UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:  March 31, 2011

Commission file number: 000-53214

MEDIA TECHNOLOGIES, INC.

(Exact name of Registrant as specified in Its Charter)

 

Nevada	26-1703958
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

495 State Street, Suite 459, Salem, Oregon, 97301

(Address of Principal Executive Offices)

 

(702) 813-1118

(Registrant's Telephone Number, including area code)

 

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      .

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.   See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	.	Accelerated filer	.
Non-accelerated filer	. (Do not check if a smaller reporting company)	Smaller reporting company	X .

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  

Yes      . No   X  .

 

As of May 13, 2011, there were 38,480,000 shares of the issuer's Common Stock, no par value, issued and outstanding.

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MEDIA TECHNOLOGIES, INC.

 

Quarterly Report on Form 10-Q

 

For the Quarterly Period Ended March 31, 2011

 

 

INDEX

 

PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	1
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	15
Item 4T.	Controls and Procedures	15
PART II – OTHER INFORMATION
Item 1.	Legal Proceeding	16
Item 1A.	Risk Factors	16
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	16
Item 3.	Defaults Upon Senior Securities	17
Item 5.	Other Information	17
Item 6.	Exhibits	17

 

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PART I - FINANCIAL INFORMATION

 

Item 1 - Financial Statements

 

The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission and, therefore, do not include all information and footnotes necessary for a complete presentation of our financial position, results of operations, cash flows, and stockholders' deficit in conformity with generally accepted accounting principles in the United States of America.  In the opinion of management, all adjustments considered necessary for a fair presentation of the consolidated results of operations and financial position have been included and all such adjustments are of a normal recurring nature.

 

Our unaudited consolidated balance sheet as of March 31, 2011 and our unaudited consolidated statements of operations for the three month periods ended March 31, 2011 and 2010, and the unaudited consolidated statements of cash flows for the three month periods ended March 31, 2011 and 2010, are attached hereto and incorporated herein by this reference.

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MEDIA TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
				March 31,			December 31,
				2011			2010
				(Unaudited)
ASSETS
CURRENT ASSETS
	Cash			$	184,744		$	23,902
	Accounts receivable, net				4,688			-
		Total Current Assets			189,432			23,902
FURNITURE AND FIXTURES, NET					79,686			20,709
		TOTAL ASSETS		$	269,118		$	44,611
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
	Accounts payable and accrued expenses			$	50,910		$	36,061
	Customer deposits				5,539			5,539
	Related party payable				220,155			210,570
	Advances				320,000			-
		Total Current Liabilities			596,604			252,170
		TOTAL LIABILITIES			596,604			252,170
STOCKHOLDERS' DEFICIT
	Preferred stock, par value $0.001; 25,000,000
		shares authorized; no shares issued
		or outstanding			-			-
	Common stock; par value $0.001; 125,000,000
		shares authorized; 33,480,000
		shares issued and outstanding			33,480			33,480
	Additional paid-in capital				67,340			67,340
	Accumulated deficit				(428,306)			(308,379)
		Total Stockholders' Deficit			(327,486)			(207,559)
		TOTAL LIABILITIES AND STOCKHOLDERS'
		DEFICIT		$	269,118		$	44,611

The accompanying notes are an integral part of these consolidated financial statements.

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MEDIA TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
				For the Three Months Ended
				March 31,
				2011			2010
				(Unaudited)			(Unaudited)
REVENUES				$	46,387		$	21,858
OPERATING EXPENSES
	Consulting				30,617			10,410
	Professional fees				66,153			8,348
	General and administrative				69,544			4,912
	Impairment of goodwill				-			150,594
		Total Operating Expenses			166,314			174,264
LOSS BEFORE TAXES					(119,927)			(152,406)
PROVISION FOR INCOME TAXES					-			-
LOSS FROM CONTINUING OPERATIONS					(119,927)			(152,406)
DISCONTINUED OPERATIONS
	Loss from discontinued operations				-			(131)
	Gain on discontinued operations				-			24,518
		Income from Discontinued Operations net of tax			-			24,387
NET LOSS				$	(119,927)		$	(128,019)
NET LOSS PER COMMON SHARE - BASIC AND DILUTED:
	Continuing operations			$	(0.00)		$	(0.01)
	Discontinued operations				0.00			0.00
NET LOSS PER COMMON SHARE - BASIC AND DILUTED				$	(0.00)		$	(0.01)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
	- basic and diluted				37,813,333			10,060,444

The accompanying notes are an integral part of these consolidated financial statements.

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The accompanying notes are an integral part of these consolidated financial statements.

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MEDIA TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
					For the Three Months Ended
					March 31,
					2011			2010
					(Unaudited)			(Unaudited)
OPERATING ACTIVITIES
	Net loss from operations				$	(119,927)		$	(152,406)
	Net income (loss) from discontinued operations					-			24,387
	Adjustments to reconcile net loss to net cash
	used  in operating activities:
		Impairment of goodwill				-			150,594
		Gain on discontinuance				-			(24,518)
		Depreciation				2,110
	Changes in operating assets and liabilities
		Accounts receivable				(4,688)			(8,910)
		Accounts payable and accrued expenses				14,849			9,802
		Customer deposits				-			-
			Net Cash Used in Operating Activities			(107,656)			(1,051)
			Net Cash Used in Discontinued Operating Activities			-			(4,641)
INVESTING ACTIVITIES
		Cash relinquished in discontinued operations				-			(964)
		Purchase of furniture and equipment				(61,087)			-
			Net Cash Used in Investing Activities			(61,087)			(964)
FINANCING ACTIVITIES
		Proceeds from related party payable				9,585			3,430
		Proceeds from advances				320,000			-
			Net Cash Provided by Financing Activities			329,585			3,430
NET INCREASE (DECREASE) IN CASH						160,842			(3,226)
CASH AT BEGINNING OF PERIOD						23,902			11,777
CASH AT END OF PERIOD					$	184,744		$	8,551
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
	CASH PAID FOR:
		Interest			$	-		$	-
		Income Taxes			$	-		$	-

The accompanying notes are an integral part of these consolidated financial statements.

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MEDIA TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements

March 31, 2011 and 2010

(Unaudited)

NOTE 1 - ORGANIZATION

Media Technologies, Inc. (“Company”) was incorporated under the laws of the State of Nevada on April 16, 2007.  On February 26, 2010 (the “Closing Date”), the Company entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Speedpal Broadband, a Nevada corporation (“Speedpal”), and the sole shareholder of Speedpal, pursuant to which the Company acquired 100% of the issued and outstanding capital stock of Speedpal (the “Speedpal Acquisition”).  Pursuant to the terms of the Share Exchange Agreement, the Company issued 2,500,000 shares of its common stock to the Speedpal shareholder, in exchange for all the issued and outstanding capital stock of Speedpal, thereby making Speedpal a wholly-owned subsidiary of the Company.    

Concurrently with the Closing of the Speedpal Acquisition, the principal shareholders of the Company, sold 7,000,000 of their 9,340,000 shares in the Company to two independent, un-related individuals, and the operations of the current appraisal service business of the Company was transferred to John S. Chidester and Kathleen Chidester, in consideration of the cancellation of 2,340,000 shares of the Company’s common stock, the balance of their shares of common stock in the Company. Speedpal is engaged in the business of providing high speed broadband internet services to both residential and commercial customs.

On January 12, 2011, the Company executed a Share Exchange Agreement pursuant to which it acquired 100% of the issued and outstanding capital stock of TechTV Media, Inc., a Nevada Corporation (“TechTV”), and as a result, TechTV became a wholly-owned subsidiary of the Company.  TechTV is engaged in the business of providing, installing, selling and managing advertisement insertion systems.  The systems enable local cable television providers to insert advertising onto network channels on their cable systems.  TechTV shares in the revenues generated from advertising with the advertising agencies and the cable system operators.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying unaudited interim consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 8 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented.  Interim results are not necessarily indicative of the results for the full year.  These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2010 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC on May 2, 2011.

The consolidated financial statements include all accounts of the Company as of March  31, 2011 and 2010 and for the interim periods then ended; all accounts of TechTV as of March  31, 2011 and for the the period from January 12, 2011 (date of acquisition) through March 31, 2011.  Speedpal is included as of March 31, 2011 and for the period from February 26, 2010 (date of acquisition) through March 31, 2011.  All inter-company balances and transactions have been eliminated.

Use of estimates

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

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MEDIA TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements

March 31, 2011 and 2010

(Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fair value of financial instruments

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels.  The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

Level 1		Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2		Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3		Pricing inputs that are generally observable inputs and not corroborated by market data.

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.  

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.  If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, accounts payable and accrued expenses, customer deposits and advances approximate their fair values because of the short maturity of these instruments.

The Company has no assets or liabilities measured at fair value on a recurring basis or a non-recurring basis; consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at March 31, 2011 or December 31, 2010; no gains or losses are reported in the consolidated statement of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the interim period ended March 31, 2011 or 2010.

Fair value of non-financial assets and impairment of long-lived assets

The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, which include furniture and fixtures are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets.  Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.  If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.

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MEDIA TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements

March 31, 2011 and 2010

(Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The Company determined that there were no impairments of long-lived assets as of March 31, 2011 or December 31, 2010.

Business combination

In accordance with section 805-10-05 of the FASB Accounting Standards Codification the Company allocates the purchase price of acquired entities to the tangible and intangible assets acquired and liabilities assumed, based on their estimated fair values.

Management makes estimates of fair values based upon assumptions believed to be reasonable.  These estimates are based on historical experience and information obtained from the management of the acquired companies. Critical estimates in valuing certain of the intangible assets include but are not limited to: future expected cash flows from revenues, customer relationships, key management and market positions, assumptions about the period of time the acquired trade names will continue to be used in the Company’s combined product portfolio, and discount rates used to establish fair value.  These estimates are inherently uncertain and unpredictable.  Assumptions may be incomplete or inaccurate, and unanticipated events and circumstances may occur which may affect the accuracy or validity of such assumptions, estimates or actual results.

Cash equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Accounts receivable

Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts.  The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on historical write-off experience, customer specific facts and economic conditions. Bad debt expense is included in general and administrative expenses, if any.

Outstanding account balances are reviewed individually for collectability.  Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

The Company does not have any off-balance-sheet credit exposure to its customers.

Furniture and fixtures

Furniture and fixtures are recorded at cost.  Expenditures for major additions and betterments are capitalized.  Maintenance and repairs are charged to operations as incurred.  Depreciation of Furniture and fixtures is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful lives ranging of five (5) years.  Upon sale or retirement of Furniture and fixtures, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of operations.  Leasehold improvements, if any, are amortized on a straight-line basis over the term of the lease or the estimated useful lives, whichever is shorter.  Upon becoming fully amortized, the related cost and accumulated amortization are removed from the accounts.

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MEDIA TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements

March 31, 2011 and 2010

(Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenue Recognition

The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition.  The Company recognizes revenue when it is realized or realizable and earned.  The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.  

Income Taxes

The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification.  Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.  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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.

The Company adopted section 740-10-25 of the FASB Accounting Standard Codification (“Section 740-10-25”).  Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements.  Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.  The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement.  Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.  The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.

Net Loss Per Common Share

Net loss per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification.  Basic net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.  Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period.  There were no potentially dilutive shares outstanding as of March 31, 2011 or 2010.

Commitments and Contingencies

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

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MEDIA TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements

March 31, 2011 and 2010

(Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Cash Flows Reporting

The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments.  

Subsequent Events

The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued.  Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.

Recent Accounting Pronouncements

In January 2010, the FASB issued the FASB Accounting Standards Update No. 2010-06 “Fair Value Measurements and Disclosures (Topic 820) Improving Disclosures about Fair Value Measurements”, which provides amendments to Subtopic 820-10 that require new disclosures as follows:

1.

Transfers in and out of Levels 1 and 2. A reporting entity should disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers.

2.

Activity in Level 3 fair value measurements. In the reconciliation for fair value measurements using significant unobservable inputs (Level 3), a reporting entity should present separately information about purchases, sales, issuances, and settlements (that is, on a gross basis rather than as one net number).

This Update provides amendments to Subtopic 820-10 that clarifies existing disclosures as follows:

1.

Level of disaggregation. A reporting entity should provide fair value measurement disclosures for each class of assets and liabilities. A class is often a subset of assets or liabilities within a line item in the statement of financial position. A reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities.

2.

Disclosures about inputs and valuation techniques. A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. Those disclosures are required for fair value measurements that fall in either Level 2 or Level 3.

This Update also includes conforming amendments to the guidance on employers' disclosures about postretirement benefit plan assets (Subtopic 715-20). The conforming amendments to Subtopic 715-20 changes the terminology from major categories of assets to classes of assets and provide a cross reference to the guidance in Subtopic 820-10 on how to determine appropriate classes to present fair value disclosures. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.

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MEDIA TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements

March 31, 2011 and 2010

(Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

In April 2010, the FASB issued ASU No. 2010-13, “Compensation—Stock Compensation (Topic 718): Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades” (“ASU 2010-13”). This update provides amendments to Topic 718 to clarify that an employee share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity’s equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, an entity would not classify such an award as a liability if it otherwise qualifies as equity. The amendments in ASU 2010-13 are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. 

In August 2010, the FASB issued ASU 2010-21, “Accounting for Technical Amendments to Various SEC Rules and Schedules: Amendments to SEC Paragraphs Pursuant to Release No. 33-9026: Technical Amendments to Rules, Forms, Schedules and Codification of Financial Reporting Policies” (“ASU 2010-21”), was issued to conform the SEC’s reporting requirements to the terminology and provisions in ASC 805, Business Combinations, and in ASC 810-10, Consolidation. ASU No. 2010-21 was issued to reflect SEC Release No. 33-9026, “Technical Amendments to Rules, Forms, Schedules and Codification of Financial Reporting Policies,” which was effective April 23, 2009. The ASU also proposes additions or modifications to the XBRL taxonomy as a result of the amendments in the update.

In August 2010, the FASB issued ASU 2010-22, “Accounting for Various Topics: Technical Corrections to SEC Paragraphs” (“ASU 2010-22”), which amends various SEC paragraphs based on external comments received and the issuance of SEC Staff Accounting Bulletin (SAB) No. 112, which amends or rescinds portions of certain SAB topics.  The topics affected include reporting of inventories in condensed financial statements for Form 10-Q, debt issue costs in conjunction with a business combination, sales of  stock by subsidiary, gain recognition on sales of business, business combinations prior to an initial public offering, loss contingent and liability assumed in business combination, divestitures, and oil and gas exchange offers. 

In December 2010, the FASB issued the FASB Accounting Standards Update No. 2010-28 “Intangibles—Goodwill and Other (Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts” (“ASU 2010-28”).Under ASU 2010-28, if the carrying amount of a reporting unit is zero or negative, an entity must assess whether it is more likely than not that goodwill impairment exists. To make that determination, an entity should consider whether there are adverse qualitative factors that could impact the amount of goodwill, including those listed in ASC 350-20-35-30. As a result of the new guidance, an entity can no longer assert that a reporting unit is not required to perform the second step of the goodwill impairment test because the carrying amount of the reporting unit is zero or negative, despite the existence of qualitative factors that indicate goodwill is more likely than not impaired. ASU 2010-28 is effective for public entities for fiscal years, and for interim periods within those years, beginning after December 15, 2010, with early adoption prohibited.

In December 2010, the FASB issued the FASB Accounting Standards Update No. 2010-29 “Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations” (“ASU 2010-29”). ASU 2010-29 specifies that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments in this Update also expand the supplemental pro forma disclosures under Topic 805 to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The amended guidance is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

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MEDIA TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements

March 31, 2011 and 2010

(Unaudited)

NOTE 3 - GOING CONCERN

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  As reflected in the accompanying consolidated financial statements, the Company had an accumulated deficit of $428,306 at March 31, 2011, with a net loss from continuing operations of $119,927 and net cash used in operating activities of $107,656 for the interim period then ended, respectively.

While the Company is attempting to generate sufficient revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations.  Management believes that the actions presently being taken to further implement its business plan and generate additional revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to increase revenues and in its ability to raise additional funds, there can be no assurances to that effect. The Company’s ability to continue as a going concern is dependent upon its ability to achieve profitable operations or obtain adequate financing.

The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 4 - ACQUISITION

On January 12, 2011, the Company executed a Share Exchange Agreement pursuant to which we acquired 100% of the issued and outstanding capital stock of TechTV Media, Inc., a Nevada Corporation (“TechTV”), in exchange for 5,000,000 shares of its common stock.  As a result of the stock-for-stock exchange, TechTV will become a wholly-owned subsidiary of the Company.   

As consideration for the purchase, the Company has issued 5,000,000 shares of the Common stock of MDTC, $0.001 par value per share, into an escrow account, for the future transfer to the prior shareholder of TechTV.  The exchange of the total 5,000,000 shares of the Company’s Common Stock, is subject to and based upon TechTV securing 500,000 new subscriptions during the period commencing on January 12, 2011 and ending on the second year anniversary date thereof.    The escrow holder shall release a certificate representing 625,000 MDTC shares for each 62,500 subscribers secured under TechTV contracts.

 On the date of acquisition, TechTV had no tangible assets and no liabilities and because the 5,000,000 share purchase price is contingent upon TechTV acquiring a customer base, no acquisition price has been recorded.  The Company will record the acquisition of TechTV’s customer base as each milestone is reached and the shares are released from escrow.  The Company will at this time record an intangible asset—customer base—and amortize it over the expected life of the acquired contracts.

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MEDIA TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements

March 31, 2011 and 2010

(Unaudited)

NOTE 4 - ACQUISITION (CONTINUED)

The following Pro forma Statement of Operations presents the combined operations on a pro forma basis as if the acquisition occurred on January 1, 2011:

		For the Three
		Months Ended
		March 31, 2011
	Media Technologies, Inc.			TechTV Media, Inc.			Pro Forma Combined Total
Revenues	$	21,858		$	-		$	21,858
General and Administrative		23,670			-			23,670
Other Income (Expenses)		(152,406)			-			(152,406)
Loss from Discontinued Operations		24,387			-			24,387
NET LOSS	$	(82,491)		$	-		$	(82,491)

NOTE 5 - RELATED PARTY TRANSACTIONS

As of March 31, 2011, the Company owed $220,155 to related parties for funds advanced for its operations. The advances are due upon demand, unsecured and non-interest bearing.

NOTE 6 - ADVANCES

During the three months ended March 31, 2011 the Company received advances totaling $320,000 from a non-related party in order to finance the continued development of the Company’s newly acquired ad insertion technology.  The advances are non-interest bearing, due on demand and are not collateralized.  

NOTE 7 - STOCKHOLDERS’ DEFICIT

Issuance of common shares

On January 12, 2011, the Company issued 5,000,000 shares of its common stock into an escrow account, for the future transfer to the TechTV shareholder, in exchange for all of the issued and outstanding capital stock of TechTV.  The shares are currently held in escrow until the performance milestones detailed in the share exchange agreement have been reached.

NOTE 8 - SUBSEQUENT EVENTS

The Company has evaluated all events that occurred after the balance sheet date through the date these financial statements were issued.  The Management of the Company determined that there were no reportable events that occurred during that subsequent period to be disclosed.

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Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations

 

Forward-looking Statements

 

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this quarterly report.  Some of the information in this quarterly report contains forward-looking statements, including statements related to anticipated operating results, margins, growth, financial resources, capital requirements, adequacy of the Company's financial resources, trends in spending on research and development, the development of new markets, the development, regulatory approval, manufacture, distribution, and commercial acceptance of new products, and future product development efforts.  Investors are cautioned that forward-looking statements involve risks and uncertainties, which may affect our business and prospects, including but not limited to, the Company's expected need for additional funding and the uncertainty of receiving the additional funding, changes in economic and market conditions, acceptance of our products by the health care and reimbursement communities, new development of competitive products and treatments, administrative and regulatory approval and related considerations, health care legislation and regulation, and other factors discussed in our filings with the Securities and Exchange Commission.

 

After the acquisition of SpeedPal Broadband, Inc., on February 26, 2010, the Company discontinued its prior commercial appraisal business.  The figures presented in the financial statements for the three months ended March 31, 2011 and 2010 reflect the continuing operations of the Company’s subsidiary, SpeedPal Broadband, Inc. from the date of acquisition for the periods presented.

THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010

Revenues – Our revenue is derived from the sale of high-speed broadband internet service.  Sales for the three months ended March 31, 2011 totaled $46,387compared to $21,858 for the same period last year.  Sales increased $24,529 or 112% due primarily to the increase in the number of customers.  

Operating Expenses- Operating expenses totaled $166,314 and $23,670 for the three months ended March 31, 2011 and 2010 respectively, an increase of $142,644 or 602%.  The increase is due to an increase in commissions from $10,410 to $30,617, an increase of $20,207, relating to commissions paid for new customers, an increase in professional fees from $8,348 to $66,153, an increase of $57,805 relating to the cost of accounting, audit and legal fees associated with our filings and an increase in general and administrative expenses of $64,632, from $4,912 to $69,544 related to the growth of the business.

Other – The Company had no “Other” income or expense during the three months ended March 31, 2011.  During the three months ended March 31, 2010 the Company recognized an impairment of goodwill expense of $150,594 related to the acquisition of SpeedPal Broadband.  

Also, during the three month period ended March 31, 2010 the Company incurred a loss of $(131) from its discontinued appraisal business along with a onetime gain of $24,518 related to the sale of that business.  This gain is the result of the discharge of liabilities in excess of assets.

LIQUIDITY AND CAPITAL RESOURCES

For the three months ended March 31, 2011, we realized net proceeds of $9,585 from borrowings from related parties and $320,000 gross proceeds from advances made by an unrelated third party.  We have used these proceeds to fund ongoing operations.  At March 31, 2011, we had available cash of $184,744.  The Company expects to continue to rely on related parties on an as needed basis and to raise capital through stock offerings until such time that we are able to generate cash from operations sufficient for our needs.  We are currently exploring the possibility of additional alternative financing, but there is no assurance that we will be able to secure financing on favorable terms or at all.

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At March 31, 2011, we had total current assets of $189,432 and total current liabilities of $596,604 resulting in a working capital deficit of $407,172.  Current assets consist of cash.  Current liabilities consists of accounts payable and accrued expenses of  $50,910, customer deposits of $5,539, related party payables of $210,155 and stock subscriptions payable of $320,000.  At March 31, 2010 we had total current assets of $23,902 and total current liabilities of $252,170 resulting in a working capital deficit of $228,268.

Net cash used by continuing operating activities was $107,656 and $920 for the year three months ended March 31, 2011 and 2010 respectively.  The increase is related to the growth of the business.

Net cash used in investing activities was $61,087, related to the purchase of furniture and equipment, for three months ended March 31, 2011.  During the three months ended March 31, 2010, $964 was related to cash relinquished in discontinued operations.  

Item 3 - Quantitative and Qualitative Disclosures about Market Risk

 

We are a smaller reporting company as defined by § 229.10(f)(1) and are not required to provide the information under this item.

 

Item 4T - Controls and Procedures

 

Disclosure Controls and Procedures

Based on an evaluation as of the date of the end of the period covered by report, our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as required by Exchange Act Rule 13a-15. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this report to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms.  The Company recognizes a material weakness in its internal controls due to the fact that we are unable, due to lack of resources, to maintain adequate segregation of duties or hire an audit committee to oversee the internal control functions.  The Company plans to address these weaknesses as resources become available.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and our Chief Financial Officer, to allow timely decisions regarding required disclosure.

  

Management’s Annual Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Exchange Act Rule 13a-15(f).  Management conducted an evaluation of the effectiveness of the internal control over financial reporting as of March 31, 2011, using the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).  Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

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A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.  Based on the evaluation of the effectiveness of the internal controls over financial reporting as of March 31, 2011, management has concluded that our internal controls over financial reporting were effective as of the end of the period covered by this report.

This 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 the company's 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 report.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

The term “internal control over financial reporting” is defined as a process designed by, or under the supervision of, the registrant’s principal executive and principal financial officers, or persons performing similar functions, and effected by the registrant’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

(a)           Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the registrant;

(b)           Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the registrant are being made only in accordance with authorizations of management and directors of the registrant; and

(c)           Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the registrant’s assets that could have a material effect on the financial statements.

PART II - OTHER INFORMATION

 

Item 1 - Legal Proceedings

 

The Company is not aware of pending claims or assessments, other than as described above, which may have a material adverse impact on the Company’s financial position or results of operations.

 

Item 1a - Risk Factors

 

We are a smaller reporting company as defined by § 229.10(f)(1) and are not required to provide the information under this item.

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds

On January 12, 2011, the Company issued 5,000,000 shares of its common stock to the TechTV shareholder, in exchange for all of the issued and outstanding capital stock of TechTV (See Note 4).  The shares are currently held in escrow until the performance milestones detailed in the share exchange agreement have been reached.

   

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Item 3 - Defaults upon Senior Securities

 

None.

  

Item 5 - Other Information

 

None. 

Item 6 - Exhibits

 

Exhibit
Number	Description of Exhibit
3.01	Articles of Incorporation(1)
3.03	Bylaws(1)
10.01	Share Exchange Agreement with Speedpal Broadband, Inc.(2)
10.02	Share Purchase Agreement of John and Kathleen Chidester (2)
10.02	Assignment and Assumption Agreement(3)
31.01	Certification of Principal Executive Officer Pursuant to Rule 13a-14(4)
31.02	Certification of Principal Financial Officer Pursuant to Rule 13a-14(4)
32.01	CEO and CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act(4)

⁽¹⁾

Incorporated by reference to our Registration Statement on Form 10 filed on May 1, 2008.

⁽²⁾

Incorporated by reference to our Form 8-K filed with the SEC on March 1, 2010.

⁽³⁾

Incorporated by reference to our Form 8-K filed with the SEC on March 25, 2010.

⁽⁴⁾

Filed herewith.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the Undersigned, thereunto duly authorized.

MEDIA TECHNOLOGIES, INC.

Dated: May 23, 2011

/s/ Bryant D. Cragun

By: Bryant D. Cragun

Its: President and Secretary

 

Pursuant to the requirement of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Dated: May 23, 2011

/s/ Bryant D. Cragun

By: Bryant D. Cragun

Its:  Director

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