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
(192,675,000
shares)
$
19,267,500.0
0
Not
applicable
$
19,267,500.0
0
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?, ?
forecasts?, ?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 December 31, 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
$10,000,0
00
$20,000,0
00
Gross Proceeds:
$1,000,00
0
$5,000,00
0
$10,000,0
00
$20,000,0
00
Expenses:
$28,500
$28,500
$28,500
$28,500
Net Proceeds:
Use of Proceeds:
$971,500
$4,971,50
0
$9,971,50
0
$19,971,5
00
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
14,000,00
0
Working Capital(4):
246,500
1,346,500
1,971,500
2,721,500
Net Proceeds
Expended:
$971,500
$4,971,50
0
$9,971,50
0
$19,971,5
00
(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 PO Box
48899A, 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 December 31, 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 $6,080 for a net loss in the amount of ($6,080). We
have an accumulated deficit of $(6,080) as of December 31, 2015.
Our operating expenses consisted of web development, legal and
audit fees of $6,080. 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 December 31, 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 ($6,080) as of December 31,
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
December 31, 2015
ASSETS
Cash
$
3,920
Other Assets(1)
0
Total Assets
$
3,920
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
(6,080
)
Total Stockholder?s Equity
3,920
Total Liabilities and Stockholder?s Equity
$
3,920
(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) - December 31, 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
(6,080)
Ending Balance, December 31, 2015
$
3,920
MEDIA ASSETS GROUP, INC.
Statement of Cash Flows
May 4, 2015 (inception) - December 31, 2015
Cash flows from operating activities
$
?
Net loss
(6,080)
Changes in operating assets and
liabilities:
10,000
Net Cash used in operating activities
6,080
Cash flows from financing activities
Proceeds from sale of common stock
$
10,000
Cash at beginning
Cash at end
$
3,920
MEDIA ASSETS GROUP, INC.
Statement of Operations
December 31, 2015
REVENUES
$
?
EXPENSES
Web and platform design
Organization costs
4,500
1,580
Total Other Expenses
6,080
NET LOSS
$
(6,080
)
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).
?
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 $6,080 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 December 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 $6,080. 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 December 31, 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 December 31, 2015 and the
related statements of operations, stockholders' deficit and cash
flows for the period of inception May 4, 2015 through December
31, 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 December 31, 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
April 21, 2016
?
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 April 21, 2016.
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: April 21, 2016
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