UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10Q
(X) Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the quarterly period ended
June 30, 2000
( ) Transition report pursuant of Section 13 or 15(d) of the
Securities Exchange Act of 1939 for the transition period ____
to______
COMMISSION FILE NUMBER 0-21322
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OUT TAKES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 95-4363944
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(State or other jurisdiction of (IRS Employer ID No.)
incorporation or organization)
3811 Turtle Creek Blvd., Suite 350 Telephone 214-528-8200
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(Address of Principal Executive Offices, including Registrant's
zip code and telephone number)
NONE
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Former name, former address and former fiscal year, if changed
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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The number of shares of the registrant's common stock as of June
30, 2000.................................... 20,788,122 shares.
Transitional Small Business Disclosure Format (check one):
Yes No X
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TABLE OF CONTENTS
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
(a) Balance Sheet
(b) Statement of Operations
(c) Statement of Changes in Financial Position
(d) Statement of Shareholders' Equity
(e) Notes to Financial Statements
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
Item 3. Risks
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults On Senior Securities
Item 4. Submission of Items to a Vote
Item 5. Other Information
Item 6
(a) Exhibits
(b) Reports on Form 8K May 4, 1998 September 14, 1998
SIGNATURES
FINANCIAL DATA SCHEDULE
<TABLE>
<CAPTION>
Out-Takes, Inc.
Consolidated Balance Sheets (Unaudited)
<S> <C> <C>
June 30, March 31,
2000 2000
------- --------
Assets
Current Assets
Cash and cash equivalents $ 11,953 $ 77,265
Accounts receivable 22,293 42,722
Note receivable 11,000 -0-
Total Current Assets 45,246 119,987
Property, Plant and Equipment-net 223,024 236,798
Other Non-Current Assets
Goodwill-net 4,143,750 4,170,891
Deposits and advances 23,148 23,148
Total Assets $ 4,435,168 $ 4,550,824
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $ 81,980 $ 95,067
Accrued expenses 27,141 25,159
Compensation payable-related parties 162,210 211,390
Accrued interest 517,034 422,931
Accrued interest-related parties 192,999 173,001
Deferred income 6,971 6,971
Short-term notes 856,477 832,966
Due to related parties 773,845 773,845
Total Current Liabilities 2,618,657 2,541,330
Long-Term Debt
Notes payable 4,011,459 4,011,459
Stockholders' Equity
Common stock, par value $0.01 per share,
35,000,000 shares authorized; 20,788,122
shares issued of which 292,396 are in
Treasury 207,882 207,882
Preferred stock, par value $0.01 per
share, 5,000,00 shares authorized;
none issued -0- -0-
Capital in excess of par 9,918,230 9,913,230
Accumulated deficit (12,212,654) (12,014,671)
(2,086,542) (1,893,559)
Treasury stock, at cost (108,406) (108,406)
Total Liabilities and
Stockholders' Equity $ 4,435,168 $ 4,550,824
See accountants' compilation report.
</TABLE>
<TABLE>
<CAPTION>
Out-Takes, Inc.
Consolidated Statement of Income (Unaudited)
<S> <C> <C>
Three Months Ended June 30,
2000 1999
Revenues $ 53,258 $ 45,238
Cost of Revenues 76,795 30,567
Gross Margin (23,537) 14,671
General and administrative 44,734 99,885
Income (loss) from operations (68,271) (85,214)
Other Income (Expense)
Interest expense (109,714) (7,529)
Interest expense-related parties (19,998) (23,430)
Total Other Income (Expenses) (129,712) (30,959)
Provision (benefit) for income taxes - -
Net Income (Loss) ($197,983) ($116,173)
Net income (Loss) Per Share ($0.01) ($0.01)
Weighted average common shares outstanding 20,495,726 20,495,726
See accountants' compilation report.
</TABLE>
<TABLE>
<CAPTION>
Out-Takes, Inc.
Consolidated Statements of Stockholders' Equity
(Unaudited)
<S> <C> <C> <C> <C>
Common Stock Additional
Number of Common Stock Paid-In Accumulated
Shares Amount Capital Deficit
------------ ------------ ---------- -----------
Balance, March 31, 1999 20,788,122 $ 207,882 $ 9,913,230 (11,130,561)
Net income (loss) - - - (884,110)
20,788,122 $ 207,882 $ 9,913,230 $(12,014,671)
Treasury Deferred
Stock Compensation Total
Balance, March 31, 1999 $ (108,406) $ - $(1,117,855)
Net income (loss) - - (884,110)
Balance, March 31, 2000 $(108,406) $ - $(2,001,965)
Common Stock Additional
Number of Common Stock Paid-In Accumulated
Shares Amount Capital Deficit
------------ ------------ ---------- -----------
Balance, March 31, 2000 20,788,122 $ 207,882 $ 9,913,230 $ (12,014,671)
Capital Contribution - - 5,000 -
Net income (loss) - - - (197,983)
Balance , June 30, 2000 20,788,122 $207,882 $9,918,230 $(12,212,654)
Treasury Deferred
Stock Compensation Total
-------- ------------ -----
Balance, March 31, 2000 $(108,406) $ - $(2,001,965)
Capital Contribution - - 5,000
Net income (loss) - - (197,983)
Balance, June 30, 2000 $(108,406) $ - $(2,194,948)
See accountants' compilation report.
</TABLE>
<TABLE>
<CAPTION>
Out-Takes, Inc.
Consolidated Statements of Cash Flows (Unaudited)
<S> <C> <C>
Three Months ended June 30,
2000 1999
Cash Flows From
Operating Activities
Net Income (Loss) ($197,983) ($116,173)
Noncash items included
In net income (loss)
Depreciation and amortization 40,915 40,891
Loss on closure of Irvine Studio - -
Management fee-related party - -
Changes in:
Accounts receivable 20,428 (4,358)
Royalty advance - -
Inventory - -
Prepaid expenses - -
Other current assets - -
Deposits and advances - -
Bank overdraft-10,612
Due from related party - -
Accounts payable (11,771) 2,361
Accrued expenses 1,982 2,674
Accrued interest 94,103 9,545
Accrued interest-related party 19,998 21,411
Accrued taxes payable - -
Deferred income - (22,953)
Provision for studio closure - -
Prepaid asset lease - -
Compensation payable-related party 22,500 15,000
Net cash provided (used)
by operating activities (9,828) (40,990)
Cash Flows From
Investing Activities
Increase in note receivable (11,000) -
Purchase of property, plant
and equipment - (2,453)
Disposal of property, plant
and equipment - -
Net cash provided (used)
by investing activities (11,000) (2,453)
Cash Flows From
Financing Activities
Advances from related parties 14,449 -
Payments to related parties (88,760) (32,794)
Capital contribution 5,000
Proceeds from short-term debt 29,827 75,000
Principal payments on long-term debt (5,000) -
Principal payments on capital lease - -
Net cash provided (used)
By financing activities (55,484) 42,206
Net increase in cash and
cash equivalents (65,312) (1,237)
Cash and cash equivalents-
beginning of period 77,265 1,356
Cash and cash equivalents-
end of year $11,953 $119
See accountants' compilation report.
</TABLE>
[CAPTION]
Out-Takes, Inc.
Consolidated Notes to Financial Statements
1. Summary of Significant Accounting Policies
Nature of Business The Company's principal business activity is
the collection and distribution of waste natural gas in the State
of California, and the conversion of such natural gas into
electricity, which is then sold to retail providers of consumer
electricity.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates that affect the reported amounts of assets,
liabilities, revenues, expenses and the disclosure of contingent
assets and liabilities. Actual results could differ from these
estimates.
Basis of Presentation The accompanying financial statements
include the accounts of Out-Takes, Inc. and its wholly owned
subsidiaries. All significant inter-company accounts and
transactions have been eliminated.
Property, Plant and Equipment - Plant and equipment are recorded
at cost. Depreciation is provided over the estimated useful asset
lives using the straight-line method over 5-7 years.
Cash and cash equivalents - The Company classifies all highly
liquid debt instruments, readily convertible to cash and
purchased with a maturity of three months or less at date of
purchase, as cash equivalents. The Company had no cash
equivalents at March 31, 2000.
Goodwill and acquisition related intangibles Goodwill is
recorded when the consideration paid for acquisitions exceeds the
fair value of net tangible and intangible assets acquired.
Goodwill is amortized on a straight-line basis over 40 years.
Net goodwill at the reporting dates is as follows:
June 30, 2000 March 31, 1999
-------------- --------------
Goodwill $4,342,874 $4,342,874
Accumulated amortization (199,124) (171,983)
--------- --------
Net Goodwill $4,143,750 $4,170,891
=========== ===========
Amortization expense $27,141 $108,564
=========== ===========
Earnings per share - Earnings per share data in the financial
statements have been calculated in accordance with SFAS No. 128.
Earnings per share reflects the amount of earnings for the period
available to each share of common stock outstanding during the
reporting period, while giving effect to all dilutive potential
common shares that were outstanding during the period, such as
common shares that could result from the potential exercise or
conversion of securities into common stock. As of June 30 and
March 31,2000, no contingently issuable shares qualified as
dilutive to be included in the earnings per share calculation.
2. Mergers and Acquisitions
On August 31, 1998, Out-Takes, Inc. acquired all of the issued
and outstanding equity interests of Los Alamos Energy, LLC, a
California limited liability company (LAE). This acquisition has
been accounted for as an exchange between companies under common
control. The investment has been recorded at historical cost in
a manner similar to a pooling of interest,
and the face value of the note given has been adjusted down to
the net equity value of LAE at the date of the exchange.
In March 2000, the Company executed a letter of intent with
Merger Solutions, LTD.(MSL), which among other things, provides
for a merger to be effected pursuant to the provisions of a
Merger Agreement. As of June 30, 2000, the merger is in process
but had not yet been completed.
In June 1999, the Company executed a letter of intent with
Coastal Resources Corporation, which, among other things,
provides for a merger to be effected pursuant to the provisions
of a Share Exchange Agreement. As of June 30, 2000, the merger is
in process but had not yet been completed.
The Company has also executed a letter of intent with Atlas
Engineering, LLC to the effect that the Company shall acquire
Atlas Engineering, LLC pursuant to the provisions of a Purchase
Agreement. As of June 30, 2000, the merger is in process but had
not yet been completed.
3. Property, Plant and Equipment
The components of property, plant and equipment are as follows:
June 30, 2000 March 31, 2000
Computers and software 4,793 4,793
Equipment and furniture 350,633 350,633
Leased asset 19,000 19,000
------------- -------------
Total - At Cost 374,426 374,426
Less: Accumulated
depreciation (151,402) (137,628)
------------- -------------
Net $ 223,024 $ 236,798
============= =============
4. Notes Payable
Note Payable - Consultant
This is an unsecured note payable to a former financial
consultant to the Company pursuant to a settlement agreement
dated August 17, 1994. The note is non-interest bearing and
payment is subject to availability of future cash flows from the
Company's operations. The note holder has threatened to commence
legal action, however management has advised the note holder that
no amount is due at the present time as the Company has not
generated positive cash flow. Counsel has advised the Company
that no litigation has commenced and counsel is unable to assess
a possible outcome, should litigation be commenced. The payable
amount as of June 30, 2000 is $48,000.
Note Payable Radovich
This is an unsecured promissory note dated September 27, 1996.
The note's original maturity dated was thirty (30) days, no
interest. The note's maturity date has been extended indefinitely
without interest. The payable amount as of June 30, 2000 is
$30,557.
Note Payable De Simone
This is an unsecured promissory note dated March 30, 1998. The
note's original maturity date was sixty (60) days, 10% per annum
simple interest. The notes maturity had been extended to December
31, 1999 with interest and is being negotiated for another
extension. The payable amount as of June 30, 2000 is $19,000.
Note Payable Reeves
This is an unsecured promissory note dated March 30, 1998. The
note's original maturity date was sixty days with interest at 10%
per annum and is convertible into Out-Takes, Inc. common stock at
a rate to be negotiated between the parties. The payable amount
as of June 30, 2000 is $25,000.
Note Payable Boyd
This is an unsecured promissory note dated August 14, 1998. The
note's original maturity date was sixty (60) days, 10% annum
simple interest. The note's maturity date was extended to
December 31, 1999 with interest and the parties are in
negotiation for an additional extension. The payable amount as of
June 30, 2000 is $45,000.
Note Payable Atlas Engineering
This is an unsecured promissory note dated March 19, 1999. The
note is convertible into Out-Takes, Inc. common stock pursuant to
a non-binding share purchase agreement executed between the
parties. The note includes interest at 10% per annum until paid
or converted. The payable amount as of June 30, 2000 is $15,000.
Note Payable - Coastal Resources Corp.
This note, dated June 15, 1999 is secured by the property, plant
and equipment of Los Alamos Energy, LLC and includes interest at
8% per annum beginning October 1, 1999. The master loan agreement
specifies a $300,000 maximum financing amount and was entered
into pursuant to a non-binding merger agreement between the
parties. If the merger is consummated, then the loan balance at
that date shall be credited to Coastal Resources Corp. as part of
its proportionate equity interest in Out-Takes, Inc. If the
merger is not consummated, then the principal and interest is due
and payable on the first anniversary date of each advance ranging
from June 2000 through August 2000. The payable amount as of June
30, 2000 is $405,641.
Note Payable Los Alamos Energy, LLC Equity Holders
This note, dated August 31, 1998, is pursuant to a share Purchase
Agreement executed between Los Alamos Energy, LLC (LAE) and Out-
Takes, Inc. The note specifies interest at 10% per annum and is
convertible into a aggregate ninety percent of the issued and
outstanding shares of common stock of Out-Takes, Inc. as of the
date of conversion. The agreement also requires as a condition of
the conversion that Out-Takes, Inc. effect a reverse stock split
of one share for every one-hundred issued and outstanding shares
at the conversion date. As of March 31, 2000, this conversion and
reverse stock split has not been completed. The payable amount as
of June 30, 2000 is $4,000,000.
Note Payable Joint Venture Working Interest
These notes are pursuant to a Joint Venture Agreement executed
between Los Alamos Energy, LLC and the participants in
development and generation of electricity from waste natural gas
activities. The agreement specifies that participants may be
required to convert their working interest into an equity
position when the Company merges with a publicly traded entity.
Those participants electing not to convert would be repaid their
original consideration plus a non-compounded annual yield of 12%.
As of March 31, 2000, this conversion or repayment has not been
completed. The payable amount as of June 30, 2000 is $250,279.
Note Payable Hall
This is an unsecured promissory note dated January 4, 2000. The
note's maturity date is January 4, 2001 without interest. The
payable amount as of June 30, 2000 is $18,000.
Lease Payable Fairfield Energy Corp.
The company is the lessee of a transformer under a capital lease
expiring July 2003. The asset and liability under the capital
lease is recorded at the present value of the minimum lease
payments. The asset is depreciated over the lease term of 50
months. Depreciation of the asset under the capital lease is
included in depreciation expense for the three months ended June
30, 2000. The equipment held under capital lease at June 30, 2000
is valued at $19,000 less accumulated depreciation of $3,110.
Future minimum lease obligations are as follows:
Year ended March 31
-------------------
2001 $ 6,137
2002 $ 6,137
2003 $ 6,137
2004 $ 2,046
--------
Total $ 20,457
Less interest 5,162
Present value of net minimum lease payment $ 15,295
---------
5. Due to Related Party
The amount due to related party of $773,845 is unsecured and
payable upon demand. Interest is charged at a rate of 10% per
annum and for the three months ended June 30, 2000 and 1999 was
$19,998 and $30,959 respectively. As of June 30, 2000 and March
31, 2000 interest of $192,999 and $173,001 respectively was
accrued.
6. Commitments and Contingencies
The Company has an extended 12 month non-cancelable operating
lease agreement for an office facility.
Future minimum lease obligations are as follows:
Year ended March 31
-------------------
2001 $ 10,200
--------
Total $ 10,200
=========
In the three months ended June 30, 2000 and 1999 total rent
expense under this lease was $2,550 and $2,550 respectively
The Company's facilities are subject to federal, state and local
provisions relating to the discharge of materials into the
environment. Compliance with these provisions has not had, nor
does the Company expect such compliance to have, any material
effect on the capital expenditures, revenues or expenses, or
financial condition of the Company. Management believes that its
current practices and procedures for the control and disposition
of materials comply with all applicable federal, state and local
requirements.
Los Alamos Energy, LLC (LAE) participates in certain agreements
with respect to the generation of electricity from waste natural
gas whereby its managing member also acts as the operator of the
electrical power plant's development and production activities.
As its managing member and operator, LAE is contingently liable
for the activities of this venture.
7. Income Taxes
As of March 31, 2000, the Company has a net operating loss (NOL)
carry forward of approximately $11,250,000. The net operating
loss carry forwards expire between 2007 and 2015. No deferred tax
asset has been recorded for these losses since a valuation
allowance has been recorded for the portion of the NOL that is
not expected to be realized.
8. New Authoritative Pronouncements
The Company intends to adopt Statement of Financial Accounting
Standards (SFAS) No. 133, "Accounting for Derivative Instruments
and Hedging Activities," as of the beginning of its fiscal year
2001. The standard will require the Company to recognize all
derivatives on the balance sheet at fair value. The effect of
adopting the standard is not expected to have a material effect
on the Company's financial position or overall results in
operations.
9. Going Concern
The Company has been unsuccessful in generating net cash from
operations. The net cash used by the Company in operating
activities in the year ended March 31, 2000 was $164,635. The
Company incurred a net loss of $884,110 for the year ended March
31, 2000 and has a working capital deficit as of March 31, 2000
of $2,421,343. This trend continued for the three months ended
June 30, 2000.
The accompanying financial statements have been prepared on a
going concern basis which contemplates the realization of assets
and the satisfaction of liabilities and commitments in the normal
course of business. The continuation of the Company as a going
concern is dependent upon its ability to generate net cash from
operations. The Company's recurring operating losses and net
working capital deficiency raises substantial doubt about the
entity's ability to continue as a going concern.
Management plans to expand its existing power plant to a four or
five mega watt facility, reduce expenses, expand operations to
include direct service of consumer electricity, and convert
$4,750,279 of existing debt and its related accrued interest to
equity, which will substantially reduce interest expense.
10. Concentrations of Credit Risk
All of the consolidated revenue of Out-Takes, Inc. is generated
from the leasing of photographic equipment to one customer and
the sale of electricity to Pacific Gas and Electric Company and
Texaco.
11. Supplemental Cash Flow Disclosures
Cash flows from operating activities include the following cash
payments:
June 30, June 30,
2000 1999
-------- --------
Income taxes $ - $ -
Interest $ 11,611 $ 7,650
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
THIS ANALYSIS CONTAINS FORWARD-LOOKING COMMENTS WHICH ARE BASED
ON CURRENT INFORMATION. ACTUAL RESULTS IN THE FUTURE MAY DIFFER
MATERIALLY.
Results of Operations
Overview
Out-Takes, Inc., ("the company") was incorporated in Delaware on
March 18, 1992 Up until October 26, 1998, the company was engaged
in the sale of photographic portraits of children, adults and
family groups. Until October 26, 1998, the Company operated a
retail photo studio, called Out-Takes(R), which opened on May 24,
1993 and is located in MCA/ Universal's CityWalkSM project in Los
Angeles, California ("the CityWalk Studio").
On or about August 31, 1998, the Company acquired all of the
issued and outstanding units of equity of Los Alamos Energy, LLC,
which operates a 1 mega watt power plant in Los Alamos,
California, which produces electricity from "waste gas," and
shifted its business emphasis to that of electrical energy
provider.
On or about October 26, 1998, the Company leased its photo studio
assets to Colorvision International, Inc., completing the shift
of its business focus to the providing of electrical energy.
Los Alamos Energy was formed in June, 1996, for the purpose of
becoming a principal electricity provider in the State of
California. With the acquisition of Los Alamos Energy, the
Company is engaged in a "niche" area of electricity production
from "waste gas," natural gas which is produced in conjunction
with oil production, but for which there is no market. Normally,
waste gas is flared, or burned. The procurement of waste gas
provides an inexpensive source of fuel for the Company's
generators. The Company currently provides all of the electrical
energy to the unincorporated town of Los Alamos, California,
through Pacific Gas and Electric Company (PG&E), which is
mandated by current law to purchase all the electrical energy
that the Company can produce. On August 31, 1998, the Company
entered into a Share Purchase Agreement (the "Acquisition
Agreement") whereby the Company acquired (the "Acquisition")
all of the issued and outstanding equity interests in Los
Alamos Energy, LLC, a California limited liability company
("LAE"). The purchase price to be paid for the equity interests
of LAE is Four Million Dollars ($4,000,000), which was paid by
Promissory Notes (the "Notes") to the holders of LAE equity
(the "Equity Holders") calling for interest on all outstanding
amounts to accrue at the rate of ten percent (10%) per annum.
Payments of principal and accrued interest under the Notes shall
be made monthly in arrears up to the maturity date, which is the
fifth anniversary of the Notes. The Notes may be prepaid at any
time without premium or penalty.The Acquisition Agreement
provides that, in the event the Equity Holders shall desire to do
so, they may convert their indebtedness to common stock of the
Company representing in the aggregate ninety percent (90%) of the
issued and outstanding shares of such common stock as of the date
of such conversion. The Acquisition Agreement provides that it is
a condition of the conversion that the Company effect a reverse
stock split of one (1) share for every one hundred (100) shares
issued and outstanding as of such date. LAE contemplates that a
significant number of persons currently holding promissory notes
and/or working interests in its electricity production
(collectively, "Interest Holders") will exercise their rights to
convert such interests into the equity of LAE, and subsequently
to join in the conversion of the Notes into common stock of the
Company. Presently, management of LAE anticipates that, prior to
the conversion of the Notes and after giving effect to the
contemplated reverse stock split, the Company will issue
approximately three million (3,000,000) additional shares of
common stock, and that subsequent to completing the conversion,
the Equity Holders and Interest Holders will own, in the
aggregate, approximately two million eight hundred eighty
thousand (2,880,000) shares of the Company's common stock,
representing ninety percent (90%) of the total amount of common
stock estimated to be issued and outstanding as of the date such
conversion rights are exercised.
The indebtedness represented by the Notes is secured by (a) a
Security Agreement, granting a first lien and security interest
upon all of the assets of the Company; and (b) a pledge of the
common stock of the Company held by Photo Corporation Group Pty
Limited, an Australian corporation, which is the controlling
stockholder of the Company. The stock pledge grants the Holders
specific rights under certain circumstances, including the right
to receive distributions made by the Company in respect of its
common stock and the right to vote the pledged shares, for so
long as the Notes are in force.
The purchase price to be paid by the Company for all of the
issued and outstanding equity of LAE was negotiated based upon
several factors, including, without limitation, the asset value
of LAE and its projected income from operations based, in part,
upon management's estimates of its natural gas reserves and its
current contracts.
Prior to the acquisition, Out Takes derived substantially all of
its revenue from a retail photographic studio, called OUT-TAKES ,
which opened on May 24, 1993 and is located in MCA/Universal's
City Walk project in Los Angeles, California. LAE is engaged in
the collection and distribution of natural gas from properties
owned or leased by it in the State of California, and management
of LAE intends to position LAE to become an important independent
power producer, and to benefit as a principal provider of
electricity to consumers in California and elsewhere as
deregulation is implemented. LAE will be operated as a wholly-
owned subsidiary of the Company.
The Company currently leases to a third party, Colorvision, an
operating photographic portrait studio, which was opened on May
24, 1993 at MCA/Universal's CityWalkSM project in Los Angeles,
California ("the CityWalk Studio"). The Company opened a second
studio on December 1, 1995 at the Entertainment Center in the
Bazaar at the Irvine Spectrum located in Irvine, Orange County,
California ("the Irvine Studio"). The Irvine Studio closed on
April 22, 1998.
The Company continues to operate at a net loss. Management
believes that the leasing of its photography studio assets, which
enabled it to cut down on payroll and lease expenses, and the
acquisition of Los Alamos Energy, which generates revenues of
approximately $20,000 per month from electrical power sales will
have a positive impact on the Company's operating results as no
further losses will be incurred by the photo studio operations.
Therefore, management expects to see that net losses will be
discontinued in the current fiscal year. The Company's short term
objectives are to increase the capacity of the Los Alamos power
plant to 4mW, which will improve the revenues from the power
plant operations. However, this takes $1.2 to 1.5 million in
equity capital to purchase new equipment. There can be no
assurance that the Company will succeed in raising this equity
capital.
Results of Operations
Period ended June 30, 2000 compared with June 30, 1999
The net loss for the period ended June 30, 2000, was $197,983
compared with $116,173 for the period ended June 30, 1999.
The Company overall generated $53,258 in revenues in the period
ended June 30, 2000 compared to revenues of $451,238 in the
fiscal year ended March 31, 1999. Management attributes this
increase to the change in business focus.
Liquidity and Capital Resources
At June 30, 2000 the Company had a working capital deficit of
$2,573,411 as compared to a working capital deficit on March 31,
2000 of $2,421,343. The company attributes this change to the
sale of its photo studio business.
Net cash used in operating activities was $9,828 for the period
ended June 30, 2000 compared to the utilization of $40,990 of
cash for the same period last year.
The Company does not anticipate that it will have any problems in
meeting its obligations for continuing fixed expenses, materials
procurement or operating labor.
Other Matters
The Company's securities are quoted on the National Quotation
Bureau's "pink sheets." Last month, it's quotation was dropped on
the OTC-Bulletin Board, where it is traded under the trading
symbol OUTT. It currently has an application pending before the
NASD to have its securities quoted on the NASD OTC Bulletin
Board.
PART II. OTHER INFORMATION
Item 1. Legal proceedings NONE
Item 2. Changes in securities and use of proceeds NONE
Item 3. Defaults on senior securities NONE
Item 4. Submission of items to a vote NONE
Item 5. Other information NONE
Item 6.
a) Exhibits NONE
b) Reports on 8K
Current Report on Form 8-K dated April 27, 1998
Current Report on Form 8-K dated May 13, 1998
Current Report on Form 8-K dated October 28, 1998
SIGNATURES
In accordance with the requirements of the Securities and
Exchange Act of 1934, the registrant caused this report to be
signed on its behalf by the undersigned, thereunto duly
authorized.
Out-Takes, Inc.
Dated: August 18, 2000 By: James Harvey
-----------------------
James Harvey, President
Secretary and Chief
Financial Officer
[TYPE]EX-27
<SEQUENCE>2
[DESCRIPTION]FINANCIAL DATA SCHEDULE
[ARTICLE] 5
[MULTIPLIER] 1
[PERIOD-TYPE] 6-MOS
[FISCAL-YEAR-END] MAR-31-2000
[PERIOD-START] MAR-31-2000
[PERIOD-END] JUN-30-2000
[CASH] 11953
[SECURITIES] 0
[RECEIVABLES] 22293
[ALLOWANCES] 0
[INVENTORY] 0
[CURRENT-ASSETS] 45246
[PP&E] 223024
[DEPRECIATION] 40915
[TOTAL-ASSETS] 4435168
[CURRENT-LIABILITIES] 2618657
[BONDS] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 207882
[OTHER-SE] 9913230
[TOTAL-LIABILITY-AND-EQUITY] 4435168
[SALES] 53258
[TOTAL-REVENUES] 53258
[CGS] 76795
[TOTAL-COSTS] 76795
[OTHER-EXPENSES] 129712
[LOSS-PROVISION] (187983)
[INTEREST-EXPENSE] (129712)
[INCOME-PRETAX] (197983)
[INCOME-TAX] 0
[INCOME-CONTINUING] (197983)
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] (197983)
[EPS-BASIC] (.01)
[EPS-DILUTED] (.01)
