Theo,
Infe holds 900k-1M shares exchanged for serices rendered. I've enclosed DTMG's latest SEC filing. The excitement is about some patents they hold or have pending on a way to take plain old copper connections and greatly increase speed and bandwidth for internet access, better than DSL in several respects. Hope it pans out.
Recent filings: Jun 15, 2000 (Annual Rpt)
More filings for DTMG available from EDGAR Online | Access real-time filings with EDGAR Online Premium
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June 15, 2000
DIGITAL TECHNOLOGIES MEDIA GROUP INC (DTMG)
Annual Report (SEC form 10KSB)
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion and analysis should be read together with the financial statements and notes thereto included elsewhere herein.
General
The Company is the product of a reorganization of two previously unaffiliated companies, Digital Technologies Group, Inc. ("DTG"), which was organized in April 1995, and Miller & Benson International, Ltd. ("M&B"), which was reincorporated in Delaware in January, 1992, subsequent to the confirmation of its Plan of Reorganization under Chapter 11 of the U.S. Bankruptcy Code. For approximately nine years prior to July 1996, M&B had no operating business. In July 1996, DTG and M&B completed a reorganization (the "Reorganization") in which all of the then outstanding shares of common stock of DTG were exchanged for 4,401,127 shares of the common stock of M&B. As a result of the Reorganization, DTG became a wholly owned subsidiary of M&B. M&B changed its name to "Digital Technologies Media Group, Inc." and the shareholders of DTG immediately prior to the Reorganization became the owners of approximately 81.5% of the outstanding shares of M&B common stock. The Reorganization has been accounted for as a reverse acquisition as if DTG issued 4,401,127 shares of its common stock to acquire the net assets of M&B at the time of the Reorganization.
Unless the context indicates otherwise, the term "Company" refers to the operations of DTG prior to and following the Reorganization. For further information regarding the Reorganization, see Note 7 of Notes to Consolidated Financial Statements.
The following discussion and analysis should be read in conjunction with our financial statements and accompanying notes appearing elsewhere in the Form10-KSB.
Overview
History of Operations
Digital Technologies Media Group, Inc., a Delaware corporation, is the Company (a Debtor in possession) in a Chapter 11 bankruptcy court case. On January 26, 1999, the Company filed bankruptcy caused by a voluntary Chapter 11 petition under the U.S. Bankruptcy code.
During the fiscal year ended December 31, 1997, the Company ceased operations and cancelled 2,320,000 shares of common stock to reverse an asset purchase of a film entertainment library and related film contracts. The then president of the Company resigned and by year-end, the existing corporate entity had no assets.
The Company remained dormant until it developed a business plan and then filed for bankruptcy to confirm the plan. The Company purchased one enterprise, DataNet Information Systems, Inc. (a Nevada corporation), which was acquired pursuant to Bankruptcy Court approval on January 19, 2000. The Company intends to operate as a Business Development Company, which is essentially a closed-end Mutual fund specifically designed to engage in investments of start up companies. Recently, pursuant to Bankruptcy Court Order, the Company received $310,000 in borrowed funds to purchase DataNet Information Systems, Inc. and to pay administrative expenses.
Results of Operations
We believe that period-to-period comparisons of our operating results are not necessarily indicators of future performance. You should consider our prospects in light of the risks, expenses and difficulties frequently encountered by companies experiencing rapid growth and, in particular, rapidly growing companies that operate in evolving markets. We may not be able to successfully address these risks and difficulties.
Comparisons of the Years Ended December 31, 1999 and December 31, 1998
In both years there was no revenue, or gross profit as the Company was inactive.
The operating expenses increased to $143,240 in 1999 from $16,632 in 1998 as a result of the Chapter 11 bankruptcy filing. Approximately $127,000 was incurred for accrued legal and administrative services to finalize prepetition claims (Liabilities) and a plan of reorganization. The balance of the expenses was for rent $6,000 and other typical services related to administrative costs. There were no taxes or interest paid. The net loss for the reasons described were $143,240 and $16,632 in 1999 and 1998, respectively. All tax losses will be carried forward in compliance with IRS regulations.
Liquidity and Capital Resources
The Liquidity of the company is dependent upon the confirmation of the plan of reorganization. The Company had a bank balance of $74 at December 31, 1999. The current liabilities of $135,520 will be part of the plan of reorganization, except for $7,227 of which most of the accrued expense is to a related party for rent, equipment and travel expenses.
The prepetition liabilities totaling $565,549 as well as the $127,293 of professional fees and post petition administrative claims will be converted into common stock under the plan of reorganization subject to final approval of the Bankruptcy Court.
The Company has a going concern issue that may be eliminated as a result of borrowing $310,000, which was received by April 4, 2000. The Company paid $100,000 for the working capital infusion of DataNet Information Systems, Inc., and is keeping the rest ($210,000) for administrative expenses. The $310,000 of notes payable can be converted into common stock at the option of the note holders. The Company believes that the above facts support that it does not have a going concern issue.
Liquidity and Capital Resources
Initially, the Company funded its operations through borrowings from private investors, of which all but two investors subsequently converted such loans into common stock of the Company in connection with the reverse acquisition in July 1996.
Since its inception, the Company has experienced losses from operations of $750,061 for the period ended December 31, 1995 and $387,157 for the year ended December 31, 1996. The Company has negative working capital of approximately $654,000. Accordingly, the Company requires additional sales and collections and/or it needs to raise additional capital to meet its operating needs and to satisfy its outstanding liabilities. If the Company is unable to acquire additional cash resources, either from current operations or new financing, it may be unable to continue as a going concern. The report of the Company's independent auditor indicates that the Company has minimal cash available to meet its future operating requirements and that, therefore, there is a substantial doubt regarding the Company's ability to continue as a going concern.
In the event of unanticipated developments during the next few months, or to satisfy future funding requirements, the Company may attempt to fund its operations through a private offering of securities. Additional financing may not be available when needed or on terms acceptable to the Company. If adequate financing is not available, the Company may be required to delay, scale back or eliminate certain of its proposed plans, to relinquish rights to certain of its products, or to license or sublicense to third parties the right to distribute programs the Company would otherwise seek to develop itself. If the Company is required to take such action, there can be no assurance that the Company will be able to continue to operate as a going concern.
ITEM 7. FINANCIAL STATEMENTS
The following financial statements are included as a separate section following the signature page to this Form 10-KSB and are incorporated herein by reference:
DIGITAL TECHNOLOGIES MEDIA GROUP, INC.
INDEX TO FINANCIAL STATEMENTS
Page
Report of Oppenheim & Ostrick, CPA's, Independent Auditors F-2
Balance Sheet as of December 31, 1998 and 1999 F-3
Statement of Income for the Years Ended December 31, 1998 (Unaudited) and 1999 F-4
Statement of Stockholders' Equity for the Years Ended December 31, 1998 (Unaudited) and 1999 F-5
Statement of Cash Flows the Years Ended December 31, 1998 (Unaudited) and 1999 F-6
Notes to Financial Statements F-7 - F-12
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
There have been disagreements with the Company's former accountants, Jay J. Shapiro respecting accounting and financial disclosure which the present officers of the Company believe were materially incorrect, and due to the misrepresentation by previous management. A copy of the letter of Jay .J. Shapiro is attached hereto as an Exhibit. Pursuant to the Disclosure Statement Describing the Third Amended Chapter 11 Plan, the Company may pursue a claim for relief against Jay J. Shapiro.
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Recent filings: Jun 15, 2000 (Annual Rpt)
More filings for DTMG available from EDGAR Online | Access real-time filings with EDGAR Online Premium
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