Form 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
[ X ] Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 1998
OR
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from ------- to -------
Commission File No. 333-26385
Media Entertainment, Inc.
(Exact Name of Small Business Issuer
as Specified in its Charter)
NEVADA 72-1346591
(State or Other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
8748 Quarters Lake Road,
Baton Rouge, Louisiana 70809
(Address of Principal Executive Offices,
including Zip Code)
(504) 922-7744
(Issuer's telephone number, including area code)
Indicate by check mark whether Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that Registrant as
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days:
Yes [ ] No [ X ]
Indicate the number of shares outstanding of each of the
issuer's classes of common stock as of the latest
practicable date:
Outstanding as
Class of 5-26-98
Common Stock, $.0001 par value 6,962,759
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Media Entertainment, Inc.
Page
Consolidated Balance Sheets as of March 31, 1998
(unaudited), and December 31, 1997 (unaudited) 3
Consolidated Statement of Operations for the
Three Months Ended March 31, 1998 and
1997 (unaudited) 5
Consolidated Statement of Cash Flows Three
Months Ended March 31, 1998 and 1997 (unaudited) 6
Notes to Consolidated Financial Statements 8
MEDIA ENTERTAINMENT, INC. AND SUBSIDIARIES
(a development stage company)
CONSOLIDATED BALANCE SHEET
12/31/97 3/31/98
(unaudited) (unaudited)
ASSETS
CURRENT ASSETS
Cash $ 135 $ 137
Accounts receivable 5,933 840
Prepaid expenses 0 0
Total current assets 6,068 977
PROPERTY AND EQUIPMENT,
net of accumulated
depreciation of
$2,116 and $2,645,
respectively 194,804 197,562
INVESTMENT IN
JOINT VENTURE 13,100 13,100
INTANGIBLES
Organization costs,
net of accumulated
amortization of
$112 and $140,
respectively 457 429
Licenses and rights
to leases of licenses,
net of accumulated
amortization of
$2,968 and $3,710,
respectively 19,781 24,040
20,238 24,469
Total assets $234,210 $236,108
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable to
stockholder 83,000 83,000
Accounts payable 2,033 53,183
Accounts payable
- affiliate 45,769 75,769
Accrued interest 7,750 12,750
Total current
liabilities 138,552 224,702
STOCKHOLDERS' EQUITY
Common stock, $.0001
par value, 100,000,000
shares authorized,
6,424,000 and
6,962,759 shares
issued and
outstanding,
respectively 642 696
Additional paid-in
capital 998,466 1,145,312
Deficit accumulated
during the develop-
ment stage (598,843) (935,704)
Subscriptions
receivable (860) (860)
Deferred compensation (303,747) (198,038)
95,658 11,406
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $234,210 $236,108
MEDIA ENTERTAINMENT, INC. AND SUBSIDIARIES
(a development stage company)
CONSOLIDATED STATEMENT OF OPERATIONS
Three Months Ended
March 31,
1998 1997
(unaudited) (unaudited)
Revenue $ 5,765 $ 224
Expenses
Depreciation and
amortization 2,645 584
Professional fees 239,573 74,181
Rent 3,182 3,826
Salary 85,900 6,756
Other 11,326 1,038
Total Expenses 342,626 86,385
Net loss $( 336,861) $(86,161)
Loss per
common share $(.05) $(.01)
Weighted average number
of shares outstanding 6,780,054 6,103,666
MEDIA ENTERTAINMENT, INC. AND SUBSIDIARIES
(a development stage company)
CONSOLIDATED STATEMENT OF CASH FLOWS
Three Months Three Months
Ended Ended
3/31/98 3/31/97
(unaudited) (unaudited)
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss $(336,861) $( 86,161)
Adjustment to
reconcile net
loss to net
cash used in
operating
activities
Depreciation 529 176
Amortization 770 407
Recognition of
services
performed
for stock 266,108 62,500
Decrease
(increase)
in accounts
payable 0 85
Increase in
pre-paids 0 (910)
Increase in
accounts payable
and accruals 51,900 892
Net cash
used in
operating
activities (17,554) (23,011)
CASH FLOWS FROM
INVESTING ACTIVITIES
Purchase of
equipment (12,444) (1,758)
Investment in
joint venture 0 (2,500)
Purchase of
organization costs 0 0
Purchase of leases
and rights to
leases of licenses 0 (5,000)
Net cash
used in
investing
activities (12,444) (9,258)
CASH FLOWS FROM
FINANCING ACTIVITIES
Increase in note
payable to
stockholder 0 3,000
Issuance of common
stock 0 50,000
Increase in open
account payable to
stockholder 30,000 0
Decrease in
subscriptions
receivable 0 1,300
Net cash
provided by
financing
activities 30,000 54,300
Net
increase
in cash 2 22,031
Cash, beginning of period 135 14,502
Cash, end of period 137 36,533
Noncash investing and financing activities for the three
months ended March 31, 1998 (unaudited):
- - 400,000 shares issued for consulting and legal
services to be performed valued at $40,000.
- - 36,092 shares issued for communications consulting
services to be performed valued at $34,400.
- - 22,667 shares issued for internet and communications
consulting services valued at $8,500.
MEDIA ENTERTAINMENT, INC.
(a development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Three Months Ended March 31, 1998
(Unaudited)
Note 1. Nature of Business, Organization
and Basis of Presentation
The Company was incorporated in the State of Nevada on
November 1, 1996, to operate as a holding company in the
wireless cable television and community (low power)
television industries, as well as other segments of the
communications industry.
Effective December 31, 1996, MEI acquired all of the
outstanding common stock of Winter Entertainment, Inc., a
Delaware corporation incorporated on December 28, 1995
(WEI), and Missouri Cable TV Corp., a Louisiana corporation
incorporated on October 9, 1996 (MCTV). WEI operates a
community television station in Baton Rouge, Louisiana; MCTV
owns wireless cable television channels in Poplar Bluff,
Missouri, which system has been constructed and is ready for
operation, and Lebanon, Missouri, which has yet to be
constructed. The acquisition of WEI and MCTV by the Company
was accounted for as a reorganization of companies under
common control. The assets and liabilities acquired were
recorded at historical cost in a manner similar to a pooling
of interests. Therefore, these financial statements include
the operations of MEI and its predecessors from inception of
WEI on December 28, 1995.
Management plans to raise capital by obtaining financing
and, eventually, through public offerings. Management
intends to commence the commercial exploitation of its
proprietary Wireless Internet Access System with the initial
proceeds from any borrowings or sales of its common stock,
as well as to increase the broadcast signal of WEI's
community television station, to start operation of MCTV's
wireless cable channels in Poplar Bluff, Missouri, and to
provide working capital. The Company believes that these
actions will enable the Company to carry out its business
plan and ultimately to achieve profitable operations.
However, there is no assurance that such will be the case.
Beginning in October 1997, the Company's Board of Directors
determined that the Company's business segment development
priority would be: (1) Wireless Internet; (2) Community
Television; and (3) Wireless Cable.
Note 2. Interim Consolidated Financial Statements
In the opinion of management, the accompanying consolidated
financial statements for the three months ended March 31,
1998 and 1997, reflect all adjustments (consisting only of
normal recurring adjustments) necessary to present fairly
the financial condition, results of operations and cash
flows of the Company, including subsidiaries, and include
the accounts of the Company and all of its subsidiaries.
All material intercompany transactions and balances are
eliminated.
The financial statements included herein have been prepared
by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission
("SEC"). Certain information and footnote disclosures
normally included in financial statements prepared in
accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and
regulations. It is suggested that these unaudited financial
statements be read in conjunction with the financial
statements and notes thereto included in the Company's
Registration Statement on Form S-1 filed with the SEC (file
no. 333-26385). Certain reclassifications and adjustments
may have been made to the financial statements for the
comparative period of the prior fiscal year to conform with
the 1997 presentation. The results of operations for the
interim periods are not necessarily indicative of the
results to be obtained for the entire year.
Note 3. Acquisitions
Effective December 31, 1996, the Company acquired WEI and
MCTV by issuing 2,157,239 shares of common stock in
exchange for all the common stock of each company. The
majority shareholder of the Company was also the sole
shareholder of WEI and the majority shareholder of MCTV.
Therefore, the acquisitions have been accounted for at
historical cost in a manner similar to a pooling of
interests. The consolidated statement of operations
includes the Company and its predecessors WEI and MCTV from
inception of WEI.
Note 4. Notes Payable to Shareholder
March 31, 1998
(unaudited)
Notes payable to majority
stockholder, interest
accrues at 8%, due on demand
and unsecured $83,000
In addition, during the three months ended March 31, 1998,
the same stockholder advanced to the Company a total of
$30,000 on open account, at 8% per annum, which is payable
on demand.
Note 5. Joint Venture
During the three months ended March 31, 1998, the Company
incurred no further costs relating to the acquisition of the
Joint Venture. As of March 31, 1998, the Joint Venture has
had no operations.
Note 6. Stock Issuances
During the three months ended March 31, 1998, the Company
issued a total of 538,759 shares of common stock, as
follows:
A. 400,000 shares were issued to prepay legal services,
which shares were valued at $.10 per share, or $40,000 in
the aggregate.
B. 36,092 shares were issued in payment of financial public
relations and communications consulting services, which
shares were valued at $.953125 per share, or $34,400, in the
aggregate.
C. 22,667 shares were issued to prepay internet and
communications consulting services, which shares were valued
at $.375 per share, or $8,500, in the aggregate.
D. 80,000 shares were issued to four of the directors of
the Company in payment for services rendered by such persons
in their capacities as directors. These shares were valued
at $.80 per share, or $64,000, in the aggregate. On the
date of such issuances, the last closing bid price, as
reported by the OTCBB, for the common stock of the Company
was $.56 per share.
Note 7. Subsequent Events
Subsequent to March 31, 1998, the Company entered into a
selling agreement with Centex Securities, Inc., La Jolla,
California, with respect to the private sale of 600,000
units of securities of the Company, at an offering price of
$2.00 per unit. Each unit is comprised of two shares of
common stock of the Company and one warrant to purchase one
share each of the common stock of the Company at an exercise
price of $2.00 per share. There is no assurance that such
private offering will be successfully completed.
Item 2. Management's Discussion and Analysis
of Financial Condition
and Results of Operations.
Background
The Company's primary focus is on the development and
exploitation of a proprietary Wireless Internet Access
System. In February 1998, the Company obtained its first
Wireless Internet customer in Baton Rouge, Louisiana.
Substantially all of the Company's business efforts and
resources will, for the foreseeable future, be committed to
its Wireless Internet business segment. In exploiting its
Wireless Internet business opportunity, it is the Company's
plan either (1) to acquire existing hard-wire dependent,
dial-up Internet Service Providers [ISP] in various markets
and "plug-in" its proprietary Wireless Internet Access
System or (2) construct a Wireless Internet Access Systems
in particular markets. The Company is seeking capital with
which to exploit its Wireless Internet technology.
The Company was incorporated on November 1, 1996, to act as
a holding company primarily in the wireless cable and
community (low power) television industries. To this end,
the Company acquired Winter Entertainment, Inc. (WEI), which
owns and operates a community (low power) television station
in Baton Rouge, Louisiana, and Missouri Cable TV Corp.
(MCTV), which owns the licenses necessary to operate
wireless cable systems in Poplar Bluff and Lebanon,
Missouri, has acquired licenses and leases of licenses
necessary to operate wireless cable systems in Port Angeles,
Washington, Astoria, Oregon, Sand Point, Idaho, The Dalles,
Oregon, and Fallon, Nevada, and has acquired licenses
necessary to operate community (low power) television
stations in Monroe/Rayville, Louisiana, Bainbridge, Georgia,
and Natchitoches, Louisiana. References to the "Company"
herein include WEI and MCTV, unless the context requires
otherwise.
Because the Company, WEI and MCTV were combined in a
reorganization of entities under common control, the
presentation contained in the financial statements of the
Company has been prepared in a manner similar to the
pooling-of-interests method. In this regard, reference is
made to Notes 1 and 3 of the Company's financial statements
appearing elsewhere herein. The following discussion
reflects such financial statement presentation.
Results of Operations
Three Months Ended March 31, 1998, versus Three Months
Ended March 31, 1997. Revenues from the Company's
operations for the three months ended March 31, 1998
("Interim 98"), were $5,765 (unaudited) compared to revenues
of $224 (unaudited) for the three months ended March 31,
1997 ("Interim 97"). During the current period,
substantially all of the Company's revenues were generated
by the Wireless Internet Segment. The Company expects that,
during the second quarter of 1998, the Wireless Internet
Segment will continue to increase revenues from operations.
However, there is no assurance in this regard. The
Company's net loss of $336,861 (unaudited) is attributable
in large part to the issuance of 538,759 shares pursuant to
various consulting agreements, which shares were valued at a
total of $146,900. During Interim 98, approximately
$200,000 of the Company's pre-paid consulting expenses
(including previously issued shares for consulting services)
was expensed. Similar expenses will be incurred during each
remaining quarter of Fiscal 98.
Wireless Internet Segment. The Wireless Internet Segment
generated revenues of $5,500 (unaudited) during Interim 98.
This Segment did not exist during Interim 97. The sale of a
single Wireless DataLink System accounted for this Segment's
revenues. The Company will continue to market its
proprietary Wireless DataLink System, although the Company's
primary focus during the remainder of Fiscal 98 will be on
the exploitation of its proprietary Wireless Internet
System.
During Interim 98, the Company entered into a marketing
agreement with a Baton Rouge, Louisiana, dial-up ISP, and
has begun to place customers onto its Wireless Internet
system, which marketing agreement will remain in place until
such time as the proposed acquisition of such dial-up ISP is
consummated, of which there is no assurance. (See
"Liquidity and Capital Resources" below). Should the
proposed acquisition be abandoned, the Company expects that
it will continue to operate under its marketing agreement
with such dial-up ISP. Also, the Company has entered into a
joint venture agreement to develop a Wireless Internet
system in Monroe, Louisiana. The Company expects that this
joint venture will begin to produce revenues during the
third quarter of Fiscal 98.
The Company has completed the development of its own
proprietary Wireless Internet Access System. It is the
Company's intention to establish a Wireless ISP in as many
U.S. cities as is possible in as short a time as is
possible. The Company believes that it wil require between
$60,000 and $200,000 ($50,000 for equipment and the balance
for marketing and other general expenses), depending upon
the size of a particular city, to commence Wireless ISP
operations in a particular city. These estimates are not
based on a specific study or market research conducted by
the Company, but are based, instead, on the business
experience of the Company's management, as well as general
and informal market surveys conducted by the Company and
others. There is no assurance that such estimates will be
accurate. There is no assurance that the Company will
possess sufficient capital with which to develop any market.
Should funding be available, of which there is no
assurance, the Company intends to commence construction and
exploitation of its Wireless Internet System in Santa Fe,
New Mexico. The Company is in need of approximately
$175,000 with which to commence such operations. (See
"Liquidity and Capital Resources" below).
Community Television Segment. Revenues from the
operations of the Community Television Segment for Interim
98 were $265 (unaudited) compared to revenues of $224
(unaudited) for Interim 97. The Company expects that this
segment's revenues will remain at Interim 98 levels for the
remainder of Fiscal 98. The Company has received FCC
authorization to increase the power of its currently
operating station to its maximum legal limit. Should the
Company be able to obtain necessary funds, of which there is
no assurance, the Company intends to commit $20,000 to
increase the power of such station, which would permit the
Company's broadcast signal to reach approximately 120,000
additional households. It is expected that the commissions
earned by K13VE from Video Catalog Channel sales originating
from its broadcast area would increase proportionately to
its increased number of households reached. There is no
assurance that such will be the case.
Wireless Cable Segment. The Company has only recently
begun to take preliminary steps to attract subscribers in
one of its wireless cable markets, Poplar Bluff, Missouri.
The Company expects that revenues, if any, will not exceed
expenditures in its Wireless Cable Segment through Fiscal
98. During Interim 98, the Wireless Cable Segment had no
activity. The Company's ability to attract customers,
thereby generating revenues in this segment, and to expand
its Wireless Cable Segment is wholly dependent upon its
obtaining adequate capital. There is no assurance that any
such capital will be available to the Company.
Liquidity and Capital Resources
March 31, 1998. The Company remained in a substantially
illiquid position throughout Interim 98. At March 31, 1998,
the Company's working capital deficit was $223,725
(unaudited), compared to a working capital deficit at
December 31, 1997, of $132,484 (audited). This continued
deterioration in the Company's working capital deficit is
attributable to the fact that no material revenues were
generated by Company operations, during Interim 98. During
Interim 98, one of the Company's officers, David M. Loflin,
advanced to the Company a total of $30,000, which funds were
used primarily for operating expenses of the Company and the
purchase of equipment. Such advances were made on open
account, bear interest at 8% per annum and are payable on
demand. As of the date of this Quarterly Report on Form 10-
QSB, the Company owed Mr. Loflin a total of $148,700, plus
accrued and unpaid interest of approximately $12,750. The
Company does not currently possess funds necessary to repay
such loans. Mr. Loflin has advised the Company that he does
not intend to make demand for repayment of the loans for the
foreseeable future. Nevertheless, should Mr. Loflin make
such demand for repayment, the Company could be unable to
satisfy such demand, which would have a materially adverse
effect of the Company. In addition, none of the officers of
the Company will be paid a salary, and such persons have
agreed to work without pay, until such time as payment of
such officers' salaries would have no adverse affect on the
Company's financial condition.
During Interim 97, the Company issued shares of its
Common Stock on four occasions:
A. 400,000 shares were issued to prepay legal
services, which shares were valued at $.10 per share, or
$40,000 in the aggregate.
B. 36,092 shares were issued in payment of financial
public relations and communications consulting services,
which shares were valued at $.953125 per share, or $34,400,
in the aggregate.
C. 22,667 shares were issued to prepay internet and
communications consulting services, which shares were valued
at $.375 per share, or $8,500, in the aggregate.
D. 80,000 shares were issued to four of the directors
of the Company in payment for services rendered by such
persons in their capacities as directors. These shares were
valued at $.80 per share, or $64,000, in the aggregate. On
the date of such issuances, the last closing bid price, as
reported by the OTCBB, for the common stock of the Company
was $.56 per share.
Current Private Offering. The Company, through Centex
Securities, Inc., La Jolla, California, is currently
conducting a private offering of units of its securities, in
a maximum amount of $600,000. Each unit consists of two
shares of Company common stock and one warrant to purchase
one share of Company common stock at an exercise price of
$2.00 per share. Each unit is offered at a purchase price
of $2.00. There is no assurance that such private offering
will be completed successfully.
Wireless ISP Markets. In general, for the development of
any of its proposed Wireless ISP markets, the Company will
be required to purchase approximately $50,000 of equipment.
Thereafter, the amount of marketing funds needed will vary
from market to market, depending on the size of a particular
market. It can be expected, however, that the initial
marketing budget will range approximately from $10,000 to
$150,000. There is no assurance that funding will be
available to the Company at such times as it attempts to
develop any one of its Wireless ISP markets.
Santa Fe, New Mexico, Wireless ISP. Should the
Company obtain $175,000 in capital, the Company intends to
establish a Wireless ISP in Santa Fe, New Mexico, a city
featuring flat terrain and few large trees. These
topographical features will allow the Company to minimize
operating costs therein. As of the date hereof, the Company
had not made any commitment to launch a Wireless ISP
operation in Santa Fe, although the Company intends to
commence Wireless ISP such operations as soon as funds
become available, of which there is no assurance. Without
additional capital, the Company will be unable to establish
any Wireless ISPs.
Baton Rouge, Lousiana. During Interim 98, the Company
entered into a marketing agreement with a Baton Rouge,
Louisiana, dial-up ISP, and has begun to place customers
onto its Wireless Internet system, which marketing agreement
will remain in place until such time as the proposed
acquisition of such dial-up ISP is consummated, of which
there is no assurance. Should the proposed acquisition be
abandoned, the Company expects that it will continue to
operate under its marketing agreement with such dial-up ISP.
Monroe, Louisiana. Subsequent to March 31, 1998, the
Company entered into a joint venture agreement to implement
the Company's Wireless Internet System in Monroe, Louisiana.
The Company expects that this joint venture will begin to
produce revenues during the third quarter of Fiscal 98.
Cash Flows from Operating Activities. During Interim 98,
the Company's operations used cash of $17,554 (unaudited).
The use of cash in the current period is primarily due to
the Company's net loss of $336,861 (unaudited), which offset
a recognition of services performed for stock. The Company
intends to recognize approximately $150,000 for services
performed for stock each quarter during the remainder of
Fiscal 98. The Company's use of cash in operations during
Interim 97 is attributable primarily to the Company's net
loss for such interim period. Without the successful
completion of the its currently on-going private offering,
the Company's management does not expect that operations for
all of Fiscal 98 will generate positive cash flow. However,
management is unable to predict the level of cash flow to be
generated during such period of time, due to the uncertainty
of the level and timing of funding, if any, with which to
commence its proposed Wireless Internet operations. Without
any such funding, it can be expected that the Company will
not be able to generate positive cash flow from operations.
Cash Flows from Investing Activities. Investing
activities of the Company during Interim 98 used $12,444
(unaudited), all of which was for the purchase of equipment.
In comparison, investing activities of the Company during
Interim 97 used $9,258 (unaudited), including $1,758
(unaudited) for the purchase of equipment, $2,500
(unaudited) for an investment in a joint venture and $5,000
(unaudited) for the purchase of licenses and rights to
leases of licenses. The Company's management is unable to
predict whether investing activities will provide cash
during the remainder of Fiscal 98. This uncertainty is due
to uncertainty as to the success of the currently on-going
private offering of the Company or the securing of other
financing commitment. Absent any such funding, it is
expected that investing activities will continue to use the
Company's cash.
Cash Flows from Financing Activities. Financing
activities of the Company provided $30,000 (unaudited) in
cash during Interim 98, compared to Interim 97 when
financing activities provided $54,300 (unaudited) in cash.
All of the cash during the current period was the result of
advances to the Company by a shareholder on open account.
The sale of 20,000 shares of Company Common Stock for a
total of $50,000 in cash provided substantially all of the
balance of cash from financing activities, during Interim
97. The Company's currently on-going private offering of
securities is the primary means of securing capital
presently available to the Company. Should the Company have
success in this regard, cash provided by financing
activities can be expected to be substantially higher during
the second quarter of Fiscal 98. However, no prediction as
to the level of such cash can be made by management, nor can
any assurance be made that any cash will be provided by
financing activities.
Non-Cash Investing Activities. During Interim 98, the
Company's non-cash investing and financing activities
included the following: (A) the issuance of 400,000 shares
of Common Stock in consideration of consulting and legal
services to be performed, which shares were valued at
$40,000, in the aggregate; (B) the issuance of 36,092 shares
of Common Stock in consideration of consulting services to
be performed, which shares were valued at $.953125 per
share, or $34,400, in the aggregate; and (C) the issuance of
22,667 shares of Common Stock in consideration of internet
and communications consulting services to be performed,
which shares were valued at $.375 per share, or $8,500, in
the aggregate.
Management's Plans Relating to Future Liquidity
It is management's opinion that the Company will be unable
to improve its current liquidity position without an
infusion of cash in an amount of not less than $200,000.
The Company's current operations will be unable, on their
own, to alleviate the Company's current lack of liquidity.
Management believes it will be able to mitigate the effects
of its current financial condition in one or more of the
following ways: (1) the Company could receive up to $600,000
upon the successful completion of its currently on-going
private offering of securities, of which there is no
assurance; (2) the Company is currently seeking, and will
continue in the future to seek, a bank loan in an amount of
not less than $200,000; (3) the Company will attempt to
locate one or more joint venture partners with whom the
Company would develop one or more of its proposed Wireless
ISP markets; or (4) the Company will pursue and other means
of financing its plan of business that may become available.
NO PREDICTION CAN BE MADE AS TO THE LIKELIHOOD THAT THE
COMPANY WILL BE SUCCESSFUL IN OBTAINING NEEDED FINANCING.
However, management believes that it will be successful in
obtaining needed funding in the near term. This belief is
based on management's discussions with the selling agent for
its currently on-going private offering of securities.
Should one of the described financing transactions be
consummated, of which there is no assurance, the Company's
management believes that the operations that are commenced
with the obtained funds will be able to generate sufficient
cash flow to sustain the Company's activities through Fiscal
98. There is no assurance that such will be the case.
Capital Expenditures
During the remainder of Fiscal 98, the Company expects to
apply substantially all of its available capital to the
construction of one or more of its Wireless ISP markets (an
average of approximately $175,000 per system) and the
acquisition of one or more existing dial-up ISPs in Baton
Rouge, Louisiana, and other, as-yet unidentified markets.
There is no assurance that any of the necessary capital for
such proposed activities will be available.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
During the three months ended March 31, 1998, the Company
issued unregistered securities on four occasions, as
follows:
1. (a) Securities Sold. On January 16, 1998, the Company
issued 400,000 shares of its Common Stock.
(b) Underwriters and Other Purchasers. Such shares
were issued to Newlan & Newlan, Attorneys at Law.
(c) Consideration. Such shares were issued in payment
of consulting services.
(d) Exemption from Registration Claimed. These
securities are exempt from registration under the Securities
Act of 1933, as amended, pursuant to the provision of
Section 4(2) thereof, as a transaction not involving a
public offering.
(e) Terms of Conversion or Exercise. Not applicable.
2. (a) Securities Sold. On February 17, 1998, the Company
issued 36,092 shares of its Common Stock.
(b) Underwriters and Other Purchasers. Such shares
were issued to Langley Downey Entertainment, Inc.
(c) Consideration. Such shares were issued in payment
of consulting services.
(d) Exemption from Registration Claimed. These
securities are exempt from registration under the Securities
Act of 1933, as amended, pursuant to the provision of
Section 4(2) thereof, as a transaction not involving a
public offering.
(e) Terms of Conversion or Exercise. Not applicable.
3. (a) Securities Sold. On March 20, 1998, the Company
issued 22,667 shares of its Common Stock.
(b) Underwriters and Other Purchasers. Such shares
were issued to Geoff Newlan, d/b/a jara.com productions.
(c) Consideration. Such shares were issued in payment
of consulting services.
(d) Exemption from Registration Claimed. These
securities are exempt from registration under the Securities
Act of 1933, as amended, pursuant to the provision of
Section 4(2) thereof, as a transaction not involving a
public offering.
(e) Terms of Conversion or Exercise. Not applicable.
4. (a) Securities Sold. On March 21, 1998, the Company
issued 80,000 shares of its Common Stock.
(b) Underwriters and Other Purchasers. Such shares
were issued to Waddell D. Loflin (20,000 shares), Ross S.
Bravata (20,000 shares), Richard N. Gill (20,000 shares) and
Michael Cohn (20,000 shares).
(c) Consideration. Such shares were issued in payment
of services rendered to the Company as directors.
(d) Exemption from Registration Claimed. These
securities are exempt from registration under the Securities
Act of 1933, as amended, pursuant to the provision of
Section 4(2) thereof, as a transaction not involving a
public offering.
(e) Terms of Conversion or Exercise. Not applicable.
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.
(a) Exhibits.
None.
(b) Reports on From 8-K.
No Current Report on Form 8-K was filed during the three
months ended March 31, 1998.
SIGNATURES
In accordance with the requirements of the Securities
Exchange Act of 1934, Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto
duly authorized.
Dated: May 26, 1998.
MEDIA ENTERTAINMENT, INC.
By: /s/ David M. Loflin
David M. Loflin
President and
Principal Financial Officer