UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended: March 31, 2001
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from To
Commission file number 0-21376
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PHOENIX MEDIA GROUP, LTD.
--------------------------
(Exact name of small business issuer as specified in its charter)
NEVADA 33-0714007
- ------------------------------------ ---------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
290 EAST VERDUGO, SUITE 207, BURBANK, CALIFORNIA 91502
------------------------------------------------------
(Address of principal executive offices)
(818) 563-3900
---------------
(Issuer's telephone number)
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practical date: March 31, 2001 6,925,649
Transitional Small Business Disclosure Format (check one). Yes ; No X
PART I
Item 1. Financial Statements
INDEPENDENT ACCOUNTANT'S REPORT
Phoenix Media Group, Ltd.
We have reviewed the accompanying balance sheets of Phoenix Media Group,
Ltd. as of March 31, 2001 and June 30, 2000, and the related statements of
operations for the three and nine month periods ended March 31, 2001 and 2000,
and cash flows for the nine month periods ended March 31, 2001 and 2000. These
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statement taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements for them to be in
conformity with generally accepted accounting principles.
Respectfully submitted
/s/ ROBISON, HILL & CO.
Certified Public Accountants
Salt Lake City, Utah
April 30, 2001
PHOENIX MEDIA GROUP, LTD.
BALANCE SHEETS
(Unaudited)
March 31, June 30,
--------- ---------
2001 2000
--------- ---------
ASSETS
Cash ........................................... $ -- $ 19,815
Inventory ...................................... 34,130 34,130
--------- ---------
Total Current Assets ................... 34,130 53,945
--------- ---------
Property and Equipment
Office Equipment ............................... 25,054 24,315
Radio Equipment ................................ 46,126 26,312
Office Condominium ............................. 75,000 75,000
Vehicles ....................................... 41,586 41,586
--------- ---------
Less Accumulated Depreciation .................. (68,006) (46,679)
--------- ---------
Net Property and Equipment ............. 119,760 120,534
--------- ---------
Other Assets
Stockholder Loans .............................. -- 18,598
--------- ---------
Total Non Current Assets ............... -- 18,598
--------- ---------
Total Assets ........................... $ 153,890 $ 193,077
========= =========
PHOENIX MEDIA GROUP, LTD.
BALANCE SHEETS
(Continued)
(Unaudited)
March 31, June 30,
--------- ---------
2001 2000
--------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Line of Credit ......................................... $ 760 $ --
Accounts payable ....................................... 25,312 18,769
Accrued expenses ....................................... 7,897 7,823
Stockholder loans ...................................... 72,529 8,000
Current portion of long-term debt ...................... 6,520 6,520
--------- ---------
Total Current Liabilities ...................... 113,018 41,112
--------- ---------
Long-term Debt ......................................... 57,311 59,647
--------- ---------
Total Liabilities .............................. 170,329 100,759
--------- ---------
Stockholders' equity
Series A convertible preferred stock
(par value $.01), 5,000,000 shares authorized,
no shares issued or outstanding .................. -- --
March 31, 2001, and June 30, 2000
Common Stock (par value $.001), 50,000,000 shares
authorized, 6,925,649 and
6,925,649 shares issued
and outstanding March 31, 2001, and June 30, 2000 . 6,926 6,926
Common Stock to be Issued 128,000 shares .......... 128 128
Paid in capital in excess of par value ................. 501,776 501,776
Retained deficit ....................................... (525,269) (416,512)
--------- ---------
Total Stockholders' Equity ..................... (16,439) 92,318
--------- ---------
Total Liabilities and Stockholders' Equity ..... $ 153,890 $ 193,077
========= =========
See accompanying notes and accountants' report.
PHOENIX MEDIA GROUP, LTD.
STATEMENTS OF OPERATIONS
(UNAUDITED)
For the For the For the For the
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
March 31, March 31, March 31, March 31,
2001 2000 2001 2000
----------- ----------- ----------- -----------
Revenue
Sales ............................. $ 28,557 $ 73,250 $ 91,457 $ 262,748
Cost of sales ..................... 7,825 18,261 41,669 51,883
----------- ----------- ----------- -----------
Gross Margin .............. 20,732 54,989 49,788 210,865
Operating Expenses
General and Administrative ........ (54,163) (83,429) (145,787) (305,870)
Other Income (Expense)
Interest expense .................. (3,146) (8,025) (12,159) (10,332)
Interest income ................... -- -- -- --
Realized gain (loss) on sale of
investments ....................... -- -- -- (32,859)
Gain (loss) on sale of assets ..... -- -- -- 2,780
----------- ----------- ----------- -----------
Income (loss) before income taxes . (36,577) (36,465) (108,158) (135,416)
Income taxes ...................... 200 200 600 600
----------- ----------- ----------- -----------
Net Income (Loss) ................. $ (36,777) $ (36,665) $ (108,758) $ (136,016)
=========== =========== =========== ===========
Earnings (Loss) Per Share ......... $ (0.01) $ (0.01) $ (0.02) $ (0.02)
=========== =========== =========== ===========
Weighted Average Shares Outstanding 6,925,649 6,908,671 6,925,649 6,853,267
=========== =========== =========== ===========
See accompanying notes and accountants' report.
PHOENIX MEDIA GROUP, LTD.
STATEMENTS OF CASH FLOW
(UNAUDITED)
For the For the
Nine Nine
Months Months
Ended Ended
March 31, March 31,
2001 2000
-------- ---------
Cash Flows From Operating Activities:
Net income (loss) ..................................... $(108,758) $ (136,016)
Adjustments to reconcile Net income (loss)
to net cash provided by (used in)
Operating activities:
Amortization and depreciation ................... 21,328 27,250
(Gain) Loss on sale of assets ................... -- (2,780)
Common stock issued for services ................ -- 32,000
(Gain) Loss on sale of investments .............. -- 32,859
Change in operating assets and liabilities:
Accounts payable ................................ 7,303 7,468
Accrued expenses ................................ 74 (5,000)
-------- ---------
Net cash used by operating activities ................. (80,053) (44,219)
-------- ---------
Cash Flows From Investing Activities:
Stockholders loans .................................... 83,127 (1,080)
Proceeds From Investments ............................. -- 24,300
Purchase of property and equipment .................... (20,553) (17,601)
-------- ---------
Net cash provided by (used in) investing activities ... 62,574 5,619
-------- ---------
Cash Flows From Financing Activities:
Principle payments on debt ............................ (2,336) (2,841)
Proceeds from capital stock issued .................... -- 50,000
-------- ---------
Net cash provided by (used in) financing activities ... (2,336) 47,159
-------- ---------
Net increase (decrease) in
cash and cash equivalents ........................... (19,815) 8,559
Cash and cash equivalents at beginning of period ...... 19,815 2,312
-------- ---------
Cash and cash equivalents at end of period ............ $ -- $ 10,871
======== =========
Supplemental Disclosure of Cash Flow Information:
Interest ........................................... $ 12,159 $ 10,332
Income taxes ....................................... 600 600
Supplemental Schedule of Non-Cash Investing and Financing Activities: None
- ---------------------------------------------------------------------
See accompanying notes and accountants' report.
PHOENIX MEDIA GROUP, LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 2001 AND 2000
NOTE 1 - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES
This summary of accounting policies of Phoenix Media Group, Ltd. is
presented to assist in understanding the Company's financial statements. The
accounting policies conform to generally accepted accounting principles and have
been consistently applied in the preparation of the financial statements.
The unaudited financial statements as of March 31, 2001 and for the three
and nine months then ended reflect, in the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
fairly state the financial position and results of operations for the three and
nine months. Operating results for interim periods are not necessarily
indicative of the results which can be expected for full year.
Organization and Basis of Presentation
The Company was organized under the laws of the State of Utah on December
5, 1985 as Bullseye Corp. On June 22, 1992 the name of the Company was changed
to Natural Solutions, Ltd. and the corporate domicile was changed to the State
of Nevada. On March 25, 1994, the Company name was changed to Phoenix Media
Group, Ltd. The Company was in the development stage through June 30, 1994. The
June 30, 1995 year is the first year during which it is considered an operating
company.
Nature of Business
The Company was formed for the purpose of creating a vehicle to obtain
capital to seek out, investigate and acquire interests in products and
businesses which may have potential for profit. The Company's objective is to
become a major player in the communications industry with an emphasis on radio,
television and Internet services.
Cash Equivalents
For the purpose of reporting cash flows, the Company considers all highly
liquid debt instruments purchased with maturity of three months or less to be
cash equivalents to the extent the funds are not being held for investment
purposes.
Income Taxes
The Company accounts for income taxes under the provisions of SFAS No. 109,
"Accounting for Income Taxes." SFAS No.109 requires recognition of deferred
income tax assets and liabilities for the expected future income tax
consequences, based on enacted tax laws, of temporary differences between the
financial reporting and tax bases of assets and liabilities.
PHOENIX MEDIA GROUP, LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 2001 AND 2000
(CONTINUED)
NOTE 1 - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES (Continued)
- --------------------------------------------------------------------
Earnings (Loss) Per Share
The reconciliations of the numerators and denominators of the basic and
diluted earnings per share ("EPS") computations are as follows:
Income Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------ -----------
For the three months ended March 31, 2001
-----------------------------------------
EPS
Net Loss to
common shareholders $ (36,777) 6,925,649 $ (0.01)
=========== ============ ===========
For the three months ended March 31, 2000
-----------------------------------------
EPS
Net Loss to
common shareholders $ (36,665) 6,908,671 $ (0.01)
============ ============ ============
For the nine months ended March 31, 2001
----------------------------------------
EPS
Net Loss to
common shareholders $ (108,758) 6,925,649 $ (0.02)
============ ============ =============
For the nine months ended March 31, 2000
----------------------------------------
EPS
Net Loss to
common shareholders $ (136,016) 6,853,267 $ (0.02)
============ ============ =============
Amortization
Intangibles and goodwill are amortized using the straight line method over
five years.
The Company has implemented the provisions of SFAS No. 121, "Accounting for
the impairment of Long-Lived Assets and for Long-Lived Assets Disposed of." SFAS
No. 121 requires that long-lived assets and certain identifiable intangibles to
be held and used by the Company be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. If the sum of the expected future cash flows from the use of the
assets and its eventual disposition (undiscounted and without interest charges)
is less than the carrying amount of the asset, an impairment loss is recognized.
PHOENIX MEDIA GROUP, LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 2001 AND 2000
(CONTINUED)
NOTE 1 - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES (Continued)
- --------------------------------------------------------------------
Depreciation
Office furniture, equipment and leasehold improvements, are stated at cost.
Depreciation and amortization are computed using the straight-line method over
the estimated economic useful lives of the related assets as follows:
Office furniture 5-10 years
Equipment 5- 7 years
Vehicles 5-10 years
Office Condominium 39 years
Maintenance and repairs are charged to operations; betterments are
capitalized. The cost of property sold or otherwise disposed of and the
accumulated depreciation thereon are eliminated from the property and related
accumulated depreciation accounts, and any resulting gain or loss is credited or
charged to income.
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles require 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 revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Certain reclassifications have been made in the 2000 financial statements
to conform with the 2001 presentation.
Concentration of Credit Risk
The Company has no significant off-balance-sheet concentrations of credit
risk such as foreign exchange contracts, options contracts or other foreign
hedging arrangements. The Company maintains the majority of its cash balances
with one financial institution, in the form of demand deposits.
PHOENIX MEDIA GROUP, LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 2001 AND 2000
(CONTINUED)
NOTE 1 - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES (Continued)
- --------------------------------------------------------------------
Investments
The Company's securities investments that are bought and held principally
for the purpose of selling them in the near term are classified as trading
securities. Trading securities are recorded at fair value on the balance sheet
in current assets, with the change in fair value during the period included in
earnings.
NOTE 2 - CAPITAL TRANSACTIONS
Preferred Stock
The Board of Directors of the Company has the authority to fix by
resolution for each particular series of preferred stock the number of shares to
be issued; the rate and terms on which cumulative or non-cumulative dividends
shall be paid; conversion features of the preferred stock; redemption rights and
prices, if any; terms of the sinking fund, if any to be provided for the shares;
voting powers of preferred shareholders; and any other special rights,
qualifications, limitations, or restrictions.
NOTE 3 - INCOME TAXES
Deferred taxes result from temporary differences in the recognition of
income and expenses for income tax reporting and financial statement reporting
purposes. Deferred benefits of $178,000 and $111,000 for the nine months ended
March 31, 2001 and 2000 respectively, are the result of net operating losses.
The Company has recorded net deferred income taxes in the accompanying
balance sheets as follows:
As at March 31,
----------------------
2001 2000
--------- ---------
Future deductible temporary differences related to
Reserves, accruals, and net operating losses ...... $ 178,000 $ 111,000
Valuation allowance .................................. (178,000) (111,000)
--------- ---------
Net Deferred Income Tax .............................. $ -- $ --
========= =========
PHOENIX MEDIA GROUP, LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 2001 AND 2000
(CONTINUED)
NOTE 3 - INCOME TAXES (Continued)
As of March 31, 2001, the Company had a net operating loss ("NOL") carry
forward for income tax reporting purposes of approximately $525,000 available to
offset future taxable income. This net operating loss carry forward expires at
various dates between June 30, 2001 and 2015. A loss generated in a particular
year will expire for federal tax purposes if not utilized within 15 years.
Additionally, the Internal Revenue Code contains provisions which could reduce
or limit the availability and utilization of these NOLs if certain ownership
changes have taken place or will take place. In accordance with SFAS No. 109, a
valuation allowance is provided when it is more likely than not that all or some
portion of the deferred tax asset will not be realized. Due to the uncertainty
with respect to the ultimate realization of the NOLs, the Company established a
valuation allowance for the entire net deferred income tax asset of $178,000 as
of March 31, 2001. Also consistent with SFAS No. 109, an allocation of the
income (provision) benefit has been made to the loss from continuing operations.
The difference between the effective income tax rate and the federal
statutory income tax rate on the loss from continuing operations are presented
below:
As of March 31,
-------------------
2001 2000
-------- --------
Expense (Benefit) at the federal statutory rate of 34% ... $(37,000) $(46,000)
Nondeductible expenses ................................... -- --
-------- --------
Utilization of net operating loss carryforward ........... $ 37,000 $ 46,000
-------- --------
$ -- $ --
======== ========
NOTE 4 - RELATED PARTY TRANSACTIONS
The Company has loaned an officer/director $20,100, interest at 1%,
repayable at $201 per month for ten months with a balloon payment due in 2007.
In addition an officer/director advanced $8,000 at 0% interest, to the Company.
During the three months ended March 31, 2001, the Company received
additional funds. The balance payable at December 31, 2000 was $64,529.
PHOENIX MEDIA GROUP, LTD.
NOTES TO FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 2001 AND 2000
(CONTINUED)
NOTE 5 - LONG-TERM DEBT
Long-term debt consists of the following:
March 31, June 30,
--------------------
2001 2000
------- -------
Mortgage payable with interest at 8.75%,
payable monthly $393.36, due March 22,
2003, collateralized by deed of trust ............... $47,844 $48,230
Note Payable with interest at 4.90%,
payable monthly $398.81, due July 15, 2004 ......... 15,987 17,937
------- -------
Less Current Maturities .............................. 6,520 6,520
------- -------
Net Long-term Debt ................................... $57,311 $59,647
======= =======
Annual principal payments on long-term debt are as follows:
2001 $ 4,633
2002 4,886
2003 5,154
2004 3,333
2005 738
---------------------
thereafter $ 46,521
=====================
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
FORWARD-LOOKING STATEMENTS MAY NOT PROVE ACCURATE
When used in this Form 10-QSB, the words anticipated, estimate, expect, and
similar expressions are intended to identify forward-looking statements. Such
statements are subject to certain risks, uncertainties and assumptions including
the possibility that the Company's will fail to generate projected revenues.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those anticipated, estimated or projected.
General
The following discusses the financial position and results of operations of
the Company.
Significantly all of the Company's revenues came from its resale of air
time to its customers. That was the Company's principle service provided during
fiscal 1999. During fiscal 1999, the Company began purchasing air time from a
total of four stations, which is double the number of stations it was purchasing
from during fiscal 1998. Revenues from sales of items associated with Manfred
Moose(TM) were negligible. At the present time, approximately twelve percent of
customers with six month contracts renew their contracts while approximately
twenty percent of customers with three month contracts renew their contracts.
Although the Company provides service to its customers with repeat business,
there is no assurance that such customers will maintain or increase the level of
volume of business of the Company.
The Company produces a weekly radio talk show which it produces in its
Burbank offices. The Company purchases air time from four radio stations and
resells the air time to customers seeking to advertise their goods and services
during the program. The Company has been producing its radio show for over two
years. The companies which sponsor the talk show through their purchase of air
time can play their own previously produced commercials or have the Company
provide the commercial for broadcast during the show.
Results of Operations - The following table set forth, for the three and nine
months ended March 31, 2001 and 2000, certain items from the Company's Condensed
Statements of Operations expressed as a percentage of net sales.
3 months 3 months 9 months 9 months
ended ended ended ended
03/31/01 03/31/00 03/31/01 03/31/00
---------- --------- --------- -------
Sales, Net 100.0% 100.0% 100.0% 100.0%
Cost of Sales 27.4% 24.9% 45.6% 19.7%
Gross Margin 72.6% 75.1% 54.4% 80.3%
Operating Expenses 189.7% 113.9% 159.4% 116.4%
Operating Income (Loss) -117.1% -38.8% -105.0% -36.1%
Other Income (Expense), Net -11.0% -11.0% -13.3% -15.4%
Income (Loss) Before Income Taxes -128.1% -49.8% -118.3% -51.5%
Income Taxes 0.7% 0.3% 0.7% 0.3%
Net Income (Loss) -128.8% -50.1% -119.0% -51.8%
Net Sales
Net sales for the three months ended March 31, 2001 compared to the three
months ended March 31, 2000 decreased by approximately $45,000 or 61.0%. Net
sales for the nine months ended March 31, 2001 decreased by approximately
$171,000 or 65.2%. This decrease was due to what management believes to be a
temporary downturn in the company's business.
Cost of Sales
Cost of sales for the three months ended March 31, 2001 decreased
approximately $10,000 or 57.1% compared to the three months ended March 31,
2000. Cost of sales for the nine months ended March 31, 2001 decreased
approximately $10,000 or 19.7% compared to the nine months ended March 31, 2000.
For the three months ended March 31, 2001, as a percentage of sales, cost of
sales increased 2.5% from 24.9% to 27.4% compared to the three months ended
March 31, 2000. For the nine months ended March 31, 2001, as a percentage of
sales, cost of sales increased 25.9% from 19.7% to 45.6% compared to the nine
months ended March 31, 2000. This increase was due to the purchase of additional
air time at increased costs.
Also, as the Company completes development of the various Manfred Moose(TM)
projects it is currently working on, its cost of sales will be affected,
although the Company cannot predict with any degree of accuracy how much since,
to a large extent, that depends on how successful this new line of business in
for the Company.
Operating Expenses
Operating expenses during the three months ended March 31, 2001 decreased
approximately $29,000 or 35.1% compared to the three months ended March 31,
2000, from approximately $83,000 to 54,000. Operating expenses during the nine
months ended March 31, 2001 decreased approximately $160,000 or 52.3% compared
to the nine months ended March 31, 2000. For the three months ended March 31,
2001, as a percentage of sales, operating expenses increased 75.8% from 113.9%
to 189.7% compared to the three months ended March 31, 2000. This increase was
due to the decrease in net sales. For the nine months ended March 31, 2001, as a
percentage of sales, operating expenses increased 43.0% from 116.4% to 159.4%
compared to the nine months ended March 31, 2000. This increase was also due to
decrease in net sales.
Liquidity and Capital Resources
The Company requires working capital to fund its current operations. The
Company has budgeted its anticipated revenue and cash flows, after paying
expenses, from its sale of radio air time to provide for its anticipated
expenditures to fund development of the Manfred Moose(TM) project until such
time as the Company begins to receive revenue from Manfred Moose(TM) projects.
If the Company's revenues decline below present or projected levels, the Company
may have to scale back its operations and its proposed development of Manfred
Moose(TM) to accommodate the resulting shortfall in revenues
to fund its projects. During the three months ended March 31, 2001, the
Company's revenues decreased approximately $45,000 over revenues from the three
months ended March 31, 2000. During the nine months ended March 31, 2001, the
Company's revenues decreased approximately $171,000 over revenues from the nine
months ended March 31, 2000. It is anticipated that the current operations will
expand and the funds generated will exceed the Company's working capital
requirements for the next year.
The Company has long term goals to further develop Manfred Moose(TM)
merchandise and products over the next twelve month period and expects that the
projects it currently has in development will require approximately $150,000
over the next twelve months. The Company believes that its operations will be
able to provide the funds for these development costs over the next twelve
months. The Company anticipates that ultimately, these development costs will be
recouped through the eventual sales of the various products being developed. If
revenues are not sufficient to fund its operations, the Company will need to
seek alternative sources of financing either through loans or through raising
capital. There are no formal commitments from banks or other lending sources for
lines of credit or similar short-term borrowing. There can be no assurances that
the Company will be able to obtain alternative financing through loans or
capital and the Company has no commitments for either type of financing. If
alternative financing is not available, then the Company will be forced to scale
back its proposed operations and perhaps be forced to abandon its Manfred
Moose(TM) projects or delay it significantly. The Company's lack of current
assets would be a factor to be considered by potential lenders or investors in
deciding whether or not to loan money to or invest in the Company.
The Company generates and uses cash flows through three activities:
operating, investing, and financing. During the nine months ended March 31,
2001, operating activities used cash of approximately $80,000 as compared to net
cash provided of approximately $44,000 for the nine months ended March 31, 2000.
Much of this increase in attributable to the Company's development and marketing
of Manfred Moose(TM).
During the nine months ended March 31, 2001, investing activities provided
approximately $38,000 primarily due to proceeds from stockholder loans of
approximately $62,000. During the nine months ended March 31, 2000, investing
activities provided approximately $6,000 primarily due to proceeds from
investments.
Financing activities used approximately $2,000 from principle payments on
debt during the three months ended March 31, 2001. During the three months ended
March 31, 2000, financing activities used approximately $3,000 from principle
payments in debt and received $50,000 from proceeds from capital stock issued.
Management believes that the Company's current cash and funds available
will be sufficient to meet capital requirements and short term and long term
working capital needs in the fiscal year ending June 30, 2001 and beyond, unless
a significant acquisition or expansion is undertaken. The Company is constantly
searching for potential acquisitions and/or expansion opportunities. However,
there are no arrangements or ongoing negotiations for any acquisition or
expansion.
RECENT DEVELOPMENTS
The Company continues to pursue its efforts in marketing and licensing
Manfred Moose(TM) and is working to complete the projects with Air Tahiti
described above. Efforts to work on a cartoon series are still progressing. The
Company entered into an agreement with a major shareholder whereby that
shareholder invested $50,000 during the three months ended March 31, 2000 to
help fund the development costs incurred by the Company in creating and
marketing Manfred Moose(TM).
Inflation and Regulation
The Company's operations have not been, and in the near term are not
expected to be, materially affected by inflation or changing prices. The Company
encounters competition from a variety of Companies in its markets. Many of these
companies have long standing customer relationships and are well-staffed and
well financed. The Company believes that competition in the its industries is
based on customer satisfaction and production of quality products and services,
although the ability, reputation and support of management is also significant.
The Company does not believe that any recently enacted or presently pending
proposed legislation will have a material adverse effect on its results of
operations.
Factors That May Affect Future Results
Management's Discussion and Analysis and other parts of this filing contain
information based on management's beliefs and forward-looking statements that
involve a number of risks, uncertainties, and assumptions. There can be no
assurance that actual results will not differ materially for the forward-
looking statements as a result of various factors, including but not limited to
the following:
The markets for many of the Company's offerings are characterized by
rapidly changing technology, evolving industry standards, and frequent new
product introductions. The Company's operating results will depend to a
significant extent on its ability to design, develop, or otherwise obtain and
introduce new products, services, systems, and solutions and to reduce the costs
of these offerings. The success of these and other new offerings is dependent on
many factors, including proper identification of customer needs, cost, timely
completion and introduction, differentiation from offerings of the Company's
competitors, and market acceptance. The ability to successfully introduce new
products and services could have an impact on future results of operations.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is not engaged in any legal proceedings other than the ordinary
routine litigation incidental to its business operations, which the Company does
not believe, in the aggregate, will have a material adverse effect on the
Company, or its operations.
No Director, Officer or affiliate of the Company, and no owner of record or
beneficial owner of more than 5.0% of the securities of the Company, or any
associate of any such Director, Officer or security holder is a party adverse to
the Company or has a material interest adverse to the Company in reference to
pending litigation.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Phoenix Media Group, Ltd.
DATE: May 1, 2001
By: /s/
-----
Ronald R. Irwin, President
(Principal Executive and
Accounting Officer)