OUR AUDITORS HAVE NOT AUDITED OR REVIEWED THESE FINANCIAL STATEMENTS
WGL ENTERTAINMENT HOLDINGS, INC.
(Formerly The World Golf League Inc)
Financial Statements
(UNAUDITED)
MARCH 31, 2007 AND 2006
OUR AUDITORS HAVE NOT AUDITED OR REVIEWED THESE FINANCIAL STATEMENTS
C O N T E N T S
| Description | Page |
| Balance Sheets | 3 |
| Statements of Operations | 4 |
| Statements of Shareholders’ Deficit | 5 |
| Statements of Cash Flows | 6 |
| Notes to Consolidated Financial Statements | 7 |
OUR AUDITORS HAVE NOT AUDITED OR REVIEWED THESE FINANCIAL STATEMENTS
| WGL ENTERTAINMENT HOLDINGS, INC | ||||||||
| BALANCE SHEETS | ||||||||
| MARCH 31, 2007 AND DECEMBER 31, 2006 | ||||||||
| (UNAUDITED) | ||||||||
| MARCH 31, | DECEMBER 31, | |||||||
| 2007 | 2006 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 1,681 | $ | 8,601 | ||||
| Accounts receivable | - | 124,000 | ||||||
| Total current assets | 1,681 | 132,601 | ||||||
| Property and equipment , net of accumulated depreciation of $14,643 and $13,978, respectively | 11,192 | 11,858 | ||||||
| Film production | 682,827 | 682,827 | ||||||
| Other assets | 1,875 | 1,875 | ||||||
| Deferred financing costs | - | 50,000 | ||||||
| Total Assets | $ | 697,575 | $ | 879,161 | ||||
| LIABILITIES & STOCKHOLDERS' DEFICIT | ||||||||
| Current Liabilities | ||||||||
| Accounts Payable | $ | 79,073 | $ | 78,573 | ||||
| Accrued Liabilities | 110,582 | 83,381 | ||||||
| Advance from related party | 448,147 | 436,322 | ||||||
| Bank overdraft | - | |||||||
| Notes payable to former winners | 272,581 | 274,081 | ||||||
| Convertible Debentures, net of discount of $279,619 and $350,263 respectively | 319,434 | 536,045 | ||||||
| Convertible debentures derivative liability | 571,296 | 780,282 | ||||||
| Total Liabilities | 1,801,112 | $ | 2,188,683 | |||||
| Stockholders' deficit: | ||||||||
| Preferred stock; $0.001 par value; 10,000,000 shares authorized, issued and outstanding | 10,000 | 10,000 | ||||||
| Common stock; $0.001 par value; 10,000,000,000 shares authorized; | 481,695 | 52,011 | ||||||
| Additional paid in capital | 19,670,780 | 19,320,271 | ||||||
| Unissued common stock | 611 | 611 | ||||||
| Treasury stock; 25,769 shares at cost | (162,018 | ) | (162,018 | ) | ||||
| Accumulated deficit | (21,104,606 | ) | (20,530,398 | ) | ||||
| Total stockholders' deficit | (1,103,542 | ) | (1,309,523 | ) | ||||
| TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT | $ | 697,575 | $ | 879,161 | ||||
See Summary of Significant Accounting Policies and Notes to Financial Statements
| WGL ENTERTAINMENT HOLDINGS, INC | ||||||||
| STATEMENTS OF OPERATIONS | ||||||||
| FOR THE THREE MONTHS ENDED MARCH 31, 2007 and 2006 | ||||||||
| (UNAUDITED) | ||||||||
| 2007 | 2006 | |||||||
| REVENUE | ||||||||
| Membership fee revenue | $ | - | $ | 11,097 | ||||
| Total Revenue | - | 11,097 | ||||||
| Operating, general and administrative expenses | 550,878 | 3,208,536 | ||||||
| Net loss from operations | (550,878 | ) | (3,197,439 | ) | ||||
| Other income (expense) | ||||||||
| Interest expense | (63,011 | ) | (630,739 | ) | ||||
| Gain (loss) on derivative liability | (70,027 | ) | 247,142 | |||||
| Gain on debt extinguishment | 153,966 | (274,224 | ) | |||||
| Registration rights expense | (50,700 | ) | - | |||||
| Other income | 8,700 | 30,073 | ||||||
| Other expenses | (2,258 | ) | (56,157 | ) | ||||
| Net loss | $ | (574,208 | ) | $ | (3,881,344 | ) | ||
| Weighted average shares outstanding – Basic and fully-diluted | 138,210,152 | 27,544,059 | ||||||
| Net loss per share – Basic and fully-diluted | $ | (0.004 | ) | $ | (0.141 | ) | ||
See Summary of Significant Accounting Policies and Notes to Financial Statements
OUR AUDITORS HAVE NOT AUDITED OR REVIEWED THESE FINANCIAL STATEMENTS
| WGL ENTERTAINMENT HOLDINGS, INC. | |||||||||
| STATEMENT OF STOCKHOLDERS' DEFICIT | |||||||||
| (UNAUDITED) | |||||||||
| Preferred Stock | Common Stock | Additional Paid-In | Unissued Common | Treasury | Accumulated | ||||
| Shares | Amount | Shares | Amount | Capital | Stock | Stock | Deficit | Total Equity | |
| Balance , December 31, 2006 | 10,000,000 | $ 10,000 | 52,011,390 | $ 52,011 | $ 19,320,271 | $ 611 | $ (162,018) | $ (20,530,398) | $ (1,309,523) |
| Common stock issued for services | - | - | 325,300,000 | 325,300 | 11,360 | - | - | - | 336,660 |
| Common stock issued for conversion of debentures | - | - | 104,383,102 | 104,384 | 180,871 | - | - | - | 285,255 |
| Common stock issued for exercise of warrants | - | - | 364 | - | 36,363 | - | - | - | 36,363 |
| Reduction of derivative liability for conversion of debentures and exercise of warrants | - | - | - | - | 121,911 | - | - | - | (378,089) |
| Net loss | - | - | - | - | - | - | - | (574,208) | (574,208) |
| Balance, March 31, 2007 | 10,000,000 | $ 10,000 | 481,694,856 | $ 481,695 | $ 19,170,776 | $ 611 | $ (162,018) | $ (21,104,606) | $ (1,603,542) |
See Summary of Significant Accounting Policies and Notes to Financial Statements
OUR AUDITORS HAVE NOT AUDITED OR REVIEWED THESE FINANCIAL STATEMENTS
| WGL ENTERTAINMENT HOLDINGS, INC | ||||||||
| STATEMENT OF CASH FLOWS | ||||||||
| FOR THREE MONTHS ENDED MARCH 31, 2007 AND 2006 | ||||||||
| (UNAUDITED) | ||||||||
| 2007 | 2006 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net income (loss) | $ | (574,208 | ) | $ | (3,881,344 | ) | ||
| Adjustments to reconcile net loss to cash | ||||||||
| provided by (used in) operating activities | ||||||||
| Depreciation and Amortization | 666 | 2,663 | ||||||
| Amortization of Discount on Convertible debentures | 65,011 | 254,054 | ||||||
| Gain on Derivative Liability | 44,536 | (247,142 | ) | |||||
| Gain/Loss on Debt Extinguishment | (127,974 | ) | 274,224 | |||||
| Shares issued for Services | 336,660 | 3,266,369 | ||||||
| Changes in: | ||||||||
| Accounts Receivable | 124,000 | (124,000 | ) | |||||
| Accounts payable | 501 | (47,122 | ) | |||||
| Other Assets | 50,000 | (50,000 | ) | |||||
| Bank Overdraft | (10,738 | ) | ||||||
| Accrued Expenses | 39,025 | 142,445 | ||||||
| Net Cash (Used)Provided by Operating Activities | $ | (41,783 | ) | $ | (420,591 | ) | ||
| Cash Flows from Investing Activities | ||||||||
| Capital Expenditures | (45 | ) | ||||||
| Increase in Film Production Cost | (40,478 | ) | ||||||
| Net Cash used in Investing Activities | $ | - | $ | (40,523 | ) | |||
| Cash Flows from Financing Activities | ||||||||
| Advance to purchase Treasury Stock | 37,500 | |||||||
| Advance from Related Party | 276,053 | |||||||
| Net payment to Prize winners | (1,500 | ) | (7,000 | ) | ||||
| Proceeds from exercise of warrants | 36,363 | 847,900 | ||||||
| Proceeds from Issuance of New Debt | 294,259 | |||||||
| Debt repayment | (978,997 | ) | ||||||
| Net cash Provided in (Used)in Financing Activities | $ | 34,863 | $ | 469,715 | ||||
| - | ||||||||
| Net Increase (Decrease) in Cash | $ | (6,920 | ) | $ | 8,601 | |||
| Cash at beginning of year | 8,601 | - | ||||||
| Cash at end of year | $ | 1,681 | $ | 8,601 | ||||
See Summary of Significant Accounting Policies and Notes to Financial Statements
OUR AUDITORS HAVE NOT AUDITED OR REVIEWED THESE FINANCIAL STATEMENTS
NOTE A – BASIS OF PRESENTATION SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying interim financial statements of WGL Entertainment Holdings, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission and should be read in conjunction with the annual financial statements and notes thereto contained in WGL Entertainment Inc.’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 a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosure contained in the annual financial statements for the most recent fiscal year, 2006, as reported in Form 10-KSB/A have been omitted.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
NOTE B - GOING CONCERN
WGL Entertainment has incurred losses totaling $574,208 through March 31, 2007, and had negative working capital at March 31, 2007. Because of these conditions, WGL Entertainment will require additional working capital to continue operations and develop the business. WGL Entertainment intends to raise additional working capital through continued financing arrangements with its current debenture holders and private placements.
There are no assurances that WGL Entertainment will be able to achieve a level of revenues adequate to generate sufficient cash flow from operations or obtain additional financing through the methods mentioned above necessary to support its working capital requirements. There are no assurances that the additional financing will be available and if it is not, then WGL Entertainment may not continue its operations or execute its business plan.
These conditions raise substantial doubt about WGL Entertainment's ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should WGL Entertainment be unable to continue as a going concern.
Note C – Property and Equipment
Property, plant and equipments as of March 31, 2007 and December 31, 2005 consisted of the following:
Description | Life | 2007 | 2006 |
| Leasehold improvements | 7 | $ 2,060 | $ 2,060 |
| Equipment | 7 | $15,795 | $15,795 |
| Furniture & fixtures | 7 | $ 7,981 | $7,981 |
| Less: Accumulated Depreciation | ($14,643) | ($13,977) | |
| Net book valued | $11,192 | $11,858 |
Note D – Capitalized Film Production Costs
Capitalized film production costs as of December 31, 2006 of $682.827 and $642,349 represent the costs to produce a reality television production of a World Golf League golf tournament. World Golf League plans to distribute the production in future periods for the generation of revenues. The total amount of the film production costs has been capitalized and costs are expected to be charged against the future revenues based on the income-forecast method through which costs are applied to revenue base don a forecast of anticipated future revenues to be generated. World Golf League has no experience in the production or distribution of television based reality television
Note E – Stockholders’ Equity
Common Stock
In February 2007, WGL effected a 1 for 100 reverse stock split. All current and prior year share amounts have been adjusted to reflect post-split share and per share amounts.
Debt Conversion
During the year ended December 31,2006, DLC converted principal of $95,262 into common stock and interest accrued thereon in the amount of approximately $4,767.
GGI converted $7,627 in principal into equity and interest accrued thereon in the amount of approximately $10,677.
During the quarter ended March 31, 2007, DLC and GGI converted principal total of $285,255 and interest accrued thereon in the amount of approximately $13,179.
Warrants and Options Exercised
During the year ended December 31, 2006, options to purchase 1,038,500,000 shares were exercised at the exercise price of $0.00022 per share.
During the quarter ended March 31, 2007, options to purchase 36,363 shares were exercised at the exercise price of $1 per share.
NOTE F - CONCENTRATIONS OF CREDIT RISK
WGL has a concentration of credit risk primarily related to accounts receivable balances, which are generally not collateralized