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, 1999
[ ] 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
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(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 [X] No[ ]
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 -- 9,584,728 outstanding shares as of
September 30, 1999.
<PAGE>
ODYSSEY PICTURES CORPORATION
INDEX
Page
Part I - Financial Information
Consolidated Balance Sheets as of 1
September 30, 1999 and June 30, 1999
Consolidated Statements of Operations 2
for the Three Month Periods Ended
September 30, 1999 and 1998
Consolidated Statements of Cash Flows 3
for the Three Month Periods Ended
September 30, 1999 and 1998
Consolidated Statements of Changes In 5
Shareholders' Equity (Deficit) for the
Years Ended June 30, 1998 and 1999 and
The Three Month Period Ended September 30, 1999
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>
<CAPTION>
ODYSSEY PICTURES CORPORATION
Consolidated Balance Sheets
September 30, June 30,
Assets 1999 1999
---------------- -----------------
<S> <C> <C>
Cash $ 163,953 $ 4,715
Accounts receivable, net of allowances
of $0 and $0 81,986 81,986
Notes receivable 135,620 131,272
Film costs, net 4,349,548 4,383,629
Prepaid expenses and other 380,906 380,906
Investments 456,600 456,600
---------------- -----------------
TOTAL ASSETS $ 5,568,613 $ 5,439,108
================ =================
Liabilities and Shareholders' Equity (Deficit)
Liabilities
Accounts payable and accrued expenses $ 763,104 $ 805,071
Accrued wages 852,985 839,185
Accrued interest 185,830 163,198
Due to producers and participants 250,000 250,000
Deferred revenues 29,000 29,000
Notes and loans payable 1,175,633 1,192,081
---------------- -----------------
Total Liabilities 3,256,552 3,278,535
---------------- -----------------
Commitments and contingencies
Shareholders' Equity (Deficit)
Preferred stock, Series A, par value $.10;
Authorized - 10,000,000 shares
Issued - 500,000 shares 50,000 50,000
Preferred stock, Series B, par value $.10
Authorized - 10,000,000 shares
Issued - 4,500,000 shares 450,000 450,000
Common stock, par value $.01;
Authorized - 40,000,000 shares
Issued and outstanding -
9,584,728 and 8,284,728 95,847 82,847
Capital in excess of par value 33,159,141 32,704,197
Accumulated deficit (31,442,927) (31,126,471)
---------------- -----------------
Total shareholders' deficit 2,312,061 2,160,573
---------------- -----------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) $ 5,568,613 $ 5,439,108
================ =================
The accompanying notes are an integral part of these financial statements.
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
ODYSSEY PICTURES CORPORATION
Consolidated Statements of Operations
For the Three Months Ended September 30,
1999 1998
---------------- ----------------
<S> <C> <C>
Revenue
$ 37,653 $ 143,700
Expenses
Costs related to revenues 37,180 126,469
Selling, general and
administrative expenses 292,145 331,693
---------------- ----------------
---------------- ----------------
329,325 458,162
---------------- ----------------
Operating income (loss) (291,672) (314,462)
Other income (expenses)
Other income
Interest income 4,348 2,798
Interest expense (29,132) (32,241)
Loss on sale of joint venture interests -
Other income
---------------- ----------------
Income (loss) from operations
before provision for income taxes (316,456) (343,905)
Provision / Benefit for income taxes - -
NET INCOME (LOSS) $ (316,456) $ (343,905)
================ ================
Basic income (loss) per share $ (0.04) $ (0.07)
Weighted average common
shares outstanding 8,764,728 5,074,285
================ ================
Diluted income (loss) per share $ (0.04) $ (0.07)
Weighted average common
shares outstanding 8,764,728 5,074,285
================ ================
The accompanying notes are an integral part of these financial statements.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
ODYSSEY PICTURES CORPORATION
Consolidated Statements of Cash Flows
For the Three Months Ended September 30,
1999 1998
-------------- ---------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net loss $ (316,456) $ (343,905)
Adjustments to reconcile net income (loss)
to net cash used in
operating activities:
Amortization of film costs 34,081 71,100
Changes in assets and liabilities:
Accounts receivable, net - (68,436)
Notes receivable (4,348) (3,037)
Prepaid expenses and other - (96)
Accounts payable and accrued expenses (5,535) 142,666
Due to producers and participants -
-------------- ---------------
Net cash used in operating activities (292,258) (201,708)
-------------- ---------------
Cash Flows From Investing Activities:
- -
None
-------------- ---------------
Net cash used in investing activities - -
-------------- ---------------
Cash Flows From Financing Activities:
Net proceeds/payments - notes and loans payable (16,448) 206,144
Issuance of shares of common stock to equity investors 467,944
-------------- ---------------
Net cash provided by financing activities 451,496 206,144
-------------- ---------------
Net increase in cash 159,238 4,436
Cash at beginning of period 4,715 4,331
-------------- ---------------
Cash at end of period $ 163,953 $ 8,767
============== ===============
The accompanying notes are an integral part of these financial statements.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
ODYSSEY PICTURES CORPORATION
Consolidated Statements of Cash Flows
For the Three Months Ended September 30,
<S> <C> <C>
1999 1998
--------------- ---------------
Supplemental Disclosures of Cash Flow Information:
Non-cash transactions:
Issuance of shares of preferred stock for purchase of
Kimon film library and other assets $4,500,000
===============
Cash paid during the period for:
Interest $ 6,500 $ -
=============== ===============
Income taxes $ - $ -
=============== ===============
The accompanying notes are an integral part of these financial 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> <C> <C>
Preferred Stock Preferred Stock
Series A Series B Common Stock Total
Capital in Shareholders'
Excess of Accumulated Equity
Shares Amount Shares Amount Shares Amount Par Value Deficit (Deficit)
------ ------- ------ ------ ------- ------- ----------- ------------ -----------
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) -
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 stock in
exchange for cancellation of
deferred compensation notes 667,648 6,676 165,823 172,499
Issuance of shares of common stock
in consideration for service
rendered 5,000 50 50
Net loss (1,119,414) (1,119,414)
------- ------- --------- -------- --------- -------- ----------- ------------- ------------
Balances - June 30, 1998 500,000 $50,000 - - 5,029,285 $50,293 $27,552,973 ($29,736,698) ($2,083,432)
Issuance of shares of common stock
as partial consideration for
loans made to company 45,000 450 19,350 19,800
Issuance of shares of preferred
stock for purchase of Kimon film
library and other assets 4,500,000 450,000 4,050,000 4,500,000
Issuance of shares to officers in
payment of notes 830,055 8,301 251,943 260,244
Issuance of shares of common stock
in consideration for barter
services to be rendered 200,000 2,000 86,000 88,000
Issuance of shares in consideration
for legal services rendered 100,000 1,000 39,000 40,000
Issuance of shares of common stock
to equity investors 1,500,000 15,000 425,693 440,693
Issuance of shares of common stock
to officer as contract signing bs 50,000 500 16,500 17,000
Issuance of shares in consideration
for services to be rendered 181,667 1,816 104,000 105,816
Issuance of shares of common stock
in full satisfaction of a loan
and accrued interest 348,721 3,487 158,738 162,225
Net loss (1,389,773) (1,389,773)
-------- ------- --------- -------- --------- -------- ----------- ------------- -----------
Balances - June 30, 1999 500,000 50,000 4,500,000 450,000 8,284,728 82,847 32,704,197 (31,126,471) 2,160,573
Issuance of shares of common
stock to equity investors - - - - 1,300,000 13,000 454,944 467,944
Net loss (316,456) (316,456)
-------- ------- --------- -------- --------- -------- ----------- ------------- -----------
500,000 $50,000 4,500,000 $450,000 9,584,728 $95,847 $33,159,141 $(31,442,927) $ 2,312,061
======== ======= ========= ======== ========= ======== =========== ============= ===========
The accompanying notes are an integral part of these statements.
</TABLE>
5
<PAGE>
ODYSSEY PICTURES CORPORATION
Notes to Consolidated Financial Statements
September 30, 1999
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, 1999.
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, 1999, (b) the results of operations for the three month
periods ended September 30, 1999 and 1998 and (c) cash flows for the three
month periods ended September 30, 1999 and 1998.
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
- ---------------------
Three Months Ended September 30, 1999 and 1998
----------------------------------------------
Revenues for the three months ended September 30, 1999 were $37,653. This
is a decrease of $106,047 from the comparable three month period ended September
30, 1998. This decrease is due to decreased revenues from the Kimon Film Library
which the company is currently exploiting.
Costs related to revenues for the three months ended September 30, 1999
were $37,180. This is a decrease of $89,289 from the comparable three month
period ended September 30, 1998. This decrease is due to the reduction in
revenues earned in the exploitation of the Kimon Film Library.
Selling, general and administrative expenses decreased by $39,548 (11.9%)
to $292,145 for the 1999 three month period from $331,693 for the comparable
1998 period.
Interest income for the three months ended September 30, 1999 was $4,348.
This is primarily due to loans made to E3 Sports New Mexico, Inc., in which the
company has a minority interest.
Interest expense decreased to $29,132 for the 1999 three month period from
$32,241 for the comparable 1998 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, 1999, the Company had a federal net operating loss
carryforward, for tax purposes, of approximately $31,000,000, 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, 1999, 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, 1999, the Company held $163,953 of cash.
The Company had no material commitments for capital expenditures as of
September 30, 1999.
7
<PAGE>
PART II - OTHER INFORMATION
Item 1 though 6 of Part II are not applicable.
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/ Pierre Koshakji
------------------------
Pierre Koshakji
President
By: /s/ Johan Schotte
----------------------
Johan Schotte
CEO and Chairman
(Principal Executive &
Financial Officer)
DATED: November 9, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 163,953
<SECURITIES> 0
<RECEIVABLES> 217,606
<ALLOWANCES> 0
<INVENTORY> 4,349,548
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,568,613
<CURRENT-LIABILITIES> 3,256,552
<BONDS> 0
0
500,000
<COMMON> 95,847
<OTHER-SE> 1,716,214
<TOTAL-LIABILITY-AND-EQUITY> 5,568,613
<SALES> 37,653
<TOTAL-REVENUES> 37,653
<CGS> 37,180
<TOTAL-COSTS> 329,325
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 29,132
<INCOME-PRETAX> (316,456)
<INCOME-TAX> 0
<INCOME-CONTINUING> (316,456)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (316,456)
<EPS-BASIC> (.04)
<EPS-DILUTED> (.04)
</TABLE>
