holdings, Ltd.,
incorporated by reference to Registrant's report on Form 10-KSB
filed with the Commission on December 30, 1998.
10.5 Written Consent of the Sole Director of AMC International Holdings,
Ltd. dated as of December 27, 1996, incorporated by reference to
Registrant's report on Form 10-KSB filed with the Commission on
December 30, 1998.
10.6 Share Acquisition Agreement, dated December 1996, among IPC
Corporation, Asia Media Communications, Ltd. and AMC International
Holdings, Ltd., incorporated by reference to Registrant's report on
Form 10-KSB filed with the Commission on December 30, 1998.
10.7 Letter Agreement, dated April 1, 1997, between AMC International
Holdings, Ltd. and IPC Corporation, incorporated by reference to
Registrant's report on Form 10-KSB filed with the Commission on
December 30, 1998..
10.8 Warrant, dated August 1, 1997, to purchase 1,000,000 shares of the
common stock of Asia Media Communications, Ltd. issued to Ocean
Strategic Holdings Limited, incorporated by reference to
Registrant's report on Form 10-KSB filed with the Commission on
December 30, 1998.
10.9 Share Purchase Agreement, dated September 1, 1997, by and between
Parthanon Investment corporation and Asia Media Communications,
Ltd., incorporated by reference to Registrant's report on Form
10-KSB filed with the Commission on December 30, 1998
10.10 Letter, dated December 28, 1998 from Albright, Persing &
Associates, Ltd., the Registrant's former principal accountant's,
to the Securities and Exchange Commission pursuant to Item
304(a)(3) of Regulation S-K, incorporated by reference to
Registrant's report on Form 10-KSB filed with the Commission on
December 30, 1998.
27
<PAGE>
<PAGE>
</TABLE>
<TABLE>
<S> <C>
10.11 Acquisition Agreement, dated February 24, 1999, by and among Asia
Media Communications, Ltd., Ambang Dinamik Sdn. Bhd., Star Channel
Systems Sdn. Bhd., Cheah Meng Fui and GEM Ventures Ltd.
incorporated by reference to Registrant's report on From 8-K filed
with the Commission on March 11, 1999.
27.1 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K
None.
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.
ASIA MEDIA COMMUNICATIONS, LTD.
a Nevada Corporation
Dated: March 30, 1999 By: /s/ T.S. Wong
---------------------------------------
T. S. Wong, President, Chief Executive
Officer and Chief Financial Officer
Dated: March 30, 1999 /s/ Edward Tobin
---------------------------------------
Edward Tobin, Director
Dated: March 30, 1999 /s/ Victor Ng
---------------------------------------
Victor Ng, Director
FINANCIAL DATA SCHEDULE ARTICLE 5
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 10,848
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 10,848
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 10,848
<CURRENT-LIABILITIES> 10,848
<BONDS> 0
<COMMON> 55,356
0
0
<OTHER-SE> (55,356)
<TOTAL-LIABILITY-AND-EQUITY> 10,848
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 35,552
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (35,552)
<INCOME-TAX> 0
<INCOME-CONTINUING> (35,552)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (35,552)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
