SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the quarter ended March 31, 1999
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
Commission file #: 33-87714
OLYMPIC ENTERTAINMENT GROUP, INC.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 88-0271810
------ ----------
(State or other jurisdiction (IRS Employer
of incorporation) Identification Number)
2550 E. Desert Inn Road, Suite 338, Las Vegas, NV 89121
-------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (702) 369-2588
Securities registered pursuant to Section 12(b) of the Act:
Common Stock $0.01 Par Value NONE
---------------------------- ----
(Title of Class) (Name of Each Exchange
on Which Registered)
Securities registered pursuant to Section 12(g) of the Act:
NONE
--------------
(Title of Class)
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. (1) Yes X No (2) Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-Q or any amendment to this
Form 10-Q. [ X ]
At March 31, 1999 there were 3,297,785 shares of common stock outstanding. The
aggregate market value of the common stock held by non-affiliates of the
registrant (i.e., excluding shares held by executive officers, directors and
control persons as defined in rule 405).
Documents incorporated by reference: None.
<PAGE>
PART I
Item 1. Business
- ----------------
(a) General Development of Business
-------------------------------
Olympic Entertainment Group, Inc. (the "Company") is a multimedia educational
company and was incorporated on May 21, 1987 in the State of Nevada. The Company
was originally formed to finance, produce, co-produce and distribute motion
pictures and television shows and pursued various opportunities through 1993,
when the Company's management decided to focus upon the development of a cable
television network for the distribution of children's nonviolent television
programming. From 1993 through 1995 the Company developed this concept and in
1995, launched the Children's Cable Network ("CCN"). To date, the Company has
had success in several markets but has experienced marginal or poor results from
the efforts of licensees overall and has determined it to be in the Company's
interest to seek to recapitalize the Company.
(b) Narrative Description of Business
---------------------------------
The Company has created a children's educational division called Children's
Cable Network ("CCN" or the "Network"). Prior to January 1998, the Company
acquired, purchased, and licensed educational programming for the Children's
Cable Network; specializing in nonviolent, educational, informative and special
interest preschool programming, children's classics programs and G-rated
children's motion pictures. The Company's present lack of any revenue and any
cash reserves has resulted in cessation of these activities.
All reference to the Company in the following discussion of the business
activities of the Company includes Children's Cable Network.
Children's Cable Network
In the past, CCN provided award-winning, nonviolent, educational, informative
and special interest children's programming for television and in the process of
providing this programming, created business opportunities for individuals and
syndications looking to get into the cable television broadcasting business.
Federal Legislation
The Federal Communications Act of 1984 requires cable operators to provide
channels for lease to the public in an attempt to enhance the diversity of
program choices available to cable subscribers. Generally, such allocation of
channels is referred to as "leased access." Section 612 of the Communications
Act of 1984 established a federal scheme through channel leasing to assure
access to cable systems by third parties unaffiliated with the cable operator.
Under the amendments to Section 612, cable operators were also permitted to
place programming from a qualified minority or educational programming source on
up to 33 percent of the cable system's designated leased access channels.
Additionally, the Cable Act of 1992 mandated that every cable system with more
than thirty-six channels and less than fifty-five activated channels must
designate 10 percent of their capacity to leased access. Systems with greater
than 55 activated channels must set aside 15 percent of their capacity to leased
access. In addition, the Federal Communications Act of 1984 provides individuals
and groups the opportunity to use the public, educational and government access
channels offered by the cable companies. Systems with fewer than 36 activated
channels are not required to make lease channel capacity available unless
otherwise required to do so by terms of the franchise in effect on December 29,
1994. The Cable Television Act of 1992 renewed government supervision of the
franchised cable television industry which was deregulated by the Cable Act of
1984. Both Acts are amendments to the Communications Act of 1934. The Cable
Television Act of 1992 ("1992 Act") authorized the FCC to implement rate and
2
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service regulation for certain basic cable television services and to create
regulations that will increase competition to franchised cable operators. On
April 1, 1993, the FCC announced several features of the rules it planned to
implement in connection with the 1992 Act. Most of the announced rules concerned
rate regulation for franchised services as well as a temporary rate freeze and
rollback. In order to promote competition with franchised cable operators, the
FCC announced program access regulations as part of the Act. These provisions
essentially allow competitive cable operators to purchase television programming
at fair prices. Management believes that these provisions of the Act may result
in lower operating costs for the Company, however, there can be no guarantee
that revisions in said regulation will not materially affect the Company.
The cable television industry is subject to both regulatory restrictions
implemented primarily by the Federal Communications Commission, ("FCC") and also
legislation which affects the communications and broadcast industries in
general.
The Children's Television Act of 1990 established new requirements including
that each broadcasting station must provide programs that serve the educational
and informational needs of young viewers. Accordingly, broadcasters must limit
the amount of advertising aired during children's programming and must provide
programs that meet the educational and informational needs of children.
Cable Affiliates
Prior to January 1, 1998, the Company licensed its programming to Cable
Affiliates who would cablecast this programming on their local cable systems
through the purchase of time on a leased access channel. The Company obtained
Cable Affiliates through business opportunity shows and seminars, direct mail
and business opportunity advertisements in national publications and on the
Internet. The Company licensed only one Cable Affiliate in each cable system
market. The Company has no cash available to continue this effort.
Employees
The Company currently has no employees in the corporate office in Las Vegas,
Nevada, having reduced its staff from eighteen employees in order to reduce
costs. The Company is being run by Directors.
Competition
The Company's business is very competitive. The Company is in competition with
many cable companies, none of which specialize in nonviolent, educational
programming. Many competitors exist which have greater financial resources
and/or more experience in the delivery of programming than the Company. The
Company competed with all other broadcasters of children's programming. On cable
television, competitors included The Family Channel, The Learning Channel, PBS,
Nickelodeon and The Disney Channel.
Programming
The Company's programs consisted of nonviolent, educational, informative and
special interest videotapes and films which taught positive character
development and morality in addition to introductions to numbers, letters and
music. Each program was approximately 25 minutes in length, which left five
minutes of time for the Cable Affiliate to sell commercial advertisements,
sponsorships, and/or create and produce locally originated programming. Overall,
the Affiliates did not meet with enough success to support the continued
operation of CCN.
The Company, through its own research, had located many award-winning children's
series produced since 1950, some of which the Company planned to obtain through
direct acquisition or licensing, providing that the Company was able to raise
the capital necessary so to do. The Company was unsuccessfulin those efforts.
The programming for children included puppet shows, live action and animated
characters, children's classic stories and music that was designed to teach
children in a fun and entertaining way.
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Library
The Company still owns many programs outright and has multi-year licenses to
others. To date, each series of programs is aimed at the 1 1/2- to 6-year-old
audience, assisting them in their preparation for school. The Company owns
outright or licenses under long-term leases each of the following programs.
Olympic Entertainment Group, Inc. Library of Programming
The Shari Show
26 1/2 hour episodes
The Shari Show takes place in the TV station called Bearly Broadcasting
where all of the positions are manned by puppets. Shari Lewis is the
secretary to the station manager, Mr. Bearly. As they put on the full
range of typical shows at Bearly Broadcasting, human interaction and
value judgments are explored and revealed. More than an entertainment
show for children of all ages, The Shari Show stimulates children's
senses of curiosity and humor, which creates involvement... a basic
measurement of the educational process. Shari Lewis and The Shari Show
have won seven (7) Emmys, the Peabody award and numerous other
prestigious awards for excellence. Programming on license.
Bill Cosby's PicturePages
80 1/2 hour episodes
Bill Cosby's PicturePages, winner of a Golden Globe award and Gold
Medalist of the International Film Festival of New York, helps children
develop important skills like following directions, drawing, hand-eye
coordination, clear thinking and numbers. PicturePages is the epitome
of educating children with love and laughter. Bill Cosby's unique
approach, which delights children and adults, is recommended by the
National Education Association. Programming on license.
Dusty's Treehouse
260 1/2 hour episodes
Dusty's Treehouse is a children's show designed for ages 2-6. The show
uses both adult and children mixed with puppets. Winner of eight (8)
Emmys and the coveted George Foster Peabody award, Dusty's Treehouse is
very entertaining, while at the same time teaches children how to cope
when someone was injured, what love is, to look both ways when crossing
the street, never let strangers into the house and other social and
practical skills for dealing with today's world. Owned by the Company.
Achievements In African-American History
10 1/2 hour programs
Achievements in African-American History documents in a ten part
series, the historical achievements of black women and men in the
fields of literature and poetry, cinema, religion, medicine and
science. This series features noted black personalities such as Abbey
Lincoln, Roscoe Lee Browne, Brock Peters and Lou Gossett, Jr., who
document through narration, dramatic scenes and readings, some of the
important historical contributions made by African- Americans. Owned by
the Company.
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Hot Fudge
75 1/2 hour episodes
Hot Fudge is the recipient of two national honors, the Action for
Children's Television Award for Outstanding Contribution to Mental
Health Programming for children, and the San Francisco State College
Excellence in Broadcasting Award. This nationally recognized program
that combines live action and a delightful cast of puppets with
lessons, music and fun. Join the Hot Fudge Gang as they learn about the
complexities of relationships, friendship, self esteem, feelings, and
cooperation, among many others, through song, live action skits, and
game shows. Each energetic show follows a single theme with engaging
dialogue And lively performances. Owned by the Company.
KidStreet
130 1/2 hour episodes
This highly exciting game show for children is also family oriented.
Three pairs of siblings, the red team, the blue team and the green
team, vie for victory and prizes by guessing how one sibling will
answer a set of questions. Points are awarded for correct answers and
the team with the most points wins the chance to solve the final
puzzle. The show motivates kids to learn problem solving skills and to
better understand their sisters and brothers. Programming on license.
Coming To Ametrica
2 1/2 hour episodes
Coming To Ametrica is a combination of live action and animation
designed to teach children as well as adults the metric system of
weights and measures. In this series, a spaceship kidnaps Admiral
Gordon and six young people who have been chosen to teach America the
metric system of measurements. While detained aloft in the spaceship
the Admiral and his young crew learn everything there is to know about
the metric system.
The spaceship computer uses lively and entertaining animation to teach
the skeptical Americans about liters, meters, and grams. They learn
that the metric system is used worldwide, and that once understood, it
is easier to use than gallons, yards and pounds. The series is fun,
entertaining and most of all, highly educational. Owned by the Company.
Metric Series
38 15 minute episodes
(approximately 600 minutes of animation)
A series of animation programs designed to teach children, as well as
adults, the metric system of weights and measures. The Metric Series
features a mild mannered character named Newton Joule who, when
conversion problems arise, turns into the superhero Metric Man to teach
children about liters, meters and grams. They learn the metric system
is used worldwide, and that once understood, it is easier to use then
gallons, yards and pounds. The series is fun, entertaining and most of
all, highly educational.
Scott McGrout Inside Out
1 30 minute special
A highly informative and entertaining film on body awareness. This
beautifully animated story introduces Scott McGrout who takes a
fascinating journey through the human body. This film teaches the child
how important each part of the body is and how each part works together
to keep the body healthy and strong. Owned by the Company.
5
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Kerchoo - What Really Happens When You Catch A Cold
1 10 minute film short
In this imaginative film, Scott McGrout learns about the common cold.
Experiencing cold spells and sneeze quakes, Scott and the viewer watch
the body fight off Elvirus and her vacation companion, Common Cold.
Owned by the Company.
Rod Rocket
135 5 minute episodes (675 minutes of animation)
The exciting adventures of two astronauts in outer space in wonderful
animation. Owned by the Company.
Feature Length Movies
Fifteen movies with Tarzan, Abbott and Costello, Danny Kaye and Shirley
Temple, among others.
Item 2. Properties
- ------------------------
The Company presently leases no space and during the report period terminated
its leases in Burbank, California, and subsequently in Las Vegas, Nevada.
Item 3. Legal Proceedings
- ------------------------------
The Company is currently involved in the following legal matters:
The Company is a Defendant in Civil Action 96 CV 1930, Capital Funding &
Financial Group, Inc., et al. vs. Olympic Entertainment Group, Inc. In this
cause, Plaintiff seeks refund of approximately $120,000 paid to the Company as
licensing fees in 1996. The Company intends to defend itself and pursue its
claims for licensing fees owed in excess of $100,000 and for damages caused by
Capital Funding through tortuous interference with various contracts. A default
judgment in excess of $1,000,000 was entered against the Company on November 2,
1998 under allegedly improper circumstances. A motion to set aside the default
judgment is pending.
The Company is a Defendant in Lee Van Dyke, Judy Lynn Kloepfer and William G.
Chandler vs. Olympic Entertainment Group, Inc., et al., which was filed in
Superior Court of Los Angeles County, Case No. BC189116, seeking class action
status and alleging various allegations of violation of California securities
laws, breach of contract and violation of the California Business and
Professions Code. The Company is also named as an adverse party in a
cross-complaint filed in the same case by Pacific Health Management, Inc. d/b/a
Carousel Mdia marketing and James Alex. The Company intends to vigorously defend
itself and deny that it ever offered or sold any securities nor did it
participate in the sale of securities. The Company further intends to assert its
rights to indemnity from the other defendants which were licensed broadcast
rights by the Company.
The Company is a defendant in Case No. A394431 in he District Court of Clark
County, Nevada, entitled Desert Inn Office III, Limited Partnership, et al. vs.
Olympic entertainment Group, Inc., et al. The alledged total for rent and "build
out" charges is $229,765.43 according to the lawsuit. The Company has not
started nor has it responded to any discovery motions in this case.
Item 4. Submission of Matters to a Vote of Security Holders
- ---------------------------------------------------------------
No matters were submitted to a vote of security holders during the first quarter
ended March 31, 1999.
6
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PART II
Item 5. Market for Registrant's Common Equity & Related Stockholder Matters
- --------------------------------------------------------------------------------
(a) Market Information
- ----------------------
(1) (i) None
(ii) Not applicable
(iii) First Quarter First Quarter
March 31, 1999 March 31, 1998
-------------- --------------
High Bid Low Bid High Bid Low Bid
---------------- -----------------
First Quarter $0.01 $0.01 $0.51 $0.25
(iv) Not applicable
(v) Not applicable
(2) (a) Not applicable
(b) Holders
- -----------
(1) Title of Class Number of Record Holders
-------------- ------------------------
Common Stock, Approximately 300
$0.01 Par Value
(2) Not applicable
(c) Dividends
- -------------
(1) There have never been any dividends declared by the Registrant.
(2) Registrant's losses do not currently indicate the ability to pay
cash dividends.
Item 6. Selected Financial Data
- ---------------------------------
Three Months Ending March 31,
1999 1998
----------------------
Income statement data:
Revenues $ -0- $ 3,800
Income (loss)
from operations ($ 51,338) ($ 158,596)
Net Interest Expense $ 1,973 $ -0-
Income (Loss)
before income taxes ($ 49,365) ($ 158,596)
Income tax $ -0- $ -0-
Net income
(loss) ($ 49,365) ($ 158,596)
========== =========
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March 31,
1999 1998
Per share data: ----------------------
Primary:
Net income (loss) ($49,365) ($158,596)
Weighted average shares
outstanding 3,277,785 2,169,785
Net income (loss) ($0.15) ($0.07)
Balance sheet data:
Working capital
(deficiency) $-0- $6,723
Total assets $101,325 $980,218
Long-term debt 22,164 22,164
Total stockholders' equity ($1,438,560) $392,327
(deficiency)
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
- --------------------------------------------------------------------------------
The Company has continued to experience severe cash flow problems occasioned by
(i) no revenue from license renewal fees or new Broadcast Affiliates licenses;
(ii) the failure of the Optimist Group licensing program initiated in January
1998, and terminated by mutual consent on April 1, 1998; and (iii) the failure
of the TSR program to produce significant new revenue from its cause marketing
initiatives. Since January 1998, the Company has sought to reduce overhead and
expenditures by (i) eliminating all paid personnel; (ii) ceasing to pay salaries
to corporate officers; and (iii) terminating its leasehold office space at 2755
East Desert Inn Road, Suite 200, Las Vegas, Nevada 89121.
Should the Company be unsuccessful in seeking a financial partner in the next 60
days, it would seek to reorganize its debt and to sell its programming in an
orderly proceeding under the protection of the Bankruptcy Court.
Comparison of 1999 to 1998
The Company's activities in the first quarter of 1999 consisted of attempting to
find a financial partner to avoid filing for bankruptcy. In the first quarter of
1998, the Company unsuccessfully attempted to license cable affiliates and was
working with Optimists International to set up a network with clubs in cities
with attractive demographics. There were no revenues in the first quarter of
1999 versus minimal revenues from a few operating CNN Affiliates in the first
quarter of 1998. The Company recognized revenue from the network license
agreements when all specified conditions had been made. In the first quarter of
1998, Company sales were attributed to network license agreements. The selling,
general and administrative expenses were $51,485 in 1999, reflecting the
close-down of operations and $162,396 in 1998.
8
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Comparison of 1998 to 1997
The Company's activities during 1998 and 1997 developed Company products,
licensed cable affiliates and negotiated acquisitions of rights to various
children's television programs. Revenues were down in 1998 versus 1997 due to
the fact that cable affiliates did not renew their license agreements when all
specified conditions had been met. During 1998 and 1997, the bulk of the
Company's sales were attributed to the sale of network license agreements. The
selling and general and administrative expenses were almost the same.
Capital Resources & Sources of Liquidity
During the first quarter of 1999 working capital decreased due to lack of
activity.
In 1998, cash requirements were for operating expenses, primarily labor and
general and administrative expenses, and for the acquisition of rights to
additional television series licensing.
In 1997, the Company's primary source of cash was from licensing agreements
which accounted for almost all of the cash brought into the Company.
Related Party Transactions
All deferred compensation to Officers and Directors has been forgiven since
1997.
Major customers
The Company had no major customers in the first quarter of 1999. Carousel
Marketing was the Company's major customer in 1998 and 1997. In 1998, Carousel
broke off its relationship with the Company. Both are now in litigation over
related matters to agreements.
Employment Contract
During 1998, Mr. Orsatti and the Company mutually agreed to terminate all
deferred compensation features and a five -year compensation agreement entered
into on January 15, 1997. Mr. Orsatti retains executive options to purchase
400,000 shares of common stock at an exercise price of 80% of the fair value of
the stock at the grant date.
Item 8. Financial Statements
- ----------------------------
The following financial statements are filed with this report as pages F-1
through F-4 following the signature page:
Reference
---------
Balance sheets F-1
Statements of operations F-2
9
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Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
- --------------------------------------------------------------------------------
There were no changes or disagreements with accountants on accounting and
financial disclosures.
PART III
Item 10. Directors and Executive Officers of the Registrant
- -------- --------------------------------------------------
The following table sets forth the name, age and position held of each director
and officer of Olympic Entertainment Group, Inc.:
Name Age Position
- ---- --- --------
Dominic Orsatti 66 Chief Executive Officer and Chairman
John Holt Smith 57 Secretary and Director
Bonnie Houldsworth 44 Treasurer and Chief Financial Officer
- ---------------
Officers and Directors
Pursuant to the Bylaws, each Director shall serve until the annual meeting of
the stockholders, or until his or her successor is elected and qualified. It is
the intent of the Company to support the election of a majority of "outside"
directors at such meeting. The Company's basic philosophy mandates the inclusion
of directors who will be representative of management, employees and the
minority shareholders of the Company. Directors may only be removed for "cause".
The term of office of each officer of the Company is at the pleasure of the
Company's Board.
BUSINESS EXPERIENCE OF DIRECTORS AND EXECUTIVE OFFICERS
Dominic Orsatti, Chairman of the Board, Chief Executive Officer and Founder, was
formerly President of Orsatti Productions, Inc., a leading producer of
educational films. Among Orsatti Productions credits were an NBC Children's
Television Special, "All About Me", a musical television special, "Get Down",
hosted by Milton Berle, more than 100 educational films and two educational
children's record albums. Mr. Orsatti is the recipient of more than 18 major
industry awards, including four gold and three silver medal awards by the New
York International Film Festival and two Golden Babe awards awarded at the
Chicagoland Film Festival. Mr. Orsatti co-wrote and was executive producer of
the first place Telly award-winning "Coming To Ametrica" in 1993. He is also a
member of the Writer's Guild of America.
John Holt Smith, Corporate Secretary and Director, is a senior partner of Smith
& Associates and was formerly a partner in the Fort Worth, Texas firm of
McDonald, Sanders, Ginsburg, Phillips, Maddox & Newkirk. As a partner, he served
as Vice President of the United States Trust Company of New York and in that
capacity opened the Beverly Hills, California office of the company. Mr. Smith
subsequently returned to the practice of law to ultimately head the securities
department of the Los Angeles firm of Bushkin, Gaims, Gaines & Jonas. In that
capacity, Mr. Smith represented clients including Johnny Carson, Kareem
Abdul-Jabbar, Diane Keaton, Joan Rivers, Bill Cosby, David Letterman, Neil Simon
and many NBC personalities. Mr. Smith is currently engaged in the private
practice of law representing broker-dealers, individuals and entities raising
capital as well as preparing private placements and subsequent public offerings.
Mr. Smith is a two-time graduate of Vanderbilt University (B.A. 1963, LL.B.
1966) and a member of the State Bars in Texas and California.
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Bonnie Houldsworth, Treasurer and Chief Executive Officer, started her public
accounting career at Laventhol & Horwath. Ms. Houldsworth has been a founding
principal in a Las Vegas public accounting firm since 1987, Houldsworth, Russo &
Company, which is a full service accounting firm in which she specializes in
accounting and auditing for highly regulated industries such as banks, mortgage
companies and gaming companies. Ms. Houldsworth obtained a Bachelor of Science
in Accounting in June 1984 from the University of Nevada, Las Vegas, and became
a licensed Certified Public Accountant in Nevada and California.
Item 11. Executive Compensation
The table below sets forth the payroll and consulting compensation for fiscal
1998 for the executive officers and directors of the Company.
Name of Individual Capacities in Which Served Compensation
- ------------------ -------------------------- ------------
Dominic Orsatti Chairman and Chief Executive Officer $-0-
John Holt Smith Secretary and Director $-0-
Bonnie Houldsworth Treasurer and Chief Financial Officer $-0-
Item 12. Security Ownership of Certain Beneficial Owners and Management
- -----------------------------------------------------------------------
As of March 31, 1999 there were 3,297,785 Shares outstanding. The following
tabulates holdings of Common Shares of the Company by each person who, subject
to the above, are holders of record or are known by Management to own
beneficially more than 5.0% of the Common Shares and, in addition, by all
directors and officers of the Company individually and as a group.
<TABLE>
<CAPTION>
Table I - Common Stock
Name and Address Number of Shares of Percentage
of Beneficial Owner Common Stock Owned(1) of Ownership
- ------------------- --------------------- ------------
<S> <C> <C>
Dominic Orsatti(2) 800,000 24.26 Percent
2550 E. Desert Inn Road #338
Las Vegas, Nevada 89121
Nevada Entertainment Partners, Ltd.(2) 800,000 24.26 Percent
2550 E. Desert Inn Road #338
Las Vegas, Nevada 89121
John Holt Smith 8,000 .0024 Percent
1925 Century Park East #1600
Los Angeles, California 90067
All Directors and Officers as a Group (3) 808,000 24.50 Percent
</TABLE>
- ---------------
(1) Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, beneficial ownership of a security consists of sole or shared
voting power (including the power to vote or direct the voting) and/or sole
or shared investment power (including the power to dispose or direct the
disposition) with respect to a security whether through a contract,
arrangement, understanding, relationship or otherwise. Unless otherwise
indicated, each person indicated above has sole power to vote, or dispose
or direct the disposition of all shares beneficially owned, subject to
applicable community property laws.
(2) Includes Nevada Entertainment Partners, Ltd., and Dominic Orsatti, the
managing general partner thereof, who together constitute a "group," as
that term is defined in Section 13D of the Securities Exchange Act of 1934,
as amended.
(3) Does not include any Common Shares to be issued upon exercise of any
outstanding warrants.
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The following tabulates holding of Series "C" Preferred Shares of the Company
owned beneficially by all directors and officers of the Company individually and
as a group.
Table 2 - Series "C" Preferred Shares
-------------------------------------
Number of Series "C" Percent of
Name and Address Preferred Shares(1) Class
- ---------------- ------------------- -----
Dominic Orsatti(2) 12,000 36.58%
2550 East Desert Inn Road, Suite 338
Las Vegas, Nevada 89121
Nevada Entertainment Partners Ltd.(2) 12,000 36.58%
2550 East Desert Inn Road, Suite 338
Las Vegas, Nevada 89121
John Holt Smith 8,000 24.39%
1925 Century Park East #1600
Los Angeles, California 90067
All Directors & Officers
as a group (three individuals) 20,000 60.97%
- ---------------------
(1) Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, beneficial ownership of a security consists of sole or shared
voting power (including the power to vote or direct the voting) and/or sole
or shared investment power (including the power to dispose or direct the
disposition) with respect to a security whether through a contract,
arrangement, understanding, relationship or otherwise. Unless otherwise
indicated, each person indicated above has sole power to vote, or dispose
or direct the disposition of all shares beneficially owned, subject to
applicable community property laws
(2) Includes Nevada Entertainment Partners, Ltd. and Dominic Orsatti, the
managing general partner thereof, who together constitute a "group," as
that term is defined in Section 13D of the Securities Exchange Act of 1934,
as amended.
Table 3 - Series "D" Preferred Shares
-------------------------------------
Number of Series "D" Percent of
Name and Address Preferred Shares(1) Class
- ---------------- ------------------- -----
Dominic Orsatti(2) 98,000 100%
2755 East Desert Inn Road, Suite 200
Las Vegas, Nevada 89121
Nevada Entertainment Partners Ltd.(2) 98,000 100%
2755 East Desert Inn Road, Suite 200
Las Vegas, Nevada 89121
All Directors & Officers
as a group (three individuals) 98,000 100%
- ----------------------
(1) Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, beneficial ownership of a security consists of sole or shared
voting power (including the power to vote or direct the voting) and/or sole
or shared investment power (including the power to dispose or direct the
disposition) with respect to a security whether through a contract,
arrangement, understanding, relationship or otherwise. Unless otherwise
indicated, each person indicated above has sole power to vote, or dispose
or direct the disposition of all shares beneficially owned, subject to
applicable community property laws.
(2) Includes Nevada Entertainment Partners, Ltd. and Dominic Orsatti, the
managing general partner thereof, who together constitute a "group," as
that term is defined in Section 13D of the Securities Exchange Act of 1934,
as amended.
12
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PART IV
Item 14. Exhibits, Financial Statements, and Reports on Form 8-K
- ----------------------------------------------------------------
(a) Financial Statements
---------------------
Reference
---------
Balance sheets F-1
Statements of operations F-2
(b) Reports on form 8-K
-------------------
None
(c) Exhibits
--------
None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized:
Olympic Entertainment Group, Inc.
By: /s/ Dominic Orsatti Date: May 21, 1999
--------------------------------- --------------------
Dominic Orsatti, Chairman and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following person on behalf of the Registrant and in the
capacity and on the date indicated.
NAME & POSITION DATE
/s/ Dominic Orsatti May 21, 1999
- ---------------------------------- --------------------------
Dominic Orsatti,
Chairman & Chief Executive Officer
/s/ John Holt Smith May 21, 1999
- ---------------------------------- --------------------------
John Holt Smith
Corporate Secretary & Director
13
<PAGE>
Olympic Entertainment Group, Inc.
Balance Sheet
As of March 31, 1999
Mar 31, '99
------------
ASSETS
Current Assets
Checking/Savings
Pioneer Citizens-OEG 1.78
----------------
Total Checking/Savings 1.78
Accounts Receivable
Accounts Receivable 20,680.00
----------------
Total Accounts Receivable 20,680.00
Other Current Assets
A/R Allowance for bad debts (20,680.00)
----------------
Total Other Current Assets (20,680.00)
----------------
Total Current Assets 1.78
Other Assets
Accum Amort-License Costs (844,770.00)
Accum Amort-Mastering Costs (11,400.00)
License Cost-PP Film Cost-Oth 912,935.00
Mastering Costs-PP film costs 43,235.27
Trademarks 1,323.00
----------------
Total Other Assets 101,323.27
----------------
TOTAL ASSETS 101,325.05
================
LIABILITIES & EQUITY
Liabilities
Current Liabilities
Accounts Payable
Accounts Payable 495,621.15
----------------
Total Accounts Payable 495,621.15
Other Current Liabilities
Accounts payable 9,558.00
Accrued interest 113,299.09
Accrued Lease Loss 351,029.00
Accrued Wages & Payroll Taxes 86,500.00
Contract Payable-Kidstreet 16,250.00
Contract Payable-Rod Rocket 40,000.00
Current portion - LTD 22,164.50
Due to D. Orsatti 255,840.87
Note payable - Herkl 14,623.00
Loan 50,000.00
Loan 25,000.00
Loan 25,000.00
Loan 25,000.00
Note pay - Wolveck 10,000.00
----------------
Total Other Current Liabilities 1,044,264.46
----------------
Total Current Liabilities 1,539,885.61
----------------
Total Liabilities 1,539,885.61
Equity
Add'l paid in capital 3,394,314.36
Common stock 30,028.00
Preferred stock ser C 65,600.00
Preferred Series D 196,000.00
Preferred stock 203,000.00
Retained Earnings (5,326,887.92)
Net Income (49,365.00)
Stock Subscriptions 48,750.00
----------------
Total Equity (1,438,560.56)
----------------
TOTAL LIABILITIES & EQUITY 101,325.05
================
F-1
<PAGE>
Olympic Entertainment Group, Inc.
Statement of Operations
January through March 1999
Jan - Mar '99
-------------
Ordinary Income/Expense
Income
Interest Income 147.18
-----------
Total Income 147.18
Expense
Bank Charges 30.91
Legal & Prof Fees 50.00
Office costs 90.00
Payroll Expenses (251.11)
Postage & Courier 14.99
Rent expense 51,379.33
Shareholder expenses 341.10
Telephone (169.44)
-----------
Total Expense 51,485.78
-----------
Net Ordinary Income (51,338.60)
Other Income/Expense
Other Expense
Tax Provision (1,973.60)
-----------
Total Other Expense (1,973.60)
-----------
Net Other Income 1,973.60
-----------
Net Income (49,365.00)
===========
F-2
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-END> MAR-31-1999 MAR-31-1998
<CASH> 1 455
<SECURITIES> 0 0
<RECEIVABLES> 20,680 20,680
<ALLOWANCES> 20,680 14,412
<INVENTORY> 0 0
<CURRENT-ASSETS> 1 6,723
<PP&E> 101,323 178,707
<DEPRECIATION> 856,170 35,045
<TOTAL-ASSETS> 101,325 980,218
<CURRENT-LIABILITIES> 1,044,264 1,534,885
<BONDS> 0 0
0 0
464,600 464,600
<COMMON> 30,028 28,264
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 101,325 980,218
<SALES> 0 3,800
<TOTAL-REVENUES> 147 3,800
<CGS> 0 88,025
<TOTAL-COSTS> 51,485 162,396
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 1,973 315
<INCOME-PRETAX> (49,365) (158,596)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (49,365) (158,596)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (49,365) (158,596)
<EPS-BASIC> (.15) (.07)
<EPS-DILUTED> (.15) (.07)
</TABLE>
