UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the Quarterly Period Ended September 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from _________ to _________
Commission File Number: 0-24592
CINEMA RIDE, INC.
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(Exact name of small business issuer as specified in its charter)
Delaware 95-4417467
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
12001 Ventura Place, Suite 340, Studio City, California 91604
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(Address of principal executive offices)
Issuer's telephone number: (818) 761-1002
Not applicable
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(Former name, former address and former fiscal year,
if changed since last report.)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
As of October 31, 2000, the Company had 789,823 shares of common stock issued
and outstanding.
Transitional Small Business Disclosure Format: Yes [ ] No [X]
Documents incorporated by reference: None.
<PAGE>
CINEMA RIDE, INC. AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - December 31, 1999
and September 30, 2000 (Unaudited)
Consolidated Statements of Operations (Unaudited)
- Three Months and Nine Months Ended September 30, 2000 and 1999
Consolidated Statements of Cash Flows (Unaudited)
- Nine Months Ended September 30, 2000 and 1999
Notes to Consolidated Financial Statements (Unaudited)
- Three Months and Nine Months Ended September 30, 2000 and 1999
Item 2. Management's Discussion and Analysis or Plan of Operation
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
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<PAGE>
Cinema Ride, Inc. and Subsidiaries
Consolidated Balance Sheets
September 30, December 31,
2000 1999
--------- ---------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 111,481 $ 320,189
Prepaid expenses and other
current assets 37,178 25,804
----------- -----------
Total current assets 148,659 345,993
----------- -----------
Property and equipment:
Office equipment and furniture 110,033 105,249
Equipment under capital lease 208,236 204,858
Lease improvements 1,062,582 1,051,723
Theater and film equipment 1,695,877 1,673,132
----------- -----------
3,076,728 3,034,962
Accumulated depreciation (1,916,683) (1,688,658)
----------- -----------
1,160,045 1,346,304
----------- -----------
Other assets:
Film library, net of accumulated
amortization of $922,628 and
$869,930 at September 30, 2000
and December 31, 1999,
respectively 170,142 222,840
Investment in joint venture 378,473 411,663
Receivables from officer - 8,069
Consulting agreement 20,808 28,611
Deferred lease costs and other
assets 103,581 123,967
----------- -----------
673,004 795,150
----------- -----------
Total assets $ 1,981,708 $ 2,487,447
=========== ===========
(continued)
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Cinema Ride, Inc. and Subsidiaries
Consolidated Balance Sheets (continued)
September 30, December 31,
2000 1999
--------- ---------
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
expenses $ 146,378 $ 219,125
Current portion of capital
lease obligations 47,042 40,381
Current portion of note payable
to lender 148,729 133,077
Current portion of note payable
to bank - 416
----------- -----------
Total current liabilities 342,149 392,999
----------- -----------
Non-current liabilities:
Obligations under capital lease,
less current portion 53,151 84,660
Note payable to lender, less
current portion 583,597 697,072
Deferred rent 67,666 84,061
Loan payable to officer 120,000 120,000
----------- -----------
824,414 985,793
----------- -----------
Total liabilities 1,166,563 1,378,792
----------- -----------
Commitments and contingencies
(Note 2)
Stockholders' equity (Note 2):
Preferred stock, $.01 par value -
Authorized - 500,000 shares
Issued - None
Common stock, $.08 par value -
Authorized - 20,000,000 shares
Issued and Outstanding -
789,823 shares and 731,823 shares
at September 30, 2000 and
December 31, 1999, respectively 63,186 58,546
Additional paid-in-capital 9,224,569 9,212,209
Accumulated deficit (8,472,610) (8,162,100)
----------- -----------
Total stockholders' equity 815,145 1,108,655
----------- -----------
Total liabilities and
stockholders' equity $ 1,981,708 $ 2,487,447
=========== ===========
See accompanying notes to consolidated financial statements.
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Cinema Ride, Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
Three Months Ended
September 30,
--------------------------
2000 1999
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Revenues $ 767,018 $ 711,437
Selling, general and
administrative expenses 662,311 508,265
Depreciation and amortization 94,691 135,280
--------- ---------
Income from operations 10,016 67,892
Other income (expense):
Equity in net income (loss)
of joint venture (24,323) 12,610
Interest income 821 3,610
Interest expense (38,080) (42,495)
--------- ---------
Net income (loss) ($ 51,566) $ 41,617
========= =========
Basic and diluted net income
(loss) per common share (Note 1) ($ 0.07) $ 0.06
========= =========
Weighted average common
shares outstanding -
basic and diluted 781,490 731,823
========= =========
See accompanying notes to consolidated financial statements.
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<PAGE>
Cinema Ride, Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
Nine Months Ended
September 30,
----------------------------
2000 1999
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Revenues $ 2,191,695 $ 1,883,764
Selling, general and
administrative expenses 1,994,163 1,692,093
Start-up costs for New Jersey
Facility (Note 3) 74,421 -
Depreciation and amortization 288,795 407,239
----------- -----------
Loss from operations (165,684) (215,568)
Other income (expense):
Equity in net income (loss)
of joint venture (18,490) 58,189
Interest income 2,921 8,893
Interest expense (129,257) (157,706)
Fair value of warrants issued
to officer as commitment fee
for line of credit (Note 2) - (64,620)
----------- -----------
Net loss ($ 310,510) ($ 370,812)
=========== ===========
Basic and diluted net loss
per common share (Note 1) ($ 0.40) ($ 0.51)
=========== ===========
Weighted average common
shares outstanding -
basic and diluted 775,046 731,823
=========== ===========
See accompanying notes to consolidated financial statements.
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<PAGE>
Cinema Ride, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended
September 30,
--------------------------
2000 1999
--------- ---------
Increase (decrease) in cash
Cash flows from operating activities:
Net loss ($310,510) ($370,812)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Depreciation and amortization 288,795 407,239
Common stock issued for services 17,000 809
Equity in net income (loss) of
joint venture 18,490 (58,189)
Amortization of consulting
agreement 7,803 7,803
Amortization of deferred
financing costs 9,314 9,314
Fair value of warrants issued
to officer as commitment fee
for line of credit - 64,620
Changes in operating assets and
liabilities:
(Increase) decrease in:
Inventories - (10,465)
Prepaid expenses and other
current assets (11,374) 35,159
Deposits 3,000 12,532
Increase (decrease) in:
Accounts payable and
accrued expenses (72,747) (85,887)
Deferred rent (16,395) (19,106)
--------- ---------
Net cash used in operating
activities (66,624) (6,983)
--------- ---------
(continued)
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<PAGE>
Cinema Ride, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
(continued)
Nine Months Ended
September 30,
--------------------------
2000 1999
--------- ---------
Increase (decrease) in cash
Cash flows from investing activities:
Purchase of property and equipment ($ 41,766) $ -
Investment in joint venture (4,376)
Dividends received from joint
venture 14,700 106,976
(Increase) decrease in receivables
from officer 8,069 (5,633)
--------- ---------
Net cash provided by (used in)
investing activities (18,997) 96,967
--------- ---------
Cash flows from financing activities:
Payments on notes payable (98,239) (51,569)
Principal payments on capital
lease obligations (24,848) (13,930)
--------- ---------
Net cash used in financing
activities (123,087) (65,499)
--------- ---------
Cash and cash equivalents:
Net increase (decrease) (208,708) 24,485
At beginning of period 320,189 240,341
--------- ---------
At end of period $ 111,481 $ 264,826
========= =========
See accompanying notes to consolidated financial statements.
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Cinema Ride, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Three Months and Nine Months Ended September 30, 2000 and 1999
1. Organization and Basis of Presentation
Basis of Presentation - The accompanying consolidated financial statements
include the operations of Cinema Ride, Inc. and its wholly-owned subsidiaries
(the "Company"). All significant intercompany transactions and balances have
been eliminated in consolidation.
The Company's investment in joint venture is accounted for under the equity
method of accounting, whereby the Company recognizes its share of the joint
venture's net income or loss and accordingly, the carrying value of the
Company's investment in joint venture in the accompanying consolidated balance
sheets is adjusted.
Business - The Company is in the business of developing and operating rides
consisting of 3-D motion simulator attractions and filmed entertainment that
combines projected three-dimensional action films of approximately four minutes
in duration with computer-controlled, hydraulically-mobilized capsules that are
programmed to move in concert with the on-screen action. With regard to the
technology employed by the Company in its ride facilities, on January 12, 1999,
the Company was granted Patent No. 5,857,917 by the United States Patent and
Trademark Office for 3-D video projected motion simulator rides. The Company's
ride facilities are located in Las Vegas, Nevada; Edmonton, Alberta, Canada;
Atlanta, Georgia; and Elizabeth, New Jersey.
Comments - The accompanying interim consolidated financial statements are
unaudited, but in the opinion of management of the Company, contain all
adjustments, which include normal recurring adjustments, necessary to present
fairly the financial position at Septmber 30, 2000, the results of operations
for the three months and nine months ended September 30, 2000 and 1999, and the
cash flows for the nine months ended September 30, 2000 and 1999. The
consolidated balance sheet as of December 31, 1999 is derived from the Company's
audited financial statements.
Certain information and footnote disclosures normally included in financial
statements that have been presented in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission with respect to interim
financial statements, although management of the Company believes that the
disclosures contained in these financial statements are adequate to make the
information presented therein not misleading. For further information, refer to
the consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-KSB for the fiscal year ended December 31,
1999, as filed with the Securities and Exchange Commission.
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<PAGE>
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial statements, and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
The results of operations for the three months and nine months ended September
30, 2000 are not necessarily indicative of the results of operations to be
expected for the full fiscal year ending December 31, 2000.
Going Concern - The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going concern, which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. The carrying amounts of assets and liabilities
presented in the accompanying consolidated financial statements do not purport
to represent the realizable or settlement values. The Company has suffered
recurring operating losses and had a working capital deficit at December 31,
1999 and September 30, 2000 that may impair its ability to obtain additional
financing. These factors raise substantial doubt about the Company's ability to
continue as a going concern. The Company's independent certified public
accountants have included a modification paragraph in their report on the
Company's consolidated financial statements for the year ended December 31, 1999
with respect to this matter.
Foreign Currency Translation - Foreign currency denominated assets and
liabilities of the subsidiary where the United States dollar is the functional
currency and which have certain transactions denominated in a local currency are
remeasured as if the functional currency was the United States dollar. The
remeasurement of local currency into United States dollars creates translation
adjustments which are immaterial and are included in the statement of
operations.
Earnings Per Share - Basic earnings per share is calculated by dividing net
income (loss) by the weighted average number of common shares outstanding during
the period. Diluted earnings per share reflects the potential dilution that
would occur if dilutive stock options and warrants were exercised. These
potentially dilutive securities were anti-dilutive for all periods presented,
and accordingly, basic and diluted earnings per share are the same for all
periods presented. As of September 30, 2000, potentially dilutive securities
consisted of outstanding stock options and warrants to acquire 222,188 shares
and 1,552,461 shares of common stock, respectively.
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<PAGE>
2. Stockholders' Equity
During January 2000, the Company issued 48,000 shares of common stock to certain
of its non-officer employees and consultants as a bonus, which were recorded at
fair market value on the date of issuance of $0.25 per share. Accordingly, for
the nine months ended September 30, 2000, the Company recognized compensation
expense of $12,000, which is included in selling, general and administrative
expenses in the statement of operations.
During September 2000, the Company issued 10,000 shares of common stock to a
consultant as compensation, which was recorded at fair market value on the date
of issuance of $0.50 per share. Accordingly, for the three months and nine
months ended September 30, 2000, the Company recognized compensation expense of
$5,000, which is included in selling, general and administrative expenses in the
statement of operations.
During January 2000, as a result of the opening of the Company's new ride
facility in Elizabeth, New Jersey, the Company was obligated to grant its Chief
Executive Officer a bonus in the form of a stock option to purchase 25,000
shares of common stock exercisable for a period of five years at $0.25 per
share, which was fair market value at the date of grant. The Chief Executive
Officer was granted this stock option pursuant to the terms of his employment
agreement with the Company, which provides for the granting of stock options
based on various occurrences, including the opening of new ride facilities.
During February 1999, as consideration for providing a line of credit to the
Company, the Company granted warrants to the Chief Executive Officer to purchase
1,538,461 shares of common stock at an exercise price of $0.13 per share, the
fair market value on the date of the agreement, expiring on February 2, 2002.
The Company calculated the fair value of the warrants granted to the Chief
Executive Officer using the Black-Scholes option pricing model, and charged the
fair value of $64,620 to operations as a loan commitment fee during the nine
months ended September 30, 1999.
3. Start-up Costs for New Jersey Facility
The Company began development of the New Jersey Facility during late 1999. The
New Jersey Facility was completed and began operations in January 2000. In
connection with the establishment of the New Jersey Facility, the Company
incurred start-up costs of $74,421 during the nine months ended September 30,
2000, which were charged to operations as incurred.
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<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Cautionary Statement Pursuant to Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995:
This Quarterly Report on Form 10-QSB for the quarterly period ended September
30, 2000 contains "forward-looking" statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, including statements that include the
words "believes", "expects", "anticipates", or similar expressions. These
forward-looking statements include, among others, statements concerning the
Company's expectations regarding its working capital requirements, its business,
growth prospects, competition and results of operations, and other statements of
expectations, beliefs, future plans and strategies, anticipated events or
trends, and similar expressions concerning matters that are not historical
facts. The forward-looking statements in this Quarterly Report on Form 10-QSB
for the quarterly period ended September 30, 2000 involve known and unknown
risks, uncertainties and other factors that could cause the actual results,
performance or achievements of the Company to differ materially from those
expressed in or implied by the forward-looking statements contained herein.
Overview:
The Company was formed in April 1993, and operations of the Company commenced in
October 1994 when the Las Vegas, Nevada Facility was opened. The Company opened
its other locations, the West Edmonton Mall Facility, the Times Square Facility,
the Atlanta, Georgia Facility, and the Elizabeth, New Jersey Facility in August
1995, September 1996, September 1998 and January 2000, respectively. The Company
closed the Times Square Facility in January 1998.
Recent Development:
During May 2000, the Company entered into an agreement with Dave & Buster's,
Inc. to amend and update its existing joint venture agreement to include the
installation of five additional ride facilities in new or existing Dave &
Buster's, Inc. locations. The Company will be responsible for the installation
of its newly-designed eight seat open pod simulator system. The Company will
also be responsible for providing all hardware and software required to operate
the ride facility. In order to fund its obligations under this agreement with
Dave & Buster's, Inc., the Company anticipates that it will be required to raise
additional working capital through one or more debt or equity financings.
However, there can be no assurances that the Company will be successful in this
regard.
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<PAGE>
Seasonality:
Because of the seasonal nature of tourist traffic, attendance patterns at
attractions may vary. The degree of this seasonality varies among attractions,
depending on the nature of tourist and local traffic patterns at a given
location as well as the nature of entertainment alternatives available to
audiences. The Company expects that attendance at its facilities will be the
highest during June through August (the height of the tourist season) and lowest
during January and February. As a result, the Company's results of operations at
its facilities will depend upon revenues generated from the peak tourist periods
and any significant decrease in revenues in such periods could have a material
adverse effect upon the Company's results of operations. Results of Operations:
Three Months Ended September 30, 2000 and 1999 -
Revenues increased by $55,581 or 7.8% to $767,018 in 2000 from $711,437 in 1999.
The New Jersey Facility opened in January 2000 and generated revenues of
$107,704. The net increase in revenues was attributable to the New Jersey
Facility, which was partially offset by a decrease in revenues at the Las Vegas
facility during the period. The decrease in revenues at the Las Vegas Facility
began during August 2000 as a result of the temporary shut-down of the fountain
show at the Caesar's Hotel and Casino Shopping Mall, as well as the opening of a
new entertainment-based shopping mall at the newly-opened Aladdin Hotel and
Casino. The Company is currently unable to predict the extent and duration of
this decrease in revenues at its Las Vegas Facility.
Selling, general and administrative expenses increased by $154,046 or 30.3% to
$662,311 in 2000 from $508,265 in 1999, primarily as a result of the opening of
the New Jersey Facility in January 2000 and increased marketing and promotional
activities.
Depreciation and amortization decreased by $40,589 or 30.0% to $94,691 in 2000
from $135,280 in 1999, primarily as a result of certain fixed assets having been
fully depreciated at December 31, 1999.
Interest expense decreased by $4,415 or 10.4% to $38,080 in 2000 from $42,495 in
1999, primarily as a result of a reduction in the outstanding principal balance
of interest-bearing debt.
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<PAGE>
Equity in net income (loss) of joint venture decreased by $36,933, to a net loss
of $24,323 in 2000 from net income of $12,610 in 1999. In an effort to improve
the operating results of the joint venture, the Company has hired its own
on-site manager to promote the Company's ride facility at Dave & Buster's, Inc.
As a result of the aforementioned factors, net loss was $51,566 for the three
months ended September 30, 2000, as compared to net income of $41,617 for the
three months ended September 30, 1999.
Nine Months Ended September 30, 2000 and 1999 -
Revenues increased by $307,931 or 16.3% to $2,191,695 in 2000 from $1,883,764 in
1999, almost all of which was attributable to the New Jersey Facility, which
opened in January 2000.
Selling, general and administrative expenses increased by $302,070 or 17.9% to
$1,994,163 in 2000 from $1,692,093 in 1999, primarily as a result of the opening
of the New Jersey Facility in January 2000 and increased marketing and
promotional activities.
Included in selling, general and administrative expenses in 1999 is a charge of
$70,000 related to the Company's former Chief Financial Officer leaving the
Company effective March 1, 1999.
During the nine months ended September 30, 2000, the Company recorded start-up
costs of $74,421 related to the opening of the New Jersey Facility in January
2000.
Depreciation and amortization decreased by $118,444 or 29.1% to $288,795 in 2000
from $407,239 in 1999, primarily as a result of certain fixed assets having been
fully depreciated at December 31, 1999.
Interest expense decreased by $28,449 or 18.0% to $129,257 in 2000 from $157,706
in 1999, primarily as a result of a reduction in the outstanding balance of
interest-bearing debt.
Equity in net income (loss) of joint venture decreased by $76,679 to a net loss
of $18,490 in 2000 from net income of $58,189 in 1999. In an effort to improve
the operating results of the joint venture, the Company has hired its own
on-site manager to promote the Company's ride facility at Dave & Buster's, Inc.
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<PAGE>
During February 1999, as consideration for providing a line of credit to the
Company, the Company granted warrants to the Chief Executive Officer to purchase
1,538,461 shares of common stock at an exercise price of $0.13 per share, the
fair market value on the date of the agreement, expiring on February 2, 2002.
The Company calculated the fair value of the warrants granted to the Chief
Executive Officer using the Black-Scholes option pricing model, and charged the
fair value of $64,620 to operations as a loan commitment fee during the nine
months ended September 30, 1999.
As a result of the aforementioned factors, the net loss was $310,510 for the
nine months ended September 30, 2000, as compared to a net loss of $370,812 for
the nine months ended September 30, 1999.
Liquidity and Capital Resources - September 30, 2000:
Operating Activities. The Company's operations utilized cash of $66,624 during
the nine months ended September 30, 2000, as compared to utilizing cash of
$6,983 during the nine months ended September 30, 1999. The increase in cash
utilized in operating activities in 2000 as compared to 1999 was primarily a
result of continuing operating losses incurred by the Company.
At September 30, 2000, cash and cash equivalents had decreased by $208,708, to
$111,481, as compared to $320,189 at December 31, 1999. As a result, the Company
had a working capital deficit of $193,490 at September 30, 2000, as compared to
a working capital deficit of $47,006 at December 31, 1999, resulting in current
ratios of .43:1 and .88:1 at September 30, 2000 and December 31, 1999,
respectively. The Company's current assets at December 31, 1999 included
$120,000 of cash that had been borrowed from an officer in November 1999 and was
reflected as a non-current liability at December 31, 1999. This cash was
utilized during the nine months ended September 30, 2000 to fund the costs
associated with the installation and start-up of the Company's new ride facility
in Elizabeth, New Jersey, which opened in January 2000.
Investing Activities. Net cash used in investing activities was $18,997 for the
nine months ended September 30, 2000, primarily as a result of the purchase of
fixed assets of $41,766, offset in part by dividends of $14,700 received from
the Company's joint venture with Dave & Buster's, Inc. and a decrease in
receivables from officer of $8,069. Net cash provided by investing activities
was $96,967 for the nine months ended September 30, 1999, primarily as a result
of $106,976 of dividends received from the Company's joint venture with Dave &
Buster's, Inc.
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<PAGE>
Financing Activities. Net cash used in financing activities was $123,087 and
$65,499 for the nine months ended September 30, 2000 and 1999, respectively, as
a result of payments on notes payable and capital lease obligations.
The Company has relied on the proceeds from the sale of its securities, loans
from both unrelated and related parties, and equipment leases to provide the
cash necessary to develop its facilities and ride films and to operate its
business.
Pursuant to the Company's amended loan agreement with its Chief Executive
Officer, during November 1999, the Chief Executive Officer repaid $85,000 of his
notes receivable, consisting of principal of $75,000 and accrued interest of
$10,000, and the Company also borrowed $120,000 from him under the line of
credit. The aggregate proceeds of $205,000 were utilized to fund the costs
associated with the installation and start-up of the Company's new ride facility
in Elizabeth, New Jersey, which opened in January 2000.
Going Concern:
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern, which contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business. The carrying amounts of assets and liabilities presented in the
accompanying consolidated financial statements do not purport to represent the
realizable or settlement values. The Company has suffered recurring operating
losses and had a working capital deficit at December 31, 1999 and September 30,
2000 that may impair its ability to obtain additional financing. These factors
raise substantial doubt about the Company's ability to continue as a going
concern. The Company's independent certified public accountants have included a
modification paragraph in their report on the Company's consolidated financial
statements for the year ended December 31, 1999 with respect to this matter.
The Company believes that its previous efforts to reduce costs and operate more
efficiently, combined with the modified financing arrangement with the Company's
secured lender, Finova Technology Finance, Inc., borrowings under the line of
credit provided by the Chief Executive Officer, and the opening of the New
Jersey Facility, will generate an improvement in cash flows, although there can
be no assurances that such efforts will be successful. Furthermore, to the
extent that the Company's Las Vegas Facility experiences a continuing decline in
revenues, the Company's liquidity and ability to conduct operations may be
impaired.
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<PAGE>
The Company will require additional capital to fund operating and debt service
requirements, as well as to fund expansion plans and possible acquisitions,
mergers and joint ventures, including the amended joint venture agreement with
Dave & Buster's, Inc. The Company is exploring various alternatives to raise
this required capital, but there can be no assurances that the Company will be
successful in this regard. To the extent that the Company is unable to secure
the capital necessary to fund its future cash requirements on a timely basis
and/or under acceptable terms and conditions, the Company may not have
sufficient cash resources to maintain operations.
From time to time the Company may also consider a wide range of other business
opportunities, some of which may be unrelated to the Company's current business
activities and could also require additional capital, and could result in a
change in control of the Company.
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<PAGE>
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(c) Recent sales of unregistered securities
During September 2000, the Company issued 10,000 shares of common stock to a
consultant as compensation, which was recorded at fair market value on the date
of issuance of $0.50 per share.
The shares of common stock were issued based on an exemption from registration
pursuant to Section 4(2) of the Securities Act of 1933, as amended, based on the
representations of the recipient.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
27 Financial Data Schedule (electronic filing only)
(b) Reports on Form 8-K:
Three Months Ended September 30, 2000 - None
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CINEMA RIDE, INC.
-----------------
(Registrant)
/s/ MITCHELL J. FRANCIS
Date: November 6, 2000 By: __________________________
Mitchell J. Francis
Chief Executive Officer,
President, Chief Financial
Officer and Chairman of
the Board of Directors
(Duly Authorized Officer
and Chief Financial
Officer)
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