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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 25, 1997
OVERSEAS FILMGROUP, INC.
(Exact name of registrant as specified in charter)
DELAWARE 0-25308 13-3751702
(State or other (Commission (I.R.S. Employer
jurisdiction of Incorporation) File Number) Identification No.)
8800 SUNSET BLVD., SUITE 302, LOS ANGELES, CA 90069
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (310) 855-1199
NOT APPLICABLE
(Former name or former address, if changed since last report)
PAGE 1 OF 10 PAGES.
THIS REPORT CONTAINS
NO EXHIBITS.
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ITEM 5. OTHER EVENTS
FROM TIME TO TIME, OVERSEAS FILMGROUP, INC. ("REGISTRANT" OR "OVERSEAS
FILMGROUP") MAY MAKE FORWARD LOOKING STATEMENTS RELATING TO SUCH MATTERS AS
ANTICIPATED FINANCIAL PERFORMANCE, BUSINESS PROSPECTS, NEW FILM PROJECTS AND
RELEASES, AND SIMILAR MATTERS. THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995 PROVIDES A SAFE HARBOR FOR FORWARD LOOKING STATEMENTS. THE
REGISTRANT NOTES THAT ALL FORWARD LOOKING STATEMENTS ARE NECESSARILY
SPECULATIVE AND THERE ARE A VARIETY OF FACTORS THAT COULD CAUSE REGISTRANT'S
ACTUAL RESULTS AND EXPERIENCE TO DIFFER MATERIALLY FROM THE ANTICIPATED
RESULTS OR OTHER EXPECTATIONS EXPRESSED IN REGISTRANT'S FORWARD LOOKING
STATEMENTS. THE DISCUSSION BELOW HIGHLIGHTS SOME OF THE MORE IMPORTANT RISKS
AND UNCERTAINTIES IDENTIFIED BY MANAGEMENT OF REGISTRANT THAT MAY AFFECT THE
OPERATIONS, PERFORMANCE, DEVELOPMENT AND RESULTS OF REGISTRANT'S BUSINESS.
SUCH RISKS AND UNCERTAINTIES SHOULD NOT BE ASSUMED TO BE THE ONLY THINGS THAT
COULD AFFECT FUTURE PERFORMANCE. THE REGISTRANT DOES NOT HAVE A POLICY OF
UPDATING OR REVISING FORWARD LOOKING STATEMENTS AND THUS IT SHOULD NOT BE
ASSUMED THAT SILENCE BY MANAGEMENT OVER TIME MEANS THAT ACTUAL EVENTS ARE
BEARING OUT AS ESTIMATED IN SUCH FORWARD LOOKING STATEMENTS.
GENERAL RISKS RELATED TO THE MOTION PICTURE INDUSTRY
The motion picture industry is highly speculative and inherently risky.
There can be no assurance of the economic success of any motion picture since
the revenues derived from the production and distribution of a motion picture
(which do not necessarily bear a direct correlation to the production or
distribution costs incurred) depend primarily upon its acceptance by the public,
which cannot be predicted. The commercial success of a motion picture also
depends upon the quality and acceptance of other competing films released into
the marketplace at or near the same time, the availability of alternative forms
of entertainment and leisure time activities, general economic conditions and
other tangible and intangible factors, all of which can change and cannot be
predicted with certainty. Therefore, there is a substantial risk that some or
all of the motion pictures released, distributed or produced by Overseas
Filmgroup will not be commercially successful, resulting in costs not being
recouped or anticipated profits not being realized.
SIGNIFICANT CHANGES IN THE MOTION PICTURE INDUSTRY
The entertainment industry in general, and the motion picture industry in
particular, are dynamic industries which have undergone significant changes.
Among the major changes, total film industry revenues of U.S. motion picture
companies (including revenues from domestic theatrical distribution) have
increased substantially, and the relative contributions of the components of
such total revenues have changed dramatically over the past fifteen years.
There has also been a substantial increase in the revenues generated from the
licensing of rights in ancillary (other than domestic theatrical) media, such as
home video, cable and pay-per-view. However, the theatrical success of a motion
picture remains a significant factor in generating revenues in foreign markets
and in other media such as television and videocassettes. Other significant
changes in the motion picture industry include ownership changes and
consolidation (see "Competition" below) and rapid technological change.
Overseas Filmgroup has not benefited from some of these changes. Technological
developments have resulted in the popularity and availability of alternative and
competing forms of leisure time entertainment, including pay/cable televisions
services and home entertainment equipment such as videocassette, video games and
computers. To date, Overseas Filmgroup has not realized any significant
revenues from the newest revenue sources such as computer and video games and
other interactive media. In addition, some of the changes in the motion picture
industry have had a negative impact upon Overseas Filmgroup. For example,
despite the expansion in the market for videocassettes for home use (which has
slowed), retail video stores increasingly have been purchasing fewer copies of
videocassettes of motion pictures which have not been theatrically released and
more copies of major studio theatrical hits. Because Overseas Filmgroup
distributes a number of films that are not released theatrically, this trend has
had a negative impact on Overseas Filmgroup and has led, in part, to Overseas
Filmgroup establishing its own domestic theatrical distribution operation. It
is not possible to predict what changes or trends will continue in the motion
picture industry. For instance, there can be no assurance that the increase in
total motion picture revenues, or the components thereof, will continue in the
future or if such increases do continue, continue at the same rate as in the
past. In addition, it is not possible to predict, what new changes or trends
might occur and the overall effect these factors will have on the potential
revenue from and profitability of
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feature-length motion pictures and the business of Overseas Filmgroup.
CERTAIN CONSIDERATIONS REGARDING THEATRICAL DISTRIBUTION BY OVERSEAS FILMGROUP
Overseas Filmgroup increasingly engages directly in theatrical distribution
in the United States through its domestic theatrical releasing division, First
Look Pictures. Domestic theatrical distribution, which involves the licensing
and booking of motion pictures to theatrical exhibitors in the United States,
the promotion of these motion pictures through advertising and publicity
campaigns and the manufacture of release prints from the film negative, is very
competitive. A substantial majority of the motion picture screens in the United
States are typically committed at any one time to between 10 and 15 films
distributed nationally by the major studio distributors that can command greater
access to available screens. Although some exhibitors specialize in the
exhibition of independent, specialized motion pictures and "art-house" films,
there is intense competition for screen availability for these films as well.
The number of motion pictures released theatrically in the United States has
increased in recent years, thereby increasing competition for exhibition outlets
and audiences. Domestic theatrical distribution, which often requires
substantial expenditures for marketing and the manufacturing of release prints,
is also very risky. The success of a domestic theatrical release by First Look
Pictures can be affected by a number of factors outside of its control,
including audience and critical acceptance, the success of competing films in
release, awards won by First Look Pictures' releases or that of its competition,
inclement weather, and competing televised events (such as sporting and news
events). Payment by a national theater chain in the United States is typically
made on the close of the engagement in all such chain's theaters. Since First
Look Pictures typically releases its films on a more limited basis than a
distributor of national, wide releases and since First Look Pictures'
specialized or "art-house" releases can have extended runs, payment to Overseas
Filmgroup by theater chains is often not made for four to nine months from
initial release, or longer. In addition, First Look Pictures' releases are
exhibited by a substantial number of independent theater owners for which it can
be comparatively more difficult to monitor and enforce timely payment than with
respect to national theater chains. Overseas Filmgroup often commits to spend
at least a minimum amount on prints and advertising with respect to motion
pictures distributed theatrically through First Look Pictures and generally, in
addition to receiving a distribution fee, Overseas Filmgroup is entitled to
recoup its prints and advertising expenditures. As a result of the foregoing
factors listed above, and depending upon audience acceptance of the films
distributed through First Look Pictures, Overseas Filmgroup expects that, in
many cases, it will not recoup all of its distribution expenses or derive any
profit solely from domestic theatrical distribution of First Look Pictures'
releases, without taking into account revenues derived from such films in
ancillary media and international markets. In addition, there can be no
assurance that total revenues from any First Look Pictures' release will be
sufficient to allow Overseas Filmgroup to recoup all of its costs or to realize
a profit on such film.
DEPENDENCE ON KEY EXECUTIVES
Ellen Dinerman Little and Robert B. Little are the founders and senior
executive officers of Overseas Filmgroup. They serve as Overseas Filmgroup's
Co-Chairs of the Board and Co-Chief Executive Officers. Ellen Dinerman Little
also serves as President of Overseas Filmgroup. Virtually all decisions
concerning the conduct of the business of Overseas Filmgroup, including the
motion picture properties and rights to be acquired by Overseas Filmgroup and
the arrangements to be made for the distribution, production and financing of
motion pictures by Overseas Filmgroup, are made or are significantly influenced
by these key executives. The loss of either of their services for any reason
would have a material adverse effect on Overseas Filmgroup's business and
operations and its prospects for the future. In addition, Overseas Filmgroup's
credit facility contains covenants and similar provisions generally requiring
Ms. Little's and Mr. Little's continued involvement with, and control of,
Overseas Filmgroup. Although Overseas Filmgroup has employment agreements with
Ms. Little and Mr. Little for terms ending in October 2001, under certain
circumstances, these employment agreements may be terminated earlier by Overseas
Filmgroup or the executives.
INCREASING ACQUISITION, PRODUCTION AND MARKETING COSTS
The costs of producing and marketing motion pictures have increased
dramatically in recent years. These costs will likely continue to increase in
the future, thereby increasing the capital required for
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the operations of motion picture producers and distributors (both the major
studios and independent film companies, including Overseas Filmgroup), and the
risk borne by such parties. The motion pictures distributed, financed or
produced by Overseas Filmgroup typically have had direct negative costs
substantially below the average for the major studios. Overseas Filmgroup may
from time to time in the future distribute, finance or produce motion pictures
with substantially larger direct negative costs and marketing costs, which may,
in certain circumstances, be substantially in excess of the average direct
negative and marketing costs of the films historically distributed by Overseas
Filmgroup. In addition, as part of Overseas Filmgroup's overall business
strategy, it intends to gradually and selectively acquire rights to, finance or
produce films which Overseas Filmgroup believes have greater production values
(often as a result of larger budgets) and greater potential for more widespread
audience appeal. As a result, management of Overseas Filmgroup anticipates that
in the future its costs and expenses (including those of acquiring distribution
rights) may rise significantly.
INCREASED MOTION PICTURE INVESTMENT BY OVERSEAS FILMGROUP
Overseas Filmgroup typically acquires distribution rights in a motion
picture for a specified term in one or more territories and media. In some
circumstances, Overseas Filmgroup also acquires the copyright to the motion
picture. The arrangements Overseas Filmgroup enters into to acquire rights
often includes Overseas Filmgroup agreeing to pay an advance or minimum
guarantee for the rights acquired and/or agreeing to advance print and
advertising costs, obligations which are independent of the actual financial
performance of the motion picture being distributed. The risks incurred by
Overseas Filmgroup dramatically increase to the extent Overseas Filmgroup takes
such actions. While Overseas Filmgroup generally works with independent
producers who have already developed projects, Overseas Filmgroup also incurs
significant risk to the extent it engages in development or production
activities itself, given the costs and risks associated with such activities,
including the uncertainty of whether any particular development project will
eventually result in a completed film. Although Overseas Filmgroup may, in
certain circumstances, reduce some of the foregoing risks by sub-licensing
certain distribution rights in exchange for minimum guarantees from
sub-licensees such as foreign sub-distributors (see "Certain Considerations
Relating to the Receipt of Minimum Guarantees by Overseas Filmgroup" below), the
risks incurred by Overseas Filmgroup are generally greater the greater the
"investment" by Overseas Filmgroup in a motion picture. This "investment" by
Overseas Filmgroup in a motion picture includes the cost of acquisition of the
distribution rights (including any advance or minimum guarantee paid to the
producer), the amount of the production financed, and the marketing and
distribution costs borne. For a variety of reasons, including (i) the
likelihood of continued industry-wide increases in acquisition, production and
marketing costs (see "Increasing Acquisition, Production and Marketing Costs"
above); (ii) Overseas Filmgroup's intent to gradually and selectively acquire
rights to or produce films which have greater production values (often as a
result of larger budgets); and (iii) Overseas Filmgroup's increasing role as the
principal financier of a greater portion of the motion pictures it distributes,
the "investment" by Overseas Filmgroup in the motion pictures it distributes in
the future and the associated risks faced by Overseas Filmgroup are likely to
increase.
CERTAIN CONSIDERATIONS RELATING TO THE RECEIPT OF MINIMUM GUARANTEES BY OVERSEAS
FILMGROUP
Overseas Filmgroup does not always receive a minimum guarantee from the
licensing of distribution rights to sub-distributors, thus increasing Overseas
Filmgroup's reliance on the actual financial performance of the film being
distributed. In some circumstances, whether Overseas Filmgroup receives a
minimum guarantee depends upon the media. For example, Overseas Filmgroup is
increasingly (particularly with respect to motion pictures which have not been
theatrically released) entering into video distribution arrangements with
sub-distributors where no minimum guarantee is paid to Overseas Filmgroup. Even
if Overseas Filmgroup does obtain minimum guarantees from its sub-distributors,
such minimum guarantees do not assure the profitability of Overseas Filmgroup's
motion pictures or Overseas Filmgroup's operations. Additional revenues may be
necessary from distribution of a motion picture in order to enable Overseas
Filmgroup to recoup any investment in such motion picture in excess of the
aggregate minimum guarantees obtained from such sub-distributors, pay for
distribution costs, pay for ongoing acquisition and development of other motion
pictures by Overseas Filmgroup and cover general overhead. While the
pre-licensing of distribution rights to sub-distributors in exchange for minimum
guarantees may reduce some of the risk to Overseas Filmgroup from unsuccessful
films, it may also result
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in Overseas Filmgroup receiving lower revenues with respect to highly successful
films than if such licensing of distribution rights were made upon different
terms that, for example, might have provided lower minimum guarantees to
Overseas Filmgroup but also provided a lower distribution fee (i.e., a lower
percentage of gross revenues) to the sub-distributor.
ABILITY TO ACHIEVE ACQUISITION AND DISTRIBUTION GOALS
As the motion picture business is subject to numerous uncertainties,
including financing requirements, personnel availability, and the release
schedule of competing films, no assurance can be given that Overseas Filmgroup's
acquisition, production, financing and distribution goals will be met in future
periods or that any of the motion pictures scheduled for finance, production,
distribution or release by Overseas Filmgroup or its First Look Pictures'
operations will actually be completed, released, released in accordance with the
anticipated schedule or budget, or necessarily involve all of the anticipated
creative elements. In addition, certain subsidiaries of Overseas Filmgroup are,
for certain films, subject to the terms in effect from time to time of various
industry-wide collective bargaining agreements, including the Writers Guild of
America, the Directors Guild of America, the Screen Actors Guild and the
International Alliance of Theatrical Stage Employees. These organizations have
all engaged in strikes and similar activities. A strike, job action or labor
disturbance by the members of any of these organizations could have a material
adverse effect on the production of a motion picture within the United States
and, consequently, on the business, operations and results of operations of
Overseas Filmgroup.
RENEWAL OR REFINANCING OF CREDIT FACILITY
Overseas Filmgroup's operations are supported by a credit facility under
which the commitment to lend is currently reviewed by the lenders on an annual
basis. Certain advances made under the credit facility are due upon expiration
of the commitment to lend while certain others are due one year after the
advance of funds. In order to have sufficient funds available to maintain its
acquisition, distribution, finance and production activities, Overseas Filmgroup
will need to renew or refinance the credit facility on or before the expiration
of the commitment to lend (May 1997). There can be no assurance that Overseas
Filmgroup will be able to renew or refinance its credit facility on terms
similar to the existing terms, or at all. Failure to do so would have a
material adverse effect on the business, financial condition and operations of
Overseas Filmgroup.
EXPIRATION OR TERMINATION OF OUTPUT ARRANGEMENTS
Overseas Filmgroup has entered into several output arrangements with local
foreign distributors in certain territories whereby the foreign sub-distributor
receives the right, typically for a specified period and/or a specified number
of motion pictures, to distribute in a particular territory and in designated
media, motion pictures released by Overseas Filmgroup. Overseas Filmgroup
enters into output arrangements with foreign sub-distributors which Overseas
Filmgroup believes have the ability to make recurring payments. Nevertheless,
in certain instances foreign sub-distributors encounter financial difficulties
that may preclude timely payment, and as a result Overseas Filmgroup may be
forced to terminate or renegotiate output agreements. The renegotiation,
expiration or termination of any such output arrangement for that or any other
reason could have a material adverse effect on Overseas Filmgroup's business,
financial condition and operations. Overseas Filmgroup also has entered into an
output arrangement for domestic video rights with BMG Video. This arrangement
covers, subject to certain conditions, twelve specified films and also generally
any film delivered to Overseas Filmgroup prior to December 31, 1996 (or December
31, 1997 in the event Overseas Filmgroup and BMG Video mutually elect to renew
the term for an additional year). In the event this output arrangement is not
extended past its expiration date, there can be no assurance that a new domestic
video output arrangement will be obtained or that, if obtained, will be on terms
similar to Overseas Filmgroup's arrangement with BMG Video. The failure to
obtain an arrangement similar to Overseas Filmgroup's current arrangement with
BMG video could have a material adverse effect on Overseas Filmgroup's business,
financial condition and operations.
COMPETITION
Motion picture production, finance and distribution are highly competitive
businesses in the
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United States and internationally, with competition coming both from companies
within the motion picture industry and companies in other entertainment media
which create alternative forms of leisure entertainment. Overseas Filmgroup
competes with major film studios (including The Walt Disney Company, Paramount
Pictures Corporation, Universal Pictures, Columbia Pictures, Tri-Star Pictures,
Twentieth Century Fox, Warner Brothers Inc. and MGM/UA) and their affiliates
which are dominant in the motion picture industry. Overseas Filmgroup also
competes with numerous independent motion picture production and distribution
companies, as well as numerous foreign motion picture production and
distribution companies. Many of the organizations with which Overseas Filmgroup
competes have significantly greater financial and other resources than does
Overseas Filmgroup. Overseas Filmgroup's ability to compete successfully
depends in large part upon the continued availability of independently-produced,
domestic and foreign, motion pictures and Overseas Filmgroup's ability to
identify and acquire distribution rights and distribute such motion pictures
successfully. A number of formerly independent motion picture companies have
been acquired in recent years by major entertainment companies. These
transactions have significantly increased competition for the acquisition of
distribution rights to independently produced motion pictures by eliminating
some available sources of independently produced films and providing greater
financial resources to other previously independent companies engaged in the
business of acquiring distribution rights to independently produced films.
CERTAIN RISKS ASSOCIATED WITH INTERNATIONAL DISTRIBUTION
A significant portion of Overseas Filmgroup's revenue is from the
distribution of motion pictures and the licensing of distribution rights in
territories outside the United States. Overseas Filmgroup's financial results
and results of operations could be negatively affected by such factors as
changes in foreign currency exchange rates and currency controls, trade
protection measures, motion picture piracy, content regulation, longer accounts
receivable collection patterns, changes in regional or worldwide economic or
political conditions or natural disasters. Because Overseas Filmgroup's
contracts are typically denominated in U.S. dollars, advances and minimum
guarantees of sublicense fees payable to Overseas Filmgroup by foreign
sub-distributors, and advances and minimum guarantees to be paid by Overseas
Filmgroup to foreign producers in connection with the acquisition of
distribution rights, are generally unaffected by exchange rate fluctuations.
However, to the extent Overseas Filmgroup's agreements with foreign
sub-distributors require such sub-distributors to pay Overseas Filmgroup a
percentage of revenues in excess of any advance or minimum guarantee,
fluctuations in the currencies in which such revenues are received by the
sub-distributor may affect the amount of U.S. dollars received by Overseas
Filmgroup in excess of any minimum guarantee. Exchange rate fluctuations could
also affect the ability of sub-distributors to bid for and acquire rights to
motion pictures distributed by Overseas Filmgroup. Therefore, exchange rate
fluctuations could have a material adverse impact on Overseas Filmgroup's
results of operations in the future.
FLUCTUATION OF OPERATING RESULTS
Most of Overseas Filmgroup's revenues are derived from the exploitation of
the relatively limited number of motion pictures distributed by Overseas
Filmgroup (compared to the number of films distributed by the major studios).
The number of motion pictures for which Overseas Filmgroup acquires distribution
rights may vary significantly from quarter to quarter. The number of motion
pictures which Overseas Filmgroup distributes, including its First Look
Pictures' releases, also may vary significantly from quarter to quarter, due to
uncertainties in the release schedules of such motion pictures. In addition,
the audience response to the motion pictures that Overseas Filmgroup distributes
is unpredictable. As a result of the foregoing, Overseas Filmgroup's revenues,
expenses and earnings have historically fluctuated and are likely to continue to
fluctuate significantly from quarter to quarter. Accordingly, Overseas
Filmgroup's revenues, expenses and earnings in any particular period may not be
indicative of the results for any future period.
REGULATION
In 1994, the United States was unable to reach agreement with its major
international trading partners to include audio-visual works, such as television
programs and motion pictures, under the terms of the General Agreement on Trade
and Tariffs Treaty ("GATT"). The failure to include audiovisual works under
GATT allows many countries (including members of the European Union, which
consists of
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Belgium, Denmark, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg,
The Netherlands, Portugal and the United Kingdom) to continue enforcing quotas
that restrict the amount of United States produced television programming which
may be aired on television in such countries. The Council of Europe has adopted
a directive requiring all member states of the European Union to enact laws
specifying that broadcasters must reserve a majority of their transmission time
(exclusive of news, sports, game shows and advertising) for European works. The
directive does not itself constitute law, but must be implemented by appropriate
legislation in each member country. In addition, France requires that original
French programming constitute a required portion of all programming aired on
French television. These quotas generally apply only to television programming
and not to theatrical exhibition of motion pictures, but quotas on the
theatrical exhibition of motion pictures could also be enacted in the future.
There can be no assurance that additional or more restrictive theatrical or
television quotas will not be enacted or that countries with existing quotas
will not more strictly enforce such quotas. Additional or more restrictive
quotas or more stringent enforcement of existing quotas could materially and
adversely affect the business of Overseas Filmgroup by limiting the ability of
Overseas Filmgroup to exploit fully its rights in motion pictures
internationally and, consequently, to assist or participate in the financing of
such motion pictures.
Management of Overseas Filmgroup is aware of reports of extensive
unauthorized misappropriation of videocassette rights to motion pictures, which
may include motion pictures distributed by Overseas Filmgroup. Motion picture
piracy is an industry wide problem and an international as well as a domestic
problem, as motion picture piracy is extensive in many parts of the world. In
the past, various entertainment industry trade associations have enacted
voluntary embargoes of motion picture exports to certain countries in order to
pressure the governments of those countries to become more aggressive in
preventing motion picture piracy. In addition, the United States government has
publicly considered trade sanctions against specific countries which do not
prevent copyright infringement of United States produced motion pictures. There
can be no assurance that voluntary industry embargoes or United States
government trade sanctions will be enacted. If enacted, such actions could
impact the amount of revenue that Overseas Filmgroup realizes from the
international exploitation of motion pictures depending upon the countries
subject to such action and the duration of such action. If not enacted or if
other measures are not taken, the motion picture industry, including Overseas
Filmgroup, may continue to lose an indeterminate amount of revenues as a result
of motion picture piracy.
The Code and Ratings Administration of the MPAA, an industry trade
association, assigns ratings indicating age-group suitability for theatrical
distribution of motion pictures. Overseas Filmgroup sometimes, although not
always, submits its motion pictures for such ratings. In certain circumstances,
motion pictures that Overseas Filmgroup does not submit for rating to the Code
and Ratings Administration of the MPAA might have received restrictive ratings
had such motion pictures been submitted for rating, including, in some
circumstances, the most restrictive rating, which prohibits theatrical
attendance by persons below the age of seventeen. Unrated motion pictures (or
motion pictures receiving the most restrictive rating) may not be exhibited by
certain theatrical exhibitors or in certain locales, thereby potentially
reducing the total revenues generated by such films. United States television
stations and networks, as well as foreign governments, impose additional
restrictions on the content of motion pictures which may restrict in whole or in
part theatrical or television exhibition in particular territories. Current and
future restrictions on the content of motion pictures could limit or adversely
affect Overseas Filmgroup's ability to exhibit certain motion pictures in
certain territories and media and, thus, also adversely affect Overseas
Filmgroup's business, financial condition and operations.
POSSIBLE VOLATILITY OF SECURITIES PRICES
The trading prices of Overseas Filmgroup's securities could be subject to
wide fluctuations in response to variations in operating results which may be
affected by variations from period-to-period in the number of motion pictures
for which Overseas Filmgroup acquires distribution rights and the number of
motion pictures which Overseas Filmgroup distributes. The operating results of
Overseas Filmgroup, also may be affected by the release schedule of the motion
pictures distributed by Overseas Filmgroup, the commercial success of such
motion pictures and other events or factors. In addition, the stock market has
experienced significant price and volume fluctuations which have affected the
market price for many companies and which have often been unrelated to the
operating performance of these companies. These broad market fluctuations may
adversely affect the market price of Overseas Filmgroup's securities. In
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addition, factors not within the control of Overseas Filmgroup, including public
statements from securities analysts and others concerning Overseas Filmgroup's
operations, public acceptance of the motion pictures distributed by Overseas
Filmgroup, interest rates and changes in general economic conditions, could also
have a significant impact on the future market prices for Overseas Filmgroup's
securities, which may be volatile. In addition, a substantial number of shares
of Overseas Filmgroup common stock (i) are issuable upon the exercise of
options, warrants and Units or (ii) are subject to certain lock-ups which expire
from time to time in the future. Sales of substantial amounts of shares of
common stock of Overseas Filmgroup (including shares issued upon the exercise of
options, warrants and Units, and shares subject to the lock-ups which expire
from time to time in the future) in the public market or the prospect of such
sales could adversely affect the market price of the common stock of Overseas
Filmgroup.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
OVERSEAS FILMGROUP, INC.
By: /S/ William F. Lischak
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Name: William F. Lischak
Title: Chief Operating Officer, Chief
Financial Officer and Secretary
Date: February 24, 1997
