UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 10-QSB
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|X| Quarterly Report under Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended March 31, 2006
|_| Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
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Commission File Number 0-22848
Mediavest, Inc.
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(Exact name of small business issuer as specified in its charter)
New Jersey
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(State of incorporation)
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22-2267658
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(IRS Employer Identification No.)
2121 Avenue of the Stars, Suite 1650
Los Angeles, CA 90067
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(Address of principal executive offices, including zip code)
(310) 601-2500
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(Registrant's Telephone Number, including area code)
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Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past ninety days.
Yes |X| No |_|
Indicate by checkmark whether the registrant is a shell company (as defined in
rule 12b-2 of the Exchange Act.)
Yes |X| No |_|
As of May 9, 2006, there were outstanding 4,000,000 shares of the Registrant's
Common Stock ($0.0001 par value per share).
Transitional Small Business Disclosure Format. Yes |_| No |X|
MEDIAVEST, INC.
TABLE OF CONTENTS
Page
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PART I -- FINANCIAL INFORMATION
ITEM 1. Financial Statements
Balance Sheet 3
Statements of Operations 4
Statements of Cash Flows 5
Notes to Financial Statements 6-7
ITEM 2. Management's Plan of Operations 8-10
ITEM 3. Controls and Procedures 10
PART II -- OTHER INFORMATION
ITEM 1. Legal Proceedings 10
ITEM 2. Unregistered Sale of Equity Securities and Use of Proceeds 10
ITEM 3. Defaults Upon Senior Securities 10
ITEM 4. Submission of Matters to a Vote of Security Holders 11
ITEM 5. Other Information 11
ITEM 6. Exhibits 11
SIGNATURES 12
2
Part I -- FINANCIAL INFORMATION
ITEM 1. Financial Statements
MEDIAVEST, INC.
BALANCE SHEET
March 31, 2006
(Unaudited)
ASSETS
Current assets:
Cash $ 9,757
---------
Total assets $ 9,757
=========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accrued expenses $ 46,482
Note payable 50,000
---------
Total liabilities 96,482
---------
Stockholders' deficit:
Preferred stock, 1,000,000 shares authorized at $.0001 par value,
no shares issued or outstanding
Common stock, 19,000,000 shares authorized at $.0001 par value,
4,000,000 shares issued and outstanding 400
Additional paid-in capital 99,600
Accumulated deficit (186,725)
---------
Total stockholders' deficit (86,725)
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Total liabilities and stockholders' deficit $ 9,757
=========
See notes to financial statements.
3
MEDIAVEST, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
Successor Company Predecessor Company
--------------------------------- -------------------
January 1, to January 27, to January 1, to
March 31, 2006 March 31, 2005 January 26, 2005
-------------- -------------- ----------------
Revenues
Continuing operations
General and administrative expenses $ (15,667) $ (23,862)
---------- ---------- ----------
Discontinued operations
Loss on discontinued operations $ (27,101)
---------- ---------- ----------
Net Loss $ (15,667) $ (23,862) $ (27,101)
========== ========== ==========
Basic net loss per common share
Loss from continuing operations $ ** $ (0.01) *
Loss from discontinued operations *
---------- ---------- ----------
Net loss per common share $ ** $ (0.01) *
========== ========== ==========
Weighted average common shares
outstanding 4,000,000 4,000,000 *
========== ========== ==========
See notes to financial statements.
** Less than $0.01, per share
* Not presented
4
MEDIAVEST, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
Successor Predecessor
Company Company
----------------------------- ---------
January 1, January 27, January 1,
to to to
March 31, March 31, January 26,
2006 2005 2005
--------- --------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss from continuing operations $ (15,667) $ (23,862)
Adjustments to reconcile net loss to net cash
used in operating activities:
Changes in assets and liabilities:
Accrued expenses (27,942) 9,100
--------- ---------
Net cash used in continuing operating activities (43,609) (14,762)
Net cash used in discontinued operating activities $(386,000)
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Net cash used in operating activities (43,609) (14,762) (386,000)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from note payable 50,000
Cash from reorganization 100,000
--------- ---------
Net cash provided by financing activities 50,000 100,000
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Net increase (decrease) in cash 6,391 85,238 (386,000)
Cash, beginning of period 3,366 386,000
--------- --------- ---------
Cash, end of period $ 9,757 $ 85,238 $
========= ========= =========
See notes to financial statements.
5
MEDIAVEST, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. ORGANIZATION AND OPERATIONS
Mediavest, Inc. (Company) was originally incorporated in the State of
Delaware on November 6, 1998 under the name eB2B Commerce, Inc. On April 27,
2000, it merged into DynamicWeb Enterprises Inc., a New Jersey corporation, the
surviving company, and changed its name to eB2B Commerce, Inc. On April 13,
2005, the Company changed its name to Mediavest, Inc. Through January 26, 2005,
the Company and its subsidiaries were engaged in providing business-to-business
transaction management services designed to simplify trading between buyers and
suppliers. Subsequent to January 26, 2005, the Company was inactive.
Reorganization
On October 27, 2004 and as amended on December 17, 2004, the Company filed
a plan (Plan) for reorganization under Chapter 11 of the United States
Bankruptcy Code. The Plan, as confirmed on January 26, 2005, provided for: (1)
the net operating assets and liabilities to be transferred to the holders of the
secured notes of $3,738,000 in satisfaction of the principal and accrued
interest thereon; (2) $400,000 to be transferred to a liquidation trust and used
to pay administrative costs and certain preferred creditors; (3) $100,000 to be
retained by the Company to fund the expenses of remaining public; (4) 3.5% of
the new common stock of the Company (140,000 shares) to be issued to the holders
of record of the Company's preferred stock (2,261,081 shares) in settlement of
their liquidation preferences; (5) 3.5% of the new common stock of the Company
(140,000 shares) to be issued to the holders of record of the Company's common
stock (7,964,170) as of January 26, 2005 in exchange for all of the outstanding
shares of common stock of the Company; and (6) 93% of the new common stock of
the Company (3,720,000 shares) to be issued to the Plan sponsor in exchange for
$500,000 in cash.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited financial statements and related notes have
been prepared in accordance with accounting principles generally accepted in the
U.S. for interim financial information and with the rules and regulations of the
Securities and Exchange Commission for Form 10-QSB. Accordingly, they do not
include all of the information and footnotes required by accounting principles
generally accepted in the United States for complete financial statements. In
the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation of the financial
position, results of operations and cash flows for the interim periods have been
included. These financial statements should be read in conjunction with the
financial statements of the Company for the year ended December 31, 2005 and
notes thereto contained in Form 10-KSB as filed with the Securities and Exchange
Commission on April 17, 2006. Interim results are not necessarily indicative of
the results for a full year.
Fresh Start Reporting
The Company has accounted for the reorganization using fresh start
reporting. Accordingly, all assets and liabilities have been restated to reflect
their reorganization value, including the elimination of the accumulated
deficit. The Company's only asset or liability upon reorganization was cash of
$100,000. Although not required under fresh start accounting, prior period
results have been presented. In accordance with fresh start reporting, results
of operations and cash flows for prior periods are designated "Predecessor" and
for the current period as "Successor".
6
MEDIAVEST, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Financial Statements
The financial statements include the accounts of the Company.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the dates of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.
Net Loss per Share
Basic net loss per share is computed by dividing net loss by the weighted
average number of shares of common stock outstanding during the period. Diluted
net loss per share is computed by dividing net loss by the weighted average
number of shares of common stock and potentially outstanding shares of common
stock during each period. Diluted loss per share is not presented, as it is
anti-dilutive. The Company's successor operations are neither representative nor
comparable to that of the Company's predecessor operations and, accordingly,
loss per share is not presented for predecessor periods.
Reclassifications
Certain amounts in the prior period financial statements have been
reclassified to conform to the current presentation.
New Accounting Pronouncements
Management does not believe that any other recently issued, but not yet
effective accounting pronouncements, if adopted, would have a material effect on
the accompanying financial statements.
3. NOTE PAYABLE
On March 20, 2006, the Company entered into an agreement with an
affiliated company to borrow up to $100,000 (Loan), until a Next Financing (as
defined below). Borrowings under the Loan bear interest at 10%, per annum, and
principal and accrued interest thereon shall be payable upon the Next Financing,
a sale of securities (other than a sale of shares of the Company's common stock
to officers, directors or employees of, or consultants to, the Company in
connection with their provision of services to the Company), to third parties
with proceeds to the Company of not less than $200,000.
7
ITEM 2. MANAGEMENT'S PLAN OF OPERATIONS
Special Note Regarding Forward-Looking Statements
We may, in discussions of our future plans, objectives and expected
performance in periodic reports filed by us with the Securities and Exchange
Commission ("SEC") (or documents incorporated by reference therein) and in
written and oral presentations made by us, include projections or other
forward-looking statements within the meaning of Section 27A of the Securities
Exchange Act of 1933 or Section 21E of the Securities Act of 1934, as amended.
Such projections and forward-looking statements are based on assumptions, which
we believe are reasonable but are, by their nature, inherently uncertain. You
are cautioned that any such forward looking statements are not guarantees of
future performance and involve risks and uncertainties, and that actual results
may differ materially from those projected in the forward looking statements as
a result of various factors. The factors that might cause such differences
include, among others, the following: (i) our inability to obtain sufficient
cash to fund ongoing obligations and continue as a going concern; (iii) our
ability to carry out our operating strategy; and (iv) other factors including
those discussed below. We undertake no obligation to publicly update or revise
forward looking statements to reflect events or circumstances after the date of
this Quarterly Report on Form 10-QSB or to reflect the occurrence of
unanticipated events.
Overview
Mediavest, Inc. (the "Company") was originally incorporated in the State
of Delaware on November 6, 1998 under the name eB2B Commerce, Inc. On April 27,
2000, it merged into DynamicWeb Enterprises Inc., a New Jersey corporation, the
surviving company, and changed its name to eB2B Commerce, Inc. On April 13,
2005, the Company changed its name to Mediavest, Inc. Through January 26, 2005,
the Company and its subsidiaries were engaged in providing business-to-business
transaction management services designed to simplify trading between buyers and
suppliers.
We are currently a "shell" company with no operations and controlled by
Trinad Capital, L.P. ("Trinad"), our majority shareholder.
On October 27, 2004 and as amended on December 17, 2004, the Company filed
a plan (Plan) for reorganization under Chapter 11 of the United States
Bankruptcy Code in the United States Bankruptcy Court for the Southern District
of New York (the "Reorganization"). The Plan, as confirmed on January 26, 2005,
provided for: (1) the net operating assets and liabilities to be transferred to
the holders of the secured notes in satisfaction of the principal and accrued
interest thereon; (2) $400,000 to be transferred to a liquidation trust and used
to pay administrative costs and certain preferred creditors; (3) $100,000 to be
retained by the Company to fund the expenses of remaining public; (4) 3.5% of
the new common stock of the Company (140,000 shares) to be issued to the holders
of record of the Company's preferred stock in settlement of their liquidation
preferences; (5) 3.5% of the new common stock of the Company (140,000 shares) to
be issued to common stockholders of record as of January 26, 2005 in exchange
for all of the outstanding shares of the common stock of the Company; and (6)
93% of the new common stock of the Company (3,720,000 shares) to be issued to
the plan sponsor in exchange for $500,000 in cash.
As a result of the Reorganization; the historical financial statements are
irrelevant to any assessment of our operations on an ongoing basis. Accordingly,
readers are advised not to rely on any historical financial information in
considering an investment in or the disposition of our stock.
Management's Plan of Operations
Trinad, a hedge fund dedicated to investing in micro-cap companies, is
seeking to raise additional capital with a view to making us an attractive
vehicle with which to acquire a business. It will then seek a suitable
acquisition candidate. No such business has been identified and we are therefore
subject to a number of risks, including: any acquisition consummated by us may
turn out to be unsuccessful; our investors will not know what operating
business, if any, will be acquired, including the particular industry in which
the business operates, and whether dilutive financing will be required
therewith; the historical operations of a specific business opportunity may not
necessarily be indicative of the potential for the future; we may acquire a
company in the early stages of development causing us to incur further risks; we
may be dependent upon the management of an acquired business which has not
proven its abilities or effectiveness; we will be controlled by a small number
of stockholders and such control could prevent the taking of certain actions
that may be beneficial to other stockholders; our common stock will likely be
thinly traded and the public market may provide little or no liquidity for
holders of our common stock.
8
Trinad has agreed that it will not dispose of any of its common stock
until an acquisition transaction has been consummated and a Current Report on
Form 8-K setting forth the terms of the acquisition and audited financial
statements of the acquisition target have been filed with the SEC.
On March 20, 2006, Trinad Capital Master Fund, Ltd., an affiliate of
Trinad, made a loan to us in the principal amount of $100,000. We believe that
this loan should be sufficient to satisfy our monetary needs for the balance of
the calendar year and that Trinad has the financial wherewithal and intent to
fund our financial needs to the extent reasonably necessary. Since our emergence
from bankruptcy through the Reorganization, we have no liabilities related to
the Reorganization, we do not currently have an operating business and we have
extremely limited cash under new management.
As described more fully above, subsequent to the Reorganization, our plan
of operation is to merge or effect a business combination with a domestic or
foreign private operating entity. We may seek to raise additional capital first
to make ourselves more attractive to acquisition candidates. We believe that
there are perceived benefits to being a "reporting company" with a class of
publicly-traded securities which may be attractive to private entities. Other
than activities relating to such financing attempting to locate such a
candidate, we do not currently anticipate conducting any operations.
We may enter into a definitive agreement with a wide variety of private
businesses without limitation as to their industry or revenues. It is not
possible at this time to predict when, if ever, we will enter into a business
combination with any such private company or the industry or the operating
history, revenues, future prospects or other characteristics of any such
company. Trinad intends to raise capital to make us a more attractive
acquisition vehicle and then seek a suitable merger candidate. Trinad has not
identified anyone for acquisition at this time.
We do not currently engage in any product research and development and
have no plans to do so in the foreseeable future. We have no present plans to
purchase or sell any plant or significant equipment. We also have no present
plans to add employees although we may do so in the future if we engage in any
merger or acquisition transactions.
CRITICAL ACCOUNTING POLICIES
The accompanying financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America.
Estimates and assumptions
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the dates of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.
Income Taxes
The Company provides for deferred income taxes using the liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and the tax effect of net operating loss carry-forwards. A valuation
allowance is recorded against deferred tax assets if it is more likely than not
that such assets will not be realized.
9
Financial Reporting by Entities in Reorganization under the Bankruptcy Code
The accompanying financial statements have been prepared in accordance
with Statement of Position 90-7 ("SOP 90-7"), "Financial Reporting by Entities
in Reorganization under the Bankruptcy Code". SOP 90-7 requires that the
financial statements for periods subsequent to the Reorganization distinguish
transactions and events that are directly associated with the Reorganization
from the ongoing operations of the business.
All of the common and preferred stock that was outstanding prior to
January 26, 2005 was cancelled and new shares of common stock were issued in
accordance with the Plan. The Reorganization value of the assets of the emerging
entity immediately before the date of confirmation were less than the total of
all postpetition liabilities and allowed claims; therefore, the Company
qualified for fresh start accounting under SOP 90-7.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We currently have no floating rate indebtedness, hold no derivative
instruments, and do not earn foreign-sourced income. Accordingly, changes in
interest rates or currency exchange rates do not generally have a direct effect
on our financial position. Changes in interest rates may affect the amount of
interest we earn on available cash balances as well as the amount of interest we
pay on borrowings. To the extent that changes in interest rates and currency
exchange rates affect general economic conditions, we may also be affected by
such changes.
ITEM 3. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures. Our principal
executive officer and principal financial officer, after evaluating the
effectiveness of our disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this
Quarterly Report on Form 10-QSB, have concluded that, based on such evaluation,
our disclosure controls and procedures were adequate and effective to ensure
that material information relating to us, was made known to them by others
within those entities, particularly during the period in which this Quarterly
Report on Form 10-QSB was being prepared.
(b) Changes in Internal Controls. There were no significant changes in our
internal control over financial reporting, identified in connection with the
evaluation of such internal control that occurred during our last fiscal quarter
that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
10
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
Note Payable
On March 20, 2006, Trinad Capital Master Fund, Ltd., an affiliate of
Trinad, made a loan to us in the principal amount of $50,000. We believe that
this loan should be sufficient to satisfy our monetary needs for the balance of
the calendar year and that Trinad has the financial wherewithal and intent to
fund our financial needs to the extent reasonably necessary. Since our emergence
from bankruptcy through the Reorganization, we have no liabilities related to
the Reorganization, we do not currently have an operating business and we have
extremely limited cash under new management.
ITEM 6. EXHIBITS
Exhibit No. Description of Exhibit
31.1 Section 302 Certification by the Chief Executive Officer
31.2 Section 302 Certification by the Chief Financial Officer
32.1 Section 906 Certifications by the Chief Executive Officer
32.2 Section 906 Certifications by the Chief Financial Officer
SIGNATURES
In accordance with Section 13 or 15 of the Exchange Act, the Registrant
caused this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.
MEDIAVEST, INC.
Dated: May 15, 2006 By: /s/ Robert Ellin
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Robert Ellin
Chief Executive Officer
(Principal Executive Officer)
Dated: May 15, 2006 By: /s/ Jay Wolf
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Jay Wolf
Chief Operating Officer and
Chief Financial Officer
(Principal Financial Officer)