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EX-32.1 - CERTIFICATION - WLMG HOLDING INC | f10k2009ex32i_wlmg.htm |
EX-14.1 - CODE OF ETHICS - WLMG HOLDING INC | f10k2009ex14i_wlmg.htm |
EX-31.1 - CERTIFICATION - WLMG HOLDING INC | f10k2009ex31i_wlmg.htm |
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
(Mark
One)
x
|
ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the fiscal year ended December 31, 2009
o
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TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For the
transition period from ___________ to ___________
Commission
File No. 333-158088
WLMG
HOLDING, INC.
(Name of
small business issuer in its charter)
DELAWARE
|
|
(State
or other jurisdiction of
incorporation
or organization)
|
(IRS
Employer Identification No.)
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3008
County Clare Road
Greensboro,
NC
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27407
|
(Address
of principal executive offices)
|
(Zip
Code)
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(336)
253-6667
(Registrant’s
telephone number, including area code)
Securities
registered under Section 12(b) of the Exchange Act:
|
|
Title
of each class registered:
|
Name
of each exchange on which registered:
|
None
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None
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Securities
registered under Section 12(g) of the Exchange Act:
|
|
Common
Stock, par value $.001
(Title
of class)
|
Indicate
by check mark whether the registrant (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
No o
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).
Yes ¨ No ¨
Indicate
by check mark whether the registrant is a shell company as defined in Rule 12b-2
of the Exchange Act. Yes x
No o
Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B not contained in this form, and no disclosure will be contained,
to the best of the registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.
Large accelerated filer o | Accelerated filer o |
Non-accelerated filer o | Smaller reporting company x |
(Do not check if a smaller reporting company) |
Revenues
for year ended December 31, 2009: $0
Aggregate
market value of the voting common stock held by non-affiliates of the registrant
as of December 31, 2009, was: $0
Number of
shares of the registrant’s common stock outstanding as of March 8, 2010 was: 6,
665, 000
Transitional
Small Business Disclosure
Format:
Yes
o No
x
TABLE
OF CONTENTS
PART
I
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ITEM
1.
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1
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ITEM
2.
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3
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ITEM
3.
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3
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ITEM
4.
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3
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PART
II
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ITEM
5.
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3
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ITEM
6.
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6
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ITEM
7.
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F-1
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ITEM
8.
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9
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ITEM
8A.
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9
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PART
III
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ITEM
9.
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10
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ITEM
10.
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12
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ITEM
11.
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12
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ITEM
12.
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13
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PART
IV
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ITEM
13.
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13
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ITEM
14.
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13
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SIGNATURES
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12
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PART
I
ITEM
1. DESCRIPTION OF BUSINESS
GENERAL
We were
incorporated in Delaware on February 2007. We plan to out-license
original television programming aimed at young adults as well as internet
sites. Our business is to distribute our unique and proprietary
programs by out-licensing the rights for broadcast, cable, satellite, Internet
and/or home video production to unrelated third parties that are independently
engaged in the promotion and distribution of consumer programming.
We plan
to out-license original television programming aimed at young adults as well as
internet sites. Our business is to distribute our unique and proprietary
programs by out-licensing the rights for broadcast, cable, satellite, Internet
and/or home video production to unrelated third parties that are independently
engaged in the promotion and distribution of consumer programming. Additionally
we plan to work with providers of turnkey marketing solutions to reach merchants
and advertisers through the internet.
Products
We plan
to produce a product line that has television ratings attractive to
audiences. Opportunity exists to expand the distribution of
copyrighted shows, to produce a limited number of new compilations from existing
footage and to convert more programming to DVD for out-licensing and for
direct-to-consumer sales. Current projects we are working on
include:
Hip-Hop
Nation: Up-and-coming as well as established artists explore the
underground world of hip-hop culture.
Playground
Earth: An up-close-and-personal look at adventure sports, the essence of
the wild outdoor experience.
Spring
Break: A feature-length documentary capturing the craziness of a great
American institution – Spring Break – as experienced by the students who live
it.
Marshall’s
Women in Comedy: Prime time network special starring Whoopie Goldberg,
Joy Behar and Caroline Rhea.
Inside
the Music: An “Access Hollywood” look at the latest music
scene.
Competition
In a
competitive market that demands differentiated programming aimed at niche
audiences, we would like to find programming that has a track record of
successful network broadcasts and syndication sales.
While our
distribution partners can choose from an unlimited number and variety of
programming available for broadcast, cable and/or DVD, we alone want to offer
our distinct original programs.
Sales
We will
seek revenues derived from out-licensing and syndication and the sale of
broadcast rights of original multi-episodic programming to distribution partners
in consumer media markets around the world. We want to out-license
television, home video and/or Internet rights around the world through a Los
Angeles-based sales agency. We are exploring a sales agency agreement
with Vision Films Inc. that would be renewable
annually. The role of the agency is to solicit agreements for the
sale, license, disposition and/or exploitation of our programs in all media
through a licensed territory during the term of the agreement. The agency
distribution fee should be equal to 30% of gross receipts, defined as all monies
payable in connection with the programming received from all sources. This
percentage fee arrangement will allow us to operate with minimal overhead while
achieving a steady gross margin. The sales agency reports a summary
of sales and expenses within 60 days of the end of each calendar quarter.
Additionally we are considering a license agreement with Internet Consulting
Services, Inc. to help create a viral internet sales
strategy.
Target
Markets and Customers
Global
interest in American youth culture creates a large consumer media market for our
programming. Therefore, we are positioned to offer a targeted product
line to distribution partners all around the world.
Our
planned sales and marketing strategy will target distribution partners in
consumer media markets around the world who can in-license our programs for
specific territories for a finite time period. We will reach these
customers through trade listings, screening DVDs, promotional print brochures
and posters, and presence at major industry markets, including NATPE, AMF,
MIPTV, LA Screenings, MipCom, MipAsia, Cannes and MIFED. Currently,
we plan to work on establishing licensing agreements for broadcast rights in
only 35% of identified broadcast markets worldwide. Sales efforts at the above
mentioned trade shows, more availability of screening DVDs, and newly compiled
programming content will increase our global penetration of broadcast market
areas.
1
The
following table lists licensing agreements that we are working on completing for
one of our initial projects Hip-Hop
Nation. Once we complete the current licensing agreements our
plans include increasing the number of licensees for Hip-Hop Nation as well as
growing our product line available for licensing to include additional titles,
primarily Playground Earth,
Spring Break and
Marshall’s Women in Comedy. To date we have not finalized any
of the agreements set forth below or any other licensing agreement on behalf of
Hip-Hop Nation but we have completed a form of licensing agreement which we are
using to negotiate the terms of the licensing agreement with these third
parties At this time it is our goal to have at least one agreement
finalized and executed by the end of the year. However, we can provide no
assurances that we will be able to finalize any of these
agreements.
AGREEMENTS
WE ARE CURRENTLY WORKING ON:
Licensing
Agreements for Hip-Hop Nation
|
||
Territory
|
Licensee
|
Rights
Granted
|
USA,
Canada
|
Xenon
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Home
video (DVD, VHS CD-Rom)
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South
Africa
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ILC
SA Ltd
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Home
video (VHS, HDDVD, iPod)
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Japan
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Step-by-Step
Co.
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Home
video (VHS, DVD, VOD)
|
Netherlands,
Belgium, Luxembourg
|
Media
Sales & Licensing BV
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All
forms of home video, include DVD and VHS
|
Philippines
|
Solar
Entertainment
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Cable
TV
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Australia,
NZ
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Stomp
Visual
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Home
video (VHS, DVD)
|
France
|
Infini
Media
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Home
video and TV: cable, satellite
|
Brazil,
Chile
|
Top
Tape
|
Home
video (VHS, DVD)
|
UK
|
Revelation
Films Ltd
|
All
physical AV (DVD, VHS)
|
Our
growth plans will include direct-to-consumer marketing to promote DVD sales of
our programming in the US. Promotions will be aimed exclusively at
the 18-to-24 year old collegiate demographic. This audience demands
the type of demographically-targeted programming that we will
provide. To market the sale of DVDs, we will employ several
previously effective promotional vehicles, including retail point-of-sale,
direct mail, and MTV infomercials. We also plan to develop a consumer website
and to test direct response advertising on USA late-night TV, a strategy proven
effective for similar television programs sold on
DVD. Additionally we have identified a consulting firm that we
think can assist us in the internet sales strategy.
Nielsen
Media Research reports that college students watch an average of 24.3 hours of
television per week. The most popular time for students to watch
television is at night, with 74 percent of student’s surveyed watching primetime
from 8 p.m. to 11 p.m. and 60 percent of students watching late-night TV from 11
p.m. to 1 a.m. The most popular networks for college students are
ESPN, MTV and Comedy Central, which indicates the most popular genres for
students are sports, music, and comedy entertainment. Traditional
television networks are investing in new media entries to maintain market share
in the collegiate demographic, which is becoming increasingly fragmented due to
ongoing growth in the amount and variety of programming available for
viewing.
Nielsen
Media Research will start this spring including college students living away
from home in its television ratings, a move that could bolster ratings on
networks like Fox, MTV and the WB, which cater to younger
viewers. Because networks and advertisers rely on the ratings to sell
commercials, the inclusion of college students who live away from home will add
a potentially influential demographic, translating into rating points that will
attract advertisers and could result in increased demand for content aimed
specifically at this demographic.
Industry
Trends
Television
Licensing
Since the
advent of cable television, the number of channels and variety of programming
has risen steadily. As a result, television audiences are increasingly
fragmented, driving the demand for low-cost, high-quality niche programming,
according to Forrester Research. Because we plan to out-license only
existing programming and intend to add only new compilations of existing
footage, our production costs will be low and we will be able to offer
high-quality products at a low licensing cost to our distribution
partners.
DVD
Sales
2
Retail
DVD sales are expected to continue to grow throughout the world, albeit at a
slower rate than in previous years. A value decline at retail is being driven by
price deflation due to the growing popularity of mass merchants as a preferred
channel among consumers for the purchase of DVDs. This trend will
continue to help drive the sale of DVDs.
In 2006,
DVD purchases outside the US generated over $1 billion, according to Media
Control International. In the US, consumer purchases of home
entertainment, primarily DVD, totaled over $500 million in 2006.
TV titles
on DVD are the biggest growth driver on home video, with sales growth of 28% in
2005, according to Nielsen Research. Buyers of TV shows on DVD tend
to be younger and more affluent than the average of all DVD buyers. Renewed
interest in network TV shows, including reality TV, has driven new interest in
the TV category in stores, contributing to growth in TV DVD
sales. Growth potential is enormous, according to MTV research.
Better packaging of TV product for rental retailers supported by
point-of-purchase promotions will help push TV DVDs in rental and purchase
categories at retail.
Digital
Technology
Technological
advancements such as Internet video-on-demand (VoD) and high definition DVD are
creating additional licensing opportunities for content
providers. While still small in comparison to the overall DVD market,
the digital retail market is expected to expand rapidly.
Employees
We have
no full time employees. Our president has agreed to allocate a portion of his
time to the activities of the Company, without compensation. The president
anticipates that our business plan can be implemented by his devoting no more
than 10 hours per month to the business affairs of the Company and,
consequently, conflicts of interest may arise with respect to the limited time
commitment by such officer.
ITEM
2. DESCRIPTION OF PROPERTY
Our
business office is located at 3008 County Clare Road, Greensboro, North Carolina
27407. Currently, this space is sufficient to meet our needs; however, if
we expand our business to a significant degree, we will have to find a larger
space.
ITEM 3. LEGAL
PROCEEDINGS
There are
currently no legal proceedings pending or threatened against us.
None.
PART
II
Public Market for Common
Stock
On
September 3, 2009, our common stock was approved to trade on the OTCCB under the
symbol WHLX, However to date there has been no trading market for our Common
Stock and there is no assurance that a trading market will ever develop or, if
such a market does develop, that it will continue.
The
Securities and Exchange Commission has adopted Rule 15g-9 which establishes the
definition of a “penny stock,” for purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, the rules require: (i)
that a broker or dealer approve a person’s account for transactions in penny
stocks and (ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and quantity of the
penny stock to be purchased. In order to approve a person’s account for
transactions in penny stocks, the broker or dealer must (i) obtain financial
information and investment experience and objectives of the person;
and (ii) make a reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also deliver, prior to
any transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which, in highlight form, (i)
sets forth the basis on which the broker or dealer made the suitability
determination and (ii) that the broker or dealer received a signed, written
agreement from the investor prior to the transaction. Disclosure also has to be
made about the risks of investing in penny stocks in both public offerings and
in secondary trading, and about commissions payable to both the broker-dealer
and the registered representative, current quotations for the securities and the
rights and remedies available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information on the
limited market in penny stocks.
3
Holders
As of
March 8, 2009, we had 42 shareholders of our common stock.
Dividends
We have
not paid any cash dividends to shareholders. The declaration of any future
cash dividends is at the discretion of our board of directors and
depends upon our earnings, if any, our capital requirements and
financial position, our general economic conditions, and other pertinent
conditions. It is our present intention not to pay any cash dividends in
the foreseeable future, but rather to reinvest earnings, if any, in our business
operations.
Recent Sales of Unregistered
Securities
We were
incorporated in the State of Delaware on February 28, 2007 and
5,000,000 common shares were issued to Steven Mitchem. These shares were issued
in reliance on the exemption under Section 4(2) of the Securities Act of 1933,
as amended (the “Act”). These shares of our common stock qualified for exemption
under Section 4(2) of the Securities Act of 1933 since the issuance shares by us
did not involve a public offering. The offering was not a “public offering” as
defined in Section 4(2) due to the insubstantial number of persons involved in
the deal, size of the offering, manner of the offering and number of shares
offered. We did not undertake an offering in which we sold a high number of
shares to a high number of investors. In addition, the shareholder had the
necessary investment intent as required by Section 4(2) since he agreed to and
received share certificates bearing a legend stating that such shares are
restricted pursuant to Rule 144 of the 1933 Securities Act. This restriction
ensures that these shares would not be immediately redistributed into the market
and therefore not be part of a “public offering.” Based on an analysis of the
above factors, we have met the requirements to qualify for exemption under
Section 4(2) of the Securities Act of 1933 for this transaction.
In
November 2008, we completed a Regulation D Rule 506 offering in which we sold
1,665,000 shares of common stock to 41 investors, at a price per share of
$0.10 per share for an aggregate offering price of $166,500. The following
sets forth the identity of the class of persons to whom we sold these shares and
the amount of shares for each shareholder:
Amick,
Angela
|
50,000
|
Amick,
Matthew
|
50,000
|
Baumqartner,
Christopher
|
50,000
|
Baumgartner,
Stephanie
|
50,000
|
Davis,
Meeqan
|
10,000
|
Dickerson,
Jason
|
50,000
|
Erickson,
John
|
50,000
|
Gignac,
Harold
|
10,000
|
Gignac,
Laura
|
10,000
|
Giqnac,
Patricia
|
10,000
|
Golt,
Gerald E
|
50,000
|
Halpin-Poirier,
Monique
|
50,000
|
Hanlin,
James
|
50,000
|
Harward,
Douq
|
50,000
|
Hudgins
Jr, Dan
|
50,000
|
Hudqins.
P.D.
|
50,000
|
Huss
Jr. Thomas H
|
50,000
|
Ihn,
Myunqhee
|
50,000
|
Ihn,
Tai S
|
50,000
|
Johnson,
Loretta
|
50,000
|
Jones,
Sandra G.
|
20,000
|
Kelly,
Daniel
|
50,000
|
Kim,
Aekyung
|
50,000
|
Kradel,
Amy
|
50,000
|
Kradel,
Michael
|
50,000
|
Mix,
Kelly A
|
50,000
|
Mix,
Thomas
|
50,000
|
Moon,
Hyunsik
|
50,000
|
Nahas,
Damon
|
50,000
|
Poirier,
Dan
|
50,000
|
Pyun,
Alex
|
5,000
|
Pyun,
Jacquelyn
|
10,000
|
4
Queen,
Nathan
|
30,000
|
Rice,
Bill
|
50,000
|
Traube,
Beatrice N
|
20,000
|
Traube,
Martin J
|
20,000
|
Whitehead,
Elizabeth
|
20,000
|
Winget,
James K
|
50,000
|
Winget,
Jill S
|
50,000
|
Woody,
Frank S
|
50,000
|
Woody,
Georqye
|
50,000
|
The
Common Stock issued in our Regulation D, Rule 506 Offering was issued in a
transaction not involving a public offering in reliance upon an exemption from
registration provided by Rule 506 of Regulation D of the Securities Act of 1933.
In accordance with Section 230.506 (b)(1) of the Securities Act of 1933, these
shares qualified for exemption under the Rule 506 exemption for this offerings
since it met the following requirements set forth in Reg. §230.506:
(A)
|
No
general solicitation or advertising was conducted by us in connection with
the offering of any of the Shares.
|
(B)
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At
the time of the offering we were not: (1) subject to the reporting
requirements of Section 13 or 15 (d) of the Exchange Act; or (2) an
“investment company” within the meaning of the federal securities
laws.
|
(C)
|
Neither
we, nor any of our predecessors, nor any of our directors, nor any
beneficial owner of 10% or more of any class of our equity securities, nor
any promoter currently connected with us in any capacity has been
convicted within the past ten years of any felony in connection with the
purchase or sale of any security.
|
(D)
|
The
offers and sales of securities by us pursuant to the offerings were not
attempts to evade any registration or resale requirements of the
securities laws of the United States or any of its
states.
|
(E)
|
None
of the investors are affiliated with any of our directors, officers or
promoters or any beneficial owner of 10% or more of our
securities.
|
Please
note that pursuant to Rule 506, all shares purchased in the Regulation D Rule
506 offering completed in November 2008 were restricted in accordance with Rule
144 of the Securities Act of 1933. In addition, each of these shareholders were
either accredited as defined in Rule 501 (a) of Regulation D promulgated under
the Securities Act or sophisticated as defined in Rule 506(b)(2)(ii) of
Regulation D promulgated under the Securities Act.
We have
never utilized an underwriter for an offering of our securities. Other than the
securities mentioned above, we have not issued or sold any
securities.
Equity Compensation Plan
Information
The
following table sets forth certain information as of December 31, 2009 with
respect to compensation plans under which our equity securities are authorized
for issuance:
(a)
|
(b)
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(c)
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||
_________________
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_________________
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_________________
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||
Number
of securities to be issued upon exercise of outstanding options, warrants
and rights
|
Weighted-average
exercise price of outstanding options, warrants and rights
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
|
||
Equity
compensation
Plans
approved by Security
holders
|
None
|
|||
|
||||
Equity
compensation
Plans
not approved By
security holders
|
None
|
|||
|
||||
Total
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||||
|
5
Plan of
Operation
We
anticipate being able to support a number of licensing agreements sold through
our sales agency for a fee equal to a percentage of gross
receipts. However, we require outside capital to convert additional
programming to DVD and to promote a more robust DVD product line through
direct-to-consumer channels.
We intend
to launch a direct-to-consumer marketing program that includes retail
point-of-sale, direct mail, MTV infomercials and direct response advertising on
USA late-night TV. In addition, we may contract with a consulting
company to assist with an internet sales strategy. Projected revenues generated
by our growth plan vary in direct correlation to the amount of marketing
spending we are able to deploy using proceeds raised in this
Offering.
We intend
to accomplish our growth plans by reaching the following
milestones:
1.
|
We
believe that we will raise sufficient capital to begin our efforts to grow
revenues through increased DVD product availability and direct-to-consumer
DVD sales.
|
2.
|
We
will begin to develop a targeted marketing plan aimed at growing licensing
and direct sales of our DVD product line. We also intend to
convert more programs to DVD for licensing or sale, which we believe will
require production expenses of $45,000 to
$80,000.
|
3.
|
Primary
marketing and production oversight related to the business will be handled
by our president and CEO. We will consider hiring a part-time
employee to facilitate additional licensing activity and assist in market
research. The time commitment of the position will depend upon
the scale of our growth, but we believe it will require a minimum of
$15,000 to hire the personnel needed to assist with this
activity.
|
4.
|
After
we have finalized our marketing planning and grown our DVD
inventory, we intend to launch a targeted two-pronged sales and
marketing campaign: (a) we plan to increase the demand for newly converted
DVD product through screening DVDs, increased trade listings, promotional
mailings and posters and presence at major industry markets; and (b) we
will market the sale of DVDs directly to consumers by employing several
previously effective promotional vehicles, including retail point-of-sale,
direct mail, and MTV infomercials. We also plan to develop a
consumer website and to test direct response advertising on USA late-night
TV.
|
Liquidity
and Capital Resources
As of
December 31, 2009 we have $4,375 in cash.
At the
present time, we have not made any arrangements to raise additional
cash. If we need additional cash and are unable to raise it, we will
either have to suspend or cease our growth plans entirely.
Since
inception, we have issued 5,000,000 shares of our common stock to Steven Mitchem
for his capital contribution of $10,000 and completed a Regulation D Rule 506
offering in which we sold 1,665,000 shares of common stock to 41 investors, at a
price per share of $0.10 per share for an aggregate offering price of
$166,500.
As
reflected in the accompanying audited financial statements, we are in the
development stage with no operations, have an accumulated deficit of $188,725
for the period from February 28, 2007 (inception) to December 31, 2009, and have
negative cash flow from operations of $172,125 from inception. This raises
substantial doubt about our ability to continue as a going concern. Our ability
to continue as a going concern is dependent on our ability to raise additional
capital and implement its business plan. The financial statements do not include
any adjustments that might be necessary if we are unable to continue as a going
concern.
Management
believes that actions presently being taken to obtain additional funding and
implement its strategic plans provide the opportunity for us to continue as a
going concern.
Results
of Operations
For the
year ended December 31, 2008 our total operating expenses were $26,662, compared
to total operating expenses $151,830 for the year ended December 31,
2009. This increase was due to an increase in professional fees
associated with the costs involved in the having our shares approved to trade on
the OTCBB Bulletin Board.
Our net
loss for the year ended December 31, 2009 was ($151,830) compared to a net loss
of ($26,662) for the year ended December 31, 2008.
6
Critical Accounting
Pronouncements
Our
significant accounting policies are summarized in Note 1 of our financial
statements.
We have
adopted the following accounting standards. While all of these significant
accounting policies impact our financial condition, our views of these policies
are critical. Policies determined to be critical are those policies that have
the most significant impact on our financial statements and require management
to use a greater degree of judgment and estimates. Actual results may differ
from those estimates. Our management believes that given current facts and
circumstances, it is unlikely that applying any other reasonable judgments or
estimate methodologies would cause effect on our consolidated results of
operations, financial position or liquidity for the periods presented in this
report:
In
preparing financial statements in conformity with generally accepted accounting
principles, management is required to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements and revenues and
expenses during the reported period. Actual results could differ from
those estimates.
For
purposes of the cash flow statements, the Company considers all highly liquid
investments with original maturities of three months or less at the time of
purchase to be cash equivalents.
Basic and
diluted net loss per common share is computed based upon the weighted average
common shares outstanding as defined by FASB Accounting Standards Codification
Topic 260, “Earnings Per Share.” As of December 31, 2009 and 2008, respectively,
there were no common share equivalents outstanding.
The
Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC
740-10-25”). Under ASC 740-10-25, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. Under ASC 740-10-25, the effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
The
Company operates in one segment and therefore segment information is not
presented.
The
carrying amounts on the Company’s financial instruments including accounts
payable, approximate fair value due to the relatively short period to maturity
for this instrument.
The
Company recognized revenue on arrangements in accordance with FASB Codification
Topic 605, “Revenue
Recognition” (“ASC Topic 605”). Under ASC Topic 605, revenue
is recognized only when the price is fixed and determinable, persuasive evidence
of an arrangement exists, the service is performed and collectability of the
resulting receivable is reasonably assured.
Recent
Accounting Policies
In
June 2009, the FASB issued ASC 105 Accounting Standards
Codification
TM and the Hierarchy of
Generally Accepted Accounting Principles. The FASB Accounting Standards
Codification TM (the
“Codification”) has become the source of authoritative accounting principles
recognized by the FASB to be applied by nongovernmental entities in the
preparation of financial statements in accordance with Generally Accepted
Accounting Principles (“GAAP”). All existing accounting standard documents are
superseded by the Codification and any accounting literature not included in the
Codification will not be authoritative. Rules and interpretive releases of the
SEC issued under the authority of federal securities laws, however, will
continue to be the source of authoritative generally accepted accounting
principles for SEC registrants. Effective September 30, 2009, all
references made to GAAP in our consolidated financial statements will include
references to the new Codification. The Codification does not change or alter
existing GAAP and, therefore, will not have an impact on our financial position,
results of operations or cash flows.
In June
2009, the FASB issued changes to the consolidation guidance applicable to a
variable interest entity (VIE). FASB ASC Topic 810, "Consolidation," amends the
guidance governing the determination of whether an enterprise is the primary
beneficiary of a VIE, and is, therefore, required to consolidate an entity, by
requiring a qualitative analysis rather than a quantitative analysis. The
qualitative analysis will include, among other things, consideration of who has
the power to direct the activities of the entity that most significantly impact
the entity's economic performance and who has the obligation to absorb losses or
the right to receive benefits of the VIE that could potentially be significant
to the VIE. This standard also requires continuous reassessments of whether an
enterprise is the primary beneficiary of a VIE. FASB ASC 810 also requires
enhanced disclosures about an enterprise's involvement with a VIE. Topic 810 is
effective as of the beginning of interim and annual reporting periods that begin
after November 15, 2009. This will not have an impact on the Company’s financial
position, results of operations or cash flows.
7
In June
2009, the FASB issued Financial Accounting Standards Codification No. 860 -
Transfers and Servicing. FASB ASC No. 860 improves the relevance,
representational faithfulness, and comparability of the information that a
reporting entity provides in its financial statements about a transfer of
financial assets; the effects of a transfer on its financial position, financial
performance, and cash flows; and a transferor's continuing involvement, if any,
in transferred financial assets. FASB ASC No. 860 is effective as of the
beginning of each reporting entity's first annual reporting period that begins
after November 15, 2009, for interim periods within that first annual reporting
period and for interim and annual reporting periods thereafter. The Company is
evaluating the impact the adoption of FASB ASC No. 860 will have on its
financial statements.
Off-Balance Sheet
Arrangements
We do not
have any off-balance sheet arrangements, financings, or other relationships with
unconsolidated entities or other persons, also known as “special purpose
entities” (SPEs).
8
ITEM 7. FINANCIAL
STATEMENTS
WLMG
HOLDING, INC.
(A
DEVELOPMENT STAGE COMPANY)
FINANCIAL
STATEMENTS
AS
OF December 31, 2009
WLMG
Holding, Inc.
(a
development stage company)
Financial
Statements Table of Contents
FINANCIAL
STATEMENTS
|
Page
#
|
Report
of Independent Registered Certified Public Accountant
|
F-1
|
Balance
Sheet's
|
F-2
|
Statement
of Operations and Retained Deficit
|
F-3
|
Statement
of Stockholders Equity
|
F-4
|
Cash
Flow Statement's
|
F-5
|
Notes
to the Financial Statements
|
F-6
|
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors of:
WLMG
Holding, Inc.
We have
audited the accompanying balance sheets of WLMG Holding, Inc. (a Development
Stage Company) (the “Company”) as of December 31, 2009 and 2008 and the related
statements of operations, changes in stockholders’ equity and cash flows for the
years ended December 31, 2009 and 2008 and for the period from February 28, 2007
(Inception) to December 31, 2009. 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 the standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. 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 WLMG Holding, Inc. as of December 31, 2009
and 2008 and the related statements of operations, changes in stockholders’
equity and cash flows for the years ended December 31, 2009 and 2008 and for the
period from February 28, 2007 (Inception) to December 31, 2009 in conformity
with accounting principles generally accepted in the United States of
America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company is in the development stage and has a net loss
and accumulated deficit of $188,725 for the period February 28, 2007 (Inception)
to December 31, 2009 and a negative cash flow from operations of $172,125 for
the period February 28, 2007 (Inception) to December 31, 2009. These
factors raise substantial doubt about the Company's ability to continue as a
going concern. Management's plans concerning these matters are also
described in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
WEBB
& COMPANY, P.A.
Certified
Public Accountants
Boynton
Beach, Florida
February
18, 2010
F-1
(A
Development Stage Company)
|
|||||||||
Balance
Sheets
|
|||||||||
ASSETS
|
|||||||||
December 31, 2009
|
December 31, 2008
|
||||||||
Current
Assets
|
|||||||||
Cash
|
$ | 4,375 | $ | 175,943 | |||||
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|||||||||
Current
Liabilities
|
|||||||||
Accounts
payable
|
|
$ | 1,800 | $ | 16,738 | ||||
Total
Liabilities
|
1,800 | 16,738 | |||||||
Commitments
and Contingencies
|
|||||||||
Stockholders'
Equity
|
|||||||||
Preferred
stock, $0.001 par value; 5,000,000 shares
authorized,
|
|||||||||
none, issued and outstanding | - | - | |||||||
Common
stock, $0.001 par value; 100,000,000 shares
authorized,
|
|||||||||
6,665,000 and 6,765,000 shares issued and outstanding, respectively | 6,665 | 6,765 | |||||||
Additional
paid-in capital
|
184,635 | 189,335 | |||||||
Accumulated
Deficit During the Development Stage
|
(188,725 | ) | (36,895 | ) | |||||
Total
Stockholders' Equity
|
2,575 | 159,205 | |||||||
Total
Liabilities and Stockholders' Equity
|
$ | 4,375 | $ | 175,943 | |||||
See
accompanying notes to financial statements
F-2
WLMG
Holding, Inc.
|
|||||||||||
(A
Development Stage Company)
|
|||||||||||
Statements
of Operations
|
|||||||||||
For
the Period From
|
|||||||||||
For
the Year Ended
|
February
28, 2007 (Inception)
|
||||||||||
December
31, 2009
|
December
31, 2008
|
to
December 31, 2009
|
|||||||||
Operating
Expenses
|
|||||||||||
Professional
fees
|
$ | 135,126 | $ | 21,289 | $ | 161,996 | |||||
General
and administrative
|
14,893 | 5,373 | 24,918 | ||||||||
Total
Operating Expenses
|
150,019
|
26,662 | 186,914 | ||||||||
Loss
from Operations Before Provision for Income Taxes
|
(150,019 | ) | (26,662 | ) | (186,914 | ) | |||||
Provision
for Income Taxes
|
1,811 | - | 1,811 | ||||||||
Net
Loss
|
$ | (151,830 | ) | $ | (26,662 | ) | $ | (188,725 | ) | ||
Net
Loss Per Share - Basic and Diluted
|
$ | (0.02 | ) | $ | (0.00 | ) | |||||
Weighted
average number of shares outstanding
|
|||||||||||
during
the period - Basic and Diluted
|
6,670,128 | 5,516,603 |
See
accompanying notes to financial statements
F-3
WLMG
Holding, Inc.
|
|||||||||||||||||||||||||
(A
Development Stage Company)
|
|||||||||||||||||||||||||
Statement
of Changes in Stockholders' Equity
|
|||||||||||||||||||||||||
For
the Period From February 28, 2007 (Inception) to December 31,
2009
|
|||||||||||||||||||||||||
Preferred
stock
|
Common
stock
|
Deficit
|
|||||||||||||||||||||||
$.001
Par Value
|
$.001
Par Value
|
Additional
|
accumulated
during
|
Total
|
|||||||||||||||||||||
Paid-in
|
development
|
Stockholders'
|
|||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
stage
|
Equity
|
|||||||||||||||||||
Balance
February 28, 2007 (Inception)
|
- | $ | - | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
In
kind contribution of services
|
- | - | - | - | 4,400 | - | 4,400 | ||||||||||||||||||
Common
stock issued for cash ($0.10/Sh)
|
- | - | 60,000 | 60 | 5,940 | - | 6,000 | ||||||||||||||||||
Common
stock issued to founder for cash ($0.002/Sh)
|
- | - | 5,000,000 | 5,000 | 5,000 | - | 10,000 | ||||||||||||||||||
Net
loss for the period February 28, 2007 (Inception ) to December 31,
2007
|
- | - | - | - | - | (10,233 | ) | (10,233 | ) | ||||||||||||||||
Balance
December 31, 2007
|
- | - | 5,060,000 | 5,060 | 15,340 | (10,233 | ) | 10,167 | |||||||||||||||||
Common
stock issued for cash ($0.10/Sh)
|
- | - | 1,705,000 | 1,705 | 168,795 | - | 170,500 | ||||||||||||||||||
In-kind
contribution of services
|
- | - | - | - | 5,200 | - | 5,200 | ||||||||||||||||||
Net
loss December 31, 2008
|
- | - | - | - | - | (26,662 | ) | (26,662 | ) | ||||||||||||||||
Balance
December 31, 2008
|
- | - | 6,765,000 | 6,765 | 189,335 | (36,895 | ) | 159,205 | |||||||||||||||||
Cancelled
stock subscriptions
|
- | - | (100,000 | ) | (100 | ) | (9,900 | ) | - | (10,000 | ) | ||||||||||||||
In-kind
contribution of services
|
- | - | - | - | 5,200 | - | 5,200 | ||||||||||||||||||
Net
loss December 31, 2009
|
- | - | - | - | - | (151,830 | ) | (151,830 | ) | ||||||||||||||||
Balance
December 31, 2009
|
- | $ | - | 6,665,000 | $ | 6,665 | $ | 184,635 | $ | (188,725 | ) | $ | 2,575 |
See
accompanying notes to financial statements
F-4
WLMG
Holding, Inc.
|
||||||||||||
(A
Development Stage Company)
|
||||||||||||
Statements
of Cash Flows
|
||||||||||||
|
|
For
the Period From
|
||||||||||
For
the Year Ended December 31, 2009 |
For
the Year Ended December 31, 2008 |
February
28, 2007 (Inception) to December 31, 2009
|
||||||||||
Cash
Flows From Operating Activities:
|
||||||||||||
Net
Loss
|
$ | (151,830 | ) | $ | (26,662 | ) | $ | (188,725 | ) | |||
Adjustment
to reconcile net loss to net cash used in
operations
|
||||||||||||
In
kind contribution of services
|
5,200 | 5,200 | 14,800 | |||||||||
Changes
in operating assets and liabilities:
|
||||||||||||
Decrease/Increase
in accounts payable
|
(14,938 | ) | 10,992 | 1,800 | ||||||||
Net
Cash Used In Operating Activities
|
(161,568 | ) | (10,470 | ) | (172,125 | ) | ||||||
Cash
Flows From Financing Activities:
|
||||||||||||
Refund
for cancelled stock subscriptions
|
(10,000 | ) | - | (10,000 | ) | |||||||
Cash
received from subscription receivable
|
||||||||||||
Proceeds
from issuance of common stock
|
- | 170,500 | 186,500 | |||||||||
Increase/(Decrease)
in Subscriptions Receivable
|
||||||||||||
Net
Cash Provided by (Used In) Financing Activities
|
(10,000 | ) | 170,500 | 176,500 | ||||||||
Net
Increase (Decrease) in Cash
|
(171,568 | ) | 160,030 | 4,375 | ||||||||
Cash
at Beginning of Period
|
175,943 | 15,913 | - | |||||||||
Cash
at End of Period
|
$ | 4,375 | $ | 175,943 | $ | 4,375 | ||||||
Supplemental disclosure of cash flow
information:
|
||||||||||||
Cash
paid for interest
|
$ | - | $ | - | $ | - | ||||||
Cash
paid for taxes
|
$ | 1,811 | $ | - | $ | 1,811 |
See
accompanying notes to financial statements
F-5
WLMG
HOLDING, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2009 AND
2008
NOTE
1
|
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES AND
ORGANIZATION
|
(A)
Organization
|
WLMG
Holding Inc. (the “Company”) was incorporated in Delaware on February 28,
2007. The Company was organized to provide business services and financing
to emerging growth entities.
|
|
Activities
during the development stage include developing the business plan and
raising capital.
|
(B) Use of
Estimates
In
preparing financial statements in conformity with generally accepted accounting
principles, management is required to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements and revenues and
expenses during the reported period. Actual results could differ from
those estimates.
(C) Cash and Cash
Equivalents
For
purposes of the cash flow statements, the Company considers all highly liquid
investments with original maturities of three months or less at the time of
purchase to be cash equivalents.
(D) Loss Per
Share
Basic and
diluted net loss per common share is computed based upon the weighted average
common shares outstanding as defined by FASB Accounting Standards Codification
Topic 260, “Earnings Per Share.” As of December 31, 2009 and 2008, respectively,
there were no common share equivalents outstanding.
(E) Income
Taxes
The
Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC
740-10-25”). Under ASC 740-10-25, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. Under ASC 740-10-25, the effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
F-6
WLMG
HOLDING, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2009 AND
2008
The net
deferred tax liability in the accompanying balance sheets includes the following
amounts of deferred tax assets and liabilities:
Years
Ended December,
|
|||||||
2009
|
2008
|
||||||
Deferred
tax liability:
|
$ | - | $ | - | |||
Deferred
tax asset
|
|||||||
Net
Operating Loss Carryforward
|
59,134 | 9,280 | |||||
Valuation
allowance
|
(59,134) | (9,280) | |||||
Net
deferred tax asset
|
- | - | |||||
Net
deferred tax liability
|
$ | - | $ | - | |||
The
valuation allowance was established to reduce the deferred tax asset to
the amount that will more likely than not be realized. This is
necessary due to the Company’s continued operating losses and the
uncertainty of the Company’s ability to utilize all of the net operating
loss carryforwards before they will expire through the year
2029.
|
|||||||
The
net change in the valuation allowance for the year ended December 31, 2009
and 2008 was an increase of $49,854and $7,297,
respectively.
|
|||||||
The
components of income tax expense related to continuing operations are as
follows:
|
|||||||
2009 | 2008 | ||||||
Federal
|
|||||||
Current
|
$ | - | $ | - | |||
Deferred
|
- | - | |||||
$ | - | $ | - | ||||
State
and Local
|
|||||||
Current
|
$ | 0 | $ | 0 | |||
Deferred
|
- | - | |||||
$ | 0 | $ | 0 | ||||
(F) Business
Segments
The
Company operates in one segment and therefore segment information is not
presented.
(G) Recent Accounting
Pronouncements
In
June 2009, the FASB issued ASC 105 Accounting Standards
Codification
TM and the Hierarchy of
Generally Accepted Accounting Principles. The FASB Accounting Standards
Codification TM
(the “Codification”) has become the source of authoritative accounting
principles recognized by the FASB to be applied by nongovernmental entities in
the preparation of financial statements in accordance with Generally Accepted
Accounting Principles (“GAAP”). All existing accounting standard documents are
superseded by the Codification and any accounting literature not included in the
Codification will not be authoritative. Rules and interpretive releases of the
SEC issued under the authority of federal securities laws, however, will
continue to be the source of authoritative generally accepted accounting
principles for SEC registrants. Effective September 30, 2009, all
references made to GAAP in our consolidated financial statements will include
references to the new Codification. The Codification does not change or alter
existing GAAP and, therefore, will not have an impact on our financial position,
results of operations or cash flows.
In June
2009, the FASB issued changes to the consolidation guidance applicable to a
variable interest entity (VIE). FASB ASC Topic 810, "Consolidation," amends the
guidance governing the determination of whether an enterprise is the primary
beneficiary of a VIE, and is, therefore, required to consolidate an entity, by
requiring a qualitative analysis rather than a quantitative analysis. The
qualitative analysis will include, among other things, consideration of who has
the power to direct the activities of the entity that most significantly impact
the entity's economic performance and who has the obligation to absorb losses or
the right to receive benefits of the VIE that could potentially be significant
to the VIE. This standard also requires continuous reassessments of whether an
enterprise is the primary beneficiary of a VIE. FASB ASC 810 also requires
enhanced disclosures about an enterprise's involvement with a VIE. Topic 810 is
effective as of the beginning of interim and annual reporting periods that begin
after November 15, 2009. This will not have an impact on the Company’s financial
position, results of operations or cash flows.
In June
2009, the FASB issued Financial Accounting Standards Codification No. 860 -
Transfers and Servicing. FASB ASC No. 860 improves the relevance,
representational faithfulness, and comparability of the information that a
reporting entity provides in its
F-7
WLMG
HOLDING, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2009 AND
2008
financial
statements about a transfer of financial assets; the effects of a transfer on
its financial position, financial performance, and cash flows; and a
transferor's continuing involvement, if any, in transferred financial assets.
FASB ASC No. 860 is effective as of the beginning of each reporting entity's
first annual reporting period that begins after November 15, 2009, for interim
periods within that first annual reporting period and for interim and annual
reporting periods thereafter. The Company is evaluating the impact the adoption
of FASB ASC No. 860 will have on its financial statements.
(H) Fair Value of Financial
Instruments
The
carrying amounts on the Company’s financial instruments including accounts
payable, approximate fair value due to the relatively short period to maturity
for this instrument.
(I) Revenue
Recognition
The
Company recognized revenue on arrangements in accordance with FASB Codification
Topic 605, “Revenue
Recognition” (“ASC Topic 605”). Under ASC Topic 605, revenue
is recognized only when the price is fixed and determinable, persuasive evidence
of an arrangement exists, the service is performed and collectability of the
resulting receivable is reasonably assured.
NOTE
2 GOING
CONCERN
As
reflected in the accompanying audited financial statements, the Company is in
the development stage with no operations, has an accumulated deficit of $188,725
for the period from February 28, 2007 (inception) to December 31, 2009, and has
negative cash flow from operations of $172,125 from inception. This raises
substantial doubt about its ability to continue as a going concern. The ability
of the Company to continue as a going concern is dependent on the Company’s
ability to raise additional capital and implement its business plan. The
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern.
Management
believes that actions presently being taken to obtain additional funding and
implement its strategic plans provide the opportunity for the Company to
continue as a going concern.
NOTE
3
|
STOCKHOLDERS’
EQUITY
|
Common Stock Issued for
Cash
For the
period February 28, 2007 (inception) to December 31, 2009 the Company issued
1,765,000 shares of common stock for cash of $176,500
($0.10/share).
The
Company also issued 5,000,000 founder shares of common stock for cash of $10,000
($0.002/share) (See Note 5).
F-8
WLMG
HOLDING, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2009 AND
2008
In kind Contribution of
Services
For the
year ended December 31, 2009, a shareholder of the Company contributed services
having a fair value of $5,200 (See Note 5).
For the
year ended December 31, 2008, the shareholders of the Company contributed
service having a fair value of $5, 200 (See Note 5).
For the
period from February 28, 2007 (inception) through December 31, 2007 the
shareholders of the Company contributed services having a fair value of $4,400
(See Note 5).
Refund of
Subscriptions
In
January 2009, the Company refunded the stock subscriptions of two stockholders
in the amount of $10,000 and subsequently cancelled 100,000 shares of common
stock.
NOTE
4 COMMITMENTS
On
November 1, 2008 the Company entered into a consulting agreement which provides
for monthly administrative and other miscellaneous services. The
Company is required to pay $5,000 a month beginning November 1,
2008. The agreement was terminated effective December 1,
2009.
On April
13, 2009, the Company entered into a licensing agreement with Internet
Consulting Services, Inc. The initial payment of $10,000 was
made on April 13, 2009 upon entering into the agreement. Per the
agreement, an additional $10,000 was due on May 13, 2009 and $15,000 was due on
September 13, 2009. The agreement terminates on April 13, 2012, it
may be renewed for successive one year terms. As of December 31,
2009, the Company paid and expensed the $35,000 in accordance with the licensing
agreement.
NOTE
5 RELATED PARTY
TRANSACTIONS
The
President of the Company contributed an estimated $14,800 worth of services to
the Company from February 28, 2007 (Inception) to December 31, 2009. The Company
has treated these services as additional paid-in capital (See Note
3).
The
Company also issued 5,000,000 founder shares of common stock for cash of $10,000
($0.002/share) (See Note 3)
NOTE
6 SUBSEQUENT
EVENTS
In
preparing these financial statements, the Company has evaluated events and
transactions for potential recognition or disclosure through February 18,
2010, the date the financial statements were issued and none were
noted.
F-9
There
have been no changes in or disagreements with accountants on accounting or
financial disclosure matters.
ITEM
8A. CONTROLS AND PROCEDURES
Evaluation
of disclosure controls and procedures
Under the
supervision and with the participation of our management, including our
principal executive officer and principal financial officer, we conducted an
evaluation of our disclosure controls and procedures, as such term is defined
under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities
Exchange Act of 1934, as amended (Exchange Act), as of December 31, 2009. Based
on this evaluation, our principal executive officer and principal financial
officers have concluded that our disclosure controls and procedures are
effective to ensure that information required to be disclosed by us in the
reports we file or submit under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified in the Securities and
Exchange Commission’s rules and forms and that our disclosure and controls are
designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is accumulated and
communicated to our management, including our principal executive and principal
financial officers, or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure.
MANAGEMENT’S
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management
of the Company is responsible for establishing and maintaining effective
internal control over financial reporting as defined in Rule 13a-15(f) under the
Exchange Act. The Company’s internal control over financial reporting
is designed to provide reasonable assurance to the Company’s management and
Board of Directors regarding the preparation and fair presentation of published
financial statements in accordance with United State’s generally accepted
accounting principles (US GAAP), including those policies and procedures
that: (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of
the company, (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with US GAAP and that receipts and expenditures are being made only
in accordance with authorizations of management and directors of the company,
and (iii) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial
statements.
Management
conducted an evaluation of the effectiveness of internal control over financial
reporting based on the framework in Internal Control—Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway
Commission. Management’s assessment included an evaluation of the
design of our internal control over financial reporting and testing of the
operational effectiveness of our internal control over financial
reporting. Based on this assessment, Management concluded the Company
maintained effective internal control over financial reporting as of December
31, 2009.
Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Therefore, even those systems
determined to be effective can provide only reasonable assurance with respect to
financial statement preparation and presentation.
This
annual report does not include an attestation report of the Company’s registered
public accounting firm regarding internal control over financial
reporting. Management’s report was not subject to attestation by our
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the Company to provide only management’s
report in this Annual Report.
Changes in internal
controls
We have
not made any changes to our internal controls subsequent to the Evaluation Date.
We have not identified any deficiencies or material weaknesses or other factors
that could significantly affect these controls, and therefore, no corrective
action was taken.
9
PART
III
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Our
executive officers and directors and their respective ages as of March 8,
2010 are as follows:
NAME
|
AGE
|
POSITION
|
Steven
Mitchem
|
55
|
President,
Director, Chief Executive Officer, Principal Executive
Officer
|
Eugene
Whitmire
|
62
|
Chief
Financial Officer, Secretary, Treasurer, Principal Financial
Officer
|
Irv
Pyun
|
51
|
Director
|
Set forth
below is a brief description of the background and business experience of our
executive officers and directors.
Steven
Mitchem
Mr.
Mitchem has extensive senior level media and advertising experience developing
and producing projects for NBC, ESPN and Viacom in addition to holding senior
positions at American Home Products, Kayser Roth Corporation and Trone
Advertising Agency.
Mr.
Mitchem has been with Pace Communications, Inc. in Greensboro, NC since
2004 as Vice President of Destination Publications. Prior to that Mr. Mitchem
served as Vice President of Sales and Program Distribution at Zoom Culture, Inc.
since 2001 where he was responsible for developing and managing
relationships with advertising, licensing and network partners. He
successfully created and launched programs from pilot through to syndication in
79% of US homes.
Mr.
Mitchem also helped launch Smart Online, Inc., a publicly-traded company in
Durham, NC, and its software product smartonline.com, a leading resource
application for small businesses and entrepreneurs. He engineered
distribution agreements with US mass retailers Wal-Mart, CompUSA, Target, Best
Buy and Staples to increase revenue from $1.3 million to $4.4
million.
As
Director of Mass Merchant Development for leg wear giant Kayser-Roth Corp., Mr.
Mitchem directed product development, brand marketing and licensing, and he
implemented retail programs for Wal-Mart and Target that dramatically increased
category sales.
Mr.
Mitchem also directed national sales efforts for A.H. Robins Pharmaceutical Co,
more than doubling sales revenues with national chain drug and mass
merchants.
Mr.
Mitchem is a 1977 graduate of Wake Forest University.
Eugene
Whitmire
Eugene
Whitmire has 35 years experience with national public and privately owned
businesses, including expertise in E-commerce, management, finance, taxation,
treasury and cash management. He has been a Certified Public
Accountant since 1971. Mr. Whitmire has owned and operated E. Eugene Whitmire,
CPA Certified Public Accountant Practice in NC & SC since 1986.
For 13
years, Mr. Whitmire served as Vice President of Finance for Telerent Leasing
Corporation, responsible for management of corporate finances including cash
management and investments, accounting, SEC filings and reporting, federal and
state (50) corporate income tax planning and preparation, MIS functions,
insurance, purchasing and inventory control and employee
relations. During his tenure, the company experienced above average
growth and financial success and was ranked consistently as one of the top
performing publicly owned companies headquartered in North
Carolina.
Following
Telerent, Mr. Whitmire served as CEO of Equitel, Inc., a public
telecommunications company, working with outside investors for venture funding.
Previously, as CFO of Equitel, Inc., he was responsible for overseeing the
company’s financial position and interfacing with finance
partners. He also performed treasury functions and investor relations
and effected a reverse merger of the company.
10
Following
Equitel Mr. Whitmire served as CFO of Smart Online, Inc., responsible for
business planning, projections and investor presentations.
More
recently, Mr. Whitmire has worked for Vaco, LLC Financial Consulting in Raleigh,
NC and Nashville, TN January 2004 to August 2006, following this he joined
Sherpa, LLC Financial Consulting in Charlotte, NC August 2006 to
March 2007 and most recently has worked with Huron Consulting Group, LLC
Financial Consulting in Chicago, IL July 2007 to present.
Mr.
Whitmire earned his BS in accounting at the University of South Carolina in
1969. Following graduation, he worked for several years as a Senior
Accountant with Deloitte & Touche.
Irv
Pyun
Irv
Pyun sold
his company Benefit Solutions Group an employee benefits brokerage/consulting
firm in Raleigh in 2004 and joined TriSure Benefits LLC as a Senior Vice
President in January of 2005. Irv left Trisure to join RPG Solutions,
LLC in October of 2008,
Irv
attended Brown University and has over 27 years of experience evaluating
group insurance plans. He was an officer and manager of the Group
Underwriting Department with The Prudential Insurance Company of America and was
responsible for underwriting group accounts ranging from 100 to 20,000
employees. He is familiar with various funding mechanisms for all
types of benefit plans whether they are fully insured, partially self-insured,
or self-insured. As an independent brokerage consultant, he has been
advising employers on their employee benefit programs for more than 22 years,
and served as Chairman of the Select Committee on Health Care for the City of
Raleigh. Irv is also a partner with Vesta Enterprises, LLC, a venture
firm specializing in real estate. Mr. Pyun is also currently involved
with the production of two movies and a PBS TV show.
Term of
Office
Our
directors are appointed for a one-year term to hold office until the next annual
general meeting of our shareholders or until removed from office in accordance
with our bylaws. Our officers are appointed by our board of directors and hold
office until removed by the board.
All
officers and directors listed above will remain in office until the next annual
meeting of our stockholders, and until their successors have been duly elected
and qualified. There are no agreements with respect to the election of
Directors. We have not compensated our Directors for service on our Board of
Directors, any committee thereof, or reimbursed for expenses incurred for
attendance at meetings of our Board of Directors and/or any committee of our
Board of Directors. Officers are appointed annually by our Board of Directors
and each Executive Officer serves at the discretion of our Board of Directors.
We do not have any standing committees. Our Board of Directors may in the future
determine to pay Directors’ fees and reimburse Directors for expenses related to
their activities.
None of
our Officers and/or Directors have filed any bankruptcy petition, been convicted
of or been the subject of any criminal proceedings or the subject of any order,
judgment or decree involving the violation of any state or federal securities
laws within the past five (5) years.
Audit
Committee
We do not
have a standing audit committee of the Board of Directors. Management has
determined not to establish an audit committee at present because of our limited
resources and limited operating activities do not warrant the formation of an
audit committee or the expense of doing so. We do not have a financial expert
serving on the Board of Directors or employed as an officer based on
management’s belief that the cost of obtaining the services of a person who
meets the criteria for a financial expert under Item 401(e) of Regulation S-B is
beyond its limited financial resources and the financial skills of such an
expert are simply not required or necessary for us to maintain effective
internal controls and procedures for financial reporting in light of the limited
scope and simplicity of accounting issues raised in its financial statements at
this stage of its development.
Certain Legal
Proceedings
No
director, nominee for director, or executive officer of the Company has appeared
as a party in any legal proceeding material to an evaluation of his ability or
integrity during the past five years.
Compliance With Section
16(A) Of The Exchange Act.
Section
16(a) of the Exchange Act requires the Company’s officers and directors, and
persons who beneficially own more than 10% of a registered class of the
Company’s equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and are required to
furnish copies to the Company. To the best of the Company’s knowledge, any
reports required to be filed were timely filed in fiscal year ended December 31,
2009.
11
Code of
Ethics
The
company has adopted a Code of Ethics applicable to its Chief Executive Officer
and Chief Financial Officer. This Code of Ethics is filed herewith as an
exhibit.
ITEM
10. EXECUTIVE COMPENSATION
Compensation of Executive
Officers
Our
directors are appointed for a one-year term to hold office until the next annual
general meeting of our shareholders or until removed from office in accordance
with our bylaws. Our officers are appointed by our board of directors and hold
office until removed by the board.
The
following summary compensation table sets forth all compensation awarded to,
earned by, or paid to the named executive officers paid by us during the years
ended December 31, 2009 and December 31, 2008 in all capacities for the accounts
of our executives, including the Chief Executive Officer (CEO) and Chief
Financial Officer (CFO):
SUMMARY
COMPENSATION TABLE
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity Incentive Plan
Compensation ($)
|
Non-Qualified
Deferred Compensation Earnings
($)
|
All
Other Compensation
($)
|
Totals
($)
|
|||||||||||||||||||
Steven
Mitchem
President/Director
|
2009
|
$
|
0
|
0
|
$
|
0
|
0
|
0
|
0
|
$
|
0
|
|||||||||||||||||
2008
|
$
|
0
|
0
|
$
|
0
|
0
|
0
|
0
|
$
|
0
|
||||||||||||||||||
Eugene
Whitmire
Chief
Financial Officer, Treasurer, Principal Financial Officer
|
2009
|
$
|
0
|
0
|
$
|
0
|
0
|
0
|
0
|
$
|
0
|
|||||||||||||||||
2008
|
$
|
0
|
0
|
$
|
0
|
0
|
0
|
0
|
$
|
0
|
(1) We
do not have any plans to pay our officers and directors any compensation at this
time and our financial situation would be worse than currently disclosed if we
were required to make such payments.
Option Grants Table. There
were no individual grants of stock options to purchase our common stock made to
the executive officer named in the Summary Compensation Table through December
31, 2009.
Aggregated Option Exercises and
Fiscal Year-End Option Value Table. There were no stock
options exercised during year ending December 31, 2009 and 2008 by the
executive officer(s) named in the Summary Compensation Table.
Long-Term Incentive Plan (“LTIP”)
Awards Table. There were no awards made to a named executive officer
during the year ended December 31, 2009 and 2008 under a LTIP.
Compensation of
Directors
Directors
are permitted to receive fixed fees for their services as directors. The
Board of Directors has the authority to fix the compensation of directors. No
amounts have been paid to, or accrued to, directors in such capacity and at this
time we have no plans to pay any fees to our directors.
Employment
Agreements
We do not
have any employment agreements in place with our officers or
directors.
12
We
currently use the offices of management at no cost to us. Management has agreed
to continue this arrangement until we complete an acquisition or
merger.
ITEM
13. EXHIBITS
Method
of Filing
|
Exhibit
Number
|
Exhibit
Title
|
Incorporated
by reference to Exhibit 3.1 to Form 10SB filed on October 26, 2007 (File
No. 000-52866)
|
3.1
|
Certificate
of Incorporation of WLMG Holding, Inc.*
|
Incorporated
by reference to Exhibit 3.2 to Form 10SB filed on October 26, 2007 (File
No. 000-52866)
|
3.2
|
By-Laws*
|
Filed herewith | 14.1 | Code of Ethics |
Filed
herewith
|
31.1
|
Certification
of Steven Mitchem pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
Filed
herewith
|
32.1
|
Certification
of Eugene Whitmire pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
* Incorporated
by reference to Exhibit 3.2 to Form 10SB filed on October 26, 2007 (File No.
000-52867)
Audit
Fees
For the
Company’s fiscal years ended December 31, 2009 and 2008, we were billed
approximately $5,798
and $5,691
for professional services rendered for the audit of our financial
statements.
Audit Related
Fees
For
the Company’s fiscal year ended December 31, 2009 and 2008, we were not billed
for professional services rendered for audited related fees.
Tax Fees
For the
Company’s fiscal year ended December 31, 2009 and 2008, we were not billed for
professional services rendered for tax compliance, tax advice, and tax
planning.
All Other
Fees
The
Company did not incur any other fees related to services rendered by our
principal accountant for the fiscal years ended December 31, 2009 and
2008.
Pursuant
to the requirements of Section 13 or 15(d) 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.
Effective
May 6, 2003, the Securities and Exchange Commission adopted rules that require
that before our auditor is engaged by us to render any auditing or permitted
non-audit related service, the engagement be:
-approved
by our audit committee; or
-entered
into pursuant to pre-approval policies and procedures established by the audit
committee, provided the policies and procedures are detailed as to the
particular service, the audit committee is
informed of each service, and such policies and procedures do not include
delegation of the audit committee's responsibilities to management.
We do not
have an audit committee. Our entire board of directors pre-approves
all services provided by our independent auditors.
The
pre-approval process has just been implemented in response to the new rules.
Therefore, our board of directors does not have records
of what percentage of the above fees were
pre-approved. However, all of the above services and fees were
reviewed and approved by the entire board of directors either before or after
the respective services were rendered.
13
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
WLMG
HOLDING, INC.
|
||
Date:
March 8, 2010
|
By:
|
/s/
Steven Mitchem
|
Steven
Mitchem
|
||
Principal
Executive Officer,
Director, President,
Chief
Executive Officer
|
WLMG
HOLDING, INC.
|
||
Date:
March 8, 2010
|
By:
|
/s/
Eugene Whitmire
|
Eugene
Whitmire
|
||
Principal
Financial Officer,
Director,
Chief Financial Officer,
Secretary,
Treasurer
|
14