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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of August, 1999
Peace Arch Entertainment Group Inc.
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(Translation of registrant's name into English)
Third Floor, 1132 Hamilton Street Vancouver, B.C., V6B 2S2
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(Address of principal executive office)
[Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
Form 20-F X Form 40-F ]
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[Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
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[If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2 (b):
82-____________.]
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[Logo of Peace Arch Entertainment Group Inc.]
(formerly Vidatron Entertainment Group Inc.)
Third Quarter Report
For the Nine Months Ended
May 31, 1999 and 1998
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Peace Arch Entertainment Group Inc. (formerly Vidatron Entertainment Group Inc.)
Consolidated Balance Sheet
As at May 31, 1999 and 1998 (Unaudited)
(in accordance with Generally Accepted Accounting Principals in Canada)
(in thousands of Canadian dollars)
<TABLE>
<CAPTION>
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1999 1998
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ASSETS
<S> <C> <C> <C> <C>
Cash and cash equivalents $ 1,559 $ 3,348
Marketable securities 105 -
Accounts receivable 2,398 1,438
Tax credits receivable 14,110 3,886
Production costs in progress 6,710 10,300
Prepaid expenses 183 354
Investments in television programming 7,985 3,163
Property and equipment 9,572 9,553
Deferred costs 440 148
Deferred income tax 38 -
Goodwill 2,447 576
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$ 45,547 $ 32,766
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LIABILITIES AND SHAREHOLDERS' EQUITY
Bank indebtedness $ 8,070 $ 1,904
Accounts payable and accrued liabilities 6,693 1,881
Deferred revenue 4,032 8,802
Due to shareholders - 208
Long-term debt, including current portion 7,009 7,446
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25,804 20,241
SHARE CAPITAL 26,644 22,300
OTHER PAID-IN CAPITAL 136 -
DEFICIT (7,037) (9,775)
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19,743 12,525
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$ 45,547 $ 32,766
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</TABLE>
<TABLE>
<CAPTION>
<S> <C>
"TIMOTHY GAMBLE" "W.D. CAMERON WHITE"
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DIRECTOR DIRECTOR
</TABLE>
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Peace Arch Entertainment Group Inc. (formerly Vidatron Entertainment Group Inc.)
Consolidated Statement of Operations and Deficit
For the Nine Months Ended May 31, 1999 and 1998 (Unaudited)
(in accordance with Generally Accepted Accounting Principals in Canada)
(in thousands of Canadian dollars, except earnings per share)
<TABLE>
<CAPTION>
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Three Months Ended Nine Months Ended
1999 1998 1999 1998
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<S> <C> <C> <C> <C>
Revenue $ 8,729 $ 1,254 $ 38,981 $ 17,487
Expenses
Amortization of film and television programs 5,592 106 30,998 12,567
Other costs of production and sales 325 664 1,833 2,530
Amortization other 147 111 352 235
Selling, general and administration 668 585 1,998 1,508
Interest 403 188 892 392
Foreign exchange (gain) loss 730 (139) 390 (173)
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7,865 1,515 36,463 17,059
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Earnings from operations before taxes 864 (261) 2,518 428
Income taxes 466 - 1,111 -
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Net earnings for the period $ 398 $ (261) $ 1,407 $ 428
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Net earnings per common share $ 0.13 $ (0.10) $ 0.46 $ 0.17
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Weighted average number of shares
outstanding during the period (000's) 3,026 2,504 3,026 2,500
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Peace Arch Entertainment Group Inc. (formerly Vidatron Entertainment Group Inc.)
Consolidated Statement of Cash Flows
For the Nine Months Ended May 31, 1999 and 1998 (Unaudited)
(in accordance with Generally Accepted Accounting Principals in Canada)
(in thousands of dollars)
<TABLE>
<CAPTION>
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Three Months Ended Nine Months Ended
1999 1998 1999 1998
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<S> <C> <C> <C> <C>
Cash flows provided by (used for):
Cash flows from operating activities:
Net earnings (loss) $ 399 $ (261) $ 1,407 $ 428
Items not involving cash:
Amortization 5,739 341 31,350 12,802
Income taxes 139 - 428 -
Long term debt discount 87 - 87 -
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6,364 80 33,272 13,230
Changes in non-cash operating working capital 1,768 (113) (4,268) (1,691)
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Cash flows provided by (used for) operating
activities 8,132 (33) 29,004 11,539
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Cash flows from investing activities:
Investments in marketable securities (105) - (105) -
Investments in film productions (4,043) (407) (33,350) (13,673)
Decrease (increase) in deferred costs (296) 91 (393) 56
Property and equipment acquired (105) (329) (246) (600)
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Total cash used for investing activities (4,549) (645) (34,094) (14,217)
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Cash flows from financing activities:
Issue of common shares - 2,974 - 2,976
Increase (repayments) in due to - (318) (386) 186
directors
Increase (repayments) in bank (1,286) 564 5,421 959
indebtedness
Increase in long-term debt - 500 1,200 1,774
Repayment of long-term debt (1,182) (71) (1,462) (1,613)
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Cash flows provided by (used for) financing (2,468) 3,649 4,773 4,282
activities
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Increase (decrease) in cash and cash 1,115 2,971 (317) 1,604
equivalents
Cash position, beginning of period 444 377 1,876 1,744
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Cash position, end of period $ 1,559 $ 3,348 $ 1,559 $ 3,348
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Supplementary information:
Interest paid 403 189 892 392
Income taxes paid - - 7 -
Non-cash transactions:
Property acquired through increase - - - 4,100
in long-term debt
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Peace Arch Entertainment Group Inc. (formerly Vidatron Entertainment Group Inc.)
Notes to Consolidated Financial Statements
For the Nine Months Ended May 31, 1999 and 1998 (Unaudited)
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Note 1. Share Capital
Effective July 14, 1999, the Company consolidated its common shares on a basis
of one Class A Multiple Voting Share and one Class B Subordinate Voting Share
for five old shares. The accompanying financial statements give retroactive
effect to this change in capital structure.
The following shares are issued and fully paid for and have been restated to
reflect the share consolidation:
<TABLE>
<CAPTION>
Total number of shares outstanding (000's)
<S> <C> <C> <C> <C>
Class A Multiple Voting Shares 1,513 1,406 1,513 1,406
Class B Subordinate Voting Shares 1,513 1,406 1,513 1,406
</TABLE>
Outstanding May 31, 1999 were 393,700 stock options at an average price of
$10.97 per common share and 100,000 warrants exercisable at $6.25 on or before
October 21, 2000.
Note 2. Subsequent events
Subsequent to May 31,1999 10,000 (25,000 pre-consolidation) incentive stock
options were exercised at a price of $7.50 ($3.00 pre-consolidation) per common
share.
On July 29, 1999, the Company offered by prospectus in the U.S. shares at a
price of $5.00 (U.S.) per share. A registration statement relating to these
shares has been filed with the Securities and Exchange Commission and has become
effective.
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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.
PEACE ARCH ENTERTAINMENT GROUP INC.
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(Registrant)
Date August 5, 1999 By /s/ Juliet Jones
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Juliet Jones
Chief Financial Officer
