UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
|X| QUARTERLY REPORT UNDER SECTION 13 OR SECTION 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2007
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number: 0-22848
MEDIAVEST, INC.
(Exact name of small business issuer as specified in its charter)
New Jersey 22-2267658
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
2121 Avenue of the Stars, Suite 2550 90067
Los Angeles, CA (Zip Code)
(Address of principal executive offices)
Issuer's telephone number, including area code: (310) 601-2500
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 |_|
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 12 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes |X| No |_|
As of May 17, 2007, there were 16,730,000 outstanding 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
PART I -- FINANCIAL INFORMATION 1
ITEM 1. Financial Statements (Unaudited)
Balance Sheet 3
Statements of Operations 4
Statements of Cash Flows 5
Notes to Financial Statements 6
ITEM 2. Management's Plan of Operation 8
ITEM 3. Controls and Procedures 10
PART II -- OTHER INFORMATION 10
ITEM 1. Legal Proceedings 10
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 11
ITEM 3. Defaults Upon Senior Securities 11
ITEM 4. Submission of Matters to a Vote of Security Holders 11
ITEM 5. Other Information 11
ITEM 6. Exhibits 11
SIGNATURES 12
PART I -- FINANCIAL INFORMATION
ITEM 1. Financial Statements
MEDIAVEST, INC.
BALANCE SHEET
March 31, 2007
(Unaudited)
ASSETS
Current assets:
Cash $ 5,417,585
-----------
Total assets $ 5,417,585
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 38,187
-----------
Total liabilities 38,187
-----------
Stockholders' equity:
Preferred stock, 1,000,000 shares authorized
Series A Convertible Preferred stock, 100,000
shares authorized at $.0001 par value,
100,000 shares issued or outstanding 100,000
Common stock, 100,000,000 shares authorized at $.0001 par value,
16,730,000 shares issued and outstanding 1,673
Additional paid-in capital 6,308,907
Accumulated deficit (1,031,182)
-----------
Total stockholders' equity 5,379,398
-----------
Total liabilities and stockholders' equity $ 5,417,585
===========
See notes to unaudited financial statements.
3
MEDIAVEST, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
----------------------------
2007 v2006
------------ ------------
General and administrative expenses $ (264,138) $ (15,667)
------------ ------------
Net Loss $ (264,138) $ (15,667)
============ ============
Basic and diluted net loss per common share* $ (0.02) **
============ ============
Basic and diluted weighted average common shares outstanding 16,730,000 10,000,000
============ ============
See notes to unaudited financial statements.
* Retroactvely adjusted to reflect the effect of the stock split (Note 4)
** Less than $0.01 per share
4
MEDIAVEST, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
For the Three Months Ended
March 31,
--------------------------
2007 2006
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (264,138) $ (15,667)
Adjustments to reconcile net loss to net cash
used in operating activities:
Changes in assets and liabilities:
Accounts payable and accrued expenses (60,510) (27,942)
----------- -----------
Net cash used in operating activities (324,648) (43,609)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from note payable -- 50,000
----------- -----------
Net cash provided by financing activities -- 50,000
----------- -----------
Net (decrease) increase in cash (324,648) 6,391
Cash, beginning of period 5,742,233 3,366
----------- -----------
Cash, end of period $ 5,417,585 $ 9,757
=========== ===========
See notes to unaudited financial statements.
5
MEDIAVEST, INC.
NOTES TO FINANCIAL STATEMENT
(Unaudited)
NOTE 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 has remained inactive.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying interim 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
statement presentation. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary to present fairly
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 Mediavest, Inc. together with the
Company's Plan of Operations in the Company's Form 10-KSB for the year ended
December 31, 2006. Interim results are not necessarily indicative of the results
for a full year.
Financial Statements
The financial statements include all the accounts of the Company.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the financial
statements and revenues and expenses during the reporting period. Actual results
could differ from those estimates.
New Accounting Pronouncements
Management does not believe that any recently issued, but not yet
effective accounting pronouncements, if adopted, would have a material effect on
the accompanying financial statements.
6
NOTE 3. INCOME TAX
Effective January 1, 2007, the Company adopted the provisions of Financial
Accounting Standards Board (FASB) Interpretation No. 48, "Accounting for
Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109" (FIN
48). FIN 48 clarifies the accounting for uncertainty in income taxes recognized
in the Company's financial statements in accordance with FASB Statement 109,
"Accounting for Income Taxes", and prescribes a recognition threshold and
measurement process for financial statement recognition and measurement of a tax
position taken or expected to be taken in a tax return. FIN 48 also provides
guidance on derecognition, classification, interest and penalties, accounting in
interim periods, disclosure and transition.
Management has evaluated and concluded that there are no significant
uncertain tax positions requiring recognition in the Company's financial
statements as of January 1, 2007. The evaluation was performed for the tax years
ended December 31, 2006, 2005, and 2004, which remain subject to examination for
Federal and state purposes as of March 31, 2007.
The Company's policy is to classify assessments, if any, for tax related
interest as interest expenses and penalties as general and administrative
expenses.
NOTE 4. COMMON STOCK
On August 3, 2006, the Company authorized a 2.5 to 1 stock split of its
common stock, increasing its outstanding shares from 4,000,000 to 10,000,000. In
connection with the split, the company transferred $6,000 from additional
paid-in capital to common stock. All share and per share amounts have been
retroactively adjusted to reflect the effect of the stock split.
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, or the 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. was originally incorporated in the State of Delaware on
November 6, 1998 under the name eB2B Commerce, Inc. On April 27, 2000, we merged
into DynamicWeb Enterprises Inc., a New Jersey corporation, the surviving
company, and changed our name to eB2B Commerce, Inc. On April 13, 2005, we
changed our name to Mediavest, Inc. Through January 26, 2005, we and our
subsidiaries were engaged in providing business-to-business transaction
management services designed to simplify trading between buyers and suppliers.
We are currently inactive and are considered a "shell" company by the SEC
with no operations. We are controlled by Trinad Master Fund, L.P., or Trinad,
our controlling stockholder.
On October 27, 2004, and as amended on December 17, 2004, we filed a 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, or the
Plan of Reorganization. The Plan of Reorganization, as confirmed on January 26,
2005, provided for: (1) our 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 us to fund the expenses of remaining public; (4) 3.5%
of the new common stock of the company (140,000 shares) were to be issued to the
holders of record of our preferred stock in settlement of their liquidation
preferences; (5) 3.5% of the new common stock of the company (140,000 shares)
were 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) were to be
issued to the sponsor of the Plan of Reorganization in exchange for $500,000 in
cash.
As a result of this 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
We have raised additional capital with a view to making ourselves an
attractive vehicle with which to acquire a business. We 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; investors in us 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 stage 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.
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 and 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 an acquisition target at this time.
Stock Sales and Liquidity
On August 3, 2006, we increased our authorized shares of common stock from
19,000,000 to 100,000,000 and authorized and effectuated a 2.5 to 1 stock split
of our common stock to increase our outstanding shares from 4,000,000 to
10,000,000. All share and per share amounts have been retroactively adjusted to
reflect the effect of the stock split.
On September 14, 2006, we sold 2,800,000 units, on October 12, 2006, we
sold 3,400,000 units, and on December 26, 2006, we sold 530,000 units. Each unit
sold consists of one share of common stock and one warrant to purchase one share
of common stock, and the sales price of each unit was $1.00 per unit. We
realized net proceeds of 6,057,000 after the costs of the offering. The warrants
have an exercise price of $2.00 per share and expire as follows: 2,800,000
warrants expire in September 2008; 3,400,000 warrants expire in October 2008;
and 530,000 warrants expire in December 2008.
On October 12, 2006, we entered into a Series A Convertible Preferred
Stock Purchase Agreement with Trinad Management, LLC, or Trinad Management.
Pursuant to the terms of the Agreement, Trinad Management purchased 100,000
shares of our Series A Convertible Preferred Stock, par value $ 0.0001 per
share, for an aggregate purchase price of $100,000. Series A Preferred holders
are entitled to convert, at their option, all or any shares of the Series A
Preferred into the number of fully paid and non-assessable shares of common
stock equal to the number obtained by dividing the original purchase price of
such Series A Preferred, plus the amount of any accumulated but unpaid dividends
as of the conversion date by the original purchase price (subject to certain
adjustments) in effect at the close of business on the conversion date. The fair
value of the 100,000 shares of our common stock underlying the Series A
Convertible Preferred Stock was $1.425 per share. Since the value was $0.425
lower than the fair value of our common stock on October 12, 2006, the $42,500
intrinsic value of the conversion option resulted in the recognition of a
preferred stock dividend and an increase to additional paid-in capital.
As of March 31, 2007, we had approximately $5,400,000 of cash, which
management believes is sufficient to satisfy our monetary needs for the next
twelve months.
9
We do not currently have an operating business and therefore have no
ability to generate cash flow from operations in order to fund our ongoing
financial needs beyond the next fiscal year.
Critical Accounting Policies
Management's plan of operations is based upon our financial statements
included elsewhere in this Form 10-QSB, which have been prepared in accordance
with accounting principles generally accepted in the United States.
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
We provide 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 has been
provided as it is more likely than not that the deferred assets will not be
realized.
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.
10
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There have been no recent sales of unregistered equity securities during
the period for which this report is presented or any such issuances have been
previously reported on a Current Report on Form 8-K.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
Exhibit No. Description Of Exhibit
31.1 Section 302 Certifications by the Chief Executive Officer
31.2 Section 302 Certifications by the Chief Financial Officer
32.1 Section 906 Certification by the Chief Executive Officer
32.2 Section 906 Certification by the Chief Financial Officer
11
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.
Dated: May 18, 2007 MEDIAVEST, INC.
By: /s/ Robert Ellin
------------------
Robert Ellin
Chief Executive Officer
(Principal Executive Officer)
Dated: May 18, 2007
By: /s/ Jay Wolf
------------------
Jay Wolf
Chief Operating Officer and
Chief Financial Officer
(Principal Financial Officer)
12