SEC Info - Learning Priority Inc - ‘8-K/A’ for 8/11/06

MEGA MEDIA GROUP, INC. AND SUBSIDIARIES

		PAGE

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		1

CONSOLIDATED BALANCE SHEETS		2

CONSOLIDATED STATEMENTS OF OPERATIONS		3

CONSOLIDATED STATEMENTS OF CASH FLOWS		4

STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT)		5

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS		6-14

KEMPISTY & COMPANY

CERTIFIED PUBLIC ACCOUNTANTS, P.C.

15 MAIDEN LANE - SUITE 1003 - NEW YORK, NY 10038 - TEL (212) 406-7272 - FAX (212) 513-1930

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors

Mega Media Group, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheet of Media Mega Group, Inc. and Subsidiaries (the "Company") as of January 31, 2006 and the related consolidated statements of operations, changes in stockholders' deficit and cash flows for each of the years in the two years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required at this time, to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. 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 audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Mega Media Group, Inc. and Subsidiaries as of January 31, 2006 and the results of its operations and cash flows for each of the years in the two years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company had a net loss of $2,270,974, an accumulated deficit of $2,870,499 and a working capital deficiency of $963,754. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans concerning this matter are also described in Note 1. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Kempisty & Company CPAs PC

Kempisty & Company

Certified Public Accountants PC

New York, New York

May 3, 2006

MEGA MEDIA GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

		July 31,			January 31,
ASSETS		2006			2006
Current Assets		(unaudited)
Cash	$	19,163		$	12,418
Accounts receivable, net (Note 3)		149,538			152,763
Prepaid Expenses		214,194			-
Total Current Assets		382,895			165,181

Fixed assets, net (Note 5)		478,824			465,590
Master records, net (Note 6)		-			128,621
Note Receivable-Gladiator (Note 4)		-			-
Deposits		225,486			183,486
Other		16,010			16,010

TOTAL ASSETS	$	1,103,215		$	958,888

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable	$	325,886		$	291,642
Sales tax payable		892			892
Payroll taxes payable		101,833			26,291
Accrued Offices' Compensation		147,000			-
Equipment loan - current portion (Note 9)		14,924			14,924
Loans payable (Note 8)		440,000			440,000
Due to related party		67,970			-
Payable to shareholders (Note 7)		169,118			355,186
Total Current Liabilities		1,267,623			1,128,935

Equipment Loan Payable (Note 9)		55,538			65,449
TOTAL LIABILITIES		1,323,161			1,194,384

Commitments and contingencies (Note 11)		-			-

Stockholders' Deficit
Preferred stock, $.001 par value, 20,000,000 shares authorized, 2,500,000 shares issued and outstanding (Note 10)		2,500			2,500

Common stock, $.001 par value, 70,000,000 shares authorized, 5,077,446 and 3,175,000 shares issued and outstanding (Note 10)		5,077			3,175

Additional paid-in capital		3,967,746			2,629,328
Accumulated Deficit		(4,195,269	)		(2,870,499	)

Total Stockholders' Deficit		(219,946	)		(235,496	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	1,103,215		$	958,888

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

MEGA MEDIA GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS


	Six Months Ended July 31,						Three Months Ended July 31,						Year Ended January 31,
	2006			2005			2006			2005			2006			2005
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenues:
Advertising revenues	$	1,533,393			1,185,606		$	838,024			574,229		$	2,598,148		$	81,430
Other revenues		10,800			197,404			10,800			114,324			150,620			112,372

Total Revenues		1,544,193			1,383,010			848,824			688,553			2,748,768			193,802

Operating Expenses:
Airlease		1,014,838			763,552			568,588			256,373			2,072,929			-
General and administrative		1,625,283			1,112,173			864,269			586,715			2,274,604			734,464
Depreciation and amortization		200,330			115,933			166,126			69,331			631,796			58,863

		2,840,451			1,991,658			1,598,983			912,419			4,979,329			793,327

Net loss from operations		(1,296,258	)		(608,648	)		(750,159	)		(223,866	)		(2,230,561	)		(599,525	)

Other Expenses:
Interest		28,512			3,739			14,532			3,739			40,413			-

Net loss before tax benefit		(1,324,770	)		(612,387	)		(764,691	)		(227,605	)		(2,270,974	)		(599,525	)

Tax benefit														-			-

Net loss	$	(1,324,770	)	$	(612,387	)	$	(764,691	)	$	(227,605	)	$	(2,270,974	)	$	(599,525	)

MEGA MEDIA GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Six Months Ended July 31,						Year Ended January 31,
	2006			2005			2006			2005
	(unaudited)			(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1,324,770	)	$	(612,387	)	$	(2,270,974)		$	(599,525	)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation and amortization		200,330			115,933			631,796			58,863
Allowance for doubtful accounts		-						13,000			-
Changes in operating assets and liabilities:
(Increase) in accounts receivable		3,225			(170,223	)		(90,078	)		(62,685	)
(Increase) decrease in advances								17,650			(17,650	)
(Increase) decrease in prepaid expenses		(214,194	)		-
(Increase) decrease in other current assets					(30,000	)
(Increase) in other					(10,410	)		(14,660	)		(1,350	)
Increase (decrease) in bank overdraft		-			-			(12,660	)		12,660
Increase (decrease) in bank overdraft
Increase in accounts payable		34,243			198,821			273,185			18,457
Increase in sales tax payable		-			-			34			858
Increase in accrued officers' compensation		147,000			-			-			-
Increase in due from related party		67,970						-			-
Increase in payroll liabilities		75,542			19,385			10,269			16,022
Total adjustments		314,117			123,506			828,536			25,175
NET CASH USED BY OPERATING ACTIVITIES		(1,010,653	)		(488,881	)		(1,442,438	)		(574,350	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Master records		-			(364,138	)		(298,539	)		(376,461	)
Fixed assets		(84,944	)		(113,772	)		(335,571	)		(136,513	)
Investment in Gladiator		-			(260,000	)		(260,000	)		-
Deposits		(42,000	)		(222,700	)		(172,486	)		(11,000	)
CASH USED BY INVESTING ACTIVITIES		(126,944	)		(960,610	)		(1,066,596	)		(523,974	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Loan proceeds, net of repayments		(9,911	)		36,188			1,135,559			-
Capital contributions		(446,068	)		700,000			710,673			1,098,544
Sale of common stock		1,600,321			727,454			675,000			-
CASH PROVIDED BY FINANCING ACTIVITIES		1,144,342			1,463,642			2,521,232			1,098,544

NET INCREASE IN CASH		6,745			14,151			12,198			220

CASH: Beginning of period		12,418			(12,440	)		220			-
End of period	$	19,163		$	1,711		$	12,418		$	220

Supplemental disclosure of noncash financing and investing activities:
Cash paid during the period for income taxes	$	1,675		$	2,730		$	-		$	-
Cash paid during the period for interest	$	28,512		$	3,739		$	-		$	-
Non Cash Investing Activities:
Equipment contributed for common stock	$			$			$	37,877		$	109,243
Stock issued for Echo Broadcasting	$			$			$	3,666		$	-

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

MEGA MEDIA GROUP, INC. AND SUBSIDIARIES

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

FOR THE YEARS ENDED JANUARY 31, 2006 AND 2005 AND THE UNAUDITED SIX AND THREE MONTHS ENDED JULY 31, 2006

														Total
	Preferred Stock				Common Stock				Additional					Stockholders'
	($.001 par value)				($.001 par value)				Paid-In		Accumulated			Equity
		Shares		Amount		Shares		Amount		Capital		Deficit			(Deficit)

Balance February 3, 2004		-	$	-		-	$	-	$	-	$	-		$	-

Capital contribution		-		-		666,665		667		1,207,120		-			1,207,787

Loss for year ended
January 31, 2005		-		-		-		-		-		(599,525	)		(599,525	)

Balance January 31, 2005		-		-		666,665		667		1,207,120		(599,525	)		608,262

Shares issued to purchase
Echo Broadcasting Group, Inc		1,833,335		1,833		1,833,335		1,833		-		-			3,666

Capital contribution		666,665		667		-		-		747,883		-			748,550

Sale of common stock		-		-		675,000		675		674,325		-			675,000

Loss for year ended
January 31, 2006		-		-		-		-		-		(2,270,974	)		(2,270,974	)

Balance January 31, 2006		2,500,000		2,500		3,175,000		3,175		2,629,328		(2,870,499	)		(235,496	)

Sale of common stock		-		-		420,000		420		249,580					250,000

Stock issued to pay for
lender's fees						100,000		100		9,900					10,000

Stock issued for conversion of loans to shareholders						1,045,257		1,045		842,086					843,131

Stock issued in exchange for lease commitments						337,189		337		236,852					237,189

Loss for six months ended July 31, 2006		-		-		-		-		-		(1,324,770	)		(1,324,770	)

Balance April 30, 2006		2,500,000	$	2,500		5,077,446	$	5,077	$	3,967,746	$	(4,195,269)		$	(219,946	)

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

MEGA MEDIA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts and Disclosures at and for the Six Months

Ended July 31, 2006 and 2005 Are Unaudited)

NOTE 1-ORGANIZATION AND NATURE OF BUSINESS

As reflected in the accompanying combined financial statements, the Company has an accumulated deficit of $2,870,499 at January 31, 2006 that includes a loss of $2,270,974 for the year ended January 31, 2006 and a working capital deficiency of $963,754. The Company’s shareholders have funded the losses and cash shortfalls allowing management to develop sales and contingency plans. The Company’s also arranging for additional funding. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Management has taken the following steps to revise its operating and financial requirements, which it believes are sufficient to provide the Company with the ability to continue as a going concern. The Company is actively pursing additional funding and a potential merger or acquisition candidate and strategic partners, which would enhance stockholders’ investment. Management believes that the above actions will allow the Company to continue operations through the next fiscal year.

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis Of Consolidation

The accompanying consolidated financial statements include the accounts of Mega Media Group, and its subsidiaries Mega Media Film, Inc., Mega Media Studios, Inc., Mega Media Records, Inc., VSE Magazine, Inc., and Echo Broadcasting Group, Inc. All significant intercompany balances and transactions have been eliminated.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affects the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the combined financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from these estimates.

MEGA MEDIA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts and Disclosures at and for the Six Months

Ended July 31, 2006 and 2005 Are Unaudited)

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Cash And Cash Equivalents

Short-term investments with an original maturity of three months or less are considered to be cash equivalents.

Depreciation and Amortization

The cost of furniture and equipment is depreciated over the estimated useful lives of the related assets. The cost of leaseholds improvements is amortized over the lesser of the length of the related lease or the estimated useful life of the assets. Depreciation is computed on a straight line basis, with lives ranging from 3 to 7 years. Leasehold improvements are amortized over the life of the lease.

Master Records

The Company records the cost of a record master borne by the Company as an asset if the past performance and current popularity of the artist provides a sound basis for estimating that the cost will be recovered from future sales. Otherwise, that cost is charged to expense. The amount recognized as an asset is amortized over the estimated life of the recorded performance.

Accounts Receivable

Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollected amounts through a charge to earnings and a credit to a allowance for bad debts based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance for bad debts and a credit to accounts receivable.

Revenue Recognition

Radio broadcasting revenue is recognized as advertisements or programs are broadcast and is generally billed monthly. The Company earns other income from fees for services performed and the production of advertisements. Revenue is realized when the service is performed in accordance with the terms of the contractual arrangement, and collection is reasonably assured. Salaries and other production costs are charged to expense at the time incurred.

MEGA MEDIA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts and Disclosures at and for the Six Months

Ended July 31, 2006 and 2005 Are Unaudited)

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Financial Instruments

Due to their short maturity, the carrying amounts of accounts and notes receivable, accounts payable, accrued liabilities, and short-term borrowings approximated their fair values at January 31, 2006.

Income Taxes

The Company accounts for income taxes using the liability method. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting bases and tax bases of assets and liabilities and are measured using the enacted tax rates expected to apply to taxable income in the periods in which the deferred tax asset or liability is expected to be realized or settled. Deferred tax assets are reduced by valuation allowances if the Company believes it is more likely than not that some portion or all of the asset will not be realized.

NOTE 3- ACCOUNTS RECEIVABLE

	July 31,			January 31,
Accounts receivable consist of the following:		2006			2006
Accounts receivable-trade	$	162,538		$	165,763
Allowance for doubtful accounts		(13,000	)		(13,000	)
	$	149,538		$	152,763

NOTE 4- NOTE RECEIVABLE GLADIATOR

The Company has entered into a joint venture agreement with Gladiator Championship Wrestling Corp. (“Gladiator”) to stage a wrestling event in Puerto Rico. The event was originally scheduled to take place on July 16, 2005, but had to be delayed. The Company funded the event with an initial payment of $260,000 to Gladiator and under the terms of a licensing agreement received exclusive rights to distribute films, tapes, reports, books, and manuals of the event. Gladiator issued a Promissory Note to the Company payable on July 17, 2005, the day after the original date of the event. The Company is guaranteed the first $260,000 from ticket sales and is entitled to 50% of all additional profits from the event. The Company borrowed the $260,000 funding from a shareholder. Under the terms of the agreement with the Company, the shareholder is entitled to repayment of the loan from the first monies the Company receives, and the shareholder is to receive 50% of the Company’s earnings from the event after repayment of the loan. The shareholder note does not have to be repaid if the Gladiator note is not paid. For financial statement purposes the Note Receivable-Gladiator and Note

Payable-Shareholder are reflected net as follows:
Note Receivable – Gladiator	$	260,000
Note Payable – Shareholder		(260,000	)
	$	-

MEGA MEDIA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts and Disclosures at and for the Six Months

Ended July 31, 2006 and 2005 Are Unaudited)

NOTE 5- FIXED ASSETS

		July31,		January 31,
		2006		2006
Fixed Assets consist of the following:
Equipment	$	318,917	$	297,862
Leasehold		290,634		230,969
Furniture		7,547		7,547
Trucks		94,288		94,288
Computer software		12,127		7,904
		723,513		638,570
Less accumulated depreciation		244,689		172,980
	$	478,824	$	465,590

NOTE 6- INTANGIBLE ASSETS

		July 31,		January 31,
		2006		2006
Master records consist of the following:
Master records	$	675,000	$	675,000
Less accumulated amortization		675,000		546,379
	$	-	$	128,621

NOTE 7- LOANS PAYABLE TO SHAREHOLDERS

Shareholders have made loans to the Company and have waived any interest on the loans. The $260,000 loan used to fund the Note Receivable-Gladiator is not included here, but as described in Note 3 has been netted against the receivable.

At January 31, 2006 loans payable to shareholders of $355,186 mature in various amounts from July 1, 2006 to November 11, 2006 and have a stated interest rate of 9%.

At April 30, 2006 total loans payable to shareholders of $659,886 mature in various amounts from July 1, 2006 to November 11, 2006 and have a stated interest rate of 9%.

On May 4th, 2006 the company enetered into debt conversion agreements with company's shareholders according to which all loans from shareholders in the amount of 1,054,257 shall be converted into shares of common stock at the conversion price of $1.00 per share. Additionally, certain shareholders have made and will be making future payments for leased equipment in the amount of $337,189.

NOTE 8- LOANS PAYABLE

During fiscal 2006, the Company borrowed two loans of $220,000 each, a total of $440,000 payable on June 7, 2006. ("STATUS") Extended for 12 months

The interest rate is the UBS Rate plus 5.5%.

MEGA MEDIA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts and Disclosures at and for the Six Months

Ended July 31, 2006 and 2005 Are Unaudited)

NOTE 9- EQUIPMENT LOANS PAYABLE

		July 31,		January 31,
		2006		2006
Equipment loans consist of the following:
Raritan Bay FCU ("RBFCU")	$	45,414	$	50,150
Chrysler Credit ("CC")		25,048		30,223
		70,462		80,373
Less current portion		14,924		14,924
	$	55,538	$	65,449

The loan from RBFCU is payable in 72 monthly loan payments of $899 that include principal and interest at 6.75% per annum and matures on September 1, 2011. The loan is secured by the vehicle purchased.

The loan payable CC is payable in 60 monthly payments of $782 which includes principal and interest at 6.75% per annum and matures on July 9, 2010. The loan is secured by the truck purchased.

NOTE 10- PREFERRED AND COMMON STOCK

During the fiscal year ended January 31, 2006:

In November and December 2005 the Company sold 675,000 of its $.001 par value common shares to unrelated investors in a private placement for $1.00 per share for proceeds of $675,000.

The Company issued 666,665 $.001 par value preferred shares for cash and fixed assets contributed by its shareholders in the amount of $748,550. Fixed assets of $37,877 included in the contribution were valued at cost.

In October, 2005 the Company acquired Echo Broadcasting Group, Inc. ("Echo") for 1,833,355 $.001 par value preferred shares and 1,833,355 $.001 par value common shares. The shares issued were valued at $3,666 which approximated the historical cost of Echo.

During fiscal 2005 the Company issued 666,665 $.001 par value common shares for cash and fixed assets contributed by its founders in the amount of $1,207,787. Fixed assets of $109,243 included in the contribution were valued at cost.

The preferred stock is convertible into common shares based upon a conversion ratio that depends upon the Company meeting various revenue and profit targets to be defined by the Board of Directors.

During the six month ended July 31, 2006:

Company sold 420,000 of its $.001 par value common shares to unrelated investors in a private placements for $1.00 and $0.50 per share for proceeds of $250,000.

Company issued 100,000 of its $.001 par value common shares to unrelated investor in consideration for the finder's fee valued at $10,000.

MEGA MEDIA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts and Disclosures at and for the Six Months

Ended July 31, 2006 and 2005 Are Unaudited)

Airtime Agreement (Lease)

The Company has an agreement (the "Agreement") with Island Broadcasting Company (the "Licensee") for airtime. Pursuant to the Agreement the Company has purchased airtime for the period November 1, 2005 to July 1, 2010. However, after July 1, 2006 the Licensee may terminate the Agreement upon 90 days notice to the Company. Per the Agreement the airtime is paid monthly. Airtime lease expense for 2006 was $2,072,929.

Remaining commitments under the Agreement are as follows:

Year Ending January 31,
2007	$	2,099,500
2008		2,204,475
2009		2,314,699
2010		2,430,434
2011		1,033,181
	$	10,082,289

Premises and Equipment

The Company has entered into lease agreements for office space and equipment, which expire at various times through April 2009. During the years ended January 31, 2006 and 2005 the Company paid $135,112 and $56,576 in rent expense respectfully. Remaining commitments under the operating leases mature as follows:

Year Ending January 31,
2007	$	192,190
2008		148,616
2009		125,762
2010		15,105
	$	481,673

On May 1, 2006 the Company has entered into a new lease agreement for office space, which expire on April 30, 2011. The commitments under the lease agreement mature as follows:

Year Ending January 31,

2007	$	126,000
2008		173,040
2009		179,958
2010		187,158
2011		194,646
2012		49,134
	$	909,936

MEGA MEDIA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts and Disclosures at and for the Six Months

Ended July 31, 2006 and 2005 Are Unaudited)

NOTE 12- INCOME TAXES

The components of the Company's tax provision are as follows:

	2006			2005
Current income tax (benefit) expense	$	(1,080,000	)	$	(269,000	)
Deferred income tax expense (benefit)		1,080,000			269,000
	$	-		$	-

The reconciliation of the income tax computed at the U.S. Federal statutory rate to income tax expense for the periods ended January 31, 2006 and 2005:

	2006			2005
Tax expense (benefit) at Federal rate (34%)	$	(815,000	)	$	(203,000	)
State and local income tax, net of Federal benefit		(265,000	)		(66,000	)
Change in valuation allowance		1,080,000			269,000
Net income tax (benefit)	$	-		$	-

Deferred income taxes reflect the net income tax effect of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and amounts used for income taxes. The Company's deferred income tax assets and liabilities consist of the following at January 31, 2006:


Net operating loss carryforward	$	1,349,000
Deferred tax assets		1,349,000
Valuation allowance		(1,349,000	)
Net Deferred tax assets	$	-

Net operating loss carryforwards totaled approximately $3,000,000 at January 31, 2006 which expire in various amounts in 2025 and 2026. After consideration of all the evidence, both positive and negative, management has recorded a valuation allowance at January 31, 2006 due to the uncertainty of realizing the deferred tax assets.

Utilization of the Company's net operating loss carryforwards are limited based on changes in ownership as defined in Internal Revenue Code Section 382.

MEGA MEDIA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts and Disclosures at and for the Six Months

Ended July 31, 2006 and 2005 Are Unaudited)

NOTE 13- ACQUISITION

On August 11, 2006 Edulink Inc. acquired all of the stock of Mega media Group. This acquisition has been accounted as a reverse merger with Mega Media Group being the acquirer. Once the shares of Edulink Inc.'s are available fro issuance, Mega Media Group will own 90 % of the company. The name of the company will be changed from Edulink, Inc to Mega Media Group.

NOTE 14- SUBSEQUENT EVENTS

Preferred Stock

In August 2006 the Company issued 11,992,000, $.001 par value, preferred shares for past and future services performed by its officers, directors, employees and consultants.

The preferred stock is convertible into common shares in 18 months after the issuance based upon a 2 to 1 conversion ratio. The shares of preferred stock have preferential treatment in case of liquidation. Each share of the preferred stock has 5 voting rights.

MEGA MEDIA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts and Disclosures at and for the Six Months

Ended July 31, 2006 and 2005 Are Unaudited)

NOTE 15- QUARTERLY INFORMATION

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended

	$	7/31/2006		$	7/31/2005
Revenues:
Advertising revenues		838,024			574,229
Other revenues		10,800			114,324

Total Revenues		848,824			688,553

Operating Expenses:
Airlease		568,588			256,373
General and administrative		864,269			586,715
Depreciation and amortization		166,126			69,331

		1,598,983			912,419

Net loss from operations		(750,159	)		(223,866	)

Other Expenses:
Interest		14,532			3,739

Net loss before tax benefit		(764,691	)		(227,605	)

Tax benefit

Net loss	$	(764,691	)	$	(227,605	)

Introduction to Unaudited Pro Forma Consolidated Financial Statements

The following unaudited pro forma consolidated statements of operations reflect adjustments to the Edulink, Inc. historical statements of operations for the year ended December 31, 2005 and the six and three months ended June 30, 2006 to give effect to:

The reverse merger which was completed August 11, 2006 as if it had occurred on February 1, 2005. In a transaction accounted for as a reverse merger, Mega Media Group, Inc. is treated as the accounting acquirer.

The unaudited pro forma consolidated statements of operations are not necessarily indicative of what the actual results of operations of Edulink, Inc. would have been assuming the transactions had been completed as set forth above, nor do they purport to represent Edulink, Inc.'s rewsults of operations for future periods.

The following unaudited pro forma consolidated balance sheet reflects adjustments to the Edulink, Inc. historical balance sheet at December 31, 2005 to give effect to this reverse merger.

The unaudited pro forma consolidated financial statements should be read in conjunction with the historical financial statements and related notes to Mega Media Group, Inc. which are included in this form 8-K and the historical financial statements of Edulink, Inc. which are included with its filings to the SEC.

UNAUDITED PRO FORMA CONDENCED CONSOLIDATED BALANCE SHEET

JANUARY 31, 2006


							Proforma Adjustments				Consolidated
ASSETS		Edulink (a)			Mega Media			Amount		Explanation		Balance

Current Assets:
Cash	$	-		$	12,418						$	12,418
Accounts receivable, net		-			152,763							152,763
Total Current Assets		-			165,181			-				165,181

Other Assets:
Fixed Assets, net		-			465,590							465,590
Master records, net		-			128,621							128,621
Note Receivable - Gladiator		-			-							-
Deposits		-			183,486							183,486
Other		-			16,010							16,010

TOTAL ASSETS	$	-		$	958,888		$	-			$	958,888


LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities:
Accounts payable	$	129,293		$	291,642						$	$420,935
Taxes payable		3,000			27,183							30,183
Accrued Officers' Compensation		189,772			-							189,772
Equipment loan - current portion		-			14,924							14,924
Loans payable		212,366			440,000							652,366
Accrued interest		88,116			-							88,116
Stock payable		100,000			-							100,000
Payable to shareholders and related parties		47,325			355,186							402,511
Total Current Liabilities		769,872			1,128,935			-				1,898,807
Other Liabilities:
Derivative liability		910,709			-							910,709
Equipment Loan Payable		-			65,449							65,449
TOTAL LIABILITIES		1,680,581			1,194,384			-				2,874,965

Commitments and contingencies

Preferred stock		-			2,500							2,500
Common stock		1,500,001			3,175			13,496,824		(b)		15,000,000
Additional paid-in capital		16,343,350			2,629,328			(13,496,824	)	(b)		5,475,854
Accumulated Defisit		(19,523,932	)		(2,870,499	)						(22,394,431	)

Total Stockholders' Deficit		(1,680,581	)		(235,496	)		-				(1,916,077	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	-		$	958,888		$	-			$	958,888

The accompanying notes are an integral part of these financial statements

EDULINK

UNAUDITED PRO FORMA CONDENCED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEAR ENDED JANUARY 31, 2006

							Proforma Adjustments			Consolidated Statement of
	Edulink (a)			Mega Media			Amount		Explanation	Operations
Advertising Revenues	$	-		$	2,598,148					$	$ 2,598,148
Other Revenues		-			150,620						150,620

Total Revenues		-			2,748,768			-			2,748,768

Expense
Airlease		-			2,072,929						2,072,929
Genaral and administrative		5,500			2,274,604						2,280,104
Depreciation and Amortization		-			631,796						631,796

		5,500			4,979,329			-			4,984,829

Net loss from operations		(5,500	)		(2,230,561	)		-			(2,236,061	)

Other Income and Expnses:

Cancelation of debt-accounts payable		431,224			-						431,224
Loss on derivatives		(491,689	)		-						(491,689	)
Interest expense		(213,366	)		(40,413	)					(253,779	)

Net loss before tax benefits	$	(279,331	)	$	(2,270,974	)		-			(2,550,305	)

Tax expense		-			-						-

Net loss	$	(279,331	)	$	(2,270,974	)				$	(2,550,305	)

Weighted average number of common shares outstanding		1,500,000,000									15,000,000,000

Net income per basis and diluted shares	$	0.00								$	0.00

The accompanying notes are an integral part of these financial statements

UNAUDITED PRO FORMA CONDENCED CONSOLIDATED BALANCE SHEET

JULY 31, 2006

							Proforma Adjustments				Consolidated
ASSETS		Edulink (a	)		Mega Media			Amount		Explanation		Balance

Current Assets:
Cash	$	-		$	19,163						$	19,163
Accounts receivable, net		-			149,538							149,538
Prepaid expenses		-			214,194							214,194
Total Current Assets		-			382,895			-				382,895

Other Assets:
Fixed Assets, net		-			478,824							478,824
Master records, net		-			-							-
Note Receivable - Gladiator		-			-							-
Deposits		-			225,486							225,486
Other		-			16,010							16,010

TOTAL ASSETS	$	-		$	1,103,215		$-	-			$	1,103,215


LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities:
Accounts payable	$	136,972		$	325,886						$	462,858
Taxes payable		3,000			102,725							105,725
Accrued Officers' Compensation		189,772			147,000							336,772
Equipment loan - current portion		-			14,924							14,924
Loans payable		250,000			440,000							690,000
Accrued interest		136,712			-							136,712
Stock payable		100,000			-							100,000
Payable to shareholders and related parties		47,325			237,088							284,413
Total Current Liabilities		863,781			1,267,623			-				2,131,404
Other Liabilities:
Derivative liability		440,515			-							440,515
Equipment Loan Payable		-			55,538							55,538
TOTAL LIABILITIES		1,304,296			1,323,161			-				2,627,457

Commitments and contingencies

Preferred stock		-			2,500							2,500
Common stock		1,500,001			5,077			13,494,923		(b)		15,000,001
Additional paid-in capital		16,343,350			3,967,746			(13,494,923	)	(b)		6,816,173
Accumulated Defisit		(19,147,647	)		(4,195,269	)						(23,342,916	)

Total Stockholders' Deficit		(1,304,296	)		(219,946	)						(1,524,242	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	-		$	1,103,215						$	1,103,215

The accompanying notes are an integral part of these financial statements

UNAUDITED PRO FORMA CONDENCED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE SIX MONTHS ENDED JULY 31, 2006

							Preforma Adjustments			Consolidated Statement of
		Edulink (a)			Mega Media		Amount	Explanation		Operations

Advertising Revenues	$	-		$	1,533,393				$	$ 1,533,393
Other Revenues		-			10,800					10,800

Total Revenues		-			1,544,193		-			1,544,193

Expense
Airlease		-			1,014,838					1,014,838
Genaral and administrative		7,680			1,625,283					1,632,963
Depreciation and Amortization		-			200,330					200,330

		7,680			2,840,451		-			2,848,130

Net loss from operations		(7,680	)		(1,296,258	)	-			(1,303,937	)

Other Income and Expnses:

Cancelation of debt-accounts payable		-			-					-
Loss on derivatives		470,194			-					470,194
Interest expense		(86,230	)		(28,512	)				(114,742	)

Net loss before tax benefits	$	376,285		$	(1,324,770	)	-			(948,485	)

Tax expense		-			-					-

Net loss	$	376,285		$	(1,324,770	)			$	(948,485	)

Weighted average number of common shares outstanding		1,500,000,000								15,000,000,000

Net income per basis and diluted shares	$	(0.00	)						$	0.00

The accompanying notes are an integral part of these financial statements

EDULINK

UNAUDITED PRO FORMA CONDENCED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED JULY 31, 2006

							Proforma Adjustments				Consolidated Statement of
	Edulink (a)			Mega Media			Amount		Explanation		Operations


Advertising Revenues	$	-		$	838,024					$	838,024
Other Revenues		-			10,800						10,800

Total Revenues		-			848,824			-			848,824

Expense
Airlease		-			568,588						568,588
Genaral and administrative		1,000			864,269						865,269
Depreciation and Amortization		-			166,126						166,126

		1,000			1,598,983			-			1,599,983

Net loss from operations		(1,000	)		(750,159	)		-			(751,159	)

Other Income and Expnses:

Cancelation of debt-accounts payable		-			-						-
Loss on derivatives		(470	)		-						(470	)
Interest expense		(33,619	)		(14,532	)					(48,151	)

Net loss before tax benefits	$	(35,089	)	$	(764,691	)		-			(799,780	)

Tax expense		-			-						-

Net loss	$	(35,089	)	$	(764,691	)				$	(799,780	)

Weighted average number of common shares outstanding		1,500,000,000									15,000,000,000

Net income per basis and diluted shares	$	0.00								$	0.00

The accompanying notes are an integral part of these financial statements

Notes to Unaudited Pro Forma Condensed Consolidated

Financial Statements

(a)	The Edulink, Inc. numbers represent the balances at December 31, 2005 for the January 31, 2006 pro forma and June 30, 2006 for the July 31, 2006 pro forma.

(b)	Issuance of Edulink, Inc. shares in exchange for Mega Media Group, Inc. shares to reflect that the Mega Media Group, Inc. shareholders will own 90% of the combined company.

This ‘8-K/A’ Filing	Date	Other Filings

	9/1/11
	4/30/11
	7/9/10
	7/1/10
	1/31/07
Filed on:	12/20/06	10-Q
	11/11/06
For Period End:	8/11/06	3, 8-K, 8-K/A
	7/31/06
	7/1/06
	6/30/06	10-Q
	6/7/06
	5/3/06
	5/1/06
	4/30/06
	1/31/06
	12/31/05	10-K
	11/1/05
	7/31/05
	7/17/05
	7/16/05
	2/1/05
	1/31/05
	2/3/04
		List all Filings

Learning Priority Inc – ‘8-K/A’ for 8/11/06 – EX-99.1

On: Wednesday, 12/20/06, at 2:32pm ET · For: 8/11/06 · Accession #: 1013762-6-2561 · File #: 0-29953

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Learning Priority Inc – ‘8-K/A’ for 8/11/06 – EX-99.1

On: Wednesday, 12/20/06, at 2:32pm ET · For: 8/11/06 · Accession #: 1013762-6-2561 · File #: 0-29953

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