UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(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, 1998
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number ----------------------------------
NEW SKY COMMUNICATIONS, INC.
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(Exact name of registrant as specified in its charter)
New York 16-1229730
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(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization number)
720 Reynolds Arcade, 16 East Main Street, Rochester, New York 14614
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(Address of principal executive offices)
(716) 454-5490
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year,
if changed since last report)
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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APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes No
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APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date. 193,736,923 as of April 30,
1998.
PART 1 -- FINANCIAL INFORMATION
Item 1. Financial Statements. Item 2. Management's Discussion and
Provide the information required Analysis of Financial Condition
by Rule 10-01 of Regulation S-X and Results of Operations
(17CFR Part 210). Furnish the information required
by Item 303 of Regulation S-K
(ss.229.303 of this chapter).
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INDEX
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PART I -- FINANCIAL INFORMATION PAGE(S)
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Statement of Income (Loss)
Three months ending 3/31/98 & 3/31/97 3
Consolidated Balance Sheet
As of 3/31/98 & 12/31/97 4 & 5
Statement of Cash Flows
Three months ended 3/31/98 & 3/31/97 6
Management's Discussion of Statement of
Income and Financial Condition 7 & 8
PART II -- OTHER INFORMATION & SIGNATURES 8 & 9
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Financial Data Summary 10
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<PAGE>
NEW SKY COMMUNICATIONS, INC.
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STATEMENT OF INCOME (LOSS)
(UNAUDITED)
For Three Months Ended
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March 31, 1998 March 31, 1997
Gross Film Receipts $ 0 $ 0
Less: Amortized Film Costs $ 0 $ 0
-------- --------
Net Film Receipts $ 0 $ 0
-------- --------
General and Administrative Expenses $ 44,239 $ 7,500
-------- --------
Income (Loss) Before Other Income
and Related Expenses $(44,239) $ (7,500)
-------- --------
Other Income (Loss) $ 0 $ 0
-------- --------
Income (Loss) $(44,239) $ (7,500)
======== ========
Net Per Common Share NIL NIL
======== ========
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<PAGE>
NEW SKY COMMUNICATIONS, INC.
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BALANCE SHEET
(As of March 31, 1998 and December 31, 1997)
ASSETS
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March 31, December 31,
1998 1997
(Unaudited) (Audited)
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Current Assets:
Cash and Cash Items $ 0 $ 56
Accounts Receivable:
Trade Accounts 0 0
Current Amortizable Portion
of Film Inventory 0 0
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Total Current Assets $ 0 $ 56
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Property and Equipment:
Property and Equipment 0 0
Film Inventory 1,253,166 1,250,660
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Total Property and Equipment 1,253,166 1,250,660
Less: Accumulated Depreciation 0 0
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Net Property and Equipment 1,253,166 1,250,660
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Other Assets 400 400
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TOTAL ASSETS $1,253,566 $1,251,116
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<PAGE>
NEW SKY COMMUNICATIONS, INC.
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BALANCE SHEET
(As of March 31, 1998 and December 31, 1997
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, December 31,
1998 1997
(Unaudited) Audited)
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Current Liabilities:
Accounts Payable $ 123,242 $ 106,554
Leases 2,068 2,068
Accrued Expenses 39,016 39,016
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Total Current Liabilities $ 164,326 $ 147,638
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Stockholders' Equity:
Common Stock $.0001 Par Value
200,000,000 Shares Authorized
193,736,923 Shares Issued and
Outstanding (193,736,923 Shares
on April 30, 1998) $ 19,374 $ 19,074
Additional Paid-In Capital 5,962,028 5,932,328
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Total Paid-In Capital 5,981,402 5,951,402
Accumulated Deficit (4,892,162) (4,847,924)
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Total Stockholders' Equity 1,089,240 1,103,478
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 1,253,566 $ 1,251,116
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<PAGE>
NEW SKY COMMUNICATIONS, INC.
STATEMENT OF CASH FLOWS
Three Months Ended March 31, 1998 and March 31, 1997
Three Months Ended Three Months Ended
March 31, 1998 March 31, 1997
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Operating Activities:
Net Income (Loss) $(44,239) $ (7,500)
Adjustments to reconcile
Net Income and Net Cash:
Depreciation and Amortization 0 0
(Increase) Decrease in Accounts
Receivable 0 0
(Increase) Decrease in Prepaid
Expenses 0 0
Increase (Decrease) in Accounts
Payable and Accrued Expenses 16,688 (2,500)
Amortization of Film Costs 30,000 0
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New Cash Provided (Used) $ 2,449 $(10,000)
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Investing Activities:
Additional Film Inventory $ (2,505) $ 0
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Net Cash Provided (Used) $ (2,505) $ 0
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Financing Activities:
Net Cash Provided (Used) $ 0 $ 10,000
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Increase (Decrease In Cash
and Cash Equivalents $ (56) $ 0
Cash and Cash Equivalents at
Beginning of Period 56 1,150
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Cash and Cash Equivalents
at End of Period $ 0 $ 1,150
======== ========
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<PAGE>
STATEMENT OF MANAGEMENT
-----------------------
In the opinion of management, the accompanying unaudited financial
statements contain all adjustments necessary to present fairly the
financial position of the Company as of March 31, 1998 and the results
of operations and cash flows for the three months then ended.
1(A) During the quarter, the Company and its Co-Producing partner,
Syracuse Productions, LLC, completed post-production work on the feature
film entitled "FREAK TALKS ABOUT SEX" (formerly "SYRACUSE MUSE"). The
film has been screened for several potential distribution companies, but
received no acceptable offers for distribution. The Co-Producers intend
to do a slight re-edit of the film and seek to enter the film in the
Toronto and/or New York film festivals in the Fall of 1998 and continue
to screen the film for potential distributors.
The Company and Owasco Entertainment, whose principals are the same as
Syracuse Productions, LLC, have obtained an option to produce a feature
film based upon a screenplay entitled "FACE VALUE" from the author,
Lynne Adams. The two companies would co-produce the film and they are
currently seeking production financing for the film and negotiating with
so-called "A" list talent to appear in the film and an "A" list director
to direct the film. The Co-Producers hope to commence principal
photography on the film by the end of 1998.
The Company issued 3,000,000 shares of its common stock to Frank
LaLoggia pursuant to, and in completion of, an Agreement dated July 2,
1996. The stock has been registered with the S.E.C. on Form S-8 dated
February 2, 1998. A copy of the Agreement was annexed as an Exhibit to
the Company's Form 10-Q for the quarter ended June 30, 1996.
The Company entered into a distribution agreement for a so-called
"Director's Cut" of its feature film "LADY IN WHITE" which was released
on DVD format during the first quarter of 1998.
The Company continues to carry its investments in feature films as an
asset of the Company under Film Inventory, amortizing these costs when
funds are received on the various film investments and at other times
management believes a write-down of the unamortized costs is
appropriate.
The Company has title to and/or interests in the following feature film
properties, which are in development or completed: "FREAK TALKS ABOUT
SEX," "FACE VALUE," "THE GIANT" and "THE GODMOTHER." The Company has
released two feature films: "FEAR NO EVIL" and "LADY IN WHITE." The
Company was also an investor, in 1989, in a feature film entitled "GRAVE
SECRETS," produced by Planet Productions, Inc.
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<PAGE>
The Company has not filed Federal or New York State tax returns for the
years 1992, 1993 and 1994 and has not paid any tax due for those years
nor for 1995, 1996 or 1997 because of lack of funds for the preparation
of the returns and the payment of tax. The Company believes no Federal
tax would be due to the Company's continuing losses. However, the
Company believes it owes New York State tax based upon capital and has
been accruing estimated amounts for such tax since 1992.
1(B) Financial Condition --
1. Working capital is inadequate. (Current Ratio is nil)
2. The Company has no outstanding debt other than current payables and
accrued expenses.
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<PAGE>
PART II
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Other Information and Signatures
NEW SKY COMMUNICATIONS, INC.
----------------------------
Item 1. Legal Proceedings -- None.
Item 2. Change in Security -- None.
Item 3. Defaults upon Senior Securities -- None.
Item 4. Submission of matters to a vote of securities holders -- None.
Item 5. Other information -- None.
SIGNATURES
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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.
NEW SKY COMMUNICATIONS, INC.
Date: May 10, 1998 /s/ Carl R. Reynolds
----------------------------
Carl R. Reynolds
President/Treasurer/
Chief Financial Officer
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NEW SKY COMMUNICATIONS, INC.
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FINANCIAL DATA SUMMARY
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,253,566
<CURRENT-LIABILITIES> 164,326
<BONDS> 0
<COMMON> 19,374
0
0
<OTHER-SE> 1,069,866
<TOTAL-LIABILITY-AND-EQUITY> 1,253,566
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 44,239
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (44,239)
<INCOME-TAX> 0
<INCOME-CONTINUING> (44,239)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (44,239)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
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