U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
MARCH 31, 2000
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: 000-28219
ECLIPSE ENTERTAINMENT GROUP, INC.
(Exact name of registrant as specified in its charter)
Nevada 91-1766849
(State or jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
10990 N.E. 8th Street, Suite 900, Bellevue, Washington 98004
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (425) 990-5969
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001 Par Value
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) been subject to such filing
requirements for the past 90 days. Yes X No .
As of March 31, 2000, the Registrant had 12,016,140 shares
of common stock issued and outstanding.
Transitional Small Business Disclosure Format (check one): Yes
No X .
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION PAGE
ITEM 1. FINANCIAL STATEMENTS
BALANCE SHEET AS OF MARCH 31, 2000 3
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED
MARCH 31, 2000 AND MARCH 31, 1999 4
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED
MARCH 31, 2000 AND MARCH 31, 1999 5
NOTES TO FINANCIAL STATEMENTS 6
ITEM 2. PLAN OF OPERATION 7
PART II
ITEM 1. LEGAL PROCEEDINGS 10
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 10
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 10
ITEN 4. SUBMISSION OF MATTERS TO A VOTE
OF SECURITY HOLDERS 11
ITEM 5. OTHER INFORMATION 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 11
SIGNATURE 11
PART I.
ITEM 1. FINANCAL STATEMENTS.
ECLIPSE ENTERTAINMENT GROUP, INC.
BALANCE SHEET
(Unaudited)
March 31, 2000
ASSETS
Cash $ 183,973
Note receivable 266,000
Film costs 1,109,895
Property and equipment, net 582
Other assets 685
Total assets $ 1,561,135
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Accounts payable and accrued expenses $ 83,119
Due to related party 437,004
Total liabilities 520,123
Stockholders' equityPreferred stock, $.001 par value; 10 million
shares authorized; no shares issued -
Common stock, $.001 par value; 50 million
shares authorized;
12,016,140 shares issued and outstanding 12,016
Stock subscriptions payable 210,000
Additional paid-in capital 1,364,360
Accumulated deficit (545,364)
Total stockholders' equity 1,041,012
Total liabilities and stockholders' equity $ 1,561,135
See Accompanying Notes to Financial Statements
ECLIPSE ENTERTAINMENT GROUP, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
For the Three For the Three
Months Ended Months Ended
March 31, 2000 March 31, 1999
Revenues $ -- $ --
General and administrative
Expenses 20,061 66,750
Loss before provision for
income taxes (20,061) (66,750)
Provision for income taxes -- --
Net loss (20,061) (66,750)
Basic and fully diluted loss per
common share (nil) (nil)
Weighted average number of common
shares used in per share calculation 12,016,140 9,710,620
See Accompanying Notes to Financial Statements
ECLIPSE ENTERTAINMENT GROUP, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
For the Three For the Three
Months Ended Months Ended
March 31, 2000 March 31, 1999
Cash flows from financing activities:
Net income $ (20,061) $ (66,750)
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation 5 51
Services paid with common stock -- 41,502
Changes in operating assets and
liabilities:
Increase in film costs -- (97,101)
Decrease in accounts payable and
accrued expenses (6,193) (26,758)
Increase in due to related party 263,840 37,840
Net cash provided (used) by
perating activities 237,637 (111,216)
Cash flows from investing activities:
Proceeds from issuance of note
Receivable (266,000) --
Net cash used by investing activities (266,000) --
Cash flows from financing activities:
Proceeds from stock subscriptions
Payable 210,000 --
Proceeds from common stocks issued -- 115,425
Net cash provided by financing activities 210,000 115,425
Net change in cash 181,637 4,209
Cash-beginning balance 2,336 --
Cash-ending balance $ 183,973 $ 4,209
See Accompanying Notes to Financial Statements
ECLIPSE ENTERTAINMENT GROUP, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying consolidated financial statements have been
prepared in accordance with U.S. Securities and Exchange
Commission ("SEC") requirements for interim financial statements.
Therefore, they do not include all of the information and
footnotes required by generally accepted accounting principles
for complete financial statements. The financial statements
should be read in conjunction with the year ended December 31,
1999 financial statements of Eclipse Entertainment Group, Inc.
("Registrant") included in the Form 10-KSB filed with the SEC by
the Registrant.
The results of operations for the interim periods shown in this
report are not necessarily indicative of results to be expected
for the full year. In the opinion of management, the information
contained herein reflects all adjustments necessary to make the
results of operations for the interim periods a fair statement of
such operation. All such adjustments are of a normal recurring
nature.
NOTE 2 - RELATED PARTY TRANSACTIONS
Due to related parties at March 31, 2000 consist of the
following:
Advances payable to an entity controlled by an
officer and shareholder of the Registrant represent
advances, unsecured, bearing no interest, and due on
demand $323,504
Promissory note payable to a shareholder, unsecured,
bearing interest at 8%, and due on demand 113,500
Total due to related parties $437,004
ITEM 2. PLAN OF OPERATION.
The following discussion should be read in conjunction with the
financial statements of the Resigtrant and notes thereto
contained elsewhere in this report.
Twelve Month Plan of Operation.
The business objectives of the Company, as developed by its Board
of Directors, are strongly focused on the production and
acquisition of action oriented feature films with strong domestic
and universal appeal that have been developed and/or produced
within well managed low to medium budgets. The Company intends
to develop a well integrated portfolio of these feature films by
producing or co-producing one or two action feature films each
year and by acquiring the rights to other similar films which are
available at attractive prices.
The Company has entered into a distribution agreement with Westar
Entertainment, Inc. ("Westar") on January 1, 1998 pursuant to
which this firm markets the Company's products both domestically
and worldwide (see Exhibit 10.1 to this Form 10-QSB) (thus, the
Company will be obligated to distribute its films exclusively
through this company). Under this agreement, the Company and
Westar Entertainment, Inc. will share gross receipts on a 50-50
basis. Under this agreement, Westar has complete authority to
distribute the Company's films. Any and all distribution expense
incurred by Westar are to be reimbursed to Westar by the Company.
The initial term of this agreement is five years; it is to
continue for successive one year periods thereafter, unless
cancelled by either party on sixty days prior written notice.
Working with Westar, the Company is working toward establishing a
strong network of domestic and foreign buyers and will produce
and/or acquire motion pictures that meet their needs in terms of
content and cost. The Company intends to develop its portfolio
to respond quickly and effectively to market needs, and has
attended and will continue to attend the major film markets in
order to stay in touch with the dictates of the domestic and
international markets. The major markets include the American
Film Market ("AFM") in Santa Monica, California, the Cannes Film
Market (Marche du Film de Cannes) in Cannes, France, and MIFED
("E.P. Fiera Internazionale Di Milano") in Milan, Italy.
The AFM is an annual one week event which takes place in Santa
Monica, California in late February. Distributors of pictures
and buyers of rights to exhibit pictures from around the world
meet to make deals. Westar rents a suite each year at the Loews
Hotel which is the focal site of the market where there are eight
floors of exhibitor suites. Buyers come to the suite to
negotiate purchases of rights for territories. Distributors and
buyers are registered attendees at the Market. There are
scheduled screenings of pictures at local movie theaters. The
annual Market is organized by the American Film Marketing
Association. Associated with the Market are film finance
conferences and location exhibitions.
MIFED is an annual five day film Market that takes place in
Milan, Italy at the beginning of October. The venue is the Fiera
di Milano (Milan Convention Center) and operates under the same
aforementioned system as the American Film Market except that
films are viewed in screening rooms and theatres located within
the Fiera di Milano itself. Buyers and Distributors do not have
to leave the convention center.
The Company has acquired the worldwide distribution rights to the
action/adventure films Beretta's Island and Double Cross through
a distribution agreement dated September 2, 1997, with Franco
Columbu, an officer and director of the Company (this agreement
also covered another film to be called Assault of the Lost
Goddess, which was not produced) (see Exhibit 10.2 to this Form
10-QSB). The Company paid the sum of $75,000 for the rights to
Beretta's Island and $150,000 for the rights to Double Cross; the
gross receipts from the distribution from each film are to be
shared equally. Under the terms of this agreement, the Company
has a right of first refusal for a term of five years to meet any
bona fide offer to produce, finance, or develop any film project
which Mr. Columbu is developing as a producer. Also, the Company
has the right to use Mr. Columbu's name and likeness in
connection with the distribution of these films.
In addition, the Company has entered into a distribution
agreement dated January 30, 1997 with Pinoy Productions, Inc.
covering the martial arts film The Process (Arthur Birzneck, an
officer and director of the Company, is also President of that
company) (see Exhibit 10.3 to this Form 10-QSB). The Company
paid the sum of $100,000 for the rights to The Process; the gross
receipts are to be shared as follows: (a) on gross receipts to
$250,000 U.S.: 100% to the Company; (b) on gross receipts between
$250,000 U./S. and $1,000,000 U.S.: 75% to the Company and 25% to
the licensor; (c) on gross receipts between $1,000,000 U.S. and
$2,500,000 U.S.: 80% to the Company and 20% to the licensor; and
(d) on gross receipts above $2,500,000 U.S.: 85% to the Company
and 15% to the licensor. Under this agreement, which has an
initial term of fifty years, the Company has the right to deduct
from gross receipts all reasonable expenses incurred in the
distribution of these films. This distribution agreement is
exclusive to the Company and has no limitation on the territory.
Beretta's Island stars Franco Columbu (MR. OLYMPIA) and Ken
Kercheval with a special appearance by Arnold Schwartzenegger.
Double Cross stars Franco Columbu, William Smith (Conan), Frank
Stallone and Barbara Niven. The Process stars and is directed by
Ernie Reyes, Jr. (Red Sonja, Ninja Turtles I & II), Cori Nemec
(Drop Zone) and Ernie Reyes, Sr. (Surf Ninjas). Under the
agreement with Westar, the rights obtained by the Company to
these three films have been assigned to Westar for distribution.
To date, Westar has, in the ordinary course of business, entered
into distribution agreements covering the films noted above.
Even though Westar anticipates that such distributions will
result in gross receipts being generated during the current
calendar year, such receipts, under the Westar agreement, must
first be applied to expenses incurred by Westar with respect to
trailers, art work, promotional materials, delivery materials,
advertising, and any and all other expenses incurred for the
sales, marketing and distribution of these films. Therefore, the
Company may not realize any revenue from these distributions.
Although the Company is, at the moment, focused on the
production, co-production and acquisition of low to medium budget
action films, it is also within its mandate to branch out into
similar genres of television programming as well as documentaries
and docudramas within budgetary constraints. Longer-range
projects include the acquisition of a movie studio project in
Sardinia, Italy, the formation or acquisition of a domestic video
label, and acquisition of a music division. However, such
projects are only possibilities and may not be realized. The
Company does not currently have any agreements, commitments, or
understandings to make any acquisitions.
For the period from the Registrant's inception through March
31, 2000, there were no revenues and operating activities
related primarily to establishing the management and
operating infrastructure. The Registrant created the ability to
acquire and license worldwide or sell distribution rights to
independently produced feature films. The Registrant can
obtain rights to motion pictures at various stages of completion
(either completed, in production or in development) and licenses
distribution rights (including video, pay television, free
television, satellite and other ancillary rights) of motion
pictures to various sub-distributors in the United States and in
foreign markets.
Film costs represent a major component of the
Registrant's assets. Film costs represent those costs
incurred in the acquisition and distribution of motion
pictures or in the acquisition of distribution rights to motion
pictures. This includes minimum guarantees paid to producers
or other owners of film rights, recoupable distribution and
production costs. The Registrant will amortize film costs using
the individual film forecast method under which film costs are
amortized for each film in the ratio that revenue earned in the
current period for such film bears to management's estimate of
the total revenue to be realized from all media and markets for
such film. The Registrant currently has not generated
revenues from such film costs, however, management believes
that distribution will commence in the early part of the year
2000. Net income in future years is in part dependent upon the
Registrant's amortization of its film costs and may be
significantly affected by periodic adjustments in such
amortization.
General and administrative expenses consist of
related general corporate functions, including marketing
expenses, professional service expenses and travel. The
Registrant expects general and administrative expenses to
increase as it commences to promote and market its motion picture
distribution rights. No material capital expenditures were made
during the quarter ended on March 31, 2000.
Risk Factors Connected with Plan of Operation.
(a) Only Limited Prior Operations.
The Registrant has only limited operations and is subject to all
the risks inherent in the creation of a new business. Since the
Registrant's principal activities to date have been limited to
organizational activities and prospect development, it has no
record of any revenue-producing operations. Consequently, there
is only a limited operating history upon which to base an
assumption that the Registrant will be able to achieve its
business plans. In addition, the Registrant has only limited
assets. As a result, there can be no assurance that the
Registrant will generate significant revenues in the future; and
there can be no assurance that the Registrant will operate at a
profitable level. If the Registrant is unable to obtain
customers and generate sufficient revenues so that it can
profitably operate, the Registrant's business will not succeed.
(b) Need for Additional Financing May Affect Operations.
Current funds available to the Registrant will not be adequate
for it to be competitive in the areas in which it intends to
operate. Therefore, the Registrant will need to raise additional
funds in order to fully implement its business plan. The
Registrant will attempt to raise approximately $1.5 million in
additional funds over the next 12 months through a private
placement for production of its next feature film. However,
there can be no assurance that the Registrant will be successful
in raising such additional funds. Regardless of whether the
Registrant's cash assets prove to be inadequate to meet the
Registrant's operational needs, the Registrant might seek to
compensate providers of services by issuance of stock in lieu of
cash.
Over the next 12 months the Registrant will continue to attend
all major sales markets to sell its film products. The
Registrant's existing capital will not be sufficient to meet
the Registrant's cash needs, including costs of its registration
and complying with its continuing reporting obligations under the
Securities Exchange Act of 1934. Accordingly, additional capital
will be required.
Since inception, the Registrant has financed operations
primarily through private placements of common stock. The
Registrant has significant ongoing liquidity needs to support its
existing business and continued growth. The Registrant's
continued operations therefore will depend upon its ability to
raise additional funds through bank borrowings, equity or debt
financing. Adequate funds may not be available when needed or
may not be available on favorable terms. If funding is
insufficient at any time in the future, the Registrant may be
unable to develop or enhance its service offering, take
advantage of business opportunities or respond to competitive
pressures, any of which could have a negative impact on the
business, operating results and financial condition. In
addition, if additional shares were issued to obtain financing,
current shareholders may suffer a dilutive effect on their
percentage of stock ownership in the Registrant.
(c) Risks in Connection with Distribution of Films.
The Registrant typically acquires distribution rights in a motion
picture for a specified term in one or more territories
and media. In some circumstances, the Registrant also
acquires the copyright to the motion picture. The
arrangements the Registrant enters into to acquire rights
may include the Registrant agreeing to pay an advance or minimum
guarantee for the rights acquired and/or agreeing to advance
print and advertising costs, obligations which are independent
of the actual financial performance of the motion picture being
distributed. The risks incurred by the Registrant increase to
the extent the Registrant takes such actions.
The Registrant also incurs significant risk to the
extent it engages in development or production activities
itself. The Registrant may, in certain circumstances, reduce
some of the foregoing risks by sub-licensing certain
distribution rights in exchange for minimum guarantees from
sub-licensees such as foreign sub-distributors. The investment
by the Registrant in a motion picture includes the cost of
acquisition of the distribution rights (including any advance or
minimum guarantee paid to the producer), the amount of the
production financed, and the marketing and distribution costs
borne.
(d) Substantial Competition.
The Registrant may experience substantial competition in its
efforts to locate and attract customers for its products. Many
competitors in the motion picture industry have greater
experience, resources, and managerial capabilities than the
Registrant and may be in a better position than the Registrant to
obtain access to attractive products. There are a number of
larger companies which will directly compete with the Registrant.
Such competition could have a material adverse effect on the
Registrant's profitability or viability.
(e) Other External Factors May Affect Viability of Registrant.
The motion picture industry in general is a speculative venture
necessarily involving some substantial risk. There is no
certainty that the expenditures to be made by the Registrant will
result in commercially profitable business. The marketability of
its products will be affected by numerous factors beyond the
control of the Registrant. These factors include market
fluctuations, and the general state of the economy (including the
rate of inflation, and local economic conditions), which can
affect peoples' discretionary spending. Factors which leave less
money in the hands of potential customers of the Registrant will
likely have an adverse effect on the Registrant. The exact
effect of these factors cannot be accurately predicted, but the
combination of these factors may result in the Registrant not
receiving an adequate return on invested capital.
(f) Control of the Registrant by Officers and Directors
Over Affairs of the Registrant.
The Registrant's officers and directors beneficially own
approximately 27% of the outstanding shares of the Registrant's
common stock. As a result, such persons, acting together, have
the ability to exercise significant influence over all matters
requiring stockholder approval. Accordingly, it could be
difficult for the investors hereunder to effectuate control over
the affairs of the Registrant. Therefore, it should be assumed
that the officers, directors, and principal common shareholders
who control these voting rights will be able, by virtue of their
stock holdings, to control the affairs and policies of the
Registrant.
(g) Success of Registrant Dependent on Management.
The Registrant's success is dependent upon the hiring and
retention of key personnel. None of the officers or directors
has any employment or non-competition agreement with the
Registrant. Therefore, there can be no assurance that these
personnel will remain employed by the Registrant. Should any of
these individuals cease to be affiliated with the Registrant for
any reason before qualified replacements could be found, there
could be material adverse effects on the Registrant's business
and prospects.
In addition, all decisions with respect to the management of
the Registrant will be made exclusively by the officers and
directors of the Registrant. Investors will only have rights
associated with minority ownership interest rights to make
decision which effect the Registrant. The success of the
Registrant, to a large extent, will depend on the quality of the
directors and officers of the Registrant. Accordingly, no person
should invest in the Shares unless he is willing to entrust all
aspects of the management of the Registrant to the officers and
directors.
(h) Conflicts of Interest May Affect Independence of Officers
and Directors.
The officers and directors have other interests to which they
devote time, either individually or through partnerships and
corporations in which they have an interest, hold an office, or
serve on boards of directors, and each will continue to do so
notwithstanding the fact that management time may be necessary to
the business of the Registrant. As a result, certain conflicts of
interest may exist between the Registrant and its officers and/or
directors which may not be susceptible to resolution.
In addition, conflicts of interest may arise in the area of
corporate opportunities which cannot be resolved through arm's
length negotiations. All of the potential conflicts of interest
will be resolved only through exercise by the directors of such
judgment as is consistent with their fiduciary duties to the
Registrant. It is the intention of management, so as to minimize
any potential conflicts of interest, to present first to the
Board of Directors to the Registrant, any proposed investments
for its evaluation.
(i) Limitations on Liability, and Indemnification, of
Directors and Officers May Result in Expenditures by the
Registrant.
The Registrant's Articles of Incorporation include
provisions to eliminate, to the fullest extent permitted by the
Nevada Revised Statutes as in effect from time to time, the
personal liability of directors of the Registrant for monetary
damages arising from a breach of their fiduciary duties as
directors. The By-Laws of the Registrant include provisions to
the effect that the Registrant may, to the maximum extent
permitted from time to time under applicable law, indemnify any
director, officer, or employee to the extent that such
indemnification and advancement of expense is permitted under
such law, as it may from time to time be in effect. Any
limitation on the liability of any director, or indemnification
of directors, officer, or employees, could result in substantial
expenditures being made by the Registrant in covering any
liability of such persons or in indemnifying them.
(j) Absence of Cash Dividends.
The Board of Directors does not anticipate paying cash
dividends on the common stock for the foreseeable future and
intends to retain any future earnings to finance the growth of
the Registrant's business. Payment of dividends, if any, will
depend, among other factors, on earnings, capital requirements
and the general operating and financial conditions of the
Registrant as well as legal limitations on the payment of
dividends out of paid-in capital.
(k) No Cumulative Voting.
Holders of the shares of common stock of the Registrant are not
entitled to accumulate their votes for the election of directors
or otherwise. Accordingly, the holders of a majority of the
shares present at a meeting of shareholders will be able to elect
all of the directors of the Registrant, and the minority
shareholders will not be able to elect a representative to the
Registrant's board of directors.
(l) No Assurance of Continued Public Trading Market; Risk
of Low Priced Securities.
Since June 27, 1997, there has been only a limited
public market for the common stock of the Registrant. The common
stock of the Registrant is currently quoted on the National
Quotation Bureau's Pink Sheets; the Registrant intends to reapply
for relisting on the Over the Counter Bulletin Board after
clearing comments on this registration statement. As a result,
an investor may find it difficult to dispose of, or to obtain
accurate quotations as to the market value of the Registrant's
securities. In addition, the common stock is subject to the low-
priced security or so called "penny stock" rules that impose
additional sales practice requirements on broker-dealers who sell
such securities. The Securities Enforcement and Penny Stock
Reform Act of 1990 ("Reform Act") requires additional disclosure
in connection with any trades involving a stock defined as a
penny stock (generally, according to recent regulations adopted
by the U.S. Securities and Exchange Commission, any equity
security that has a market price of less than $5.00 per share,
subject to certain exceptions), including the delivery, prior to
any penny stock transaction, of a disclosure schedule explaining
the penny stock market and the risks associated therewith. The
regulations governing low-priced or penny stocks sometimes limit
the ability of broker-dealers to sell the Registrant's common
stock and thus, ultimately, the ability of the investors to sell
their securities in the secondary market.
(m) Effects of Failure to Maintain Market Makers.
If the Registrant is unable to maintain a National
Association of Securities Dealers, Inc. member broker/dealers as
market makers, the liquidity of the common stock could be
impaired, not only in the number of shares of common stock which
could be bought and sold, but also through possible delays in the
timing of transactions, and lower prices for the common stock
than might otherwise prevail. Furthermore, the lack of market
makers could result in persons being unable to buy or sell shares
of the common stock on any secondary market. There can be no
assurance the Registrant will be able to maintain such market
makers.
(n) Uncertainty Due to Year 2000 Problem.
The Year 2000 issue arises because many computerized systems
use two digits rather than four to identify a year. Date
sensitive systems may recognize the year 2000 as 1900 or some
other date, resulting in errors when information using the year
2000 date is processed. In addition, similar problems may arise
in some systems which use certain dates in 1999 to represent
something other than a date. The effects of the Year 2000 issue
may be experienced after January 1, 2000, and if not addressed,
the impact on operations and financial reporting may range from
minor errors to significant system failure which could affect the
Registrant's ability to conduct normal business operations. This
creates potential risk for all companies, even if their own
computer systems are Year 2000 compliant. It is not possible to
be certain that all aspects of the Year 2000 issue affecting the
Registrant, including those related to the efforts of customers,
suppliers, or other third parties, will be fully resolved.
The Registrant currently believes that its systems are Year 2000
compliant in all material respects. The Registrant estimates
that it has incurred minimal costs of less than $10,000 related
to its Year 2000 initiative. Although management is not aware of
any material operational issues or costs associated with
preparing its internal systems for the Year 2000, the Registrant
may experience serious unanticipated negative consequences (such
as significant downtime for one or more of its suppliers) or
material costs caused by undetected errors or defects in the
technology used in its internal systems. Furthermore, the
purchasing patterns of customers may be affected by Year 2000
issues. The Registrant does not currently have any information
about the Year 2000 status of its potential material suppliers.
The Registrant's Year 2000 plans are based on management's best
estimates.
(o) Forward-Looking Statements.
The foregoing Plan of Operation contains "forward looking
statements" within the meaning of Rule 175 under the Securities
Act of 1933, as amended, and Rule 3b-6 under the Securities Act
of 1934, as amended, including statements regarding, among other
items, the Registrant's business strategies, continued growth in
the Registrant's markets, projections, and anticipated trends in
the Registrant's business and the industry in which it operates.
The words "believe," "expect," "anticipate," "intends,"
"forecast," "project," and similar expressions identify forward-
looking statements. These forward-looking statements are based
largely on the Registrant's expectations and are subject to a
number of risks and uncertainties, certain of which are beyond
the Registrant's control. The Registrant cautions that these
statements are further qualified by important factors that could
cause actual results to differ materially from those in the
forward looking statements, including, among others, the
following: reduced or lack of increase in demand for the
Registrant's products, competitive pricing pressures, changes in
the market price of ingredients used in the Registrant's products
and the level of expenses incurred in the Registrant's
operations. In light of these risks and uncertainties, there can
be no assurance that the forward-looking information contained
herein will in fact transpire or prove to be accurate. The
Registrant disclaims any intent or obligation to update "forward
looking statements."
PART II.
ITEM 1. LEGAL PROCEEDINGS.
The Registrant is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action by
or against the Registrant has been threatened.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not Applicable.
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.
(a) Reports on Form 8-K. No Reports on Form 8-K were filed
during the three month period covered this Form 10-QSB.
(b) Exhibits. Exhibits included or incorporated by reference
herein: See Exhibit Index.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) 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.
Eclipse Entertainment Group, Inc.
Dated: July 10, 2000 By: /s/ Arthur Birzneck
Arthur Birzneck, President
EXHIBIT INDEX
Number Description
3.1 Articles of Incorporation (incorporated by reference to
Exhibit 3.1 of the Form 10-SB/A filed on June 27, 2000).
3.2 Bylaws (incorporated by reference to Exhibit 3.2 of the Form
10-SB/A filed on June 27, 2000).
10.1 Distribution Agreement between the Company and Westar
Entertainment, Inc., dated January 1, 1998 (incorporated by
reference to Exhibit 10 of the Form 10-KSB filed on April 11,
2000).
10.2 Agreement between the Company and Franco Columbu, dated
September 2, 1997 (incorporated by reference to Exhibit 10.2 of
the Form 10-SB/A filed on June 27, 2000).
10.3 Distribution Agreement between the Company and Pinoy
Productions, Inc., dated January 30, 1997 (incorporated by
reference to Exhibit 10.3 of the Form 10-SB/A filed on June 27,
2000).
27 Financial Data Schedule (see below).
