Mail Stop 0407
May 13, 2005
Via U.S. Mail and Fax (703-455-8519)
Mr. Phillip Trigg
Treasurer
Next Generation Media Corp.
7644 Dynatech Court
Springfield, VA 22153
RE: Next Generation Media Corp.
Form 10-KSB for the Year ended December 31, 2004
Filed April 1, 2005
File No. 002-74785-B
Dear Mr. Trigg:
We have reviewed the above referenced filing and have the
following comments. We have limited our review to only your
financial statements and related disclosures and will make no
further
review of your document. As such, all persons who are responsible
for the adequacy and accuracy of the disclosure are urged to be
certain that they have included all information required pursuant
to
the Securities Exchange Act of 1934. Where indicated, we think
you
should revise your document in response to these comments. If you
disagree, we will consider your explanation as to why our comment
is
inapplicable or a revision is unnecessary. Please be as detailed
as
necessary in your explanation. In some of our comments, we may
ask
you to provide us with supplemental information so we may better
understand your disclosure. After reviewing this information, we
may
or may not raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Form 10-KSB for the Year Ended December 31, 2004:
Section 302 Certifications
1. Please revise to remove your exhibits from the body of the
periodic report. The exhibits should be separately filed and
tagged
on EDGAR as exhibits, and not appended to the body of the periodic
report.
2. In addition, your certifications do not comply with the form as
specified in Rule 13a-14. Please amend your Form 10-KSB to provide
certifications so that these certifications conform exactly with
the
form of Rule 13a-14(a) certification set forth in Item 601(b)(31)
of
Regulation S-B. Refer to Release No. 33-8238 and Item 601(b)(31)
of
Regulation S-B. Note that the amendment must contain the entire
Form
10-KSB, as revised. Please similarly revise your Forms 10-QSB for
the quarters ended March 31, 2004, June 30, 2004, and September
30,
2004.
Independent Auditor`s Report
3. Please have your auditors revise their report to refer to "the
standards of the Public Company Accounting Oversight Board (United
States)" as required by PCAOB Auditing Standard No. 1.
Consolidated Statements of Operations
4. Addressing the relevant accounting literature, tell us your
basis
for recording $188,673 of gain or settlement of debt in 2004.
Consolidated Statements of Stockholders` Equity
5. Revise to reflect the amount of net income recorded for the
year
ended December 31, 2004.
Note 1. Summary of Significant Accounting Policies
Intangibles
6. You state that you have recorded goodwill based on the
difference
between the cost and the fair value of certain purchased assets
and
it is being amortized on a straight-line basis over the estimated
period of benefit, which ranges from 5 to 10 years. We note that
you
have recorded goodwill amortization of $135,684 for 2004 and 2003.
Note that goodwill should not be amortized under paragraph 18 of
SFAS
142 effective January 1, 2002. As such, please restate your
financial
statements for the years affected and advise us. We would not
object
to your presenting restated 2004 and 2003 financial statements in
the
amended 2004 Form 10-KSB and providing amended 2004 Forms 10-QSB.
7. Further, advise us and disclose your impairment policy
(measurement and recognition) for goodwill in accordance with
paragraphs 19-22 of SFAS 142.
Revenue Recognition
8. We note from Note 1 that you have 53 area franchise license
agreements in the U.S. You state that `franchise support and other
fees are recognized when billed to the franchisee.` Advise us and
disclose the significant terms of your franchise agreements and
the
revenue earning process for `initial franchise fees` and
`franchise
support and other fees.` Refer to SAB 104. Also, disclose the
significant terms of the agreements in MD &A.
* * * *
As appropriate, please amend your Forms 10-KSB and 10-QSB
and
respond to these comments within 10 business days or tell us when
you
will provide us with a response. You may wish to provide us with
marked copies of the amendment to expedite our review. Please
furnish a cover letter with your amendment that keys your
responses
to our comments and provides any requested supplemental
information.
Detailed cover letters greatly facilitate our review. Please file
your cover letter on EDGAR. Please understand that we may have
additional comments after reviewing your amendment and responses
to
our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that
* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filings; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filings or
in
response to our comments on your filings.
You may contact Andrew Mew, Staff Accountant, at (202) 551-
3377
or Carlos Pacho, Senior Assistant Chief Accountant, at (202) 551-
3835
if you have questions regarding comments on the financial
statements
and related matters. Please contact me at (202) 551-3810 with any
other questions.
Sincerely,
Larry Spirgel
Assistant Director
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Next Generation Media Corp.
May 13, 2005
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