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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 12b-25
NOTIFICATION OF LATE FILING
(Check One): / /Form 10-KSB / /Form 20-F / /Form 11-K /X/Form 10-QSB
/ /Form N-SAR
For Period Ended: March 31, 1998
/ / Transition Report on Form 10-K
/ / Transition Report on Form 20-F
/ / Transition Report on Form 11-K
/ / Transition Report on Form 10-Q
/ / Transition Report on Form N-SAR
For the Transition Period Ended: __________________________
Read Attached Instruction Sheet Before Preparing Form. Please Print or Type.
Nothing in this form shall be construed to imply that the Commission
has verified any information contained herein.
If the notification relates to a portion of the filing checked above, identify
the item(s) to which the notification relates:
PART I - REGISTRANT INFORMATION
Skyline Multimedia Entertainment, Inc.
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Full Name of Registrant
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Former Name if Applicable
350 Fifth Avenue
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Address of Principal Executive Office (Street and Number)
New York, New York 10118
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City, State and Zip Code
PART II - RULES 12b-25(b) AND (c)
If the subject report could not be filed without unreasonable effort or
expense and the registrant seeks relief pursuant to Rule 12b-25(b), the
following should be completed. (Check box if appropriate)
/X/ (a) The reasons described in reasonable detail in Part III of this
form could not be eliminated without unreasonable effort or
expense;
/X/ (b) The subject annual report, or semi-annual report, transition
report on Form 10-K, Form 20-F, Form 11-K, Form N-SAR, or portion
thereof, will be filed on or before the fifteenth calendar day
following the prescribed due date; or the subject quarterly
report or transition report on Form 10-Q, or portion thereof,
will be filed on or before the fifth calendar day following the
prescribed due date; and
/ / (c) The accountant's statement or other exhibit required by Rule
12b-25(c) has been attached if applicable.
PART III - NARRATIVE
State below in reasonable detail the reasons why the Form 10-K, 11-K, 10-Q,
N-SAR, or the transition report or portion thereof, could not be filed within
the prescribed time period. (Attach Extra Sheets if Needed)
SEC 1344(8-89) (Attach Extra Sheets if Needed)
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The Company is in the process of resolving certain events and providing
additional disclosure with respect thereto, which events transpired
subsequent to the end of the fiscal period and which will be disclosed
in the Company's quarterly report on Form 10-QSB.
PART IV - OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification
Neil S. Belloff, Esq. (212) 969-3208
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(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under Section 13 or 15(d) of
the Securities Exchange Act of 1934 or Section 30 of the Investment
Company Act of 1940 during the preceding 12 months (or for such
shorter) period that the registrant was required to file such
reports) been filed? If answer is no, identify report(s).
/X/ Yes / / No
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(3) Is it anticipated that any significant change in results of
operations from the corresponding period for the last fiscal year
will be reflected by the earnings statements to be included in the
subject report or portion thereof?
/X/ Yes / / No
If so, attach an explanation of the anticipated change, both
narratively and quantitatively, and, if appropriate, state the
reasons why a reasonable estimate of the results cannot be made. See
attached explanation on Exhibit "A".
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Skyline Multimedia Entertainment, Inc.
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(Name of Registrant as Specified in Charter)
has caused this notification to be signed on its behalf by the undersigned
thereunto duly authorized.
Date: May 15, 1998 By: s/Steven Schwartz
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Steven Schwartz
Executive Director of Operations
and Finance
INSTRUCTION: The form may be signed by an executive officer of the registrant
or by any other duly authorized representative. The name and title of the
person signing the form shall be typed or printed beneath the signature. If
the statement is signed on behalf of the registrant by an authorized
representative (other than an executive officer), evidence of the
representative's authority to sign on behalf of the registrant shall be filed
with the form.
Intentional misstatements or omissions of fact constitute
Federal Criminal Violations (see 18 U.S.C. 1001).
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SEC 1344(8-89) (Attach Extra Sheets if Needed)
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GENERAL INSTRUCTIONS
1. This form is required by Rule 12b-25 (17 CFR 240. 12b-25) of the
General Rules and Regulations under the Securities Exchange Act
of 1934.
2. One signed original and four conformed copies of this form and
amendments thereto must be completed and filed with the Securities
and Exchange Commission, Washington, D.C. 20549, in accordance with
Rule 0-3 of the General Rules and Regulations under the Act. The
information contained in or filed with the form will be made a matter
of public record in the Commission files.
3. A manually signed copy of the form and amendments thereto shall be
filed with each national securities exchange on which any class of
securities of the registrant is registered.
4. Amendments to the notifications must also be filed on Form 12b-25 but
need not restate information that has been correctly furnished. The
form shall be clearly identified as an amended notification.
SEC 1344(8-89) (Attach Extra Sheets if Needed)
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EXHIBIT A
SKYLINE MULTIMEDIA ENTERTAINMENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
March 31, March 31
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1998 1997 1998 1997
<S> <C> <C> <C> <C>
Revenues:
Attraction sales $1,958,000 $1,412,000 $7,148,000 $4,378,000
Concession sales 191,000 270,000 766,000 917,000
Sponsorship income 60,000 88,000 236,000 261,000
---------- ---------- ---------- ----------
Total Revenues 2,209,000 1,770,000 8,150,000 5,556,000
---------- ---------- ---------- ----------
Operating Expenses:
Cost of merchandise sold 92,000 124,000 383,000 354,000
Selling, general and administrative 2,193,000 2,846,000 8,339,000 6,308,000
Depreciation and amortization 406,000 381,000 1,310,000 674,000
---------- ---------- ---------- ----------
Total Operating Expenses 2,691,000 3,351,000 10,032,000 7,336,000
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(Loss) from operations (482,000) (1,581,000) (1,882,000) (1,780,000)
Net interest (expense) (248,000) (192,000) (674,000) (266,000)
---------- ---------- ---------- ----------
(Loss) before provision for income taxes (730,000) (1,773,000) (2,556,000) (2,046,000)
Income tax expense (benefit) (Note 3) 0 (118,000) 0 61,000
Net deferred tax expense (Note 3) 0 1,179,000 0 340,000
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Net (loss) $(730,000) $(2,834,000) $(2,556,000) $(2,447,000)
---------- ---------- ---------- ----------
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Basic (loss) per share $ (.44) $ (1.68) $ (1.53) $ (1.40)
---------- ---------- ---------- ----------
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Diluted (loss) per share $ (.44) $ (1.68) $ (1.53) $ (1.40)
---------- ---------- ---------- ----------
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Basic Weighted average number of
shares (excludes 670,000 escrow 1,675,000 1,690,000 1,675,000 1,754,000
shares and 1,090,909 preferred ---------- ---------- ---------- ----------
shares) ---------- ---------- ---------- ----------
Diluted Weighted average number of shares 1,675,000 1,690,000 1,675,000 1,754,000
(excludes 670,000 escrow shares and ---------- ---------- ---------- ----------
1,090,909 preferred shares) ---------- ---------- ---------- ----------
</TABLE>
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Results of Operations
Revenues. Revenues generated during the three and nine months ended
March 31, 1998 aggregated $2,209,000 and $8,150,000, respectively as compared
to $1,770,000 and $5,556,000 respectively for the three and nine months ended
March 31, 1997. The increase in revenue for the three and nine months ended
March 31, 1998, from the prior year period is primarily due to the
commencement of operations of the Company's XS New York facility, which
accounted for total revenues of $1,026,000 and $3,670,000 during the three and
nine months ended March 31, 1998 as compared to $904,000 and $951,000 for the
three and nine months ended March 31, 1997.
Management expects to continue to supplement its primary revenue
stream from ticket sales for New York Skyride and game revenue at XS New York
by soliciting corporate sponsorships from a number of key consumer product
companies. During the three and nine month periods ended March 31, 1998 the
Company earned approximately $60,000 and $236,000 respectively in sponsorship
income as a result of monthly fees and capital improvements received from
sponsors. Current agreements with the Company's three sponsors are expected to
provide annual sponsorship fees aggregating approximately $1,300,000 during
the five year duration of such agreements which commenced November 1994.
Operating Expenses. Operating expenses incurred during the three and
nine months ended March 31, 1998, aggregated $2,691,000 and $10,032,000
compared to $3,351,000 and $7,336,000 for the three and nine months ended
March 31, 1997. The increase for the nine months ended March 31, 1998 is due
in part to an increase in overhead at the New York Skyride from $4,303,000 for
the nine months ended March 31, 1997, to approximately $4,583,000 for the nine
months ended March 31, 1998. In addition, the increase for the nine months
ended March 31, 1998 is due in part to an increase of approximately $299,000
in rent expense at the New York Skyride relating to the additional space in
the Empire State Building. Also contributing, as a result of full scale
operations at XS New York, the Company had an increase in operating expenses
of approximately $846,000. XS New York was opened on a preview basis until
March 20, 1997, the date of its official grand opening. Accordingly, expenses
incurred for the nine months ended March 31, 1998 are higher than the nine
months ended March 31, 1997. These XS New York related expenses include, among
other things, payroll and related expenses of approximately $600,000, and an
allocation of corporate overhead of approximately $350,000 for the nine months
ended March 31, 1998. Additionally, as a result of defaults on the Woodfield
Mall lease, the Company incurred expenses during the nine months ended March
31, 1998 relating to this facility aggregating approximately $729,000. These
costs included rent accrued during the period as well as the write-off of all
assets acquired relating to the facility. Also, included in operating expenses
during the nine months ended March 31, 1998 is approximately $120,000 relating
to the proposed warrant exchange offer, which was terminated on November 4,
1997.
Net (Loss) and (Loss) Per Share. Basic and diluted net (loss) and
(loss) per share available to common stockholders before deferred taxes were
($730,000) and ($.44) and ($2,556,000) and ($1.53) for the three and nine
months ended March 31, 1998 as compared to ($1,655,000) and ($.98) and
($2,107,000) and ($1.20) for the three and nine months ended March 31, 1997.
The net loss for the quarter ended March 31, 1998 included a loss of
approximately ($393,000) related to XS New York (see "Operating Expenses"
above), a loss of approximately ($316,000) from New York Skyride, and a loss
of approximately ($21,000) related to certain start-up costs in connection
with the Company's proposed Australia site. During the quarter ended March 31,
1997, New York Skyride operations incurred a loss of approximately ($107,000)
with $1,061,000 in deferred tax expense realized, offset, in part, by start-up
costs of approximately $1,052,000 related to XS New York.
As a result of operating loss carryforwards from prior years, the
Company recognized a net deferred tax expense of $1,061,000 or $.63 per share,
during the quarter ended March 31, 1997 which was offset by a provision for
certain state and local income taxes of ($20,000) or ($.01) per share. During
the quarter ended March 31, 1998 there was a provision for certain state and
local taxes on capital aggregating $12,000 with no benefit recognized for net
operating loss carryforwards.
Working Capital. Working capital (deficiency) at March 31, 1998, was
approximately ($5,477,000) compared to a working capital (deficiency) of
approximately ($2,532,000) at March 31, 1997. The increase in working capital
deficiency is primarily the result of the XS New York buildout of
approximately $7,769,000, the operating loss incurred during the past nine
month period of ($2,556,000), writeoffs as a result of defaults on the
Woodfield Mall lease of $729,000, deferred project, leasing and financing
costs aggregating $941,000 related to the Company's capital investments in XS
New York and Sidney Skyride and costs associated with the Company's stock
buy-back program of $601,000.
