-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, E5rEYURvHNHD7bHshT7kx5w1a+2j1sN/ZFYB1vJ63ROYSue80kg/GqGtLGsQBdf8 M4wa63VmvqA5FTemtjojBQ== 0000889812-00-002431.txt : 20000522 0000889812-00-002431.hdr.sgml : 20000522 ACCESSION NUMBER: 0000889812-00-002431 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000519 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEO MODERN ENTERTAINMENT CORP CENTRAL INDEX KEY: 0001043222 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE PRODUCTION [7812] IRS NUMBER: 954627285 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-29169 FILM NUMBER: 640323 BUSINESS ADDRESS: STREET 1: 442 N LA CIENEGA BLVD STREET 2: S 206 CITY: W HOLLYOOD STATE: CA ZIP: 90038 BUSINESS PHONE: 2136507556 MAIL ADDRESS: STREET 1: 422 N LA CIENEGA BLVD STREET 2: SUITE 206 CITY: W HOLLYWOOD STATE: CA ZIP: 90038 10QSB 1 QUARTERLY REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2000 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from___ to___ Commission file number 000-29169 --------- Neo Modern Entertainment Corp. ------------------------------ (Exact name of small business issuer as specified in its charter) California 95-4627285 ---------- ---------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 442 N. La Cienega Blvd., Suite 206, West Hollywood, CA 90048 ------------------------------------------------------------ (Address of principal executive offices) (310) 652-7556 -------------- (Issuer's telephone number) ---------------------------- (Former name, former address and former fiscal year, if changed since last report) Transitional Small Business Disclosure Format (Check One): Yes [ ] No [x] NEO MODERN ENTERTAINMENT CORP. Page PART I. FINANCIAL INFORMATION Item 1. Financial Statements Balance Sheet March 31, 2000 and June 30, 1999 4 Statement of Operations Nine Months and Three Months Ended March 31, 2000 and 1999 5 Statement of Cash Flows Nine Months and Three Months Ended March 31, 2000 and 1999 6 Management's Discussion and Analysis or Plan of Operation 10 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 10 Signatures 11 - 2 - NOTE CONCERNING FORWARD-LOOKING STATEMENTS Certain statements contained in this Quarterly Report on Form 10-QSB that are not statements of historical fact constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These statements involve risks and uncertainties that may cause actual results to differ materially from those in such statements. PART I - FINANCIAL INFORMATION Item 1. Financial Statements. The accompanying interim unaudited financial statements have been prepared in accordance with the instructions to Form 10-QSB and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included, and the disclosures are adequate to make the information presented not misleading. Operating results for the nine months ended March 31, 2000 are not necessarily indicative of the results that may be expected for the year ended June 30, 2000. These statements should be read in conjunction with the financial statements and notes thereto included in the Registration Statement on Form 10-SB filed with the Securities and Exchange Commission. - 3 - NEO MODERN ENTERTAINMENT CORP. BALANCE SHEET
6/30/99 ASSETS 03/31/00 (audited) ------ -------------- -------------- Current assets: Cash $ 224 $ 168 Subscription Receivables 22,500 -------------- -------------- Total current assets 224 22,668 Other assets: Completed film less accumulated amortization of $355,248 and $340,248 respectively (NOTE 4, 7, and 13) 110,000 125,000 Organization costs less accumulated amortization of $2,500 and $1,900 respectively (NOTE 8) 1,500 2,100 Projects in process (NOTE 4 and 7) 341,726 339,938 -------------- -------------- Total assets $ 453,450 $489,706 ============== ============== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payables & Accrued Expenses (NOTE 9) $ 159,315 $132,970 Long term liabilities (NOTE 10) 306,631 294,631 -------------- -------------- Total Liabilities 465,946 427,601 -------------- -------------- Commitment and Contingencies: (Note 13) Stockholders' equity: Common stock $.001 par value; shares authorized 100,000,000 reserved for stock option 13,513,182 issued and outstanding 9,810,459 and 5,172,386,245 respectively. (NOTE 11) 9,811 5,172 Preferred stock $.50 par value; authorized 20,000,000 shares; issued and outstanding, none Paid-in capital 217,898 261,603 Retained earnings (deficit) (240,205) (204,670) -------------- -------------- Total stockholders' equity (12,496) 62,105 -------------- -------------- Total liabilities and stockholders' equity $ 453,450 $489,706 ============== ==============
See accompanying notes to the financial statements. -4- NEO MODERN ENTERTAINMENT CORP. STATEMENT OF OPERATIONS
July 1,1999 to January 1 to July 1,1998 to January 1 to March 31, March 31, March 31, March 31, 2000 2000 1999 1999 ----------------- ---------------- ---------------- ----------------- Net sales $ 15,000 $ - $ 5,707 $ - ----------------- ---------------- ---------------- ----------------- Costs and expenses: Amortization of film costs 15,000 - 5,707 - Administrative and general 16,173 4,841 22,507 6,491 Interest expense 19,362 4,000 12,000 4,000 ----------------- ---------------- ---------------- ----------------- Total costs and expenses 50,535 8,841 40,214 10,491 ----------------- ---------------- ---------------- ----------------- Loss before income taxes (35,535) (8,841) (34,507) (10,491) Income tax (benefit) - - - - ----------------- ---------------- ---------------- ----------------- Net (loss) $ (35,535) $ (8,841) $ (34,507) $ (10,491) ================= ================ ================ ================= Loss per average share outstanding: Basic and diluted $ (0.005) $ (0.001) $ (0.008) $ (0.002) ===================================== ==================================== Average number of outstanding shares used in the per share calculation: Basic and diluted 7,244,967 7,244,967 4,218,780 4,218,780 ===================================== ====================================
See accompanying notes to the financial statements. -5- NEO MODERN ENTERTAINMENT CORP. STATEMENT OF CASH FLOWS
July 1,1999 to January 1 to July 1,1998 to January 1 to March 31, March 31, March 31, March 31, 2000 2000 1999 1999 ------------- -------------- ------------- --------------- Cash flows from operating activities: Net (loss) $ (35,535) $ (8,841) $ (34,507) $ (10,491) Amortization of Film Cost and Organization Expense 15,600 200 6,507 200 Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Changes in assets and liabilities: Reduction of Recievables 22,500 15,000 - - Increase (decrease) Accounts payables and accrued expenses 25,233 14,037 20,000 5,000 ------------- -------------- ------------- --------------- Net cash provided (applied) by operating activities 27,798 20,396 (8,000) (5,291) ------------- -------------- ------------- --------------- Cash flows used in investing activities: Film costs (1,788) (250) (50,856) - ------------- -------------- ------------- --------------- Net cash used in investing activities (1,788) (250) (50,856) - ------------- -------------- ------------- --------------- Cash used in financing activities: Increase in Notes Payable 13,112 13,112 80,722 5,257 Proceeds from issuance of stocks 4,639 533 - - Stock issuance cost (43,705) (34,277) (21,974) - ------------- -------------- ------------- --------------- Net cash used in financing activities (25,954) (20,632) 58,748 5,257 ------------- -------------- ------------- --------------- Net increase in cash 56 (486) (108) (34) Cash and cash equivalents at beginning of period 168 710 124 50 ------------- -------------- ------------- --------------- Cash and cash equivalents at end of period $ 224 $ 224 $ 16 $ 16 ============= ============== ============= =============== Supplemental disclosure of cash flow information: Interest paid ============= ============== ============= =============== Income taxes paid $ - $ - $ - $ - ============= ============== ============= ===============
See accompanying notes to the financial statements. -6- NEO MODERN ENTERTAINMENT, CORP. (A Development Stage Company) Notes to Financial Statements Note 1 Organization The company was incorporated on March 19, 1997, under laws of the state of California. The Company is engaged in the development, production and distribution of motion pictures. Note 2 Method of Accounting Assets, liabilities, revenues and expenses are recorded under the accrual method of accounting for both financial statements and income tax purposes. Note 3 Accounting Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. Note 4 Film Library and Projects under Development Film Library and projects in progress are stated at the lower of amortized cost or market. Upon completion, cost are amortized on an individual production basis in the proportion of current gross revenues divided by the Management's estimate of total gross revenues with such estimates being reviewed at least quarterly pursuant to FASB 53. Note 5 Income Taxes Income taxes are accounted for in accordance with Statement of Financial Accounting Standards SFAS No. 109 "Accounting for Income Taxes". The Statement employs an asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for tax consequences of "temporary differences" by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. Under SFAS No. 109, the effect on deferred income taxes of a change in tax rates is recognized income in the period that includes the enactment date. Note 6 Development Stage Company Since the inception, the Company has been primarily involved in raising capital, commencing production schedules for various projects under progress, and acquiring services in the field of legal, financial, and entertainment to promote the company and develop it's future infrastructure. The Company has devoted substantially all of its efforts toward establishing the entity, by developing various projects and operating the day to day activities. The Company has not generated any significant revenues since its inception. Upon development, release and distribution of motion pictures, more steady revenue can be expected. Theses financial statements comply with the reporting requirements under SFAS No. 7 for Development Stage Companies -7- NEO MODERN ENTERTAINMENT, CORP. (A Development Stage Company) Notes to Financial Statements Note 7 Film Library and Projects in Progress On May 1, 1997 the Company acquired the rights, interests, and titles to certain feature motion pictures and projects in progress from Filmart, Inc., Rafael Zelinsky and related companies subject to the related liabilities. The Company incurred additional costs for Projects in Progress, which were capitalized pursuant to FASB 53. As of March 31, 2000 the cost for the completed film "Fun" amounted $465,248 less accumulated amortization of $362,748 and the cost of the film in progress "Bohemia" is $341,726 with an estimated cost to complete of $200,000 ($100,000 for the completion of principal photography and $100,000 for post production). Note 8 Organization Cost Organization cost is amortized ratably over a 60 months period. Note 9 Accounts Payable Account payable includes project development costs, which consists of expenses incurred but not paid. The accounts payable includes liabilities and obligation acquired as part of the agreement with Filmart, Inc., as explained in Note 7, in addition to the Company's current payables. Note 10 Long Term Payable Long term debt at consist of the following: 3/31/2000 12/31/1999 --------- ---------- Rafael Zelinsky & Filmart Inc. including interest @ prime plus one $179,468 168,468 Deluxe Lab (NOTE 13) 90,000 90,000 Other plus interest @ prime plus one 37,163 36,163 ---------- ---------- Total $306,631 $294,631 ========== ========== Note 11 Capital Stock Due to limited cash resources, the Company engaged various individuals or entities to provide legal, financial, creative, script writing and administrative services by issuing common stock. -8- Note 12 Compensation On October 31, 1999 the Board of Directors ratified an employment contract to the President/CEO for a term of seven years starting from March 21, 1997 calling for the issuance of 18,088,182 in stock options at par value exercisable 4,575,000 shares by March 21, (which were exercised), the balance exercisable every 90 days incrementally through March 21, 2004. The contract also calls for compensation starting March 21, 1997, of $2,000 per month increasing by 25% each year for seven years to be paid plus 10% simple interest when funds are available in excess of operating needs as approved by the Board of Directors. No salary has been paid to date. In addition the other 2 members of Board of Directors will receive 8000 shares per month until November 2000. Note 13 Commitment & Contingencies The company owes Deluxe Lab $90,000 colateralized by the U.S. video rights of the movie "Fun". They will be paid from the income from sales. Compensation owed to the President/CEO due to date is $91,500 plus interest. This will be paid by Board approval (see Note 12). -9- Item 2. Management's Discussion and Analysis or Plan of Operation. Plan of Operation: We have had a limited operational history over our last three and a half years with no appreciable revenues and may be regarded as a development stage company. Our plan of operation is to raise capital sufficient to fund the production of several extremely low-budget films, and thereby supplement our film library and generate revenue for the subsequent production of films. We have completed partial principal photography on our first low-budget feature film tentatively entitled "Bohemia", and our plan calls for finishing the film if and when we have raised sufficient capital for "Bohemia" as well as one or more of the micro-budget films. The modest revenues received by us so far have been from the exploitation of our film library and are utilized towards operating costs and to pay down a portion of the debt against the film library. We are continuing to seek sources of financing and/or a possible business combination as well as examining the possible application and benefits of the digital transformation of data to our business, as well as digital production methods. Liquidity and Capital Resources: We have historically raised capital to fund our operations by the sale of our common stock. For the immediately foreseeable future, we will be required to sell common stock or other equity securities to raise capital to fund our operations. There can be no assurance that such capital investment will be available on terms that will be acceptable to us. Furthermore, the sale of such capital will further dilute the interest of current stockholders. Other capital may also be raised through loans, deferments of goods and services, pre-sales of rights and/or co-financing with other entities. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. (a) None. (b) No reports on Form 8-K were filed during the quarter ended March 31, 2000. -10- SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: May 18, 2000 Neo Modern Entertainment Corp. ------------------------------------ (Registrant) By: /S/ Rafal Zielinski ------------------------------------ Rafal Zielinski President (principal executive officer and principal financial and accounting officer) -11- EX-27 2 NEO MODERN ENTERTAINMENT CORP. FDS --
5 The schedule contains summary financial information extracted from the consolidated financial statements and is qualified in its entirety by reference to such financial statements. 1 US Dollars 3-MOS JUN-30-2000 JAN-01-2000 MAR-31-2000 1 224 0 0 0 0 224 0 0 453,450 159,315 0 0 0 (12,496) 0 453,450 0 0 0 8,841 0 0 4,000 0 0 0 0 0 0 (8,841) (0.001) (0.001)
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