U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15 (d) of the Securities Exchange Act
of 1934
For the quarterly period ended March 31, 1999
[ ] Transition report under Section 13 or 15 (d) of the Exchange Act
For the Transition period from ________ to __________
Commission file number: 0-92402
ON STAGE ENTERTAINMENT, INC.
- --------------------------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
NEVADA 88-0214292
- ----------------------------- ---------------------------------
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
4625 W. NEVSO DRIVE, LAS VEGAS, NEVADA 89103
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices)
(702) 253-1333
- --------------------------------------------------------------------------------
Issuer's Telephone Number, Including Area Code
- --------------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
Check whether the issuer: (1) 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 [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date.
Class Outstanding at May 14, 1999
----------------------------- ---------------------------
Common Stock, $0.01 par value 7,572,046
<PAGE>
ON STAGE ENTERTAINMENT, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
PAGE NO.
Part I. Financial Information
Item 1. Consolidated Financial Statements
Balance sheets........................................ 1
Statements of operations.............................. 2
Statements of cash flows.............................. 3-4
Notes to financial statements......................... 5-12
Item 2. Management's Discussion and Analysis
Of Financial Condition and Results of Operations... 13-18
Part II. Other Information
Item 1. Legal Proceedings............................ 19
Item 2. Changes in Securities........................ 19
Item 3. Defaults Upon Senior Securities.............. 19
Item 4. Submission of Matters of a Vote of
Security Holders............................. 19
Item 5. Other Information............................ 20
Item 6. Exhibits and Reports on Form 8-K............. 20
Signatures................................................. 21
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
<TABLE>
<CAPTION> On Stage Entertainment, Inc. and Subsidiaries
Consolidated Balance Sheets
December 31, March 31,
1998 1999
------------- ------------
<S> <C> <C>
Assets (Unaudited)
Current assets
Cash and cash equivalents.................... $ 1,009,768 $ 281,256
Accounts receivable, net..................... 1,264,526 1,107,669
Inventory.................................... 243,413 231,663
Deposits..................................... 125,784 323,742
Prepaid and other assets..................... 594,777 658,374
Notes receivable from officers (Note 2)........ 77,330 76,853
--------- ---------
Total current assets.......................... 3,315,598 2,679,557
--------- ---------
Property, equipment and leasehold improvements..... 24,130,663 24,126,707
Less: Accumulated depreciation and amortization... (4,396,229) (4,754,474)
--------- ----------
Property, equipment and leasehold improvements,net. 19,734,434 19,372,233
--------- ----------
Deferred financing costs, net of amortization
of $80,813 and $108,813.......................... 1,039,187 1,011,187
--------- ----------
$ 24,089,219 $ 23,062,977
=========== ============
</TABLE>
<TABLE>
<CAPTION> Liabilities and Stockholders' Equity
<S> <C> <C>
Current liabilities
(Note 2) Working capital line................. $ 999,679 $ 999,679
Accounts payable and accrued expenses......... 2,533,232 1,758,532
Accrued payroll and other liabilities......... 1,891,924 2,283,499
Current maturities of long-term debt.......... 14,682,246 14,677,709
Note payable to officer (Note 2).............. - 100,000
---------- ----------
Total current liabilities..................... 20,107,081 19,819,419
---------- ----------
Long-term debt, less current maturities........... 786,468 664,769
---------- ----------
Total liabilities and long-term debt... 20,893,549 20,484,188
---------- ----------
Commitment and contingencies (Note 5)
Stockholders' equity
Preferred stock, par value $1 per share,
1,000,000 shares authorized; none issued
and outstanding................................ - -
Common stock, par value $0.01 per share;
authorized 25,000,000 Shares; 7,452,350 and
7,602,350 shares issued and outstanding........ 74,523 76,023
Additional paid-in-capital..................... 11,254,587 11,353,137
Treasury Stock................................ - (30,121)
Currency Exchange Adjustment................. 67,289 264,043
Accumulated deficit........................... (8,200,729) (9,084,293)
---------- ----------
Total stockholders' equity............... 3,195,670 2,578,789
---------- ----------
$ 24,089,219 $ 23,062,977
=========== ===========
</TABLE>
1
<PAGE>
On Stage Entertainment, Inc. and Subsidiaries
Consolidated Statements of Operations
<TABLE>
<CAPTION> Three months ended
December 31, March 31,
1998 1999
(Unaudited) (Unaudited)
<S> <C> <C>
Net revenues................................ $ 3,724,486 $ 6,272,239
Costs of revenues........................... 2,664,305 5,450,509
----------- -----------
Gross profit................................ 1,060,181 821,730
Selling, general & administrative........... 1,380,447 1,045,916
Depreciation and amortization............... 139,129 250,067
----------- -----------
Operating loss.............................. (459,395) (474,253)
Interest expense, net....................... 69,331 409,311
------------ -----------
Net loss.................................... $ (528,726) $ (883,564)
=========== ===========
Basic and diluted loss per share............ $ (0.08) $ (0.12)
=========== ===========
Basic and diluted average number of common
shares outstanding......................... 7,565,683 6,714,548
=========== ===========
</TABLE>
2
<PAGE>
On Stage Entertainment, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION> Increase (Decrease) in Cash and Cash Equivalents
Three months ended
March 31,
-----------------------------
1998 1999
(Unaudited) (Unaudited)
----------- -----------
<S> <C> <C>
Cash flows from operating activities
Net loss...................................... $ (528,726) $ (883,564)
------------ -----------
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization............... 160,180 387,552
Increase (decrease) from changes in
operating assets and liabilities Accounts
receivable.................................. (508,655) 145,544
Inventory..................................... ( 60,987) 11,750
Deposits...................................... (123,289) (201,399)
Pre-opening costs............................. (804,410) -
Prepaid and other assets...................... 75,382 (63,597)
Accounts payable and accrued expenses......... 241,735 (774,700)
Accrued payroll and other liabilities......... 531,993 391,575
----------- ----------
Total adjustments............................. (488,051) (103,275)
----------- ----------
Net cash used in operating activities........... (1,016,777) (986,839)
----------- ----------
Cash flows from investing activities
Advances on notes receivable from officers.... (55,000) (1,531)
Payments received on notes receivable from
officers..................................... 32,626 2,008
Capital expenditures.......................... (134,363) (12,718)
Direct acquisition costs ..................... (488,298) -
Payment for purchase of Gedco, USA,
net of cash received (Note 6)................ (12,116,556) -
------------ ----------
Net cash used in investing activities........... (12,761,591) (12,241)
------------ ----------
Cash used in financing activities
Borrowings/repayments under working
capital line................................. 250,000 -
Proceeds from long-term borrowing............. 12,500,000 -
Repayment on long-term borrowing.............. (100,004) (126,236)
Cash received on note payable from officer.... - 100,000
Issuance of common stock...................... - 100,050
------------ ----------
Net cash provided by financing activities....... 12,649,996 73,814
------------ ----------
Effect of exchange rate changes on cash and
cash equivalents.............................. - 196,754
----------- ----------
Net decrease in cash and cash equivalents....... (1,128,372) (728,512)
Cash and cash equivalents at beginning of period 2,323,559 1,009,768
----------- ----------
Cash and cash equivalents at end of period...... $ 1,195,187 $ 281,256
============ ============
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest..................................... $ 22,923 $ 53,895
============ ============
</TABLE>
3
<PAGE>
Supplemental schedule of non-cash investing and financing activities
On February 23, 1999, On Stage entered into a Common Stock Purchase
Agreement with Richard S. Kanfer to re-convey the November 1996 acquisition of
Interactive Events, Inc. Under this agreement, we re-conveyed all of the assets
of Interactive Events, Inc. to Mr. Kanfer in consideration for the re-conveyance
by Mr. Kanfer of the 30,304 shares of common stock valued at $1.125 per share.
Net assets totaling $30,121 were written-off with a corresponding entry to
treasury stock.
4
<PAGE>
ON STAGE ENTERTAINMENT, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
March 31, 1998
Basis of Presentation
The financial statements in this annual report include the accounts of On
Stage Entertainment, Inc., a publicly traded Nevada corporation and its
subsidiaries: Legends in Concert, Inc., a Nevada corporation; On Stage
Marketing, Inc., a Nevada corporation; On Stage Theaters, Inc., a Nevada
corporation; Wild Bill's California, Inc., a Nevada corporation; Blazing Pianos,
Inc., a Nevada corporation; King Henry's Inc., a Nevada corporation; On Stage
Merchandise, Inc., a Nevada corporation; On Stage Events, Inc., a Nevada
corporation; On Stage Casino Entertainment, Inc., a Nevada corporation; On Stage
Productions, Inc., a Nevada corporation; On Stage Theaters North Myrtle Beach,
Inc., a Nevada corporation; On Stage Theaters Surfside Beach, Inc., a Nevada
corporation; and Interactive Events, Inc., a Georgia corporation.
On Stage derives net revenues from four reportable segments:
o Casinos. The casinos segments primarily sells live theatrical productions
to casinos and commercial clients, worldwide for a fixed fee. In addition,
this segment operates our Legends show at the Imperial Palace hotel and
casino in Las Vegas, Nevada, and our corporate sales events.
o Production Services. The production services segment sells technical
equipment and services to commercial clients, however, this segment's
primary focus is to technically support all of the other segments.
o Theaters. The theaters segment owns or rents live theaters and dinner
theaters in urban and resort tourist locations primarily in the United
States. This segment derives revenues from the sale of tickets, merchandise
and souvenir photography, and food and beverage to patrons who attend
live theatrical performances at these venues.
o The On Stage entertainment segment is responsible for the corporate
management of all our segments.
(2) Subsequent Events
Downsizing and Restructuring
On April 30, 1999, the board of directors adopted a restructuring plan. The
restructuring plan focuses on four key areas:
o overhead reduction;
o debt restructuring;
o accounts payable rescheduling; and
o overall cost containment.
We have already implemented the initial phase of the plan by reducing overhead
by approximately $707,000 on an annualized basis. We also expect the cost
containment measures implemented to yield another $100,000 of annualized
savings, for a total savings of $807,000 for the two measures. Subsequent
overhead reductions are planned and scheduled to be implemented by June 30,
1999. In addition to these measures, we are also in the process of attempting to
restructure our debt and rescheduling payments of our accounts payable in order
to maximize cash flow.
5
<PAGE>
Existing Defaults Under Credit Facilities
On April 29, 1999, we received a notice of default under our line of credit
with First Security Bank of Nevada. In the notice of default, First Security
requested that we make a repayment proposal and provide additional information
on or before May 19, 1999. While we are attempting to negotiate an extension or
restructuring of this line of credit, there can be no assurance that our
attempts to negotiate an extension or restructuring of this line of credit will
be successful or that First Security will not take additional action to collect
this debt.
Delisting Inquiry
On April 20, 1999, On Stage received a letter of inquiry from The Nasdaq
Stock Market, Inc. requesting that we submit a detailed letter describing our
plans to address the specific items that led to the issuance of a "going
concern" opinion from our independent auditors. The letter further requested a
discussion from us as to why we believe we will be able to sustain compliance
with the continued listing standards of The Nasdaq SmallCap Market. We are
required to provide a responsive answer by June 4, 1999. If we are unable to
develop a responsive answer in a timely manner or in the event Nasdaq does not
find our answer acceptable, our common stock may be delisted from The Nasdaq
SmallCap Market under Nasdaq's rules.
Toronto Closing
Our Legends in Concert production opened at the Sheraton Centre Toronto
Hotel in May 1997. For reasons discussed below, this Legends production did not
prove to be successful and was discontinued in April 1999 after generating an
operating loss of $717,000 for the year ended December 31, 1998 and $264,000 for
the four-month period ended April 30, 1999. At December 31, 1998, we had an
impairment of net assets associated with the Toronto Show and we wrote off net
assets of $409,000.
We believe that the operating performance of Legends at the Sheraton Centre
Toronto Hotel in 1998 suffered from inadequate sales and marketing resulting in
less than optimal ticket sales in the start-up phase of the production. The
lower than anticipated revenue levels, combined with high indirect production
costs associated with the "four wall" cost structure resulted in the losses.
Note Payable to Principal Stockholder
On March 4, 1999, we borrowed $100,000 from John M. Stuart, our chairman,
chief executive officer and principal stockholder. This loan is evidenced by a
one-year promissory note bearing an interest rate of twelve percent (12%) per
annum, due on March 3, 2000. In consideration for this loan, we issued to Mr.
Stuart warrants to purchase 100,000 shares of common stock at a price of $1.00
per share, the market price on the closing date of this loan. Additionally, we
agreed to pay legal fees incurred by Mr. Stuart in connection with this
transaction, as well as an additional $12,500 for previous legal bills Mr.
Stuart personally incurred for On Stage related matters.
On April 5, 1999, On Stage entered into an agreement with Mr. Stuart,
pursuant to which On Stage agreed to accept a bridge loan from Mr. Stuart in an
amount of up to $500,000 in return for a one- year promissory note bearing 12%
interest, a 5% origination fee and a warrant to purchase one share of common
stock for each $1.00 invested provided that On Stage did not repay Mr. Stuart
within thirty (30) days. As of April 20,1999, we had accepted $200,000 of the
potential $500,000 from Mr. Stuart.
6
<PAGE>
Notes Receivable from Chief Financial Officer
On April 13, 1999, On Stage loaned $63,213 to Kiran Sidhu, our senior vice
president and chief financial officer, to assist Mr. Sidhu with satisfying
personal income taxes incurred as a result of the issuance of 40,532 shares of
common stock in accordance with the terms of Mr. Sidhu's employment agreement
with On Stage. The note, which recently matured on April 12, 1999, is secured by
Mr. Sidhu's 40,532 shares of common stock. We agreed to extend the maturity date
of the note through to December 31, 1999, due primarily to the fact that he did
not have the money to repay the note, coupled with the fact that the market
value of the common stock which secured the repayment of the note is not enough
to satisfy the outstanding debt since the common stock has declined in value
from $5.00 per share when issued, to approximately $1.00 per share as of the
maturity date.
On April 16, 1999, Mr. Sidhu sold Mr. Stuart 40,532 shares of common stock.
In exchange, Mr. Stuart agreed to assume Mr. Sidhu's $60,875 note in favor of On
Stage, with recourse only to the 40,532 shares of common stock purchased from
Mr. Sidhu. Mr. Sidhu executed a new promissory note in favor of On Stage in the
principal amount of $7,472, which was subsequently forgiven as part of Mr.
Sidhu's employment restructuring discussed below.
Chief Financial Officer Employment Restructuring
On April 16, 1999, Mr. Sidhu agreed to restructure his current employment
agreement with On Stage in an attempt to assist On Stage with facilitating our
restructuring plan. Under the terms of his employment restructuring, Mr. Sidhu
agreed to forego any rights he had to his employment, option, and
confidentiality agreements, in return for the following:
o a new agreement which he will be an "at-will" consultant at a flat rate of
$50.00 per hour;
o a new option agreement which affords him the right to purchase 140,000
shares of common stock at a strike price of $1.50 per share;
o a reimbursement of $25,000 for unpaid insurance, car allowances and
expenses;
o $17,887 for all accrued, but unused vacation pay; o all earned, but
unpaid salary under his old employment agreement; and o forgiveness of
a promissory note in the amount of $7,472 held by On Stage.
Additionally, On Stage agreed to pay Mr. Sidhu $25,000 within ninety (90) days
of this restructuring, in consideration for Mr. Sidhu's execution of a new
confidentiality and non-competition agreement.
(3) New Accounting Pronouncements
Statement of Financial Accounting Standards No. 129, "Disclosure of
information about Capital Structure" ("SFAS No. 129") issued by the FASB is
effective for financial statements ending after December 15, 1997. The new
standard reinstates various securities disclosure requirements previously in
effect under Account Principles Board Opinion No. 15, which has been superseded
by SFAS No. 129. We adopted SFAS No. 129 as of January 1, 1998 and had no effect
on our financial position or results of operations.
Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income" ("SFAS No. 130") issued by the FASB is effective for
financial statements with fiscal years beginning after December 15, 1997.
Earlier application is permitted. SFAS No. 130 establishes standards for
reporting and display of Comprehensive income and its components in a full set
of general-purpose financial statements. On Stage adopted SFAS No. 130 as of
January 1, 1998 and it had no effect on our financial position or results of
operations.
7
<PAGE>
Statement of Financial Accounting Standards No. 131, "Disclosures about
Segments of an Enterprise and Related Information" ("SFAS No. 131") issued by
the FASB is effective for financial statements with fiscal years beginning after
December 15, 1997. Earlier application is permitted. SFAS No. 131 requires that
the public companies report certain information about operating segments,
products, services and geographical areas in which they operate and their major
customers. On Stage adopted SFAS No. 131 on January 1, 1998 and it had no effect
on our financial position or results of operations; however, disclosures on
certain of these items were expanded.
Statement of Position 98-5, "Reporting on the Costs of Start-up
Activities," ("SOP 98-5") issued by the American Institute of Certified Public
Accountants is effective for financial statements beginning after December 15,
1998. SOP 98-5 requires that the costs of start-up activities, including
organization costs, be expensed as incurred. Start-up activities are defined
broadly as those one-time activities related to opening a new facility,
introducing a new product or service, conducting business in a new territory,
conducting business with a new class of customers (excluding ongoing customer
acquisition costs, such as policy acquisition costs and loan origination costs)
or beneficiary, initiating a new process in an existing facility, or commencing
some new operation. We do not expect the adoption of SOP 98-5 to have a material
impact, if any, on our financial position or results of operations.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" effective for financial statements with
fiscal years beginning after June 15, 1999. SFAS No. 133 provides a
comprehensive and consistent standard for the recognition and measurement of
derivatives and hedging activities and requires all derivatives to be recorded
on the balance sheet at fair value. We do not expect the adoption of SFAS No.
133 to have a material impact, if any, on our results of operations, financial
position or cash flows.
(4) Loss Per Share
Statement of Financial Accounting Standard No. 128 ("SFAS No. 128")
provides a different method of calculating earnings per share than is currently
used in accordance with APB 15, Earnings per Share. SFAS 128 provides for the
calculation of basic and diluted earnings per share. Basic earnings per share
includes no dilution and is computed by dividing income available to common
shareholders by the weighted average number of common shares outstanding for the
period. Diluted earnings per share reflect the potential dilution of securities
that could share in the earnings of the entity, similar to fully diluted
earnings per share. SFAS 128 is effective for fiscal years and interim periods
after December 15, 1997. On Stage has adopted this pronouncement during the
fiscal year ended December 31, 1997.
For the three-months ended March 31, 1998, potential dilutive securities
representing 563,953 outstanding stock options and 2,802,000 outstanding
warrants are not included, since their effect would be anti-dilutive. For the
three-months ended March 31, 1999, potential dilutive securities representing
896,550 outstanding stock options and 2,724,917 outstanding warrants are not
included, since their effect would be anti-dilutive.
(5) Commitments and Contingencies
On Stage is party to various legal proceedings in the ordinary course of
business in which the adverse parties are seeking damages from us. While there
can be no assurance that any of the instituted or threatened lawsuits will be
settled or decided in favor of us, the management does not believe the final
resolution of these matters will have a material adverse effect upon our
financial condition and results of operations.
8
<PAGE>
(6) Business Acquisition
Interactive Events, Inc. Acquisition and Disposition
On November 1, 1996, On Stage entered into a Common Stock Purchase
Agreements with Interactive Events, Inc., a Georgia corporation owned by Mr.
Richard S. Kanfer. Interactive Events created and implemented interactive events
for parties and conventions. Mr. Kanfer joined On Stage as our vice president of
sale. We issued 19,284 and 11,020 shares of common stock on November 1, 1996 and
November 1, 1997, respectively, as payment. We recorded $129,180 as the excess
of the purchase price over the net assets acquired, which was being amortized
over ten years. At December 31, 1998, we determined there was an impairment in
the value of the excess of the purchase price over the net assets acquired in
connection with the purchase and we wrote off the remaining unamortized balance
of $102,131.
On February 23, 1999, we entered into a Common Stock Purchase Agreement
with Mr. Kanfer, pursuant to which the parties agreed to re-convey the November
1996 acquisition by us of Interactive Events. Under the terms of the Agreement,
On Stage reconveyed all of the assets of Interactive Events to Mr. Kanfer, in
consideration for the reconveyance by Mr. Kanfer of 30,304 shares of On Stage's
common stock valued at $1.125 per share, a non-plan option to purchase 15,000
shares of common stock and incentive stock options to purchase 19,835 shares of
common stock at a price of $5.00 per share. In addition, the parties agreed to
release one another from any liability arising out of the November 1996
acquisition of Interactive Events by us and any claim relating to Mr. Kanfer's
subsequent employment with On Stage. On Stage and Mr. Kanfer also entered into
an exclusive right of representation agreement in February 1999, under which we
granted to Mr. Kanfer the right to represent our Legends production in
designated areas in consideration for a portion of the gross proceeds generated
thereby.
Gedco USA, Inc. Acquisition
On March 13, 1998, we completed our acquisition of certain assets from
Gedco USA, Inc. and its affiliates for a purchase price of $14,000,000,
consisting of $11,500,000 in cash and 595,238 shares of common stock valued at
$2,500,000. Included in the transaction were substantially all of the income
producing assets and associated real property of Orlando Entertains and LA
Entertains, consisting of King Henry's Feast, Blazing Pianos piano bar, the Fort
Liberty shopping complex that includes a Wild Bill's Dinner Theater, each of
which is located in greater Orlando, Florida, and a second Wild Bill's Dinner
Theater located in Buena Park, California. Gerard O'Riordan, President of Gedco
USA, Inc., joined us as president of On Stage Theaters, Inc., a wholly-owned
subsidiary that manages the acquired dinner theaters and piano bar as well as
other selected theaters.
On Stage funded the cash portion of the purchase price and transaction fees
and expenses with $12,500,000 of mortgage financing from Imperial Credit
Commercial Mortgage Investment Corp. Imperial Credit had committed a total of
$20,000,000, of which $7,500,000 was remaining to finance our future real estate
related acquisitions. In connection with the loan agreement entered into on
March 13, 1998, we granted Imperial Credit the right to provide us with up to an
additional $30 million of similar mortgage financing. In connection with the
financing, we issued Imperial Credit and Imperial Capital Group LLC (an
affiliate of Imperial Credit), an aggregate of 575,000 warrants immediately
exercisable into common stock at an exercise price of $4.44. In addition,
concurrent with the Imperial Credit financing, Mark Karlan, the President of
Imperial Credit, was named a member of our board of directors, filling a vacancy
created by the resignation of Kenneth Berg. We have made January and February
1999 payments under this loan after the due date for those payments. As a result
of those delinquencies, we have incurred late charges and default interest,
which we have not paid. We are in default under the Imperial Credit facility and
we are unable to borrow additional funds under the facility. As of
9
<PAGE>
May 17, 1999, we had made our payments to Imperial Credit due March 1, 1999,
April 1, 1999 or May 1, 1999. We are currently negotiating with Imperial Credit
to extend some of the repayment terms under this facility and to obtain waivers
or amendments with respect to other defaults under the facility, including a
breach of debt service coverage ratio warranties. Mr. Karlan subsequently
resigned as a director on April 16, 1999.
The components of the purchase price and its allocation to the assets and
liabilities are as follows:
Purchase Price:
Liabilities assumed........................................ $ 986,044
Issuance of 595,238 restricted shares of common stock...... 2,500,000
--------------
3,486,044
Costs of acquisition incurred.............................. 1,645,874
Cash paid................................................ 11,500,000
--------------
$16,631,918
==============
The acquisition was accounted for as a purchase and the assets acquired
were recorded at a fair market value. The building and equipment are being
depreciated over twenty and three years, respectively, under the straight-line
method. The allocation of the purchase price was as follows:
Cash....................................................... $ 383,444
Inventory.................................................. 120,084
Prepaid expenses........................................... 157,516
Land....................................................... 11,275,507
Building................................................... 3,214,740
Equipment.................................................. 730,627
Deferred financing acquisition expenses.................... 750,000
==============
$16,631,918
==============
The assets acquired and liabilities assumed were transferred to either our
wholly owned subsidiary, On Stage Theaters, Inc., or a wholly owned subsidiary
of On Stage Theaters, Inc., concurrent with the acquisition.
The unaudited pro forma results of operations presented below reflect
our operations as though the acquisition had taken place at the beginning of
each period presented. The pro forma results have been prepared for comparative
purposes only, and are not necessarily indicative of what the actual result of
operations would have been had such acquisitions occurred at the beginning of
the periods presented, or what results of operations will be in the future.
<TABLE>
Three months ended March 31,
--------------------------------------
1998 1999
--------------------------------------
<S> <C> <C>
Revenues .......................................... $ 6,205,371 $ 6,272,239
Operating income loss.............................. (182,794) (474,253)
Net loss........................................... (528,726) (883,564)
Basic and diluted loss per share................... (0.12) (0.08)
Basic and diluted average number of common
shares outstanding.............................. 6,714,548 7,565,683
</TABLE>
10
<PAGE>
Calvin Gilmore Productions, Inc. Acquisition
On June 30, 1998, On Stage completed our acquisition of certain assets from
Calvin Gilmore Productions, Inc., an affiliate of Fox Family Worldwide, Inc. for
a purchase price of $1,000,000 in cash and 206,612 shares of common stock valued
at $723,142. Included in the transaction were substantially all of the income
producing assets and associated real and personal property in the greater Myrtle
Beach, South Carolina area, consisting of a fee simple purchase of The Surfside
Beach Theater, which we had leased for our presentation of our flagship Legends
in Concert production since 1995, and a leasehold interest in The Eddie Miles
Theater. We funded the cash portion of the purchase price and transaction fees
and expenses with $1,100,000 million of mortgage financing from Imperial Credit.
Upon consummation of the transaction, Fox Family also agreed to order
television programming and production services from On Stage, and to give us a
30-day right of negotiation to acquire specified live theatrical/stage rights in
projects developed and owned by Fox Family over the next five years. Also, Fox
Family increased its stock ownership to a 5% equity stake in On Stage, and Mel
Woods, President and Chief Operating Officer of Fox Family, was elected to our
board of directors.
(7) Going Concern
The accompanying consolidated financial statements have been prepared
assuming that we will continue as a going concern which contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business. The carrying amounts of assets and liabilities presented in the
financial statements do not purport to represent realizable or settlement
values. However, we have suffered recurring operating losses and has a working
capital deficit that impairs our ability to obtain additional financing. On
Stage's auditors have included an explanatory paragraph in their report for the
year ended December 31, 1998, indicating that there is substantive doubt
regarding our ability to continue as a going concern. The accompanying
consolidated financial statements do not include any adjustments that might
result from the outcome of any uncertainity.
We have historically met our working capital requirements through a
combination of cash flow from operations, equity and debt offerings and
traditional bank financing. We anticipate, based on our proposed plans and
assumptions relating to our operations that our current cash, cash equivalent
balances, anticipated revenues from operations are insufficient to fund our
ongoing operations.
We intend to manage short-term liquidity concerns through the
renegotiations of our expired working capital line, capital leases and mortgage
facilities. We have either closed down or restructured any business units that
are not generating positive cash flow. In addition, we have lowered selling,
general and administrative expenses as a percent of net revenues from 37.1% in
the quarter ended March 31, 1999, to 16.8% in the quarter ended March 31, 1998
and continue to downsize and restructure our selling, general and administrative
functions.
In addition, we are continuing our efforts to secure working capital for
operations, expansion and possible acquisitions, mergers, joint ventures, and/or
other business combinations. However, there can be no assurance that we will be
able to secure additional capital or that if such capital is available, whether
the terms or conditions would be acceptable to us.
(8) Year 2000
On Stage believes that our accounting and financial reporting systems are
Year 2000 ready or Year 2000 compliant. We have invested in the latest hardware
and software and we have implemented standards that require Year 2000 compliance
from all vendors. We do not anticipate any problems in maintaining this
compliance in the future.
11
<PAGE>
However, we are still continuing to assess Year 2000 preparedness, through
actively coordinating with vendors, creditors and financial organizations to
prepare for possible repercussions of non-compliance. We are also undertaking
exhaustive surveys in each of our geographic locations to further determine
preparedness. We have hired Business Communications, Inc. to visit each site and
physically re-certify that each machine, microprocessor and software program in
use is Year 2000 compliant. We have allocated $50,000 to complete our
certification program and we anticipate completion by June 30, 1999.
(9) Segment Information
The following tables set forth the segment profit/loss and asset information.
<TABLE>
<CAPTION> For the period ended March 31, 1998
-------------- -------------- -------------- ------------ ----------------
On Stage Total
Casino Production Theaters Entertainment Consolidated
-------------- -------------- -------------- ------------ ----------------
<S> <C> <C> <C> <C> <C>
Revenues from external customers....... $ 2,075,918 $ - $ 1,648,568 $ - $ 3,724,486
-------------- -------------- -------------- ------------ ----------------
Interest expense....................... $ (20) $ - $ 63,375 $ 5,976 $ 69,331
-------------- -------------- -------------- ------------ ----------------
Depreciation and amortization.......... $ 41,151 $ - $ 20,414 $ 77,564 $ 139,129
-------------- -------------- -------------- ------------ ----------------
Segment profit (loss).................. $ 429,992 $ (74,653) $ (89,403) $ (794,662) $ (528,726)
-------------- -------------- -------------- ------------ ----------------
Segment assets ........................ $ 267,970 $ - $ 16,199,005 $6,834,308 $ 23,301,283
-------------- -------------- -------------- ------------ ----------------
Additions to long-lived assets......... $ 111,546 $ 18,220 $ 339,820 $ 4,066 $ 543,652
</TABLE>
<TABLE>
<CAPTION> For the period ended March 31, 1999
-------------- -------------- ------------- ------------- ----------------
On Stage Total
Casino Production Theaters Entertainment Consolidated
-------------- -------------- ------------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Revenues from external customers....... $ 2,589,886 $ 1,877 $ 3,680,476 $ - $ 6,272,239
-------------- -------------- ------------- ------------- ----------------
Interest expense....................... $ - $ 1,124 $ 356,890 $ 51,297 $ 409,311
-------------- -------------- ------------- ------------- ----------------
Depreciation and amortization.......... $ 99,379 $ 21,894 $ 80,673 $ 48,121 $ 250,067
-------------- -------------- ------------- ------------- ----------------
Segment profit (loss).................. $ 654,332 $ (193,905) $ (718,413) $ (625,578) $ (883,564)
-------------- -------------- ------------- ------------- ----------------
Segment assets......................... $ 961,971 $ 554,348 $16,135,092 $ 5,411,566 $ 23,062,977
-------------- -------------- ------------- ------------- ----------------
Additions to long-lived assets......... $ 38,831 $ 653 $ 1,388 $ 316 $ 41,188
</TABLE>
12
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
This document contains certain forward-looking statements that are subject
to risks and uncertainties. Forward-looking statements include certain
information relating to potential new show openings, the potential markets for
On Stage's productions, the expansion of existing and potential gaming and
tourist markets, our exposure to various trends in the gaming industry, our
acquisition plans and the benefits we anticipate from these acquisitions, our
business strategy, our outstanding litigation matters and the defenses available
to us, the seasonality of our business, and liquidity issues, as well as
information contained elsewhere in this report where current statements are
preceded by, followed by or include the words "believes," "expects,"
"anticipates" or similar expressions. For these statements, On Stage claims the
protection of the safe harbor for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995. The forward-looking statements
in this document are subject to risks and uncertainties that could cause the
assumptions underlying the forward-looking statements and the actual results to
differ materially from those expressed in or implied by the statements.
The most important factors that could prevent On Stage from achieving our
goals--and cause the assumptions underlying the forward-looking statements and
the actual results to differ materially from those expressed in or implied by
those forward-looking statements--include the information provided under the
heading "Description of Business-Risk Factors" in Item 1 of our Annual Report on
Form 10-KSB for the year ended December 31, 1999, as well as the following:
o On Stage's dependence on our flagship Legends in Concert production and
our principal production venues;
o The ability to successfully produce and market new productions and
to manage the growth associated with the any new productions;
o Risks associated with our acquisition strategy, including our ability to
successfully identify, complete and integrate strategic acquisitions;
o The ability to meet our commitments under our credit facilities, which are
currently in default, and to obtain alternative, additional financing on
commercially reasonable terms;
o The ability to continue as an ongoing concern;
o The competitive nature of the leisure and entertainment industry
and the ability to continue to distinguish our services;
o Fluctuations in quarterly operating results and the highly seasonal nature
of our business;
o The ability to reproduce the performance, likeness and voice of various
celebrities without infringing on the publicity rights of those
celebrities or their estates, as well as our ability to protect our
intellectual property rights;
o The ability to successfully manage the litigation pending against us
and to avoid future litigation; and
o The results of operations which depend on numerous factors, including
the commencement and expiration of contracts, the timing and amount of new
business generated by us, our revenue mix, the timing and level of
additional selling, general and administrative expense and the general
competitive conditions in the leisure and entertainment industry as well
as the overall economy.
13
<PAGE>
Results of Operations
The following tables sets forth, the results of operations by operating
divisions for the period indicated:
<TABLE>
<CAPTION> For the quarter ended March 31, 1998
-------------- ------------- -------------- --------------- ------------------ ---------------
Sub-Total
Operating On Stage Total
Casino Production Theaters Divisions Entertainment Consolidated
-------------- ------------- -------------- --------------- ------------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Net revenues.................$ 2,075,918 $ - $ 1,648,568 $ 3,724,486 $ - $ 3,724,486
Cost of revenues.............$ 1,320,774 $ 31,549 $ 1,311,982 $ 2,664,305 $ - $ 2,664,305
-------------- ------------- -------------- --------------- ------------------ ---------------
Gross profit(loss)...........$ 755,144 $ (31,549) $ 336,586 $ 1,060,181 $ - $ 1,060,181
Selling, general &
administrative..............$ 284,021 $ 43,104 $ 342,200 $ 669,325 $ 711,122 $ 1,380,447
Depreciation &
amortization.................$ 41,151 $ - $ 20,414 $ 61,565 $ 77,564 $ 139,129
-------------- ------------- -------------- --------------- ------------------ ---------------
Operating income (loss)......$ 429,972 $ (74,653) $ (26,028) $ 329,291 $ (788,686) $ (459,395)
Interest expense, net........$ (20) $ - $ 63,375 $ 63,355 $ 5,976 $ 69,331
-------------- ------------- -------------- --------------- ------------------ ---------------
Net income (loss)............$ 429,992 $ (74,653) $ (89,403) $ 265,936 $ (794,662) $ (528,726)
=============== ============= ============== =============== ================== ===============
</TABLE>
<TABLE>
<CAPTION> For the quarter ended March 31, 1999
-------------- ------------- -------------- --------------- ------------------- --------------
Sub-Total
Operating On Stage Total
Casino Production Theaters Divisions Entertainment Consolidated
-------------- ------------- -------------- --------------- ------------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net revenues.................$ 2,589,886 $ 1,877 $ 3,680,476 $ 6,272,239 $ - $ 6,272,239
Cost of revenues.............$ 1,644,778 $ 172,764 $ 3,632,967 $ 5,450,509 $ - $ 5,450,509
-------------- ------------- -------------- --------------- ------------------ --------------
Gross profit (loss)..........$ 945,108 $ (170,887) $ 47,509 $ 821,730 $ - $ 821,730
Selling, general &
administrative...............$ 191,397 $ - $ 328,359 $ 519,756 $ 526,160 $ 1,045,916
Depreciation &
amortization.................$ 99,379 $ 21,894 $ 80,673 $ 201,946 $ 48,121 $ 250,067
-------------- ------------- -------------- --------------- ------------------ --------------
Operating income (loss)......$ 654,332 $ (192,781) $ (361,523) $ 100,028 $ (574,281) $ (474,253)
Interest expense, net........$ - $ 1,124 $ 356,890 $ 358,014 $ 51,297 $ 409,311
-------------- ------------- -------------- --------------- ------------------ --------------
Net income (loss)............$ 654,332 $ (193,905) $ (718,413) $ (257,986) $ (625,578) $ (883,564)
=============== ============= ============== =============== ================== ==============
</TABLE>
14
<PAGE>
Quarter Ended March 31, 1998 versus Quarter Ended March 31, 1999
Net Revenues. Revenues increased by $2,547,000 or $68.4% to $6,272,000 for
the quarter ended March 31, 1999 compared to $3,725,000 for the quarter ended
March 31, 1998. On Stage's revenue is derived from four principal operating
segments: Casinos, Productions, Theaters and Corporate Management. Revenues from
Events and Merchandise are included in the Casino and Theater segments.
o Casinos revenues were approximately $2,590,000 for the quarter ended March
31, 1999 compared to $2,076,000 for the quarter ended March 31, 1998, an
increase of $514,000, or 24.8%. Contributing to this increase were
increases in revenues at the Legends show at the Imperial Palace Hotel and
Casino in Las Vegas, Nevada, the addition of new shows at the Taj Mahal
Hotel and Casino and Hilton Hotel and Casino, both in Atlantic City, New
Jersey, as well as the addition of a variety ice show at the River Palms
Resort and Casino in Laughlin, Nevada.
o Production revenues were approximately $2,000 for the quarter ended March
31, 1999 compared to $0 for the quarter ended March 31, 1998. The
increase was attributable to equipment rentals.
o Theaters revenues were approximately $3,680,000 for the quarter ended March
31, 1999 compared to $1,649,000 for the quarter ended March 31, 1998, an
increase of $2,031,000, or 123.2%. This was primarily attributable to the
inclusion of the Gedco asset acquisition.
Costs of Revenues. Total costs of revenues were $5,451,000 for the quarter
ended March 31, 1999 compared to $2,664,000 the quarter ended March 31, 1998, an
increase of $2,787,000, or 104.6%. Costs of revenues increased to 86.9% of net
revenues for the quarter ended March 31, 1999, as compared to 71.5% for the
quarter ended March 31, 1998. This increase in cost of sales as percentage of
revenues was primarily attributable to a change in the mix of our revenues due
to the inclusion of the Gedco asset acquisition revenues, which have higher
costs of revenues than our other business segments.
Selling, General and Administrative. Selling, general and administrative
expenses were approximately $1,046,000 for the quarter ended March 31, 1999 as
compared to $1,381,000 for the quarter ended March 31, 1998, a decrease of
$335,000, or 24.3%. Selling, general and administrative expenses decreased to
16.7% of net revenues for the quarter ended March 31, 1999, as compared to 37.1%
for the quarter ended March 31, 1998. This is primarily attributable to our
reduction of overhead associated with On Stage's discontinued "roll-out"
strategy.
Operating Loss. On Stage's operating loss was approximately $474,000 for
the quarter ended March 31, 1999, compared to an operating loss of $460,000 for
the quarter ended March 31, 1998, a decrease of $14,000, or 3.0%.
Depreciation and Amortization. Depreciation and amortization for the
quarter ended March 31, 1999 increased by $111,000, or 79.9% as compared to the
quarter ended March 31, 1998. The increase was primarily due to capital
additions to current shows, new shows, and an increase in assets as a result of
the Gedco asset acquisition.
15
<PAGE>
Interest Expense, Net. Interest expense for the quarter ended March 31,
1999 increased by $340,000, or 492.8% as compared to the quarter ended March 31,
1998. The increase was primarily due to interest paid on the debt incurred from
the Gedco asset acquisition.
Income Taxes. On Stage is a Nevada corporation with a substantial portion
of revenue and income derived in Nevada. There are no state or local income
taxes in Nevada. We have accrued no federal income tax for the quarter ended
March 31, 1998. At March 31, 1998 and 1999, we had federal net operating loss
carryforwards of approximately $3,025,000 and $7,185,000 respectively. Under
Section 382 of the Internal Revenue Code, certain significant changes in
ownership that we are currently undertaking may restrict the future utilization
of these tax loss carryforwards. The net deferred tax assets have a 100%
valuation allowance, as management cannot determine if it is more likely than
not that the deferred tax assets will be realized.
Seasonality and Quarterly Results
Our business has been, and is expected to remain, highly seasonal, with the
majority of our revenue being generated during the months of April through
October. Part of our business strategy is to increase sales in tourist markets
that experience their peak seasons from November through March, so as to offset
this seasonality in revenues. The Gedco asset acquisition should also help to
decrease the seasonality of our business since Gedco's revenue was historically
less seasonal.
The following table sets forth our net revenue for each of the last nine
quarters ended March 31, 1999:
<TABLE>
<CAPTION> Net Revenues ($ in thousands)
<S> <C> <C> <C> <C>
March 31, June 30, September 30, December 31,
Fiscal 1997.................. $ 2,719 $ 3,979 $ 5,071 $ 3,957
Fiscal 1998.................. $ 3,724 $ 8,245 $ 8,059 $ 7,819
Fiscal 1999.................. $ 6,272 - - -
</TABLE>
Liquidity and Capital Resources
General
On Stage has historically met our working capital requirements through a
combination of cash flow from operations, equity and debt offerings and
traditional bank financing. We anticipate, based on our proposed plans and
assumptions relating to our operations, that our current cash, cash equivalent
balances, anticipated revenue from operations and our working capital line are
insufficient to fund our ongoing operations.
On Stage intends to manage short-term liquidity concerns through the
renegotiations of our expired working capital line, capital leases and mortgage
facilities. We have either closed down or restructured any business units that
were not generating positive cash flow. In addition, we have lowered selling,
general and administrative expenses as a percentage of net revenues from 31.5%
in 1997 to 22.4% in 1998 and continues to downsize and restructure our selling,
general and administrative functions.
For the quarter ended March 31, 1998, we had net cash deficit used by
operations of approximately $1,017,000. As of March 31, 1998, we had
approximately $1,195,000 in cash and cash equivalents. For the quarter ended
March 31, 1999, we had net cash deficit used by operations of approximately
$987,000. As of March 31, 1999, we had approximately $281,000 in cash and cash
equivalents. The operating deficits for both quarters were primarily
attributable to business seasonality.
16
<PAGE>
The net cash used in investing activities for the quarter ended March 31,
1998 of $12,762,000, was primarily attributable to direct acquisition expenses
related to the Gedco asset acquisition. The net cash used in investing
activities for the quarter ended March 31, 1999 of $12,000, was primarily
attributable to capital expenditures.
Net cash provided by financing activities for the quarter ended March 31,
1998 of $12,650,000, was primarily attributable to Imperial Credit's funding of
$12,500,000 for the Gedco asset acquisition. Net cash provided by financing
activities for the quarter ended March 31, 1999 of $74,000, was primarily
attributable to notes payable from officer, and the issuance of common stock.
Working Capital
At March 31, 1998, we had a working capital of approximately $298,000
primarily attributable to an increase in pre-paid tickets and monies received
from the Gedco asset acquisition. At March 31, 1999, we had working capital
deficit of approximately $17,139,000 which resulted primarily, from an increase
in the accrued expenses, accrued payroll and other liabilities, note payable to
officer, and the reclassification of the Imperial Credit mortgage loan to
current liabilities. Because of the recurring losses, the working capital
deficit and the loan defaults, our auditors have issued a going concern opinion
for the year ended December 31, 1998.
Working Capital Line
In May 1997, First Security Bank of Nevada issued a line of credit to us
for up to $250,000. Borrowings under this facility bear variable interest at
1.5% over the First Security Bank of Idaho's index (10% per year as of the
facility's inception) and are due on demand. On March 28, 1998, First Security
increased the line of credit from $250,000 to $1,000,000 and extended the
expiration date of the line to March 25, 1999. We had drawn $1,000,000 on the
line of credit. On April 29, 1999, we received a notice of default under the
line of credit from First Security. In the notice of default, First Security
asked On Stage to make a repayment proposal and provide additional information
on or before May 3, 1999. While we are attempting to negotiate an extension or
restructuring of this line of credit, there can be no assurance that our
attempts to negotiate an extension or restructuring of this line of credit will
be successful or that First Security will not take additional action to collect
this debt.
Capital Equipment Financing Commitment
On September 29, 1997, First Security Leasing Company, a Utah corporation,
approved us for a $1,000,000 lease line of credit. Advances under the lease line
incur interest at a rate of 9.75% per annum. The lease line has been utilized in
the following amounts: $389,290, $442,997 and $167,713, commencing in April 1998
and May 1998, respectively, and terminating on October 2001, September 2001 and
November 2001. We also received a notice of default under this lease line on
April 29, 1999. While we are attempting to negotiate an extension or
restructuring of this lease line, there can be no assurance that our attempts to
negotiate an extension or restructuring of this lease line will be successful or
that First Security Leasing will not take additional action to collect this
debt.
Mortgage Financing Commitment
On March 13, 1998, Imperial Credit Commercial Mortgage Investment
Corporation agreed to provide up to $20,000,000 of mortgage financing to On
Stage. On the same date, we used $12,500,000 of said facility to fund the cash
portion of the Gedco asset acquisition and related fees. We subsequently used
$1,100,000 on June 30, 1998 to fund the cash portion of the Fox Family
acquisition and $550,000 on October 7, 1998 for our working capital needs.
17
<PAGE>
We have made January and February 1999 payments under this loan after the due
date for those payments. As a result of those delinquencies, we have incurred
late charges and default interest, which we have not paid. We are in default
under the Imperial Credit facility and we are unable to borrow additional funds
under the facility. As of May 17, 1999, we had made our payments to Imperial
Credit due March 1, 1999, April 1, 1999 or May 1, 1999. We are currently
negotiating with Imperial Credit to extend some of the repayment terms under
this facility and to obtain waivers or amendments with respect to other defaults
under the facility, including a breach of debt service coverage ratio
warranties.
In the event that First Security, First Security Leasing or Imperial Credit
initiates foreclosure action against us or our assets, all or a portion of our
property and assets securing the credit facilities and mortgage financing
extended by those lenders may be sold to satisfy our commitments under the terms
of those facilities. We are attempting to renegotiate the terms of our credit
facilities, to obtain extensions of the terms of those facilities and to seek
alternative additional financing. There can be no assurance that our efforts
will be successful. Year 2000
Year 2000
On Stage believes that our accounting and financial reporting systems are
Year 2000 ready or Year 2000 compliant. We have invested in the latest hardware
and software and we have implemented standards that require Year 2000 compliance
from all vendors. We do not anticipate any problems in maintaining this
compliance in the future.
However, we are still continuing to assess Year 2000 preparedness, through
actively coordinating with vendors, creditors and financial organizations to
prepare for possible repercussions of non-compliance. We are also undertaking
exhaustive surveys in each of our geographic locations to further determine
preparedness. We have hired Business Communications, Inc. to visit each site and
physically re-certify that each machine, microprocessor and software program in
use is Year 2000 compliant. We have allocated $50,000 to complete our
certification program and we anticipate completion by June 30, 1999.
18
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
On May 28, 1998, Silver State Property Management, a Nevada corporation,
Roger A. Bergmann Enterprises, a Nevada corporation, and R.E. Lyle Corp., a
Nevada corporation filed a complaint in the Second Judicial District Court of
the State of Nevada, County of Washoe, alleging, among other things, that John
W. Stuart, acting as an agent, chairman of the board and chief executive officer
of On Stage, breached an alleged oral agreement to purchase the Plaintiff's
respective interests in the Legends in Concert production in Hawaii for an
aggregate purchase price of $1,000,000. The case is currently in the discovery
stage of litigation and the matter has been set for trial on September 20, 1999.
Item 2. Changes in Securities and Use of Proceeds.
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 & Reports on Form 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
The registrant was not required to file any reports on Form 8-K for the
three-months ended March 31, 1999.
19
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
ON STAGE ENTERTAINMENT, INC.
Date: May 17, 1999 /s/ John W. Stuart
--------------------------------
John W Stuart, Chairman and Chief
Executive Officer
Date: May 17, 1999 /s/ Pedro Perez
--------------------------------
Pedro Perez
Chief Accounting Officer
20
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements set forth in the Form 10-QSB On Stage Entertainment, Inc.
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0001035514
<NAME> On Stage Entertainment, Inc.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-1-1999
<PERIOD-END> MAR-31-1999
<CASH> 281
<SECURITIES> 0
<RECEIVABLES> 1108
<ALLOWANCES> 0
<INVENTORY> 232
<CURRENT-ASSETS> 2680
<PP&E> 24127
<DEPRECIATION> 4754
<TOTAL-ASSETS> 23063
<CURRENT-LIABILITIES> 19819
<BONDS> 665
0
0
<COMMON> 76
<OTHER-SE> 2503
<TOTAL-LIABILITY-AND-EQUITY> 23063
<SALES> 6272
<TOTAL-REVENUES> 6272
<CGS> 2094
<TOTAL-COSTS> 5451
<OTHER-EXPENSES> 1296
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 409
<INCOME-PRETAX> (884)
<INCOME-TAX> 0
<INCOME-CONTINUING> (884)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (884)
<EPS-PRIMARY> (0.12)
<EPS-DILUTED> (0.12)
</TABLE>
