FORM 10-Q SB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended December 31, 1999
COMMISSION FILE NUMBER: 24-3948
OASIS ENTERTAINMENT'S FOURTH MOVIE PROJECT, INC.
(Exact name of Registrant as specified in its charter)
Nevada 76-0528600
(Jurisdiction of Incorporation) (I.R.S. Employer Identification No.)
24843 Del Prado, Suite 326 Dana Point, California 92629
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (949) 488-0736
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: 14,810,000
Yes [] No [x] (Indicate by check mark whether the Registrant (1) has filed
all report 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) has been subject
to such filing requirements for the past 90 days.)
As of December 31, 1999, the number of shares outstanding of the Registrant's
Common Stock was 14,810,000.
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PART I: FINANCIAL INFORMATION
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ITEM 1. FINANCIAL STATEMENTS
Attached as Exhibit FQ1-99 hereto and incorporated herein by this reference
are consolidated unaudited financial statements for the year ended September 30,
1999, and the three months ended December 31, 1999.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(A) CASH REQUIREMENTS AND OF NEED FOR ADDITIONAL FUNDS, TWELVE MONTHS. This
Company has no immediate or forseeable need for additional funding, from sources
outside of its circle of shareholders, and their consultants, during the next
twelve months. The expenses of its audit, legal and professional requirements,
including expenses in connection with this 1934 Act Registration of its common
stock, have been and continue to be advanced by its management and principal
shareholder. Management believes that no significant cash or funds will be
required for its Management to evaluate possible transactions, at such time as
it begins its search. The Registrant enjoys the non-exclusive use of office,
telecommunication and incidental supplies of stationary, provided by its
Officers and Attorneys, who are related to its sole Consultant. These Officers,
Directors, and Attorneys of these issuer are substantially the same as those of
its sole consultant, such that its maintenance expenses are minimal and
manageable during this period and for the foreseeable future.
(B) DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
We produced one full-length movie entitled "The Blood Game" intended for
adult video and cable release. Its subject matter is adventure, and it contains
nudity and violence. It was completed in November of 1999. The movie was
produced for a cost of $174,360. This cost is carried as an investment and had
not been written off. We continue to hope to recover these costs by eventual
marketing of this motion picture. We have as yet been unsuccessful in our
efforts to sell or distribute this movie. While we have not abandoned our
intention to market our production, there are no assurances that we will be able
to sell or distribute this movie. If we are unsuccessful in these efforts, or if
there is only limited distribution of the movie, then all or a part of the
production cost may be lost.
BLOOD GAME. The subject of the movie is an erotic action thriller based upon a
man's struggle to rescue a woman from a gang of weekend warriors and who winds
up having to rescue himself. The movie was completed in November 1999. The
distribution efforts began in late December 1999 when over sixty preview copies
were sent to distributors accepting this type of genre. The distribution
consisted of media packets containing copies of the film and trailer, a one
sheet on the movie and stars, and a personalized letter to the individual
distributors. The media packets were received on or around January 10, 2000.
There were two responses that proposed purchasing and/or distributing options,
Troma Films and Victory Multimedia. These negotiations are currently in
progress, however, they have been slow and unassuring of a profitable
distribution and/ or purchase agreement.
Due to the distribution problems encountered with the "Blood Game" and due
to recent changes in the entertainment industry regarding the technological
demands of producing, the Officers and Directors of Registrant have reviewed and
analyzed the current business plan of "producing low budget movies." The
business analysis concluded that the current business plan projected diminishing
returns and great margins of risk. The technology in the movie industry was
changing so rapidly that the cost for production may exceed gross revenue for
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"made-for-cable and video features." The industry trade publications predicted
that the following two years would see an emergence of the major movie studios
into the smaller markets such as "made-for-cable and video features,"
independent films, and Internet programming due to the changes in market demands
for content, medium and genre. The Registrant also lacks the capital resources
presently to fund multiple productions in one period, which is a growing
necessity to compete in the industry. Accordingly, we may seek additional
funding from our existing shareholders or the public, to attempt further
production, but we have not determined whether such a course is in the best
interests of our shareholders.
INFOMERCIALS. Meanwhile, an opportunity to produce and finance direct response
television programs arose. An emerging "Direct Response" company, Reliant
Interactive Media Corp. ("Reliant") approached the Registrant to finance and
co-produce direct-response television and electronic retailing programs. Reliant
is a full reporting public company trading under the symbol "RIMC" on the OTCBB.
After extensive due diligence, we concluded that the potential for profit and
growth in this new opportunity is attractive. We have accordingly expanded the
scope of our business to include and emphasize direct-response retailing
production. We have begun by entering into a contract with Reliant for financing
and co-producing three (3) direct-response television programs. In the Agreement
between Reliant and Registrant, dated March 24, 1999, we provided $250,000 to
Reliant for production of three infomercials. In consideration of this
financing, we received 250,000 shares of common stock of Reliant and royalties
equal to 2% of the adjusted gross revenues received by Reliant up to a maximum
of $625,000. Thereafter, the royalty will be reduced to 1%. To date, no
royalties have been paid to Registrant under this Agreement. The first of the
three projects did not test well and was abandoned. The remaining two projects
tested more favorably and may yet generate royalty revenues.
In a separate transaction we made a loan of $300,000 to Reliant of which
the sum of $113,500 is presently unpaid. The note included interest at 10% per
annum. As of December 31, 1999, principal and accrued interest owing to us stood
at $116,906.
As additional consideration for this loan and forebearance as to prompt
repayment, Reliant issued us an additional 5,000 shares of its common stock.
Reliant has notified Registrant that no additional financing is required
from Registrant, at the present time. We continue to correspond with Reliant
with a view to participation in future project as may become attractive for our
investment.
A comparison of the corresponding three months of 1999 and 1998 reflect
only modest expenses more recently than in the former period. The difference is
due to the fact that the former period involved considerable production
expenses, while the current period does not. Our operations in the current
period have involved legal, professional and audit expenses principally.
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGE IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
None
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ITEM 5. OTHER INFORMATION
Our registration statement was voluntarily filed pursuant to Section
12(g) of the Securities Exchange Act of 1934, in order to comply with the
requirements of National Association of Securities Dealers for quotation on the
Over-the-Counter Bulletin Board, often called OTCBB . This Registrant's common
stock is not presently quoted on any exchange at the present time. The
requirements of the OTCBB are that the financial statements and information
about the Registrant be reported periodically to the Commission and be and
become information that the public can access easily. This Registrant wishes to
report and provide disclosure voluntarily, and will file periodic reports in the
event that its obligation to file such reports is suspended under the Exchange
Act. If and when this 1934 Act Registration is effective and clear of comments
by the staff, this Registrant will be eligible for consideration for the OTCBB
upon submission of one or more NASD members for permission to publish quotes for
the purchase and sale of the shares of the common stock of the Registrant.
Our Form 10-SB has become effective by operation of law but has not yet
cleared comments by the Securities and Exchange Commission.
While we have no present intention of doing so, it is possible that we may
become the subject of a Reverse Acquisition at some undetermined future time.
A reverse acquisition is the acquisition of a private ( Target ) company by a
public company, by which the private company's shareholders acquire control of
the public company. We have not determined to pursue a reverse acquisition
transactions, although we disclose that possibility, nor have we identified any
acquisition target. In the event that such a transactions is determined to be
pursued, we cannot project what the intentions of such an unidentified target
might be, for engaging in a reverse acquisition. We can evaluate what be believe
are the general advantages and disadvantages for such a target, in considering a
reverse acquisition. First, a reverse acquisition does not register any shares
of stock for sale or for resale. It is not a substitute for a 1933 Act
Registration of shares for sale or resale. Shares which may be issued by us, in
connection with such an acquisition would be restricted securities and would not
be freely tradeable except in compliance with the holding periods and other
provisions of Rule 144. We believe that the advantage to such a target company,
in choosing a reverse acquisition with a public company would be its
quotablility, so that a market price for its shares might be determinable, and
so that when, after such an acquisition, the new resulting company may engage in
capital formation, its prospective investors might obtain market quotes to
assist them in making investment decisions. While no such arrangements or plans
have been adopted or are presently under consideration, it would be expected
that a reverse acquisition of a target company or business, if such a
transaction were determined to be pursued by us, would be associated with some
private placements and/or limited offerings of common stock for cash. Such
placements, or offerings, if and when made or extended, would be made with
disclosure and reliance on the businesses and assets to be acquired, and not
upon our the present condition.
ITEM 6. REPORTS ON FORM 8-K
None
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EXHIBIT INDEX
FINANCIAL STATEMENTS AND DOCUMENTS
FURNISHED AS A PART OF THIS REGISTRATION STATEMENT
Exhibit FQ1-99: Financial Statements (Un-Audited) for the three months
ended December 31, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Form 10-Q Report for the Quarter ended December 31, 1999, has been signed below
by the following person on behalf of the Registrant and in the capacity and on
the date indicated.
May 12, 2000
OASIS ENTERTAINMENT'S FOURTH MOVIE PROJECT, INC.
by
/s/ /s/ /s/
Kirt W. James J. Dan Sifford Karl E. Rodriguez
President/Director Secretary-Treasurer General Counsel
/Director /Director
<PAGE>
EXHIBIT FQ1-99
UN-AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED SEPTEMBER 30, 1998, AND THE
THREE MONTHS ENDED DECEMBER 31, 1999
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OASIS ENTERTAINMENT'S FOURTH MOVIE PROJECT, INC.
BALANCE SHEET (UNAUDITED)
For the fiscal years ended September 30, 1998 and 1999
And the three months ended December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C>
December 31, September 30,
---------------
1999 1999 1998
-------------- --------------- --------
ASSETS
CURRENT ASSETS
Cash $ 490 $ 3,151 $150,000
-------------- --------------- --------
TOTAL CURRENT ASSETS 490 3,151 150,000
OTHER ASSETS
Investments 255,000 255,000 0
-------------- --------------- --------
TOTAL OTHER ASSETS 255,000 255,000 0
TOTAL ASSETS $ 255,490 $ 258,151 $150,000
============== =============== ========
LIABILITIES & STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable 2,644 2,644 0
Notes payable - related parties 139,095 125,800 0
-------------- ---------------
TOTAL LIABILITIES 141,739 128,444 0
STOCKHOLDERS' EQUITY
Common Stock, $.001 par value; authorized 100,000,000
shares; issued and outstanding, 11,500,000 shares,
14,810,000 shares and 14,810,000 shares respectively 14,810 14,810 11,500
Additional Paid-In Capital 470,818 470,818 138,500
Notes receivable - related parties (161,782) (161,782) 0
Accumulated Equity (Deficit) (210,095) (194,139) 0
-------------- --------------- --------
Total Stockholders' Equity 113,751 129,707 150,000
-------------- --------------- --------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 255,490 $ 258,151 $150,000
============== =============== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
OASIS ENTERTAINMENT'S FOURTH MOVIE PROJECT, INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
For the fiscal years ended September 30, 1998 and 1999
And the three months ended December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
From inception on
For the three For the April 9,1998
months ended Year ended through
December 31, September 30, December 31,
---------------
1999 1998 1999 1999
--------------- ------------ --------------- -------------------
Revenues $ 0 $ 0 $ 0 $ 0
--------------- ------------ --------------- -------------------
General and administrative 15,956 119,804 214,396 230,352
--------------- ------------ --------------- -------------------
Total expenses 15,956 119,804 214,396 230,352
Net Income (Loss) ($15,956) ($119,804) ($214,396) ($230,352)
=============== ============ =============== ===================
Other income (expense)
Interest expense (4,628) (4,628)
Interest income 506 24,885 25,391
------------ --------------- -------------------
Net Loss (15,956) (119,298) (194,139) (209,589)
Loss per Share ($0.0011) ($0.0104) ($0.0135) ($0.0159)
=============== ============ =============== ===================
Weighted Average
Shares Outstanding 14,810,000 $11,478,255 $ 14,393,116 $ 13,144,128
=============== ============ =============== ===================
</TABLE>
The accompanying notes are an integral part of these financial statements.
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OASIS ENTERTAINMENT'S FOURTH MOVIE PROJECT, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
For the period from inception of the Development Stage
On April 9, 1998, through September 30, 1998, for September 30, 1999
And the three months ended December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Additional Accumulated Total Stock-
Common Par Paid-In Equity holders' Equity
Stock Value Capital (Deficit) (Deficit)
---------- ------- ------------ ------------- -----------------
Common Stock issued at inception 10,000,000 $10,000 ($10,000) $ 0 $ 0
Common Stock issued for
cash at $0.10 per share 1,500,000 1,500 148,500 0 0
Net loss during period 0 0 0 0 0
---------- ------- ------------ ------------- -----------------
Balances at September 30, 1998 11,500,000 11,500 138,500 0 150,000
Common Stock issued for
cash at $0.10 per share 3,310,000 3,310 327,690 0 0
Accrued interest on notes to related
parties recorded as contributed capital 0 0 4,628 0 0
Net Loss for the period 0 0 0 (194,139) 0
Balances at September 30, 1999 14,810,000 $14,810 $ 470,818 ($194,139) $ 291,489
Net Loss for the period 0 $ 0 $ 0 ($15,956) $ 0
Balances at December 31, 1999 14,810,000 $14,810 $ 470,818 ($210,095) $ 275,533
</TABLE>
The accompanying notes are an integral part of these financial statements.
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OASIS ENTERTAINMENT'S FOURTH MOVIE PROJECT, INC.
STATEMENTS OF CASH FLOW (UNAUDITED)
For the fiscal years ended September 30, 1998 and 1999
And the three months ended December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C>
From inception on
For the three April 9,1998
months ended through
December 31, December 31,
---------------
1999 1998 1999
--------------- ----------- -------------------
Operating Activities
Net Income (Loss) ($15,956) ($119,298) ($210,095)
(Increase) in interest receivable 0 0 (15,482)
Increase in accounts payable 0 0 3,644
--------------- ----------- -------------------
Net Cash from Operations (15,956) (119,298) (221,933)
Cash flows from investing activities
Cash paid for investments 0 (121,000) (255,000)
Net cash (used) by investing activities 0 (121,000) (255,000)
--------------- ----------- -------------------
Cash flows from financing activities
Proceeds paid on notes receivable - related parties 0 0 (246,300)
Principal received on notes receivable - related parties 0 0 100,000
Proceeds received on notes payable - related parties 13,295 0 139,095
Common stock issued for cash 0 240,700 481,000
Contributed capital 0 0 4,628
--------------- ----------- -------------------
Net cash provided by financing activities 13,295 240,700 478,423
Net increase (decrease) in Cash (2,661) 402 490
Cash at beginning of period 3,151 -0- -0-
Cash as of Statement Date $ 490 $ 402 $ 490
=============== =========== ===================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
OASIS ENTERTAINMENT'S FOURTH MOVIE PROJECT, INC.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1999
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
Oasis Entertainment's Fourth Movie Project, Inc. (the Company) was incorporated
on April 9, 1998 under the laws of the State of Nevada, primarily for the
purpose of producing film and video for theatrical, cable and televised
releases.
The Company has limited operations, assets and liabilities. Accordingly, the
Company is dependent upon management and/or significant shareholders to provide
sufficient working capital to preserve the integrity of the corporate entity
during this phase. It is the intent of management and significant shareholders
to provide sufficient working capital necessary to support and preserve the
integrity of the corporate entity.
b. Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a September 30 year end.
c. Cash and Cash Equivalents
Cash equivalents include short-term, highly liquid investments with maturities
of three months or less at the time of acquisition.
d. Basic Loss Per Share
The computation of basic loss per share of common stock is based on the weighted
average number of shares outstanding during the period of financial statements.
e. Provision for Taxes
At December 31, 1999, the Company had net operating loss carryforwards of
approximately $210,000 that may be offset against future taxable income through
2014. No tax benefit has been reported in the financial statements, because the
Company believes there is a 50% or greater chance the carryforwards will expire
unused. Accordingly, the potential tax benefits of the loss carryforwards are
offset by a valuation amount of the same amount.
f. Additional Accounting Policies
Additional accounting policies will be established once planned principal
operations commence.
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OASIS ENTERTAINMENT'S FOURTH MOVIE PROJECT, INC.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1999
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
g. Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
NOTE 2 - GOING- CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company does not have significant cash or other material
assets, nor does it have an established source of revenues sufficient to cover
its operating costs and to allow it to continue as a going concern. It is the
intent of the Company to produce and earn revenues from the sale of 'B genre'
movies. Until this occurs, shareholders of the Company have committed to
meeting the Company's operating expenses.
NOTE 3 - ROYALTY AGREEMENT - RELATED PARTY
On March 24, 1999, the Company entered into an agreement with Reliant
Interactive Media Corporation ("Reliant"), a shareholder of the Company, under
which the Company committed to provide funding for three "infomercials' Reliant
was to produce. Under the terms of this agreement, the Company provided a total
of $250,000 for this purpose. As consideration for this funding, Reliant was to
issue 250,000 restricted, post-split shares of its common stock to the Company
(see Note 4). Also, Reliant agreed to pay the Company a royalty equal to two
percent of the adjusted gross revenues created by the infomercials until the
Company had received $625,000. The royalty would be reduced to one percent of
the revenues thereafter.
As of December 31, 1999, Reliant had produced only two of the three
infomercials. Both were unprofitable, and produced no royalties for the
Company. The third infomercial is expected to be produced in early 2000.
<PAGE>
OASIS ENTERTAINMENT'S FOURTH MOVIE PROJECT, INC.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1999
NOTE 4 - INVESTMENT
On March 24, 1999, the Company entered into an agreement with Reliant
Interactive Media Corporation ("Reliant") under which the Company provided
funding of $250,000 to Reliant (see Note 3). As consideration for this funding,
Reliant contracted to issue 250,000 restricted, post-split shares of its common
stock to the Company upon completion of the funding. The investment has been
recorded at its cost of $250,000.
On May 25, 1999, the Company entered into another agreement with Reliant under
which the Company loaned $200,000 to Reliant. As part of the consideration for
this loan, Reliant agreed to issue 5,000 shares of its restricted common stock
to the Company. The investment has been recorded at a cost of $1.00 per share,
based on the determination of the previous agreement.
NOTE 5 - NOTES RECEIVABLE - RELATED PARTIES
As of December 31, 1999, the Company had a total of $161,782 in notes receivable
from related parties. All of the notes are unsecured. Three of the four notes
(totaling $46,300) are non-interest bearing and have no specific payback terms.
The fourth note, totaling $115,482 is receivable from Reliant Interactive Media
Corp (see Note 3) and bears a ten percent (10%) interest rate.
NOTE 6 - NOTES PAYABLE - RELATED PARTIES
As of December 31, 1999, the Company had a total of $139,095 in notes payable to
related parties. All of the notes are non-interest bearing, and have no
specific payback terms. All the notes are unsecured. A 10% interest rate has
been imputed for these loans, which has been recorded as contributed capital in
the financial statements.
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