-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L0JYLN26OUC4Mo8GRYziOH+ezi7bqzZKCheM/LCfb90kZXHZbagkHo2xq+yIBCTF N2ijI6dBvedXkwqUbJQCGA== 0001013176-00-000359.txt : 20010101 0001013176-00-000359.hdr.sgml : 20010101 ACCESSION NUMBER: 0001013176-00-000359 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001220 ITEM INFORMATION: FILED AS OF DATE: 20001229 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WESTERN MEDIA GROUP CORP CENTRAL INDEX KEY: 0000225501 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 411311718 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 002-71164 FILM NUMBER: 798495 BUSINESS ADDRESS: STREET 1: 11900 WAYZATA BLVD STREET 2: SUITE 100 CITY: HOPKINS STATE: MN ZIP: 55305 BUSINESS PHONE: 6125121851 MAIL ADDRESS: STREET 1: 11900 WAYZATA BLVD STREET 2: SUITE 100 CITY: HOPKINS STATE: MN ZIP: 55305 FORMER COMPANY: FORMER CONFORMED NAME: IONIC CONTROLS INC DATE OF NAME CHANGE: 19890402 8-K 1 0001.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (date of event reported): December 18, 2000. WESTERN MEDIA GROUP CORPORATION (Exact name of registrant as specified in its charter) Commission File No. 2-71164 Minnesota 41-1311718 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 11900 Wayzata Blvd., Suite 100 Hopkins, MN 55305 (Address of principal executive (Zip Code) offices) Registrant's Telephone Number: (612)-546-1332 Not Applicable (Former name, former address and former fiscal year, if changed since last report) ITEM 5. OTHER INFORMATION Western Media Group Corporation ("Company") previously filed annual reports on Form 10-KSB for the years ended December 31, 1999, 1998, and 1997. The Company believes the form of the financial statements included in these filings complies with applicable requirements of generally accepted accounting principles with respect to the presentation of stockholder equity. Nevertheless, the Company is refilling the financial statements with formal statements of stockholders' equity so that the information is presented in a more customary form. Enclosed are the audited financial statements of the Company for the years ended December 31 1999 and 1998, and December 31, 1998 and 1997. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Western Media Group Corporation DATED: December 18, 2000 By: /s/ Patrick L. Riggs, President 2 WESTERN MEDIA GROUP CORPORATION (A Development Stage Company) FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1999 AND 1998 AND PERIOD FROM REENTRANCE INTO DEVELOPMENT STAGE (AUGUST 1, 1991) TO DECEMBER 31, 1999 3 WESTERN MEDIA GROUP CORPORATION (A Development Stage Company) FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1999 AND 1998 AND PERIOD FROM REENTRANCE INTO DEVELOPMENT STAGE (AUGUST 1, 1991) TO DECEMBER 31, 1999 TABLE OF CONTENTS Page Independent Auditors' Report F-1 Financial Statements: Balance Sheets F-2 Statements of Operations F-3 Statements of Stockholders' Equity (Deficit) F-4 Statements of Cash Flows F-5 Notes to Financial Statements F-6 4 Callahan, Johnston & Associates, LLC Certified Public Accountants and Consultants INDEPENDENT AUDITORS' REPORT Stockholders and Board of Directors Western Media Group Corporation (A Development Stage Company) Minneapolis, Minnesota We have audited the accompanying balance sheets of Western Media Group Corporation as of December 31, 1999 and 1998, and the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended and the period from reentrance into development stage (August 1, 1991) to December 31, 1999. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Western Media Group Corporation as of December 31, 1999 and 1998 and the results of operations and cash flows for the years then ended and the period from reentrance into development stage (August 1, 1991) to December 31, 1999, in conformity with generally accepted accounting principles. As described in Note 2 to the financial statements, the ultimate recoverability of investments in the development stage and continuance of the Company as a going concern is dependent on future profitable operations, which presently cannot be determined. /s/ Callahan, Johnston & Associates, LLC CALLAHAN, JOHNSTON & ASSOCIATES, LLC Minneapolis, Minnesota June 8, 2000 7850 Metro Parkway, Suite 207, Minneapolis, MN 55425 Telephone: (952)858-7207 Fax: (952)858-7202 Email: callahan_johnston@msn.com F-1 WESTERN MEDIA GROUP CORPORATION (A Development Stage Company) BALANCE SHEETS December 31, 1999 1998 ASSETS Total current assets and total assets $ - $ - LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable $ 87,149 $ 87,149 Note payable and accrued interest - related party 18,681 18,681 Amount due to officer 22,710 22,710 Total current liabilities 128,540 128,540 Stockholders' equity (deficit): Common stock: $.01 par value; 25,000,000 shares authorized; issued and outstanding 11,993,100 shares 119,931 119,931 Additional paid-in capital 737,314 737,314 Accumulated deficit (943,064) (943,064) Deficit accumulated during development stage (42,721) (42,721) Total stockholders' equity (deficit) (128,540) (128,540) Total liabilities and Stockholders' equity (deficit) $ - $ - The accompanying notes are an integral part of these financial statements. F-2 WESTERN MEDIA GROUP CORPORATION (A Development Stage Company) STATEMENTS OF OPERATIONS Period From August 1, 1991 Years Ended December 31, December 31, 1999 1998 1999 Revenues $ - $ - $ - Administrative expenses - - (42,721) Income tax expense (benefit) - - - Net income (loss) - - (42,721) Other comprehensive income (loss) - - - Comprehensive income (loss) $ - $ - $ (42,721) Basic earnings (loss) per share $ - $ - $ - Weighted average number of shares outstanding 11,993,100 11,993,100 11,993,100 The accompanying notes are an integral part of these financial statements. F-3 WESTERN MEDIA GROUP CORPORATION (A Development Stage Company) STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
Deficit Accumulated Common Stock Additional During Number of Paid-In Accumulated Development Shares Amount Capital Deficit Stage Total Reentrance into development stage (August 1, 1991) 11,993,100 $ 119,931 $ 737,314 $(943,064) $ - $ (85,819) Net loss: August 1, 1991 to December 31, 1991 - - - - - - Net income (loss) - 1992 - - - - (42,721) (42,721) Net income (loss) - 1993 - - - - - - Net income (loss) - 1994 - - - - - - Net income (loss) - 1995 - - - - - - Net income (loss) - 1996 - - - - - - Net income (loss) - 1997 - - - - - - December 31, 1997 11,993,100 119,931 737,314 (943,064) (42,721) (128,540) Net income (loss) - - - - - - December 31, 1998 11,993,100 119,931 737,314 (943,064) (42,721) (128,540) Net income (loss) - - - - - - December 31, 1999 11,993,100 $ 119,931 $ 737,314 $(943,064) $(42,721) $(128,540) The accompanying notes are an integral part of these financial statements. F-4 WESTERN MEDIA GROUP CORPORATION (A Development Stage Company) STATEMENTS OF CASH FLOWS Increase (Decrease) In Cash Period From August 1, 1991 Years Ended December 31, December 31, 1999 1998 1999 Cash flows from operating activities: Net income (loss) $ - $ - $ (42,721) Adjustments to reconcile net income (loss) to cash flows from operating activities: Bad debt expense - - 24,910 Accounts payable and other current liabilities - - (6,377) Cash flows from operating activities - - (24,188) Cash flows from financing activities: Proceeds from due to officer - - 22,710 Cash flows from investing activities - - - Increase (decrease) in cash - - (1,478) Cash: Beginning of year - - 1,478 End of year $ - $ - $ - Supplemental cash flow information: Interest paid $ - $ - $ - Income taxes paid $ - $ - $ - Summary of non cash activity: None. The accompanying notes are an integral part of these financial statements. F-5 WESTERN MEDIA GROUP CORPORATION (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1999 AND 1998 AND THE PERIOD FROM REENTRANCE INTO DEVELOPMENT STAGE (AUGUST 1, 1991) TO DECEMBER 31, 1999 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business The Company was incorporated on July 26, 1977, under the laws of the State of Minnesota. On November 17, 1988, the Company changed its name to Western Media Group Corporation. Formerly the Company was known as Ionic Controls, Inc. On July 31, 1991, the Company sold substantially all of its operations, KXDC-AM and FM in Monterey, California for $1,100,000. Proceeds from this sale were assigned to the Company's chief executive officer in settlement of $5,156,139 owed to this individual. The Company recorded a gain on debt forgiveness of $4,056,139 on this transaction as reported in its September 30, 1991 Form 10-Q. The Company's only remaining operations at that date were 100% working interests in two oil leases in Bugai - Guadolupe County, Texas owned through the Company's wholly-owned subsidiary, Ionic Energy Corporation. These leases were without value and the Company ultimately abandoned these interests in 1992. The Company further allowed Ionic Energy Corporation to be statutorially dissolved on August 1, 1997. The Company currently has no operations. Risks, Estimates and Uncertainties 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 reported amounts of revenues and expenses during the reporting period. (Continued) F-6 WESTERN MEDIA GROUP CORPORATION (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1999 AND 1998 AND THE PERIOD FROM REENTRANCE INTO DEVELOPMENT STAGE (AUGUST 1, 1991) TO DECEMBER 31, 1999 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Earnings Per Share The Company implemented FASB 128: Earnings Per Share. FASB 128 replaces the presentation of primary EPS with basic EPS. Basic EPS excludes dilution and is computed by dividing net income by the weighted-average number of common shares outstanding for the year. Diluted EPS reflects the potential dilution from stock options and warrants and is computed using the treasury stock method. Under the treasury stock method stock options are assumed to have been exercised at the beginning of the period if the exercise price exceeds the average market price during the period. The computation of diluted EPS does not assume conversion or exercise of securities that would have an antidilutive effect on earnings per share. There are not outstanding stock options or warrants. Income Taxes The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" which requires the use of the "liability method" of accounting for income taxes. The Company's net operating loss carryforwards are fully allowed for due to questions regarding the Company's ability to utilize these losses before they expire. Deferred tax asset relating to net operating loss carryforwards $ 340,000 Valuation allowance (340,000) Net deferred tax asset $ - (Continued) F-7 WESTERN MEDIA GROUP CORPORATION (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1999 AND 1998 AND THE PERIOD FROM REENTRANCE INTO DEVELOPMENT STAGE (AUGUST 1, 1991) TO DECEMBER 31, 1999 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Income Taxes (Continued) At December 31, 1999, the Company has carryforwards as follows: Federal State 2007 $1,137,000 $ 12,000 NOTE 2 - DEVELOPMENT STAGE COMPANY On July 31, 1991, the Company sold substantially all of its operations and reentered the development stage. Since that date the Company has devoted the majority of its efforts to: maintenance of the corporate status; raising capital; and the search for a merger candidate. The Company is fully dependent upon the support of certain stockholder(s) for the maintenance of its corporate status and to provide all working capital support for the Company. These stockholder(s) intend to continue to fund necessary expenses to sustain the Company. The Company is presently seeking a merger candidate and feels it will be successful in finding such a candidate. Failure of the Company to find a merger candidate and achieve profitable operations or the failure of its stockholder(s) to fund necessary expenses of the Company could result in the Company being unable to continue as a going concern. No estimate can be made of the range of loss that is reasonably possible should the Company be unsuccessful. (Continued) F-8 WESTERN MEDIA GROUP CORPORATION (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1999 AND 1998 AND THE PERIOD FROM REENTRANCE INTO DEVELOPMENT STAGE (AUGUST 1, 1991) TO DECEMBER 31, 1999 NOTE 3 - SUBSEQUENT EVENTS Note Payable and Accrued Interest - Related party / Amount Due to Officer These obligations were settled March 16, 2000 for $20,000 ( $10,000 in cash; 1,000,000 shares of common stock with a stated value of $10,000) resulting in $21,391 in debt forgiveness. Accounts Payable Subsequent to year end the $87,149 in accounts payable were settled for $22,500 resulting in debt forgiveness of $64,649. Stock Issuance On March 16, 2000, the Company approved the issuance of 12,000,000 shares of common stock at $.003 a share. These monies were collected in 2000. F-9 WESTERN MEDIA GROUP CORPORATION (A Development Stage Company) FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1998 AND 1997 AND PERIOD FROM REENTRANCE INTO DEVELOPMENT STAGE (AUGUST 1, 1991) TO DECEMBER 31, 1998 F-10 WESTERN MEDIA GROUP CORPORATION (A Development Stage Company) FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1998 AND 1997 AND PERIOD FROM REENTRANCE INTO DEVELOPMENT STAGE (AUGUST 1, 1991) TO DECEMBER 31, 1998 TABLE OF CONTENTS Page Independent Auditors' Report F-12 Financial Statements: Balance Sheets F-13 Statements of Operations F-14 Statements of Stockholders' Equity (Deficit) F-15 Statements of Cash Flows F-16 Notes to Financial Statements F-17 F-11 Callahan, Johnston & Associates, LLC Certified Public Accountants and Consultants INDEPENDENT AUDITORS' REPORT Stockholders and Board of Directors Western Media Group Corporation (A Development Stage Company) Minneapolis, Minnesota We have audited the accompanying balance sheets of Western Media Group Corporation as of December 31, 1998 and 1997, and the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended and the period from reentrance into development stage (August 1, 1991) to December 31, 1998. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Western Media Group Corporation as of December 31, 1998 and 1997 and the results of operations and cash flows for the years then ended and the period from reentrance into development stage (August 1, 1991) to December 31, 1998, in conformity with generally accepted accounting principles. As described in Note 2 to the financial statements, the ultimate recoverability of investments in the development stage and continuance of the Company as a going concern is dependent on future profitable operations, which presently cannot be determined. /s/ Callahan, Johnston & Associates, LLC CALLAHAN, JOHNSTON & ASSOCIATES, LLC Minneapolis, Minnesota June 8, 2000 7850 Metro Parkway, Suite 207, Minneapolis, MN 55425 Telephone: (952)858-7207 Fax: (952)858-7202 Email: callahan_johnston@msn.com F-12 WESTERN MEDIA GROUP CORPORATION (A Development Stage Company) BALANCE SHEETS December 31, 1998 1997 ASSETS Total current assets and total assets $ - $ - LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable $ 87,149 $ 87,149 Note payable and accrued interest - related party 18,681 18,681 Amount due to officer 22,710 22,710 Total current liabilities 128,540 128,540 Stockholders' equity (deficit): Common stock: $.01 par value; 25,000,000 shares authorized; issued and outstanding 11,993,100 shares 119,931 119,931 Additional paid-in capital 737,314 737,314 Accumulated deficit (943,064) (943,064) Deficit accumulated during development stage (42,721) (42,721) Total stockholders' equity (deficit) (128,540) (128,540) Total liabilities and Stockholders' equity (deficit) $ - $ - The accompanying notes are an integral part of these financial statements. F-13 WESTERN MEDIA GROUP CORPORATION (A Development Stage Company) STATEMENTS OF OPERATIONS Period From August 1, 1991 Years Ended December 31, December 31, 1998 1997 1998 Revenues $ - $ - $ - Administrative expenses - - (42,721) Income tax expense (benefit) - - - Net income (loss) - - (42,721) Other comprehensive income (loss) - - - Comprehensive income (loss) $ - $ - $(42,721) Basic earnings (loss) per share $ - $ - $ - Weighted average number of shares outstanding 11,993,100 11,993,100 11,993,100
The accompanying notes are an integral part of these financial statements. F-14 WESTERN MEDIA GROUP CORPORATION (A Development Stage Company) STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
Deficit Accumulated Common Stock Additional During Number of Paid-In Accumulated Development Shares Amount Capital Deficit Stage Total Reentrance into development stage (August 1, 1991) 11,993,100 $ 119,931 $ 737,314 $(943,064) $ - $ (85,819) Net loss: August 1, 1991 to December 31, 1991 - - - - - - Net income (loss) - 1992 - - - - (42,721) (42,721) Net income (loss) - 1993 - - - - - - Net income (loss) - 1994 - - - - - - Net income (loss) - 1995 - - - - - - Net income (loss) - 1996 - - - - - - December 31, 199 11,993,100 119,931 737,314 (943,064) (42,721) (128,540) Net income (loss) - - - - - - December 31, 1997 11,993,100 119,931 737,314 (943,064) (42,721) (128,540) Net income (loss) - - - - - - December 31, 1998 11,993,100 $ 119,931 $ 737,314 $(943,064) $ (42,721) $(128,540)
The accompanying notes are an integral part of these financial statements. F-15 WESTERN MEDIA GROUP CORPORATION (A Development Stage Company) STATEMENTS OF CASH FLOWS Increase (Decrease) In Cash Period From August 1, 1991 Years Ended December 31, December 31, 1998 1997 1998 Cash flows from operating activities: Net income (loss) $ - $ - $ (42,721) Adjustments to reconcile net income (loss) to cash flows from operating activities: Bad debt expense - - 24,910 Accounts payable and other current liabilities - - (6,377) Cash flows from operating activities - - (24,188) Cash flows from financing activities: Proceeds from due to officer - - 22,710 Cash flows from investing activities - - - Increase (decrease) in cash - - (1,478) Cash: Beginning of year - - 1,478 End of year $ - $ - $ - Supplemental cash flow information: Interest paid $ - $ - $ - Income taxes paid $ - $ - $ - Summary of non cash activity: None. The accompanying notes are an integral part of these financial statements. F-16 WESTERN MEDIA GROUP CORPORATION (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1998 AND 1997 AND PERIOD FROM REENTRANCE INTO DEVELOPMENT STAGE (AUGUST 1, 1991) TO DECEMBER 31, 1998 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business The Company was incorporated on July 26, 1977, under the laws of the State of Minnesota. On November 17, 1988, the Company changed its name to Western Media Group Corporation. Formerly the Company was known as Ionic Controls, Inc. On July 31, 1991, the Company sold substantially all of its operations, KXDC-AM and FM in Monterey, California for $1,100,000. Proceeds from this sale were assigned to the Company's chief executive officer in settlement of $5,156,139 owed to this individual. The Company recorded a gain on debt forgiveness of $4,056,139 on this transaction as reported in its September 30, 1991 Form 10-Q. The Company's only remaining operations at that date were 100% working interests in two oil leases in Bugai - Guadolupe County, Texas owned through the Company's wholly-owned subsidiary, Ionic Energy Corporation. These leases were without value and the Company ultimately abandoned these interests in 1992. The Company further allowed Ionic Energy Corporation to be statutorially dissolved on August 1, 1997. The Company currently has no operations. Risks, Estimates and Uncertainties 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 reported amounts of revenues and expenses during the reporting period. (Continued) F-17 WESTERN MEDIA GROUP CORPORATION (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1998 AND 1997 AND PERIOD FROM REENTRANCE INTO DEVELOPMENT STAGE (AUGUST 1, 1991) TO DECEMBER 31, 1998 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Earnings Per Share The Company implemented FASB 128: Earnings Per Share. FASB 128 replaces the presentation of primary EPS with basic EPS. Basic EPS excludes dilution and is computed by dividing net income by the weighted-average number of common shares outstanding for the year. Diluted EPS reflects the potential dilution from stock options and warrants and is computed using the treasury stock method. Under the treasury stock method stock options are assumed to have been exercised at the beginning of the period if the exercise price exceeds the average market price during the period. The computation of diluted EPS does not assume conversion or exercise of securities that would have an antidilutive effect on earnings per share. There are not outstanding stock options or warrants. Income Taxes The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" which requires the use of the "liability method" of accounting for income taxes. The Company's net operating loss carryforwards are fully allowed for due to questions regarding the Company's ability to utilize these losses before they expire. Deferred tax asset relating to net operating loss carryforwards $ 340,000 Valuation allowance (340,000) Net deferred tax asset $ - (Continued) F-18 WESTERN MEDIA GROUP CORPORATION (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1998 AND 1997 AND PERIOD FROM REENTRANCE INTO DEVELOPMENT STAGE (AUGUST 1, 1991) TO DECEMBER 31, 1998 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Income Taxes (Continued) At December 31, 1998, the Company has carryforwards as follows: Federal State 2007 $1,137,000 $ 12,000 NOTE 2 - DEVELOPMENT STAGE COMPANY On July 31, 1991, the Company sold substantially all of its operations and reentered the development stage. Since that date the Company has devoted the majority of its efforts to: maintenance of the corporate status; raising capital; and the search for a merger candidate. The Company is fully dependent upon the support of certain stockholder(s) for the maintenance of its corporate status and to provide all working capital support for the Company. These stockholder(s) intend to continue to fund necessary expenses to sustain the Company. The Company is presently seeking a merger candidate and feels it will be successful in finding such a candidate. Failure of the Company to find a merger candidate and achieve profitable operations or the failure of its stockholder(s) to fund necessary expenses of the Company could result in the Company being unable to continue as a going concern. No estimate can be made of the range of loss that is reasonably possible should the Company be unsuccessful. (Continued) F-19 WESTERN MEDIA GROUP CORPORATION (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1998 AND 1997 AND PERIOD FROM REENTRANCE INTO DEVELOPMENT STAGE (AUGUST 1, 1991) TO DECEMBER 31, 1998 NOTE 3 - SUBSEQUENT EVENTS Note Payable and Accrued Interest - Related party / Amount Due to Officer These obligations were settled March 16, 2000 for $20,000 ( $10,000 in cash; 1,000,000 shares of common stock with a stated value of $10,000) resulting in $21,391 in debt forgiveness. Accounts Payable Subsequent to year end the $87,149 in accounts payable were settled for $22,500 resulting in debt forgiveness of $64,649. Stock Issuance On March 16, 2000, the Company approved the issuance of 12,000,000 shares of common stock at $.003 a share. These monies were collected in 2000. F-20 -----END PRIVACY-ENHANCED MESSAGE-----