...Part VII.5...the last pr was to long for one page:
8. Agreement with V&R Distribution:
The Company has entered into an agreement with V&R Distribution to acquire the assets and/or
corporate entities of V&R Distribution, permitting Genesis to have its own well-established distribution
arm in retail, direct response and Internet channels of distribution.
D. Changes of Officers and Directors
The Company announces the resignation of the present Board of Directors, effective March 8, 1999.
The company announces the appointment of a new Board of Directors. The new Directors are:
Mark Wassmer
Jack Belton
Georgia Jacobson
The company announces the resignation of the present Officers of Genesis, effective March 8, 1999.
The company announces the appointment of new Officers. The new Officers are:
Jack Belton -- President
Mark Wassmer -- Executive Vice President
Carl J. Conte -- Secretary
Georgia Jacobson -- Treasurer
Safe Harbor Act Disclaimer:
The forward-looking statements in this release involve risk uncertainties, including but not limited to the
successful completion of the projects. Successful completion of these projects, are subject to a number
of uncertainties and unforeseen events. There can be no assurance of the goals of the company, to be
realized.
Forward-looking statements represent the company's beliefs and expectations concerning future
events. These forward-looking statements are qualified by important factors that could materially
impact the company's business and its abilities to complete these projects.
For information contact: Carl J. Conte, V.P., Investor Relations of Genesis Media Group, Inc.,
310-665-0221.
GENESIS MEDIA GROUP, INC.
Financial Statement (Unaudited)
December 31, 1998
Genesis Media Group, Inc.
Balance Sheet
December 31, 1998
(Unaudited)
ASSETS
Current Assets
Cash on hand and in banks $400
Accounts receivable -- trade 186,437
Loan receivable -- D. Jacobson 50,000
Contract receivables (Note 2) 1,800,000
Inventory (Notes 1, 3) 41,068,329
Prepaid expenses and misc.
receivables (Note 4) 111,030
43,216,196
Property & Equipment (Net of $37,333
accumulated depreciation) (Notes 1, 5) 661,666
Marketable Securities (Note 9) 235,168
Other Assets (Notes 2, 4, 6) 3,744,338
$47,857,368
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $17,286
Payroll taxes payable & other accrued taxes 46,735
Current portion of long term debt (Note 7) 934,873
998,894
Long Term Debt (Note 7) 1,843,822
Total Liabilities 2,842,716
Stockholders' Equity
Common Stock - Par value $0.0001, Authorized
50,000,000 shares, issued and outstanding
29,330,607 shares 2,933
Additional paid in capital (Note 3) 42,202,314
Retained earnings - December 31, 1998 2,809,405
45,014,652
$47,857,368
See accompanying footnotes.
Genesis Media Group, Inc.
Statement of Income and Retained Earnings
For the Year Ended Dec. 31, 1998
(Unaudited)
Gross Sales & Other Income
(Net of cost of sales of $81,564) $439,998
Operating Expenses
Advertising 6,420
Alarm expense 28
Amortization of copyrights 1,384
Automobile & parking 5,249
Bank charges 1,089
Commissions 1,000
Charitable contributions 150
Delivery & freight 316
Depreciation (Note 1) 28,362
Dues & subscriptions 1,101
Employee reimbursed expenses 55,980
Entertainment & meals 8,199
Insurance 10,730
Interest 28,062
Janitorial 3,360
Legal & accounting 92,833
Maintenance & repairs 3,482
Miscellaneous 24,103
Office expense & supplies 5,943
Outside services 43,181
Postage 6,253
Printing & reproductions 3,544
Rent & storage (Note 8) 106,327
Salaries & wages 266,640
Taxes & licenses
principally payroll taxes 13,929
Telephone 16,090
Travel 4,623
Utilities 226
Web site expense 1,500
740,104
Net (Loss) before Taxes (300,106)
Provision for Taxes 800
Net (Loss) (300,906)
Net (Loss) per common share (Note 10) $0.0103
Retained Earnings -- December 31, 1997 3,110,311
Retained Earnings -- December 31, 1998 $2,809,405
See accompanying footnotes.
Genesis Media Group, Inc.
Notes to Unaudited Financial Statements
December 31, 1998
Note 1 - Summary of Significant Accounting Policies
The summary of significant accounting policies of Genesis Media Group, Inc. is presented to assist in
understanding the Company's financial statements. The financial statements and notes are
representations of the Company's management. Management is responsible for their integrity. These
accounting policies conform to generally accepted accounting principles and have been consistently
applied in the preparation of the financial statements.
Line of Business
The Company is primarily engaged in media and advertising.
Accounts Receivable
The Company provides allowances against accounts receivable to maintain sufficient reserves to cover
anticipated losses.
Inventory
Inventory is stated at the lower of cost or market (with the exception of the inventory acquired from
Genesis Group, Inc. which has been stated at its appraised value), cost generally being determined on
a first-in, first-out basis.
Equipment and Depreciation
Depreciation has been provided on the same basis for tax and financial accounting purposes using the
straight-line, accelerated and declining balance methods. The estimated useful lives of the assets are as
follows:
Production equipment 10 years
Office equipment, furniture
& fixtures 5 - 10 years
Leasehold improvements 3 - 10 years
Copyrights and Amortization
Copyright were purchased and are subject to the 15 years amortization rules. For purpose of these
financial statements, copyrights are amortized on the straight line basis over 15 years.
Note 2 - Contracts Receivable
In August, 1997, Genesis Media Group, Inc., (formerly Hollywood Showcase T.V. Network, Inc.)
purchased in a tax free exchange a company named Genesis Group, Inc. One of the assets received is
a contract for the sales of rights to certain films. The terms of the contract call for monthly payments
which commenced March 1, 1998 in the amount of $100,000 per month for year and $200,000 per
month for the next 24 months. The total of the contract being $5,400,000. Income tax on this
transaction will be reported on the installment basis. Beginning October 1, 1999, a licensing fee of
$100,000 will be paid monthly to the Company until September 1, 2002.
Note 3 - Inventories
The inventory was acquired from Genesis Group Inc., and consists of movie films, music tapes and CD
ROM interactive tapes. With the inventory comes the rights to reconfigure, compile, manufacture,
distribute, license, sell and lease. Each item is one of a kind. The Company has an independent
appraisal that identifies each item of inventory, and evaluates it. Inventory is carried at appraised value.
Inventories consist of the following:
Music and films $41,005,414
Work in process - James Dean Production 54,085
Products ' 8,830
$41,068,329
Note 4 - Miscellaneous receivables
Included in the prepaids and miscellaneous receivables is a note for $20,000 from an officer of the
Company. The officer has pledged his shares of the company's common stock as collateral for said
note.
Note 5 - Property and Equipment
Property and equipment consists of the following at cost:
Computer equipment 34,114
Office furniture 27,356
Office equipment 46,172
Production equipment 55,371
Leased production equipment 515,810
Signs 335
Software 230
Leasehold improvements 19,611
698,999
Less accumulated deprec. (37,333)
$661,666
Leased production equipment represents capitalized leases whereby the company has the right to
exercise a nominal purchase option at the end of the lease. The portion of the lease included in the
equipment account are the estimated costs of the equipment at the time the leases were first executed
plus the purchase option cost.
Note 6 - Other Assets
Other assets consist of the following:
Deposits $29,728
Copyrights net of accumulated
amortization of $1,384 40,116
Production costs 50,638
License agreements 1,100
Loans to Dealer Direct 3,000
Loans to stockholder 19,756
Long term portion of
contract receivable 3,600,000
$3,744,338
Note 7 - Long Term Debt
The company sold the licensing and commercial broadcast rights to certain movies under an installment
contract maturing in year 2002. Under the Genesis' original terms of acquisition, Genesis Media Group
is obligated to pay the seller a percentage of the gross receipts from the buyer until said time the entire
obligation of $2,284,475 has been satisfied. The estimated current and long term portions of said
obligation consists of the following:
Contract payable $2,778,695
Less current portion (934,873)
$1,843,822
Also included are the net values of certain leases for production equipment. It is the intent of the
Company to exercise the purchase options at the end of the leases and therefore the value of the
equipment leased has been capitalized and said cost will be depreciated over the estimated useful life
of said equipment. The purchase options on said leases range from $1.00 to $100.00 per lease.
Note 8 - Commitments and Contingencies
The Company is committed under a lease with 5757 Leasing for office space at 5757 Century Blvd.,
in Los Angeles. Said lease requires a minimum monthly rent of approximately $7,400 and expires in
1999.
Note 9 - Marketable Securities
The Company holds a minority interest of approximately 5% in TranStar Communications, Inc. after a
distribution of TranStar stock to the shareholders of Genesis Media Group, Inc. Said investment is
represented by 1,000,000 shares of TranStar Communications, Inc.'s rule 144 restricted common
stock. As of December 31, 1998, said stock was quoted on the Bulletin Board at $10 per share.
The Company has purchased equipment and paid various expenses of TranStar, in which it holds a
minority interest. These costs ($235,168) are considered part of the cost of the Company's investment
in TranStar.
Note 10 - Earnings per Common Share
Earnings per share of common stock has been computed based on the total shares outstanding at
December 31, 1998.
SOURCE Genesis Media Group, Inc.
/CONTACT: Carl J. Conte, V.P., Investor Relations of Genesis Media Group,
Inc., 310-665-0221/
(GNNX) |
