Table of Contents
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2003 | |
OR
| ||
[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to |
WESTERN MEDIA GROUP CORPORATION
Minnesota (State or other jurisdiction of incorporation or organization) |
| 41-1311718 (I.R.S. Employer Identification No.) |
69 Mall Drive, Commack, New York 11725 (Address of principal executive offices) 631-297-1750 (not applicable) |
Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Exchange Act subsequent to the distribution of securities under a plan confirmed by a court. Yes o No o
APPLICABLE ONLY TO CORPORATE ISSUERS:
The Company's stock transfer agent is Computershare, 12039 West Alameda Parkway Suite Z-2, Lakewood, Colorado 80228.
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: as of May 16, 2003 there were 24,272,857 shares outstanding.
Transitional Small Business Format: Yes o No x
Index | ||||
Page | ||||
Part I | Financial Information: | |||
Item 1. | Financial Statements | |||
Consolidated Balance Sheets March 31, 2003 (unaudited) and December 31, 2002 | 1 | |||
Consolidated Statements of Operations for the three months ended March 31, 2003 and 2002 (unaudited) and for the period from August 1, 1991 through March 31, 2003 (unaudited) | 4 | |||
Consolidated Statement of Stockholders' Equity (Deficit) for the three months ended March 31, 2002 (unaudited) and for the period from August 1, 1991 through March 31, 2003 (unaudited) | 3-5 | |||
Consolidated Statements of Cash Flows for the three months ended March 31, 2003 and 2002 (unaudited) and for the period from August 1, 1991 through March 31, 2003 (unaudited) | 6 | |||
Notes to Consolidated Financial Statements | 7-23 | |||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 24-25 | ||
Item 3. | Controls and Procedures | |||
Part II | Other Information: | |||
Item 2. | Changes in Securities | |||
Item 6. | Exhibits and Reports on Form 8-K | |||
Signature | ||||
Certifications | ||||
Exhibit Index | ||||
Ex-10.10 | ||||
Ex-10.10A | ||||
Ex-10.10B | ||||
Ex-10.10C | ||||
Ex-10.11 | ||||
Ex-99.1 | ||||
Ex-99.2 |
Part I. Financial Information
Item 1. Financial Statements
WESTERN MEDIA GROUP CORPORATION
(A Development Stage Company)
ASSETS | March 31, 2003 | December 31, 2002 | ||
(Unaudited) | (Audited) | |||
Current assets: | ||||
Cash | $ 3,341 | $ 2,134 | ||
Notes receivable, related parties - current portion | 74,600 | 50,094 | ||
Accounts receivable | 5,979 | 6,053 | ||
Total current assets | 83,920 | 58,281 | ||
Office equipment (at cost), net of accumulated depreciation | 1,508,744 | 1,609,751 | ||
Security deposit | 4,778 | 4,778 | ||
Notes receivable, related parties - long-term portion | - | 28,188 | ||
Goodwill | 2,292,779 | 2,292,779 | ||
Total assets | $3,890,221 | $3,993,777 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Current liabilities: | ||||
Notes payable - bank | $ 152,155 | $ 149,164 | ||
Accounts payable and accrued expenses | 186,754 | 186,034 | ||
Loans payable - related parties | 91,789 | 92,841 | ||
- - other | 45,908 | 45,908 | ||
Total current liabilities | 476,606 | 473,947 | ||
Stockholders' equity: | ||||
Preferred stock: undesignated, | ||||
Common stock: $.001 par value; | 24,026 | 23,330 | ||
Additional paid-in capital | 6,638,315 | 6,584,708 | ||
Deficit accumulated during the development stage | (2,305,662) | (2,145,144) | ||
Accumulated deficit | (943,064) | (943,064) | ||
Total stockholders' equity | 3,413,615 | 3,519,830 | ||
Total liabilities and stockholders' equity | $3,890,221 | $3,993,777 |
See Notes to Financial Statements.
WESTERN MEDIA GROUP CORPORATION
(A Development Stage Company)
(Unaudited)
For the period from | |||||||
For the three months ended March 31, | August 1, 1991 to March 31, | ||||||
2003 | 2002 | 2003 | |||||
Sales $ 9,662 |
$ 39,768
$319,494
Costs and expenses:
Operating & administrative
66,388
145,003
840,448
Depreciation
101,007
76,143
484,939
167,395
221,146
1,325,387
Operating loss
(157,733)
(181,378)
(1,005,893)
Other income (expense):
Debt forgiveness
-
-
86,040
Cost of aborted acquisition
-
-
(1,375,000)
Interest expense
(2,991)
(2,862)
(14,303)
Interest income
480
3,494
(2,382)
(1,299,769)
Net loss
$(160,518)
$(183,760)
$(2,305,662)
Basic loss per share
$ (.01)
$ (.01)
Weighted average number of shares outstanding
23,524,979
20,378,212
See Notes to Financial Statements.
WESTERN MEDIA GROUP CORPORATION
(A Development Stage Company)
(DEFICIT)
Surplus | ||||||||||||
Common Stock | ||||||||||||
Accumulated During Development | Number of Shares | Amount | Additional Paid-In Capital | Accumulated Deficit | Stage | Total | ||||||
| ||||||||||||
Reentrance into development stage (August 1, 1991) | 1,199,310 | $ 1,199 | $856,046 | $(943,064) | $ - | $(85,819) | ||||||
| ||||||||||||
Net loss: August 1, 1991 to December 31, 1991 | - | - | - | - | - | - | ||||||
Net income (loss) - 1992 | - | - | - | - | (42,721) | (42,721) | ||||||
Net income (loss) - 1993 | - | - | - | - | - | - | ||||||
Net income (loss) - 1994 | - | - | - | - | - | - | ||||||
Net income (loss) - 1995 | - | - | - | - | - | - | ||||||
Net income (loss) - 1996 | - | - | - | - | - | - | ||||||
Net income (loss) - 1997 | - | - | - | - | - | - | ||||||
Net income (loss) - 1998 | - | - | - | - | - | - | ||||||
Net income (loss) - 1999 | - | - | - | - | - | - | ||||||
December 31, 1999 | 1,199,310 | 1,199 | 856,046 | (943,064) | (42,721) | (128,540) | ||||||
Stock issuance on March 16, 2000 in settlement of indebtedness to former officer | 100,000 | 100 | 9,900 | - | - | 10,000 | ||||||
Stock issuance on March 16, 2000 at $.03 per share, net of issuance costs of $1,125 | 1,200,000 | 1,200 | 32,675 | - | - | 33,875 | ||||||
Equity contribution to cover administrative expenses | - | - | 8,923 | - | - | 8,923 | ||||||
Issuance of shares as part of DDR agreements | 9,000,000 | 9,000 | (8,100) | - | - | 900 | ||||||
| ||||||||||||
Net income - 2000 | - | - | - | - | 96,016 | 96,016 | ||||||
December 31, 2000 | 11,499,310 | $11,499 | $899,444 | $(943,064) | $53,295 | $21,174 |
See Notes to Financial Statements.
WESTERN MEDIA GROUP CORPORATION
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(DEFICIT) (continued)
Surplus | ||||||||||||
Common Stock | ||||||||||||
Accumulated During Development | Number of Shares | Amount | Additional Paid-In Capital | Accumulated Deficit | Stage | Total | ||||||
| ||||||||||||
Balance at December 31, 2000 (brought forward) | 11,499,310 | $11,499 | $899,444 | $(943,064) | $ 53,295 | $ 21,174 | ||||||
Cash contributed by DDR | - | - | 21,100 | - | - | 21,100 | ||||||
Shares issued in connection with assignment of indebtedness | 120,000 | 120 | 29,880 | - | - | 30,000 | ||||||
Shares issued in connection with confidential and non-disparagement agreement relating to an aborted acquisition | 1,100,000 | 1,100 | 1,373,900 | - | - | 1,375,000 | ||||||
Shares issued for cash consideration | 75,000 | 75 | 13,925 | - | - | 14,000 | ||||||
Shares issued and to be issued for consulting services to be rendered | 4,095,000 | 4,095 | 158,755 | - | - | 162,850 | ||||||
Imputed interest on officer/stockholder loan | - | - | 947 | - | - | 947 | ||||||
Other | 13 | - | - | - | - | - | ||||||
Net loss for the year ended December 31, 2001 | - | - | - | - | (1,465,035) | (1,465,035) | ||||||
Less deferred charges | - | - | - | - | - | (134,075) | ||||||
Balance at December 31, 2001 | 16,889,323 | $16,889 | $2,497,951 | $(943,064) | $(1,411,740) | $ 25,961 |
See Notes to Financial Statements.
WESTERN MEDIA GROUP CORPORATION
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(DEFICIT) (continued)
Surplus | ||||||||||||
Common Stock | ||||||||||||
Accumulated During Development | Number of Shares | Amount | Additional Paid-In Capital | Accumulated Deficit | Stage | Total | ||||||
| ||||||||||||
Balance at December 31, 2001 (brought forward) | 16,889,323 | $16,889 | $2,497,951 | $(943,064) | $(1,411,740) | $25,961 | ||||||
Shares issued in connection with the Med-Link USA, Inc. acquisition | 2,000,000 | 2,000 | 2,098,000 | - | - | 2,100,000 | ||||||
Shares issued in connection with Four J's fixed assets acquisition | 2,000,000 | 2,000 | 1,915,000 | - | - | 1,917,000 | ||||||
Shares to be issued in connection with the exercise of a consultant's options | 1,147,389 | 1,147 | 21,801 | - | - | 22,948 | ||||||
Shares issued for consulting services | 1,294,272 | 1,294 | 51,956 | - | - | 53,250 | ||||||
Net loss for the year ended December 31, 2002 | - | - | - | - | (733,404) | (733,404) | ||||||
Amortization of deferred charges | - | - | - | - | - | 134,075 | ||||||
Balance at December 31, 2002 | 23,330,984 | 23,330 | 6,584,708 | (943,064) | (2,145,144) | 3,519,830 | ||||||
Shares issued for consulting services | 642,734 | 643 | 52,607 | - | - | 53,250 | ||||||
Shares issued in connection with the exercise of a consultant's options | 52,611 | 53 | 1,000 | - | - | 1,053 | ||||||
Net loss for the three months ended March 31, 2003 | - | - | - | - | (160,518) | (160,518) | ||||||
Balance at March 31, 2003 (unaudited) | 24,026,329 | $24,026 | $6,638,315 | $(943,064) | $(2,305,662) | $3,413,615 |
See Notes to Financial Statements.
WESTERN MEDIA GROUP CORPORATION
(A Development Stage Company)
| Period from | |||||
| For the three months ended to | to | August 1, 1991 | |||
| 2003 | March 31, 2002 | March 31, 2003 | |||
Cash flows from operating activities: | ||||||
Net loss | $(160,518) | $(183,760) | $(2,305,662) | |||
Adjustments to reconcile net loss to cash flows used in operating activities: | ||||||
Depreciation | 101,007 | 76,143 | 484,939 | |||
Amortization of deferred charges | - | 65,183 | 134,075 | |||
Debt forgiveness | - | - | (86,040) | |||
Issuance of common shares for consulting and other services rendered | 53,250 | - | 1,510,275 | |||
Imputed interest on officer's loan | - | - | 947 | |||
Accounts receivable | - | 6,836 | 13,788 | |||
Accrued expenses and other current liabilities | 3,785 | 20,562 | 152,005 | |||
Net cash flows used in operating activities | (2,476) | (15,036) | (95,673) | |||
Cash flows from financing activities: | ||||||
Issuance of common stock | 1,053 | - | 102,799 | |||
Repayment of bank loans | - | (10,477) | (47,333) | |||
Proceeds from loan payable | - | - | 45,908 | |||
Advances from officer/shareholder | 2,630 | 22,736 | 23,943 | |||
| ||||||
Net cash flows provided by financing activities | 3,683 | 12,259 | 125,317 | |||
| ||||||
Cash flows from investing activities: | ||||||
Purchase of equipment | - | (2,147) | (20,509) | |||
Cash acquired in Med-Link acquisition | - | - | 274 | |||
Investments in partnerships | - | - | (7,546) | |||
Cash flows used in investing activities | - | (2,147) | (27,781) | |||
Increase (decrease) in cash | 1,207 | (4,924) | 1,863 | |||
Cash - beginning of period | 2,134 | 6,805 | 1,478 | |||
Cash - end of period | $ 3,341 | $ 1,881 | $ 3,341 | |||
Supplemental disclosures of cash flows information: | ||||||
Cash paid during the year for: | ||||||
Interest | $ - | $ 700 | $ 11,300 | |||
Income taxes | $ - | $ 300 | $ 300 |
Non-cash financing activities:
Reference is made to financial statements notes for certain non-cash financing activities.
See Notes to Financial Statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2003
(UNAUDITED)
Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated unaudited balance sheet as of March 31, 2003 and the consolidated unaudited statement of operations for the three months ended March 31, 2003, the consolidated unaudited statement of shareholders' equity for the three months ended March 31, 2003, the consolidated unaudited statements of cash flows for the three months ended March 31, 2003 along with the consolidated unaudited statement of operations for the period from August 1, 1991 through March 31, 2003 have been prepared by the Company without audit in accordance with generally accepted accounting principles for interim financial information. In the opinion of management, all adjustments (which include only normal recurring adjustments), necessary for fair presentation have been included.
For information concerning the Company's significant accounting policies and basis of presentation, along with more informative disclosures, reference is made to the Company's Annual Report filed on Form 10-KSB for the year ended December 31, 2002. Results of operations for the period ended March 31, 2003 are not necessarily indicative of the operating results to be expected for the full year and such results are subject to year-end adjustments and independent audit.
Nature of Business
The Company was incorporated on July 26, 1977, under the laws of the State of Minnesota. On November 17, 1988, the Company changed its name to Western Media Group Corporation (Formerly known as Ionic Controls, Inc.).
On January 1, 2002, the Company acquired Med-Link USA, Inc., a privately held New York corporation ("Med-Link"), pursuant to a Share Exchange Agreement dated December 28, 2001 (the "Agreement").
Pursuant to the agreement, the Company issued 2,000,000 shares of its $.001 par value per share common stock and 400 shares of preferred stock to Med-Link's shareholders for all the issued and outstanding shares of Med-Link.
WESTERN MEDIA GROUP CORPORATION
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2003
(UNAUDITED)
Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Nature of Business (continued)
The acquisition of Med-Link was accounted for under the purchase method of accounting, resulting with the recording of goodwill in the amount of approximately $2,300,000.
Med-Link USA was incorporated in 1998. While it shares an office with the Company, substantially all of its operations have been outsourced. Med-Link provides a full service communication network to physicians and hospitals and can provide its services to labs and other businesses that require a service for communication of emergencies.
On October 31, 2000, the Company issued 9,000,000 shares of its common stock to DDR, Ltd. ("DDR") in connection with certain transactions contemplated under a Consulting Agreement dated October 11, 2000 and Acquisition Agreement dated October 27, 2000 (collectively the "DDR Agreements"). These shares were issued following a recapitalization of the Company in which the Company increased the number of authorized shares to 100,000,000, par value $0.001, consisting of 95,000,000 shares of common stock and 5,000,000 shares of stock undesignated as to series, rights, or preferences, and a one for ten reverse split in the issued and outstanding common shares. The recapitalization was approved at a meeting of the stockholders held on October 10, 2000.
Under the DDR Agreements, DDR agreed to provide over a period of one-year consulting services to the Company in connection with private and public financing, securities, broker and investor relations, and mergers and acquisitions, including the acquisition of K-Rad Konsulting, LLC, of Huntington, New York ("KKL") which was a wholly owned subsidiary of DDR. In consideration for such services, the Company agreed to sell to DDR 9,000,000 post-reverse split shares for $900 and the acquisition of KKL.
WESTERN MEDIA GROUP CORPORATION
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2003
(UNAUDITED)
Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Nature of Business (continued)
Pursuant to the verbal agreement of the parties to modify the terms of the written DDR Agreements, the Company issued 9,000,000 shares of common stock to acquire all of the member interest in KKL from DDR, and DDR agreed to continue to provide the consulting services described in the DDR Agreements in consideration for the benefits derived from the Company's common stock issued to DDR. The acquisition of KKL was accounted for as pooling of interests in the December 31, 2000 financial statements. KKL was formed February 10, 2000 as this acquisition had no effect on the Company's historical financial statements. The purchase price was determined through arm's-length negotiations between the Company and DDR on the basis of the net assets of KKL and the goodwill associated with the business. The owners of DDR were not affiliated or associated with the Company or its affiliates prior to the acquisition. The Company entered into a consulting agreement with one of the former officers and consultants to DDR in October, 2001 (see Note 10c).
As of March 31, 2003 DDR owns approximately 36% of the Company's outstanding common shares.
K-Rad Konsulting, LLC is engaged in the business of providing computer network and software systems, consulting, installation, and maintenance services to businesses. KKL's operating income and expenses for the three months ended March 31, 2003 are reflected in the accompanying consolidated statement of operations.
The Company also has two wholly-owned inactive subsidiaries, Western Media Acquisition Corp. (former Western Media Sports Holdings, Inc.) and Western Media Publishing Corp.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and all of its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.
WESTERN MEDIA GROUP CORPORATION
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2003
(UNAUDITED)
Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Depreciation and Amortization
The Company depreciates its equipment on the straight-line method for financial reporting purposes over a five year period. For tax reporting purposes, the Company uses accelerated methods of depreciation. Expenditures for maintenance, repairs, renewals and betterments are reviewed by management and only those expenditures representing improvements to equipment are capitalized. At the time equipment is retired or otherwise disposed of, the cost and accumulated depreciation accounts and the gain or loss on such disposition is reflected in operations.
Goodwill
Goodwill has been calculated at the fair market value of the shares of common stock issued (on the purchase date) over the net assets of the company acquired (Note 10a).
The Company evaluates their long-lived assets, and certain identifiable intangibles in accordance with the provisions of Statement of Financial Accounting Standards No. 121 ("SFAS 121"), "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of", for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets or intangibles may not be recoverable. The Company considers factors such as significant changes in the business climate and projected discounted cash flows from the respective asset. Impairment losses are measured as the amount by which the carrying amount of the asset exceeds its fair value. In July, 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 142 ("SFAS 142"), "Goodwill and Other Intangible Assets". SFAS 142 requires goodwill to be tested for impairment at least annually, and written off when impaired, rather than being amortized as previous standa rds required. As such no amortization of goodwill has been recorded for the year ended December 31, 2002 in the accompanying financial statements. In August 2001, the FASB issued Statement of Financial Accounting Standards No. 144 ("SFAS 144"), "Accounting for the Impairment or Disposal of Long-Lived Assets". This Statement addresses financial accounting and reporting for the impairment or disposal of long-lived assets and supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of", and the accounting and reporting provisions of APB No. 30, "Reporting the Results of Operations for a Disposal of a Segment of a Business". The Company adopted SFAS 142 and 144 beginning January 1, 2002.
WESTERN MEDIA GROUP CORPORATION
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2003
(UNAUDITED)
Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires the Company's management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Concentration of credit risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of sales, trade accounts receivable and cash. The Company grants credit to domestic companies located throughout the New York tri-state area. The Company performs ongoing credit evaluations of its customers' financial condition and generally requires no collateral from its customers.
At March 31, 2003, the Company deems no allowance for doubtful accounts on its trade accounts receivable is necessary.
Deferred Income taxes
Deferred income taxes are provided based on the provisions of SFAS No. 109, "Accounting for Income Taxes" ("SFAS 109"), to reflect the tax effect of differences in the recognition of revenues and expenses between financial reporting and income tax purposes based on the enacted tax laws in effect at March 31, 2003.
The Company, as of March 31, 2003, had available approximately $3,393,000 of net operating loss carry forwards to reduce future Federal and state income taxes. Since there is no guarantee that the related deferred tax asset will be realized by reduction of taxes payable on taxable income during the carry forward period, a valuation allowance in the amount of $1,357,000 has been computed to offset in its entirety the deferred tax asset attributable to this net operating loss. The amount of valuation allowances are reviewed periodically.
WESTERN MEDIA GROUP CORPORATION
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2003
(UNAUDITED)
Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Earnings per common share of common stock
The Company applies Statement of Financial Accounting Standards No. 128, "Earnings Per Share", which requires two presentations of earnings per share - "basic" and "diluted". Basic earnings per share is computed by dividing income available to common stockholders by the weighted-average number of common shares for the period. The computation of diluted earnings per share is similar to basic earnings per share, except that the weighted average number of common shares is increased to include the number of additional common shares that would have been outstanding if the potentially dilutive common shares had been issued.
In October, 2000 the Board of Directors of the Company approved a reverse stock split of the Company's common stock on a one-for-ten basis. All per share amounts in the accompanying financial statements have been restated to reflect this reverse stock split. Only basic earnings per share is presented as all common stock equivalents are either anti-dilutive or not material for the period presented. For the three months ended March 31, 2003 and 2002, the weighted average number of shares outstanding used in the per share computation was 23,524,979 and 20,378,212, respectively.
Fair value of financial instruments
At March 31, 2003, the carrying amounts of the Company's assets and liabilities approximate fair value.
Comprehensive income
The Company adopted SFAS No. 130, which had no impact on the Company's financial position, results of operations or cash flows for the periods presented.
WESTERN MEDIA GROUP CORPORATION
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2003
(UNAUDITED)
Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Recent Accounting Pronouncements
In May 2002, the FASB issued Statement of Financial Accounting Standard No. 145 ("SFAS 145"), "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections". Among other things, SFAS 145 rescinds Statement of Financial Accounting Standards No. 4 (SFAS 4), "Reporting Gains and Losses from Extinguishment of Debt" and eliminates the requirement that gains and losses from the extinguishment of debt be classified as an extraordinary item, net of related income tax effects, unless the criteria in Accounting Principles Board Opinion No. 30, "Reporting the Results of Operations - Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions" are met. Adoption of this statement is generally required in fiscal years beginning after May 15, 2002. The Company does not expect the adoption of this statement to have a material impact on its consolidated financial statements.
In June 2002, the FASB issued Statement of Financial Accounting Standard No. 146 (SFAS 146), "Accounting for Costs Associated with Exit or Disposal Activities". SFAS 146 nullifies Emerging Issues Task Force Issue No. 94-3 (EITF 94-3), "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (Including Certain Costs Incurred in a Restructuring)". SFAS 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. Therefore, SFAS 146 eliminates the definition and requirements for recognition of exit costs in EITF 94-3. The provisions of SFAS 146 are effective for exit or disposal activities that are initiated after December 31, 2002. The Company will adopt the provisions of SFAS 146 for all exit activities, if any, initiated after December 31, 2002. The Company does not expect the adoption of this statement to have a material impact on its consolidated financial statements.
WESTERN MEDIA GROUP CORPORATION
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2003
(UNAUDITED)
Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Recent Accounting Pronouncements (continued)
In November 2002, the EITF reached a consensus on issue 00-21, "Revenue Arrangements with Multiple Deliverables." EITF 00-21 addresses revenue recognition on arrangements encompassing multiple elements that are delivered at different points in time, defining criteria that must be met for elements to be considered to be a separate unit of accounting. If an element is determined to be a separate unit of accounting, the revenue for the element is recognized at the time of delivery. The Company does not expect that the pronouncement will have a material impact on its financial position or results of operations.
In November 2002, the FASB issued FASB Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others" (the "Interpretation"). This Interpretation elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued. It also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The Company does not expect that this Interpretation will have a material impact on its financial position or results of operations.
Accounting for stock-based compensation
In December 2002, the FASB issued FAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure - an amendment of FASB Statement No. 123". FAS No. 148 amends FAS No. 123, "Accounting for Stock-Based Compensation", to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, FAS No. 148 amends the disclosure requirements of FAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. As provided for in FAS No. 123, the Company has elected to apply Accounting Principles Board ("APB") No. 25 "Accounting for Stock Issued to Employees" and related interpretations in accounting for our stock based compensation plans. APB No. 25 does not require options to be expensed when granted with an exercise price equal to fair market value. T he Company intends to continue to apply the provisions of APB No. 25. See Note 13 of the Consolidated Financial Statements.
WESTERN MEDIA GROUP CORPORATION
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2003
(UNAUDITED)
Note 2 - DEVELOPMENT STAGE COMPANY
On July 31, 1991, the Company sold substantially all of its operations and reentered the development stage. From that date to the present, the Company has devoted the majority of its efforts to maintenance of the corporate status, raising capital, and the search for merger candidates. The Company has been fully dependent upon the support of certain stockholder(s) for the maintenance of its corporate status and to provide all working capital support for the Company. These stockholders intend to continue to fund necessary expenses to sustain the Company. If the Company does not become profitable or if the Company's stockholders do not continue to fund necessary expenses of the Company and resolve the default judgment entered by a bank against Med-Link, it could result in the Company being unable to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.
Note 3 - NOTES RECEIVABLE - RELATED PARTIES
a) On March 29, 2001, the Company sold certain assets to the President of KKL for $25,000, evidenced by a note bearing interest at a rate of 10% per annum. The note matured in 2002 and was extended until March 1, 2004. The note bears interest at the rate of 3% per annum. Accrued interest on this loan was $3,394 as of March 31, 2003. This note is collateralized by 100,000 restricted shares of Western Media Group Corporation common shares owned by the officer.
In addition, this Officer has a loan outstanding due to the Company in the amount of $28,292 as of March 31, 2003. This loan is payable on demand and is non-interest bearing.
b) As of March 31, 2003, Med-Link has a loan due from one of its officers in the amount of $17,914, which is guaranteed by another officer of Med-Link. This loan is payable on demand and is non-interest bearing.
WESTERN MEDIA GROUP CORPORATION
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2003
(UNAUDITED)
Note 4 - PROPERTY AND EQUIPMENT
As of March 31, 2003, a summary of property and equipment and the estimated useful lives used in the computation of depreciation is as follows:
Estimated useful Life (Years) | Amount | |
Office equipment | 5 | $ 2,372 |
Computer equipment and software | 5 | 2,017,855 |
-------------- | ||
2,020,227 | ||
Less accumulated depreciation | 511,483 | |
-------------- | ||
$1,508,744 |
Included in fixed assets above is $1,917,000 of computer equipment acquired from Four J's on January 23, 2002 (see Note 10b).
Note 5 - DEFERRED CHARGES
Deferred charges represented commission and consulting services to be rendered, which was paid for by the issuances of the Company's common shares (see Note 10). Such charges were being shown as a reduction of the Company's shareholders' equity in the accompanying Consolidated Statement of Shareholders' Equity (Deficit).
WESTERN MEDIA GROUP CORPORATION
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2003
(UNAUDITED)
Note 6 - NOTES PAYABLE - BANKS
On April 30, 2001, Med-Link entered into a five year $100,000 loan agreement with a bank. Payments in the amount of $2,064, with interest at the rate of 8.75% per annum were due monthly. The loan balance as of March 31, 2003 was $76,802. In addition, in April 2001, Med-Link entered into a three year business credit loan agreement with a bank permitting the Company to borrow up to $100,000. As of March 31, 2003, the loan balance, inclusive of accrued interest (at 6.75% per annum) and late charges, was $75,353. Both loans are guaranteed by officers of Med-Link. Interest expense for the above two bank loans was approximately $3,000 and $2,900 for the three months ended March 31, 2003 and 2002, respectively.
Med-Link is in default under the terms of both loan agreements and a default judgment has been entered in favor of the bank against Med-Link and certain of its officers (see Note 15).
Note 7 - LOAN PAYABLE - RELATED PARTIES
Med-Link has a loan payable to one of its officers in the amount of $91,034 as of March 31, 2003. The Company, as of March 31, 2003, also has a loan due to one of its consultants/shareholders in the amount of $755. These loans are payable on demand and are non-interest bearing.
Note 8 - LOAN PAYABLE - OTHER
During the three months ended March 31, 2003, a company that is owned by the family of a more than 5% owner of Western Media Group Corporation advanced $45,908 to Western Media Group Corp. and Med-Link. This loan is non-interest bearing and is payable on demand.
WESTERN MEDIA GROUP CORPORATION
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2003
(UNAUDITED)
Note 9 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES
As of March 31, 2003, accounts payable and accrued expenses consisted of the following:
Professional fees | $ 70,580 |
Rent | 27,462 |
Telephone | 50,107 |
Miscellaneous | 15,143 |
Sales tax payable | 23,462 |
$186,754 |
Note 10 - STOCKHOLDERS' EQUITY
a) On January 1, 2002, the Company issued 2,000,000 shares of its $.001 par value per share common stock and 400 shares of preferred stock for all of the issued and outstanding shares of Med-Link. The shares were valued at the closing stock price of the Company's common shares on the date of acquisition ($1.05). No value has been attributable to the 400 shares of preferred stock issued.
b) On January 23, 2002, The Company acquired software, computers, servers, monitors, hubs, and other related equipment from Four J's Enterprises. The purchase price for the assets was 2,000,000 shares of the Company's common stock. The value of the aforementioned assets received was $1,917,000, which was determined by the average closing stock price of the Company for three days before and three days after the date of the agreement ($1.065) less a ten percent discount for restrictions placed on the shares issued.
WESTERN MEDIA GROUP CORPORATION
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2003
(UNAUDITED)
Note 10 - STOCKHOLDERS' EQUITY (continued)
c) In October 2001, the Company entered into consulting agreements with three individuals. The agreements provide for the issuance of 4,020,000 shares in exchange for consulting fees to be rendered during a twelve month period. The shares issued for the agreed upon value of the services to be rendered, were based upon the available market price of the Company's common shares ranging from $.02 to $.05. Of the total shares issuable, 75% were issued upon the approval of the agreements by the Company's Board of Directors and the balance of the shares were subsequently issued.
Of the total value of the aforementioned shares aggregating $126,600, $97,825 has been allocated, as of December 31, 2001, to deferred charges for services to be rendered, of which $31,650 was expensed during the three months ended March 31, 2002.
In addition, the aforementioned individuals received options to purchase 3,400,000 common shares at an exercise price of $.02, which shares shall vest eight months after the commencement date of the agreement. The options expire in October, 2004. In December, 2002, one of the individuals exercised his option to purchase 1,147,389 common shares at $0.02 and exercised an additional 52,611 common shares at $.02 during the three months ended March 31, 2003. Subsequent to March 31, 2003, two consultants exercised their option to purchase 774,108 common shares at $.02.
All of the agreements provide for a one year extension at the Company's option. Compensation during the extension period ranges from $2,000 per month to $10,000 per month, payable in cash or in the Company's common shares at a 20% discount to the prevailing market value on the last business day of each month, and options to purchase an additional 3,400,000 shares at the fair market value on October 1, 2002 ($.065). In connection therewith, 1,294,272 shares were issued for consulting services, which were valued at $53,250 during the fourth quarter of 2002. During the three months ended March 31, 2003, the Company issued 642,734 shares for consulting services, which were also valued at $53,250. While the Company did not formally extend the agreement, the Consultants continue to provide services to the Company. Subsequent to March 31, 2003, the Company issued 338,977 shares of its common stock for consulting services rendered in April and May, 2003.
WESTERN MEDIA GROUP CORPORATION
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2003
(UNAUDITED)
Note 10 - STOCKHOLDERS' EQUITY (continued)
(d) The Company, pursuant to an arrangement dated December 28, 2001, issued 860,000 shares of its common stock for services rendered in connection with the Med-Link USA, Inc. acquisition which occurred on January 1, 2002. This arrangement was rescinded on April 12, 2002 and accordingly, is not reflected in the consolidated statements of stockholders' equity.
e) In December 2001, the Company issued 50,000 shares for consulting services to be rendered in 2002 and 25,000 shares to an individual for services relating to the development of the Company's business plan. These shares were valued at the closing stock price of the Company's common shares on the dates the agreements were signed ($.10) and ($1.25), respectively. The aggregate value of the shares issued was $36,250 of which $33,533 was charged to operations during the three months ended March 31, 2002.
f) In October 2001, the Company granted stock options to two stockholders to purchase 1,000,000 shares (500,000 shares each) of the Company's common stock, at an exercise price of $.02. These stock options expire in October, 2004.
Note 11 - PREFERRED STOCK
The holders of the Company's Preferred stock have the right to receive yearly payments in an amount which will not exceed the Available Dividend Amount, as defined. The decision to make annual payments to the preferred stockholder rests with the sole discretion of the Company's Board of Directors, which determination will be made in February of each year. The declared payment will be paid on March 31 for the prior year then ended. The preferred shares are not transferrable without the consent of the Company, except in the case of death of the stockholder, and carry no voting rights, liquidation preferences and other rights, except for the right to receive distributions disclosed above.
WESTERN MEDIA GROUP CORPORATION
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2003
(UNAUDITED)
Note 12 - OTHER RELATED PARTY TRANSACTIONS
The Company does not currently lease or rent any property. Office space and services are provided without charge by various directors of the Company in Long Island, New York. Such costs are immaterial to the financial statements, and, accordingly, have not been reflected therein.
Note 13 - ACCOUNTING FOR STOCK-BASED COMPENSATION
FAS No. 123, "Accounting for Stock-Based Compensation" defined a fair value method of accounting for stock options and other equity instruments. Under the fair value method, compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period, which is usually the vesting period. As provided for in FAS No. 123, the Company elected to apply Accounting Principles Board ("APB") Opinion No. 25 and related interpretations in accounting for its stock-based compensation plans. The following is a reconciliation had the Company adopted FAS No. 123.
2003 | 2002 | |
Net loss (as reported) | $(160,518) | $(183,760) |
Less: stock compensation costs, had all options been recorded at fair value | - | 90,250 |
Adjusted net loss | $(160,518) | $(274,010) |
Basic earnings per share (as reported) | $ (.01) | $ (.01) |
Basic earnings per share (as adjusted) | $ (.01) | $ (.01) |
The fair value of each option granted during 2003 and 2002 is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions:
2003 | 2002 | |
Dividend yield | None | None |
Expected volatility | 100% | 100% |
Risk-free interest rate | 3% | 3% |
Expected life (years) | 2 | 3 |
WESTERN MEDIA GROUP CORPORATION
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2003
(UNAUDITED)
Note 14 - COMMITMENTS AND CONTINGENCIES
Med-Link was obligated under an operating lease which expired in February 28, 2001. Med-Link moved its operations to the same location as Western Media Group Corporation in December, 2002 and is not being charged rent. Rent expense for the three months ended March 31, 2002 was approximately $8,300.
In January, 2002, Western Media Sports Holdings, Inc., (an inactive subsidiary) signed a Letter of Intent to acquire 50.01 percent of Klein's Acquisition Corp. in exchange for 2,000,000 shares of Western Media Group Corp. and other consideration. Western Media subsequently rescinded this offer.
In November 2002, Med-Link entered into an answering service agreement with a company which will provide contact and/or call center and attendant support services for Med-Link as set forth in the agreement.
In December, 2002, Med-Link entered into a letter of understanding with Netwolves Technologies to jointly market Netwolves HIPA Infrastructure Solutions combined with Med-Link's health care management applications.
On November 27, 2002, Med-Link entered into a telecommunications agreement with a hospital. Under the terms of the agreement, Med-Link will provide, among other things, the installation and implementation of a virtual private network ("VPN") for the hospital.
The Company has not filed their 2001 income tax returns.
Note 15 - LEGAL PROCEEDINGS
In January, 2003, a bank commenced an action against Med-Link, USA, Inc. and two officers of Med-Link USA, Inc. in the Supreme Court of the State of New York, County of Suffolk. The bank alleged that it was due a total of $138,814.01, plus interest, relating to two loans extended to Med-Link. On April 22, 2003, a default judgment was entered in favor of the bank in the amount of $148,900.66, which has not yet been paid and for which each defendant is jointly and severally liable.
WESTERN MEDIA GROUP CORPORATION
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2003
(UNAUDITED)
Note 16 - SUBSEQUENT EVENTS
In May 2003, Med-Link entered into a letter of understanding with Vested Health Care, a company which holds a licensing agreement with Avreo Inc., which will grant the Med-Link VPN the opportunity to offer its client's software that allows for the reading of MRI and CAT scans digitally.
In May 2003, the Company entered into a Letter of Intent with ITES, LLC, whereby the Company would acquire all of the issued and outstanding shares of ITES, LLC for 2,000,000 shares of its $.001 par value common stock. ITES, LLC is a New York based company that specializes in outsourcing IT enabled services.
On June 3, 2003, the Company entered into a private label healthcare communications agreement with Wildgate Wireless, Inc. The agreement was entered to facilitate value-added services to be offered through Med-Link's VPN.
Item 2. Management's Discussion And Analysis of Financial Condition And Results of Operations
This discussion summarizes the significant factors affecting the consolidated operating results, financial condition and liquidity of the Company for the three-month period ended March 31, 2003. This discussion should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements included elsewhere in this quarterly report.
Plan of Operation
The Company has started to utilize its subsidiaries to jointly develop the MedlinkVPN( products targeted at the medical community. Furthermore, the Company has entered into various contracts in recent months to further enhance the scope of the features offered to healthcare facilities and professionals through the MedlinkVPN(, Vested Healthcare, Inc., Wildgate Wireless, Inc., and ITES LLC.
K-Rad Konsulting, a wholly owned subsidiary of the Company, has assisted the Company by providing the technical support and services its businesses require. Utilizing K-Rad to develop software and applications has allowed the Company to substantially reduce the costs associated with the development of the MedlinkVPN(.
The Company has restructured the operations of the MedlinkVPN( to reduce costs and enhance efficiencies by transferring part of its call center functions to a call center in India pursuant to a contract entered into in the fourth quarter of 2002. The Company anticipates the transfer of additional call center functions to India in the future.
The Company entered into a non-binding Letter of Intent to acquire ITES, LLC in May of 2003. ITES specializes in outsourcing IT Enabled Services overseas, which allows for companies to achieve significant improvements in cost, quality and time, while creating platforms for building new business. ITES specializes in Call Centers, Help Desks, Market Research, Medical Billing, Medical Transcription, and Accounting services. The Company believes that significant synergies exist for both the development of the MedlinkVPN( and the services ITES offers in the event that an acquisition is completed, of which there can be no guarantee.
The Company also entered into an agreement with Vested Health Care, which holds a licensing agreement with Avreo, Inc., that will grant the MedlinkVPN( the opportunity to offer its clients Avreo Radiology Workflow Software. This software allows for the reading of MRIs and CAT scans digitally. Through a previous strategic acquisition, the Company has a significant amount of the hardware required to offer this service on its network to its clients. The Company believes it is in a position to offer the transmission of various medical images and significantly reduce costs in that area.
With the intention of increasing the range of options for the medical community's messaging services. The Company executed a Private Label Healthcare Communications Agreement with Wildgate Wireless, Inc. The agreement was entered into to facilitate additional value-added services to be offered by the Company. Since negotiations between the Company and Wildgate began, Wildgate has developed features specifically designed for the healthcare community that will initially be offered exclusively by the Company. These features will include Wildgate Automated Appointment Confirmation, Dictation and Transcription, Record-a-Call, Data Storage, Billing Solutions and Toll-free One Number and Unified Communications Solution which offers Call Blasting, EVoice (e-mail over the phone), One Button Call Back, and Event Notification.
The Company plans to market the MedlinkVPN( services to medical practices in the New York metropolitan area by utilizing local hospitals as a contact point. In furtherance to this plan, Med-Link has signed, and will begin the process of implementing, a Virtual Private Network for New Island Hospital in Bethpage, New York. The network will be marketed to all the medical staff affiliated with New Island Hospital, which will allow for various services to be offered to medical practices on its network.
The Company plans to utilize strategic and joint venture partners to further develop and expand its operations through joint product offerings. In this way, management believes it can minimize the need for additional capital. The Company is currently seeking to market various services, by itself, and with strategic partners, to medical practices, medical labs, hospitals and insurance companies.
As part of its operating plan, the Company plans to enter into one or more strategic relationships to ensure its networks are compliant with Title II, Part C of the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"). HIPPA required the Department of U.S. Health and Human Services to establish national standards for electronic health care transactions and national identifiers for providers, health plans, and employers. It also addresses the security and privacy of health data. The goal of the standards adopted is to improve the efficiency and effectiveness of the nation's health care system by encouraging the widespread use of electronic data interchange in health care, while protecting that information with a secure environment.
The Company has commenced preliminary discussions for a strategic relationship to acquire and/or market HIPPA complaint solutions.
Item 2. Management's Discussion And Analysis of Financial Condition And Results of Operations (continued)
Liquidity and Capital Resources
At March 31, 2003, the Company had a working capital deficiency of $392,686. Management believes revenue from operations will be sufficient to sustain the Company's operations for the next twelve months. Even though the Company completed the Med-Link acquisition in January, 2002, and signed a telecommunications agreement with a hospital in November 2002, it cannot predict whether the Company will realize any meaningful growth in the future.
Three Months Ended March, 2003 and 2002
The Company's revenues from continuing operations for the three months ended March 31, 2003 and 2002 were $9,662 and $39,768, respectively.
Expenses for the three months ended March 31, 2003 and 2002 were $167,395 and $221,146, respectively. This decrease in expenses is primarily attributable to lower payroll and telephone expenses during the three months ended March 31, 2003.
The Company had a net loss of $160,518 for the three months ended March 31, 2003, as compared to a net loss of $183,760 for the same period in 2002.
Item 3. Controls and Procedures
As of June 9, 2003, an evaluation was performed under the supervision and with the participation of the Company's management, including the President and Vice President, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on that evaluation, the Company's management, including the President and Vice President concluded that the Company's disclosure controls and procedures were effective in ensuring that material information relating to the Company with respect to the period covered by this report was made known to them.
Based upon their evaluation of the Company's internal controls within 90 days of the date of this report, the President and Vice President of the Company have identified the following internal control deficiencies: (1) lack of segregation of duties relating to cash, receivables and safeguarding of assets; (2) lack of training in the areas of accounting and book keeping; and (3) non-timely filing of income, sales and payroll tax returns. The Company plans to take steps to address these deficiencies. There have been no significant changes in the Company's internal controls or in other factors that could significantly affect internal controls subsequent to June 9, 2003.
PART II - OTHER INFORMATION
Item 2. Changes in Securities
In January 2003, the Company issued a total of 184,896 shares of common stock to Munish
Rametra, Ray Vuono and James Rose as compensation pursuant to their consulting agreements. The issuances were accomplished in reliance upon Section 4(2) of the Act in private transactions.
Also in January 2003, the Company issued 52,611 option to purchase the Company's common stock exercisable at a price of $0.02 per share to Ray Vuono pursuant to his consulting agreement. The issuances were accomplished in reliance upon Section 4(2) of the Act in private transactions.
In February, 2003, the Company issued a total of 211,312 shares of common stock to Munish Rametra, Ray Vuono and James Rose as compensation pursuant to their consulting agreements. The issuances were accomplished in reliance upon Section 4(2) of the Act in private transactions.
In March, 2003, the Company issued a total of 246,528 shares of common stock to Munish Rametra, Ray Vuono and James Rose as compensation pursuant to their consulting agreements. The issuances were accomplished in reliance upon Section 4(2) of the Act in private transactions.
In April, 2003, the Company issued a total of 246,528 shares of common stock to Munish Rametra, Ray Vuono and James Rose as compensation pursuant to their consulting agreements. The issuances were accomplished in reliance upon Section 4(2) of the Act in private transactions.
In May, 2003, the Company issued a total of 92,449 shares of common stock to Munish Rametra, Ray Vuono and James Rose as compensation pursuant to their consulting agreements. The issuances were accomplished in reliance upon Section 4(2) of the Act in private transactions.
In May 2003, the Company issued a total of 774,108 options to purchase the Company's common stock exercisable at a price of $0.02 per share to Ray Vuono and James Rose pursuant to their consulting agreements. The issuances were accomplished in reliance upon Section 4(2) of the Act in private transactions.
Item 6. Exhibits and Reports on Form 8-K
(a) Copies of the following documents are included as exhibits to this report pursuant to Item 601 of Regulation S-B.
SEC Ref. No. | Title of Document | |
3.1 | Amended of Articles of Incorporation (1) | |
3.2 | Bylaws (1) | |
4.1 | Common Stock Option dated October 1, 2001 issued to Munish K. Rametra (2) | |
4.2 | Common Stock Option dated October 1, 2001 issued to Ray Vuono (2) | |
4.3 | Common Stock Option dated October 1, 2001 issued to James Rose (2) | |
4.4 | Common Stock Option dated October 1, 2001 issued to Konrad Kim | |
4.5 | Common Stock Option dated October 1, 2001 issued to James Rose | |
10.1 | Consulting Agreement with DDR, Ltd. dated October 11, 2000 (3) | |
10.2 | Acquisition Agreement pertaining to K-Rad Konsulting, LLC, dated October 27, 2000 (3) | |
10.3 | Consulting Agreement with Munish K. Rametra dated October 1, 2001 (2) | |
10.4 | Consulting Agreement with Ray Vuono dated October 18, 2001 (2) | |
10.5 | Consulting Agreement with James Rose dated October 1, 2001 (2) | |
10.6 | Share Exchange Agreement between the Company and Med-Link USA, Inc. dated December 28, 2001 (4) | |
10.7 | Asset Purchase Agreement between the Company and 4J's Enterprises dated January 23, 2002 (5) | |
10.8 | Telecommunications Services Agreement dated November 27, 2002 between New Island Hospital and Med-Link USA, Inc. (6) | |
10.9 | Messaging Service Agreement made as of November 22, 2002 between Total Infosystems, Inc. and Med-Link USA, Inc. (6) | |
10.10 | Agreement between Wildgate Wireless, Inc. and Western Media Group Corporation dated June 4, 2003. | |
10.11 | Agreement between Med-Link USA, Inc. and Vested Health Care dated May 5, 2003. |
(1) Incorporated by this reference from the Annual Report on Form 10-KSB for the year ended December 31, 1999, filed with the Securities and Exchange Commission on June 28, 2000.
(2) Incorporated by this reference from the Company's registration statement on Form S-8 filed with the Securities and Exchange Commission on November 14, 2001.
(3) Incorporated by this reference from the Current Report on Form 8-K dated October 31, 2000, filed with the Securities and Exchange Commission on November 13, 2000.
(4) Incorporated by reference from the Current Report on Form 8-K dated January 10, 2002 filed with the Securities and Exchange Commission on January 15, 2002.
(5) Incorporated by reference from the Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on February 7, 2002.
(6) Incorporated by reference from the quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2002 and filed with the Securities and Exchange Commission on December 18, 2002.
(b) The Company did not file any reports on Form 8-K for the period ended March 31, 2003.
SIGNATURE
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Western Media Group Corporation | ||
(Registrant) | ||
Date June 13, 2003 | /s/ Konrad Kim | |
Konrad Kim | ||
President | ||
(principal accounting officer of the registrant) |
Table of Contents
CERTIFICATIONS
Pursuant to 18 U.S.C. Section 1350,as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Konrad Kim, certify that:
1. | I have reviewed this quarterly report on Form 10-QSB of Western Media Group Corporation; | |
2. | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; | |
4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: |
a) | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; | ||
b) | evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and | ||
c) | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; |
5. | The registrant’s other certifying officers and I have disclosed, based on the registrant’s most recent evaluation, to the registrant's auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
a) | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and | ||
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and |
6. | The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. |
Date: June13, 2003 | By: | /s/ Konrad Kim | ||
Konrad Kim | ||||
President | ||||
(principal executive officer of the registrant) |
CERTIFICATIONS
Pursuant to 18 U.S.C. Section 1350,as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, James Rose, certify that:
1. | I have reviewed this quarterly report on Form 10-QSB of Western Media Group Corporation; | |
2. | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; | |
4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: |
a) | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; | ||
b) | evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and | ||
c) | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; |
5. | The registrant’s other certifying officers and I have disclosed, based on the registrant’s most recent evaluation, to the registrant's auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
a) | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and | ||
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and |
6. | The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. |
Date: June13, 2003 | By: | /s/ James Rose | ||
James Rose | ||||
Vice President and Principal Financial Officer | ||||
(principal executive officer of the registrant) |