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, 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
---------------------------------------------------
(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 -- 10,145,518 outstanding shares as of
Decmber 31, 1999.
<PAGE>
ODYSSEY PICTURES CORPORATION
INDEX
Page
Part I - Financial Information
Consolidated Balance Sheets as of 1
December 31, 1999 and June 30, 1999
Consolidated Statements of Operations 2
for the Six and Three Month Periods Ended
December 31, 1999 and 1998
Consolidated Statements of Cash Flows 3-4
for the Six Month Periods Ended
December 31, 1999 and 1998
Consolidated Statements of Changes In 5
Shareholders' Equity (Deficit) for the
Six Month Period Ended December 31, 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
December 31, June 30,
Assets 1999 1999
- ------ ----------------- ----------------
<S> <C> <C>
Cash $ 11,224 $ 4,715
Accounts receivable, net of allowances
of $0 and $0 94,287 81,986
Notes receivable 139,968 131,272
Film costs, net 4,121,733 4,383,629
Prepaid expenses and other 425,906 380,906
Investments 456,600 456,600
----------------- ----------------
TOTAL ASSETS $ 5,249,718 $ 5,439,108
================= ================
Liabilities and Shareholders' Equity
- ------------------------------------
Liabilities
Accounts payable and accrued expenses $ 729,104 $ 805,071
Accrued wages 990,802 839,185
Accrued interest 208,917 163,198
Due to producers and participants 250,000 250,000
Deferred revenues 29,000 29,000
Notes and loans payable 1,054,879 1,192,081
----------------- ----------------
Total Liabilities 3,262,702 3,278,535
----------------- ----------------
Commitments and contingencies
Shareholders' Equity
Preferred stock, Series A, par value $.10;
Authorized - 10,000,000 shares
Issued - No shares at December 31, 1999 and 500,000 shares - 50,000
at June 30, 1999
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 -
10,145,518 and 8,284,728 101,455 82,847
Capital in excess of par value 33,215,116 32,704,197
Accumulated deficit (31,779,555) (31,126,471)
----------------- ----------------
Total shareholders' equity 1,987,016 2,160,573
----------------- ----------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 5,249,718 $ 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
<S> <C> <C> <C> <C>
For the Three Months Ended For the Six Months Ended
December 31, December 31,
1999 1998 1999 1998
------------ ------------ ----------- -----------
Revenue
$ 23,599 $ 64,679 $ 61,252 $ 208,379
Expenses
Costs related to revenues 45,208 62,571 82,388 189,040
Selling, general and
administrative expenses 289,124 301,449 581,269 633,142
------------ ------------ ----------- -----------
334,332 364,020 663,657 822,182
------------ ------------ ----------- -----------
Operating income (loss) (310,733) (299,341) (602,405) (613,803)
Other income (expenses)
Interest income 4,348 3,890 8,696 6,688
Interest expense (30,243) (43,577) (59,375) (75,818)
Other income
------------ ------------ ----------- -----------
Income (loss) from operations
before provision for income taxes (336,628) (339,028) (653,084) (682,933)
Provision / Benefit for income taxes - - - -
NET INCOME (LOSS) $ (336,628) $ (339,028) $(653,084) $(682,933)
============ ============ =========== ===========
Basic income (loss) per share $ (0.03) $ (0.06) $ (0.07) $ (0.11)
Weighted average common
shares outstanding 9,914,018 5,976,813 9,312,707 5,976,813
============ ============ =========== ===========
Diluted income (loss) per share $ (0.03) $ (0.06) $ (0.07) $ (0.11)
Weighted average common
shares outstanding 9,914,018 5,976,813 9,312,707 5,976,813
============ ============ =========== ===========
The accompanying notes are an integral part of these financial statements.
2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ODYSSEY PICTURES CORPORATION
Consolidated Statements of Cash Flows
For the Six Months Ended
December 31,
<S> <C> <C>
1999 1998
--------------- --------------
Cash Flows From Operating Activities:
Net loss $ (653,084) $ (682,933)
Adjustments to reconcile net income (loss)
to net cash used in
operating activities:
Amortization of film costs 63,160 109,811
Issuance of shares of common stock for
services and other consideration 49,656 164,800
Changes in assets and liabilities:
Accounts receivable, net (12,301) 1,983
Notes receivable (8,696) -
Accounts payable and accrued expenses 202,552 (7,279)
Other (45,000) -
--------------- --------------
Net cash used in operating activities (403,713) (413,618)
--------------- --------------
Cash Flows From Investing Activities:
- -
None
--------------- --------------
Net cash used in investing activities - -
--------------- --------------
Cash Flows From Financing Activities:
Net proceeds/payments - notes and loans payable (94,722) 230,449
Issuance of shares of common stock to equity investors 504,944 187,500
--------------- --------------
Net cash provided by financing activities 410,222 417,949
--------------- --------------
Net increase (decrease) in cash 6,509 4,331
Cash at beginning of period 4,715 1,468
--------------- ---------------
Cash at end of period $ 11,224 $ 5,799
=============== ==============
The accompanying notes are an integral part of these statements.
3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ODYSSEY PICTURES CORPORATION
Consolidated Statements of Cash Flows
For the Six Months Ended
December 31,
<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
============== ==============
Issuance of shares of common stock for services and other
consideration $ 42,480 $ 164,800
============== ==============
Issuance of shares of common stock to officers for payment of
notes and other $ 130,839 $ 260,244
============== ==============
Exchange of certain film cost assets for all outstanding
series A preferred stock $ 198,736 -
============== ==============
Cash paid during the period for:
Interest $ - $ -
============== ==============
Income taxes $ - $ -
============== ==============
The accompanying notes are an integral part of these statements.
4
</TABLE>
<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, 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 1,392,500 13,925 491,019 504,944
Issuance of shares of common stock
for conversion of notes payable
and related accrued interest 399,990 4,000 126,839 130,839
Issuance of shares of common stock
for services rendered 68,300 683 41,797 42,480
Exchange of certain film cost assets
for all outstanding series A
preferred stock (500,000) (50,000) (148,736) (198,736)
Net loss (653,084) (653,084)
-------- ------- --------- -------- ---------- -------- ----------- ------------- -----------
- $ - 4,500,000 $450,000 10,145,518 $101,455 $33,215,116 $(31,779,555) $1,987,016
======== ======= ========= ======== ========== ======== =========== ============= ===========
The accompanying notes are an integral part of these statements.
</TABLE>
5
<PAGE>
ODYSSEY PICTURES CORPORATION
Notes to Consolidated Financial Statements
December 31, 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 December 31, 1999, (b) the results of operations for
the six and three month periods ended December 31, 1999 and 1998 and
(c) cash flows for the six month periods ended December 31, 1999 and
1998.
2. - Sale of Kimon Asset/Valuation Key:
In December 1999 , the Company sold its Valuation Key software for
$500,000 in shares of the Company's Preferred Series B stock. The
Valuation Key was part of the original Kimon assets purchased in July
1998 and was valued then at $200,000.
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
- ---------------------
Six and Three Months Ended December 31, 1999 and 1998
-----------------------------------------------------
Revenues for the six months and three months ended December 31, 1999
decreased to $61,252 and $23,599 from $208,379 and $64,679 for the comparable
six and three month periods ended December 31, 1998. This decrease is due
primarily to reduced activity from the sale of film assets related to the Kimon
acquisiton.
Costs related to revenues decreased to $82,388 and $45,208, respectively
for the 1999 six and three month periods ended December 31, 1999 from $189,040
and $62,571 for the comparable six and three months ended December 31, 1998.
This decrease is due primarily to reduced activity from the sale of film assets
related to the Kimon acquisiton.
Selling, general and administrative expenses decreased by $51,873 (8%) to
$581,269 for the six month period from $633,142 for the comparable 1998 period.
For the 1999 three month period such expenses decreased by $12,325 (4%) to
$289,124 from $301,449 for the comparable 1998 three month period.
Interest expense decreased in 1999 to $59,375 and $30,243 for the six month
and three month periods from $75,818 and $43,577.
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, 1999, the Company had a federal net operating loss
carryforward, for tax purposes, of approximately $32,000,000, 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, 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 December 31, 1999, the Company held $11,224 of cash.
The Company had no material commitments for capital expenditures as of
December 31, 1999.
In December, 1999 the Company was loaned 2,000,000 Belgian Francs
(approximately $50,000) by one unaffiliated investor who received one year
convertible notes with interest at 10% per annum (the note is convertible at a
15% discount to the market price).
During the period from December 1999 through February 10, 2000 , the
Company completed a private placements to offshore investors for a total of
962,500 shares of common stock at a purchase price of $.40 per share (resulting
in gross proceeds to the Company of $385,000).
7
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Not Applicable.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
Not Applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not Applicable.
ITEM 5. OTHER INFORMATION.
Not Applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 10-K.
Exhibits. None
Reports on Form 8-K. None
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: February 11, 2000
9
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> OCT-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 11,224
<SECURITIES> 0
<RECEIVABLES> 234,255
<ALLOWANCES> 0
<INVENTORY> 4,121,733
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,249,718
<CURRENT-LIABILITIES> 3,262,702
<BONDS> 0
0
450,000
<COMMON> 101,455
<OTHER-SE> 1,435,561
<TOTAL-LIABILITY-AND-EQUITY> 5,249,718
<SALES> 23,599
<TOTAL-REVENUES> 23,599
<CGS> 45,208
<TOTAL-COSTS> 334,332
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 30,243
<INCOME-PRETAX> (336,628)
<INCOME-TAX> 0
<INCOME-CONTINUING> (336,628)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (336,628)
<EPS-BASIC> (.03)
<EPS-DILUTED> (.03)
</TABLE>
