FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
ANNUAL REPORT
Pursuant to Section 13 or 15(d) of the
Securities & Exchange Act of 1934
For fiscal year ended September 30, 1999
CENTURY PARK PICTURES CORPORATION
(Exact name of registrant as specified in its charter)
Minnesota 0-14247 41-1458152
- ------------------------ ----------- --------------
(State of Incorporation) (Commission (IRS Employer
File Number) Identification
Number)
4701 IDS Center, Minneapolis, Minnesota 55402
- ---------------------------------------- --------------
(Address of principal executive offices) (zip code)
Registrant's telephone number: (612) 333-5100
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK par value $.001
Registrant has (1) filed all reports to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934, during the 12 months next preceding September
30, 1998 and (2) has been subject to such filing requirements for the ninety
(90) days preceding September 30, 1999.
Disclosure of delinquent filers pursuant to Item 405 of Regulation S-K
(ss.229.405 of this chapter) is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
As of December 31, 1999, 9,886,641 common shares were outstanding. The aggregate
market value of the common shares (based upon only limited and sporadic
quotations not to exceed $1/10) of the Registrant held by non-affiliates was
$816,815.
PAGE 1
<PAGE>
PART I
ITEM 1. BUSINESS
(a) GENERAL DESCRIPTION OF BUSINESS
The Company develops, produces and markets various entertainment properties for
the motion picture, pay/cable and commercial television markets and, until
September 1995 through its then 50.1% owned subsidiary, Willy Bietak
Productions, Inc. ("WBPI"), produced and operated small touring ice shows and
theme shows appearing in theatres, casinos, and major amusement parks and
arenas. On September 29, 1995, in consideration of guarantees of certain bank
debt of WBPI, provided WBPI by its minority shareholder, the Company transferred
65,900 of its shares of WBPI common stock to such minority shareholder, thereby
reducing the Company's interest to 30%. Until December 1998 a wholly-owned
subsidiary, International Theatres Corporation ("ITC"), of the Company operated
the Chanhassen Dinner Theatre in Chanhassen, Minnesota which the Company
acquired in 1993.
On December 17, 1998 the Board of Directors passed a resolution to transfer the
Company's interest in ITC and its remaining interest in WBPI to the Company's
CEO as repayment of $100,000 in advances the Company's CEO made to the Company.
In setting the $100,000 amount the Board of Directors obtained and relied upon
an independent market analysis of ITC and WBPI.(See Liquidity and Sources of
Capital for further discussion)
The Company may be unable to continue as a going concern without raising
additional funds from outside sources. Management is uncertain as to the
likelihood of raising additional funds. (See Liquidity and Sources of Capital
for Further Discussion.)
The Company was organized under Minnesota law in 1983. The Company's executive
offices are located at 4701 IDS Center, Minneapolis, Minnesota 55402 and its
telephone number is (612) 333- 5100.
(b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
The Company's operations are attributable to one business segment. The
ownership, production, and operation of entertainment attractions.
(c) ACCOUNTANTS OPINION
The Company's independent auditors issued their opinion on the Company's
financial statements for the year ended September 30, 1999, which included an
explanatory paragraph as to substantial doubt about the Company's ability to
continue as a going concern.
PAGE 2
<PAGE>
This doubt was raised primarily due to recurring losses from operations and due
to the Company's stockholders' deficit of $1,224,096 at September 30, 1999.
(d) NARRATIVE DESCRIPTION OF BUSINESS
(i) International Theatres Corporation
On December 17, 1998 the Board of Directors in reliance upon an
independent market analysis transferred International Theatres Corporation to
the Company's CEO as partial repayment of $100,000 in advances. (See Footnote 13
to Financial Statements)
(ii) Motion Pictures, Pay/Cable, and Television
In producing entertainment properties for motion picture, pay/cable
and commercial television, the Company has limited its costs to those incurred
prior to the commencement of principal photography. It has been the Company's
intention to produce or co-produce and arrange for the distribution of primarily
feature length motion pictures with production financing derived from third
party sources. The Company has reported no revenues from motion pictures,
pay/cable and television during 1997, 1998 and 1999. At September 30, 1999, the
Company had two (2) properties in various stages of production and development
of which one (1) was substantially completed. All such properties have been
charged to expenses.
The profits of an enterprise involved in the entertainment industry
generally and, particularly, the motion picture, television and music industries
are greatly dependent upon the audience appeal of each creative product,
compared with the cost of such product's purchase, development, production and
distribution. Competition is intense both within the motion picture and
television industry and other entertainment media. The Company is in competition
with major film studios, as well as with numerous "independent" motion picture
and television production companies for the acquisition of artistic properties,
and the services of creative and technical personnel.
ITEM 2. PROPERTIES
The Company leases, as its headquarters, 1,941 square feet of office space at
4701 IDS Center, Minneapolis, Minnesota 55402. The Company's motion picture and
television operations lease 160 square feet of office space at 3575 Cahuenga
Blvd. West, Los Angeles, California 90048. Affiliates of the Company are
presently advancing the rent for this space. Management believes that there is
adequate space available in the Los Angeles area to accommodate its California
operations.
PAGE 3
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
There are no material legal proceedings that involve primary claims for damages
in excess of 10 percent of current assets of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders during the fourth quarter
of the fiscal year covered by this Report.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCK HOLDER
MATTERS
a. Price Range of Common Stock
The following table shows the range of the closing bid prices for the
Common Stock in the over-the-counter market for the fiscal years ended September
30, 1999 and 1998. Since the first quarter 1996 there was no established public
trading market for the Company's common shares. There were only limited or
sporadic quotations and none exceed $.10.
Fiscal Years 1998 and 1999 Bid Prices
-------------------------- ----------
High Low
---- ---
See above explanation
b. Number of equity security holders' accounts at December 31, 1999:
509
c. Dividends:
The Registrant has never paid any cash dividends on its Common Stock and
does not plan to pay any cash dividends in the foreseeable future.
PAGE 4
<PAGE>
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA **
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C>
Revenues $ -- $ -- $ -- $ 383,033 $ --
Income (Loss) from
Continuing Operations (67,027) (308,698) (391,748) (1,988,093) (670,721)
Income (Loss) from
Continuing Operations
per Share (0.01) (.03) (.04) (.20) (.08)
Weighted Average
Number of
Common Shares 9,886,641 9,886,641 9,886,641 9,751,594 8,636,952
Total Assets $ 955 $ 1,174,146 $ 1,311,966 $ 1,740.952 $ 1,963,738
Long Term Debt -- -- $ 161,537 $ 376,362 $ 562,187
(excluding current portion)
Stockholders'
Equity (Deficit) $(1,224,096) $(2,135,511) $(2,071.627) $(1,902,715) $ (643,455)
</TABLE>
** Restated to reflect the reclassification of ITC's operations and the
Company's equity in the operations of WBPI to discontinued operations. See
Note 13 to Consolidated Financial Statements
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND THE
RESULTS OF OPERATIONS
OPERATIONS
Year ended September 30, 1999 compared to September 30, 1998
Due to the disposal of ITC and WBPI as discussed in Item 1(a), their
respective revenues and expenses have been classified as discontinued
operations. Continuing operations consisted primarily of
administrative expenses and interest expense. Administrative expenses
were $15,530 for 1999 compared to $221,883 for 1998. The decrease is
primarily due to the elimination of expenses related to ITC. Interest
expense was $51,497 for 1999 compared to $ 98,313 for 1998. The
decrease was primarily due to the elimination of interest expense
attributable to the Pike in 1998.
Year Ended September 30, 1998 compared to September 30, 1997
Due to the disposal of ITC and WBPI as discussed in Item 1(a), their
respective revenues and expenses have been classified as discontinued
operations. Continuing operations consisted primarily of administrative
expenses and interest expense.
PAGE 5
<PAGE>
Administrative expenses were $221,883 for 1999 compared to $297,851 for
1998. The decrease is primarily due to the elimination of expenses related
to the Minnesota Arena Football, Inc. ("PIKE"). [See Footnote 1 to
Financial Statements] Interest expense was $98,313 for 1999 compared to
$91,981 for 1998. The increase is primarily due to a full years interest in
1998 and only a partial year in 1997, on notes payable.
LIQUIDITY AND SOURCES OF CAPITAL
Cash used by continuing operating activities for the year ended September 30,
1999 was $17,213 compared to $144,541 in the comparable prior year period. Cash
provided by discontinued operating activities for the year ended September 30,
1999 was $382,553 compared to $420,515 for the comparable prior year. Cash used
by investing and financing activities was $48,809 and $333,479 respectively,
substantially all of which related to discontinued operations.
Management intends to continue to restrict expenditures with respect to the
future development of entertainment properties and to market its completed
properties. The Company has two completed properties. The costs of development
have been written off. Accordingly, the Company will incur little, if any, costs
of marketing. Management believes these actions may contribute to the Company's
liquidity. The Company had no material commitments for capital expenditures as
of September 30, 1999 and capital expenditures for fiscal 2000 are expected to
be immaterial.
During the fiscal years ended September 30, 1999, 1998, and 1997, the Company
incurred substantial losses from continuing operations of $ 67,027, $ 308,698
and $ 391,748, respectively, and has a working capital deficit as of September
30, 1999 of $1,224,096. The impact of these losses is to limit the liquidity and
available cash resources for operations.
During the fiscal years ended September 30, 1999, 1998 and 1997, the Company's
CEO made cash advances to the Company in order to meet cash flow needs. These
advances were secured by the Company's shares of stock in ITC and WPBI.
Subsequent to September 30, 1998 the Company's management, with approval of the
Board of Directors, transferred the assets and operations of ITC and the
Company's investment in WBPI to the CEO as partial repayment of the advances
made to the Company. See Note 13 to Financial Statements This left the Company
with no on-going operating business or operating
PAGE 6
<PAGE>
assets. All that remains are the liabilities of Pike and the Company.
The Company's operations subsequent to the disposition of its subsidiaries
consist of acquisition searches and certain administrative costs, both of which
could be scaled back and/or financed by the Company's CEO and major stockholder.
The Company intends to continue to seek out potential acquisitions, However,
potential acquisitions are in the early stages of investigations. The Company
intends to finance any acquisitions with senior bank financing of approximately
60%, and the remainder with a combination of other debt and equity instruments.
There are no assurances that the Company will successfully identify these or any
other potential acquisitions or that, if identified, it will obtain financing
under terms acceptable to the Company. Management presently considers an
acquisition or a merger of the Company a viable alternative.
The Company raised during 1996 financing from outside sources of approximately
$400,000, due to inadequate cash flow and insufficient funds of the Pike. Such
financing was due in December, 1996, and is secured by the common stock of
Minnesota Arena Football, Inc. Management anticipates the majority of the
financing will be converted into the Company's common stock. Management
attempted to sell the Company's interest in the PIKE, but was unsuccessful.
There are no assurances that the financing will be converted into the Company's
common stock. Management is uncertain as to the alternate resolution of the
liabilities of the PIKE. Management continues to evaluate the best course of
action which may involve a bankruptcy filing of the PIKE.
The Company's independent auditors issued their opinion on the Company's
financial statements for the year ended September 30, 1999, which included an
explanatory paragraph as to substantial doubt about the Company's ability to
continue as a going concern. This doubt was raised primarily due to recurring
losses from operations, the Company's stockholder's deficit of $1,224,096 at
September 30, 1999, and to no ongoing operations.
INFLATION
Inflation and changing prices have not had a significant impact on operations of
the Company to date.
PAGE 7
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
This information is included following "Index to Financial Statements".
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
NONE
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT AT SEPTEMBER
30, 1999
Director/
Officer
Name Office Held Since Age
- ---- ----------- ----- ---
Philip Rogers President, Director 1983 65
Thomas K. Scallen Chief Executive Officer, 1983 74
Chief Financial Officer,
Director
Bruce Lansbury Director 1983 69
Willy Bietak Director 1992 52
Mr. Rogers became President and Director upon the Company's
formation in 1983. Mr. Roger is also a principal of Philipico
Picture Company, a motion picture and television production
company.
Mr. Scallen became Chairman of the Board of Directors, Vice
President, and Treasurer of CPPC upon its formation in 1983. Mr.
Scallen was elected Chief Executive Officer of the Company on March
14, 1992. Mr. Scallen assumed the responsibilities of chief
financial officer in 1998. Mr. Scallen was president, director and
principal stockholder of International Broadcasting Corporation, a
publicly traded company engaged in entertainment activities, the
presentation of touring shows, arena shows and motion picture or
television productions until March 1992. International
Broadcasting Corporation filed for protection under Chapter 11 of
the Bankruptcy Act in August 1991.
Mr. Lansbury became a Director of the Company upon its formation.
PAGE 8
<PAGE>
For more than the past five years, Mr. Lansbury has been an independent producer
and is Supervising Producer and one of the writers for the television series
"Murder She Wrote."
Mr. Bietak became a Director of the Company in 1992. He is
President of Willy Bietak Productions, Inc. and has been associated
with the Company since 1986.
ITEM 11. EXECUTIVE COMPENSATION
Officer Compensation
Cash and Cash Equivalent Aggregate
------------------------ ---------
Name Capacity Year Paid or Accrued Salaries Remuneration
---- -------- ---- ------------------------ ------------
Philip Rogers President 1999 $ -0- $ -0-
1998 $ -0- $ -0-
1997 $ -0- $ -0-
Thomas K. Scallen CEO 1999 $ -0- $ -0-
1998 $135,000 $ 135,000
1997 $135,000 $ 135,000
All Officers as a
Group
(2 in number)** 1999 $ -0- $ -0-
1998 $195,000 $ 195,000
1997 $195,000 $ 195,000
** Mr. Ronald Leckelt resigned as CFO in 1998. For each of the years 1997 and
1998 the Company has accrued $60,000 salary due Mr. Leckelt.
Director Compensation
The Directors have not received any cash compensation. Directors, other than
Messrs. Scallen and Rogers, each received 2 year options to purchase 10,000
shares of the Company's common stock at $1.50 per share in 1993. These options
expired September 30, 1996.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as at September 30, 1999, the information with
respect to common stock ownership of each person known to the Company to own
beneficially more than five percent (5%) of the shares of the Company's common
stock and all Directors and Officers as a group.
Name Number of
& Address Shares Percentage
- --------- --------- ----------
Thomas K. Scallen 1,619,480 16.4%
Heron Cove, Unit B
Windham, NH 03087
PAGE 9
<PAGE>
All Officers and Directors
as a Group (5 in number) 1,718,855 17.3%
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the years ended September 30, 1999 and 1998, the Company's chief
executive officer (CEO) provided short-term advances of $2,770 and $75,665,
respectively to the Company. These amounts were required to be reported as
additional paid in capital in the accompanying financial statements. The
advances contained specific repayment provisions and, as such, when repayments
occur, a corresponding reduction additional paid in capital would occur. The
advances are secured by the Company's shares of stock in ITC.
On December 17, 1998, the Board of Directors passed a resolution to transfer the
Company's interest in its subsidiaries ITC and WBPI to the Company's CEO as
repayment of $100,000 in advances the Company's CEO had made to the Company (see
Note 5 to Financial Statements). In setting the $100,000 amount the Board of
Directors obtained and relied upon an independent market analysis of ITC and
WBPI.
On December 31, 1998 the Company's CEO forgave the remainder of the advances of
approximately $1,081,000 owed to him by the Company.
As of September 30, 1999 and 1998, the Company owed the Company's CEO $227,500
for cumulative accrued salary. These amounts are included in accrued expenses on
the accompanying balance sheets.
As of September 30, 1999 and 1998, the Company owed the Company's former CFO
$127,000 for cumulative accrued salary. These amounts are included in accrued
expenses on the accompanying balance sheets.
As of September 30, 1996, the Company owed a company owned by the Company's CEO
$18,683 for contracted services and cash advances. The Company's CEO sold this
company during the fiscal year ended September 30, 1997, and the amount due the
Company's CEO was forgiven.
THIS PORTION OF THIS PAGE INTENTIONALLY LEFT BLANK
PAGE 10
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. Financial Statements. See following "Index to Financial Statements".
2. Financial Statement Schedules. See following "Index to Financial
Statements".
(b) Reports on Form 8-K
NONE
(c) Exhibits
(3.) Articles of Incorporation and By-Laws are incorporated by
reference to the Exhibits to the Registrant's Registration
Statement of September 15, 1983.
(4.) Rights of warrant holders set forth in Exhibits to
Registration No.33-58546 effective April 12, 1993
incorporated by this reference.
(10.) Stock Purchase Agreement, dated July 29, 1993 between
registrant and International Broadcasting Corporation,
International Theatres Corporation and National Westminster
Bank USA attached as an Exhibit to Registrants Report on
Form 8-K is incorporated by this reference.
(22.ii) Registrant is the sole shareholder of Minnesota Arena
Football, Inc., a Minnesota corporation ("MAF"). MAF did
business under the trade name Minnesota Fighting Pike until
1996.
(25) Manually signed powers of attorney for members of the Board
of Directors, filed with Registrants 1998 annual report on
Form 10-K are incorporated by this reference.
(27) Financial Data Schedule.
PAGE 11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized as of the 14th day of January, 2000.
CENTURY PARK PICTURES CORPORATION
By: /s/ Thomas K. Scallen
-------------------------------------
Thomas K. Scallen
Chief Executive Officer
Pursuant to the Requirements of the Securities Exchange Act of 1934, this Report
has been signed on behalf of the Registrant and in capacities and on the dates
indicated.
*
/s/ Philip Rogers January 14, 2000
- -------------------------------
Philip Rogers
President
& Director
/s/ Thomas K. Scallen January 14, 2000
- -------------------------------
Thomas K. Scallen
Chief Executive Officer & Director
*
/s/ Bruce Lansbury January 14, 2000
- -------------------------------
Bruce Lansbury Director
*
/s/ Willy Bietak January 14, 2000
- -------------------------------
Willy Bietak Director
* Signed pursuant to Power of Attorney
(SEE EXHIBIT 25 HERETO)
PAGE 12
<PAGE>
CENTURY PARK PICTURES CORPORATION AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS AND SUPPORTING SCHEDULES
INCLUDED IN ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
INDEX
Page numbers refer to pages in the attached Consolidated Financial Statements:
Page
----
Independent Auditors' Report................................................ 1
Consolidated Balance Sheets - September 30, 1999
and September 30, 1998................................................... 2
Consolidated Statements of Operations -
Years ended September 30, 1999, 1998, and 1997............................ 3
Consolidated Statements of changes in
Stockholders' deficit - Years Ended
September 30, 1999, 1998, and 1997........................................ 4
Consolidated Statements of Cash Flows -
Years ended September 30, 1999, 1998, and 1997............................ 5
Notes to Consolidated Financial Statements.................................. 6
PAGE 13
<PAGE>
CENTURY PARK PICTURES CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
CONTENTS
Page
Independent auditors' report 1
Financial statements:
Consolidated balance sheets 2
Consolidated statements of operations 3
Consolidated statements of changes in stockholders' deficit 4
Consolidated statements of cash flows 5
Notes to consolidated financial statements 6-15
<PAGE>
BOARD OF DIRECTORS AND STOCKHOLDERS
CENTURY PARK PICTURES CORPORATION
MINNEAPOLIS, MINNESOTA
Independent Auditors' Report
We have audited the accompanying consolidated balance sheets of CENTURY PARK
PICTURES CORPORATION as of September 30, 1999 and 1998, and the related
consolidated statements of operations, changes in stockholders' deficit, and
cash flows for the years ended September 30, 1999, 1998, and 1997. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of CENTURY
PARK PICTURES CORPORATION as of September 30, 1999 and 1998, and the
consolidated results of its operations and its cash flows for the years ended
September 30, 1999, 1998, and 1997 in conformity with generally accepted
accounting principles.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 11 to
the consolidated financial statements, the Company has suffered recurring losses
from operations, and its total liabilities exceed its total assets. Those
conditions raise substantial doubt about its ability to continue as a going
concern. Management's plans regarding those matters are also described in Note
11. The consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
Blanski Peter Kronlage & Zoch, P.A.
Minneapolis, Minnesota
November 22, 1999
<PAGE>
CENTURY PARK PICTURES CORPORATION
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1999 AND 1998
ASSETS
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 29 $ 16,977
Accounts receivable 70,043
Inventories 45,771
Deferred show costs 74,525
Due from unconsolidated subsidiary 293
Prepaid expenses 926 95,776
---------- ----------
Total current assets 955 303,385
---------- ----------
PROPERTY, PLANT, AND EQUIPMENT:
Leasehold interest in building 1,000,000
Equipment 636,728
Furniture and fixtures 94,077 454,414
---------- ----------
94,077 2,091,142
Less accumulated depreciation and amortization 94,077 1,609,195
---------- ----------
481,947
---------- ----------
OTHER:
Cost in excess of net assets of business acquired, less
accumulated amortization 388,814
---------- ----------
$ 955 $1,174,146
========== ==========
</TABLE>
See notes to financial statements
<PAGE>
LIABILITIES AND STOCKHOLDERS' DEFICIT
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
CURRENT LIABILITIES:
Notes payable $ 400,000 $ 450,000
Current maturities of capitalized lease obligation 168,836
Accounts payable 281,979 636,986
Deferred revenue 1,187,607
Accrued expenses:
Compensation 354,500 546,041
Other 188,572 320,187
----------- -----------
Total current liabilities 1,225,051 3,309,657
----------- -----------
COMMITMENTS AND CONTINGENCIES (NOTE 7 AND 11)
STOCKHOLDERS' DEFICIT:
Common stock, $0.001 par; 200,000,000 shares
authorized 9,886,641 and shares issued and
outstanding 9,887 9,887
Additional paid-in capital 3,993,605 4,906,736
Accumulated deficit (5,227,588) (7,052,134)
----------- -----------
(1,224,096) (2,135,511)
----------- -----------
$ 955 $ 1,174,146
=========== ===========
</TABLE>
2
<PAGE>
CENTURY PARK PICTURES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
REVENUE $ 0 $ 0 $ 0
----------- ----------- -----------
OPERATING COSTS AND EXPENSES:
Administration 15,530 221,883 297,851
Depreciation and amortization 942 1,920
----------- ----------- -----------
15,530 222,825 299,771
----------- ----------- -----------
OPERATING LOSS (15,530) (222,825) (299,771)
----------- ----------- -----------
NONOPERATING INCOME (EXPENSE):
Other income 12,440 4
Interest expense (51,497) (98,313) (91,981)
----------- ----------- -----------
(51,497) (85,873) (91,977)
----------- ----------- -----------
LOSS FROM CONTINUING OPERATIONS (67,027) (308,698) (391,748)
----------- ----------- -----------
DISCONTINUED OPERATIONS (SEE NOTE 13):
Income (loss) from operations of ITC (less
applicable income taxes of $426, $2,000 and
$2,100 for 1999, 1998 and 1997, respectively) (350,331) 171,483 7,358
Equity in net income (loss) from operations of
WBPI (less applicable income taxes of $0) 74,647 (2,334) (41,688)
Gain on disposal of ITC (less applicable
taxes of $574) 1,086,703
----------- ----------- -----------
811,019 169,149 (34,330)
----------- ----------- -----------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM 743,992 (139,549) (426,078)
----------- ----------- -----------
EXTRAORDINARY ITEM:
Gain on debt forgiveness (net of income
taxes of $0) (Note 13) 1,080,554
----------- ----------- -----------
NET INCOME (LOSS) $ 1,824,546 $ (139,549) $ (426,078)
=========== =========== ===========
Loss from continuing operations per
share of common stock $ (0.01) $ (0.03) $ (0.04)
=========== =========== ===========
Income (loss) from discontinued operations per
share of common stock $ (0.03) $ 0.02 $ 0.00
=========== =========== ===========
Gain on disposal of ITC per
share of common stock $ 0.11 $ 0.00 $ 0.00
=========== =========== ===========
Extraordinary item - debt forgiveness per
share of common stock $ 0.11 $ 0.00 $ 0.00
=========== =========== ===========
Net income (loss) per share of common stock $ 0.18 $ (0.01) $ (0.04)
=========== =========== ===========
Weighted average number of common shares 9,886,641 9,886,641 9,886,641
=========== =========== ===========
</TABLE>
See notes to financial statements 3
<PAGE>
CENTURY PARK PICTURES CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
<TABLE>
<CAPTION>
Common Stock Issued Additional
--------------------------- Paid-In Accumulated
Shares Amount Capital Deficit Total
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Balance, September 30, 1996 9,886,641 $ 9,887 $ 4,573,905 $(6,486,507) $(1,902,715)
Advances from officer 257,166 257,166
Net loss (426,078) (426,078)
----------- ----------- ----------- ----------- -----------
Balance, September 30, 1997 9,886,641 9,887 4,831,071 (6,912,585) (2,071,627)
Advances from officer 75,665 75,665
Net loss (139,549) (139,549)
----------- ----------- ----------- ----------- -----------
Balance, September 30, 1998 9,886,641 9,887 4,906,736 (7,052,134) (2,135,511)
Forgiveness of debt
by officer (913,131) (913,131)
Net income 1,824,546 1,824,546
----------- ----------- ----------- ----------- -----------
Balance, September 30, 1999 9,886,641 $ 9,887 $ 3,993,605 $(5,227,588) $(1,224,096)
=========== =========== =========== =========== ===========
</TABLE>
See notes to financial statements 4
<PAGE>
CENTURY PARK PICTURES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
INCREASE (DECREASE) IN CASH
<TABLE>
<CAPTION>
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Continuing operations:
Net income (loss) $ 1,013,527 $ (308,698) $ (391,748)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation 942 1,920
Gain on forgiveness of debt (1,080,554)
Increase (decrease) in liabilities:
Accounts payable (1,683) (61,378) (12,902)
Accrued expenses 51,497 224,593 101,909
----------- ----------- -----------
CASH USED IN CONTINUING OPERATIONS BEFORE
INCOME TAXES (17,213) (144,541) (300,821)
----------- ----------- -----------
Discontinued operations (See Note 13):
Net income (loss) 811,019 169,149 (34,330)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation 77,526 338,568 295,685
Amortization 388,814 22,238 20,366
Gain on disposition of ITC (1,086,703)
Loss on disposal of property and equipment 3,055 15,112
Equity in net (income) loss of unconsolidated subsidiary (74,647) 709 41,688
(Increase) decrease in assets:
Accounts receivable (220,339) (24,368) 112,821
Inventories (14,498) (3,515) 6,950
Deferred shows costs (99,914) (52,808) (17,692)
Prepaid expenses (58,617) (14,946) (6,109)
Increase (decrease) in liabilities:
Accounts payable (68,441) (165,989) (53,886)
Deferred revenue 679,006 113,601 (16,495)
Accrued expenses 46,292 22,764 (59,891)
----------- ----------- -----------
CASH PROVIDED BY DISCONTINUED OPERATIONS BEFORE
INCOME TAXES 382,553 420,515 289,107
----------- ----------- -----------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 365,340 275,974 (11,714)
----------- ----------- -----------
</TABLE>
See notes to financial statements 5
<PAGE>
<TABLE>
<CAPTION>
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
Discontinued operations:
Purchases of property, plant, and equipment $ (48,809) $ (159,580) $ (25,023)
(Increase) decrease in due from unconsolidated subsidiary 1,625
----------- ----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (48,809) (157,955) (25,023)
CASH FLOWS FROM FINANCING ACTIVITIES:
Continuing operations:
Advances from officer 2,700 75,665 253,483
Discontinued operations:
Advances to officer (15,000)
Cash transferred with disposition of ITC (250,864)
Net payments on short-term notes (25,000)
Payments on long-term capitalized lease obligation (60,315) (207,527) (200,126)
----------- ----------- -----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (333,479) (131,862) 38,357
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH (16,948) (13,843) 1,620
----------- ----------- -----------
CASH AT BEGINNING OF YEAR 16,977 30,820 29,200
----------- ----------- -----------
CASH AT END OF YEAR $ 29 $ 16,977 $ 30,820
=========== =========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for interest $ 5,668 $ 46,593 $ 100,359
=========== =========== ===========
Cash paid during the year for income taxes $ 1,000 $ 2,000 $ 2,100
=========== =========== ===========
</TABLE>
6
<PAGE>
CENTURY PARK PICTURES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
1. DESCRIPTION OF BUSINESS AND CONSOLIDATION (SEE NOTE 13):
CENTURY PARK PICTURES CORPORATION (the Company) is engaged in the
development, production, and marketing of entertainment properties.
International Theatres Corporation (ITC), was a 100 percent owned
subsidiary, that owned and operated the Chanhassen Dinner Theatres in
Chanhassen, Minnesota. During the year ended September 30, 1999, ITC
was transferred to the majority shareholder. During the normal course
of business, ITC granted credit to its corporate clients. ITC performed
on-going credit evaluations of its customers' financial condition and
generally required no collateral from them. Due to the nature of its
business, the Company believed that no allowance for uncollectible
amounts was necessary.
Minnesota Arena Football, Inc. dba Minnesota Fighting Pike (Pike), a
100 percent owned subsidiary, was an indoor professional football team
that the Company obtained the rights to during the fiscal year ended
September 30, 1996. The Pike ceased operations on August 31, 1996. The
net losses generated by the Pike were $48,019, and $104,582 for the
fiscal years ended September 30, 1998, and 1997, respectively. During
the year ended September 30, 1999, The Pike recognized income of
$627,835 due to forgiveness of debt to a shareholder and a related
company. Management has not adopted a formal plan to dispose of the
Pike.
The Company had a 30 percent investment in Willy Bietak Productions,
Inc. (WBPI), which produces touring ice shows and theme shows appearing
in shopping malls, theatres, casinos, arenas, and major amusement parks
throughout the United States. During the year ended September 30, 1999,
WBPI was transferred to the majority shareholder.
Principals of consolidation:
The accompanying consolidated financial statements include the
accounts of the Company and its wholly owned subsidiary, the Pike.
All significant intercompany transactions and balances have been
eliminated in consolidation.
Investment in common stock of WBPI:
The Company used the equity method of accounting for its 30 percent
investment in WBPI. Under this method, the Company's equity in the
earnings or losses of the investee was reported currently in the
Company's earnings. However, losses of the investee were reported
only to the extent of the carrying amount of the investment plus any
Company advances or commitments.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Use of estimates:
Management uses estimates and assumptions in preparing financial
statements in accordance with generally accepted accounting
principles. Those estimates and assumptions affect the reported
amounts of assets and liabilities, the disclosure of contingent
assets and liabilities, and the reported revenue and expenses. Actual
results could vary from the estimates that were used.
7
<PAGE>
CENTURY PARK PICTURES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
Cash:
The Company maintains its cash in bank deposit accounts, which, at
times, may exceed federally insured limits.
Inventories:
Inventories consisted primarily of food and beverages and are stated
at the lower of cost or market using the first-in, first-out method.
Property, plant, and equipment:
Property and equipment are stated at the lower of depreciated cost or
net realizable value. Depreciation is computed using the
straight-line and various accelerated methods over the following
estimated useful lives:
Years
-----
Leasehold interest in building 6
Equipment 3-7
Furniture and fixtures 3-7
Income taxes:
Income taxes are provided for the tax effects of transactions
reported in the financial statements and consist of taxes currently
due plus deferred taxes related primarily to differences between the
bases of property, plant, and equipment and accrued vacation for
financial and income tax reporting. The deferred tax assets and
liabilities represent the future tax return consequences of those
differences, which will either be taxable or deductible when the
assets and liabilities are recovered or settled. Deferred taxes also
are recognized for operating losses that are available to offset
future federal income taxes.
Advertising costs:
Advertising costs are charged to operations when the advertising
first takes place. Advertising expense for the periods ended
September 30, 1999, 1998 and 1997 was $201,346, $621,204and $661,468,
respectively.
Intangibles:
Costs in excess of net assets of business acquired have been
amortized on the straight-line basis over 25 years (see Note 13).
3. RELATED PARTY TRANSACTIONS:
During the years ended September 30, 1999 and 1998, the Company's chief
executive officer (CEO) provided short-term advances of $2,700 and
$75,665, respectively, to the Company. This amount was required to be
reported as additional paid-in capital in the accompanying consolidated
financial statements. The advances contained specific repayment
provisions and when repayments occur, there will be a reduction of
additional paid-in capital. The advances were secured by the Company's
shares of stock in ITC (see Note 13).
8
<PAGE>
CENTURY PARK PICTURES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
3. RELATED PARTY TRANSACTIONS (CONTINUED):
As of September 30, 1999 and 1998, the Company owed the Company's CEO
$227,500 for cumulative accrued salary. This amount is included in
accrued expenses on the accompanying consolidated balance sheets.
4. INVESTMENT IN UNCONSOLIDATED SUBSIDIARY:
During the year ended September 30, 1999, the Company's investment in
WBPI was transferred to the Company's CEO as partial repayment of the
advances the CEO made to the Company (see Note 13).
Condensed financial information of WBPI as of September 30, 1999 and
1998, and for the three months ended December 31, 1998, and the fiscal
years ended September 30, 1998, and 1997, is as follows:
<TABLE>
<CAPTION>
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
BALANCE SHEET
Total current assets $ $ 71,595 $
Total noncurrent assets 512,595
Total current liabilities 220,757
Total noncurrent liabilities 433,145
Equity (69,712)
OPERATIONS
Admissions revenues $1,305,657 $2,783,839 $2,520,646
Operating costs 921,656 2,221,433 2,173,233
General and administrative costs 138,716 602,161 462,471
Nonoperating income 6,401 32,142 2,419
Income tax expense 2,864 168 26,319
---------- ---------- ----------
Net income (loss) $ 248,822 $ (7,781) $ (138,958)
========== ========== ==========
</TABLE>
Operations for WBPI for the period ended December 31, 1998 represents a
portion of that Company's total fiscal year. Results of operations
detailed above for the three-month period ended December 31, 1998, may
not be reflective of an entire years operation.
5. NOTES PAYABLE:
The Company has notes payable to various individuals totaling $400,000
at September 30, 1999 and 1998. The notes bear interest at the rate of
12% to 15% and are secured by the Company's right, title, and interest
in the Pike. The notes matured between June and December 1996. The
notes are convertible into common stock of the Company. These notes are
in default at September 30, 1999 and 1998. As of September 30, 1999,
the holders of the notes had not exercised their right to convert.
9
<PAGE>
CENTURY PARK PICTURES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
5. NOTES PAYABLE (CONTINUED):
ITC had an available line of credit with a bank totaling $50,000 at
September 30, 1998. The line of credit bore interest at the rate of
2.5% over the bank's base rate and the amount outstanding at September
30, 1998 was $50,000 (see Note 13).
ITC also had a standby letter of credit of $50,000 for the actor's
union. There were no amounts outstanding on the letter of credit at
September 30, 1998 (see Note 13).
6. INCOME TAXES:
The Company's net deferred tax assets and liabilities consisted of the
following at September 30:
<TABLE>
<CAPTION>
1999
------------------------------------
Federal State Total
---------- ---------- ----------
<S> <C> <C> <C>
Deferred tax assets:
Other (current) $ 96,000 $ 35,000 $ 131,000
Net operating loss carryforwards
(non-current) 564,000 227,000 791,000
---------- ---------- ----------
660,000 262,000 922,000
Valuation allowance (660,000) (262,000) (922,000)
---------- ---------- ----------
$ 0 $ 0 $ 0
========== ========== ==========
Deferred tax liabilities $ 0 $ 0 $ 0
========== ========== ==========
<CAPTION>
1998
------------------------------------
Federal State Total
---------- ---------- ----------
Deferred tax assets:
Other (current) $ 142,000 $ 47,000 $ 189,000
Property and equipment (non-current) 444,000 148,000 592,000
Net operating loss carryforwards
(non-current) 1,082,000 428,000 1,510,000
---------- ---------- ----------
1,668,000 623,000 2,291,000
Valuation allowance (1,668,000) (623,000) (2,291,000)
---------- ---------- ----------
$ 0 $ 0 $ 0
========== ========== ==========
Deferred tax liabilities $ 0 $ 0 $ 0
========== ========== ==========
</TABLE>
During the years ended September 30, 1999 and 1998, the Company
recorded valuation allowances of $922,000 and $2,291,000, respectively,
on the deferred tax assets to reduce the total amounts that management
believes will ultimately be realized. Realization of deferred tax
10
<PAGE>
CENTURY PARK PICTURES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
6. INCOME TAXES (CONTINUED):
assets is dependent upon sufficient future taxable income during the
period that deductible temporary differences and carryforwards are
expected to be available to reduce taxable income. There was no other
activity in the valuation allowance accounts.
The Company has loss carryforwards totaling approximately $1,879,000
that may be offset against future taxable income. If not used, the
carryforwards will expire as follows:
Expiration Date Amount
--------------- ------
2000 $ 17,000
2001 17,000
2002 17,000
2003 17,000
2004 17,000
2005 17,000
2006 17,000
2007 17,000
2011 1,581,000
2012 162,000
----------
$1,879,000
==========
The Company's provision for income taxes differs from applying the U.S.
federal income tax rate of 34% to income before income taxes. A
reconciliation between taxes computed at the federal statutory rate and
the consolidated effective rate is as follows for the years ended
September 30:
<TABLE>
<CAPTION>
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
Income tax benefit from continuing
Operations at federal statutory rates $ (23,000) $(105,000) $(133,000)
Income tax expense (benefit) from
Discontinued operations at federal
Statutory rates 250,000 58,000 (12,000)
States taxes 1,000 2,000 2,100
Effect of limiting tax credit on net
operating losses from continuing
operations to taxes paid 23,000 105,000 133,000
Effect of limiting tax credit on net operating
(income) losses from discontinued
operations to taxes paid (250,000) (58,000) 12,000
--------- --------- ---------
$ 1,000 $ 2,000 $ 2,100
========= ========= =========
</TABLE>
11
<PAGE>
CENTURY PARK PICTURES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
7. COMMITMENTS AND CONTINGENCIES:
Operating leases:
The Company leased the land used in the operations of ITC and certain
office equipment under noncancelable operating leases (see Note 13).
The Company leases office space under a noncancelable operating lease
that expires August 31, 2000. The space has been sub-leased to a
Company owned by the Company's CEO. The Company incurred no expense
related to this lease during the fiscal year ended September 30,
1999.
Total rent expense under the above leases for the years ended
September 30, 1999, 1998, and 1997, was $58,448, $271,138, and
$301,453, respectively. For the year ending September 30, 2000,
future minimum rental payments required under these leases are
$30,247. There are no required lease payments after September 30,
2000.
Capitalized leases (see Note 13):
The Company leased the buildings used in the operations of ITC under
a capitalized lease.
Amortization expense was $36,684, $172,655, and $171,429 for the
years ended September 30, 1999, 1998, and 1997, respectively and is
included in depreciation expense on the accompanying financial
statements.
The following is a summary of leased assets and lease obligations
included on the consolidated balance sheet at September 30, 1998:
Leasehold interest in building $ 1,000,000
Equipment 17,169
-----------
1,017,169
Less accumulated amortization 886,940
-----------
Net unamortized value $ 130,229
===========
8. STOCKHOLDER'S DEFICIT:
Stock options:
The Company issued options to purchase up to 10,000 shares of common
stock of the Company to three of its directors. The exercise price is
$1.50 per share. These options expired February 24, 1998.
9. RETIREMENT PLANS (SEE NOTE 13):
ITC had a 401(k) incentive savings plan covering substantially all of
its non-union employees. Eligible employees may defer up to 10% of
their compensation to the plan. ITC will match 25% of the employees'
contribution up to 6% of the employees' compensation.
12
<PAGE>
CENTURY PARK PICTURES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
9. RETIREMENT PLANS (SEE NOTE 13) (CONTINUED):
ITC also contributed to a retirement plan established by the union for
its employees who are represented by a collective bargaining unit. The
required contribution is 8% of gross wages.
ITC's contribution to the plans were $6,580, $29,312, and $26,114, for
the period ended December 17, 1998, and the years ended September 30,
1998 and 1997, respectively.
10. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Non-cash transactions:
During the year ended September 30, 1999, the Company's interest in
ITC and WBPI was transferred to the Company's CEO as repayment of
advances the CEO made to the Company (see Note 13). This resulted in
a non-cash forgiveness of debt of $1,086,703 for ITC, $452,719 for
the Company, and $627,835 for the Pike.
During the year ended September 30, 1997 an officer of the Company
assumed $18,683 of obligations due to non-related parties. This
amount is included in advances from officer on the accompanying
financial statements. There were no non-cash transactions for the
year ended September 30, 1998.
11. CORPORATE LIQUIDITY (SEE NOTE 13):
During the fiscal years ended September 30, 1998, and 1997, the Company
incurred substantial losses of $139,549, and $426,078, respectively,
and had a working capital deficit as of September 30, 1998 of
$3,006,272. The impact of these losses was to limit the liquidity and
available cash resources for operations. During the year ended
September 30, 1999, the company had income of $1,824,546 due primarily
to the gain on disposal of ITC and gains on debt forgiveness to ITC and
a shareholder. The Company had a working capital deficit as of
September 30, 1999 of $1,224,096.
During the fiscal years ended September 30, 1998, and 1997, the
Company's CEO made cash advances to the Company in order to meet cash
flow needs. These advances were secured by the Company's shares of
stock in ITC. On December 17, 1998, the Company's management, with
approval by the Board of Directors, transferred the assets and
operations of ITC and the Company's investment in WBPI to the CEO as
partial repayment of the advances made to the Company. This left the
Company with no on-going operating business or operating assets.
The Company's operations exclusive of its subsidiaries consist of
acquisition searches and certain administrative costs, both of which
could be scaled back and/or financed by the Company's CEO and major
stockholder. Management intends to purchase a Company that will have
sufficient cash to operate in the 2000 fiscal year.
13
<PAGE>
CENTURY PARK PICTURES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
12. FAIR VALUE OF FINANCIAL INSTRUMENTS:
The estimated fair values of the Company's financial instruments, none
of which are held for trading purposes, are as follows at September 30:
1999 1998
------------------- -------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
------------------- -------------------
Assets:
Cash $ 29 $ 29 $ 16,977 $ 16,977
Liabilities:
Notes payable 400,000 400,000 450,000 450,000
The carrying amounts of cash and the short-term notes payable
approximate fair values.
13. DISCONTINUED OPERATIONS:
On December 17, 1998 the Board of Directors passed a resolution to
transfer the Company's interest in ITC and WBPI to the Company's CEO as
repayment of $100,000 in advances the Company's CEO made to the Company
(see Note 3). In setting the $100,000 amount, the Board of Directors
obtained and relied upon an independent market analysis of ITC and
WBPI.
The net assets of ITC at December 17, 1998, the date of the transfer,
were as follows:
Cash $ 250,865
Accounts receivable 290,382
Inventories 60,269
Deferred show costs 174,439
Due from related parties 168,986
Prepaid expenses 153,467
Property, plant, and equipment - net 450,175
Cost in excess of net assets of business acquired - net
Notes payable (25,000)
Current maturities of capitalized lease obligation (108,521)
Accounts payable (284,885)
Deferred revenue (1,866,613)
Accrued expenses:
Compensation (255,607)
Other (94,660)
-----------
$(1,086,703)
===========
The net assets of WBPI at December 17, 1998, were as follows:
Due from unconsolidated subsidiary $ 293
Investment in unconsolidated subsidiary 74,647
-----------
$ 74,940
===========
14
<PAGE>
CENTURY PARK PICTURES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
13. DISCONTINUED OPERATIONS (CONTINUED):
Revenues generated by ITC were $2,267,889, $8,641,542, and $7,848,460
for the period ended December 17, 1998, and the years ended September
30, 1998, and 1997, respectively. The income (loss) from operations of
ITC were $(350,331), $171,483, and $7,358 for the period ended December
17, 1998, and the years ended September 30, 1998 and 1997,
respectively. The loss from operations for the period ended December
17,1998, included the writedown of goodwill in the amount of $384,062
as a result of a review of the recoverability of the carrying amount of
the goodwill.
On December 31, 1998 the Company's CEO forgave the remainder of the
advances owed to him by the Company and the Pike. The amount of the
advances forgiven and net gain on debt forgiveness were as follows:
Company $ 527,659
Pike 627,835
-----------
Advances forgiven 1,155,494
Net assets of WBPI transferred to CEO (74,940)
-----------
Gain on debt forgiveness $ 1,080,554
===========
14. SEGMENT INFORMATION:
During the year ended September 30, 1999, the Company adopted Financial
Accounting Standards Board Statement No. 131, DISCLOSURES ABOUT
SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION. The Company has two
reportable segments: ITC and Pike (see Note 13). The Company's
reportable segments are strategic business units that offer different
products and services. They are managed separately because each
business requires different technology and marketing strategies.
Corporate operations include administrative expenses and corporate
assets, which include cash and prepaid expenses.
Segment information is as follows:
<TABLE>
<CAPTION>
Fiscal year
Ended
September 30, ITC Pike Corporate Total
---------------------- --------------- ------------------ ---------------- ------------------
<S> <C> <C> <C> <C> <C>
1999 $ $ $ (67,027) $ (67,027)
1998 (48,019) (260,679) (308,698)
Segment profit 1997 (104,582) (287,166) (391,748)
---------------------------------------------------------------------------------------------
1999 51,497 51,497
1998 53,313 45,000 98,313
Interest expense 1997 32,927 59,054 91,981
---------------------------------------------------------------------------------------------
1999 77,526 77,526
1998 338,568 942 339,510
Depreciation 1997 295,685 1,920 297,605
---------------------------------------------------------------------------------------------
Income (loss) from 1999 736,372 74,647 811,019
discontinued 1998 171,483 (2,334) 169,149
operations 1997 7,358 (41,688) (34,330)
---------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
CENTURY PARK PICTURES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
14. SEGMENT INFORMATION (CONTINUED):
<TABLE>
<S> <C> <C> <C> <C> <C>
1999 $ $ 627,835 $ 452,719 $ 1,080,554
Extraordinary 1998 0
item 1997 0
---------------------------------------------------------------------------------------------
Identifiable 1999 955 955
assets 1998 672,617 501,529 1,174,146
---------------------------------------------------------------------------------------------
Capital 1999 48,809 48,809
expenditures 1998 159,580 159,580
</TABLE>
Revenues from external customers, revenues from transactions with other
segments, interest revenue, equity in the net income of investees
accounted for by the equity method and income tax expense or benefit
were zero for the years ended September 30, 1999, 1998, and 1997.
16
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> SEP-30-1999
<CASH> 29
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 955
<PP&E> 94,077
<DEPRECIATION> (94,077)
<TOTAL-ASSETS> 955
<CURRENT-LIABILITIES> 1,225,051
<BONDS> 0
0
0
<COMMON> 9,887
<OTHER-SE> (1,233,983)
<TOTAL-LIABILITY-AND-EQUITY> (1,224,096)
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 15,530
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (51,497)
<INCOME-PRETAX> (67,027)
<INCOME-TAX> 0
<INCOME-CONTINUING> (67,027)
<DISCONTINUED> 811,019
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,824,546
<EPS-BASIC> (.01)
<EPS-DILUTED> (.01)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> SEP-30-1998 SEP-30-1997
<PERIOD-START> OCT-01-1997 OCT-01-1996
<PERIOD-END> SEP-30-1998 SEP-30-1997
<CASH> 16,977 30,820
<SECURITIES> 0 0
<RECEIVABLES> 70,043 45,675
<ALLOWANCES> 0 0
<INVENTORY> 45,771 42,256
<CURRENT-ASSETS> 303,385 223,216
<PP&E> 2,091,142 1,968,274
<DEPRECIATION> (1,609,195) (1,291,285)
<TOTAL-ASSETS> 1,174,146 1,311,966
<CURRENT-LIABILITIES> 3,309,657 3,222,056
<BONDS> 0 0
0 0
0 0
<COMMON> 9,887 9,887
<OTHER-SE> (2,145,398) (2,081,514)
<TOTAL-LIABILITY-AND-EQUITY> 1,174,146 1,311,966
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 222,825 299,771
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> (98,313) (91,981)
<INCOME-PRETAX> (308,698) (391,748)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (308,698) (391,748)
<DISCONTINUED> 169,149 (34,330)
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (139,549) (426,078)
<EPS-BASIC> (.03) (0.04)
<EPS-DILUTED> (.03) (0.04)
</TABLE>
