PART II
OFFERING CIRCULAR
MEDIA ASSETS GROUP, INC.
P.O. Box 48899A
Los Angeles, CA 90048
(404) 819-4866
Persons to contact at Company with respect to offering: John Berner
Best Efforts Offering of
200,000,000 Shares of Common Stock
At a price of $0.10 Per Share
Media Assets Group, Inc. (?the Company?, ?we?) is selling up to
192,675,000 shares of our common stock (par value $0.001), At a price
of $0.10 per share pursuant to Rule 251(d)(3)(ii). Of the 200,000,000
shares being offered, 192,675,000 are being sold by the Company and
7,325,000 are being sold by Selling Shareholders. The offering is
being made on a self-underwritten, ?best efforts? basis. The minimum
number of shares required to be purchased by each investor is 1,000
shares.
The shares offered by the Company will be sold on our behalf by our
President John Berner. He will not receive any commissions or
proceeds for selling the shares on our behalf. There is uncertainty
that we will be able to sell any of the 192,675,000 shares being
offered herein by the Company. All of the shares being registered for
sale by the Company will be sold at a price of $0.10 per share. In
accordance with Rule 251(d)(3)(ii) of Regulation A the selling
shareholder shares will be offered at a fixed price of $0.10 for the
duration of the Offering. Assuming all of the 192,675,000 shares being
offered by the Company are sold, the Company will receive up to
$19,267,500 in gross proceeds. There is no minimum amount we are
required to raise from the shares being offered by the Company and any
funds received will be immediately available to us. Additionally,
there is no guarantee that a public market will ever develop and you
may be unable to sell your shares.
This primary offering will terminate upon the earliest of (i) such
time as all of the common stock has been sold pursuant to the Offering
Statement or (ii) 365 days from the qualified date of this offering
circular, unless extended by our directors for an additional 90 days.
We may however, at any time and for any reason terminate the offering.
We are a development stage company. Investing in our Common Stock
involves a high degree of risk, including the risk that you could lose
all of your investment. Please read ?Risk Factors? beginning on page
12 of this Offering Circular about the risks you should consider
before investing.
SHARES OFFERED
PRICE TO
SELLING AGENT
PROCEEDS TO
BY COMPANY
PUBLIC
COMMISSIONS
THE COMPANY
Per Share
$
0.10
Not applicable
$
0.10
Minimum Purchase
None
Not applicable
Not applicable
Total (200,000,000
shares)
$
19,267,500.0
0
Not applicable
$
19,267,500.00
As soon as practicable after this Offering Circular is qualified.
NOTICE TO INVESTORS
If all the shares are not sold in the company?s offering, there is the
possibility that the amount raised may be minimal and might not even
cover the costs of the offering, which the Company estimates at
$28,500. The proceeds from the sale of the securities will be placed
directly into the Company?s account; any investor who purchases shares
will have no assurance that any monies, beside their own, will be
subscribed to the offering circular. All proceeds from the sale of the
securities are non-refundable, except as may be required by applicable
laws. All expenses incurred in this offering are being paid for by the
Company. There has been no public trading market for the common stock
Media Assets Group, Inc.
The Company qualifies as an ?emerging growth company? as defined in
the Jumpstart Our Business Startups Act, which became law in April
2012 and will be subject to reduced public company reporting
requirements.
The United States Securities and Exchange Commission does not pass
upon the merits of or give its approval to any securities offered or
the terms of the offering, nor does it pass upon the accuracy or
completeness of any offering circular or other solicitation materials.
These securities are offered pursuant to an exemption from
registration with the Commission; however, the Commission has not made
an independent determination that the securities offered are exempt
from registration.
An offering statement pursuant to Regulation A relating to these
securities has been filed with the Securities and Exchange Commission.
Information contained in this Preliminary Offering Circular is subject
to completion or amendment. These securities may not be sold nor may
offers to buy be accepted before the offering statement filed with the
Commission is qualified. This Preliminary Offering Circular shall not
constitute an offer to sell or the solicitation of an offer to buy nor
may there be any sales of these securities in any state in which such
offer, solicitation or sale would be unlawful before registration or
qualification under the laws of any such state. We may elect to
satisfy our obligation to deliver a Final Offering Circular by sending
you a notice within two business days after the completion of our sale
to you that contains the URL where the Final Offering Circular or the
offering statement in which such Final Offering Circular was filed may
be obtained.
Generally, no sale may be made to you in this offering if the
aggregate purchase price you pay is more than 10% of the greater of
your annual income or net worth. Different rules apply to accredited
investors and non-natural persons. Before making any representation
that your investment does not exceed applicable thresholds, we
encourage you to review Rule 251(d)(2)(i)(C) of Regulation A. For
general information on investing, we encourage you to refer to
www.investor.gov.
You should rely only on the information contained in this offering
circular and the information we have referred you to. We have not
authorized any person to provide you with any information about this
Offering, the Company, or the shares of our Common Stock offered
hereby that is different from the information included in this
offering circular. If anyone provides you with different information,
you should not rely on it.
?
TABLE OF CONTENTS
Summary and Risk Factors 4
The Company 4
Our Offering 5
Emerging Growth Company 8
Risk Factors 9
Risks Related to the Structure and
Recent Formation of the Registrant 9
Entertainment Industry Risks May Adversely
Affect the Registrant 11
General Investment Risks May Adversely
Affect the Registrant 15
Other Risks 16
Dilution 17
Selling Security Holders 18
Plan of Distribution 20
Use of Proceeds 21
Description of Business 22
The Company 22
Business Objectives and Strategies 23
Industry Overview 29
Competition 29
Employees 30
Principal Executive Office 30
Management?s Discussion and Analysis of
Financial Condition 30
General 30
Overview 30
Results of Operations 30
Plan of Operations 30
Liquidity and Cash Flow 32
Current and Future Financing Needs 32
Going Concern 32
Off Balance Sheet Arrangements 32
Directors, Executive Officers and Significant Employees 33
Compensation of Directors and Executive Officers 34
Security Ownership of Management and
Certain Security Shareholders 34
Interest of Management and Others in
Certain Transactions 35
Litigation 36
Securities Being Offered 36
Common Stock 36
Dividends 36
?
SUMMARY AND RISK FACTORS
In this offering circular, ??Media Assets Group?? the ?Company,??
??we,?? ??us,?? and ??our,?? refer to Media Assets Group, Inc., unless
the context otherwise requires. Unless otherwise indicated, the term
??fiscal year?? refers to our fiscal year ending December 31. Unless
otherwise indicated, the term ??common stock?? refers to shares of the
Company?s common stock.
This offering circular, and any supplement to this offering circular
include ?forward-looking statements?. To the extent that the
information presented in this offering circular discusses financial
projections, information or expectations about our business plans,
results of operations, products or markets, or otherwise makes
statements about future events, such statements are forward-looking.
Such forward-looking statements can be identified by the use of words
such as
intends?, ?anticipates?, ?believes?, ?estimates?, ?projects?, ?forecas
ts?, ?expects?, ?plans? and ?proposes?. Although we believe that the
expectations reflected in these forward-looking statements are based
on reasonable assumptions, there are a number of risks and
uncertainties that could cause actual results to differ materially
from such forward-looking statements. These include, among others, the
cautionary statements in the ?Risk Factors? section and
the ?Management?s Discussion and Analysis of Financial Position and
Results of Operations? section in this offering circular.
This summary only highlights selected information contained in greater
detail elsewhere in this offering circular. This summary may not
contain all of the information that you should consider before
investing in our common stock. You should carefully read the entire
offering circular, including ?Risk Factors? beginning on Page 6, and
the financial statements, before making an investment decision.
The Company
Media Assets Group, Inc., a Wyoming corporation (?the Company?) was
incorporated under the laws of the State of Wyoming on June 17, 2015.
Media Assets Group, Inc. is currently in in a pre-developmental stage,
having completed our concepts, identified target growth areas in the
industry, and are now seeking funding in order to fully develop and
market our services. To date the company has not engaged in any
material operations.
The registrant is intended to be an entertainment asset acquisition,
management and distribution company with a focus on audiovisual
content including feature films, television programming and web
series.
Every year thousands of hours of content are produced independently of
the major studios (including 20th Century Fox, Paramount, Sony
Pictures, Universal, and Warner Bros.) and broadcasters (including
NBC, CBS, ABC, AMC and a multitude of others around the globe). Such
?independent content? does not have immediate access to existing
channels of distribution.
While major studios and broadcasters are often part of much larger
conglomerates and feature a high degree of vertical integration, the
independent financing and production business generally looks to third
parties in order to assist in accessing consumers for their product.
They themselves often have neither the necessary means nor
relationships.
The registrant will seek to aggregate such ?independent content? from
third party producers and sell it to distributors worldwide either as
an agent on their behalf or as the principal by way of acquisition. As
such, the company will compete with a number of existing international
sales agents.
To date, we have completed our concepts and require funds to complete
the development and marketing of our services. As of the date of this
prospectus, the registrant has not engaged in any material operations
nor generated any revenues.
Our Offering
We have authorized capital stock consisting of 500,000,000 shares of
common stock, $0.001 par value per share (?Common Stock?). We have
200,000,000 shares of Common issued and outstanding. Through this
offering we will register a total of 200,000,000 shares of common
stock. We may endeavor to sell all 200,000,000 shares of common stock
after this registration becomes qualified. The price at which we, the
company, offer these shares is set at $0.10 per. We will receive all
proceeds from the sale of our common stock with the exception of the
$500,000 being sold by selling shareholders.
Securities being
offered by the
Company
Up to 192,675,000 shares of common stock, at a
price of $0.10 per share offered by us in a
direct offering. Our offering will terminate
upon the earliest of (i) such time as all of the
common stock has been sold pursuant to the
Offering Statement or (ii) 365 days from the
qualified date of this offering circular unless
extended by our Board of Directors for an
additional 90 days. We may however, at any time
and for any reason terminate the offering.
Offering price
per share
At a price of $0.10 per share.
Number of shares
of common stock
outstanding
before the
offering of
common stock
200,000,000 common shares are currently issued
and outstanding.
Number of shares
of common stock
outstanding
after the maximum
offering
400,000,000 common shares will be issued and
outstanding if all securities offered herby are
sold pending an increase in authorized shares.
The minimum
number of shares
to be
sold in this
offering
None.
Market for the
common shares
There is no public market for our shares. We may
not be able to meet the requirement for a public
listing or quotation of our common stock.
Furthermore, even if our common stock is quoted
or granted listing, a market for the common
shares may not develop.
Use of Proceeds
We intend to use the gross proceeds of this
offering for registration expenses and start-up
costs; acquisition of film rights, their
distribution, marketing, and sale; as well as
maintaining working capital for future
endeavors.
Termination of
the Offering
This offering will terminate upon the earlier to
occur of (i) 365 days after this Offering
Statement becomes qualified with the Securities
and Exchange Commission, or (ii) the date on
which all 200,000,000 shares registered
hereunder have been sold. We may, at our
discretion, extend the offering for an
additional 90 days. At any time and for any
reason we may also terminate the offering.
Terms of the
Offering
Our President and Director, John Berner will
sell the 192,675,000 shares of common stock on
behalf of the company upon qualification of this
Offering Statement, on a BEST EFFORTS basis.
Subscriptions:
All subscriptions once accepted by us are
irrevocable.
Registration
Costs
We estimate our total offering registration
costs to be approximately $28,500.
Risk Factors:
See ?Risk Factors? and the other information in
this offering circular for a discussion of the
factors you should consider before deciding to
invest in shares of our common stock.
You should rely only upon the information contained in this offering
circular. We have not authorized anyone to provide you with
information different from that which is contained in this offering
circular. We are offering to sell common stock and seeking offers to
common stock only in jurisdictions where offers and sales are
permitted.
Emerging Growth Company
The recently enacted JOBS Act is intended to reduce the regulatory
burden on emerging growth companies. The Company meets the definition
of an emerging growth company and so long as it qualifies as
an ?emerging growth company,? it will, among other things:
? be temporarily exempted from the internal control audit
requirements Section 404(b) of the Sarbanes-Oxley Act;
? be temporarily exempted from various existing and forthcoming
executive compensation-related disclosures, for example: ?say-
on-pay?, ?pay-for-performance?, and ?CEO pay ratio?;
? be temporarily exempted from any rules that might be adopted by
the Public Company Accounting Oversight Board requiring
mandatory audit firm rotation or supplemental auditor discussion
and analysis reporting;
? be temporarily exempted from having to solicit advisory say-on-
pay, say-on-frequency and say-on-golden-parachute shareholder
votes on executive compensation under Section 14A of the
Securities Exchange Act of 1934, as amended;
? be permitted to comply with the SEC?s detailed executive
compensation disclosure requirements on the same basis as a
smaller reporting company; and,
? be permitted to adopt any new or revised accounting standards
using the same timeframe as private companies (if the standard
applies to private companies).
Our company will continue to be an emerging growth company until the
earliest of:
? the last day of the fiscal year during which we have annual
total gross revenues of $1 billion or more;
? the last day of the fiscal year following the fifth anniversary
of the first sale of our common equity securities in an offering
registered under the Securities Act;
? the date on which we issue more than $1 billion in non-
convertible debt securities during a previous three-year period;
or
? the date on which we become a large accelerated filer, which
generally is a company with a public float of at least $700
million (Exchange Act Rule 12b-2).
Risk Factors
Please consider the following risk factors and other information in
this offering circular relating to our business before deciding to
invest in our common stock.
This offering and any investment in our common stock involves a high
degree of risk. You should carefully consider the risks described
below and all of the information contained in this offering circular
before deciding whether to purchase our common stock. If any of the
following risks actually occur, our business, financial condition and
results of operations could be harmed. The trading price of our common
stock could decline due to any of these risks, and you may lose all or
part of your investment.
We consider the following to be the material risks for an investor
regarding this offering. Our company should be viewed as a high-risk
investment and speculative in nature. An investment in our common
stock may result in a complete loss of the invested amount.
An investment in our common stock is highly speculative, and should
only be made by persons who can afford to lose their entire investment
in us. You should carefully consider the following risk factors and
other information in this report before deciding to become a holder of
our common stock. If any of the following risks actually occur, our
business and financial results could be negatively affected to a
significant extent.
1. Risks Related to the Structure and Recent Formation of the
registrant
(a) The registrant Has Limited Operating History. We will be
dependent upon the experience and expertise of our management in
sourcing and administering film rights acquisitions and other
investments as well as operating the company day-to-day. There can be
no assurance that we will be able to successfully implement the
strategies that the registrant intends to pursue and that the
registrant?s film and television rights acquisitions and other
investments will be profitable or produce a reasonable return, if any.
We have operated the registrant for a short period, so we have only a
limited operating history upon which you can evaluate our business and
prospects. You should consider our prospects in light of the risks,
expenses, and difficulties encountered by companies in their earlier
stage of development. Our success depends upon our ability to address
those risks successfully, which includes, among other things: (i)
whether we will be able to assemble and maintain the necessary
resources, including financial resources that we will need to
implement our business plan; (ii) whether we can continue to build and
maintain a strong management team that can develop and execute our
business strategy; (iii) whether we will be successful in establishing
and maintaining the strategic associations necessary to implement our
business strategy; and (iv) whether we will be successful in
implementing our sales and marketing strategy.
(b) Dependence on Key Individuals. The success of the registrant will
depend upon the ability of our management to develop and implement
strategies that achieve the registrant?s objectives. If any key
personnel, including John Berner, were to become unable to participate
in the management of the registrant, the consequences to the
registrant could be material and adverse to the registrant?s
performance. We do not have key-man life insurance policy for Mr.
Berner and the loss of Mr. Berner's services could have a material
adverse effect on our business, operations and financial condition.
Mr. Berner has had a broad spectrum of experience in the business
world, which includes working with micro-cap companies trading on
?Penny Stock? markets. He has over 20 years? experience on Wall Street
including a position as Managing Director of Riviera Capital
Management, a private hedge fund. Although his experience in the
financial sector is extensive, his experience in the film and
television industry is extremely limited, which includes his degree in
college.
(c) Industry Focus. The registrant is restricted to acquiring film
and television rights, therefore, we may employ such investment,
operations and marketing methods as we determine to achieve the best
results in those industries. As a result of these methods, an investor
may lose all of its investment in the registrant. We cannot offer any
assurance as to our future financial results.
(d) The registrant May Have Difficulties Identifying Specific
Acquisition Properties for the Proceeds of this Offering. Even though
to date the registrant has identified a number of attractive film and
television rights acquisition candidates, which may qualify for the
investment criteria and business objectives as set forth herein, there
can be no assurances that these business opportunities will continue
to be available when the registrant has been sufficiently capitalized
to take advantage of them. Shareholders will not have an opportunity
to review the registrant?s proposed acquisitions before deciding
whether to invest in the registrant. No assurance can be given that
the registrant will be successful in identifying or consummating
economically feasible film and television rights acquisitions and
other investments on a timely basis. If the registrant has not
identified immediate uses of the proceeds of subscription to be made
pursuant to this offering once the registrant has been sufficiently
capitalized, the registrant intends to invest such proceeds in readily
marketable, interest-bearing investments until appropriate investment
opportunities have been identified by us. Such short-term use of
capital ordinarily provides a significantly lower net return than the
return the registrant seeks to achieve from its intended investment
strategy.
(e) Portfolio Concentration May Negatively Affect Profitability.
Although the registrant will make best efforts to diversify its
acquisitions in order to minimize risks associated with investments in
the entertainment industry, the registrant may make a large purchase
in a single property. While this asset concentration may increase the
profits of the registrant, if any large position sustains a material
loss, the registrant may lose all of its working capital and possibly
be forced to cease operations.
(f) No Public Market in Our Securities. We do not have a public
market in our securities. If our common stock has no active trading
market, you may not be able to sell your common shares at all. Our
securities are not currently traded on any exchange. We cannot assure
you that an active public market will ever develop. Consequently, you
may not be able to liquidate your investment in the event of an
emergency or for any other reason.
(g) Best Efforts. The registrant is offering its common stock on a
?best efforts? self-underwritten basis and there is no third-party
underwriting for this offering. We can give no assurance that all or
any of the common stock will be sold. Share subscriptions are
irrevocable. There is no minimum offering amount and we have not
engaged a broker/dealer or underwriter to sell the common shares on
our behalf. As a result, we may not receive sufficient proceeds to
fund planned operations or even cover the costs of the offering. If we
are unable to raise sufficient funds or obtain alternate financing, we
may never complete development and become profitable.
2. Entertainment Industry Risks May Adversely Affect the registrant
(a) Impact of Industry Competition. The film and television business
is highly competitive. The registrant faces substantial competition
both in obtaining film and television program rights and in licensing
distribution rights thereto. The registrant?s competitors include both
major studios such as Warner Bros., Paramount, 20th Century Fox,
Lionsgate and others, as well as well capitalized independent
acquisition and sales companies such as FilmNation, Sierra / Affinity,
and many others. Because we lack the name recognition and resources of
our competitors, we may never generate any revenues or become
profitable. While the increase in distribution outlets over the past
years (including those based on Internet and/or mobile technology) is
potentially beneficial, there is no guarantee that we will be able to
successfully penetrate these markets. Failure to penetrate these
potential distribution channels would have a material adverse impact
on our results of operations. If the registrant is unable to compete
efficiently, such failure could harm its business, results of
operations and financial condition.
We are smaller and less diversified than many of our competitors. As
an independent distributor and producer, we constantly compete with
major U.S. and international studios and independent producers and
distributors. Most of the major U.S. studios are part of large
diversified corporate groups with a variety of other operations,
including television networks and cable channels that can provide both
the means of distributing their products and stable sources of
earnings that may allow them better to offset fluctuations in the
financial performance of their motion picture operations. In addition,
the major studios and larger independent producers and distributors
have more resources with which to compete for ideas, storylines and
scripts created by third parties as well as for actors, directors and
other personnel required for production. The resources of the major
studios and larger independent producers and distributors may also
give them an advantage in acquiring other businesses or assets,
including film libraries, that we might also be interested in
acquiring. Our inability to compete successfully could have a material
adverse effect on our business, results of operations and financial
condition.
The motion picture industry is highly competitive and at times may
create an oversupply of motion pictures in the market. The number of
motion pictures released by our competitors may create an oversupply
of product in the market, reduce our share of box office receipts and
make it more difficult for our films to succeed commercially.
Oversupply may become most pronounced during peak release times, such
as school holidays and national holidays, when theater attendance is
expected to be highest. For this reason, and because of our more
limited production and advertising budgets, generally provided by
third party distributors, we typically do not release our films during
peak release times, which may also reduce our potential revenues for a
particular release. Moreover, we cannot guarantee that we can release
all of our films when they are otherwise scheduled. In addition to
production or other delays that might cause us to alter our release
schedule, a change in the schedule of a major studio may force us to
alter the release date of a film because we cannot always compete with
a major studio?s larger promotion campaign. Any such change could
adversely impact a film?s financial performance. In addition, if we
cannot change our schedule after such a change by a major studio
because we are too close to the release date, the major studio?s
release and its typically larger promotion budget may adversely impact
the financial performance of our film. The foregoing could have a
material adverse effect on our business, results of operations and
financial condition.
The limited supply of motion picture screens compounds this product
oversupply problem. Currently, a substantial majority of the motion
picture screens in the United States typically are committed at any
one time to only ten to fifteen films distributed nationally by major
studio distributors. In addition, as a result of changes in the
theatrical exhibition industry, including reorganizations and
consolidations and the fact that major studio releases occupy more
screens, the number of screens available to us when we want to release
a picture may decrease. If the number of motion picture screens
decreases, box office receipts, and the correlating future revenue
streams, such as from home video and pay and free television, of our
motion pictures may also decrease, which could have a material adverse
effect on our business, results of operations and financial condition.
(b) Variability in the Development, Production, and Distribution
Process. The process of developing, producing, and distributing films
and television programs is inherently unpredictable. The registrant
may not have consistent access to quality film and television
acquisition opportunities from which to build its assets. Even with
firm distribution contracts in place, the distribution of the
registrant?s film and television programs could be subject to release
schedule or programming changes and a lack of distributor focus on the
marketing of any given project.
(c) Variability in the Sequence of Film and Television Program
Performance. If several of the registrant?s rights acquisitions
perform below expectations in a row, the registrant?s ability to
generate future cash flow could be negatively affected, which could
limit the amount of financing available to the registrant. This, in
turn, would reduce the total number of films or television programs
that the registrant could acquire, thereby diversifying the risk over
a smaller number of projects.
(d) Dependence on Labor Unions. Many of the individuals who will be
involved in the production of the registrant?s films will be members
of a trade union. Union decisions, including the decision to strike,
can greatly impact the production of a film or television program.
Correspondingly, the number and quality of acquisition opportunities
available to the registrant will be influenced by union decisions.
(e) Impact of Technological Change and Piracy. Driven principally by
the advent of the Internet, the film and television business is
undergoing significant technological and structural changes. While
this may create opportunities for the registrant, there is no
guarantee that these changes will not adversely affect asset values
and returns for the registrant in the future. Film piracy remains a
major area of concern in the film industry, and new technologies
contribute to the problem. A number of organizations are attempting to
address this. Trade embargoes and restrictions have been used to
encourage particular countries to institute and enforce strict
copyright laws. However, these actions have produced mixed results and
there is no assurance that future actions will satisfactorily resolve
the matter.
(f) Importance of Human Capital. The registrant will rely heavily on
the experience and talent of the employees and independent contractors
who work for the registrant and the production companies producing the
film and television programs acquired by the registrant. The efforts
of these individuals will contribute significantly to the success of
the registrant whereas their poor performance may adversely affect the
business of the registrant. The development and marketing of our
services will continue to place a significant strain on our limited
personnel, management, and other resources. Our ability to manage any
future growth effectively will require us to successfully attract,
train, motivate, retain, and manage employees, particularly key
marketing, sales, managerial and engineering personnel, to effectively
integrate new employees into our operations and to continue to improve
our operational, financial and management systems. The competition for
such personnel is intense. Our failure to manage growth and changes in
our business effectively and to attract and retain key personnel could
limit our growth and the success of our services and business. We
currently do not maintain key person life insurance policies on any of
our employees.
(g) High Level of Dependence on Distributors. The registrant will not
be able to effectively exploit its films and television programs
without distribution partners. The registrant will not have complete
control over how every member of its distribution network (including
sub-distributors) releases and markets its films and television
programs. Other projects may detract from the distributor?s ability to
focus on the marketing and distribution on the registrant?s
investments. The distributor may only spend what is minimally required
to market and distribute them or, conversely, overspend. Collectively,
these factors and decisions could have a negative effect on the amount
of revenue generated by the registrant?s investments.
(h) Inability to Get Distributors to Accurately Account for Receipts
Owed to the registrant. The registrant will seek certain audit rights
from the distributor of the registrant?s films and television
programs. These rights are intended to protect the registrant?s
ability to claim its share of all revenues earned through the
distribution of its films and television programs. However,
distributors can account for revenues in a manner that makes it
difficult to conclusively audit their efforts and determine the
registrant?s true share of the receipts due.
(i) Distributor, Exhibitor and Broadcaster Collection Risk. Local
distributors, exhibitors and broadcasters will collect revenues
generated by the registrant?s films and television programs. Although
the registrant will maintain close relationships with its distribution
partners, significant collection risk remains. Sub-distributors,
exhibitors and broadcasters may delay sending payments to distributors
who, in return, may delay sending payments to the registrant.
Distributors, exhibitors and broadcasters also occasionally go
bankrupt, preventing payments from materializing. The registrant will
be subject to these risks.
3. General Investment Risks May Adversely Affect the registrant
(a) General Economic and Market Conditions. The success of the
registrant?s activities will be affected by general economic and
market conditions, such as interest rates, availability of credit,
inflation rates, economic uncertainty, changes in laws (including laws
relating to taxation of the registrant), trade barriers, currency
exchange controls, and national and international political
circumstances. These factors may affect the cost, returns and
potential liquidity of the registrant?s rights acquisitions and other
investments.
(b) Rights Acquisitions May Fail to Perform as Expected. In deciding
whether to acquire a particular film or television project, the
registrant will make certain assumptions regarding the expected future
performance and marketability of such rights acquisition. If
anticipated future performance and marketability does not occur as
expected, the financial performance of the registrant may be adversely
affected.
(c) Failure to Achieve Profitability. We have not generated any
revenues from operations to date and future financial results are
uncertain. We cannot assure you that the registrant can operate in a
profitable manner. Even if we obtain future revenues sufficient to
expand operations, increased acquisition, operating, marketing and
other expenses would adversely affect liquidity of the registrant. In
their opinion on our financial statements as of and for the period
ended September 15, 2015, our auditors have indicated that there is
substantial doubt about our ability to continue as a going concern. We
forecast our future expense levels based on our operating plans and
our estimates of future revenues. If our revenues grow at a slower
rate than we anticipate, or if our spending levels exceed our
expectations or cannot be adjusted to reflect slower revenue growth,
we may not generate sufficient revenues to achieve or sustain
profitability. In this case, the value of your investment could be
reduced or lost. We expect to continue to incur losses for the
immediate future as we build our infrastructure, continue our sales
and marketing efforts, and continue development of our services. Even
if we do achieve profitability, we may not sustain or increase
profitability on a quarterly or annual basis. Failure to achieve or
maintain profitability will materially and adversely affect the market
price of our common stock
(d) Variability in Operating Results. Our quarterly revenues will
also be difficult to forecast because the markets for our proposed
programs and services are evolving and our revenues in any period
could be significantly affected by new product announcements and
product launches by our competitors, as well as by alternative
technologies. Variations in timing of sales may cause significant
fluctuations in future operating results. In addition, because a
significant portion of our business may be derived from orders placed
for film and television programs by a limited number of large
customers, the timing of such orders can also cause significant
fluctuations in our operating results. Anticipated orders from
customers may fail to materialize. Delivery schedules may be deferred
or cancelled for a number of reasons, including changes in specific
customer or international economic conditions. The adverse impact of a
shortfall in our revenues may be magnified by our inability to adjust
spending to compensate for such shortfall. As a result of these
factors and other factors, it is likely that in some future period our
operating results will be below the expectations of securities
analysts or investors, which would likely result in a significant
reduction in the market price of our stock. Period-to-period
comparisons of our results of operations will not necessarily be
meaningful for the foreseeable future.
(e) Threat of Terrorism and War. Terrorist attacks and war could
affect the registrant?s performance and asset values. A change in the
behavior and mindset of consumers could negatively impact industry
revenues. These events are unpredictable and cannot be estimated by
the registrant.
4. Other Risks
(a) Trading Limitations under ?Penny Stock? regulation. We do not
meet the requirements for our stock to be quoted on NASDAQ, American
Stock Exchange or any other senior exchange and the tradability in our
stock will be limited under the ?Penny Stock? regulation. Under the
rules of the Securities and Exchange Commission, if the price of the
registrant's common stock on the OTC Bulletin Board is below $5.00 per
share, the registrant's common stock will come within the definition
of a ?Penny Stock.? As a result, the registrant's common stock is
subject to the ?Penny Stock? rules and regulations and its liquidity
is restricted. Broker-dealers who sell ?Penny Stocks? to certain types
of investors are required to comply with the Commission's regulations
concerning the transfer of ?Penny Stock.? These regulations require
broker-dealers to: (i) Make a suitability determination prior to
selling ?Penny Stock? to the purchaser; (ii) Receive the purchaser's
written consent to the transaction; and (iii) Provide certain written
disclosures to the purchaser. These requirements may restrict the
ability of broker/dealers to sell the registrant's common stock, and
may affect the ability to resell the registrant's common stock.
(b) Costs of Reporting and Other Requirements. The costs to meet our
reporting and other requirements as a public company subject to the
Exchange Act of 1934 will be substantial and may result in us having
insufficient funds to complete the development of our product line or
even to meet routine business obligations. If we become a public
entity, subject to the reporting requirements of the Exchange Act of
1934, we will incur ongoing expenses associated with professional fees
for accounting, legal and a host of other expenses for annual reports
and proxy statements. We estimate that these costs could range up to
$25,000 per year for the next few years and will be higher if our
business volume and activity increases but lower during the first year
of being public because we have not yet completed development of our
line of services, and we will not yet be subject to the requirements
of Section 404 of the Sarbanes-Oxley Act of 2002. As a result, we may
not have sufficient funds to complete the development of our line of
services or even to meet routine business obligations.
(c) Insurance May Not Cover All Future Liabilities. We intend to
carry commercial, general liability and comprehensive insurance on our
operations, including fire, liability, extended coverage, other
casualty insurance and key man insurance. There may be risks that are
uninsurable on terms that we believe to be economic. In addition,
losses may exceed amounts on the policies.
(d) Investing in the registrant Can Have Complicated Tax
Consequences. Persons considering an investment in the registrant are
strongly encouraged to consult their own tax advisors regarding the
tax consequences (including any U.S. federal, state, local, and
foreign taxes) of their prospective investment and the consequences of
such an investment to them. This offering is being made on the
explicit condition that each prospective investor will rely solely on
such person?s own advisor with respect to the tax consequences of
purchasing, holding and disposing of interests in the registrant.
DILUTION
If you purchase common stock in this offering, you will experience an
immediate and substantial dilution in the projected book value of the
common stock from the price you pay in this initial offering.
The book value of our common stock as of August 1, 2015 was $10,000 or
$0.00005 per share. Projected book value per share is equal to our
total assets, less total liabilities, divided by the number of shares
of common stock outstanding. Assuming completion of the offering,
there will be up to 400,000,000 common shares outstanding. The
following table illustrates the per common share dilution that may be
experienced by investors at various numbers of shares sold.
--------------------------------------------------------------------
Funding Level $1,000,000 $5,000,000 $10,000,000 $20,000,000
--------------------------------------------------------------------
Offering price $0.10 $0.10 $0.10 $0.10
--------------------------------------------------------------------
Number of Shares Sold 10,000,000 50,000,000 100,000,000 200,000,000
--------------------------------------------------------------------
Net tangible book value
per common share before offering .00 .00 .00 .00
--------------------------------------------------------------------
Increase per common share
Attributable to investors .005 .02 .033 .05
--------------------------------------------------------------------
Pro forma net tangible book value
per common share after offering .005 .02 .033 .05
--------------------------------------------------------------------
Dilution to investors .095 .08 .067 .05
--------------------------------------------------------------------
Dilution as a percentage of
Offering price 95% 80% 67% 50%
--------------------------------------------------------------------
Based on 200,000,000 common shares outstanding as of August 15, 2015
and total stockholder's equity of $10,000.
Since inception, the current shareholders have paid an aggregate
average price of $.00005 per common share in comparison to the
offering price of $0.10 per common share.
The registrant may issue equity and debt securities in the future.
These issuances and any sales of additional common shares may have a
depressive effect upon the market price of the registrant's common
shares and investors in this offering.
SELLING SECURITY HOLDERS
The following table sets forth the shares beneficially owned, as of
September 9, 2015, by the Selling Security Holders prior to the
offering contemplated by this prospectus, the number of shares each
Selling Security Holder is offering by this prospectus and the number
of shares which each would own beneficially if all such offered shares
are sold.
Beneficial ownership is determined in accordance with Securities and
Exchange Commission rules. Under these rules, a person is deemed to be
a beneficial owner of a security if that person or his/her spouse has
or shares voting power, which includes the power to vote or direct the
voting of the security, or investment power, which includes the power
to vote or direct the voting of the security. The person is also
deemed to be a beneficial owner of any security of which that person
has a right to acquire beneficial ownership within 60 days. Under the
Securities and Exchange Commission rules, more than one person may be
deemed to be a beneficial owner of the same securities, and a person
may be deemed to be a beneficial owner of securities as to which he or
she may not have any pecuniary beneficial interest. Except as noted
below, each person has sole voting and investment power.
None of the Selling Security Holders is a registered broker-dealer or
an affiliate of a registered broker-dealer. Each of the Selling
Security Holders acquired his, her or its shares pursuant to a private
placement solely for investment and not with a view to or for resale
or distribution of such securities.
On July 15, 2015, we issued Left Coast Pictures, Inc. or its
designees, 180,000,000 shares of common stock in consideration of
founding capital of $10,000 received plus a 20% stake in their
company, a private start up film distribution company.
On July 31, 2015, Left Coast Pictures designated the issuance of
172,675,000 to Black Swan Partners BT and 7,325,000 shares to the
Selling Shareholders in consideration of their interests in Left Coast
Pictures, Inc.
The percentages below are calculated based on 200,000,000 shares of
our common stock issued and outstanding as of September 9, 2015.
Name of Selling
Security
Holder
Number of
Shares
Owned by the
Selling
Security
Holder
Number of
Shares
Offered by
Selling
Security
Holder
Number of
Shares
Held After
the
Offering
Percentage
of
Total Issued
and
Outstanding
after
the Offering
(1)
Red River
Ventures LLC
3,000,000
3,000,000
0
0.00%
Lost Art
Pictures LLC
2,000,000
2,000,000
0
0.00%
Sean A McNamee
500,000
500,000
0
0.00%
Cara E Hubbell
500,000
500,000
0
0.00%
Wanda McNamee
500,000
500,000
0
0.00%
Pamela S Curley
500,000
500,000
0
0.00%
Melissa McNamee
25,000
25,000
0
0.00%
Vanessa McNamee
25,000
25,000
0
0.00%
Jonathan McNamee
25,000
25,000
0
0.00%
Nilda McNamee
25,000
25,000
0
0.00%
Robert Berner
25,000
25,000
0
0.00%
Peggy Berner
25,000
25,000
0
0.00%
Kristen Berner
25,000
25,000
0
0.00%
Mary Nicastro
25,000
25,000
0
0.00%
Thomas P McNamee
25,000
25,000
0
0.00%
William M
McNamee
25,000
25,000
0
0.00%
Mark Long
25,000
25,000
0
0.00%
Lauren Harden
25,000
25,000
0
0.00%
Sophie
Lorscheider
25,000
25,000
0
0.00%
Total
7,325,000
7,325,000
0
0.00%
(1) Assumes all of the Primary Offering and Secondary Offering shares of
common stock offered in this prospectus are sold and no other shares
of common stock are sold or issued during this offering period. Based
on 200,000,000 shares of common stock issued and outstanding as of
September 9, 2015, and 400,000,000 shares of common stock issued and
outstanding after completion of the offerings.
We may require the Selling Security Holders to suspend the sales of
the securities offered by this prospectus upon the occurrence of any
event that makes any statement in this prospectus, or the related
registration statement, untrue in any material respect, or that
requires the changing of statements in these documents in order to
make statements in those documents not misleading. We will file a
post-effective amendment to this registration statement to reflect any
material changes to this prospectus.
PLAN OF DISTRIBUTION
Our common stock offered through this offering is being made by John
Berner, our CEO and director. Our Common Stock may be sold or
distributed from time to time by Mr. Berner or directly to one or more
purchasers utilizing general solicitation through the internet, social
media, and any other means of widespread communication at a price of
$0.10 per share.
In connection with the Company?s selling efforts in the offering, John
Berner will not register as a broker-dealer pursuant to Section 15 of
the Exchange Act, but rather will rely upon the ?safe
harbor? provisions of SEC Rule 3a4-1, promulgated under the Securities
Exchange Act of 1934, as amended (the ?Exchange Act?). Mr. Berner is
exempt from registration as he 1) is not subject to a statutory
disqualification, as defined in Section 3(a)(39) of the Exchange Act;
2) will not be compensated in connection with the sale of the issuer?s
securities by the payment of commissions or other remuneration based
either directly or indirectly on transactions in securities; and 3) is
not an associated person of a registered broker-dealer. Further, Mr.
Berner?s duties are limited in Frequency and Proportion: 1) he will
remain with the Issuer in the capacity as President and CEO, 2) was
not an associated person of a broker-dealer in the previous 12 months,
and 3) has not nor will not participate in an offering of securities
by any other issuer in a 12 month period.
The Company will receive all proceeds from the sale of the 192,675,000
shares being offered. The Company will pay all expenses incidental to
the registration of the shares (including registration pursuant to the
securities laws of certain states), which we expect to be no more than
$28,500.
We cannot assure you that all or any of the shares offered under this
prospectus will be sold. No one has committed to purchase any of the
shares offered. Therefore, we may sell only a nominal amount of
shares, in which case our ability to execute our business plan might
be negatively impacted. We reserve the right to withdraw or cancel
this Offering and to accept or reject any subscription in whole or in
part, for any reason or for no reason. Subscriptions will be accepted
or rejected promptly. All monies from rejected subscriptions will be
returned immediately by us to the subscriber, without interest or
deductions. Certificates for shares purchased will be issued and
distributed by our transfer agent, VStock Transfer LLC, promptly after
a subscription is accepted and ?good funds? are received in our
account.
Deposit of Offering Proceeds
This is a direct primary, self-underwritten basis offering, so we are
not required to sell any specific number or dollar amount of
securities, but will use our best efforts to sell the securities
offered. We have made no arrangements to place subscription funds in
an escrow, trust or similar account, which means that all funds
collected for subscriptions, will be immediately available to us for
use in the implementation of our business plan.
USE OF PROCEEDS
Our offering is being made on a self-underwritten basis: no minimum
number of shares must be sold in order for the offering to
proceed. The offering price per share is set at $0.10. There is no
assurance that we will raise the full $20,000,000 as anticipated.
The principal purpose of this Offering is to allow the Company to make
acquisitions of completed motion pictures and television programs,
offer financing to early stage film projects, develop their marketing
strategy, and for general working capital. The Company intends to
apply these proceeds substantially as set forth herein; provided,
however, the Company has the complete discretion and authority to
reallocate the use of proceeds.
These proceeds will be used as follows:
Funding Level:
$1,000,00
0
$5,000,00
0
$10,000,00
0
$20,000,00
0
Gross Proceeds:
$1,000,00
0
$5,000,00
0
$10,000,00
0
$20,000,00
0
Expenses:
$28,500
$28,500
$28,500
$28,500
Net Proceeds:
Use of Proceeds:
$971,500
$4,971,50
0
$9,971,500
$19,971,50
0
Start-Up Costs(1):
$ 150,000
$
250,000
$
500,000
$
1,250,000
Marketing & Sales(2):
75,000
375,000
1,000,000
1,500,000
Film
Rights/Distribution(3)
:
500,000
3,000,000
6,500,000
14,000,000
Working Capital(4):
246,500
1,346,500
1,971,500
2,721,500
Net Proceeds Expended:
$971,500
$4,971,50
0
$9,971,500
$19,971,50
0
(1) Start-Up Costs include obtaining sufficient office space of
approximately 2,500 square feet; salaries to Mr. Berner of
$60,000 per year, an assistant for $36,000 and additional staff
dependent upon the size and scope of operations dependent upon
the amount of funds raised in the Offering.
(2) The Company intends to engage the services of outside sales
companies now employed in the business of selling films and
television programming to their established clientele, until such
time that the Company has built up its own customer base.
(3) Dependent upon the amount of funds raise in this Offering, the
Company will acquire films and television programming for its own
library.
(4) Funds left in the Company?s bank accounts for the purpose of the
day to day operations including any potential extraordinary items
or opportunities that meet the business plan in the Circular.
If the company does not sell all of the shares and therefore does not
raise the full amount intended, the company will revise its use of
proceeds accordingly. Management will always use its best judgment in
the allocation of funds even if less than the full offering amount is
received by the company.
DESCRIPTION OF BUSINESS
The Company
Media Assets Group, Inc., a Wyoming corporation (?the Company?) was
incorporated under the laws of the State of Wyoming on June 17, 2015.
Media Assets Group, Inc. is currently in in a pre-developmental stage,
having completed out concepts, identified target growth areas in the
industry, and are now seeking funding in order to fully develop and
market our services. To date the company has not engaged in any
material operations nor generated any revenue.
Business Objectives and Strategies
The registrant is seeking to create a broad portfolio of entertainment
assets. The registrant believes that superior returns in the motion
picture and television programs are generated by (i) the ?breakout?
success of individual investments, as well as, (ii) the eventual sale,
possibly by way of a public offering, of a wide portfolio of assets
created or acquired in pursuit of such ?breakout? success. A recent
example of the latter is the sale of the 700 title Miramax film
library to a group of investors for US$660 million in 2010.
To maximize exit value, the registrant will focus primarily on the
acquisition of completed motion pictures and television programs (so-
called ?library assets?) allowing the registrant to achieve a greater
degree of scale. The registrant has no intention of producing its own
content.
While the possibility for ?breakout? success can be optimized through
detailed analysis, access to captive capital and control over
investment timing, it is difficult to predict exactly when and where
?lightning will strike.? The building of a valuable portfolio of
commercial entertainment assets, however, can be planned to a much
greater degree. New investments replenish and drive the value of any
library of motion pictures and television programs.
Each new motion picture and television program bears with it an option
for ?breakout? success. The assets in aggregate provide the exit value
as well as the financial hedge to the risks contained within the
portfolio of ?breakout? options financed. Proper management and
planning is as important as ?staying in the game.?
The registrant?s investment strategy will be developed with
consideration of the following:
? strong reliance on continual quantitative research to drive
capital allocation in an industry that often functions merely on ?gut
feeling.? The Principal has spent the past five years building (i) an
unparalleled database on the performance of entertainment assets, and,
(ii) a process for keeping such information current.
? a reliance not only on data but on constant and iterative testing
of investment and production decisions throughout the acquisitions,
development, production and distribution process against market
opinions. This will be achieved by an open, direct and continuing
dialogue with leading and creditworthy distributors from territories
around the world, many of whom will be business partners of the
registrant.
? a paradigm shift in the traditional distribution and financing
models driven particularly by the decline in the direct-to-video value
of entertainment assets which has historically provided a downward
hedge to ?busted? theatrical films, i.e. films which did not
ultimately enjoy their intended release (or level of release) in
cinemas. Without this hedge it has become much more difficult and
risky for independent distributors to pre-buy product. This has
resulted in a downward shift in price points as well as a shift toward
product that is hedged by television value as opposed to direct-to-
video value such as name brand ?A-list? cast-driven action thrillers
and higher budget effects-driven films which are expected to be a
primary focus of the registrant.
? value-driven as opposed to cost-driven investment decisions. Most
of the independent production industry uses cost to justify value as
opposed to determining value in order to arrive at an economically
justifiable level of cost. This can partially be explained by the poor
negotiating position of undercapitalized financiers and producers.
? a shift in the production decisions of major studios who have
retreated to smaller release slates of ever more costly so-called
?tent-pole? films with budgets approaching or even exceeding $300
million in production cost alone. This has provided a significant
opening in the marketplace for a quality-oriented and well-capitalized
company to operate at lower budget levels. The focus of major studios
on lower volume at higher price points and the resulting decrease in
competition for production resources has driven down salaries for
stars and other high-profile creative talent among other costs.
? the inability of the vast majority of industry players to make
capital allocation decisions that lead to the green light of a motion
picture or television program. This results in an inability to
properly plan and negotiate price points for talent, crew, equipment,
services and locations which in turn leads to a massive waste of
capital and resources and results in inferior product. This is due to
the vast majority of attention being redirected from production and
creative management post-capital allocation decision to continuing
search for pieces to the remaining financing under the duress of
progressing a partially funded project.
? independent distributors value and are willing to pay a premium
for certainty in terms of how and when projects are realized. In the
current market, buyers seeking ? say ? 12 motion pictures for their
theatrical slate often have to acquire 18 ? 24 to account for the fact
that many announced projects never commence production (let alone
commence production with the creative elements originally announced).
This creates substantial frustration and potential problems for a
territorial distributor who requires a steady stream of product of a
certain volume. Too few motion pictures mean underutilization of
overhead, too many strain of operational and financial resources.
? ?green-light? capacity will make the registrant an attractive
partner to film production facilities, local government, co-financiers
and debt providers who lack such capacity. The registrant will seek to
syndicate part of its investment risk to these third parties on terms
attractive to it. The registrant will at all times retain ownership
and control over the asset financed.
? many US distributors are seeking partners to fund marketing costs
(also known as Print & Advertising Costs or P&A Costs) for third party
productions required to complete their annual slate of theatrical
releases. A wide domestic release has become the principal value
driver and will significantly increase not only the domestic but the
worldwide value of a motion picture. The capacity to selectively
finance or co-finance P&A Costs will give the registrant greater
control over its ability to maximize value and will make it a more
attractive business partner to distributors around the world. All of
the major studios have lucrative foreign output deals with pay and
free television broadcasters which are generally triggered by a wide
US theatrical release (the exact scope and definition of which will
vary in each instance). As their own production volume has declined,
these studios will often make so-called ?slots? available under these
output agreements to qualifying motion pictures financed by third
parties such as the registrant in return for a fee.
? the relative void created by the recession-related withdrawal of
significant number of equity funds and high net worth private
individuals from the business of financing motion pictures and
television programs and the crisis-related financial strain from which
many industry participants have not yet recovered. This has created
continuing opportunity both for the investment into new motion
pictures and television programs as well as the acquisition of
existing library assets.
Development Financing
Development Financing includes the acquisition of underlying rights
(such as motion picture and television program rights to novels,
articles, life stories or foreign films suitable for remake),
treatments and screenplays, payment to writers and consultants as well
as payment for the budgeting, scheduling, location scouting and
packaging of motion pictures and television programs for production.
It will provide the registrant with (i) a significantly greater degree
of control over the assets financed, and (ii) a strong competitive
advantage vis-a-vis other producers and financiers that limit
themselves to production and distribution risk only.
Many of the fully-packaged films available to the independent
marketplace for late-stage acquisition and financing have already been
thoroughly reviewed and rejected by the major industry participants.
Subsequently, fully packaged films with high commercial potential tend
to be the exception rather than the rule (although the registrant will
carefully consider these projects as well).
Development Financing will allow the registrant to secure ownership to
higher quality material than is generally available at a later stage.
Major studios as most large corporations often move slowly allowing
the registrant to be highly competitive in selected situations.
Twilight, The Hunger Games, Taken, Resident Evil, to name but a few,
were all the result of early stage Development Financing.
This type of financing will significantly raise the profile of the
registrant in the creative community and allow the registrant to build
partnerships with A-list talent and high-profile directors. This will
credibility and facilitate the packaging of development projects with
major directors and actors during the pre-production phase ? a key
challenge to any independent financier.
The primary development focus of the registrant will be on (i) action
and thriller product in the vein of Taken, The American, Colombiana,
The Transporter and Hanna, and (ii) on higher budgeted visual effects
driven genre films such as District 9, Underworld and Resident Evil.
Both of these types of films are a suitable fit for a new theatrical
landscape in which studios are producing fewer, ever more ambitious
?tentpole? films such as the Dark Knight and the Harry Potter series.
Consequently, both types are well suited to an independent financier
seeking not only the ?breakout? option value of individual investments
but also the long-term portfolio value generated through the creation
and aggregation of a large number of entertainment assets.
In all cases and throughout the development process, the registrant
will seek the advice and guidance of key distributors on an iterative
basis from first acquisition of intellectual property. The Principal
has extensive relationships with such distributors, many of whom are
clients of the Consulting registrant.
The goal will be to secure upfront and firm distribution commitments
with fixed payments, so-called ?minimum guarantees? or ?MGs,? which
are due on delivery of the motion picture or television program (see
also the ?Production Financing? criteria described in the next
section).
The distributors? involvement ensures a strong and current commercial
perspective validated not only by internal experience and research but
also by a continually changing outside marketplace. The amount of the
MGs secured will validate the size of the eventual budget of the
motion picture or television program.
The registrant will have full ownership and control of the
intellectual property it develops. In the case of ?breakout? success,
the registrant will be able to reap significant rewards by way of
control over sequel, spin-off and ancillary rights such as licensing
and merchandising. Had Twentieth Century Fox not relented control to
George Lucas over the sequel and merchandising rights to the original
Star Wars released in 1977, the director would likely not be the
multi-billionaire he is today.
Given the early stage nature of Development Financing, the registrant
will limit its total exposure to it at any given time to the lesser of
(i) US$2 million, and, (ii) 5% of the assets under management of the
registrant.
The Development Financing will be repaid with a premium from the
budget of a motion picture or television program on the earlier of (i)
start of production, and (ii) full closing of Production Financing. In
addition, it will entitle the registrant to a significant portion of
the economic upside.
Prints and Advertising (P&A) Financing
P&A Financing refers to the financing of marketing costs for release
of motion pictures in movie theaters. The term comes from the two
major components of such marketing costs; (i) the creation of physical
print copies of the film, and, (ii) advertising.
The advent of digital print distribution has dramatically reduced the
required outlay for creating and delivering copies of a motion picture
to individual movie houses while the cost of advertising has
significantly increased with the competition for eyeballs.
P&A Financing consists of the initial commitment (through opening
weekend) as well as any follow on investment required in case of
success. Additional monies are used to ?chase? revenue potential from
a ?hit.?
The registrant will focus on commercial films suitable for wide
release (i.e. on a minimum of 2000 screens) in the United States. It
believes that these films have the highest probability of recouping
their P&A Financing as well as generating significant additional
returns. The registrant?s Production Financing strategy will focus on
motion pictures meriting such wide release.
The financial crisis and the major studio?s shift in focus on ever
fewer and much larger ?tentpole? films has created a capital shortage
for the marketing costs of independent films meriting a wide
commercial release. Many independently financed producers are having
difficulty obtaining P&A funding from distributors and other sources.
This trend has coincided with the shifting of commercial prospects of
motion pictures in ancillary markets (such as online, DVD and
television) towards films that have benefited from a wide theatrical
release. So-called ?busted theatricals,? i.e. films that were produced
with the intention of theatrical exploitation but went straight to
video instead, now have significantly less value in later distribution
windows than before.
An additional advantage to distributors in accessing third-party P&A
Financing is the favorable GAAP treatment of off-balance sheet funding
of theatrical release costs. Under US GAAP, if the P&A is provided by
the studio or distributor, it can no longer be capitalized and is
required to be expensed in the current period.
As indicated above, wide theatrical release via a studio partner often
triggers domestic pay and foreign television deals that can
significantly increase the value of the worldwide rights of a motion
picture. Given the reduced volume of production at the major studios,
slots for these domestic foreign television deals are often available
to third party producers if P&A costs can be financed.
Subsequently, the capacity to commit P&A Financing in selected
circumstances will be strong competitive advantage for the registrant
and permit it to generate better returns.
An attractive aspect of P&A financing is that it is funded on a last-
in, first-out basis and is generally committed late in the life cycle
of a film (after completion). The final capital allocation decision
for P&A financing is generally made after completion of a motion
picture. This allows the commercial prospect to be independently
verified and tested by way of test screenings and focus groups. A
number of third party companies such as Ipsos Worldwide Motion Picture
Group provide these services.
P&A financing has a high velocity of capital as funding commences just
before the theatrical release of the film and recoups from first
proceeds. A senior debt ?ultimates? facility can accelerate this
further. Banks will finance up to 80% of major studio ultimate revenue
statements provided starting two months from theatrical release.
?Ultimates? are a distributor?s internal estimates of revenue
potential through all distribution windows of a film.
P&A will be repaid from all receipts (net of exhibitor / movie theater
share, fees to the distributor handling the marketing and physical
distribution, guild residuals and any box office bonuses or other
participations) generated from exploitation of the motion picture in
the United States in first position together with either (i) a premium
and an on-going profit participation, or (ii) an override to the
distribution fee charged by the major studio or independent
distributor handling the actual theatrical distribution of the film.
Rights Acquisition
In order to supplement its investment into new motion pictures and
television programs, the registrant will build out its entertainment
asset value through the careful acquisition of copyright and worldwide
distribution rights to so-called library titles, i.e. motion picture
and television programs that have completed their first cycle of
exploitation. Focus will be on titles with recognizable actors and
resulting television value.
The registrant sees specific opportunity in the field of motion
picture and television program library acquisition due to the fact
that asset ownership in the independent film business is extremely
fragmented and there is little to no liquidity for individuals looking
to sell one or a few titles.
While larger libraries often sell for significant premiums to
discounted cash flow, ?one-off? titles or small groups of titles can
be had a significant discounts. This is especially true in the general
current economic environment and the lack of liquidity in the
entertainment industry specifically.
Industry Overview
The motion picture industry involves the production and distribution
of feature films. Production involves the development and physical
production of feature-length films. Distribution involves the domestic
and international marketing and exploitation of those films in a
variety of ways, including theatrical exhibition, home video sales and
rentals, licensing fees from pay and broadcast television operators
and revenue from ancillary markets. The major studios have leading
industry positions based on the number of films that they release. The
major studios are generally part of large diversified corporations
with production and distribution operations and established
relationships with exhibitors, creative talent and others involved in
the industry. The MPAA defines the major studios as Metro-Goldwyn-
Mayer Inc. (including MGM Studios, MGM Pictures, Orion and UA Films),
Paramount Pictures Corporation, Sony Pictures Entertainment, Inc.
(including Columbia Pictures), The Walt Disney Company (including
Buena Vista, Miramax Films and Touchstone), Twentieth Century Fox Film
Corp., Universal Studios and Warner Bros. (including Castle Rock
Entertainment, New Line Cinema and Turner). In the past seven years,
the total number of feature films released in the United States has
remained relatively stable, with 471 released in 1996 compared to 473
released in 2003, according to the MPAA. In addition to distributing
films developed and produced by their wholly owned studios, the major
studios also distribute films of independent production companies and
independent film studios.
Competition
The film and television business is highly competitive. Our
competition includes major film studios, well capitalized and
established independent companies, as well as the burgeoning
television and online sectors. We will be competing with well-
connected operations at every stage of development. We will have to
compete with these companies on the basis of the quality of our
product and our strategic growth strategy that sees us identifying
projects that will interest consumers and releasing those projects at
the most opportune times to take advantage of the less-saturated film
seasons.
Employees
The company currently has two (2) employees. We do not anticipate
hiring any additional employees for the balance of the calendar year.
Principal Executive Office
The Company?s principal executive office is located at 308 N. Sycamore
Ave, Suite 104, Los Angeles, CA 90048.
MANAGEMENT?S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
General
The following discussion of our financial condition and results of
operations should be read in conjunction with the unaudited
consolidated financial statements, including notes thereto, for the
periods ended September 15, 2015, which is included herein.
Overview
The Company was organized on May 4, 2015 under the laws of the State
of Wyoming. The Company?s headquarters are located in Los Angeles,
California. The Company?s business model is to be an entertainment
asset acquisition, management and distribution company with a focus on
audiovisual content including feature films, television programming
and web series.
Results of Operations
As an early stage operating company with its current business model,
we have generated no revenues and incurred operating expenses of
$1,570 for a net loss in the amount of ($1,570). We have an
accumulated deficit of $(1,570) as of September 15, 2015. Our
operating expenses consisted of legal and audit fees of $1,570.
Operating expenses will continue to increase as we pursue this
offering and implement sales and marketing initiatives.
Plan of Operations
The registrant has not yet developed its film and television
acquisition and distribution programs.
The main uncertainties or obstacles involved before planned operations
can commence include raising sufficient funds to market and advertise,
hire key consultants, sales staff and implementing services.
If we are unable to raise sufficient funds or obtain alternate
financing, we may never complete development and become profitable.
Our current cash balance is estimated not to be sufficient to fund our
current operations. Left Coast Pictures, Inc. has verbally agreed to
loan any amounts up to $100,000 needed to run operations. Any loan
provided by Left Coast shall be binding, with an interest rate of five
percent per annum and a term of one year. However, we still need raise
sufficient funds to complete the development of our service line.
No other financing plans are in place. We may never obtain the
necessary financing to complete product development and begin
operations.
We anticipate that in the event we are able to raise a minimum of
$20,000,000 in the next 12 months, that we would be able to acquire
film and television rights that would generate at least $7,000,000 per
year in positive cash flow using the formula below. Our initial goal
is to obtain films and television programming in the horror genre,
which generally requires low budgets to complete. Based on past
performance of small independent film distributors, we have collected
historic data showing an average film in the $1-2 million budget
range, produces approximately $211,000 in income in the first 2 years
of distribution. Our goal would be to acquire these films for $50,000
each and to allocate and additional $50,000 in distribution and
marketing expenses. After recouping our expenses, we would enjoy 50%
of the revenue stream for a period of 5 years, while adding the film
to our library. There is no assurance that any of the films we acquire
will produce any income and may result in a total loss of our
investment.
Independent film makers generally do not have the budget to hire
distribution firms once the film is completed. By purchasing the low
budget film upon its completion, we enable the producer to benefit on
the same magnitude he/she would if they had the funds to hire a sales
company, pocket a $50,000 sales fee, and have their film distributed
worldwide through our proprietary platform. At the same time, we add
to our library and build asset value.
We anticipate that if we were able to raise $20,000,000, this formula
would enable us to acquire up to 100-150 films in the first year. In
the event we are not successful in selling all of the securities to
raise $20,000,000, we would give priority to allocating capital to
acquisitions, development of our distribution platform, and to develop
sales in the industry. Any remaining capital would be used to fund our
working capital needs which we anticipate to be no more than 15-20% of
our revenue stream.
Liquidity & Cash Flow
We have not received any revenues to date. Until we are able to raise
funds to pursue our business plan and generate material revenues, our
activities will be restricted.
During the period from inception through September 15, 2015, we
received proceeds of $10,000 from the sale of common stock to Lost Art
Pictures LLC, a private investor, resulting in net cash provided by
financing activities.
Our current cash balance is estimated not to be sufficient to fund our
current operations. Left Coast Pictures, Inc. has verbally agreed to
loan any amounts up to $100,000 needed to run operations. Any loan
provided by Left Coast shall be binding, with an interest rate of five
percent per annum and a term of one year. However, no other financing
plans are in place. We will still need to raise sufficient funds to
complete the development of our service line.
Current and Future Financing Needs
Our cash balance is not sufficient to fund our limited levels of
operations for any period of time. We have been utilizing and may
utilize funds from John Berner our Chief Executive Officer and
Director, who has informally agreed to advance funds to allow us to
pay for offering costs, filing fees, and professional fees. Mr.
Berner, however, has no formal commitment, arrangement or legal
obligation to advance or loan funds to the company. In order to
continue our plan of operations for the next twelve-month period, we
require a minimum of $250,000 of funding from this offering.
We have an accumulated net loss of ($1,570) as of September 15, 2015.
Management recognizes the Company?s need for capital is paramount to
its future success and requires obtaining the funds being raised in
this Offering. Management believes that this is the primary key to
achieving success. The actual amount of funds we will need to operate
is subject to many factors, some of which are beyond our control.
Going Concern
The Company does not yet have a history of financial stability. The
principal sources of liquidity have been the issuance of convertible
debt, equity securities and prior year?s deferral of officers?
compensation. These factors raise doubt about the Company?s ability to
continue as a going concern. The ability of the Company to continue
operations is dependent on the success of management?s plans, which
include the operational business model described herein and the
success of the Company?s current securities offering.
The Company requires the funds obtained from this offering to finance
the growth of its current and expected future operations and believes
its current available cash along with anticipated cash will be
insufficient to meet its cash needs for the long-term future.
Off-Balance Sheet Arrangements
We do not have any unconsolidated special purpose entities and we do
not have significant exposure to any off-balance sheet arrangements.
DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
The table below summarizes key full time contributors during the
startup phase of the company. All of these individuals and several
more are key to the growth phase of the company.
Name
Position
Age
John Berner
Founder/CEO, Director
47
John Berner, Chief Executive Officer
From 1998-to present, Mr. Berner has acted as Founder and CFO of
Hollywood Operating System, known as Hollywood O.S. The company,
located in Burbank, CA, is a publishing and multimedia firm whose
primary function has been to promote and sell its publication "Extra
Work for Brain Surgeons", a 200 page guide updated every six months
which highlights local Los Angeles area companies involved in film
production and casting. The publication is a cross between an
employment guide and directory, and is sold on Amazon.com,
BarnesandNoble.com, local bookstores and newsstands in the Los Angeles
area. Hollywood O.S. offers digital photos and film clips of talent
for hire via it's website. Under Mr. Berner's direction, Hollywood
O.S. makes investments in film festivals, print publications and video
games.
From 1996-2015, Mr. Berner has had a broad spectrum of experience in
the business world, which includes consulting private companies in
going public through reverse merger with existing public companies or
by way of filing registration statements with the SEC. During this
period, Mr. Berner successfully assisted over 40 companies in
completing this process and has consulted them in raising over $50
million through the public markets.
From 2013-2014, Mr. Berner acted as Managing Member of Riviera Capital
Management, LLC which served as a vehicle to manage Mr. Berner's own
capital. Mr. Berner acted as the sole officer and director and the
company had no outside investors other than himself and, as such, Mr.
Berner never offered investment advice nor acted in an investment
advisor capacity. Riviera's function was to participate in various IPO
and SPO offerings on behalf of its own account.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Since inception, we have not paid any compensation to our officers or
directors. Mr. Berner was granted 20,000,000 common shares in exchange
for his services as CEO of the Company. Although Mr. Berner has no
formal employment agreement in place, he has agreed to act in a
management capacity with the registrant for a minimum of three years.
We do not have any standard arrangements by which directors are
compensated for any services provided as a director. No cash has been
paid to the directors in their capacity as such. The Company expects
that if the proceeds of this offering are deemed to be reasonably
sufficient, it will thereafter seek to provide salaries to our
officers. We do not expect to separately compensate our directors.
We do not have an employment or consulting agreement with any officers
or Directors. The Company intends to enter into employment agreements
with our officer following the offering. The amount raised pursuant to
this offering will weigh heavily with regards to the relative
compensation offered to our officer.
The following compensation was paid to the individuals listed below.
Name
Capacities in
which
Compensation
Was Received
Cash
Compensation
($)
Share
Compensation
Total
Compensation($)
John
Berner
Chief Executive
Officer and
President
$
-
20,000,000
(1)
$
-
(1) On June 18, 2015 the Company issued 20,000,000 of its authorized
common stock to its CEO and Director, John Berner, in exchange for
executive services rendered.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITYHOLDERS
The following tables set forth the ownership, as of the date of this
prospectus, of our common stock by each person known by us to be the
beneficial owner of more than 5% of our outstanding common stock, our
directors, and our executive officers and directors as a group. To
the best of our knowledge, the persons named have sole voting and
investment power with respect to such shares, except as otherwise
noted. There are not any pending or anticipated arrangements that may
cause a change in control.
The information presented below regarding beneficial ownership of our
voting securities has been presented in accordance with the rules of
the Securities and Exchange Commission and is not necessarily
indicative of ownership for any other purpose. Under these rules, a
person is deemed to be a "beneficial owner" of a security if that
person has or shares the power to vote or direct the voting of the
security or the power to dispose or direct the disposition of the
security. A person is deemed to own beneficially any security as to
which such person has the right to acquire sole or shared voting or
investment power within 60 days through the conversion or exercise of
any convertible security, warrant, option or other right. More than
one person may be deemed to be a beneficial owner of the same
securities. The percentage of beneficial ownership by any person as of
a particular date is calculated by dividing the number of shares
beneficially owned by such person, which includes the number of shares
as to which such person has the right to acquire voting or investment
power within 60 days, by the sum of the number of shares outstanding
as of such date plus the number of shares as to which such person has
the right to acquire voting or investment power within 60 days.
Consequently, the denominator used for calculating such percentage may
be different for each beneficial owner. Except as otherwise indicated
below and under applicable community property laws, we believe that
the beneficial owners of our common stock listed below have sole
voting and investment power with respect to the shares shown.
Name
Number of Shares
Percentage
Percentage after
Offering
Black Swan
Partners BT(1)
172,675,000
86.3%
43.2%
John Berner
20,000,000
10%
5%
Officers and
Directors
20,000,000
10%
5%
(1) Sean McNamee and Cara Hubbell are the Trustees for Black Swan
Partners BT and, as such, have voting control of the Trust.
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
On June 29, 2015, the Company entered into a joint venture agreement
with Left Coast Pictures for the purpose of combining the parties?
efforts and assets in producing, acquiring, and distributing
independent films and television programming. Pursuant to the terms of
the agreement, the Company has issued 180,000,000 shares of its common
stock to Left Coast Pictures, Inc., and agreed to provide the funding
necessary to build the distribution platform and for the acquisition
of film and television licensing, at a minimum of $250,000. In
exchange, Left Coast has agreed to issue the Company an interest in
their Series A Preferred Stock with a conversion rate equal to twenty
(20) percent of the current issued and outstanding shares of Left
Coast at the time of conversion. In addition, Left Coast Pictures,
Inc. has verbally agreed to loan any amounts up to $100,000 needed to
run operations. Any loan provided by Left Coast shall be binding, with
an interest rate of five percent per annum and a term of one year.
Left Coast Pictures has designated Black Swan Partners the designee of
the 172,675,000 shares of common stock issued by the Company to Left
Coast. Black Swan Partners BT, is controlled by Sean A McNamee,
Trustee. The remaining 7,325,000 shares were issued to the Selling
Shareholders for their ownership interests in Left Cost Pictures, Inc.
On July 1, 2015, the Company entered into a share purchase agreement
with Lost Art Pictures. Pursuant to this agreement, the Company agreed
to issue 2,000,000 shares of its common stock for a purchase price of
$10,000.
On July 29, 2015, the Company entered into a stock purchase agreement
with Red River Ventures, LLC. Pursuant to this agreement, Red River
Ventures may purchase up to five million dollars ($5,000,000) of the
Company?s common stock. As a condition for execution of this
agreement, the Company has agreed to issue Red River Ventures three
million (3,000,000) of its common shares being offered in this
offering.
LITIGATION
Although we may become subject to litigation or other legal
proceedings from time to time in the ordinary course of our business,
we are not a party to any pending legal proceedings and are not aware
of any material threatened legal proceeding.
SECURITIES BEING OFFERED
We have authorized capital stock consisting of 500,000,000 shares of
common stock, $0.001 par value per share (?Common Stock?). As of the
date of this filing and taking into account the Share Transactions, we
have 200,000,000 shares of Common Stock issued and outstanding.
The company is hereby offering for sale to the public, 192,675,000
shares of its common stock at an initial price of $0.10 per share with
a one thousand (1,000) share minimum and no maximum number of shares
per buyer, up to the remaining amount available for sale without
exceeding $20,000,000.
Common Stock
The holders of outstanding shares of Common Stock are entitled to
receive dividends out of assets or funds legally available for the
payment of dividends of such times and in such amounts as the board
from time to time may determine. Holders of Common Stock are entitled
to one vote for each share held on all matters submitted to a vote of
shareholders. There is no cumulative voting of the election of
directors then standing for election. The Common Stock is not entitled
to pre-emptive rights and is not subject to conversion or redemption.
Upon liquidation, dissolution or winding up of our company, the assets
legally available for distribution to stockholders are distributable
ratably among the holders of the Common Stock after payment of
liquidation preferences, if any, on any outstanding payment of other
claims of creditors.
Dividends
The Company has never declared or paid any cash dividends on its
common stock or preferred stock and currently intends to retain any
future earnings to finance the expansion of its business. As a result,
the Company does not anticipate paying any cash dividends on its
common stock in the foreseeable future.
?
FINANCIAL STATEMENTS
MEDIA ASSETS GROUP, INC.
Balance Sheet
September 15, 2015
ASSETS
Cash
$
8,430
Other Assets(1)
0
Total Assets
$
8,430
LIABILITIES AND STOCKHOLDER?S EQUITY
LIABILITIES
Accounts Payable
$
0
Total Liabilities
0
STOCKHOLDER?S EQUITY
Common stock, $0.001 par value, 500,000,000 shares
authorized; 200,000,000 shares issued and outstanding
10,000
Accumulated deficit
(1,570
)
Total Stockholder?s Equity
8,430
Total Liabilities and Stockholder?s Equity
$
8,430
(1) Value of Preferred Shares in Left Coast Pictures, Inc.
prior to the launch of the Joint Venture
MEDIA ASSETS GROUP, INC.
Statement of Stockholders? Equity
May 4, 2015 (inception) - September 15, 2015
Beginning Balance, May 4, 2015
$
0
Issuance of Common Stock
200,000,000 shares par value $0.001
10,000
Additional Paid in Capital Organizational Loss
(1,570)
Ending Balance, September 15, 2015
$
8,430
MEDIA ASSETS GROUP, INC.
Statement of Cash Flows
May 4, 2015 (inception) - September 15, 2015
Cash flows from operating activities
$
?
Net loss
(1,570)
Changes in operating assets and
liabilities:
10,000
Net Cash used in operating activities
1,570
Cash flows from financing activities
Proceeds from sale of common stock
$
10,000
Cash at beginning
Cash at end
$
8,430
MEDIA ASSETS GROUP, INC.
Statement of Operations
September 15, 2015
REVENUES
$
?
EXPENSES
Organization costs
1,570
Total Other Expenses
1,570
NET LOSS
$
(1,570
)
TOTAL WEIGHTED AVERAGE SHARES
200,000,000
BASIC EARNINGS PER SHARE ATTRIBUTABLE TO COMMON
STOCKHOLDER
$
(0.001
)
The accompanying notes are an integral part of these financial
statements.
MEDIA ASSETS GROUP, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION
Media Assets Group, Inc. (the ?Company?) was formed as a Wyoming
corporation on May 4, 2015 to acquire film and television libraries.
The Company is internally managed and intends on distributing these
assets through relationships with independent distributors.
The Company was initially capitalized through the Issuance of One
Hundred Seventy Three Million Shares of Corporate Stock (100% of the
Issued Common Stock Shares) to Black Swan Partners BT for a 20% stake
in Left Coast Pictures, Inc., and the sale of Two Million Shares of
Corporate Stock to Lost Art Pictures LLC for a price of $0.005 per
share.
As of September 1, 2015, the Company has not yet commenced
operations and has not entered into any contracts to acquire any
intellectual property.
NOTE 2. BASIS OF ACCOUNTING:
The accompanying financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of
America (?GAAP?).
Use of Estimates
The preparation of the financial statements in conformity with GAAP
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. Actual events and results could differ from those
assumptions and estimates.
Organizational and Offering Costs
The Company expenses organization costs as incurred and offering
costs, when incurred, will be deferred and charged to shareholders?
equity.
Revenue Recognition
Revenues are earned and are recognized in accordance with FASB ASC
Topic 605 Revenue Recognition and Concepts Statement 5, Recognition
and Measurement in Financial Statements of Business Enterprises,
paragraph 83(b) states that ?an entity?s revenue-earning activities
involve delivering or producing goods, rendering services, or other
activities that constitute its ongoing major or central operations,
and revenues are considered to have been earned when the entity has
substantially accomplished what it must do to be entitled to the
benefits represented by the revenues?.
Accounts Receivable
Accounts receivable are reported at the customers? outstanding
balances, less any allowance for doubtful accounts. Interest is not
accrued on overdue accounts receivable.
Allowance for Doubtful Accounts
An allowance for doubtful accounts on accounts receivable is charged
to operations in amounts sufficient to maintain the allowance for
uncollectible accounts at a level management believes is adequate to
cover any probable losses. Management determines the adequacy of the
allowance based on historical write-off percentages and information
collected from individual customers. Accounts receivable are charged
off against the allowance when collectability is determined to be
permanently impaired.
Stock Based Compensation
When applicable, the Company will account for stock-based payments to
employees in accordance with ASC 718, ?Stock Compensation? (?ASC
718?). Stock-based payments to employees include grants of stock,
grants of stock options and issuance of warrants that are recognized
in the consolidated statement of operations based on their fair values
at the date of grant.
The Company accounts for stock-based payments to non-employees in
accordance with ASC 505-50, ?Equity-Based Payments to Non-
Employees.? Stock-based payments to non-employees include grants of
stock, grants of stock options and issuances of warrants that are
recognized in the consolidated statement of operations based on the
value of the vested portion of the award over the requisite service
period as measured at its then-current fair value as of each financial
reporting date.
The Company calculates the fair value of option grants and warrant
issuances utilizing the Binomial pricing model. The amount of stock-
based compensation recognized during a period is based on the value of
the portion of the awards that are ultimately expected to vest. ASC
718 requires forfeitures to be estimated at the time stock options are
granted and warrants are issued to employees and non-employees, and
revised, if necessary, in subsequent periods if actual forfeitures
differ from those estimates. The term ?forfeitures? is distinct from
?cancellations? or ?expirations? and represents only the unvested
portion of the surrendered stock option or warrant. The Company
estimates forfeiture rates for all unvested awards when calculating
the expense for the period. In estimating the forfeiture rate, the
Company monitors both stock option and warrant exercises as well as
employee termination patterns. The resulting stock-based compensation
expense for both employee and non-employee awards is generally
recognized on a straight-line basis over the period in which the
Company expects to receive the benefit, which is generally the vesting
period.
Loss per Share
The Company reports earnings (loss) per share in accordance with ASC
Topic 260-10, "Earnings per Share." Basic earnings (loss) per share is
computed by dividing income (loss) available to common shareholders by
the weighted average number of common shares available. Diluted
earnings (loss) per share is computed similar to basic earnings (loss)
per share except that the denominator is increased to include the
number of additional common shares that would have been outstanding if
the potential common shares had been issued and if the additional
common shares were dilutive. Diluted earnings (loss) per share has
not been presented since there are no dilutive securities.
Cash and Cash Equivalents
For purpose of the statements of cash flows, the Company considers
cash and cash equivalents to include all stable, highly liquid
investments with maturities of three months or less.
Concentration of Credit Risk
The Company primarily transacts its business with one financial
institution. The amount on deposit in that one institution may from
time to time exceed the federally-insured limit.
Business segments
ASC 280, ?Segment Reporting? requires use of the ?management approach?
model for segment reporting. The management approach model is based on
the way a company?s management organizes segments within the company
for making operating decisions and assessing performance. The Company
determined it has one operating segment as of August 31, 2015.
Income Taxes
The Company accounts for its income taxes under the provisions of ASC
Topic 740, ?Income Taxes.? The method of accounting for income taxes
under ASC 740 is an asset and liability method. The asset and
liability method requires the recognition of deferred tax liabilities
and assets for the expected future tax consequences of temporary
differences between tax bases and financial reporting bases of other
assets and liabilities.
Recently Issued Accounting Pronouncements
In April 2014, the Financial Accounting Standards Board (?FASB?)
issued ASU 2014-08, ?Reporting Discontinued Operations and Disclosures
of Disposals of Components of an Entity?. This new standard changes
the criteria for determining which disposals can be presented as
discontinued operations and modifies related disclosure requirements.
Under the new guidance, a discontinued operation is defined as a
disposal of a component or group of components that is disposed of or
is classified as held for sale and represents a strategic shift that
has (or will have) a major effect on an entity?s operations and
financial results. The guidance is effective as of the first quarter
of 2015, and it does not have a material effect on the financial
statements.
In May 2014, the FASB issued ASU No. 2014-09, ?Revenue from Contracts
with Customers?. This new standard will replace all current U.S. GAAP
guidance related to revenue recognition and eliminate all industry-
specific guidance. The new revenue recognition standard provides a
unified model to determine when and how revenue is recognized. The
core principle is that a company should recognize revenue to depict
the transfer of promised goods or services to customers in an amount
that reflects the consideration to which the entity expects to be
entitled in exchange for those goods or services. This guidance will
be effective beginning in 2017 and can be applied either
retrospectively to each period presented or as a cumulative-effect
adjustment as of the date of adoption. Management is evaluating the
impact of adopting this new accounting standard on the financial
statements.
In June 2014, the FASB issued ASU 2014-10, ?Development Stage
Entities.? This new standard eliminates the distinction between
entities that are in the development stage from other entities in
GAAP. The requirements to present inception-to-date information, label
the financial statements as those of a development stage entity and
disclose in the first year in which the company is no longer
considered to be in the development stage that in prior years it had
been in the development stage has also been eliminated. In addition,
FASB ASU 2014-10 eliminates the requirement for development stage
entities to disclose the development stage activities in which the
company is engaged.
The Financial Statements of the Company have been prepared on the
accrual basis of accounting in accordance with accounting principles
generally accepted in the United States of America (U.S. GAAP).
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NOTE 3. INCOME TAXES
Deferred income tax assets and liabilities are computed annually for
differences between financial statement and tax bases of assets and
liabilities that will result in taxable or deductible amounts in the
future based on enacted tax laws and rates applicable to the periods
in which the differences are expected to affect taxable income.
Valuation allowances are established when necessary to reduce deferred
tax assets to the amount expected to be realized. Income tax expense
is the tax payable or refundable for the period plus or minus the
change during the period in deferred tax assets and liabilities.
On an interim basis, the Company has a net operating loss of
approximately $1,570 available to offset future income for income tax
reporting purposes, which will expire in various years through 2032,
if not previously utilized. However, the Company?s ability to use the
carryover net operating loss may be substantially limited or
eliminated pursuant to Internal Revenue Code Section 382.
The Company adopted the provisions of ASC 740-10-50, formerly FIN 48,
and ?Accounting for Uncertainty in Income Taxes?. The Company had no
material unrecognized income tax assets or liabilities as of August
31, 2015. The Company?s policy regarding income tax interest and
penalties is to expense those items as general and administrative
expense but to identify them for tax purposes. There are no income
tax, or related interest and penalty items in the income statement, or
liabilities on the balance sheet. The Company files income tax returns
in the U.S. federal jurisdiction and Georgia state jurisdiction. We
are not currently involved in any income tax examinations.
NOTE 4. STOCKHOLDER?S EQUITY
The Company is authorized to issue up to 500,000,000 shares of common
stock at $0.001 par value per share. Holders of the Company?s common
stock are entitled to receive dividends when authorized by the
Company?s board of directors.
On May 15, 2015, the Company issued 20,000,000 shares of common stock
to its sole Officer and Director, John Berner, in exchange for his
position and President and CEO of the Company.
On June 29, 2015, the Company issued 180,000,000 shares of common
stock to Left Coast Pictures, Inc. (or its designees) in exchange for
a 20% equity interest in Left Coast.
On July 1, 2015, the Company issue 2,000,000 shares of common stock to
Lost Art Pictures LLC for a purchase price of $10,000.
On July 29, 2015, the Company issued 3,000,000 shares of common stock
to Red River Ventures LLC as part of an Equity Purchase Agreement for
the purchase of up to $5,000,000 of the Company?s common stock.
The holders of the Company's common stock are entitled to one vote per
share of common stock held.
As of August 31, 2015 the Company had 200,000,000 shares issued and
outstanding.
NOTE 5. COMMITMENTS AND CONTINGENCIES
Commitments:
The Company currently has no long term commitments as of our balance
sheet date.
Contingencies:
None as of our balance sheet date.
NOTE 6. GOING CONCERN
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. Currently, the Company
has no operating history and has incurred operating losses, and as of
August 31, 2015 the Company had an accumulated deficit of $1,570.
These factors raise substantial doubt about the Company?s ability to
continue as a going concern. Management believes that the Company?s
capital requirements will depend on many factors including the success
of the Company?s development efforts and its efforts to raise capital.
Management also believes the Company needs to raise additional capital
for working capital purposes. There is no assurance that such
financing will be available in the future. The conditions described
above raise substantial doubt about our ability to continue as a going
concern. The financial statements of the Company do not include any
adjustments relating to the recoverability and classification of
recorded assets, or the amounts and classifications of liabilities
that might be necessary should the Company be unable to continue as a
going concern.
We have evaluated subsequent events through September 15, 2015 the
date which the financial statements were available to be issued, for
recognition or disclosure in the financial statements.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders Media Assets Group, Inc.:
I have audited the accompanying balance sheets of Media Assets Group,
Inc. (the ?Company?) as of September 15, 2015 and the related
statements of operations, stockholders' deficit and cash flows for the
period of inception May 4, 2015 through September 15, 2015. These
financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. I was not engaged to perform an audit of its internal
control over financial reporting. My audit included consideration of
internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly, I
express no such opinion. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. I believe
that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Media
Assets Group, Inc. as of September 15, 2015, and the results of its
operations and cash flows the years ended in conformity with
accounting principles generally accepted in the United States of
America. The accompanying consolidated financial statements have been
prepared assuming that the company will continue as a going concern.
As discussed in Note 6 to the consolidated financial statements, the
Company has recently commenced operations and has not generated any
revenues. These factors raise substantial doubt about its ability to
continue as a going concern. Management?s plans in regard to these
matters are also described in Note 6. The consolidated financial
statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/K.Brice Toussaint
K.Brice Toussaint MBA, CPA
Dallas, TX
September 22, 2015
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PART III ? EXHIBITS
Index to Attached Exhibits:
Bylaws
Subscription Agreement
Material Contracts
Joint Venture Agreement - Media Assets Group and Left Coast
Pictures
Equity Purchase Agreement
Auditor?s Consent
Legal Opinion
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SIGNATURES
Pursuant to the requirements of Regulation A, the issuer certifies
that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form 1-A and has duly caused this
offering statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Los Angeles, State of
California, on December 30, 2015.
MEDIA ASSETS GROUP, INC.
By: /s/John Berner
Its: principal executive officer, principal financial officer,
principal accounting officer, and the majority of the board members
This offering statement has been signed by the following persons in
the capacities and on the dates indicated.
By: /s/John Berner
Its: principal executive officer, principal financial officer,
principal accounting officer, and the majority of the board members
Date: December 30, 2015
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