UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[xx] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
----------------------------------------------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 0-28690
Hollywood Productions, Inc.
(Exact name of registrant as specified in its charter)
Delaware 13-3704059
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
14 East 60th Street, Ste 402, New York, NY 10022
(Address of principal executive offices) (Zip Code)
(212) 688-9223
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) has filed all reports required to be filed by
section 13 or 15 (d) of the Exchange Act during the past 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 [xx] No [
]
APPLICABLE ONLY TO CORPORATE ISSUERS
Common stock, par value $.001 per share: 6,092,500 shares outstanding as of
June 30, 1997.
<PAGE>
HOLLYWOOD PRODUCTIONS, INC. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION:
ITEM 1 - FINANCIAL STATEMENTS
<S> <C>
Consolidated balance sheet at
June 30, 1997 (unaudited) and December 31, 1996 1
Consolidated statements of operations (unaudited)
for the three months ended June 30, 1997 and 1996 2
Consolidated statements of operations (unaudited)
for the six months ended June 30, 1997 and 1996 3
Consolidated statements of stockholders' equity (unaudited)
for the six months ended June 30, 1997 4
Consolidated statements of cash flows (unaudited)
for the six months ended June 30, 1997 and 1996 5 - 6
Notes to consolidated financial statements 7 - 9
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 10- 13
PART II - OTHER INFORMATION 14
Signatures 15
</TABLE>
<PAGE>
HOLLYWOOD PRODUCTION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
(Unaudited)
June 30, 1997 December 31, 1996
Current assets:
<S> <C> <C>
Cash and cash equivalents .......................................... $ 2,188,730 $ 2,717,629
Accounts receivable ................................................ 23,445 22,351
Due from factor .................................................... 211,914 --
Prepaid expenses ................................................... 76,171 86,698
Inventory .......................................................... 120,640 1,815,526
Film production and distribution costs ............................. 1,649,658 1,518,639
Deferred offering costs ............................................ 47,743 --
Advances to related parties ........................................ 115,007 115,854
----------- -----------
Total current assets .......................................... 4,433,308 6,276,697
Deferred compensation, net ............................................. 68,054 209,722
Organizational costs, net .............................................. 87,500 100,000
Excess of cost over net assets acquired, net ........................... 1,011,069 1,046,545
Other assets ........................................................... 14,761 10,118
----------- -----------
Total assets ........................................................... $ 5,614,692 $ 7,643,082
=========== ===========
LIABILITIES AND STOCKHOLDERS= EQUITY
Current liabilities:
Accounts payable ................................................... $ 30,325 $ 61,788
Accrued expenses ................................................... 39,167 103,194
Due to factor ...................................................... -- 1,434,686
Income taxes payable ............................................... 51,335 35,279
Deferred taxes payable ............................................. 21,698 12,309
----------- -----------
Total current liabilities ..................................... 142,525 1,647,256
----------- -----------
Redeemable preferred stock of subsidiary:
Series A redeemable preferred stock, 5,600 shares
authorized, 2,800 and 5,600 issued and outstanding, respectively,
full liquidation value $280,000 and $560,000, respectively ........ 280,000 560,000
Commitments and contingencies (Note 4) ................................. -- --
Stockholders= equity:
Common stock - $.001 par value, 20,000,000 shares authorized,
6,092,500 and 6,117,500 shares issued and outstanding, respectively 6,093 6,118
Additional paid-in capital ......................................... 5,589,215 5,651,690
Accumulated deficit ................................................ (403,141) (221,982)
----------- -----------
Total stockholders= equity .................................... 5,192,167 5,435,826
----------- -----------
Total liabilities and stockholders= equity ............................. $ 5,614,692 $ 7,643,082
=========== ===========
</TABLE>
See notes to consolidated financial statements (unaudited)
<PAGE>
HOLLYWOOD PRODUCTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30,
(UNAUDITED)
<TABLE>
<CAPTION>
1997 1996
------------- ------------
<S> <C> <C>
Net sales .................................................. $ 931,204 $ --
Cost of sales .............................................. 691,808 --
----------- -----------
Gross profit ............................................... 239,396 --
----------- -----------
Expenses:
Selling, general and administrative expenses ........... 539,504 54,422
Amortization of excess of costs over net assets acquired 17,738 --
----------- -----------
Total expenses ............................................. 557,242 54,422
----------- -----------
Loss before interest expense
and provision for income taxes ............................ (317,846) (54,422)
Other income (expense):
Interest and finance expense ........................... (41,126) (129)
Interest income ........................................ 20,384 --
----------- -----------
Total other income (expense) ...................... (20,742) (129)
----------- -----------
Loss before provision for
income taxes .............................................. (338,588) (54,551)
Provision for income tax benefit ........................... 30,050 --
----------- -----------
Net loss ................................................... $ (308,538) $ (54,551)
Loss per common equivalent shares:
Net loss ............................................... $ (.05) (.01)
=========== ===========
Weighted average number of
common shares outstanding ................................. 6,092,500 5,050,000
=========== ===========
</TABLE>
See notes to consolidated financial statements (unaudited)
<PAGE>
HOLLYWOOD PRODUCTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30,
(UNAUDITED)
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Net sales .................................................. $ 3,372,285 $ --
Cost of sales .............................................. 2,157,607 --
----------- -----------
Gross profit ............................................... 1,214,678 --
----------- -----------
Expenses:
Selling, general and administrative expenses ........... 1,210,447 54,422
Amortization of excess of costs over net assets acquired 35,476 --
----------- -----------
Total expenses ............................................. 1,245,923 54,422
----------- -----------
Loss before interest expense
and provision for income taxes ............................ (31,245) (54,422)
Other income (expense):
Interest and finance expense ........................... (164,125) (129)
Interest income ........................................ 53,988 --
----------- -----------
Total other income (expense) ...................... (110,137) (129)
----------- -----------
Loss before provision for
income taxes .............................................. (141,382) (54,551)
Provision for income taxes ................................. 39,777 --
----------- -----------
Net loss ................................................... $ (181,159) $ (54,551)
Loss per common equivalent shares:
Net loss ............................................... $ (.03) $ (.01)
=========== ===========
Weighted average number of
common shares outstanding ................................. 6,092,500 5,025,000
=========== ===========
</TABLE>
See notes to consolidated financial statements (unaudited)
<PAGE>
HOLLYWOOD PRODUCTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Additional Total
Common Stock Paid-in Accumulated Stockholders'
Shares Amount Capital Deficit Equity
<S> <C> <C> <C> <C> <C>
Balances at December 31, 1996 6,117,500 $6,118 $5,651,690 $(221,982) $5,435,826
Cancellation of common stock
in connection with the Senior Management
Incentive Plan as consideration
for services rendered to the Company (25,000) (25) (62,475) - (62,500)
Net loss for the six months
ended June 30, 1997 - - - (181,159) (181,159)
Balances at June 30, 1997 6,092,500 $6,093 $5,589,215 $(403,141) $5,192,167
</TABLE>
See notes to consolidated financial statements (unaudited)
<PAGE>
HOLLYWOOD PRODUCTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30
<TABLE>
<CAPTION>
1997 1996
------------------ -----------
Cash flows from operating activities:
<S> <C> <C>
Net loss $ (181,159) $ (54,551)
Adjustments to reconcile net loss to
net cash used by operating activities
Amortization and depreciation 131,684 12,500
Forgiveness of note receivable in lieu of compensation 30,130 -
Decrease (increase) in:
Accounts receivable (1,094) -
Prepaid expenses 10,527 -
Inventory 1,694,886 -
Film production costs (131,019) (1,134,490)
Security deposits 4,300 -
Increase (decrease) in:
Accounts payable (31,463) 78,851
Accrued expenses (64,027) -
Due to factor (1,646,600) -
Income taxes payable 25,445 -
------------------ ---------------
Net cash used by operating activities (158,390) (1,097,690)
------------------ -----------------
Cash flows from investing activities:
Acquisition of furniture and fixtures (13,483)
Subsidiary=s redemption of preferred stock (280,000) -
------------------ ---------------
Net cash used for investing activities (293,483) -
------------------ ---------------
Cash flows from financing activities:
Advances to related parties (33,450) (8,429)
Deferred offering costs (47,743) (156,371)
Proceeds from advances to related parties 4,167 183,000
Proceeds from stock subscription receivable - 1,000,000
Proceeds from capital contributions - 100,000
------------------ -----------------
Net cash (used for) provided by financing activities (77,026) 1,118,200
Net (decrease) increase in cash (528,899) 20,510
Cash, beginning of period 2,717,629 -
------------------ ---------------
Cash, end of period $ 2,188,730 $ 20,510
================== =================
Supplemental disclosure of non-cash flow information: Cash paid during the year
for:
Interest $ 122,014 $ -
================== ===============
Income taxes $ 9,154 $ -
</TABLE>
See notes to consolidated financial statements (unaudited)
<PAGE>
HOLLYWOOD PRODUCTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30
<TABLE>
<CAPTION>
1997 1996
------------------ -----------
<S> <C> <C>
Schedule of non-cash operating activities:
In connection with the Senior Management Incentive Plan for services
rendered to the Company, 150,000 options on common stock were issued $ - $ -
====== ==========
In connection with the Senior Management Incentive Plan, 25,000 shares
originally issued as consideration for services
rendered to the Company were canceled $(62,500) $ -
In connection with the Senior Management Incentive Plan 125,000 shares of
common stock issued as consideration for
services rendered the Company $ - $ 312,500
================== =================
In connection with the formation of the Company, 50,000
shares of common stock were issued $ - $ 125,000
</TABLE>
See notes to consolidated financial statements (unaudited)
<PAGE>
HOLLYWOOD PRODUCTIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
NOTE 1 - ORGANIZATION
Hollywood Productions, Inc. (the "Company") was incorporated in the State
of Delaware on December 1, 1995. The Company was formed for the purpose of
acquiring screen plays and producing motion pictures. The Company's and its
subsidiaries' year end is December 31.
NOTE 2 - ADVANCES TO RELATED PARTIES
During October 1996, pursuant to two promissory notes, the Company loaned
two of its officers a total of $87,000 bearing interest at six and one-half (62)
percent payable over three years. During January 1997, the balance of one of
these notes amounting to $30,130 was written off as part of a severance package
for one of its previous officers. As of June 30, 1997 the remaining note
amounted to $56,167. The remaining balance, amounting to $58,840, represents
advances to officers, shareholders and other related parties. Such advances are
non-interest bearing and are due on demand.
NOTE 3 - DUE TO FACTOR
On April 4, 1991, Breaking Waves entered into an accounts receivable
financing agreement with NationsBanc Commercial Corp. ("Nations") to sell their
interest in all present and future receivables without recourse. Breaking Waves
submits all sales orders to Nations for credit approval prior to shipment, and
pays Nations .75% of the gross amount of the receivables. Nations retains from
amounts payable to Breaking Waves a reserve for possible obligations such as
customer disputes and possible credit losses on unapproved receivables. Breaking
Waves may take advances of up to 85% of the purchase price on the receivables,
with interest charged at the rate of 13/4% over prime. Interest charged to
expense totaled approximately $49,569 and $122,014 for the three and six months
ended June 30, 1997, respectively. Nations has a continuing interest in Breaking
Waves's inventory as collateral for the advances. On June 30, 1997 Nations
informed Breaking Waves that it was terminating its agreement with it as of
August 30,1 997. Breaking Waves is currently negotiating a factoring agreement
with another financing company, though no agreement has been executed.
NOTE 4 - COMMITMENTS AND CONTINGENCIES
a) Lease commitments - The Company and its subsidiaries=
approximate future minimum rentals under non-cancelable
operating leases in effect on June 30, 1997 are as follows:
Year ended
December 31,
1997 $ 42,380
1998 119,157
1999 119,157
2000 90,282
2001 69,657
--------------
$ 440,633
<PAGE>
HOLLYWOOD PRODUCTIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
Rent expense charged to operations for the three and six
months ended June 30, 1997 amounted to approximately $43,000
and $77,000, respectively.
b) License agreement
On October 16, 1995, Breaking Waves entered into a license
agreement with Beach Patrol, Inc. ("BPI") for the exclusive
use of certain trademarks in the United States. For the three
and six months ended June 30, 1997, Breaking Waves incurred
royalty and advertising expenses amounting to approximately
$35,500 and $71,000, respectively.
c) Concentration of risk
Breaking Waves purchases the majority of it's inventory from
one vendor in Indonesia. For the six months ended June 30,
1997, Breaking Waves purchased 100% of its
merchandise from this vendor. Breaking Waves has one customer
which comprised 18% of net sales for the six months ended June
30, 1997.
d) Seasonality
Breaking Waves's business may be considered
seasonal with a large portion of its revenues and profits
being derived between December and June for shipments being
made between November and May. Each year from June to November
Breaking Waves engages in the process of designing and
manufacturing the following seasons swimwear lines, during
which time it incurs the majority of its expenses, with
limited revenues.
e) Co-production and property purchase agreements
Pursuant to co-production and property purchase agreements
dated March 15, 1996, as amended, the Company, through is
wholly owned subsidiary, D.L., acquired the rights to
co-produce a motion picture and has agreed to finance the
costs of production and distribution of such motion picture
with the co-producer agreeing to finance $100,000 of the costs
of production. The Company retains all rights to the motion
picture, the screenplay, and all ancillary rights attached
thereto.
As of June 30, 1997, the Company invested $1,549,658 in D.L.
for the co-production and distribution of such motion picture
whereas the co-producers have invested $100,000 in D.L. which
has been recorded as a capital contribution.
NOTE 5 - STOCKHOLDER'S EQUITY
a) 1996 Senior Management Incentive Plan
Effective March 14, 1997, the Company granted 150,000
options to purchase shares of common stock pursuant to the
Company=s Incentive Plan. 100,000 options were granted to the
Company=s President and 50,000 options were granted to an
officer.
<PAGE>
HOLLYWOOD PRODUCTIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
b) Cancellation of shares
Effective January 10, 1997, upon the resignation of an
officer of the Company, 25,000 of the 50,000 shares originally
issued to such officer under the Incentive Plan were caused to
be immediately vested and the remaining 25,000 shares were
returned to treasury.
<PAGE>
HOLLYWOOD PRODUCTIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Hollywood Productions, Inc. (the "Company") was incorporated in the State
of Delaware on December 1, 1995. The Company was formed for the purpose of
acquiring screen plays and producing motion pictures. During December 1995, the
Company issued 5,000,000 shares of its $.001 par value common stock to European
Ventures Corp. ("EVC") for an investment of $1,100,000. The sole officer and
director of EVC is the former President and Director of the Company. During
September 1996, in connection with the completion of its Initial Public Offering
("IPO"), the Company acquired all the capital stock of Breaking Waves, Inc.
("Breaking Waves"). Breaking Waves designs, manufactures and distributes a line
of private label swimwear.
On April 8, 1996, the Company formed a wholly owned subsidiary named D.L.
Productions, Inc. ("D.L."). D.L. was formed in the State of New York for the
purpose of purchasing and producing the motion picture ADirty Laundry@. As of
June 30, 1997, the Company has presented consolidated financial statements.
Results Of Operations
For the three months ended June 30, 1997 as compared to the three months
ended June 30, 1996
From April 1, 1997, to June 30, 1997 the Company's subsidiary, Breaking
Waves, generated sales amounting to $931,204 with cost of sales amounting to
$691,808. Breaking Waves generated a net loss after an estimated provision for
income tax benefit of approximately $17,000 amounting to approximately $122,000.
Of the total selling, general and administrative expenses amounting to $539,504,
$337,161 were incurred by Breaking Waves with the remainder amounting to
$202,343, incurred by the Company.
The major components of the total selling, general and administrative
expenses of the Company are composed of the following: $22,100 of consulting
expenses paid to an officer of the Company; $31,459 of consulting and
compensation expenses paid to officers of the Company paid in the form of common
stock; and amortization of organization costs of $6,250. The remainder of
expenses amounting to approximately $479,695 is composed of rent amounting to
$43,103; officer's salaries of $94,016; other salaries and related payroll taxes
amounting to approximately $89,879; legal and professional fees of $58,066;
miscellaneous office expenses of $106,802; and miscellaneous selling expenses of
$87,829. For the three months ended June 30, 1997, the Company reported a
consolidated net loss amounting to $308,538 after an estimated provision for
income tax benefit amounting to approximately $30,050.
<PAGE>
For the six months ended June 30, 1997 as compared to the six months ended
June 30, 1996
From January 1, 1997, to June 30, 1997 the Company's subsidiary, Breaking
Waves, generated sales amounting to $3,372,285 with cost of sales amounting to
$2,157,607. Breaking Waves generated net income after an estimated provision for
income taxes of $33,833 amounting to approximately $269,493. Of the total
selling, general and administrative expenses amounting to $1,210,447, $751,439
were incurred by Breaking Waves with the remainder amounting to $459,008,
incurred by the Company.
The major components of the total selling, general and administrative
expenses of the Company are composed of the following: $45,700 of consulting
expenses paid to an officer of the Company; $86,668 of consulting and
compensation expenses paid to officers of the Company paid in the form of common
stock; $30,130 of officer=s compensation by forgiveness of note receivable; and
amortization of organization costs of $12,500. The remainder of expenses
amounting to approximately $1,035,449 is composed of rent amounting to $77,103;
officer's salaries of $183,032; other salaries and related payroll taxes
amounting to approximately $187,049; legal and professional fees of $69,867;
miscellaneous office expenses of $220,097; and miscellaneous selling expenses of
$298,301.
For the six months ended June 30, 1997, the Company reported a consolidated
net loss amounting to $181,159 after an estimated provision for income taxes
amounting to approximately $39,777.
Liquidity And Capital Resources
At June 30, 1997, the Company has a consolidated working capital amounting
to $4,290,783 It is not anticipated that the Company will be required to raise
any additional capital within the next twelve months, since no material change
in the number of employees or any other material events are expected to occur.
Prior to the consummation of the Company's IPO, during September 1996,
Breaking Waves performed a recapitalization and exchanged all its common stock
for new common stock, and for a series of preferred stock. Pursuant to the
Agreement, Breaking Waves issued 5,600 shares of its newly authorized Series A
Preferred Stock to its previous stockholders in proportion to their respective
holdings, which shares are 2 redeemable on each of January 1, 1997 and 1998
subject to legally available funds, at a redemption price of $100 per share on a
pro rata basis. During January 1997, Breaking Waves redeemed 2,800 shares of its
Series A preferred stock for a total of $280,000.
On April 4, 1991, Breaking Waves entered into an accounts receivable
financing agreement with NationsBanc Commercial Corp. ("Nations") to sell their
interest in all present and future receivables without recourse. Breaking Waves
submits all sales orders to Nations for credit approval prior to shipment, and
pays Nations .75% of the gross amount of the receivables. Nations retains from
amounts payable to Breaking Waves a reserve for possible obligations such as
customer disputes and possible credit
<PAGE>
losses on unapproved receivables. Breaking Waves may take advances of up to
85% of the purchase price on the receivables, with interest charged at the rate
of 13/4% over prime. Interest charged to expense totaled approximately $72,445
and $122,014 for the three and six months ended June 30, 1997, respectively.
Nations has a continuing interest in Breaking Waves's inventory as collateral
for the advances. On June 30, 1997 Nations informed Breaking Waves that it was
terminating its agreement with it as of August 30,1 997. Breaking Waves is
currently negotiating a factoring agreement with another financing company,
though no agreement has been executed.
On October 16, 1995, Breaking Waves entered into a license agreement with
Beach Patrol, Inc. ("BPI") for the exclusive use of certain trademarks in the
United States. For the three and six months ended June 30, 1997, Breaking Waves
incurred royalty and advertising expenses amounting to approximately $35,500 and
$71,000, respectively.
During May, 1996, the Company established the 1996 Senior Management
Incentive Plan ("Incentive Plan") pursuant to which 250,000 of common stock are
reserved for issuance. The Incentive Plan is designed to serve as an incentive
for retaining qualified and competent key employees, officers and directors of
the Company. During June 1996, pursuant to such plan the Company issued 50,000
shares to each of two officers of the Company. 50% of such shares issued vesting
12 months from the issuance date and the remaining 50% vesting 24 months from
the issuance date. Such shares were valued at 50% of the IPO price of $2.50.
Accordingly, the Company recorded a deferred compensation amounting to $250,000
which is being amortized as the shares vest. During January 1997, 25,000 of
these shares were canceled and the vesting schedule for the remaining shares
terminated whereby the shares became fully vested. For the three and six months
ended June 30, 1997, $46,875 and $62,500, respectively has been amortized as a
compensation expense.
During December 1996, the Company entered into an employment agreement with
two of the officer=s of Breaking Waves, whereby 5,000 shares each of common
stock of the Company was issued as compensation for services. Accordingly, the
Company recorded deferred compensation amounting to $25,000, which is being
amortized as the shares vest. For the three and six months ended June 30, 1997,
$8,334 and $16,668, respectively has been amortized as compensation expenses.
During March 1997, pursuant to the Senior Management Incentive Plan, the
Company issued 100,000 options to the Company President and 50,000 options to an
officer. As of June 30, 1997, the Company has invested $1,549,658 in D.L. for
the co-production and distribution of such motion picture whereas the
co-producers have invested $100,000 in D.L. which has been recorded as a capital
contribution to the Company.
For the six months ended June 30, 1997 and 1996, the Company used cash for
operating activities amounting to $158,390 and $1,097,690, respectively. The
major components of such use of cash for the six months ended June 30, 1997 was
for the payment of amounts due Breaking Wave=s factor of $1,646,600 and for the
six months ended June 30, 1996, the major use of cash was $1,134,480 advanced to
D.L. for production of the motion picture. The majority of cash provided for
operating activities for the six months ended June 30, 1997 amounting to
$1,694,886 was
<PAGE>
provided from sales of inventory. For the six months ended June 30, 1997,
the Company used $293,483 of cash for investing and finance purposes which was
primarily for the partial redemption of Breaking Wave=s preferred stock pursuant
to the purchase agreement. For the six months ended June 30, 1996, $1,118,200 of
cash was provided by financing activities, primarily from the collection of
stock subscriptions receivable and the capital contribution by Rogue.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1 - Legal Proceedings: None
ITEM 2 - Changes in Securities: None
ITEM 3 - Defaults Upon Senior Securities: None
ITEM 4 - Submission of Matters to a Vote of Security Holders: None
ITEM 5 - Other Information: None
ITEM 6 - Exhibits and Reports on Form 8-K: None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Hollywood Productions, Inc.
(Registrant)
Dated: August 12, 1997 /s/ Harold Rashbaum
Harold Rashbaum
President
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Exhibit 27
HOLLYWOOD PRODUCTIONS, INC.
This schedule contains summary financial information extracted from
Balance Sheet, Statement of Operations, Statement of Cash Flows and Notes
thereto incorporated in Part I, Item 1 of this Form 10-QSB and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<CAPTION>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> dec-31-1996
<PERIOD-END> jun-30-1997
<CASH> 2,188,730
<SECURITIES> 0
<RECEIVABLES> 23,445
<ALLOWANCES> 0
<INVENTORY> 120,640
<CURRENT-ASSETS> 4,433,308
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,614,692
<CURRENT-LIABILITIES> 142,525
<BONDS> 0
0
0
<COMMON> 6,093
<OTHER-SE> 5,186,074
<TOTAL-LIABILITY-AND-EQUITY> 5,614,692
<SALES> 931,204
<TOTAL-REVENUES> 931,204
<CGS> 691,808
<TOTAL-COSTS> 691,808
<OTHER-EXPENSES> 557,242
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20,742
<INCOME-PRETAX> (338,588)
<INCOME-TAX> (30,050)
<INCOME-CONTINUING> (308,538)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (308,538)
<EPS-PRIMARY> (0.05)
<EPS-DILUTED> (0.05)
</TABLE>
