FORM 10Q-SBforGLOBAL BROADCAST GROUP, INC.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10Q-SB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended: March 31, 2003
Commission file number: 0-50155
GLOBAL BROADCAST GROUP, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 02-0563302
State or other jurisdiction of I.R.S. Employer
incorporation or organization Identification No.
5770 Roosevelt Boulevard, Suite 510, Clearwater, Florida 33760
(Address of Principal Executive Office)
(727) 533-8300
(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 ___
The number of shares of registrant's Common Stock, $.001 par value, outstanding
as of March 31, 2003 was 11,497,871 shares.
1
INDEX
Page
PART I - FINANCIAL INFORMATION:
ITEM 1. FINANCIAL STATEMENTS
Independent Accountants' Report..........................................1-2
Balance Sheet at March 31 2003 (Unaudited)
and December 31, 2002......................................................3
Statements of Changes in Stockholders' Equity
(Deficit) for the Three Months Ended
March 31, 2003 and 2002 and for the Period from
Date of Inception (October 31, 2000)
through March 31, 2003 (Unaudited).......................................4-5
Statements of Operations for the
Three Months Ended March 31, 2003
and 2002 and for the Period from Date
of Inception (October 31, 2000)
through March 31, 2003 (Unaudited).........................................6
Statements of Cash Flows for the
Three Months Ended March 31, 2003
and 2002 and for the Period from
Date of Inception (October 31, 2000)
through March 31, 2003 (Unaudited).......................................7-8
Notes to Financial Statements..............................................9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS..........................10
PART II - OTHER INFORMATION:..........................................11
ITEM 1. LEGAL PROCEEDINGS ............................................12
ITEM 2. CHANGES IN SECURITIES ........................................12
ITEM 3. DEFAULTS UPON SENIOR SECURITIES ..............................12
ITEM 4. CONTROLS AND PROCEDURES.......................................12
ITEM 5. OTHER INFORMATION.............................................12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K .............................12
SIGNATURES ............................................................13
2
FORWARD LOOKING STATEMENTS
When used in this report, the words "may," "will," "expect," "anticipate,"
"continue," "estimate," "project" or "intend" and similar expressions identify
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E Securities Exchange Act of 1934 regarding events,
conditions and financial trends that may effect our future plan of operation,
business strategy, operating results and financial position. Current
stockholders and prospective investors are cautioned that any forward-looking
statements are not guarantees of future performance and are subject to risks and
uncertainties and that actual results may differ materially from those included
within the forward-looking statements as a result of various factors. Such
factors are described under the headings "Business-Certain Considerations,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," and the financial statements and their associates notes.
Important factors that may cause actual results to differ from projections
include, for example:
o the success or failure of management's efforts to implement their
business strategy;
o our ability to protect our intellectual property rights;
o our ability to compete with major established companies;
o our ability to attract and retain qualified employees; and
o other risks which may be described in future filings with the SEC.
3
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
-----------------------------------------------------
FINANCIAL REPORTS
AT
MARCH 31, 2003
------------------------------------------------------
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
TABLE OF CONTENTS Page
Independent Accountants' Report............................................F 1-2
Balance Sheets at March 31, 2003
(Unaudited) and December 31, 2002............................................F-3
Statements of Changes in Stockholders'
Equity (Deficit) for the Three
Months Ended March 31, 2003 and 2002
and for the Period from Date of Inception
(October 31, 2000) through March 31, 2003
(Unaudited)................................................................F 4-5
Statements of Operations for the
Three Months Ended March 31, 2003
and 2002 and for the Period from
Date of Inception (October 31, 2000)
through March 31, 2003 (Unaudited)...........................................F-6
Statements of Cash Flows for the
Three Months Ended March 31, 2003
and 2002 and for the Period from
Date of Inception (October 31, 2000)
through March 31, 2003 (Unaudited).........................................F 7-8
Notes to Financial Statements................................................F-9
4
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors
and Stockholders
Global Broadcast Group, Inc.
(A Development Stage Company)
(A Delaware Corporation)
Clearwater, Florida
We have reviewed the accompanying balance sheet of Global Broadcast
Group, Inc. as of March 31, 2003, and the related statements of changes in
stockholder's equity (deficit), operations, and cash flows for the three months
ended March 31, 2003 and 2002, and for the period from date of inception
(October 31, 2000) through March 31, 2003. These financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and of making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with auditing standards generally accepted in the United States of
America, the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material modifications that
should be made to such financial statements for them to be in conformity with
accounting principles generally accepted in the United States of America.
We have previously audited, in accordance with auditing standards
generally accepted in the United States of America, the balance sheet of Global
Broadcast Group, Inc. as of December 31, 2002 (presented herein), and the
related statements of changes in stockholders' equity (deficit) (presented
herein), operations, and cash flows (not presented herein) for the year then
ended and for the period from date of inception (October 31, 2000) to December
31, 2002; and in our report dated February 28, 2003 we expressed an unqualified
opinion on those financial statements. In our opinion, the information set forth
in the accompanying balance sheet as of December 31, 2002 and the related
statement of stockholders' equity (deficit) for the year then ended and for the
period from date of inception (October 31, 2000) to December 31, 2002 is fairly
stated, in all material respects. No auditing procedures have been performed
subsequent to the date of our report.
F-1
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note C to the
financial statements, the Company has incurred losses that have resulted in a
stockholders' deficit. This condition raises substantial doubt about its ability
to continue as a going concern. Management's plans regarding this matter are
also described in Note C. The financial statements do not include any
adjustments that result from the outcome of this uncertainty.
/s/ Rotenberg & Co., LLP
Rotenberg & Co., llp
Rochester, New York
May 9, 2003
F-2
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
BALANCE SHEETS
-------------------------------------------------------------------------------------------------
(Unaudited)
March 31, December 31,
2003 2002
-------------------------------------------------------------------------------------------------
ASSETS
Current Assets
Cash and Cash Equivalents $ 3,977 $ 1,462
Accounts Receivable - 1,160
-------------------------------------------------------------------------------------------------
Total Assets $ 3,977 $ 2,622
-------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts Payable $ 26,811 $ 27,030
Accrued Interest Payable - 4,000 4,000
Accrued Payroll 11,823 -
Notes Payable - 150,000 150,000
Due to Stockholder 19,827 -
-------------------------------------------------------------------------------------------------
Total Liabilities 58,461 181,030
-------------------------------------------------------------------------------------------------
Stockholders' Deficit
Common Stock - $.001 Par Value;
50,000,000 Shares Authorized,
12,197,871 and 11,497,871
Shares Issued
and Outstanding, Respectively 12,198 11,498
Additional Paid-in Capital 612,732 438,182
Deficit Accumulated During Development Stage (679,414) (628,088)
-------------------------------------------------------------------------------------------------
Total Stockholders'Deficit (54,484) (178,408)
-------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Deficit $ 3,977 $ 2,622
-------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
F-3
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
------------------------------------------------------------------------------------------------------------------------------------
Deficit
Common Accumulated
Stock Additional During Total
Number of ($0.001 Par Paid-In Development Stockholders'
Shares Value) Capital Stage Equity (Deficit)
------------------------------------------------------------------------------------------------------------------------------------
Balance - October 31, 2000 - $ - $ - $ - $ -
Common Stock Issued in Exchange
for Services and
Expenses Paid by Shareholders
(Galli) 11,553,100 11,553 202 - 11,755
Common Stock Issued in Exchange
for Services and
Expenses Paid by Shareholders
(City View) 3,425,000 (1) 3,425 - - 3,425
Common Shares Issued for Cash -
Private Placement (City View) 862,500 (1) 863 286,637 - 287,500
Capital Contribution - Shareholder - - 100,000 - 100,000
Net Loss for the Period - - - (297,116) (297,116)
------------------------------------------------------------------------------------------------------------------------------------
Balance - December 31, 2001 15,840,600 15,841 386,839 (297,116) 105,564
Common Shares Issued for Cash -
Private Placement (City View) 66,000 66 21,934 - 22,000
Net Loss for the Period (Unaudited) - - - (101,916) (101,916)
------------------------------------------------------------------------------------------------------------------------------------
Balance - March 31, 2002
(Unaudited) 15,906,600 $ 15,907 $ 408,773 $ (399,032) $ 25,648
------------------------------------------------------------------------------------------------------------------------------------ - continued -
(1) Shares issued and outstanding have been adjusted to reflect the Plan of
Merger effected on March 1, 2002.
The accompanying notes are an integral part of these financial statements.
F-4
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
STATEMENTS OF CHANGES IN
STOCKHOLDERS' EQUITY (DEFICIT)
- continued
------------------------------------------------------------------------------------------------------------------------------------ Deficit
Common Accumulated
Stock Additional During Total
Number of ($0.001 Par Paid-In Development Stockholders'
Shares Value) Capital Stage Equity (Deficit)
------------------------------------------------------------------------------------------------------------------------------------
Balance - March 31, 2002
(Unaudited) 15,906,600 $ 15,907 $ 408,773 $ (399,032) $ 25,648
Common Shares Issued for Cash -
Private Placement
(Global Broadcast) 267,500 267 64,733 - 65,000
Shares Issued for
Services Rendered 640,000 640 5,360 - 6,000
Shares Issued to Directors
for Services Rendered 100,000 100 3,900 - 4,000
Shares Repurchased (5,416,229) (5,416) (144,584) - (150,000)
Capital Contribution
- Shareholder - - 100,000 - 100,000
Net Loss for the
Period (Unaudited) - - - (229,056) (229,056)
------------------------------------------------------------------------------------------------------------------------------------
Balance - December 31, 2002 11,497,871 11,498 438,182 (628,088) (178,408)
Common Shares Issued for Cash
- Private Placement
(Global Broadcast) 250,000 250 21,000 - 21,250
Issuance of Stock via
Conversion of Note Payable 450,000 450 153,550 - 154,000
Net Loss for the Period
(Unaudited) - - - (51,326) (51,326)
------------------------------------------------------------------------------------------------------------------------------------
Balance - March 31, 2003
(Unaudited) 12,197,871 $ 12,198 $ 612,732 $ (679,414) $ (54,484)
------------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
F-5
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
STATEMENTS OF OPERATIONS (UNAUDITED)
------------------------------------------------------------------------------------------------------------------------------------
Period From
Date of Inception
(October 31, 2000) Three Months Ended March 31,
Through -------------------------------------
March 31, 2003 2003 2002
------------------------------------------------------------------------------------------------------------------------------------
Revenues $ 500 $ - $ 500
------------------------------------------------------------------------------------------------------------------------------------
Expenses
Commissions 11,250 - 4,000
General and Administrative 23,056 2,342 1,790
Insurance 39,727 6,597 3,616
Interest 4,000 - -
Investment Banker 35,000 - -
Management Fees 167,392 18,000 37,188
Marketing 16,000 - 16,000
Organizational Costs 164,853 - -
Payroll Taxes 6,742 840 840
Production Equipment 24,257 - 16,717
Professional Fees 56,125 748 3,000
Rent 8,769 1,371 1,371
Salaries 87,611 10,983 11,983
Telephone 12,074 1,998 1,116
Transfer Agent Fees 3,005 620 -
Travel 20,053 7,827 4,795
------------------------------------------------------------------------------------------------------------------------------------
Total Expenses 679,914 51,326 102,416
------------------------------------------------------------------------------------------------------------------------------------
Loss Before Provision for Taxes (679,414) (51,326) (101,916)
Provision for Taxes - - -
------------------------------------------------------------------------------------------------------------------------------------
Net Loss for the Period $ (679,414) $ (51,326) $ (101,916)
------------------------------------------------------------------------------------------------------------------------------------
Weighted Average Number of
Common Shares Outstanding 12,765,888 12,030,843 15,893,334
Net Loss per Common Share
- Basic and Diluted $ (0.05) $ (0.00) $ (0.01)
------------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
F-6
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
STATEMENTS OF CASH FLOWS (UNAUDITED)
------------------------------------------------------------------------------------------------------------------------------------
Period From
Date of Inception
(October 31, 2000) Three Months Ended March 31,
Through ------------------------------
March 31, 2003 2003 2002
------------------------------------------------------------------------------------------------------------------------------------
Cash Flows from Operating
Activities
Net Loss for the Period $ (679,414) $ (51,326) $ (101,916)
Non-Cash Adjustments
Organizational Costs
Paid by Shareholders 14,853 - -
Franchise Taxes and Filing
Fees Paid by Shareholders 202 - -
Contributed Services
by Shareholders 125 - -
Common Stock Issued
for Services Rendered 10,000 - -
Changes in Assets and Liabilities
Accounts Receivable - 1,160 -
Accounts Payable 26,811 (219) (133,990)
Accrued Interest Payable 4,000 - -
Accrued Payroll 11,823 11,823 -
Due to Stockholder 19,827 19,827 -
------------------------------------------------------------------------------------------------------------------------------------
Net Cash Flows from Operating Activities (591,773) (18,735) (235,906)
------------------------------------------------------------------------------------------------------------------------------------
Cash Flows from Investing Activities - - -
------------------------------------------------------------------------------------------------------------------------------------
Cash Flows from Financing Activities
Contribution by Shareholder 200,000 - -
Proceeds from the Issuance of Note Payable 150,000 - -
Proceeds from the Issuance of Common Stock 395,750 21,250 22,000
Common Stock Repurchased (150,000) - -
------------------------------------------------------------------------------------------------------------------------------------
Net Cash Flows from Financing Activities 595,750 21,250 22,000
------------------------------------------------------------------------------------------------------------------------------------
Net Change in Cash and Cash Equivalents 3,977 2,515 (213,906)
Cash and Cash Equivalents - Beginning of Period - 1,462 240,614
------------------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents - End of Period $ 3,977 $ 3,977 $ 26,708
------------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
F-7
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
STATEMENTS OF CASH FLOWS (UNAUDITED) - continued
------------------------------------------------------------------------------------------------------------------------------------
Period From
Date of Inception
(October 31, 2000) Three Months Ended March 31,
Through -------------------------------------
March 31, 2003 2003 2002
------------------------------------------------------------------------------------------------------------------------------------
Supplemental Disclosures
------------------------------------------------------------------------------------------------------------------------------------
Interest Paid $ - $ - $ -
Income Taxes Paid $ - $ - $ -
------------------------------------------------------------------------------------------------------------------------------------
NON-CASH INVESTING AND
FINANCING ACTIVITIES
------------------------------------------------------------------------------------------------------------------------------------
Organizational Costs Paid by Shareholders
in Exchange for Common Stock $ 14,583 $ - $ -
Franchise Taxes and Filing Fees Paid by
Shareholder $ 202 $ - $ -
Contributed Services by Shareholders $ 125 $ - $ -
Common Stock Issued for Services Rendered $ 10,000 $ - $ -
Issuance of Common Stock via Conversion of
Note Payable and Accrued Interest Payable $ 154,000 $ 154,000 $ -
-----------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
F-8
GLOBAL BROADCAST GROUP, INC.
(A DEVELOPMENT STAGE COMPANY)
(A DELAWARE CORPORATION)
Clearwater, Florida
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Note A - Basis of Presentation
The condensed financial statements of Global Broadcast
Group, Inc. (the "Company") included herein have been prepared
by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission
(the "SEC"). Certain information and footnote disclosures
normally included in financial statements prepared in conjunction
with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations,
although the Company believes that the disclosures are adequate
to make the information presented not misleading.These condensed
financial statements should be read in conjunction with the annual
audited financial statements and the notes thereto included in the
Company's registration statement on Form 10-SB.
The accompanying unaudited interim financial statements reflect
all adjustments of a normal and recurring nature which are, in the
opinion of management, necessary to present fairly the financial
position, results of operations and cash flows of the Company for
the interim periods presented. The results of operations for these
periods are not necessarily comparable to, or indicative of, results
of any other interim period or for the fiscal year taken as a whole.
Factors that affect the comparability of financial data from year
to year and for comparable interim periods include non-recurring
expenses associated with the Company's registration with the SEC,
costs incurred to raise capital, and stock awards.
Reclassifications
Certain amounts in the prior year financial statements have been
reclassified to conform with the current year presentation.
Note B - Notes Payable
During September 2002, the Company entered into a loan agreement
with a former stockholder of the Company in the amount of
$150,000. The note was secured by two promissory notes and 150,000
restricted shares of the Company's common stock. The notes bore
interest at 8% per annum. The notes were due in full, together
with accrued interest, in September 2003.
In January 2003, the Company issued 450,000 restricted shares of
common stock in full consideration of payment of the two
promissory notes and accrued interest to date of $4,000.
Note C - Going Concern
The Company's financial statements have been presented on the
basis that it is a going concern, which contemplates the
realization of assets and the satisfaction of liabilities in the
normal course of business. The Company has reported net losses of
$679,414 through March 31, 2003. As a result, there is an
accumulated deficit of $679,414 at March 31, 2003.
The Company's continued existence is dependent upon its ability
to raise capital or to successfully market and sell its products.
The financial statements do not include any adjustments that might
be necessary should the Company be unable to continue as a going
concern.
F-9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion and analysis of GBG's financial condition and results
of its operations for the three months ended March 31, 2003 should be read in
conjunction with our financial statements included elsewhere herein.
When used in the following discussions, the words "believes," "anticipates,"
"intends," "expects," and similar expressions are intended to identify
forward-looking statements. Such statements are subject to certain risks and
uncertainties, which could cause results to differ materially from those
projected.
Company Activities
GBG (formerly known as Galli Process, Inc.) was incorporated on October 31, 2000
under the laws of the state of Delaware. Galli Process, Inc. changed to its
current name on February 7, 2002.
We are in the development stage and have developed an innovative advertising and
informational platform that incorporates satellite and Internet-based
technology. The platform enables advertisers and businesses to promote their
products and services on television sets and electronic displays in retail
stores, hotels, offices, high traffic areas and other facilities. Programming
will consist of short format, full motion video such as music videos, video ads
and short infomercials designed to entertain, inform and educate consumers. To
date, GBG has received only limited revenues from operations.
We have reported net losses since the date of inception (October 31, 2000)
through March 31, 2003 of $679,414. As a result, there is an accumulated deficit
of $679,414 at March 31, 2003.
Results of Operations
Three months ended March 31, 2003 compared with three months ended March 31, 2002
Expenses for the three months ended March 31, 2003 decreased $51,000 or 50% to
$51,000 from $102,000 for the three months ended March 31, 2002. The decrease is
mainly due to a decrease in management fees, marketing and production equipment.
As we are in the development stage, we expect that our expenses will fluctuate
from period to period.
Liquidity and Capital Resources
As reflected in the Consolidated Statement of Cash Flows for the three months
ended March 31, 2003, $19,000 of cash was used by operating activities.
Cash required during the three months ended March 31, 2003 came from the
issuance of common stock in the amount of $21,000
During the three months ended March 31, 2003, GBG issued 450,000 restricted
shares of common stock in full consideration of payment of the $150,000 Note
Payable and Accrued Interest to date of $4,000.
Due to the lack of any significant revenues, GBG has relied upon proceeds
realized from the private sale of its common stock, cash contributions from
shareholders and the issuance of a note payable to meet its funding
requirements. Funds raised by GBG have been expended primarily in connection
with the costs to acquire Galli Process, Inc. and administrative costs.
During the next 12 months, GBG expects that it will spend between $200,000 and
$250,000 on operating expenses. The more significant expenses are management
fees, salaries, marketing, professional fees and insurance. As of March 31,
2003, GBG had cash on hand of $3,977. GBG plans to use its existing financial
resources, the proceeds from the sale of additional common stock, as needed, and
shareholder infusion of cash, as needed, to fund its operating expenses during
this period. In addition, GBG is currently utilizing a Private Placement
Memorandum seeking $2,000,000 in capital to fund operations and initial
acquisitions. As of May 12, 2003, there have been no units sold. Our
shareholders have committed the $200,000 to $250,000 needed during the next
twelve months to fund operations if funding is not available from any other
sources. There is no formal agreement for our shareholders to provide this
funding.
Other than funding its operating expenses, GBG does not have any material
capital commitments.
10
Plan of Operation
We have completed the development of our product and we have been in the process
of marketing it to companies that market to our target industries as well as the
companies in the industries that can best benefit from our product. We have
modified our products to serve national accounts and have streamlined our
entertainment package so it can be marketed to various age groups. We have been
finding that most potential customers want to work with a public reporting
company. On May 16, 2003 we became a public reporting company. We anticipate
that we should begin generating revenues within six months of this date.
During the next 12 months we will take the following steps to market our product:
o We will visit with national hotel chains embracing new technologies
o We will seek independent representatives who will sell directly to
our target audience
o We will joint venture with the larger companies supplying TV sets
and TV services to hotels and commercial companies
o We will continue to develop new uses for our product
o We will continue to explore opportunities to acquire companies that
would be synergistic with our business and that would
provide a positive cash flow to GBG, however, no negotiations have
reached the probable stage.
To date, we have discovered a new and expanded use of our services in Radiology,
where high-speed connections are required to send x-rays and other diagnostic
data. We can send this information from remote areas to medical facilities with
trained specialists via satellite.
The above work will not require any additional working capital as it will be
performed by employees and consultants accounted for in the operating expenses
described above.
Until GBG receives adequate outside financing to fund its capital commitments,
its operations will be limited to those that can be effected through the
proceeds from the sale of additional common stock and shareholder infusion of
cash.
During this 12 month period, GBG does not anticipate hiring more than two employees.
Application of Critical Accounting Policies
GBG's financial statements and accompanying notes are prepared in accordance
with generally accepted accounting principles in the United States. Preparing
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenue, and expenses. These
estimates and assumptions are affected by management's application of accounting
policies. The critical accounting policy for GBG currently is revenue
recognition.
GBG recognizes revenue in accordance with Staff Accounting Bulletin No. 101,
"Revenue Recognition in Financial Statements." We will recognize revenue when
realized or realizable and earned, which is when the following criteria are met:
persuasive evidence of arrangement exists; delivery has occurred; the sales
price is fixed and determinable; and collectibility is reasonably assured. We
will provide for the estimated costs of warranties and reduce revenue for
estimated returns.
For sales related to services, GBG will recognize revenue upon the completion of
the installation of all equipment necessary to provide the satellite
transmission services. The fees that will be billed monthly to these customers
will then be recognized on a monthly basis after the services have been
provided. We will only recognize our portion of any such services that relate to
a revenue sharing agreement.
For equipment sales, revenue will be recognized when the equipment is shipped to
the customer.
For equipment leases, rental revenue will be recognized as earned over the term
of the lease.
11
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not involved in any legal proceedings or litigation, and the
officers and directors are aware of no other pending litigation.
ITEM 2. CHANGES IN SECURITIES
As of March 31, 2003, the Company issued an additional 250,000 shares of its
common stock pursuant to an exemption provided for under Rule 506 of Regulation
D of the Securities Act of 1933, as amended. The shares were purchased for
$21,250. In addition, the Company authorized the issuance of 450,000 shares of
its common stock in connection with the conversion of outstanding promissory
notes. This conversion was made in reliance on Section 4(2) of the Securities
Act of 1933, as amended. The 450,000 restricted shares were issued as full
payment of two promissory notes in the aggregate amount of $150,000 and accrued
interest to date of $4,000.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. CONTROLS AND PROCEDURES
Sam Winer, the Company's President, Chief Executive Officer and Principal
Financial Officer, has evaluated the effectiveness of the Company's disclosure
controls and procedures as of the date within 90 days prior to the filing date
of this report (the "Evaluation Date"); and in his opinion the Company's
disclosure controls and procedures ensure that material information relating to
the Company, including the Company's consolidated subsidiaries, is made known to
him by others within those entities, particularly during the period in which
this report is being prepared, so as to allow timely decisions regarding
required disclosure. To the knowledge of Mr. Winer, there have been no
significant changes in the Company's internal controls or in other factors that
could significantly affect the Company's internal controls subsequent to the
Evaluation Date. As a result, no corrective actions with regard to significant
deficiencies or material weakness in the Company's internal controls were
required.
ITEM 5. OTHER EVENTS
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
There were no reports on Form 8-K filed by the registrant for the quarter ending
March 31, 2003
12
SIGNATURES
In accordance with the requirements of Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
GLOBAL BROADCAST GROUP, INC.
Date: May 19, 2003 By: /s/ Sam Winer
------------------------------------
Sam Winer, Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer and
Principal Financial Officer)
Date: May 19, 2003 By: /s/ James Goodman
----------------------------------
James Goodman, Director
Date: May 19, 2003 By: /s/ Micheal D. Rocha
-----------------------------------
Michael D. Rocha, Director
13
CERTIFICATION
In connection with the Quarterly Report of Global Broadcast Group, Inc. (the
"Company") on Form 10-QSB for the period ending March 31, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Sam
Winer, President, Chief Executive Officer, Principal Financial Officer of the
Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or
5(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects the financial condition and results of the Company.
Date: May 19, 2003 /s/ Sam Winer
Sam Winer
President, Chief Executive Officer
and Principal Financial Officer