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UNITED STATES
SECURITIES EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-K/A-2
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [fee required]
FOR THE FISCAL YEAR ENDED JUNE 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [no fee required]
For the transition period from____to_____
Commission File Number 0-14613
CST ENTERTAINMENT IMAGING, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-2614435
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5901 Green Valley Circle, Suite 400, Culver City, California 90230
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (310) 417-3444
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 $0.15 Per Share
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) has been subject to such
filing requirements for the past 90 days. Yes X. No. .
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Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K 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.[X]
The aggregate market value of the voting common stock held by
non-affiliates, based upon the last reported sale price of the Common Stock on
the American Stock Exchange on September 19, 1994, was approximately
$28,124,577.
As of September 19, 1994, there were 24,999,624 shares of common stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE: The information required by Part III
of Form 10-K is incorporated herein by reference to the registrant's definitive
Proxy Statement relating to its 1994 Annual Meeting of Stockholders which will
be filed with the Commission within 120 days after the end of the registrant's
fiscal year.
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AMENDMENT:
To amend the Company's June 30, 1994, Form 10-K/A to revise footnote
disclosure on Note #2 of the Company's financial statements.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
WORK-IN-PROCESS: Work-in-Process is stated at the lower of cost or market,
not to exceed net realizable value.
PROPERTY AND EQUIPMENT AND DEPRECIATION: Property and equipment relating to
the Company's digital coloring system, including capitalized software and other
equipment, is carried at cost and is depreciated by the straight-line method
over the estimated useful life of three years. Leasehold improvements and
video equipment are being depreciated by the straight-line method over the
estimated useful life of five years.
CAPITALIZED SOFTWARE: Unamortized capitalized computer software costs was
$507,451 at June 30, 1993 and $446,621 at June 30, 1994. Amortization expense
of capitalized computer software was $33,796, $217,678 and $252,975 for the
three years ended June 30, 1992, 1993 and 1994.
PATENT: Cost incurred in acquiring the patent are being amortized on a
straignt-line basis over the remaining life of the patent, which expires
in 1996.
FILM LIBRARY: The Company's film library is carried at the lower of cost or
estimated net realizable value. The film library costs primarily include the
rights to acquire the film and internally generated costs of production and
colorization. The film library is evaluated periodically and when management
determines cost are not recoverable, the library is written down to net
realizable value. The film library was written down in 1992 by $893,180 to
$181,838 and in 1993 by $101,838 to $40,000, its estimated net realizable
values. The Company utilizes no more than five years in the projection of
future revenues for purposes of evaluating recoverability of film costs.
The Company's films are generally colorized public domain films and specials
that are generally released, first, in the domestic television market, second,
in the international markets, and, third, in the domestic cable and home video
markets. Based on the Company's estimates of revenue as of June 30, 1994
approximately 88% of unamortized film costs applicable to released films will
be amortized during the three years ending June 30, 1997. The Company utilizes
the individual-film-forecast-computation method in the amortization of its film
library. The Company anticipates the release of its three films which were
completed in fiscal 1994 to occur in fiscal 1995. The Company's film library
consists of twenty films, all of which have been released as of June 30, 1994,
except for the three previously mentioned.
REVENUE RECOGNITION: Revenues are recognized when color converted
projects are completed and shipped. Deferred income arises as a result of
prepayments on contracts in progress. Revenues and related expenses from
television and video licensing agreements are generally recognized on the
date the film is available for broadcasting by the licensee. Revenues from
royalties are recognized upon receipt.
NET LOSS PER SHARE: Net loss per share is based on the weighted
average number of shares of common stock outstanding during each year,
exclusive of common share equivalents which, for the years presented, would
be anti-dilutive.
