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 December 31, 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 --
4,361,637 outstanding shares as of December 31, 1997.
<PAGE>
ODYSSEY PICTURES CORPORATION
INDEX
Page
Part I - Financial Information
Consolidated Balance Sheets as of 1
December 31, 1997 and June 30, 1997
Consolidated Statements of Operations 2
for the Six and Three Month Periods Ended
December 31, 1997 and 1996
Consolidated Statements of Cash Flows 3
for the Six Month Periods Ended
December 31, 1997 and 1996
Consolidated Statements of Changes In 5
Shareholders' Equity (Deficit) for the
Six Month Period Ended December 31, 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>
December 31,
1997 June 30, 1997
--------------- -------------
ASSETS:
Cash $35,841 $8,790
Accounts receivable, net of allowances
of $0 and $0 175,581 292,251
Note receivable 325,000 300,000
Film costs, net 133,444 120,472
Other assets 14,423 17,998
--------------- ----------------
$684,289 $739,511
=============== ================
LIABILITIES AND SHAREHOLDERS' EQUITY:
Liabilities:
Accounts payable and accrued expenses $811,394 $874,020
Accrued wages 464,834 335,996
Accrued interest 65,468 64,601
Accrued rent - 149,000
Due to producers and participants 431,006 560,499
Deferred revenues 29,000 19,800
Notes and loans payable 680,173 961,500
--------------- ----------------
Total liabilities 2,481,875 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 -4,361,637 and 3,279,515
shares 43,617 32,796
Capital in excess of par value 27,387,151 26,358,583
Accumulated deficit (29,278,354) (28,617,284)
--------------- ----------------
Total shareholders' deficit (1,797,586) (2,225,905)
--------------- ----------------
$684,289 $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 Six Months For the Three Months
Ended December 31, Ended December 31,
------------------------------- -------------------------------
<S> <C> <C> <C> <C>
1997 1996 1997 1996
REVENUES: $38,816 $88,175 $3,500 $30,924
-------------- -------------- -------------- --------------
EXPENSES:
Costs related to revenues 11,252 127,898 3,415 124,896
Selling, general and
administrative expenses 648,371 875,896 319,190 522,422
-------------- -------------- -------------- --------------
659,623 1,003,794 322,605 647,318
-------------- -------------- -------------- --------------
Operating loss (620,807) (915,619) (319,105) (616,394)
OTHER INCOME (EXPENSES):
Other income - 2,263,101 - 2,263,101
Interest expense (40,263) (46,781) (16,898) (23,564)
-------------- -------------- -------------- --------------
Net loss ($661,070) $1,300,701 ($336,003) $1,623,143
============== ============== ============== ==============
Net loss per share ($0.16) $0.48 ($0.08) $0.58
============== ============== ============== ==============
Weighted average common shares outstanding 4,110,410 2,708,103 4,110,410 2,807,103
============== ============== ============== ==============
The accompanying notes are an integral part of these statements.
</TABLE>
2
<PAGE>
<TABLE>
ODYSSEY PICTURES CORPORATION
Consolidated Statements Of Cash Flows
<CAPTION>
For the Six Months
Ended December 31,
----------------------------------
<S> <C> <C>
1997 1996
Cash Flows from Operating Activities:
Net loss ($661,070) $1,300,701
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Amortization of film costs 13,954 951,710
Additions to film costs (26,926) 13,199
Other depreciation and amortization 3,575 (209,035)
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 539,339 --
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
Issuance of shares of common stock in consideration
for services rendered 50 1,000
Decrease (increase) in assets:
Accounts receivable, net 116,670 (39,836)
Note receivable (25,000) (300,000)
Other -- 1,119
Increase (decrease) in liabilities:
Accounts payable and accrued expenses (81,921) 163,111
Due to producers and participants (129,493) (2,411,058)
Deferred revenues 9,200 14,800
---------------- ---------------
Net cash used in
operations 308,378 (469,289)
---------------- ---------------
Cash Flows from Investing Activities:
Acquisition of fixed assets -- (8,480)
----------------------------------
Net cash used in investing
activities -- (8,480)
----------------------------------
Cash Flows from Financing Activities:
Note payable in settlement of Generale Bank
complaint (25,000) 275,000
Notes payable exchanged for common stock (282,500) --
Net proceeds from interim financing 26,173 --
---------------- ---------------
Net cash provided by
financing activities (281,327) 275,000
---------------- ---------------
Net (decrease) increase in cash and equivalents 27,051 (202,769)
Cash and equivalents at beginning of period 8,790 462,971
---------------- ---------------
Cash and equivalents at end of period $35,841 $260,202
================ ===============
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 Six Months
Ended December 31,
--------------------------------------------
<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 1,010,455 10,104 529,235 539,339
Issuance of shares of common stock
to equity investors 66,667 667 49,333 50,000
Issuance of shares of common stock
in consideration for service
rendered 5,000 50 50
Net loss (661,070) (661,070)
------------ --------- ------------ ----------- ------------ ------------- ------------
Balances - December 31, 1997 500,000 $50,000 4,361,637 $43,617 $27,387,151 ($29,278,354) ($1,797,586)
============ ========= ============ =========== ============ ============= ============
The accompanying notes are an integral part of these statements.
</TABLE>
5
<PAGE>
ODYSSEY PICTURES CORPORATION
Notes to Consolidated Financial Statements
December 31, 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
December 31, 1997, (b) the results of operations for the six and three month
periods ended December 31, 1997 and 1996 and (c) cash flows for the six 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
Six and Three Months Ended December 31, 1997 and 1996
Revenues for the six and three month period ended December 31, 1997
decreased to $38,816 and $3,500 from $88,175 and $30,924 for the comparable six
and three month periods ended December 31, 1996. There were no films which
became available for delivery in either of the periods.
Costs related to revenues decreased to $11,252 and $3,415 respectively for
the 1997 six and three month periods ended December 31, 1997 from $127,898 and
$124,896 for the comparable six and three month periods ended December 31, 1996.
This is primarily related to the decreases in revenue in the current six and
three month periods from the comparable periods in the prior year.
Selling, general and administrative expenses decreased by $227,525 (26%) to
$648,371 for the 1997 six month period from $875,896 for the comparable 1996
Period. For the 1997 three month period such expenses decreased by $203,232
(64%) to $319,190 from $522,422 for the comparable 1996 three month period. The
decreases are primarily due to decreases in personnel and related expenses.
Other income for the six and three month period ended December 31, 1997
decreased by $2,263,101 from the comparable six and three month period because
there was no recognition of other income in the current six and three month
periods.
Interest expense decreased to $40,263 and $16,898 for the 1997 three month
period from $46,781 and $23,564 for the comparable 1996 six and three month
periods.
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 December 31, 1997, the Company had a federal net operating loss
carryforward, for tax purposes, of approximately $28,000,000, 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 December 31, 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 December 31, 1997, the Company held approximately $35,841 of cash.
The Company had no material commitments for capital expenditures as of
December 31, 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> DEC-31-1997 JUN-30-1997
<CASH> 350,841 8,790
<SECURITIES> 0 0
<RECEIVABLES> 500,581 592,251
<ALLOWANCES> 0 0
<INVENTORY> 133,444 120,472
<CURRENT-ASSETS> 0 0
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 684,289 739,511
<CURRENT-LIABILITIES> 2,481,875 2,965,416
<BONDS> 0 0
0 0
50,000 0
<COMMON> 43,617 32,796
<OTHER-SE> (1,891,203) (2,258,701)
<TOTAL-LIABILITY-AND-EQUITY> 684,289 739,511
<SALES> 38,816 141,202
<TOTAL-REVENUES> 38,816 2,404,303
<CGS> 11,252 565,610
<TOTAL-COSTS> 659,623 2,244,060
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 40,263 91,435
<INCOME-PRETAX> (661,070) 68,808
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (661,070) 68,808
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (661,070) 68,808
<EPS-PRIMARY> (.16) .02
<EPS-DILUTED> (.16) .02
</TABLE>
