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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From _______ to _______
Commission File No. 0-18954
ODYSSEY PICTURES CORPORATION
--------------------------------------------------
(Exact name of registrant as specified in charter)
Nevada 95-4269048
- ----------------------- --------------------
(State or other juris- (I.R.S. Employer
diction of incorporation Identification No.)
or organization)
1601 ELM STREET, STE 4000, DALLAS, TX 75201-2522
- ---------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone No., including area code (214) 720-1622
--------------
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 the
filing requirement for at least the past 90 days. Yes No X
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, par value $.01 per share -- 3,861,182 outstanding shares as of
September 30, 1997.
<PAGE>
ODYSSEY PICTURES CORPORATION
INDEX
Page
Part I - Financial Information
Consolidated Balance Sheets as of 1
September 30, 1997 and June 30, 1997
Consolidated Statements of Operations 2
for the Three Month Periods Ended
September 30, 1997 and 1996
Consolidated Statements of Cash Flows 3
for the Three Month Periods Ended
September 30, 1997 and 1996
Consolidated Statements of Changes In 5
Shareholders' Equity (Deficit) for the
Three Month Period Ended September 30, 1997
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
Part II - Other Information 8
Signatures 9
<PAGE>
<TABLE>
ODYSSEY PICTURES CORPORATION
Consolidated Balance Sheets
-------------------------------------
<CAPTION>
<S> <C> <C>
September 30,
1997 June 30, 1997
------------------- ---------------
ASSETS:
Cash $24,937 $8,790
Accounts receivable, net of allowances
of $0 and $0 242,245 292,251
Note receivable 550,000 300,000
Film costs, net 121,197 120,472
Other assets 15,316 17,998
------------------- --------------------
$953,695 $739,511
=================== ====================
LIABILITIES AND SHAREHOLDERS' EQUITY:
Liabilities:
Accounts payable and accrued expenses $776,086 $874,020
Accrued wages 374,772 335,996
Accrued interest 73,059 64,601
Accrued rent - 149,000
Due to producers and participants 481,398 560,499
Deferred revenues 29,000 19,800
Notes and loans payable 917,673 961,500
------------------- --------------------
Total liabilities 2,651,988 2,965,416
------------------- --------------------
Shareholders' Equity (Deficit):
Preferred stock, par value $.10;
Authorized - 10,000,000 shares
Issued - 500,000 shares 50,000 -
Common stock, par value $.01;
Authorized - 6,666,666 shares
Issued -3,861,182 and 3,279,515
shares 38,612 32,796
Capital in excess of par value 27,155,446 26,358,583
Accumulated deficit (28,942,351) (28,617,284)
------------------- --------------------
Total shareholders' deficit (1,698,293) (2,225,905)
------------------- --------------------
$953,695 $739,511
=================== ====================
The accompanying notes are an integral part of these statements.
</TABLE>
1
<PAGE>
<TABLE>
ODYSSEY PICTURES CORPORATION
Consolidated Statements Of Operations
<CAPTION>
For the Three Months
Ended September 30,
---------------------------------------
<S> <C> <C>
1997 1996
REVENUES: $35,316 $57,251
------------------ ------------------
EXPENSES:
Costs related to revenues 7,837 3,002
Selling, general and
administrative expenses 329,181 353,474
------------------ ------------------
337,018 356,476
------------------ ------------------
Operating loss (301,702) (299,225)
OTHER INCOME (EXPENSES):
Interest expense (23,365) (23,217)
------------------ ------------------
Net loss ($325,067) ($322,442)
================== ==================
Net loss per share ($0.08) ($0.12)
================== ==================
Weighted average common shares outstanding 3,861,182 2,670,190
================== ==================
The accompanying notes are an integral part of these statements.
</TABLE>
2
<PAGE>
<TABLE>
ODYSSEY PICTURES CORPORATION
Consolidated Statements Of Cash Flows
For the Three Months
Ended September 30,
------------------------------------------
<S> <C> <C>
1997 1996
Cash Flows from Operating Activities:
Net loss ($325,067) ($322,442)
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Amortization of film costs 10,539 --
Additions to film costs (11,264) (53,793)
Other depreciation and amortization 2,682 519
Issuance of shares of preferred stock to
equity investors 500,000 --
Issuance of shares of common stock in exchange for
cancellation of notes and other liabilities 302,679 302,679
Issuance of shares of common stock to
equity investors 50,000 --
Issuance of shares of common stock to officers in payment
of deferred compensation -- 45,000
Decrease (increase) in assets:
Accounts receivable, net 50,006 (26,000)
Note receivable (250,000)
Other -- (516)
Increase (decrease) in liabilities:
Accounts payable and accrued expenses (199,700) (24,373)
Due to producers and participants (79,101) 25,671
Deferred revenues 9,200 --
-------------------- -------------------
Net cash used in
operations 59,974 (53,255)
-------------------- -------------------
Cash Flows from Investing Activities:
Acquisition of fixed assets -- (1,500)
-------------------- -------------------
Net cash used in investing
activities -- (1,500)
-------------------- -------------------
Cash Flows from Financing Activities:
Note payable exchanged for common stock (70,000) --
Net proceeds from interim financing 26,173
-------------------- -------------------
Net cash provided by
financing activities (43,827) --
-------------------- -------------------
Net (decrease) increase in cash and equivalents 16,147 (54,755)
Cash and equivalents at beginning of period 8,790 462,971
-------------------- -------------------
Cash and equivalents at end of period $24,937 $408,216
==================== ===================
The accompanying notes are an integral part of these statements.
</TABLE>
3
<PAGE>
<TABLE>
ODYSSEY PICTURES CORPORATION
Consolidated Statements Of Cash Flows
<CAPTION>
For the Three Months
Ended September 30,
--------------------------------------------
<S> <C> <C>
1997 1996
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for-
Interest $5,370 --
================== ===================
Income taxes -- --
============================================
The accompanying notes are an integral part of these statements.
</TABLE>
4
<PAGE>
<TABLE>
ODYSSEY PICTURES CORPORATION
Consolidated Statements Of Changes in Shareholders' Equity (Deficit)
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Preferred Stock Common Stock Total
Amount Amount Capital in Shareholders'
($.10 Par ($.01 Par Excess of Accumulated Equity
Shares Value) Shares Value) Par Value Deficit (Deficit)
Balances - June 30, 1995 2,284,189 $22,842 $25,682,817 ($23,726,376) $1,979,283
Issuance of shares to officers
in payment of notes 307,053 3,071 228,949 232,020
Cash payments in lieu of
fractional shares on
conversion of Class A stock (400) (400)
Net loss (4,959,716) (4,959,716)
------------ --------- ------------ ----------- ------------- ------------- ------------
Balances - June 30, 1996 - - 2,591,242 25,913 25,911,366 (28,686,092) (2,748,813)
Issuance of shares to officers
in payment of notes 78,948 789 44,211 45,000
Re-issue of unexchanged shares
shares previously cancelled 65,825 659 (659) 0
Issuance of shares in consideration
for services rendered 43,500 435 33,665 34,100
Sale of shares to equity
investors 500,000 5,000 370,000 375,000
Net income 68,808 68,808
------------ --------- ------------ ----------- ------------ ------------- ------------
Balances - June 30, 1997 - - 3,279,515 $32,796 $26,358,583 ($28,617,284) ($2,225,905)
Issuance of shares of preferred
stock to equity investors 500,000 50,000 450,000 500,000
Issuance of shares of common stock
in exchange for cancellation
notes payable and other
liabilities 515,000 5,150 297,530 302,680
Issuance of shares of common stock
to equity investors 66,667 666 49,333 49,999
Net loss (325,067) (325,067)
------------ --------- ------------ ----------- ------------ ------------- ------------
Balances - September 30, 1997 500,000 $50,000 3,861,182 $38,612 $27,155,446 ($28,942,351) ($1,698,293)
============ ========= ============ =========== ============ ============= ============
The accompanying notes are an integral part of these statements.
</TABLE>
5
<PAGE>
ODYSSEY PICTURES CORPORATION
Notes to Consolidated Financial Statements
September 30, 1997
1. Basis of Financial Statement Preparation:
------------------------------------------
The Consolidated Financial Statements for Odyssey Pictures Corporation and
subsidiaries (collectively the "Company"), included herein, have been prepared
by the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading. These financial
statements should be read in conjunction with the consolidated financial
statements and the notes thereto included in the Company's Report on Form 10-K
for the period ended June 30, 1997.
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments, consisting only of normal recurring adjustments,
necessary to present fairly (a) the financial position as of September 30, 1997,
(b) the results of operations for the three month periods ended September 30,
1997 and 1996 and (c) cash flows for the three month periods ended September 30,
1997 and 1996.
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Three Months Ended September 30, 1997 and 1996
----------------------------------------------
Revenues for the three month period ended September 30, 1997 did not
increase substantially from the three months ended September 30, 1996. There
were no films which became available for delivery in either of the periods.
Costs related to revenues increased to $7,837 for the 1997 three month
period from $3,002 for the 1996 three month period.
Selling, general and administrative expenses decreased by $24,293 (7%) to
$329,181 for the 1997 three month period from $353,474 for the comparable 1996
Period.
Interest expense increased to $23,365 for the 1997 three month period from
$23,217 for the comparable 1996 three month period.
The Company did not recognize any tax benefits related to its losses from
operations for either period due to its inability to carry-back such losses to
prior years.
As of September 30, 1997, the Company had a federal net operating loss
carryforward, for tax purposes, of approximately $27,000,000, expiring through
2010, available to be used to reduce future tax liability. Due to limitations
imposed by the Internal Revenue Service, the utilization of approximately
$4,900,000 of these net operating losses will be limited to approximately
$350,000 per year.
The Company's principal activities have been the acquisition of rights in
either completed or incomplete motion pictures and the licensing of these rights
to sub-distributors in foreign countries. As of September 30, 1997, the Company
had no agreements with sub-distributors relating to distribution commitments or
guarantees that had not been recognized in the statement of operations.
Liquidity and Capital Resources
At September 30, 1997, the Company held approximately $24,937 of cash.
The Company had no material commitments for capital expenditures as of
September 30, 1997.
7
<PAGE>
PART II - OTHER INFORMATION
Reference is made to the Company's Annual Report on Form 10-K for the
fiscal year ended June 30, 1997, dated October 20, 1998
8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
ODYSSEY PICTURES CORPORATION
By: /s/ Stephen R. Greenwald
-----------------------------
Stephen R. Greenwald
Managing Director
By: /s/ Johan Schotte
----------------------
Johan Schotte
CEO and Chairman
(Principal Executive &
Financial Officer)
DATED: December 21, 1998
9
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> JUN-30-1998 JUN-30-1997
<PERIOD-START> JUL-01-1997 JUL-01-1996
<PERIOD-END> SEP-30-1997 JUN-30-1997
<CASH> 24,937 8,790
<SECURITIES> 0 0
<RECEIVABLES> 792,245 592,251
<ALLOWANCES> 0 0
<INVENTORY> 121,197 120,472
<CURRENT-ASSETS> 0 0
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 953,695 739,511
<CURRENT-LIABILITIES> 2,651,988 2,965,416
<BONDS> 0 0
0 0
50,000 0
<COMMON> 38,612 32,796
<OTHER-SE> (1,786,905) (2,258,701)
<TOTAL-LIABILITY-AND-EQUITY> 953,695 739,511
<SALES> 35,316 141,202
<TOTAL-REVENUES> 35,316 2,404,303
<CGS> 7,837 565,610
<TOTAL-COSTS> 337,018 2,244,060
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 23,365 91,435
<INCOME-PRETAX> (325,067) 68,808
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (325,067) 68,808
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (325,067) 68,808
<EPS-PRIMARY> (.08) .02
<EPS-DILUTED> (.08) .02
</TABLE>
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