SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE THREE MONTHS ENDED COMMISSION FILE NUMBER
DECEMBER 31, 2004 333-51880
NEW MEDIUM ENTERPRISES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA 11-3502174
(STATE OR OTHER JURISDICTION OF I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
1510 51 ST., BROOKLYN, NEW YORK 11219
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) ZIP CODE
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (718) 435-5291
INDICATE BY CHECK MARK WHETHER THE 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 SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED
TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR
THE PAST 90 DAYS. YES [X] NO [_]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
INDICATE BY CHECK MARK WHETHER THE ISSUER HAS FILED ALL DOCUMENTS AND REPORTS
REQUIRED TO BE FILED BY SECTIONS 2, 13 OR 15(D) OF THE SECURITIES ACT OF 1934
SUBSEQUENT TO THE DISTRIBUTION OF SECURITIES UNDER A PLAN CONFIRMED BY A COURT.
YES [_] NO [X]
APPLICABLE ONLY TO CORPORATE ISSUERS:
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE
..
COMMON STOCK $.001 PAR VALUE, 98,787,285
(TITLE OF CLASS) (SHARES OUTSTANDING AT FEBRUARY 14, 2005)
PAGE 1
NEW MEDIUM ENTERPRISES, INC.
FORM 10Q-SB
THREE MONTHS ENDED DECEMBER 31, 2004
TABLE OF CONTENTS
BALANCE SHEET
- ------------------------------------------------------------------------ 3
STATEMENT OF CASH FLOWS
- ------------------------------------------------------------------------ 4
STATEMENT OF OPERATIONS
- ------------------------------------------------------------------------ 5
STATEMENT OF STOCKHOLDERS EQUITY
- ------------------------------------------------------------------------ 6
NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------ 7
ITEM 1 LEGAL PROCEEDINGS 8
- ------------------------------------------------------------------------ -
ITEM 2 CHANGES IN SECURITIES 9
- ------------------------------------------------------------------------ -
ITEM 3 DEFAULTS UPON SENIOR SECURITIES 9
- ------------------------------------------------------------------------ -
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS. 9
- ------------------------------------------------------------------------ -
ITEM 5 OTHER INFORMATION 9
- ------------------------------------------------------------------------ 9
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K 9
- ------------------------------------------------------------------------ -
ITEM 7 MANAGEMENT DISCUSSION & ANALYSIS: 9
- ------------------------------------------------------------------------ -
ITEM 8- COMMITMENTS AND CONTINGENCIES 10
- ------------------------------------------------------------------------ -
ITEM 9 RELATED PARTY TRANSACTIONS 10
- ------------------------------------------------------------------------
ITEM 10 CONTROLS & PROCEDURES 11
- ------------------------------------------------------------------------
PAGE 2
NEW MEDIUM ENTERPRISES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
(UNAUDITED) AS AT DECEMBER 31, 2004
ASSETS DEC. 31, 2004 JUNE 30, 2004
- ------ --------------- ---------------
CURRENT ASSETS
- -------------------------------------------------------------------------------
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . $ 450,229 $ 103,930
- ------------------------------------------------------------------------------- ----------- -----------
Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,198 8,540
- ------------------------------------------------------------------------------- ----------- -----------
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,722 30,667
- ------------------------------------------------------------------------------- ----------- -----------
Total Current Assets. . . . . . . . . . . . . . . . . . . . . . . . . $ 483,149 $ 143,137
- ------------------------------------------------------------------------------- ----------- -----------
Property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . 158,040 158,040
- ------------------------------------------------------------------------------- ----------- -----------
less: Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . -47,412 110,628 -31,608 126,432
- ------------------------------------------------------------------------------- ----------- ----------- ------- ----------
Intellectual property-net of amortization. . . . . . . . . . . . . . . . . . 15,139,001 14,877,509
- ------------------------------------------------------------------------------- ----------- -----------
less: Accumulated amortization . . . . . . . . . . . . . . . . . . . . . 1,387,742 13,751,259 0 14,877,509
- ------------------------------------------------------------------------------- ----------- ----------- ------- ----------
Deferred tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0
- ------------------------------------------------------------------------------- ----------- -----------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $14,345,036 $15,147,078
- ------------------------------------------------------------------------------- ----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
- -------------------------------------------------------------------------------
CURRENT LIABILITIES
- -------------------------------------------------------------------------------
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 28,314 $ 53,314
- ------------------------------------------------------------------------------- ----------- -----------
Due to shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174,000 0
- ------------------------------------------------------------------------------- ----------- -----------
Total Current Liabilities . . . . . . . . . . . . . . . . . . . . . . $ 202,314 $ 53,314
- ------------------------------------------------------------------------------- ----------- -----------
COMMITMENTS AND CONTINGENCIES
- -------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
- -------------------------------------------------------------------------------
Preferred stock, $.001 par value, Authorized 10,000,000 shares ; none issued ----- -----
- ------------------------------------------------------------------------------- ----------- -----------
Common stock, $.0001 par value , Authorized 200,000,000 &
- -------------------------------------------------------------------------------
100,000,000 shares; Issued & outstanding 98,782,350 & 92,147,220 shares . . 9,879 9,215
- ------------------------------------------------------------------------------- ----------- -----------
Additional paid in capital. . . . . . . . . . . . . . . . . . . . . . . . . . 17,986,440 16,443,185
- ------------------------------------------------------------------------------- ----------- -----------
Accumulated other comprehensive gain (loss). . . . . . . . . . . . . . . . . -3,318 -11,658
- ------------------------------------------------------------------------------- ----------- -----------
Deficit accumulated during the development stage. . . . . . . . . . . . . . . -3,850,279 -1,346,978
- ------------------------------------------------------------------------------- ----------- -----------
Total Stockholders' Equity. . . . . . . . . . . . . . . . . . . . . . 14,142,722 15,093,764
- ------------------------------------------------------------------------------- ----------- -----------
Total Liabilities and Stockholders' Equity. . . . . . . . . . . . . . . . . . . $14,345,036 $15,147,078
- ------------------------------------------------------------------------------- ----------- -----------
Page 3
STATEMENT OF OPERATIONS
NEW MEDIUM ENTERPRISES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS (UNAUDITED)
AS AT DECEMBER 31, 2004
DEC. 31 DEC. 31
-------- --------
2004 2003
---- ----
REVENUES $0 $0
- --------------------------------------------- ------------ -----------
OPERATING EXPENSES
- ---------------------------------------------
General and administrative. . . . . . . . . 1,208,583 89,934
- --------------------------------------------- ------------ -----------
Total operating expenses . . . . . . . . 1,208,583 89,934
- --------------------------------------------- ------------ -----------
Income (loss) from operations . . . . . -1,208,583 -89,934
- --------------------------------------------- ------------ -----------
OTHER INCOME
- ---------------------------------------------
Gain on sale of securities . . . . . . . . 4,320 13,934
- --------------------------------------------- ------------ -----------
Interest Income. . . . . . . . . . . . . . 4,775 721
- --------------------------------------------- ------------ -----------
Loss before income taxes . . . . . . . . -1,199,488 -75,279
- --------------------------------------------- ------------ -----------
Income tax benefit. . . . . . . . . . . . . . 0 0
- --------------------------------------------- ------------ -----------
NET LOSS . . . . . . . . . . . . . . . . -$1,199,488 -$89,213
- --------------------------------------------- ------------ -----------
LOSS PER COMMON SHARE- Basic and Diluted. . . -$0.01 $ 0.00
- --------------------------------------------- ------------ -----------
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 98,573,535 19,541,444
- --------------------------------------------- ------------ -----------
Page 4
NEW MEDIUM ENTERPRISES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS (UNAUDITED)
AS AT DECEMBER 31, 2004
DECEMBER 31, DECEMBER 31,
------------- -------------
2004 2003
---- ----
Cash flows from operating activities
- -------------------------------------------------------
Net loss . . . . . . . . . . . . . . . . . . . . . -$1,199,488 -$75,279
- ------------------------------------------------------- ------------ ---------
Adjustments to reconcile net loss to net
- -------------------------------------------------------
cash provided by operating activities:
- -------------------------------------------------------
Depreciation and amortization . . . . . . . . 764,852 0
- ------------------------------------------------------- ------------ ---------
Changes in assets and liabilities:
- -------------------------------------------------------
Investment . . . . . . . . . . . . . . . . -3,318 48,261
- ------------------------------------------------------- ------------ ---------
prepaid expenses. . . . . . . . . . . . . 9,200 60
- ------------------------------------------------------- ------------ ---------
Net cash used in operating activities . . . . . . . . . -428,754 -26,958
- ------------------------------------------------------- ------------ ---------
Cash flows from investing activities
- -------------------------------------------------------
Net cash provided from investing activities . . . . . 0 0
- ------------------------------------------------------- ------------ ---------
Cash flows from financing activities
- -------------------------------------------------------
Issuance of shares for services rendered 4,387 62,000
- ------------------------------------------------------- ------------ ---------
exercise of warrants . . . . . . . . . . . . . . . . 97,500 0
- ------------------------------------------------------- ------------ ---------
Net cash provided from financing activities . . . . . 101,887 62,000
- ------------------------------------------------------- ------------ ---------
Net increase (decrease) in cash and cash equivalents . -326,867 35,042
- ------------------------------------------------------- ------------ ---------
Cash and cash equivalents, October 1, . . . . . . . . . 778,638 604,731
- ------------------------------------------------------- ------------ ---------
Cash and cash equivalents, December 31, . . . . . . . . $ 451,771 $ 639,773
- ------------------------------------------------------- ------------ ---------
Page 5
NEW MEDIUM ENTERPRISES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF EQUITY (UNAUDITED)
AS AT DECEMBER 31, 2004
RETAINED ACCUMULATED
----------- ------------
ADDITIONAL EARNINGS OTHER
PER SHARE COMMON STOCK PAID-IN (ACCUMULATED COMPREHENSIVE
----------- ------------ ----------- ----------- -------------- --------------
AMOUNT SHARES AMOUNT CAPITAL DEFICIT) LOSS TOTALS
---------- ------------ ----------- ----------- -------------- -------------- ------
BALANCES, JULY 1, 2003. . . . . . . 18,429,444 $ 1,843 $ 1,867,402 -$1,190,495 $ 11,519 $ 690,269
- --------------------------------------------- ----------- ----------- ---------- ----------
ISSUANCE OF SHARES TO
OFFICER FOR
- -------------------------------------
SERVICES RENDERED OCT. 2003 . . . . $ 0.06 1,112,000 111 61,889 62,000
- ------------------------------------- ------------ ----------- --------------
ISSUANCE OF SHARES FOR PURCHASE OF. $ 0.20 72,605,776 7,261 4,513,894 14,521,155
- ------------------------------------- ------- ----------- -----------
INTELLECTUAL PROPERTIES
- -------------------------------------
COMPREHENSIVE LOSS. . . . . . . . . . -23,177 -23,177
- -------------------------------------
NET LOSS FOR YEAR ENDED
JUNE 30, 2004. . . . . . . . . . . . 156,483 -156,483
- -------------------------------------
BALANCES, JUNE 30, 2004 . . . . . . . 92,147,220 9,215 16,443,18 -1,346,978 -11,658 15,093,764
- ------------------------------------- ------ ----------- ----------- -------------- -----------
WARRANTS EXERCISED. . . . . . . $ 0.25 250,000 25 62,475 62,500
- ----------------------------------- ----------- ------------ -
JULY AND AUGUST 2004
- -------------------------------------
ISSUANCE OF SHARES FOR
SERVICES
- -------------------------------------
RENDERED, AUGUST 2004. . . . . $ 0.30 100,000 10 29,990 30,000
- ---------------------------------------- ----------- -----------
ISSUANCE OF SHARES FOR
SERVICES TO BE
- -------------------------------------
RENDERED, AUGUST 2004. . . . . $ 0.40 875,000 88 349,912 350,000
- ------------------------------------ - ----------- ------------
SALE OF COMMON STOCK TO INVESTOR. 0.20 5,000,000 500 999,500 1,000,000
- ---------------------------------------
AUGUST 2004
- -------------------------------------
ISSUANCE OF SHARES FOR
SERVICES TO BE
- -------------------------------------
RENDERED, SEPTEMBER 2004 . . . . 0.17 6,315 1 1,073 1,074
COMPREHENSIVE GAIN. . . . . . . . . . 4,020 4,020
- -------------------------------------
NET LOSS FOR PERIOD ENDED
SEPT. 30, 2004 . . . . . . . . . . . -1,303,813 -1,303,813
- -------------------------------- -----------
BALANCES, SEPTEMBER 30, 2004 . . . . 98,378,535 $ 9,838 $17,886,135 -$2,650,791 -$7,638 $ 15,237,545
- -------------------------- -----------
WARRANTS EXERCISED. . . . . .. $ 0.25 390,000 39 97,461 97,500
- --------------------------
OCTOBER, NOVEMBER,AND DECEMBER
2004
ISSUANCE OF SHARES FOR SERVICES TO BE
- -------------------------------------
RENDERED, NOVEMBER DECEMBER 2004 . 0.23 18,215 1 4,387 4,387
- ----------------------------------
COMPREHENSIVE GAIN. . . . . . . . . . 4,320 4,320
- ----------------------------------
NET LOSS FOR PERIOD ENDED
DEC. 31, 2004. . . . . . . . . . . . -1,199,488 -1,199,488
- -------------------------------------
BALANCES, DECEMBER 31, 2004. . . . . 98,786,750 9,879 $17,987,983 -$3,850,279 -$3,318 $4,144,266
- ------------------------------------- ----------- ------------ ----------- ----------- -------
Page 6
NEW MEDIUM ENTERPRISES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
AS AT DECEMBER 31, 2004
NOTE 1 - FORMATION AND BUSINESS OF THE COMPANY.
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of only normal
recurring accruals) considered necessary for a fair presentation of the
Company's financial position at December 31, 2004, the results of operations
for the three months ended December 31, 2004. Operating results for the
three-month period ended September 31, 2004 are not necessarily indicative of
the results that may be expected for the year ending June 30, 2005 The
information contained should be read in conjunction with audited financial
statements as of June 30, 2004
New Medium Enterprises Inc. (the "Company) was organized on August 2, 1999 in
the State of Nevada under the name Shopoverseas.com, Inc. On July 10, 2000 the
name was changed to New Medium Enterprises, Inc. As of the September 30, 2004
the Company is considered a development stage company. The Company has acquired
the rights to and is currently developing a new DVD format. As of the June 30,
2004 the Company had generated minimal revenues and is considered a development
stage company. Management is pursuing additional capital through various
methods.
On January 13, 2004, the Company acquired the business and all the intellectual
property assets pertaining to a new DVD format from Multidisk Ltd. and TriGM
International SA. In connection with the acquisition the Company issued
72,605,776 shares of its stock to the shareholders of MultiDisk and TriGM. These
shares were valued at $14,521,155, which approximates the fair market value of
those supplies. The Company also paid additional fees in funding, legal and
brokerage fees, which have been capitalized, part of these funds ($150,000) was
allocated to Machinery and Equipment. During July 2004 the Company developed a
working prototype and started amortizing the product over a sixty month life
using the straight-line method
.
Page 7
Shareholders Equity
In January 14, 2004 the Company voted to raise the authorized common shares from
100,000,000 to 200,000,000 and changed the par value to $.0001 per share.
In connection with the acquisitions, the Company issued 72,605,776 shares of its
stock to the shareholders of Multitask and TriGM. These shares were valued at
$14,521,155, which approximated the fair market value of these shares.
Additionally, the Company offered Series A warrant holders the right to lower
the exercise price from $1.50 to $.25 a share in return for assigning six out of
seven warrants to certain parties providing services to the Company in lieu of
compensation. A total of 1,300,000 warrants were lowered to .25 cents exercise
price. On July 18, 2003 the Board of Directors voted to extend the Series
A,B,C,D and E warrants until July 2005.
In November and December several warrant holders exercised 390,000 warrants at
$.25 per share for a total of $97,500. The warrant holders paid $97,500 to the
Company and received 390,000 common shares.
On 11-18 the Company issued 7,500 shares valued at $2,025 which approximates the
fair market value of .27 cents per share. On 12-22 the company issued 11,250
shares valued at .21 cents which approximates the fair market value issued
to a vendor in exchange for services rendered.
According the acquisition agreements with MultiDisc Ltd and TriGM International,
the Company was obligated to pay certain milestone payment amounting to $87,000
to each upon the raising of capital in excess of $500,000.
In August 2004 the Company entered into a consulting agreement for consulting
services. The company paid a fee of $75,000 and issued 875,000 common shares the
shares were valued at $.40, which approximates the fair market value of the
shares at the date of issuance.
ITEM 1 LEGAL PROCEEDINGS
There are no legal proceedings to which the company is a party to or
which any of their property is subject.
Page 8
ITEM 2 CHANGES IN SECURITIES
None
ITEM 3 DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS.
None
ITEM 5 OTHER INFORMATION
None
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K -
None
FORWARD-LOOKING STATEMENTS
THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION
27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, INCLUDING, WITHOUT LIMITATION, STATEMENTS
REGARDING THE COMPANY'S EXPECTATIONS, BELIEFS, INTENTIONS OR FUTURE STRATEGIES
THAT ARE SIGNIFIED BY THE WORDS "EXPECTS," "ANTICIPATES," "INTENDS," "BELIEVES,"
OR SIMILAR LANGUAGE. THESE FORWARD-LOOKING STATEMENTS, INCLUDING THOSE WITH
RESPECT TO OUR OPERATING RESULTS FOR 2004, ARE BASED UPON CURRENT EXPECTATIONS
AND BELIEFS OF THE COMPANY'S MANAGEMENT AND ARE SUBJECT TO RISKS AND
UNCERTAINTIES THAT COULD CAUSE RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED
IN THE FORWARD-LOOKING STATEMENTS. SOME, BUT NOT ALL, OF THE FACTORS, WHICH
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY INCLUDE THOSE SET FORTH IN THE
RISKS DISCUSSED BELOW UNDER THE SUBHEADING "RISK FACTORS" AND ELSEWHERE IN THIS
REPORT. THE COMPANY UNDERTAKES NO OBLIGATION TO REVISE OR PUBLICLY RELEASE THE
RESULTS OF ANY REVISION TO THESE FORWARD-LOOKING STATEMENTS, OR TO EXPLAIN WHY
ACTUAL RESULTS DIFFER. READERS SHOULD CAREFULLY REVIEW THE RISK FACTORS
DESCRIBED IN THIS SECTION BELOW AND IN ANY REPORTS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION ("SEC").
ITEM 7 MANAGEMENT DISCUSSION & ANALYSIS:
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations:
We are a development stage company currently engaged in the development of our
proprietary technology, VMD (Versatile MultiLayer Disc), next generation, high
capacity high definition discs & players capable of playing High Definition
content such as movies, sporting events, and other HD applications.
As of September 30, 2004 we have completed the initial first-generation product
prototype of prerecorded 120 mm Red Laser 20GB VMD (Multilayer Video Disc),
providing 180 minutes of High-Definition (1080i) Video Content in full MPEG-2
format. We anticipate that by early 2005 we will achieve six layers yielding
30GB of storage capacity with bit rates up 60 Mbs maximal, capable of playing
High Definition content for both HDTV and Digital Cinema on a single VMD Player.
We are currently planning to conduct a series of road shows across the globe to
demonstrate the VMD products to select groups at various times and locations to
be announced. During the quarter ending 12-31-2004, the company completed the
development of the VMD product from its prototype stage.
The company's plans for 2005-2007 include building cost-effective red laser
VMD-ROM and VMD-R (recordable) systems with up to 50GB storage capacity for HDTV
and Digital Cinema. At the same time the company plans to begin developing Blue
Laser VMD with 200GB capacity on each disc for high-end Digital Cinema and
Video-On-Demand (VOD) applications.
On August 8, 2004, we received a $1,000,000 investment from a single, accredited
Investor against the issuance of 5,000,000 common shares. Shares are subject to
Rule 144. In August we re-established a U.K. Office to focus on business
Development. We signed a month to month lease for approximately 1300 British
Pounds per month.
Page 9
LIQUIDITY & CAPITAL RESOURCES:
We intend to meet our long-term liquidity needs through available cash and cash
flow as well as through additional financing from outside sources. We anticipate
raising additional funds from the possible exercise of outstanding warrants or
equity financing with private investors. As of December 31, 2004 no agreements
have been undertaken to obtain any funding. The warrants are exercisable at
price ranges from $.25 per share to $1.50 per share. The company does not expect
that warrants will be exercised if the prevailing price of the stock at such
time of exercise is below or at the exercise price. During the quarter ending
December 31, 2004, Warrant exercise proceeds amounted to $97,500.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDING 12-31-2004
We have generated no revenues since inception.
Research & Development: During the quarter ending 12-31-2004 we spent
approximately BP 110,004 Equivalent to approximately $205,500 USD for Research &
Development, plus associated costs including travel related R&D amounted to BP
17,081 - USD equivalent $32,037 and R&D related equipment amounting to BP 7833,
USD Equivalent $14,691. Total R&D $252,228 USD equivalent.
General and Administrative Expenses:
General & Administrative UK Office- Consulting Fees BP 15,080- USD $28,296
Travel & Related BP 18,079- USD$ 33,928, Rent BP 6,272- USD $11,774 Equipment
4,942 USD 9269 Total UK Office Administrative $83,267.
NY Office- public company expenses & NY Administrative Total $4,283, Consulting
Germany, $8,593 Consulting Israel $ 9,175, Approximate Total Administrative
Expenses $105,318
PROFESSIONAL FEES: legal & Accounting $3,455 Patents $1,170 website 500, Outside
Consulting: $121,404
The company plans to begin production of VMD discs and drives in early 2005. In
order to gear up for production, the company will need to raise additional
capital to finance the manufacturing facility and engineering teams. The company
is currently in discussions with several possible sources of funds. As of the
December 31, 2004, no agreements have been entered into. There is no assurance
that the company will enter into an agreement for funding, or that funding will
be available at an acceptable cost of funds. In the event the company is
unable to raise the necessary funds, it will be forced to significantly curb its
activities in order to preserve its capital.
Page 10
NOTE 8- COMMITMENTS AND CONTINGENCIES
The Company has entered into several ongoing consultancy agreements with various
individuals and companies. Monthly payments are approximately $10,000 per month
In August we re-established a U.K. office to focus on business Development. We
signed a month to month lease for approximately 1300 British Pounds per month
Item 9: Certain Relationships & Related Transactions:
In August 2004 we re-established a U.K. Office to focus on business Development.
We signed a month to month lease for approximately 1399 British Pounds per month
which is approximately $2,600 per month with Triband Global Limited. Triband
Global Limited is owned By Victor Danenza, the spouse of Ann Kellgren who is an
affiliate of our company.
ITEM 10: CONTROLS AND PROCEDURES
The CEO periodically reviews the design and effectiveness of its disclosure
controls and internal controls, and their associated procedures, over financial
reporting. The CEO makes modifications to improve the design and effectiveness
of its disclosure controls and internal control structure, and may take
corrective action, if its reviews identify a need for such modifications or
actions.
The Company's Chief Executive Officer ("CEO") does not expect that its
disclosure controls and procedures or its internal controls and procedures for
financial reporting will prevent all error and all fraud. A control system, no
matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are met. Further,
the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within the Company have been detected. These inherent
limitations include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
control. The design of any system of controls also is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions; over time, controls may become inadequate because of changes
in conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected,
especially as a result of operational activities occurring in countries outside
of the USA.
We have evaluated, with the participation of our Chief Executive Officer and our
Treasurer who is the Chairman of the Board of Directors, the effectiveness of
our disclosure controls and procedures as of December 31, 2004. Since August,
with the re-establishment of our UK office, the Treasurer & Chairman in the UK
handles the company funds and disbursements, formerly handled by our CEO. In the
course of our audit for the period ending December 31, 2004, the CEO has
identified certain areas in the allocation and documentation of expenses
administered out of the UK office that the CEO believes needs to be improved.
As a result of the audit for the 12-31-2004 quarterly period covered by this
report, the CEO has disseminated procedures to strengthen the allocation,
documentation, certification & authorization of expenses. We believe these
procedures when followed will result in disclosure controls and procedures which
are effective to ensure that we record, process, summarize, and report
information required to be disclosed by us in our quarterly reports filed under
the Securities Exchange Act within the time periods specified by the Securities
and Exchange Commission's rules and forms
..
AT DECEMBER 31, 2004, THE COMPANY'S CURRENT ASSETS AMOUNTED TO $483,149 WHILE
CURRENT LIABILITIES AMOUNTED TO $202,304.00.
Page 11
SIGNATURE
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.
February 14 2005 NEW MEDIUM ENTERPRISES, INC.
BY: /S/ ETHEL SCHWARTZ
CEO, President, & Director
PAGE 11