MediaG3 (MDGC)

[Stock_Nerd]

MDGC: Book Value Per Common Share

Disclaimer: The following is my opinion. I am not an accountant or an investment adviser. I encourage everyone to perform their own due diligence and make their investing decisions accordingly.

In my opinion, MDGC's price per share is undervalued even when only considering current book value.

Some calculations for consideration:

Book Value Per Common Share indicates the dollar value remaining for common shareholders after all assets are liquidated and all debtors are paid, should the company decide to dissolve.

Book Value Per Share = (Total Shareholder Equity – Preferred Equity) / (Total Outstanding Shares)

1. Let's start conservatively. Since the determination of the valuation is not provided, exclude the prepaid expenses (media credits) of $5,000,000 from the company's total assets.

Book Value Per Share = (Total Shareholder Equity – Preferred Equity) / (Total Outstanding Shares)
Total Shareholder Equity = (Total Assets – Media Credits) – Total Liabilities = ($19,107,466 - $5,000,000) - $3,839,371 = $ 10,268,095
Preferred Equity = Preferred Shareholder Equity = 0 (No preferred shares issued)
Total Outstanding Shares = 1,055,247,882
Book Value Per Share = ($10,268,095–$0) / (1,055,247,882) = $0.0097 per share
That’s 294% of today’s (8/26/10) closing price of $0.0033

2. The same calculation with the media credits included in the total assets:

Total Shareholder Equity = Total Assets – Total Liabilities = $19,107,466 - $3,839,371 = $15,268,095
Preferred Equity = Preferred Shareholder Equity = 0 (No preferred shares issued)
Total Outstanding Shares = 1,055,247,882
Book Value Per Share = ($15,268,095 –$0) / (1,055,247,882) = $0.0145 per share
That’s 439% of today’s (8/26/10) closing price of $0.0033

3. The same calculation with the SUBSEQUENT media credits included in the total assets:

From the financial statement: “On June 20, 2010, we purchased Media Credits that are current assets, for our use to promote our business plan, valued at $5,000,000 in exchange for 10,000,000 shares of our common stock.” (included in total assets on the balance sheet)

"14. Subsequent Events – In August 2010, we purchased additional Media Credits that are current assets, for our use to promote our business plan, valued at $5,000,000 in exchange for an additional 10,000,000 shares of our common stock." (not included in total assets on the balance sheet)

Total Shareholder Equity = Total Assets – Total Liabilities = ($19,107,466 + $5,000,000) - $3,839,371 = $20,268,095
Preferred Equity = Preferred Shareholder Equity = 0 (No preferred shares issued)
Total Outstanding Shares = 1,055,247,882
Book Value Per Share = ($20,268,095–$0) / (1,055,247,882) = $0.0192 per share
That’s 582% of today’s (8/26/10) closing price of $0.0033

Note: Numbers were obtained from company’s quarterly report dated June 30, 2010. www.pinksheets.com

GLTA!
Stock_Nerd

Disclaimer: The above is my opinion. I am not an accountant or an investment adviser. I encourage everyone to perform their own due diligence and make their investing decisions accordingly.