FORM 10-KA
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
ANNUAL REPORT
Pursuant to Section 13 or 15(d) of the
Securities & Exchange Act of 1934
For fiscal year ended September 30, 1999
CENTURY PARK PICTURES CORPORATION
(Exact name of registrant as specified in its charter)
Minnesota 0-14247 41-1458152
- -------------------------- ----------- ------------
(State of Incorporation) (Commission (IRS Employer
File Number) Identification
Number)
4701 IDS Center, Minneapolis, Minnesota 55402
- --------------------------------------- --------
(Address of principal executive offices) (zip code)
Registrant's telephone number: (612) 333-5100
--------------
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK par value $.001
----------------------------
Registrant has (1) filed all reports to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934, during the 12 months next preceding September
30, 1998 and (2) has been subject to such filing requirements for the ninety
(90) days preceding September 30, 1999.
Disclosure of delinquent filers pursuant to Item 405 of Regulation S-K
(ss.229.405 of this chapter) 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-K or any
amendment to this Form 10-K.
As of December 31, 1999, 9,886,641 common shares were outstanding. The aggregate
market value of the common shares (based upon only limited and sporadic
quotations not to exceed $1/10) of the Registrant held by non-affiliates was
$816,815.
PART I
ITEM 1. BUSINESS
(a) GENERAL DESCRIPTION OF BUSINESS
The Company develops, produces and markets various entertainment properties,
including without limitation, the intellectual product(s) of entities engaged in
the motion picture, television, and theatrical state productions,such as
creative writers, producers and directors, for the motion picture, pay/cable and
commercial television markets and, until September 1995 through its then 50.1%
owned subsidiary, Willy Bietak Productions, Inc. ("WBPI"), produced and operated
small touring ice shows and theme shows appearing in theatres, casinos, and
major amusement parks and arenas. On September 29, 1995, in consideration of
guarantees of certain bank debt of WBPI, provided WBPI by its minority
shareholder, the Company transferred 65,900 of its shares of WBPI common stock
to such minority shareholder, thereby reducing the Company's interest to 30%.
Until December 1998 a wholly-owned subsidiary, International Theatres
Corporation ("ITC"), of the Company operated the Chanhassen Dinner Theatre in
Chanhassen, Minnesota which the Company acquired in 1993.
On December 17, 1998 the Board of Directors passed a resolution to transfer the
Company's interest in ITC and its remaining interest in WBPI to the Company's
CEO as repayment of $100,000 on account of advances made to the Company by the
Company's CEO. In setting the $100,000 amount the Board of Directors obtained
and relied upon an independent market analysis of ITC and WBPI by Lingate
Financial Group, a Minnesota corporation.(See Exhibit and Liquidity and Sources
of Capital)
The Company may be unable to continue as a going concern without raising
additional funds from outside sources. Management is uncertain as to the
likelihood of raising additional funds. (See Liquidity and Sources of Capital
for Further Discussion.)
The Company was organized under Minnesota law in 1983. The Company's executive
offices are located at 4701 IDS Center, Minneapolis, Minnesota 55402 and its
telephone number is (612) 333-5100.
(b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
The Company's operations are attributable to one business segment. The
ownership, production, and operation of entertainment attractions.
PAGE 2
(c) ACCOUNTANTS OPINION
The Company's independent auditors issued their opinion on the Company's
financial statements for the year ended September 30, 1999, which included an
explanatory paragraph as to substantial doubt about the Company's ability to
continue as a going concern. This doubt was raised primarily due to recurring
losses from operations and due to the Company's stockholders' deficit of
$1,224,096 at September 30, 1999.
(d) NARRATIVE DESCRIPTION OF BUSINESS
(i) International Theatres Corporation
As previously discussed, on December 17, 1998 the Board of Directors
in reliance upon an independent market analysis transferred International
Theatres Corporation to the Company's CEO as partial repayment of $100,000 on
advances. (See Footnote 13 to Financial Statements)
(ii) Motion Pictures, Pay/Cable, and Television
In producing entertainment properties for motion picture, pay/cable
and commercial television, the Company has limited its costs to those incurred
prior to the commencement of principal photography, either at a studio or on
selected site(s). It has been the Company's intention to produce or co-produce
and arrange for the distribution of primarily feature length motion pictures
with production financing derived from third party sources. The Company has
reported no revenues from motion pictures, pay/cable and television during 1997,
1998 and 1999. At September 30, 1999, the Company had two (2) properties only
one of which was substantially completed. All entertainment properties have been
charged to expenses.
The profits of an enterprise involved in the entertainment industry
generally and, particularly, the motion picture, television and music industries
are greatly dependent upon the audience appeal of each creative product,
compared with the cost of such product's purchase, development, production and
distribution. Competition is intense both within the motion picture and
television industry and other entertainment media. The Company is in competition
with major film studios, as well as with numerous "independent" motion picture
and television production companies for the acquisition of artistic properties,
and the services of artistic, creative and technical personnel. The Company is
unaware of any recognized approach to determined its or any participants'
postion in these industries. Moreover, the Company's financial resources does
not suggest that it would be considered a "major participant in these
industsries.
PAGE 3
ITEM 2. PROPERTIES/REAL ESTATE RELATED
The Company leases, as its headquarters, 1,941 square feet of office space at
4701 IDS Center, Minneapolis, Minnesota 55402. The Company's motion picture and
television operations lease 160 square feet of office space at 3575 Cahuenga
Blvd. West, Los Angeles, California 90048. Affiliates of the Company are
presently advancing the rent for this space. Management believes that there is
adequate space available in the Los Angeles area to accommodate its California
operations.
ITEM 3. LEGAL PROCEEDINGS
The Company is not involved in any material legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders during the fourth quarter
of the fiscal year covered by this Report.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCK HOLDER
MATTERS
a. Price Range of Common Stock
The following table shows the range of the closing bid prices for the
Common Stock in the over-the-counter market for the fiscal years ended September
30, 1999 and 1998. Since the first quarter 1996 there was no established public
trading market for the Company's common shares. There were only limited or
sporadic quotations and none exceed $.10.
Fiscal Years 1998 and 1999 Bid Prices
-------------------------- ----------
High Low
---- ---
See above explanation
b. Number of equity security holders' accounts at December 31, 1999:
509
---
PAGE 4
c. Dividends:
The Registrant has never paid any cash dividends on its Common Stock
and does not plan to pay any cash dividends in the foreseeable future.
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA **
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
Revenues $ -- $ -- $ -- $ 383,033 $ --
Income (Loss) from
Continuing Operations (67,027) (308,698) (391,748) (1,988,093) (670,721)
Income (Loss) from
Continuing Operations
per Share (0.01) (.03) (.04) (.20) (.08)
Weighted Average
Number of
Common Shares 9,886,641 9,886,641 9,886,641 9,751,594 8,636,952
Total Assets $ 955 $ 1,174,146 $ 1,311,966 $ 1,740,952 $ 1,963,738
Long Term Debt -- -- $ 161,537 $ 376,362 $ 562,187
(excluding current portion)
Stockholders'
Equity (Deficit) $(1,224,096) $(2,135,511) $(2,071,627) $(1,902,715) $ (643,455)
** Restated to reflect the reclassification of ITC's operations and the
Company's equity in the operations of WBPI to discontinued operations.
See Note 13 to Consolidated Financial Statements
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND THE RESULTS OF OPERATIONS
OPERATIONS
Year ended September 30, 1999 compared to September 30, 1998
Due to the disposal of ITC and WBPI as discussed in Item 1(a), their
respective revenues and expenses have been classified as discontinued
operations. Continuing operations consisted primarily of administrative
expenses and interest expense. Administrative expenses were $15,530 for
1999 compared to $221,883 for 1998. The decrease is primarily due to
the elimination officers' salaires of
PAGE 5
approximately $150,000 insurance of approximately $13,000, employees'
benefits of approximately $20,000 and professional fees of
approximately $8,000. Interest expense was $51,497 for 1999 compared to
$98,313 for 1998. The decrease was primarily due to the elimination of
interest expense attributable to the Pike in 1998.
Year Ended September 30, 1998 compared to September 30, 1997
Due to the disposal of ITC and WBPI as discussed in Item 1(a), their
respective revenues and expenses have been classified as discontinued
operations. Continuing operations consisted primarily of administrative
expenses and interest expense. Administrative expenses were $221,883
for 1999 compared to $297,851 for 1998. The decrease is primarily due
to the elimination of expenses related to the Minnesota Arena Football,
Inc. ("PIKE"). [See Footnote 1 to Financial Statements] Interest
expense was $98,313 for 1999 compared to $91,981 for 1998. The increase
is primarily due to a full years interest in 1998 and only a partial
year in 1997, on notes payable.
LIQUIDITY AND SOURCES OF CAPITAL
Cash used by continuing operating activities for the year ended September 30,
1999 was $17,213 compared to $144,541 in the comparable prior year period. Cash
provided by discontinued operating activities for the year ended September 30,
1999 was $382,553 compared to $420,515 for the comparable prior year. Cash used
by investing and financing activities was $48,809 and $333,479 respectively,
substantially all of which related to discontinued operations.
Management intends to continue to restrict expenditures with respect to the
future development of entertainment properties and to market its completed
properties. The Company has two properties one of which is substantially
completed. The costs of development have been written off. The Company believes
it will incur little, if any, costs of marketing. Management believes these
actions may contribute to the Company's liquidity. The Company had no material
commitments for capital expenditures as of September 30, 1999 and capital
expenditures for fiscal 2000 are expected to be immaterial.
During the fiscal years ended September 30, 1999, 1998, and 1997, the Company
incurred substantial losses from continuing operations of $ 67,027, $ 308,698
and $ 391,748, respectively, and has a working capital deficit as of September
30, 1999 of $1,224,096.
PAGE 6
The impact of these losses is to limit the liquidity and available cash
resources for operations.
During the fiscal years ended September 30, 1999, 1998 and 1997, the Company's
CEO made cash advances to the Company in order to meet cash flow needs. These
advances were secured by the Company's shares of stock in ITC and WPBI.
Subsequent to September 30, 1998 the Company's management, with approval of the
Board of Directors, transferred the assets and operations of ITC and the
Company's investment in WBPI to the CEO as partial repayment of the advances
made to the Company. There can be no assurances that the Company's CEO and
majorstockholder will advance any amount(s) either as loans or capital
contributions in the future. See Note 13 to Financial Statements This left the
Company with no on-going operating business or operating assets. All that
remains are the liabilities of Pike and the Company.
The Company's operations subsequent to the disposition of its subsidiaries
consist of acquisition searches and certain administrative costs, both of which
could be scaled back and/or financed by the Company's CEO and major stockholder.
There can be no assurances that the Company's CEO and major stockholder will
advance any amount(s) either as loans or capital contributions in the future.
The Company intends to continue to seek out potential acquisitions. However,
potential acquisitions are in the early stages of investigations. Since the
Company has no bank lines of credit it intends to finance any acquisitions with
to be negotiated senior bank financing of approximately 60%, and the remainder
with a combination of other debt and equity instruments. There are no assurances
that the Company will successfully identify these or any other potential
acquisitions or that, if identified, it will obtain financing under terms
acceptable to the Company. Management presently considers an acquisition or a
merger of the Company a viable alternative.
The Company raised during 1996 financing from outside sources of approximately
$400,000, due to inadequate cash flow and insufficient funds of the Pike. Such
financing was due in December, 1996, and is secured by the common stock of
Minnesota Arena Football, Inc. Management anticipates the majority of the
financing will be converted into the Company's common stock. Management
attempted to sell the Company's interest in the PIKE, but was unsuccessful.
There are no assurances that the financing will be converted into the Company's
common stock. Management is uncertain as to the alternate resolution of the
liabilities of the PIKE. Management continues to evaluate the best course of
action which may involve a bankruptcy filing of the PIKE.
PAGE 7
The Company's independent auditors issued their opinion on the Company's
financial statements for the year ended September 30, 1999, which included an
explanatory paragraph as to substantial doubt about the Company's ability to
continue as a going concern. This doubt was raised primarily due to recurring
losses from operations, the Company's stockholder's deficit of $1,224,096 at
September 30, 1999, and to no ongoing operations. Currently, the Company has no
specific viable plans intended to mitigate the effect of such conditions, other
than its plans to accquire a company that will generate sufficient cash flows
for continued existance.
INFLATION
Inflation and changing prices have not had a significant impact on operations of
the Company to date.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
This information is included following "Index to Financial Statements".
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
NONE
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT AT
SEPTEMBER 30, 1999
Director/
Officer
Name Office Held Since Age
- ---- ----------- ----- ---
Philip Rogers President, Director 1983 65
Thomas K. Scallen Chief Executive Officer, 1983 74
Chairman of the Board
of Directors,
Bruce Lansbury Director 1983 69
Willy Bietak Director 1992 52
Mr. Rogers became President and Director upon the Company's formation in 1983.
Mr. Roger is also a principal of Philipico
PAGE 8
Picture Company, a motion picture and television production company and is a
principal of Rogers & Associates.
Mr. Scallen became Chairman of the Board of Directors, Vice President, and
Treasurer of CPPC upon its formation in 1983. Mr. Scallen was elected Chief
Executive Officer of the Company on March 14, 1992. Mr. Scallen assumed the
responsibilities of chief financial officer in 1998. Mr. Scallen was president,
director and principal stockholder of International Broadcasting Corporation, a
publicly traded company engaged in entertainment activities, the presentation of
touring shows, arena shows and motion picture or television productions until
March 1992. International Broadcasting Corporation filed for protection under
Chapter 11 of the Bankruptcy Act in August 1991.
Mr. Lansbury became a Director of the Company upon its formation. For more than
the past five years, Mr. Lansbury has been an independent producer and is
Supervising Producer and one of the writers for the television series "Murder
She Wrote."
Mr. Bietak became a Director of the Company in 1992. He is
President of Willy Bietak Productions, Inc. and has been associated
with the Company since 1986.
ITEM 11. EXECUTIVE COMPENSATION
Officer Compensation
- --------------------
Cash and Cash Equivalent Aggregate
------------------------ ---------
Name Capacity Year Paid or Accrued Salaries Remuneration
---- -------- ---- ------------------------ ------------
Philip Rogers President 1999 $ -0- $ -0-
1998 $ -0- $ -0-
1997 $ -0- $ -0-
Thomas K. Scallen CEO 1999 $ -0- $ -0-
1998 $135,000 $ 135,000
1997 $135,000 $ 135,000
Ronald Leckelt** CFO
All Officers as a
Group
(2 in number)** 1999 $ -0- $ -0-
1998 $195,000 $ 195,000
1997 $195,000 $ 195,000
** Mr. Ronald Leckelt resigned as CFO in 1998. For each of the years 1997 and
1998 the Company has accrued $60,000 salary due Mr. Leckelt.
Director Compensation
- ---------------------
The Directors have not received any cash compensation. Directors,
PAGE 9
other than Messrs. Scallen and Rogers, each received 2 year options to purchase
10,000 shares of the Company's common stock at $1.50 per share in 1993. These
options expired September 30, 1996.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as at September 30, 1999, the information with
respect to common stock ownership of each person known to the Company to own
beneficially more than five percent (5%) of the shares of the Company's common
stock and all Directors and Officers as a group.
Name Number of
NAME & Address Shares Percentage
Thomas K. Scallen 1,619,480 16.4%
Heron Cove, Unit B
Windham, NH 03087
Philip Rogers 99,375 1%
c/o Rogers & Associates
3575 Cahuenga Blved. W.
Los Angles, CA 90068
All Officers and Directors
as a Group (5 in number) 1,718,855 17.3%
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the years ended September 30, 1999 and 1998, the Company's chief
executive officer (CEO) provided short-term advances of $2,770 and $75,665,
respectively to the Company. These amounts were required to be reported as
additional paid in capital in the accompanying financial statements. The
advances contained specific repayment provisions and, as such, when repayments
occur, a corresponding reduction additional paid in capital would occur. The
advances are secured by the Company's shares of stock in ITC.
On December 17, 1998, the Board of Directors passed a resolution to transfer the
Company's interest in its subsidiaries ITC and WBPI to the Company's CEO as
repayment of $100,000 in advances the Company's CEO had made to the Company (see
Note 5 to Financial Statements). In setting the $100,000 amount the Board of
Directors obtained and relied upon an independent market analysis of ITC and
WBPI.
PAGE 10
On December 31, 1998 the Company's CEO forgave the remainder of the advances of
approximately $1,081,000 owed to him by the Company.
As of September 30, 1999 and 1998, the Company owed the Company's CEO $227,500
for cumulative accrued salary. These amounts are included in accrued expenses on
the accompanying balance sheets.
As of September 30, 1999 and 1998, the Company owed the Company's former CFO
$127,000 for cumulative accrued salary. These amounts are included in accrued
expenses on the accompanying balance sheets.
As of September 30, 1996, the Company owed a company owned by the Company's CEO
$18,683 for contracted services and cash advances. The Company's CEO sold this
company during the fiscal year ended September 30, 1997, and the amount due the
Company's CEO was forgiven.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTS ON FORM
8-K
(a) 1. Financial Statements. See following "Index to Financial Statements".
2. Financial Statement Schedules. See following "Index to Financial
Statements".
(b) Reports on Form 8-K
NONE
(c) Exhibits
(3.) Articles of Incorporation and By-Laws are incorporated by reference
to the Exhibits to the Registrant's Registration Statement of
September 15, 1983.
(4.) Rights of warrant holders set forth in Exhibits to Registration
No.33-58546 effective April 12, 1993 incorporated by this
reference.
(10.) Stock Purchase Agreement, dated July 29, 1993 between registrant and
International Broadcasting Corporation, International Theatres
Corporation and National Westminster Bank USA attached as an
Exhibit to Registrants Report on Form 8-K is incorporated by this
reference.
PAGE 11
(22.ii) Registrant is the sole shareholder of Minnesota Arena Football,
Inc., a Minnesota corporation ("MAF"). MAF did business under the
trade name Minnesota Fighting Pike until 1996.
(24) Manually signed powers of attorney for members of the Board of
Directors, filed with Registrants 1998 annual report on Form 10-K
are incorporated by this reference.
(27) Financial Data Schedule.
(99) Value Opinion re: WBPI and International Theatres Corp.
PAGE 12
SIGNATURES
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, thereunto duly authorized as of the 1st day of May 2000.
CENTURY PARK PICTURES CORPORATION
By: s/ Thomas K. Scallen
-----------------------------------
Thomas K. Scallen
Chief Executive Officer
Pursuant to the Requirements of the Securities Exchange Act of 1934, this Report
has been signed on behalf of the Registrant and in capacities and on the dates
indicated.
*
s/ Philip Rogers May 1, 2000
- -----------------------
Philip Rogers
President
& Director
/ Thomas K. Scallen May 1, 2000
- ----------------------
Thomas K. Scallen
Chief Executive Officer & Director
*
/ Bruce Lansbury May 1, 2000
- ----------------------
Bruce Lansbury Director
*
s/ Willy Bietak May 1, 2000
- ----------------------
Willy Bietak Director
* Signed pursuant to Power of Attorney
(SEE EXHIBIT 25 HERETO)
PAGE 13
CENTURY PARK PICTURES CORPORATION AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS AND SUPPORTING SCHEDULES
INCLUDED IN ANNUAL REPORT ON FORM 10-KA
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
INDEX
Page numbers refer to pages in the attached Consolidated Financial Statements:
Page
Independent Auditors' Report................................................ 1
Consolidated Balance Sheets - September 30, 1999
and September 30, 1998.................................................... 2
Consolidated Statements of Operations -
Years ended September 30, 1999, 1998, and 1997............................ 3
Consolidated Statements of changes in
Stockholders' deficit - Years Ended
September 30, 1999, 1998, and 1997........................................ 4
Consolidated Statements of Cash Flows -
Years ended September 30, 1999, 1998, and 1997............................ 5
Notes to Consolidated Financial Statements.................................. 6
PAGE 14
CENTURY PARK PICTURES CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
CENTURY PARK PICTURES CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
CONTENTS
Page
Independent auditors' report 1
Financial statements:
Consolidated balance sheets 2
Consolidated statements of operations 3
Consolidated statements of changes in stockholders' deficit 4
Consolidated statements of cash flows 5
Notes to consolidated financial statements 6-15
BOARD OF DIRECTORS AND STOCKHOLDERS
CENTURY PARK PICTURES CORPORATION
MINNEAPOLIS, MINNESOTA
Independent Auditors' Report
We have audited the accompanying consolidated balance sheets of CENTURY PARK
PICTURES CORPORATION as of September 30, 1999 and 1998, and the related
consolidated statements of operations, changes in stockholders' deficit, and
cash flows for the years ended September 30, 1999, 1998, and 1997. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of CENTURY
PARK PICTURES CORPORATION as of September 30, 1999 and 1998, and the
consolidated results of its operations and its cash flows for the years ended
September 30, 1999, 1998, and 1997 in conformity with generally accepted
accounting principles.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 11 to
the consolidated financial statements, the Company has suffered recurring losses
from operations, and its total liabilities exceed its total assets. Those
conditions raise substantial doubt about its ability to continue as a going
concern. Management's plans regarding those matters are also described in Note
11. The consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
November 22, 1999
Minneapolis, Minnesota
CENTURY PARK PICTURES CORPORATION
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1999 AND 1998
ASSETS
1999 1998
---------- -------------
CURRENT ASSETS:
Cash $ 29 $ 16,977
Accounts receivable 70,043
Inventories 45,771
Deferred show costs 74,525
Due from unconsolidated subsidiary 293
Prepaid expenses 926 95,776
-------- ------------
Total current assets 955 303,385
-------- ------------
PROPERTY, PLANT, AND EQUIPMENT:
Leasehold interest in building 1,000,000
Equipment 636,728
Furniture and fixtures 94,077 454,414
-------- ------------
94,077 2,091,142
Less accumulated depreciation and amortization 94,077 1,609,195
-------- ------------
481,947
-------- ------------
OTHER:
Cost in excess of net assets of business acquired, less
accumulated amortization 388,814
-------- ------------
$ 955 $ 1,174,146
======== ============
See notes to financial statements
LIABILITIES AND STOCKHOLDERS' DEFICIT
1999 1998
----------- -----------
CURRENT LIABILITIES:
Notes payable $ 400,000 $ 450,000
Current maturities of capitalized lease obligation 168,836
Accounts payable 281,979 636,986
Deferred revenue 1,187,607
Accrued expenses:
Compensation 354,500 546,041
Other 188,572 320,187
----------- -----------
Total current liabilities 1,225,051 3,309,657
----------- -----------
COMMITMENTS AND CONTINGENCIES (NOTE 7 AND 11)
STOCKHOLDERS' DEFICIT:
Common stock, $0.001 par; 200,000,000 shares
authorized 9,886,641 and shares issued and
outstanding 9,887 9,887
Additional paid-in capital 6,160,862 4,906,736
Accumulated deficit (7,394,845) (7,052,134)
----------- -----------
(1,224,096) (2,135,511)
----------- -----------
$ 955 $ 1,174,146
=========== ===========
See notes to financial statements
2
CENTURY PARK PICTURES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
1999 1998 1997
----------- ----------- -----------
REVENUE $ 0 $ 0 $ 0
----------- ----------- -----------
OPERATING COSTS AND EXPENSES:
Administration 15,530 221,883 297,851
Depreciation and amortization 942 1,920
----------- ----------- -----------
15,530 222,825 299,771
----------- ----------- -----------
OPERATING LOSS (15,530) (222,825) (299,771)
----------- ----------- -----------
NONOPERATING INCOME (EXPENSE):
Other income 12,440 4
Interest expense (51,497) (98,313) (91,981)
----------- ----------- -----------
(51,497) (85,873) (91,977)
----------- ----------- -----------
LOSS FROM CONTINUING OPERATIONS (67,027) (308,698) (391,748)
----------- ----------- -----------
DISCONTINUED OPERATIONS (SEE NOTE 13):
Income (loss) from operations of ITC (less
applicable income taxes of $426, $2,000 and
$2,100 for 1999, 1998 and 1997, respectively) (350,331) 171,483 7,358
Equity in net income (loss) from operations of
WBPI (less applicable income taxes of $0) 74,647 (2,334) (41,688)
----------- ----------- -----------
(275,684) 169,149 (34,330)
----------- ----------- -----------
NET LOSS $ (342,711) $ (139,549) $ (426,078)
=========== =========== ===========
Loss from continuing operations per
share of common stock $ (0.01) $ (0.03) $ (0.04)
=========== =========== ===========
Income (loss) from discontinued operations per
share of common stock $ (0.03) $ 0.02 $ (0.00)
=========== =========== ===========
Net loss per share of common stock $ (0.03) $ (0.01) $ (0.04)
=========== =========== ===========
Weighted average number of common shares 9,886,641 9,886,641 9,886,641
=========== =========== ===========
See notes to financial statements
3
CENTURY PARK PICTURES CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
Common Stock Issued Additional
---------------------------- Paid-In Accumulated
Shares Amount Capital Deficit Total
--------------- ----------- -------------- ------------------- ---------------
Balance, September 30, 1996 9,886,641 $ 9,887 $ 4,573,905 $ (6,486,507) $ (1,902,715)
Advances from officer 257,166 257,166
Net loss (426,078) (426,078)
-------------- ----------- -------------- ------------------- ---------------
Balance, September 30, 1997 9,886,641 9,887 4,831,071 (6,912,585) (2,071,627)
Advances from officer 75,665 75,665
Net loss (139,549) (139,549)
-------------- ----------- -------------- ------------------- ---------------
Balance, September 30, 1998 9,886,641 9,887 4,906,736 (7,052,134) (2,135,511)
Forgiveness of debt by officer
and transfer of assets 1,254,126 1,254,126
Net loss (342,711) (342,711)
-------------- ----------- -------------- ------------------- ---------------
Balance, September 30, 1999 9,886,641 $ 9,887 $ 6,160,862 $ (7,394,845) $ (1,224,096)
============== =========== ============== =================== ===============
See notes to financial statements
4
CENTURY PARK PICTURES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
INCREASE (DECREASE) IN CASH
1999 1998 1997
--------- --------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Continuing operations:
Net loss $ (67,027) $(308,698) $(391,748)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation 942 1,920
--------- --------- ---------
(67,027) (307,756) (389,828)
Increase (decrease) in liabilities:
Accounts payable (1,683) (61,378) (12,902)
Accrued expenses 51,497 224,593 101,909
--------- --------- ---------
CASH USED IN CONTINUING OPERATIONS BEFORE
INCOME TAXES (17,213) (144,541) (300,821)
--------- --------- ---------
Discontinued operations (See Note 13):
Net income (loss) (275,684) 169,149 (34,330)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation 77,526 338,568 295,685
Amortization 388,814 22,238 20,366
Loss on disposal of property and equipment 3,055 15,112
Equity in net (income) loss of unconsolidated subsidiary (74,647) 709 41,688
(Increase) decrease in assets:
Accounts receivable (220,339) (24,368) 112,821
Inventories (14,498) (3,515) 6,950
Deferred shows costs (99,914) (52,808) (17,692)
Prepaid expenses (58,617) (14,946) (6,109)
Increase (decrease) in liabilities:
Accounts payable (68,441) (165,989) (53,886)
Deferred revenue 679,006 113,601 (16,495)
Accrued expenses 46,292 22,764 (59,891)
--------- --------- ---------
CASH PROVIDED BY DISCONTINUED OPERATIONS BEFORE
INCOME TAXES 382,553 420,515 289,107
--------- --------- ---------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 365,340 275,974 (11,714)
--------- --------- ---------
See notes to financial statements
5
1999 1998 1997
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Discontinued operations:
Purchases of property, plant, and equipment $ (48,809) $(159,580) $ (25,023)
(Increase) decrease in due from unconsolidated subsidiary 1,625
--------- --------- ---------
NET CASH USED IN INVESTING ACTIVITIES (48,809) (157,955) (25,023)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Continuing operations:
Advances from officer 2,700 75,665 253,483
Discontinued operations:
Advances to officer (15,000)
Cash transferred with disposition of ITC (250,864)
Net payments on short-term notes (25,000)
Payments on long-term capitalized lease obligation (60,315) (207,527) (200,126)
--------- --------- ---------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (333,479) (131,862) 38,357
--------- --------- ---------
NET INCREASE (DECREASE) IN CASH (16,948) (13,843) 1,620
--------- --------- ---------
CASH AT BEGINNING OF YEAR 16,977 30,820 29,200
--------- --------- ---------
CASH AT END OF YEAR $ 29 $ 16,977 $ 30,820
========= ========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for interest $ 5,668 $ 46,593 $ 100,359
========= ========= =========
Cash paid during the year for income taxes $ 1,000 $ 2,000 $ 2,100
========= ========= =========
See notes to financial statements
6
CENTURY PARK PICTURES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
1. DESCRIPTION OF BUSINESS AND CONSOLIDATION (SEE NOTE 13):
CENTURY PARK PICTURES CORPORATION (the Company) is engaged in the
development, production, and marketing of entertainment properties.
International Theatres Corporation (ITC), was a 100 percent owned
subsidiary, that owned and operated the Chanhassen Dinner Theatres in
Chanhassen, Minnesota. During the year ended September 30, 1999, ITC was
transferred to the majority shareholder. During the normal course of
business, ITC granted credit to its corporate clients. ITC performed
on-going credit evaluations of its customers' financial condition and
generally required no collateral from them. Due to the nature of its
business, the Company believed that no allowance for uncollectible
amounts was necessary.
Minnesota Arena Football, Inc. dba Minnesota Fighting Pike (Pike), a 100
percent owned subsidiary, was an indoor professional football team that
the Company obtained the rights to during the fiscal year ended
September 30, 1996. The Pike ceased operations on August 31, 1996. The
net losses generated by the Pike were $48,019, and $104,582 for the
fiscal years ended September 30, 1998, and 1997, respectively. During
the year ended September 30, 1999, The Pike recognized income of
$627,835 due to forgiveness of debt to a shareholder and a related
company. Management has not adopted a formal plan to dispose of the
Pike.
The Company had a 30 percent investment in Willy Bietak Productions,
Inc. (WBPI), which produces touring ice shows and theme shows appearing
in shopping malls, theatres, casinos, arenas, and major amusement parks
throughout the United States. During the year ended September 30, 1999,
WBPI was transferred to the majority shareholder.
Principals of consolidation:
The accompanying consolidated financial statements include the
accounts of the Company and its wholly owned subsidiary, the Pike. All
significant intercompany transactions and balances have been
eliminated in consolidation.
Investment in common stock of WBPI:
The Company used the equity method of accounting for its 30 percent
investment in WBPI. Under this method, the Company's equity in the
earnings or losses of the investee was reported currently in the
Company's earnings. However, losses of the investee were reported only
to the extent of the carrying amount of the investment plus any
Company advances or commitments.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Use of estimates:
Management uses estimates and assumptions in preparing financial
statements in accordance with generally accepted accounting
principles. Those estimates and assumptions affect the reported
amounts of assets and liabilities, the disclosure of contingent assets
and liabilities, and the reported revenue and expenses. Actual results
could vary from the estimates that were used.
7
CENTURY PARK PICTURES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
Cash:
The Company maintains its cash in bank deposit accounts, which, at
times, may exceed federally insured limits.
Inventories:
Inventories consisted primarily of food and beverages and are stated
at the lower of cost or market using the first-in, first-out method.
Property, plant, and equipment:
Property and equipment are stated at the lower of depreciated cost or
net realizable value. Depreciation is computed using the straight-line
and various accelerated methods over the following estimated useful
lives:
Years
-----
Leasehold interest in building 6
Equipment 3-7
Furniture and fixtures 3-7
Income taxes:
Income taxes are provided for the tax effects of transactions reported
in the financial statements and consist of taxes currently due plus
deferred taxes related primarily to differences between the bases of
property, plant, and equipment and accrued vacation for financial and
income tax reporting. The deferred tax assets and liabilities
represent the future tax return consequences of those differences,
which will either be taxable or deductible when the assets and
liabilities are recovered or settled. Deferred taxes also are
recognized for operating losses that are available to offset future
federal income taxes.
Advertising costs:
Advertising costs are charged to operations when the advertising first
takes place. Advertising expense for the periods ended September 30,
1999, 1998 and 1997 was $201,346, $621,204and $661,468, respectively.
Intangibles:
Costs in excess of net assets of business acquired have been amortized
on the straight-line basis over 25 years (see Note 13).
Earnings per share:
The Company's net loss per share is computed based upon the weighted
average number of common shares outstanding during the year using the
treasury stock method. The Company is not required to present diluted
earnings per share as these potential common shares would be
anti-dilative. Dilutive common equivalent shares consist of stock
options and convertible debt.
8
CENTURY PARK PICTURES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
3. RELATED PARTY TRANSACTIONS:
During the years ended September 30, 1999 and 1998, the Company's chief
executive officer (CEO) provided short-term advances of $2,700 and
$75,665, respectively, to the Company. This amount was required to be
reported as additional paid-in capital in the accompanying consolidated
financial statements. The advances contained specific repayment
provisions and when repayments occur, there will be a reduction of
additional paid-in capital. The advances were secured by the Company's
shares of stock in ITC (see Note 13).
As of September 30, 1999 and 1998, the Company owed the Company's CEO
$227,500 for cumulative accrued salary. This amount is included in
accrued expenses on the accompanying consolidated balance sheets.
4. INVESTMENT IN UNCONSOLIDATED SUBSIDIARY:
During the year ended September 30, 1999, the Company's investment in
WBPI was transferred to the Company's CEO as partial repayment of the
advances the CEO made to the Company (see Note 13).
Condensed financial information of WBPI as of September 30, 1999 and
1998, and for the three months ended December 31, 1998, and the fiscal
years ended September 30, 1998, and 1997, is as follows:
1999 1998 1997
---------------- -------------- ---------
BALANCE SHEET
Total current assets $ $ 71,595 $
Total noncurrent assets 512,595
Total current liabilities 220,757
Total noncurrent liabilities 433,145
Equity (69,712)
OPERATIONS
Admissions revenues $ 1,305,657 $ 2,783,839 $ 2,520,646
Operating costs 921,656 2,221,433 2,173,233
General and administrative costs 138,716 602,161 462,471
Nonoperating income 6,401 32,142 2,419
Income tax expense 2,864 168 26,319
---------------- -------------- -------------
Net income (loss) $ 248,822 $ (7,781) $ (138,958)
================ ============== =============
Operations for WBPI for the period ended December 31, 1998, represents a
portion of that Company's total fiscal year. Results of operations
detailed above for the three-month period ended December 31, 1998, may
not be reflective of an entire years operation.
9
CENTURY PARK PICTURES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
5. NOTES PAYABLE:
The Company has notes payable to various individuals totaling $400,000
at September 30, 1999 and 1998. The notes bear interest at the rate of
12% to 15% and are secured by the Company's right, title, and interest
in the Pike. The notes matured between June and December 1996. The notes
are convertible into common stock of the Company. These notes are in
default at September 30, 1999 and 1998. As of September 30, 1999, the
holders of the notes had not exercised their right to convert.
ITC had an available line of credit with a bank totaling $50,000 at
September 30, 1998. The line of credit bore interest at the rate of 2.5%
over the bank's base rate and the amount outstanding at September 30,
1998 was $50,000 (see Note 13).
ITC also had a standby letter of credit of $50,000 for the actor's
union. There were no amounts outstanding on the letter of credit at
September 30, 1998 (see Note 13).
6. INCOME TAXES:
The Company's net deferred tax assets and liabilities consisted of the
following at September 30:
1999
-----------------------------------------------
Federal State Total
------------- ----------- -------------
Deferred tax assets:
Other (current) $ 96,000 $ 35,000 $ 131,000
Net operating loss carryforwards
(non-current) 564,000 227,000 791,000
------------- ------------ -------------
660,000 262,000 922,000
Valuation allowance (660,000) (262,000) (922,000)
-------------- ------------- --------------
$ 0 $ 0 $ 0
============= ============ =============
Deferred tax liabilities $ 0 $ 0 $ 0
============= ============ =============
10
CENTURY PARK PICTURES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
6. INCOME TAXES (CONTINUED):
1998
-----------------------------------------------
Federal State Total
------------- ----------- -------------
Deferred tax assets:
Other (current) $ 142,000 $ 47,000 $ 189,000
Property and equipment (non-current) 444,000 148,000 592,000
Net operating loss carryforwards
(non-current) 1,082,000 428,000 1,510,000
------------- ------------ -------------
1,668,000 623,000 2,291,000
Valuation allowance (1,668,000) (623,000) (2,291,000)
------------- ------------ -------------
$ 0 $ 0 $ 0
============= ============ =============
Deferred tax liabilities $ 0 $ 0 $ 0
============= ============ =============
During the years ended September 30, 1999 and 1998, the Company recorded
valuation allowances of $922,000 and $2,291,000, respectively, on the
deferred tax assets to reduce the total amounts that management believes
will ultimately be realized. Realization of deferred tax assets is
dependent upon sufficient future taxable income during the period that
deductible temporary differences and carryforwards are expected to be
available to reduce taxable income. There was no other activity in the
valuation allowance accounts.
The Company has loss carryforwards totaling approximately $1,879,000
that may be offset against future taxable income. If not used, the
carryforwards will expire as follows:
Expiration Date Amount
--------------- ------------
2000 $ 17,000
2001 17,000
2002 17,000
2003 17,000
2004 17,000
2005 17,000
2006 17,000
2007 17,000
2011 1,581,000
2012 162,000
------------
$ 1,879,000
============
The Company's provision for income taxes differs from applying the U.S.
federal income tax rate of 34% to income before income taxes. A
reconciliation between taxes computed at the federal statutory rate and
the consolidated effective rate is as follows for the years ended
September 30:
11
CENTURY PARK PICTURES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
6. INCOME TAXES (CONTINUED):
1999 1998 1997
------------- --------------- --------------
Income tax benefit from continuing
Operations at federal statutory rates $ (23,000) $ (105,000) $ (133,000)
Income tax expense (benefit) from
Discontinued operations at federal
Statutory rates 250,000 58,000 (12,000)
States taxes 1,000 2,000 2,100
Effect of limiting tax credit on net
operating losses from continuing
operations to taxes paid 23,000 105,000 133,000
Effect of limiting tax credit on net operating
(income) losses from discontinued
operations to taxes paid (250,000) (58,000) 12,000
--------------- --------------- ----------------
$ 1,000 $ 2,000 $ 2,100
=============== =============== ================
7. COMMITMENTS AND CONTINGENCIES:
Operating leases:
The Company leased the land used in the operations of ITC and certain
office equipment under noncancelable operating leases (see Note 13).
The Company leases office space under a noncancelable operating lease
that expires August 31, 2000. The space has been sub-leased to a
Company owned by the Company's CEO. The Company incurred no expense
related to this lease during the fiscal year ended September 30, 1999.
Total rent expense under the above leases for the years ended September
30, 1999, 1998, and 1997, was $58,448, $271,138, and $301,453,
respectively. For the year ending September 30, 2000, future minimum
rental payments required under these leases are $30,247. There are no
required lease payments after September 30, 2000.
Capitalized leases (see Note 13):
The Company leased the buildings used in the operations of ITC under a
capitalized lease.
Amortization expense was $36,684, $172,655, and $171,429 for the years
ended September 30, 1999, 1998, and 1997, respectively and is included
in depreciation expense on the accompanying financial statements.
12
CENTURY PARK PICTURES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
7. COMMITMENTS AND CONTINGENCIES (CONTINUED):
Capitalized leases (see Note 13) (continued):
The following is a summary of leased assets and lease obligations
included on the consolidated balance sheet at September 30, 1998:
Leasehold interest in building $ 1,000,000
Equipment 17,169
---------------
1,017,169
Less accumulated amortization 886,940
---------------
Net unamortized value $ 130,229
===============
8. STOCKHOLDER'S DEFICIT:
Stock options:
The Company issued options to purchase up to 10,000 shares of common
stock of the Company to three of its directors. The exercise price is
$1.50 per share. These options expired February 24, 1998.
9. RETIREMENT PLANS (SEE NOTE 13):
ITC had a 401(k) incentive savings plan covering substantially all of
its non-union employees. Eligible employees may defer up to 10% of their
compensation to the plan. ITC will match 25% of the employees'
contribution up to 6% of the employees' compensation.
ITC also contributed to a retirement plan established by the union for
its employees who are represented by a collective bargaining unit. The
required contribution is 8% of gross wages.
ITC's contribution to the plans were $6,580, $29,312, and $26,114, for
the period ended December 17, 1998, and the years ended September 30,
1998 and 1997, respectively.
10. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Non-cash transactions:
During the year ended September 30, 1999, the Company's interest in
ITC and WBPI was transferred to the Company's CEO as repayment of
advances the CEO made to the Company (see Note 13). This resulted in a
non-cash forgiveness of debt of $1,086,703 for ITC, $452,719 for the
Company, and $627,835 for the Pike.
During the year ended September 30, 1997 an officer of the Company
assumed $18,683 of obligations due to non-related parties. This amount
is included in advances from officer on the accompanying financial
statements. There were no non-cash transactions for the year ended
September 30, 1998.
13
CENTURY PARK PICTURES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
11. CORPORATE LIQUIDITY (SEE NOTE 13):
During the fiscal years ended September 30, 1999, 1998, and 1997, the
Company incurred substantial losses of $342,711, $139,549, and $426,078,
respectively, and had working capital deficits as of September 30,
1999 and 1998 of $1,224,096 and $3,006,272, respectively. The impact of
these losses was to limit the liquidity and available cash resources for
operations.
During the fiscal years ended September 30, 1998, and 1997, the
Company's CEO made cash advances to the Company in order to meet cash
flow needs. These advances were secured by the Company's shares of stock
in ITC. On December 17, 1998, the Company's management, with approval by
the Board of Directors, transferred the assets and operations of ITC and
the Company's investment in WBPI to the CEO as partial repayment of the
advances made to the Company. This left the Company with no on-going
operating business or operating assets.
The Company's operations exclusive of its subsidiaries consist of
acquisition searches and certain administrative costs, both of which
could be scaled back and/or financed by the Company's CEO and major
stockholder. Management intends to purchase a Company that will have
sufficient cash to operate in the 2000 fiscal year.
12. FAIR VALUE OF FINANCIAL INSTRUMENTS:
The estimated fair values of the Company's financial instruments, none
of which are held for trading purposes, are as follows at September 30:
1999 1998
--------------------- -----------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
--------------------- -----------------------
Assets:
Cash $ 29 $ 29 $ 16,977 $ 16,977
Liabilities:
Notes payable 400,000 400,000 450,000 450,000
The carrying amounts of cash and the short-term notes payable approximate
fair values.
13. DISCONTINUED OPERATIONS:
On December 17, 1998 the Board of Directors passed a resolution to
transfer the Company's interest in ITC and WBPI to the Company's CEO as
repayment of $100,000 in advances the Company's CEO made to the Company
(see Note 3). In setting the $100,000 amount, the Board of Directors
obtained and relied upon an independent market analysis of ITC and WBPI.
14
CENTURY PARK PICTURES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
13. DISCONTINUED OPERATIONS (CONTINUED):
The net assets of ITC at December 17, 1998, the date of the transfer,
were as follows:
Cash $ 250,865
Accounts receivable 290,382
Inventories 60,269
Deferred show costs 174,439
Due from related parties 168,986
Prepaid expenses 153,467
Property, plant, and equipment - net 450,175
Cost in excess of net assets of business acquired - net
Notes payable (25,000)
Current maturities of capitalized lease obligation (108,521)
Accounts payable (284,885)
Deferred revenue (1,866,613)
Accrued expenses:
Compensation (255,607)
Other (94,660)
---------------
$ (1,086,703)
===============
The net assets of WBPI at December 17, 1998, were as follows:
Due from unconsolidated subsidiary $ 293
Investment in unconsolidated subsidiary 74,647
---------------
$ 74,940
===============
Revenues generated by ITC were $2,267,889, $8,641,542, and $7,848,460 for
the period ended December 17, 1998, and the years ended September 30,
1998, and 1997, respectively. The income (loss) from operations of ITC
were $(350,331), $171,483, and $7,358 for the period ended December 17,
1998, and the years ended September 30, 1998, and 1997, respectively. The
loss from operations for the period ended December 17, 1998, included the
writedown of goodwill in the amount of $384,062 as a result of a review
of the recoverability of the carrying amount of the goodwill.
On December 31, 1998 the Company's CEO forgave the remainder of the
advances owed to him by the Company and the Pike. The amount of the
advances forgiven and net gain on debt forgiveness were reported as
additional paid-in capital in the accompanying consolidated financial
statements. The net gain on debt forgiveness was as follows:
Company $ 527,659
Pike 627,835
---------------
Advances forgiven 1,155,494
Net assets of WBPI transferred to CEO (74,940)
---------------
Gain on debt forgiveness $ 1,080,554
===============
15
CENTURY PARK PICTURES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 1999, 1998, AND 1997
14. SEGMENT INFORMATION:
During the year ended September 30, 1999, the Company adopted Financial
Accounting Standards Board Statement No. 131, DISCLOSURES ABOUT SEGMENTS
OF AN ENTERPRISE AND RELATED INFORMATION. The Company has two reportable
segments: ITC and Pike (see Note 13). The Company's reportable segments
are strategic business units that offer different products and services.
They are managed separately because each business requires different
technology and marketing strategies. Corporate operations include
administrative expenses and corporate assets, which include cash and
prepaid expenses.
Segment information is as follows:
Fiscal year
ended
September 30, ITC Pike Corporate Total
--------------------------------------------------------------------------------
Segment profit 1999 $ $ $ (67,027) $ (67,027)
1998 (48,019) (260,679) (308,698)
1997 (104,582) (287,166) (391,748)
--------------------------------------------------------------------------------
Interest expense 1999 51,497 51,497
1998 53,313 45,000 98,313
1997 32,927 59,054 91,981
--------------------------------------------------------------------------------
Depreciation 1999 77,526 77,526
1998 338,568 942 339,510
1997 295,685 1,920 297,605
--------------------------------------------------------------------------------
Income (loss) from 1999 736,372 74,647 811,019
discontinued 1998 171,483 (2,334) 169,149
operations 1997 7,358 (41,688) (34,330)
--------------------------------------------------------------------------------
Extraordinary 1999 627,835 452,719 1,080,554
item 1998 0
1997 0
--------------------------------------------------------------------------------
Identifiable 1999 955 955
assets 1998 672,617 501,529 1,174,146
--------------------------------------------------------------------------------
Capital 1999 48,809 48,809
expenditures 1998 159,580 159,580
--------------------------------------------------------------------------------
Revenues from external customers, revenues from transactions with other
segments, interest revenue, equity in the net income of investees
accounted for by the equity method and income tax expense or benefit
were zero for the years ended September 30, 1999, 1998, and 1997.
16