UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
|X| Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended May 31, 2006
|_| Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act
For the transition period from _____________ to _______________
Commission File Number 000-505-79
EPIC MEDIA, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
California 33-0735929
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
2049 Century Park East, Suite 1920 90067
Los Angeles, CA (Zip Code)
(Address of Principal Executive Offices)
(310) 691-8800
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such 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 CORPORATE ISSUERS
The number of shares of the issuer's common equity outstanding as of July 14,
2006 was 22,839,260 shares of common stock, par value $.0001.
Transitional Small Business Disclosure Format: Yes |X| No |_|
================================================================================
i
TABLE OF CONTENTS
PART I.
FINANCIAL INFORMATION
Page
Item 1. Financial Statements
Condensed Consolidated Unaudited Balance Sheet
as of May 31, 2006 4
Condensed Consolidated Unaudited Statements of Operations
for the Three-Month Period Ended May 31, 2006 5
Condensed Consolidated Unaudited Statements of Cash Flows
for the Three-Month Period Ended May 31, 2006 7
Notes to the Condensed Consolidated Unaudited Financial Statements 8
Item 2. Management's Discussion and Analysis 14
Item 3. Controls and Procedures 15
PART II
OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 16
Item 3. Defaults Upon Senior Securities 16
Item 4. Submission of Matters to a Vote of Security Holders 16
Item 5. Other Information 16
Item 6. Exhibits 17
================================================================================
ii
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MOORE & ASSOCIATES, CHARTERED
ACCOUNTANTS AND ADVISORS
------------------------
PCAOB REGISTERED
Epic Media Inc.
2049 Century Park East, Suite 1920
Los Angeles, CA 90067
We have reviewed the accompanying balance sheet of Epic Media Inc. as of
May 31, 2006, and the related statements of income, retained earnings, and cash
flows for the six months then ended, in accordance with the standards of the
Public Company Accounting Oversight Board (United States). All information
included in these financial statements is the representation of the management
of Epic Media Inc.
A review consists principally of inquiries of company personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements 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 financial statements in order for them to be in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. As discussed in the notes to the
financial statements, the Company has no established source of revenue and no
operations. This raises substantial doubt about the Company's ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from this uncertainty.
/s/ Moore & Associates, Chartered
- ---------------------------------
Moore & Associates, Chartered
Las Vegas, Nevada
June 28, 2006
2675 S. JONES BLVD. SUITE 109, LAS VEGAS, NEVADA 89146
======================================================
(702) 253-7511 Fax: (702)253-7501
=================================
3
Epic Media, Inc.
(A Development Stage Company)
Balance Sheets
--------------
(Unaudited)
ASSETS
------
May 31,
2006 November 30,
(Unaudited) 2005
----------- -----------
Current Assets
Cash $ 12,081 $ -
Prepaid Expense 48,406
----------- -----------
Total Current Assets 60,487 -
Equipment - Net 25,971
Internet Portal - Net 120,000 -
----------- -----------
Total Assets $ 206,458 $ -
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities
Taxes Due - 8,362
Due to Related Parties 666,151 130,834
----------- -----------
Total Liabilities 666,151 139,196
----------- -----------
Stockholders' Equity
Common Stock, authorized
100,000,000 shares, no par value,
issued and outstanding on
May 31, 2006 and November 30,
2005 is 22,839,260 and
22,789,260 shares respectively 96,617 76,767
Subscriptions Receivable - -
Deficit Accumulated During the
Development Stage (556,310) (215,963)
----------- -----------
Total Stockholders' Equity (459,693) (139,196)
----------- -----------
Total Liabilities and Stockholders' Equity $ 206,458 $ -
----------- -----------
The accompanying notes are an integral part of these statements
4
Epic Media, Inc.
(A Development Stage Company)
Statements of Operations
------------------------
(Unaudited)
Six Months Ended Three Months Ended December 11,
--------------------------------------------------------------- 1996
May 31, May 31, May 31, May 31, (Inception) to
2006 2005 2006 2005 May 31, 2006
------------------------------------------------------------------------------------
Revenue from Discontinued
Operations $ - $ - $ - $ - $ 44,173
Expenses
General and Administrative 280,107 9,370 236,894 5,183 348,057
Advertising - 3,274 3,274 55,587
Rent 22,278 11,289 22,278
Consulting 30,850 19,850 30,850
Investor Relations 80,000
Depreciation Expense 2,693 2,076 7,538
Corporate Taxes 1,600 1,600 10,462
Professional Fees 2,819 925 2,819 - 45,711
---------- ---------- ---------- ---------- -----------
Total Expenses 340,347 13,569 274,528 8,457 600,483
---------- ---------- ---------- ---------- -----------
Net (Loss) $ (340,347) $ (13,569) $ (274,528) $ (8,457) $ (556,310)
========== ========== ========== ========== ===========
Basic and Diluted
(Loss) per Share a a a a a
---------- ---------- ---------- ---------- ----------
Weighted Average
Number of Shares 22,797,457 22,797,260 22,797,457 22,797,260 22,797,457
---------- ---------- ---------- ---------- -----------
a = Less than ($0.01) per share
The accompanying notes are an integral part of these statements
5
Epic Media, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity
---------------------------------
(Unaudited)
December 11, 1996 (Inception) to May 31, 2006
Common Stock
------------------------- Subscriptions Accumulated Total
Shares Amount Receivable Deficit Equity
--------------------------------------------- ----------- -----------
Common Shares issued to Founders
on 12 December 1996 at $0.001 15,250,000 $ 15,000 $ $ - $ 15,000
Net (Loss) (7,011) (7,011)
---------- --------- ---------- ----------- -----------
Balance, November 30, 1997 15,250,000 15,000 - (7,011) 7,989
Common Shares subscribed
on 30 November 1998 at $0.50 10,000,000 5,000,000 (5,000,000)
Net (Loss) (8,789) (8,789)
---------- --------- ---------- ----------- -----------
Balance, November 30, 1998 25,250,000 5,015,000 (5,000,000) (15,800) (800)
Net (Loss) (1,031) (1,031)
---------- --------- ---------- ----------- -----------
Balance, November 30, 1999 25,250,000 5,015,000 (5,000,000) (16,831) (1,831)
Net (Loss) (1,262) (1,262)
---------- --------- ---------- ----------- -----------
Balance, November 30, 2000 25,250,000 5,015,000 (5,000,000) (18,093) (3,093)
Net (Loss) (1,498) (1,498)
---------- --------- ---------- ----------- -----------
Balance, November 30, 2001 25,250,000 5,015,000 (5,000,000) (19,591) (4,591)
Net (Loss) (1,725) (1,725)
---------- --------- ---------- ----------- -----------
Balance, November 30, 2002 25,250,000 5,015,000 (5,000,000) (21,316) (6,316)
Net (Loss) (1,246) (1,246)
---------- --------- ---------- ----------- -----------
Balance, November 30, 2003 25,250,000 5,015,000 (5,000,000) (22,562) (7,562)
Payment of expense by cancellation
of Subscription Receivable (4,955,899) 5,000,000 44,101
Surrender of Common Shares (2,500,000) -
Net (Loss) (52,880) (52,880)
---------- --------- ---------- ----------- -----------
Balance, November 30, 2004 22,750,000 59,101 - (75,442) (16,341)
Common Stock issued for service
on 9 November 2005 at $0.45 39,260 17,666 17,666
Net (Loss) (140,521) (140,521)
---------- --------- ---------- ----------- -----------
Balance, November 30, 2005 22,789,260 76,767 - (215,963) (139,196)
Common Stock issued for service
on 1 May 2006 at $0.397 50,000 19,850 19,850
Net (Loss) (340,347) (340,347)
---------- --------- ---------- ----------- -----------
Balance, May 31, 2006 22,839,260 $ 96,617 $ - (556,310) $ (459,693)
========== ========= ========== =========== ===========
On June 29, 2005 the company executed a 10:1 forward stock split that has been
retroactive applied to this statement.
The accompanying notes are an integral part of these statements
6
Epic Media, Inc.
(A Development Stage Company)
Statements of Cash Flows
------------------------
(Unaudited)
Six Months Ended Three Months Ended December 11
------------------------------------------------------ 1996
May 31, May 31, May 31, May 31, (Inception) to
2006 2005 2006 2005 May 31, 2006
--------------------------------------------------------------------------
Operating Activities
Net (Loss) $ (340,347) $ (13,569) $(274,528) $ (8,457) $ (556,310)
Adjustments to Net (Loss):
Stock Issued for services 19,850 - 19,850 - 81,617
Depreciation 2,693 - 2,076 - 2,693
Changes in Operating Assets and Liabilities
(Increase)/Decrease in Prepaid Expense (48,406) - 6,539 - (48,406)
Increase/(Decrease) in Accounts Payable (8,362) - -
--------------------------------------------------------------------------
Net Cash (Used) by Operating Activities (374,572) (13,569) (246,063) (8,457) (520,406)
--------------------------------------------------------------------------
Investing Activities
Internet Portal (120,000) (120,000) (120,000)
Purchase of equipment (28,664) - (6,465) - (28,664)
-------------------------------------------------------------------------
Net Cash Used by Investing Activities (148,664) - (126,465) - (148,664)
-------------------------------------------------------------------------
Financing Activities
Proceeds from Related Party 535,317 13,569 362,523 8,457 666,151
Proceeds from sale of Common Stock - - 15,000
--------------------------------------------------------------------------
Cash Provided by Financing Activities 535,317 - 362,523 - 681,151
--------------------------------------------------------------------------
Net Increase in Cash 12,081 - (10,005) - 12,081
Cash, Beginning of Period - - 22,086 - -
--------------------------------------------------------------------------
Cash, End of Period $ 12,081 $ - $ 12,081 $ - $ 12,081
==========================================================================
Supplemental Information:
Interest Paid $ - $ - $ - $ - $ -
Income Taxes Paid $ - $ - $ - $ - $ -
The accompanying notes are an integral part of these statements
7
EPIC Media, Inc.
(A Development Stage Company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(As of May 31, 2006 and November 31, 2005)
NOTE 1. GENERAL ORGANIZATION AND BUSINESS
EPIC Media, Inc. (A Development Stage Company) was incorporated on December 11,
1996 under the laws of the State of California as "International Environmental
Technologies, Inc." On February 14, 2004 the Company reorganized and changed its
name to EPIC Media, Inc. The Company is considered to be in the development
stage in accordance with SFAS #7.
EPIC Media, Inc. is a multimedia company founded to develop and package
information into marketable print and digital products.
NOTE 2. DISCONTINUED OPERATIONS AND REORGANIZATION
In 1996, the Company secured distribution rights to the Automatic Mechanical
Variable Ratio Transmission (AMVRT) system from VRT Inc. by issuing a note in
the amount of $3,000,000. It began marketing the AMVRT in 1998 and reported
revenue of $44,173 with an associated net loss through November 30, 2001 of
$19,591. In January 1999, because of VRT Inc.'s inability to perform, the
Company ended its relationship with VRT by returning the AMVRT distribution
rights for its $3,000,000 note that was promptly cancelled.
The Company discontinued operations and began a process of reorganization. In
February 2004 the company purchased all rights including copyrights, trademarks,
websites and samples to two magazines entitled "EVERYTHING for Men" and
"EVERYTHING for Women" from Epic Media, Inc. an Oregon corporation and
publisher.
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
Accounting Basis
- ----------------
8
These financial statements are prepared on the accrual basis of accounting in
conformity with accounting principles generally accepted in the United States of
America.
Management Certification
- ------------------------
The financial statements and notes herein are certified by the officers of the
Company to present fairly, in all material respects, the financial position,
results of operations and cash flows for the periods presented in conformity
with accounting principles generally accepted in the United States of America,
consistently applied.
Cash and Cash Equivalents
- -------------------------
For the purpose of the statement of cash flows, cash equivalents include all
highly liquid investments with maturity of three months or less.
Dividends
- ---------
The Company has not adopted any policy regarding payment of dividends. No
dividends have been paid during the period shown.
Income Taxes
- ------------
The Company provides for income taxes under Statement of Financial Accounting
Standards NO. 109, "Accounting for Income Taxes." SFAS No. 109 requires the use
of an asset and liability approach in accounting for income taxes.
SFAS No. 109 requires the reduction of deferred tax assets by a valuation
allowance if, based on the weight of available evidence, it is more likely than
not that some or all of the deferred tax assets will not be realized. No
provision for income taxes is included in the statement due to its immaterial
amount, net of the allowance account, based on the likelihood of the Company to
utilize the loss carry-forward
Use of Estimates
- ----------------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
Net Income Per Common Share
- ---------------------------
Net income (loss) per common share is computed based on the weighted average
number of common shares outstanding and common stock equivalents, if not
anti-dilutive. The Company has not issued any potentially dilutive common
shares.
9
Revenue and Cost Recognition
- ----------------------------
The Company has no current source of revenue; therefore the Company has not yet
adopted any policy regarding the recognition of revenue or cost.
Advertising
- -----------
Advertising costs are expensed when incurred. Advertising for year ended
November 30, 2005 is $11,486.
NOTE 4. STOCKHOLDERS' EQUITY
Common Stock - No Par Value
- ---------------------------
On June 15, 2005 the Company increased its authorized no-par common stock to
100,000,000 shares.
On December 11, 1996, the company issued 1,525,000 pre-split shares of its no
par value common stock for $15,000 to the founders of the Company.
On November 30, 1998, the Company issued 1,000,000 pre-split shares of its no
par value common stock for $5,000,000 subscription receivable from one of the
founders in the Company's 1998 Regulation A Offering.
On February 14, 2004, the Company cancelled the $5,000,000 subscription
receivable note in exchange for advertising services valued at $44,101 from one
of its shareholders. The capital stock account was reduced by $4,955,899.
On May 30, 2004, one of the founders returned 250,000 pre-split shares of the
Company's no par value common stock.
On June 29, 2005 the Company authorized and executed a 10:1 forward stock split
bringing the total issued and outstanding shares to 22,750,000. The forward
split has been retroactively applied to the accompanying statements.
On November 9, 2005 the Company issued 39,260 post-split common shares for
services valued at $17,666.
On May 1, 2006 the Company issued 50,000 post-split common shares for services
valued at $19,850 based on three months average bid price of $0.397 per share.
10
NOTE 5. RELATED PARTY TRANSACTIONS
On 14 February 2004 advertising services valued at $44,101 were provided to the
Company by one of its founders. Consideration given for the advertising was the
cancellation of a $5,000,000 subscription receivable note originally issued for
the purchase of 1,000,000 pre-split shares of the companies no par value common
stock. As determined by the board of directors, on May 30, 2004 the shareholder
also surrendered 250,000 pre-split shares of no par value common stock. The
capital stock account was reduced by $4,055,899 ($5,000,000 - $44,101).
As of May 31, 2006, $666,151 is owed to two shareholders for advances made to
the Company.
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities that become available. They may face a conflict in selecting
between the Company and other business interests. The Company has not formulated
a policy for the resolution of such conflicts.
NOTE 6. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. The Company has no established source
of revenue. This raises substantial doubt about the Company's ability to
continue as a going concern. Without realization of additional capital, it would
be unlikely for the Company to continue as a going concern. The financial
statements do not include any adjustments that might result from this
uncertainty.
The Company's activities to date have been supported by equity financing. It has
sustained losses in all previous reporting periods with an inception to date
loss of $556,310 as of May 31, 2006. Management continues to seek funding from
its shareholders and other qualified investors to pursue its business plan. In
the alternative, the Company may be amenable to a sale, merger or other
acquisition in the event such transaction is deemed by management to be in the
best interests of the shareholders.
NOTE 7. PROVISION FOR INCOME TAXES
The Company provides for income taxes under Statement of Financial Accounting
Standards NO. 109, Accounting for Income Taxes. SFAS No. 109 requires the use of
an asset and liability approach in accounting for income taxes. Deferred tax
assets and liabilities are recorded based on the differences between the
financial statement and tax bases of assets and liabilities and the tax rates in
effect when these differences are expected to reverse.
SFAS No. 109 requires the reduction of deferred tax assets by a valuation
allowance if, based on the weight of available evidence, it is more likely than
not that some or all of the deferred tax assets will not be realized. In the
Company's opinion, it is uncertain whether they will generate sufficient taxable
income in the future to fully utilize the net deferred tax asset. Accordingly, a
valuation allowance equal to the deferred tax asset has been recorded. The total
11
deferred tax asset is $122,388, which is calculated by multiplying a 22%
estimated tax rate by the items making up the deferred tax account, the NOL of
$556,310. The total valuation allowance is a comparable $122,388.
The provision for income taxes is comprised of the net changes in deferred taxes
less the valuation account plus the current taxes payable as shown in the chart
below for the period ended May 31, 2006:
Net changes in Deferred Tax Benefit less
valuation account $0.00
Current Taxes Payable 0.00
------
Net Provision for Income Taxes $0.00
======
The Company has not filed any federal income returns since inception.
NOTE 8. THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS
Below is a listing of the most recent accounting standards SFAS 150-154 and
their effect on the Company.
Statement No. 150 Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity (Issued 5/03)
This Statement establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity.
Statement No. 151 Inventory Costs-an amendment of ARB No. 43, Chapter 4 (Issued
11/04)
This statement amends the guidance in ARB No. 43, Chapter 4, Inventory Pricing,
to clarify the accounting for abnormal amounts of idle facility expense,
freight, handling costs, and wasted material (spoilage). Paragraph 5 of ARB 43,
Chapter 4, previously stated that "...under some circumstances, items such as
idle facility expense, excessive spoilage, double freight and re-handling costs
may be so abnormal ass to require treatment as current period charges...." This
Statement requires that those items be recognized as current-period charges
regardless of whether they meet the criterion of "so abnormal." In addition,
this Statement requires that allocation of fixed production overheads to the
costs of conversion be based on the normal capacity of the production
facilities.
Statement No. 152 Accounting for Real Estate Time-Sharing Transactions (an
amendment of FASB Statements No. 66 and 67)
12
This Statement amends FASB Statement No. 66, Accounting for Sales of Real
Estate, to reference the financial accounting and reporting guidance for real
estate time-sharing transactions that is provided in AICPA Statement of Position
(SOP) 04-2, Accounting for Real Estate Time-Sharing Transactions.
This Statement also amends FASB Statement No. 67, Accounting for Costs and
Initial Rental Operations of Real Estate Projects, states that the guidance for
(a) incidental operations and (b) costs incurred to sell real estate projects
does not apply to real estate time-sharing transactions. The accounting for
those operations and costs is subject to the guidance in SOP 04-2.
Statement No. 153 Exchanges of Non-monetary Assets (an amendment of APB Opinion
No. 29)
The guidance in APB Opinion No. 29, Accounting for Non-monetary Transactions, is
based on the principle that exchanges of non-monetary assets should be measured
based on the fair value of the assets exchanged. The guidance in that Opinion,
however, includes certain exceptions to the principle. This Statement amends
Opinion 29 to eliminate the exception for non-monetary exchanges of similar
productive assts and replaces it with a general exception for exchanges of
non-monetary assets that do not have commercial substance. A non-monetary
exchange has commercial substance if the future cash flows of the entity are
expected to change significantly as a result of the exchange.
Statement No. 154 - Accounting Changes and Error Corrections (a replacement of
APB Opinion No. 20 and FASB Statement No. 3)
This Statement replaces APB Opinion No. 20, Accounting Changes, and FASB
Statement No. 3, Reporting Accounting Changes in Interim Financial Statements,
and changes the requirements for the accounting for and reporting of a change in
accounting principle. This Statement applies to all voluntary changes in
accounting principle. It also applies to changes required by an accounting
pronouncement in the unusual instance that the pronouncement does not include
specific transition provisions. When a pronouncement includes specific
transition provisions, those provisions should be followed.
The adoption of these new Statements is not expected to have a material effect
on the Company's current financial position, results or operations, or cash
flows.
13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
After careful consideration the management of Epic Media has decided to
discontinue the operations of the proposed magazine business. The management
believed the proposed magazines no longer represent a profitable venture for the
Company based on the proposed budgets, the inability to hire effective talent in
the Los Angeles area, along with many other factors. On April 6, 2006, the
Magazine Division of EPIC Media Inc. otherwise referred to as Everything For Men
Magazine and Everything for Women ceased operation. EPIC Media Inc. will
continue to manage and finance the Internet and Television Divisions of the
company. Since the ceasing of the magazine operation the Company has focused
primarily on realigning its other business divisions. The prototype phase (Proof
of Concept / Alpha) of the Internet portal is on track to meet its scheduled
roll out date of July 14, 2006.
Cautionary statement identifying important factors that could cause our
actual results to differ from those projected in forward looking statements.
Pursuant to the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, readers of this report are advised that this
document contains both statements of historical facts and forward looking
statements. Forward looking statements are subject to certain risks and
uncertainties, which could cause actual results to differ materially from those
indicated by the forward looking statements. Examples of forward looking
statements include, but are not limited to (i) projections of revenues, income
or loss, earnings per share, capital expenditures, dividends, capital structure
and other financial items, (ii) statements of our plans and objectives with
respect to business transactions and enhancement of shareholder value, (iii)
statements of future economic performance, and (iv) statements of assumptions
underlying other statements and statements about our business prospects.
Our operating results showed a increase in general expenses and no increase
in revenues for the three-month period ended May 31, 2006 as compared to the
same period in 2005.
Three Months
Summary of Operations Ended May 31,
------------------------
2006 2005
------------------------
Revenues 0 0
Cost of Revenue -- --
Gross Income (Loss) 0 0
Reversal of variable stock options expense -- --
Selling, General and Administrative Costs $ 274,528 $ 8,457
Operating (Loss) $(274,581) $ (8,457)
Other Income (Expense) 0 0
Interest Expense -- --
Net (Loss) $(274,581) $ (8,457)
========== ==========
14
ITEM 3. CONTROLS AND PROCEDURES
(a) Under the supervision and with the participation of our principal executive
officer and principal financial officer, we conducted an evaluation of the
design and operation of our disclosure controls and procedures, as such term is
defined under Rules 13a-14(c) and 15d-14(c) promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), within 90 days of the
filing date of this report. Based on that evaluation, our principal executive
officer and our principal financial officer concluded that the design and
operation of our disclosure controls and procedures were effective to ensure
that information required to be included in our Securities and Exchange
Commission reports is recorded, processed, summarized and reported within the
time periods specified in the Commission's rules and forms.
(b) In addition, there were no significant changes in our internal controls or
in other factors that could significantly affect these controls subsequent to
the Evaluation Date, including any corrective actions with regard to significant
deficiencies and material weaknesses.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
On April 20, 2006, Wendy A. Klenk, a former employee, filed a lawsuit
against EPIC Media, Inc. in the Superior Court of the State of California,
County of Los Angeles entitled Wendy A. Klenk v. EPIC Media, Inc., Nicholas A.
Czuczko, et al. (Case No. SC089402). The complaint alleges failure to pay wages,
breach of contract, promissory estoppel, fraud, violation of California Labor
Code Section 970, and negligent misrepresentation arising out of the termination
of her employment on or about April 20, 2006. The complaint seeks compensatory,
general, special, double, and punitive damages, civil penalties, wages owed,
interest, attorneys' fees, and costs. On June 14, 2006, EPIC Media, Inc. filed a
demurrer to the complaint, which is set for hearing on September 19, 2006. EPIC
Media, Inc. denies the allegations and plans on defending against the
allegations vigorously.
On May 24, 2006, Nelson Anderson, Ginny Chien, and Rob Hill, former
employees, filed a lawsuit against EPIC Media, Inc. in the Superior Court of the
State of California, County of Los Angeles entitled Nelson Anderson, Ginny
Chien, Rob Hill v. EPIC Media, Inc., Nicholas Czuczko, et al. (Case No.
BC352917). The complaint alleges intentional and negligent deceit, violation of
15
California Labor Code Section 970, breach of contract, promissory estoppel,
intentional and negligent interference with prospective economic advantage,
negligence, and waiting time penalties under California Labor Code Section 203
arising out of the termination of their employment on or about April 20, 2006.
The complaint seeks compensatory, special, incidental, double, and punitive
damages, penalties, interest, attorneys' fees, and costs. EPIC Media, Inc.'s
response to the complaint is currently due July 27, 2006. EPIC Media, Inc.
denies the allegations and plans on defending against the allegations
vigorously.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults on Senior Securities
None.
Item 4. Submission of Matters to Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits
The following exhibits are either attached hereto or incorporated herein by
reference as indicated:
Exhibit
Number Description
- ------------- ----------------------------------------------------------------
31 Certification of Chief Executive and Chief Financial Officer
pursuant to SEC Release No. 33-8238, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
32 Certification of Chief Executive and Chief Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
================================================================================
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
EPIC MEDIA, INC.
Dated: July 11, 2006 /s/ Nicholas A. Czuczko
--------------------------------
Nicholas A. Czuczko
Chief Executive Officer and
Chief Financial Officer
16
================================================================================
EXHIBIT INDEX
Exhibit
Number Description
- ------------- ----------------------------------------------------------------
31 Certification of Chief Executive and Chief Financial Officer
pursuant to SEC Release No. 33-8238, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
32 Certification of Chief Executive and Chief Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
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