Unassociated Document

10-Q 1 v065887_10-q.htm Unassociated Document

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2006

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________.

Commission file number O-32345

Electronic Media Central Corporation

(Exact name of registrant as specified in its charter)

California (State or other jurisdiction of incorporation or organization)	33-0795854 (I.R.S. Employer Identification No.)

413 Avenue G, #1 Redondo Beach, CA (Address of principal executive offices)	90277 (Zip Code)

Registrant’s telephone number, including area code (310) 493-2244

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x Noo.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o

Accelerated filer o

Non-accelerated filer x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x.

Applicable only to issuers involved in bankruptcy proceedings during the preceding five years:

Indicate by check mark whether the registrant filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yeso No o

Applicable only to corporate issuers:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of February 9, 2007, there were 1,300,000 shares of common stock, par value $0.02, issued and outstanding.

Electronic Media Central Corporation

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION		3

ITEM 1.	Financial Statements	3
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	19
ITEM 4.	Controls and Procedures	19

PART II - OTHER INFORMATION		20

ITEM 1.	Legal proceedings	20
ITEM 1A.	Risk Factors	20
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
ITEM 3.	Defaults Upon Senior Securities	20
ITEM 4.	Submission of Matters to a Vote of Security Holders	20
ITEM 5.	Other Information	20
ITEM 6.	Exhibits	20

PART I - FINANCIAL INFORMATION

This Quarterly Report includes forward-looking statements within the meaning of the Securities Exchange Act of 1934 (the “Exchange Act”). These statements are based on management’s beliefs and assumptions, and on information currently available to management. Forward-looking statements include the information concerning possible or assumed future results of operations of the Company set forth under the heading “Management’s Discussion and Analysis of Financial Condition or Plan of Operation.” Forward-looking statements also include statements in which words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “consider” or similar expressions are used.

Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions. The Company’s future results and shareholder values may differ materially from those expressed in these forward-looking statements. Readers are cautioned not to put undue reliance on any forward-looking statements.

ITEM 1. Financial Statements

ELECTRONIC MEDIA CENTRAL CORPORATION
BALANCE SHEETS
DECEMBER 31, 2006 AND 2005
(Unaudited)

ASSETS

	2006			2005
CURRENT ASSETS:
Cash & cash equivalents	$	4,484		$	18,077
Accounts receivable, net of allowance for doubtful
accounts of $3,700		12,200			31,101
Total current assets		16,685			49,178

OTHER ASSETS:
Due from related party		70,275			11,517

Total assets	$	86,959			60,695

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
Accounts payable & accrued expenses	$	70,297			71,723
Notes payable - related parties		113,700			118,500
Due to related party		8,682			5,366
Due to officer		121,785			71,779
Total current liabilities		314,464			267,368

STOCKHOLDERS' DEFICIT
Preferred stock, $0.001 par value; 10,000,000 shares authorized;
none issued and outstanding
Common stock; $0.02 par value; 40,000,000 shares authorized;
1,300,000 shares issued and outstanding at December 31, 2005
and December 31, 2006		26,000			26,000
Additional paid in capital		42,600			42,600
Accumulated deficit		(296,105	)		(275,273	)
Total stockholders' deficit		(227,505	)		(206,673	)

Total liabilities and stockholders' deficit	$	86,959			60,695

The accompanying notes are an integral part of these unaudited financial statements

ELECTRONIC MEDIA CENTRAL CORPORATION

STATEMENTS OF OPERATIONS

FOR THE THREE MONTH PERIODS ENDED DECEMBER 31, 2006, 2005 AND 2004

(Unaudited)


	2006			2005			2004

Revenues	$	17,853		$	52,243		$	59,723

Cost of revenues		13,099			35,540			17,432

Gross profit		4,753			16,703			42,291

Operating expenses
Professional fees		4,841			4,633			2,951
Salaries and related expenses		9,131			8,009			9,839
Consulting fees paid to related party		-			9,000			-
Bad debts		-			-			8,473
Other		3,789			5,981			-
Total operating expenses		17,761			27,623			21,263

Loss from operations		(13,008	)		(10,920	)		21,028

Non-operating income (expense):
Interest expense		(3,843	)		(2,879	)		(2,752	)

Profit before income taxes		(16,851	)		(13,799	)		18,276

Provision for income taxes		-			-			-

Net profit (loss)	$	(11,368	)	$	(13,799	)	$	18,276

Basic weighted average number of common stock outstanding		1,300,000			1,300,000			1,000,000

Basic net profit (loss) per share	$	(0.01	)	$	(0.01	)	$	0.02

Diluted weighted average number of common stock outstanding		1,300,000			1,300,000			1,000,000

Diluted net profit (loss) per share	$	(0.01	)	$	(0.01	)	$	0.02

The accompanying notes are an integral part of these unaudited financial statements

ELECTRONIC MEDIA CENTRAL CORPORATION
STATEMENTS OF OPERATIONS
FOR THE NINE MONTH PERIODS ENDED DECEMBER 31, 2006, 2005 AND 2004
(Unaudited)

	2006			2005			2004

Revenues	$	140,421		$	158,227		$	167,951

Cost of revenues		90,977			100,066			80,647

Gross profit		49,444			58,161			87,304

Operating expenses
Professional fees		25,378			20,002			7,662
Salaries and related expenses		26,823			25,896			29,244
Consulting fees paid to related party		-			9,000			-
Other		13,008			25,468			26,761
Total operating expenses		65,210			80,366			63,667

Loss from operations		(15,766	)		(22,205	)		23,637

Non-operating income (expense):
Interest expense		(10,853	)		(8,779	)		(7,823	)
Gain on settlement of debts, related party		805			-			-
Total other income (expense)		(10,048	)		(8,779	)		(7,823	)

Profit before income taxes		(25,814	)		(30,984	)		15,814

Provision for income taxes		(800	)		(800	)		(800	)

Net profit (loss)	$	(26,614	)		(31,784	)	$	15,014

Basic weighted average number of common stock outstanding		1,300,000			1,142,909			1,000,000

Basic net profit (loss) per share	$	(0.02	)		(0.03	)	$	0.02

Diluted weighted average number of common stock outstanding		1,300,000			1,142,909			1,000,000

Diluted net profit (loss) per share	$	(0.02	)		(0.03	)	$	0.02

The accompanying notes are an integral part of these unaudited financial statements

ELECTRONIC MEDIA CENTRAL CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTH PERIODS ENDED DECEMBER 31, 2006, 2005 AND 2004
(Unaudited)

	2006			2005			2004

CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (loss)	$	(26,614	)	$	(31,784	)	$	15,014
Adjustments to reconcile net income (loss) to net cash used in
operating activities:
Related party notes payable issued for consulting fees and office expense		900			9,300			-
Increase in accounts receivable		112,567			30,945			(20,210	)
Increase/(decreased) in accouts payable		(60,222	)		(6,001	)		4,093
Increase in accouts payable -related party		-			-			1,769
Net cash provided by operating activities		26,631			2,460			666

CASH FLOWS FROM FINANCING ACTIVITIES:
Stock issued for cash		-			45,000			-
Proceeds from loans from officers		27,229			(1,039	)		29,619
Increase in receivables from related party		(53,157	)		(11,517	)		(26,364	)
Increase in due from affiliates		(2,666	)		(23,691	)		-
Net cash provided by financing activities		(28,594	)		8,753			3,255

NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS		(1,963	)		11,213			3,921

CASH & CASH EQUIVALENTS, BEGINNING BALANCE		6,447			6,864			1,001

CASH & CASH EQUIVALENTS, ENDING BALANCE	$	4,484		$	18,077		$	4,922

SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION:

Interest paid during the year	$	-		$	-		$	-

Taxes paid during the year	$	837		$	-		$	-

The accompanying notes are an integral part of these unaudited financial statements

ELECTRONIC MEDIA CENTRAL CORPORATION

NOTES TO UNAUDITED FINANCIAL STATEMENTS

NOTE 1 ORGANIZATION

On April 1, 1998, Electronic Media Central Corporation (the “Company” or “EMC”) was incorporated in California (formerly a division of Internet Infinity, Inc. (III)). The Company is engaged in providing services for duplication, replication and packaging of DVDs and CDs.

As of May 12, 2006 the Company filed Form N-54A with the United States Securities Exchange Commission to become a business development company by certifying that it is a closed-end company (mutual fund) organized and operated for the purpose of making investments in securities described in section 55 (a)(1) through (3) of the Investment Company Act of 1940; and that it will make available significant managerial assistance with respect to issuers of such securities to the extent required by the act.

The Company has commenced the development of new management consulting services to assist client companies in complying with the reporting requirements to the government and in communicating with shareholders, customers and the public and the accessing of needed growth capital.

NOTE 2 BASES OF PRESENTATION AND BUSINESS

The accompanying financial statements have been prepared by EMC (the Company), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures included herein are adequate to make the information presented not misleading. The unaudited financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary to fairly state the financial position as of December 31, 2006, 2005 and 2004, and the results of operations and cash flows for the related interim periods ended December 31, 2006, 2005 and 2004. The results of operations for the three month period ended December 31, 2006, are not necessarily indicative of the results that may be expected for the fiscal year ended March 31, 2007, or any other period.

The accounting policies followed by the Company and other information are contained in the notes to the Company’s financial statements filed on March 31, 2006, as part of the Company’s annual report on Form 10-KSB. This quarterly report should be read in conjunction with such annual report.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

ELECTRONIC MEDIA CENTRAL CORPORATION

NOTES TO UNAUDITED FINANCIAL STATEMENTS

Reclassifications

Certain comparative amounts have been reclassified to conform to the current year's presentation.

Recent Pronouncements

In February 2006, FASB issued SFAS No. 155, “Accounting for Certain Hybrid Financial Instruments”. SFAS No. 155 amends SFAS No 133, “Accounting for Derivative Instruments and Hedging Activities”, and SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities”. SFAS No. 155, permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation, clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS No. 133, establishes a requirement to evaluate interest in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation, clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives, and amends SFAS No. 140 to eliminate the prohibition on the qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. This statement is effective for all financial instruments acquired or issued after the beginning of the Company's first fiscal year that begins after September 15, 2006. SFAS No. 155 is not expected to have a material effect on the financial position or results of operations of the Company.

In March 2006 FASB issued SFAS 156, “Accounting for Servicing of Financial Assets.” This Statement amends FASB Statement No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” with respect to the accounting for separately recognized servicing assets and servicing liabilities. This Statement:

1.	Requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract.

2.	Requires all separately recognized servicing assets and servicing liabilities to be initially measured at fair value, if practicable.

3.	Permits an entity to choose ‘Amortization method’ or ‘Fair value measurement method’ for each class of separately recognized servicing assets and servicing liabilities.

At its initial adoption, permits a one-time reclassification of available-for-sale securities to trading securities by entities with recognized servicing rights, without calling into question the treatment of other available-for-sale securities under Statement 115, provided that the available-for-sale securities are identified in some manner as offsetting the entity’s exposure to changes in fair value of servicing assets or servicing liabilities that a servicer elects to subsequently measure at fair value.

5.	Requires separate presentation of servicing assets and servicing liabilities subsequently measured at fair value in the Balance Sheet and additional disclosures for all separately recognized servicing assets and servicing liabilities.

This Statement is effective as of the beginning of the Company’s first fiscal year that begins after September 15, 2006. Management believes that this statement will not have a significant impact on the financial statements.

In September 2006, FASB issued SFAS 157 “Fair Value Measurements”. This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. This Statement applies under other accounting pronouncements that require or permit fair value measurements, the Board having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this Statement does not require any new fair value measurements. However, for some entities, the application of this Statement will change current practice. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Management is currently evaluating the effect of this pronouncement on financial statements.

ELECTRONIC MEDIA CENTRAL CORPORATION

NOTES TO UNAUDITED FINANCIAL STATEMENTS

In September 2006, FASB issued SFAS 158 “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106, and 132(R)” This Statement improves financial reporting by requiring an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income of a business entity or changes in unrestricted net assets of a not-for-profit organization. This Statement also improves financial reporting by requiring an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions. An employer with publicly traded equity securities is required to initially recognize the funded status of a defined benefit postretirement plan and to provide the required disclosures as of the end of the fiscal year ending after December 15, 2006. An employer without publicly traded equity securities is required to recognize the funded status of a defined benefit postretirement plan and to provide the required disclosures as of the end of the fiscal year ending after June 15, 2007. However, an employer without publicly traded equity securities is required to disclose the following information in the notes to financial statements for a fiscal year ending after December 15, 2006, but before June 16, 2007, unless it has applied the recognition provisions of this Statement in preparing those financial statements:

a.	A brief description of the provisions of this Statement

b.	The date that adoption is required

c.	The date the employer plans to adopt the recognition provisions of this Statement, if earlier.

The requirement to measure plan assets and benefit obligations as of the date of the employer’s fiscal year-end statement of financial position is effective for fiscal years ending after December 15, 2008. Management is currently evaluating the effect of this pronouncement on financial statements.

In July 2006, the FASB released FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109 (FIN 48)”. FIN 48 clarifies the accounting and reporting for uncertainties in income tax law. This interpretation prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. This statement is effective for fiscal years beginning after December 15, 2006. Management is currently in the process of evaluating the expected effect of FIN 48 on our results of operations and financial position.

ELECTRONIC MEDIA CENTRAL CORPORATION

NOTES TO UNAUDITED FINANCIAL STATEMENTS

NOTE 3 UNCERTAINTY OF ABILITY TO CONTINUE AS A GOING CONCERN

The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has accumulated deficit of $296,105 at December 31, 2006, and its total liabilities exceeds its total assets by $227,505.

In view of the matters described above, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheets is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to raise additional capital, obtain financing and to succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Management has taken the following steps to revise its operating and financial requirements, which it believes are sufficient to provide the Company with the ability to continue as a going concern. The Company is actively pursuing additional funding and potential merger or acquisition candidates and strategic partners, which would enhance stockholders’ investment. Management believes that the above actions will allow the Company to continue operations through the next fiscal year.

NOTE 4 ACCRUED EXPENSES

Accrued expenses consisted of the following at December 31, 2006:

Account payable	$	29,712
Accrued state tax		2,357
Accrued interest		35,228
Accrued accounting		3,000
	$	70,297

NOTE 5 RELATED PARTY TRANSACTIONS

The Company has a receivable of $70,275 from and a payable of $8,682 to parties related through a common shareholder and officer of the Company. The amounts are temporary loans in normal course of business, interest free, unsecured and due on demand.

The Company has a note payable to a related party through a common shareholder and officer. The note amounts to $113,700 as of December 31, 2006, is due on demand, and is secured by assets of EMC. Interest shall accrue at 6% per annum, due and payable upon demand. This note is the remaining unpaid consulting fees and office expense provided by the related party. The company recorded interest of $4,360, $2,006 and $1,890 for the three month periods ended December 31, 2006, 2005 and 2004, respectively. Interest expenses for the nine month periods ended December 31, 2006, 2005, and 2004 were $8,643, $ 5,932, and $5,588, respectively. The interest payable amounting to $35,228 at December 31, 2006 is included in the accompanying financial statements.

ELECTRONIC MEDIA CENTRAL CORPORATION

NOTES TO UNAUDITED FINANCIAL STATEMENTS

The Company has a payable to the Company’s chairman. The loan amounting $108,030 at December 31, 2006, carries an interest rate of 6% per annum, is unsecured and due on March 31, 2007. The company recorded interest of $1,642, $873 and $861 for the three month period ended December 31, 2006, 2005 and 2004, respectively. The total interest payable on the loan amounted to $13,755 at December 31, 2006 and has been included in due to officer in the accompanying financial statements.

George Morris is the chairman of EMC. As of December 31, 2006, Mr. Morris’ beneficial ownership percentages of related companies’ common stock is as follows:

Electronic Media Central Corporation (the Company)	82.87%
Internet Infinity, Inc.	85.06%
Morris & Associates, Inc.	71.30%
Apple Realty, Inc.	100.00%

NOTE 6 CONCENTRATION OF CREDIT RISK

For the three month periods ended December 31, 2006, 2005 and 2004, revenue from the top three customers represents 86.9%, 95.8% and 100% of the Company’s total revenue, respectively. Accounts receivable balance outstanding from these customers as of December 31, 2006 was $12,288.

For total purchases, for the three month periods ended December 31, 2006 the Company had three top vendors who represent 72.8% and 82.3% for December 31, 2005 and one vendor for 100% for December 31, 2004. Accounts payable balance outstanding as of December 31, 2006 for these vendors was $6,097.

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Disclaimer Regarding Forward Looking Statements

Our Management’s Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national and local general economic and market conditions; demographic changes; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.

Although the forward-looking statements in this Quarterly Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report and in our other reports as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.

Overview

We focus on the development of opportunities to invest in eligible portfolio companies providing early stage capital, strategic guidance and operational support.

Our principal objective is long-term capital appreciation. We may invest in debt securities of these companies, or may acquire an equity interest in the form of common or preferred stock, warrants or options to acquire stock or the right to convert the debt securities into stock. We may invest alone, or as part of a larger investment group. Consistent with our status as a BDC and the purposes of the regulatory framework for BDC’s under the 1940 Act, we will offer to provide managerial assistance, potentially in the form of a consulting agreement or in the form of a board of director’s seat, to the developing companies in which we invest.

In addition, we may acquire either a minority or controlling interest in mature companies in a roll-up strategy. It is anticipated that any acquisitions will be primarily in exchange for our common stock, or a combination of cash and stock. The principal objective of acquisitions pursuant to a roll-up strategy would be to consolidate an industry and either sell the acquired entities as a larger unit, or take the unit public through an initial public offering, spin-off to our shareholders, or reverse merger into a publicly traded shell corporation.

We operate as an externally managed investment company. Our operations will be governed by an Investment Advisory Management Agreement to be entered into between us and a new investment advisory limited liability company which will be formed and wholly-owned by our Chairman, George Morris. We have not elected to qualify to be taxed as a regulated investment company as defined under Subchapter M of the Internal Revenue Code.

Our common stock trades on the over the counter bulletin board under the symbol “EMEC.”

Our financial statements have been prepared assuming we will continue as a going concern. Because we have historically incurred operating losses, and expect those losses to continue in the future, our Certified Public Accountants included an explanatory paragraph in their report raising substantial doubt about our ability to continue as a going concern.

Regulation as a BDC

Although the 1940 Act exempts a BDC from registration under that Act, it contains significant limitations on the operations of BDC’s. Among other things, the 1940 Act contains prohibitions and restrictions relating to transactions between a BDC and its affiliates, principal underwriters and affiliates of its affiliates or underwriters, and it requires that a majority of the BDC’s directors be persons other than “interested persons,” as defined under the 1940 Act. The 1940 Act also prohibits a BDC from changing the nature of its business so as to cease to be, or to withdraw its election as, a BDC unless so authorized by the vote of the holders of a majority of its outstanding voting securities. BDC’s are not required to maintain fundamental investment policies relating to diversification and concentration of investments within a single industry.

Generally, a BDC must be primarily engaged in the business of furnishing capital and providing managerial expertise to companies that do not have ready access to capital through conventional financial channels. Such portfolio companies are termed “eligible portfolio companies.” More specifically, in order to qualify as a BDC, a company must (1) be a domestic company; (2) have registered a class of its equity securities or have filed a registration statement with the Securities and Exchange Commission pursuant to Section 12 of the Securities Exchange Act of 1934; (3) operate for the purpose of investing in the securities of certain types of portfolio companies, namely immature or emerging companies and businesses suffering or just recovering from financial distress; (4) extend significant managerial assistance to such portfolio companies; and (5) have a majority of “disinterested” directors (as defined in the 1940 Act).

An eligible portfolio company is, generally, a U.S. company that is not an investment company and that (1) does not have a class of securities registered on an exchange or included in the Federal Reserve Board’s over-the-counter margin list; or (2) is actively controlled by a BDC and has an affiliate of a BDC on its board of directors; or (3) meets such other criteria as may be established by the Securities and Exchange Commission. Control under the 1940 Act is generally presumed to exist where a BDC owns 25% of the outstanding voting securities of the company.

The 1940 Act prohibits or restricts companies subject to the 1940 Act from investing in certain types of companies, such as brokerage firms, insurance companies, investment banking firms and investment companies. Moreover, the 1940 Act limits the type of assets that BDC’s may acquire to “qualifying assets” and certain assets necessary for its operations (such as office furniture, equipment and facilities) if, at the time of acquisition, less than 70% of the value of the BDC’s assets consist of qualifying assets. Qualifying assets include: (1) securities of companies that were eligible portfolio companies at the time the BDC acquired their securities; (2) securities of bankrupt or insolvent companies that were eligible at the time of the BDC’s initial acquisition of their securities but are no longer eligible, provided that the BDC has maintained a substantial portion of its initial investment in those companies; (3) securities received in exchange for or distributed in or with respect to any of the foregoing; and (4) cash items, government securities and high-quality short-term debt. The 1940 Act also places restrictions on the nature of the transactions in which, and the persons from whom, securities can be purchased in order for the securities to be considered qualifying assets. These restrictions include limiting purchases to transactions not involving a public offering and acquiring securities from either the portfolio company or its officers, directors, or affiliates.

A BDC is permitted to invest in the securities of public companies and other investments that are not qualifying assets, but those kinds of investments may not exceed 30% of the BDC’s total asset value at the time of the investment.

A BDC must make significant managerial assistance available to the issuers of eligible portfolio securities in which it invests. Making available significant managerial assistance means, among other things, any arrangement whereby the BDC, through its directors, officers or employees, offers to provide, and, if accepted does provide, significant guidance and counsel concerning the management, operations or business objectives and policies of a portfolio company. The portfolio company does not have to accept the BDC’s offer of managerial assistance, and if they do accept may be required to pay prevailing market rates for the services.

We do not currently have any subsidiaries or EPC’s, however we do have an operating division that provides services for the duplication, replication, and packaging of DVD’s and CD’s. We are actively seeking quality eligible portfolio companies in which to make an investment and provide managerial assistance.

Three Months ended December 31, 2006 compared to the Three Months ended December 31, 2005 and 2004

Results of Operations

Introduction

During the three months ended June 30, 2006, we elected to become subject to certain sections of the Investment Company Act of 1940 by becoming a Business Development Company. During that quarter, and in subsequent quarters, our DVD and CD division continued to be our sole source of revenues.

Revenues and Income (Loss) from Operations

Our revenue, cost of revenue, total operating expenses and income (loss) from operations for the three months ended December 31, 2006, as compared to the three months ended December 31, 2005 and 2004, and September 30, 2006, are as follows:

	3 Months Ended December 31, 2006			3 Months Ended December 31, 2005			Percentage Change Increase (Decrease)			3 Months Ended December 31, 2004		3 Months Ended September 30, 2006

Revenue	$	17,853		$	52,243			(66	)%	$	59,723	$	40,055
Cost of revenue		13,099			35,540			(63	)%		17,432		25,230
Total operating expenses		17,761			27,623			(36	)%		21,263		22,725

Income (loss) from operations	$	(13,008	)	$	(10,920	)		19	%	$	21,028	$	(7,900	)

Our revenues for the three months ended December 31, 2006 decreased to $17,853 compared to $52,243 for the three months ended December 31, 2005, $59,723 for the three months ended December 31, 2004, and $40,055 for the three months ended September 30, 2006. The decrease in revenues for the third quarter of 2006 compared to the third quarter of 2005 was due to reduced purchases of replication services.

While our revenues for the current quarter decreased by 66% compared to a year earlier (and 55% compared to last quarter), our total operating expenses decreased by only 36% (22% compared to last quarter), resulting in our loss from operations for the three months ended December 31, 2006 being $(13,008) as compared to $(10,920) for the three months ended December 31, 2005 and income from operations of $21,028 for the three months ended December 31, 2004 and a loss from operations of $(7,900) for the three months ended September 30, 2006.

Our cost of revenue as a percentage of revenue has increased at 73%, 68%, and 29% for the three month periods ending December 31, 2006, 2005, and 2004, respectively. Our cost of revenue as a percentage of revenue for the three months ended September 30, 2006 was 63%. The increase in our cost of revenue as a percentage of revenue in recent periods is attributed to reduced revenue and higher prices for a different product mix.

Non-Operating Income (Expense) and Net Income (Loss)

Our other income, interest expense, and net income (loss) for the three months ended December 31, 2006, as compared to the three months ended December 31, 2005 and 2004, and September 30, 2006, are as follows:

		3 Months Ended December 31, 2006		3 Months Ended December 31, 2005	Percentage Change Increase (Decrease)			3 Months Ended December 31, 2004		3 Months Ended September 30, 2006

Other income	$	-	$	-	-		$	-	$	-
Interest expense		(3,843)		(2,879)	33	%		(2,752)		(3,468)

Net income (loss)	$	(11,368)	$	(13,799)	(18)	%	$	18,276	$	(11,369)

The interest expense for each of the quarters presented is related to notes owed to our Chairman George Morris.

Nine Months ended December 31, 2006 compared to the Nine Months ended December 31, 2005 and 2004

Results of Operations

Introduction

During the nine months ended December 31, 2006, we elected to become subject to certain sections of the Investment Company Act of 1940 by becoming a Business Development Company. During that period, our DVD and CD division continued to be our sole source of revenues.

Revenues and Income (Loss) from Operations

Our revenue, cost of revenue, total operating expenses and income (loss) from operations for the nine months ended December 31, 2006, as compared to the nine months ended December 31, 2005 and 2004, are as follows:

	9 Months Ended December 31, 2006			9 Months Ended December 31, 2005			Percentage Change Increase (Decrease)			9 Months Ended December 31, 2004

Revenue	$	140,421		$	158,227			(11	)%	$	167,951
Cost of revenue		90,977			100,066			(9	)%		80,647
Total operating expenses		65,210			80,366			(19	)%		63,667

Income (loss) from operations	$	(15,766	)	$	(22,205	)		(29	)%	$	23,637

Our revenues for the nine months ended December 31, 2006 decreased to $140,421 compared to $158,227 for the nine months ended December 31, 2005 and $167,951 for the nine months ended December 31, 2004.

While our revenues for the current nine month period decreased by 11% compared to a year earlier, our total operating expenses decreased by $15,156, or 19%, resulting in a smaller loss from operations for the nine months ended December 31, 2006 of $(15,766) as compared to $(22,205) for the nine months ended December 31, 2005. We had income from operations of $23,637 for the nine months ended December 31, 2004, primarily because of higher revenue and smaller total operating expenses.

Our cost of revenue as a percentage of revenue has increased at 65%, 63%, and 48% for the nine month periods ending December 31, 2006, 2005, and 2004, respectively. The increase in our cost of revenue as a percentage of revenue in recent periods is attributed to increased price competition.

Non-Operating Income (Expense) and Net Income (Loss)

Our other income, interest expense, and net income (loss) for the nine months ended December 31, 2006, as compared to the nine months ended December 31, 2005 and 2004, are as follows:

	9 Months Ended December 31, 2006			9 Months Ended December 31, 2005			Percentage Change Increase (Decrease)			9 Months Ended December 31, 2004

Other income	$	-		$	-			-	%	$	-
Interest expense		(10,853	)		(8,779	)		24	%		(7,823	)

Net income (loss)	$	(26,614	)	$	(31,784	)		(16	)%	$	(15,014	)

The interest expense for each of the nine-month periods presented is related to notes owed to our Chairman, George Morris.

Liquidity and Capital Resources

Introduction

During the nine months ended December 31, 2006, we had a net loss of $(26,614), but a positive cash flow from operations of $26,631. Because our revenues are small, almost any change in our revenues or operating expenses has a material effect, and we anticipate that our net profit or loss, and operating profit or loss, will continue to vary widely from time period to time period.

Our cash and cash equivalents, accounts receivable, total current assets, total current liabilities, and total liabilities as of December 31, 2006, compared to December 31, 2005 and September 30, 2006, are as follows:

		December 31,		December 31,		September 30,
		2006		2005		2006

Cash	$	4,484	$	18,077	$	10,052
Accounts receivable		12,200		31,101		20,363
Total current assets		16,685		49,178		94,050
Total assets		86,959		60,695		94,050
Total current liabilities		314,464		267,368		304,704
Total liabilities		314,464		267,368		304,704

Cash Requirements

Our cash requirements are expected to remain stable over the next 12 months. Our cash is utilized primarily for professional fees associated with being a public, reporting company and with the acquisition of eligible portfolio companies.

Sources and Uses of Cash

Operations and Financing

During the nine months ended December 31, 2006, we generated negative cash flow of $(1,963). This was a result of net cash provided by operating activities of $26,631, offset by net cash used in financing activities of $(28,594). Net cash provided by operating activities consisted primarily of an increase in accounts receivable of $112,567, offset by a decrease in accounts payable of $(60,222). We anticipate that we will continue to operate at approximately break-even and generate a small positive cash flow from the operations of our DVD and CD division.

Critical Accounting Policies

Our accounting policies are fully described in Note 2 to our consolidated financial statements. The following describes the general application of accounting principles that impact our consolidated financial statements.

Our results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principals generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to bad debt, inventories, investments, intangible assets, income taxes, financing operations, and contingencies and litigation.

We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

Since we have very few assets and only one operating division there is no quantitative information, as of December 31, 2006, about market risk that has any impact on our present business. Once we begin making investments in additional eligible portfolio companies we anticipate there will be market risk sensitive instruments and we will disclose the applicable market risk information at that time.

Our primary financial instruments are cash in banks and money market instruments. We do not believe that these instruments are subject to material potential near-term losses in future earnings from reasonably possible near-term changes in market rates or prices. We do not have derivative financial instruments for speculative or trading purposes. We are not currently exposed to any material currency exchange risk.

ITEM 4. Controls and Procedures

Evaluation of disclosure controls and procedures. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2006. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective for gathering, analyzing and disclosing the information we are required to disclose in the reports we file under the Securities Exchange Act of 1934, within the time periods specified in the SEC’s rules and forms.

There were no significant changes in our internal controls or other factors that could significantly affect our internal controls subsequent to the date of our evaluation.

PART II - OTHER INFORMATION

ITEM 1.

Legal proceedings

In the ordinary course of business, we may be from time to time involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations. However, in the opinion of our management, matters currently pending or threatened against us are not expected to have a material adverse effect on our financial position or results of operations.

ITEM 1A.

Risk Factors

At the time we filed our Annual Report on Form 10-KSB, we were a Small Business Issuer as defined in Regulation S-B, and thus did not include risk factors in our filing.

ITEM 2.

Unregistered Sales of Equity Securities and Use of Proceeds

There have been no events which are required to be reported under this Item.

ITEM 3.

Defaults Upon Senior Securities

There have been no events which are required to be reported under this Item.

ITEM 4.

Submission of Matters to a Vote of Security Holders

There have been no events which are required to be reported under this Item.

ITEM 5.

Other Information

There have been no events which are required to be reported under this Item.

ITEM 6.

Exhibits

(a)	Exhibits

	3.1(1)	Articles of Incorporation of Electronic Media Central Corporation

	3.2(1)	Bylaws of Electronic Media Central Corporation

	31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

	31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

	32.1	Chief Executive Officer Certification Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

	32.2	Chief Financial Officer Certification Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

	(1)	Incorporated by reference to our Form 10-SB, Commission file number 000-32345, filed with the Commission on February 13, 2001.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: February 9, 2007	/s/ Roger Casas
	By: Roger Casas
	Its: Chief Executive Officer



Dated: February 9, 2007	George P. Morris
	By: George P. Morris
	Its: Chief Financial Officer