-----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, T8oAZminZwImdHFqXTT5BgHaJL081SJutGYYaHCOCmhFUTces9MwA0lF9nM12DRe 7YZE9gikMD2Zaxh+hDm6Og== /in/edgar/work/20000808/0000909012-00-000499/0000909012-00-000499.txt : 20000921 0000909012-00-000499.hdr.sgml : 20000921 ACCESSION NUMBER: 0000909012-00-000499 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000808 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW SKY COMMUNICATIONS INC CENTRAL INDEX KEY: 0000771999 STANDARD INDUSTRIAL CLASSIFICATION: [7812 ] IRS NUMBER: 161229730 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-14621 FILM NUMBER: 687947 BUSINESS ADDRESS: STREET 1: 16 EAST MAIN ST STREET 2: 720 REYNOLDS ARCADE CITY: ROCHESTER STATE: NY ZIP: 14614 BUSINESS PHONE: 7164545490 MAIL ADDRESS: STREET 1: 720 REYNOLDS ARCADE STREET 2: 16 EAST MAIN STREET CITY: ROCHESTER STATE: NY ZIP: 14614 FORMER COMPANY: FORMER CONFORMED NAME: THOROUGHBREDS USA INC DATE OF NAME CHANGE: 19861118 10-Q 1 0001.txt QUARTERLY REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended JUNE 30, 2000 ------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ----------------- --------------------- Commission file number 0-14621 ------- NEW SKY COMMUNICATIONS, INC. --------------------------- (Exact name of registrant as specified in its charter) NEW YORK 16-1229730 -------- ---------- (State or other jurisdiction of (I.R.S. Employer Identification incorporation or organization) Number) 731 POWERS BUILDING, 16 WEST MAIN STREET, ROCHESTER, NEW YORK 14614 ------------------------------------------------------------------- (Address of principal executive offices) (716) 454-5490 -------------- (Registrant's telephone number, including area code) --------------------------------------------- (Former name, former address and fiscal year, if changed since last report) Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and 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. Yes______X_______ No_____________ APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities and Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes______________ No_______________ APPLICABLE ONLY TO CORPORATE ISSUERS Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 193,736,923 as of August 1, 2000 PART 1 - FINANCIAL INFORMATION Item 1. Financial Statements. Item 2. Management's Discussion and Provide the information Analysis of Financial Condition required by Rule 10-01 and Results of Operations. of Regulation S-X (17CFR Part 210). Item 303 of Regulation S-K (Sec. 229.303 of this chapter). INDEX PART I - FINANCIAL INFORMATION PAGE(S) Statement of Operations Six months ending 6/30/00 & 6/30/99 3 Consolidated Balance Sheet As of 6/30/00 & 12/31/99 4 & 5 Statement of Cash Flows Six months ended 6/30/00 & 6/30/99 6 Management's Discussion of Statement of Income and Financial Condition 7 - 11 PART II - OTHER INFORMATION & SIGNATURES 12 Financial Data Summary 13 Page 2
NEW SKY COMMUNICATIONS, INC. STATEMENT OF INCOME (LOSS) (UNAUDITED) FOR THREE MONTHS ENDED FOR SIX MONTHS ENDED ---------------------- -------------------- June 30, June 30, June 30, June 30, 2000 1999 2000 1999 ---- ---- ---- ---- Gross Film Receipts $ 0 $ 0 $ 0 $ 0 Less: Amortized Film Costs $ 0 $ 0 $ 0 $ 0 -------- -------- -------- -------- Net Film Receipts $ 0 $ 0 $ 0 $ 0 -------- -------- -------- -------- General and Administrative Expenses $ 8,308 $ 11,345 $ 18,913 $ 18,845 -------- -------- -------- -------- Income (Loss) Before Other Income and Related Expenses $ (8,308) $(11,345) $(18,913) $(18,845) -------- -------- -------- -------- Other Income (Loss) $ 0 $ 0 $ 0 $ 0 -------- -------- -------- -------- Income (Loss) $ (8,308) $(11,345) $(18,913) $(18,845) ======== ======== ======== ======== Net Per Common Share NIL NIL NIL NIL
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NEW SKY COMMUNICATIONS, INC. BALANCE SHEET (As of June 30, 2000 and December 31, 1999) ASSETS June 30, 2000 December 31, 1999 (UNREVIEWED) (AUDITED) ------------- ----------------- Current Assets: Cash and Cash Items $ 0 $ 0 Accounts Receivable: Trade Accounts 0 0 Current Amortizable Portion of Film Inventory 0 0 ---------- ---------- Total Current Assets $ 0 $ 0 ---------- ---------- Fixed Assets: Property and Equipment: Property and Equipment 0 0 Film Inventory 1,259,166 1,259,166 ---------- ---------- Total Property and Equipment 1,259,166 1,259,166 Less: Accumulated Depreciation 0 0 ---------- ---------- Net Property and Equipment 1,259,166 1,259,166 ---------- ---------- Other Assets 25,400 25,400 ---------- ---------- TOTAL ASSETS $1,284,566 $1,284,566 ========== ==========
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NEW SKY COMMUNICATIONS, INC. BALANCE SHEET (As of June 30, 2000 and December 31, 1999) LIABILITIES AND STOCKHOLDERS' EQUITY June 30, 2000 December 31, 1999 (UNREVIEWED) (AUDITED) ------------- ----------------- Current Liabilities: Accounts Payable $ 208,124 $ 189,211 Notes Payable 25,000 25,000 Leases 2,068 2,068 Accrued Expenses 41,016 41,016 ----------- ----------- Total Current Liabilities $ 276,208 $ 257,295 ----------- ----------- Stockholders' Equity: Common Stock $.0001 Par Value 200,000,000 Shares Authorized 193,736,923 Shares Issued and Outstanding (193,736,923 Shares on August 31, 2000) $ 19,374 $ 19,374 Additional Paid-In Capital 5,962,028 5,962,028 ----------- ----------- Total Paid-In Capital 5,981,402 5,981,402 Accumulated Deficit (4,973,044) (4,954,131) ----------- ----------- Total Stockholders' Equity 1,008,358 1,027,271 ----------- ----------- TOTAL LIABILITIES ANDb STOCKHOLDERS' EQUITY $ 1,284,566 $ 1,284,566 =========== ===========
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NEW SKY COMMUNICATIONS, INC. Statement Of Cash Flows Six Months Ended June 30, 2000 and June 30, 1999 Six Months Six Months Ended Ended JUNE 30, 2000 JUNE 30, 1999 ------------- ------------- Operating Activities: Net Income (Loss) $(18,913) $ (7,500) Adjustments to reconcile Net Income and Net Cash: Depreciation and Amortization 0 0 (Increase)Decrease in Accounts Receivable 0 0 (Increase)Decrease in Prepaid Expenses 0 0 Increase(Decrease) in Accounts Payable and Accrued Expenses 18,913 32,500 Amortization of Film Costs 0 0 -------- -------- Net Cash Provided (Used) $ 0 $ 25,000 -------- -------- Investing Activities: Additional Film Inventory $ 0 $ 0 Investment in Web site 0 25,000 -------- -------- Net Cash Provided (Used) $ 0 $(25,000) -------- -------- Financing Activities: Net Cash Provided (Used) $ 0 $ 0 -------- -------- Increase (Decrease) In Cash and Cash Equivalents $ 0 $ 0 Cash and Cash Equivalents at Beginning of Period $ 0 $ 0 -------- -------- Cash and Cash Equivalents at End of Period $ 0 $ 0 ======== ========
Page 6 STATEMENT OF MANAGEMENT In the opinion of management, the accompanying unreviewed financial statements contain all adjustments necessary to present fairly the financial position of the Company as of June 30, 2000 and the results of operations and cash flows for the six months then ended. 1(A) In 1997, the Company entered into a joint venture agreement with Syracuse Productions, LLC to Co-Produce a feature film entitled "FREAK TALKS ABOUT SEX." The Company is a special limited partner in the financing limited partnership for the film and is entitled to one-third of the profits from the sale of the film after the investors receive their investment plus a twenty percent (20%) return on their investment. In addition, the Company has agreed to pay, from its share of profits, five percent (5%) of film profits to Steve Zahn, one of the stars of the film. The Company may not disclose the budget or cost of the film for proprietary reasons, but the film qualifies as a "low-budget" film. The film debuted as a Cinemax Friday Night Premiere in December 1999 and January 2000. During the quarter, the Producers entered into an agreement for the grant of U.S. video rights to the film to Lions Gate Films. The film will debut on video late in 2000. The sales agent retained to sell foreign rights to the film has taken the film to The American Film Market and Cannes Film Festivals and has begun closing sales of rights to individual foreign territories. During the quarter, the financing limited partnership continued paying the investors on their investment. The Joint Venture Agreement has been previously filed as an Exhibit in an earlier Form 10Q for the Company and the Company's 1997 Form 10-K. To procure the Company's position as Co-Producer of the film, it issued 20,000,000 common shares of stock in the Company, with restrictive legend, to Charles M. LaLoggia in 1997. Mr. LaLoggia is the former President and Chairman of the Company. Mr. LaLoggia was the original Executive Producer of the film and is a significant investor in the financing limited partnership. The Company has capitalized the market value cost of the issuance of the stock, $100,000, under "Film Inventory" on the Balance Sheet. "FREAK TALKS ABOUT SEX" is a comedy starring Steve Zahn, who has recently appeared in "OUT OF SIGHT" and "YOU'VE GOT MAIL" and stars in the current Miramax film "HAPPY TEXAS" and Josh Hamilton, who has recently appeared in the NBC mini-series "THE 60'S." In 1999, the Company acquired a forty percent (40%) interest in the business called The Movie Place, which owns and operates the Internet site "movieplace.com." The Web site features movie reviews and interviews with movie stars by nationally syndicated movie reviewer Mike Cidoni, along with links to movie trailers and movie showing times around the country. The interest was purchased for $25,000.00, which The Movie Place expended to enhance and market the Web site and for working capital. The Company procured the funds for the investment by a loan on a promissory note from its Chairman and President, Carl R. Reynolds. The Promissory Note is in the amount of $25,000.00, Page 7 payable on demand and bears interest at the rate of ten percent (10%) per annum. A copy of the Promissory Note and the Agreement with The Movie Place are were annexed to the Company's Form 10-K for 1999 as exhibits. The Company hopes to develop the site into a significant Web site of interest for movie fans and as an agent for raising production funds for independent films by the Company and others. Movieplace.com intends to be a premiere Internet site for movie fans, motion picture industry professionals, stock market investors with a particular interest in entertainment, media, communications and internet stocks and investors who are interested in participating in the financing of independent motion pictures. The Movieplace.com business plan has three essential elements: FIRST, it will provide timely, interesting, informative and proprietary content which draws viewers to the Movieplace.com web site. This content includes reviews of current movies and news from the world of entertainment; exclusive "One On One" interviews with major motion picture stars conducted by Movieplace.com Chief Executive Officer and Managing Editor Mike Cidoni in full streaming video; a regular internet "television" program, "The Critics", a full streaming video production featuring reviews of current movie releases and commentary on classic films and video releases; "The Movieplace Radio Hour", a weekly one-hour audio streaming program that discusses films and videos, featuring guests commentators and journalists from around the country and which also includes interactivity with the listening audience; "Everybody's A Critic", an audio interactive message board feature which allows Movieplace.com visitors to express their views on movies and other topics in a voice/audio format; and "Spotlight On Wall Street", which features proprietary columns and other information dealing mainly (but not exclusively) with media, entertainment and communications stocks which would be of interest to stock market investors, provided partially as free, advertiser-supported content and also offering "premium" content on a subscription basis. Other content includes movie and entertainment industry news, links to movie showing times at theaters around the country, full video streaming movie music videos, message boards for interactive comment, e-commerce trade in movie-related items and 24-hour video and audio streaming television and radio programming. SECOND, Movieplace.com intends to provide a mechanism through which selected independent film makers can promote the production of their independent films and to secure full or partial financing for their projects over the Movieplace.com web site. It is anticipated that Movieplace.com will receive equity interests in films financed in this manner in return for presenting the projects on the site. The size of the interest will vary from project to project, and Movieplace.com may, in certain instances, provide partial funding and additional services for certain projects. Page 8 THIRD, Movieplace.com will acquire internet rights to selected independent films, videos and television programming for presentation on the Movieplace.com web site either as advertiser-supported free programming or for presentation on a pay-per-view basis. The goals of Movieplace.com are as follows: (1) To turn "Movieplace" into a brand name which is readily recognizable to anyone with an interest in movies, the business of movies or the entertainment industry in general, including moviegoers who will ultimately be attending films produced by "Movieplace", television viewers who will be watching programming produced by "Movieplace", newspaper readers who are reading columns written by Movieplace writers, radio listeners who are listening to movie reviews from Movieplace critics and stock market investors who are watching interviews or reading about recommendations from analysts who write for Movieplace's "Spotlight On Wall Street" section; (2) To attract as many visitors as possible to the Web site by using a variety of unique and proprietary content targeted to different elements and interests relating not only to movies but to the business of movies and other forms of media and communications; (3) To use the proprietary content of the Web site to allow the "Movieplace" brand name to migrate to other forms of media, including television and radio syndication, newspaper columns, newsletters, books and motion picture production so that the "Movieplace" brand name becomes familiar to users of "traditional" media, allowing both the Web site and its "traditional" media offshoots to cross-promote each other without necessitating the exorbitant advertising expenditures other "dot.com" businesses are burdened with; and (4) To make the assets of Movieplace.com increasingly valuable over time to a potential partner or purchaser seeking to expand its presence on the Web. There is no guarantee that Movieplace.com will be able to accomplish all of the goals of its business plan. There is significant competition among movie-content Web sites, many of which, have a been in existence longer and have significantly more financial resources than Movieplace.com to provide features and advertising and promotion for a Web site. The Company is exploring various options with a view toward both maximizing the value of its holdings in Movieplace.com and also toward providing Movieplace.com sufficient capital to achieve its goal of becoming the leading "brand name" among movie/entertainment web sites. The Company has been advised that, due to the recent weakness in the market for Internet stocks, an Initial Public Offering of Movieplace.com is not feasible at the present time. Page 9 Pre-production activities for the Company's next feature film, "THE GODMOTHER," began in Los Angeles on May 1, 2000. During the quarter, the casting process was initiated. The Company has obtained commitments for financing. pending the procurement of certain additional cast members, and principal photography is tentatively scheduled to begin late this year or in early 2001. "THE GODMOTHER" is a comedy written in part by Joel and Ethan Coen, who won an academy award for "Fargo". New Sky says it has received letters of intent from Katherine Helmond ("Soap" and "Who's The Boss?") , Alex Rocco ("The Godfather II"; "Get Shorty"); and Max Casella ("Doogie Howser, M.D."; "Analyze This") to appear in the film, and that other cast members are expected to be announced during the pre-production process, which is expected to last approximately six months. The film will be Co-Executive Produced by Charles M. LaLoggia and Leonard Shapiro. During the quarter the Company also announced the filing of registration documents for a public offering by its production partner, Bellacasa Productions, Inc., for the financing of its feature film "THE GIANT." The film examines artistic inspiration and the political turmoil surrounding Michaelangelo's carving of the David. New Sky is entitled to a producer's fee and fifteen percent (15%) of Producer's profits from the film. The Company entered into a distribution agreement for a so-called "Director's Cut" of its feature film "LADY IN WHITE" which has been released on DVD format. All remaining outstanding distribution agreements on the film expire in 2002, at which time all rights will revert to the Company. The Company continues to carry its investments in feature films as an asset of the Company under Film Inventory, amortizing these costs when funds are received on the various film investments and at other times management believes a write-down of the unamortized costs is appropriate. The Company has title to and/or interests in the following feature film properties, which are in development or completed: "FREAK TALKS ABOUT SEX", "THE GIANT" and "THE GODMOTHER". The Company has released two feature films: "FEAR NO EVIL" and "LADY IN WHITE". The Company was also an investor, in 1989, in a feature film entitled "GRAVE SECRETS", produced by Planet Productions, Inc. The Company received no revenues in the second quarter. The Company has not filed Federal or New York State tax returns for the years 1992, 1993 and 1994 and has not paid any tax due for those years nor for 1995, 1996, 1997, 1998 and 1999 because of lack of funds for the preparation of the returns and the payment of tax. The Company believes no Federal tax would be due due to the Company's continuing losses. However, the Company believes it owes New York State tax based Page 10 upon capital and has been accruing estimated amounts for such tax since 1992. The Company is an independent motion picture production company. Independent motion picture production involves a number of risks and elements that must coalesce to produce a successful feature film. These elements include: procuring rights to a screenplay, securing financing to finance the budget of the film, procuring talent for production, direction, acting and post-production, which includes editing, music and mixing and obtaining distribution of the completed film. Inadequate performance of any of these elements, or miscalculation of the tastes of the movie-going public can cause the film to not obtain distribution and/or be a box-office failure. The potential market for motion pictures is divided into two components: foreign and domestic (U.S and Canada). Within each of these markets there are several different potential revenue streams: theatrical, pay television, free television, video cassette and new emerging sources such as CD-ROM, laser disc and DVD. Distribution of an independent film may be accomplished by a single distributor acquiring all rights in "the world", or the markets and elements of each can be sold off by the producer to separate distributors. The lead time from original acquisition of a screenplay to final cut of the film and ultimate exhibition, if any, and receipt of revenues can take several years. Therefore, the revenue streams and profitabilty of an independent production company can vary greatly year-to-year. There is significant competition in the independent film business. Many more films are produced each year than receive distribution or recover their investment. In addition, independent films compete against major studios who have significantly greater resources and can therefore employ the most talented people to make films and better promote their films. The Company employs only one person, the President, Carl R. Reynolds, but has working relationships with other persons who provide access to different elements needed to produce a film, including financing, production and securing talent. 1(B) Financial Condition - 1. Working capital is inadequate. (Current Ratio is nil) 2. The Company has an outstanding loan to its Chairman and President, Carl R. Reynolds in the amount of $25,000.00 and current payables and accrued expenses. Page 11 PART II Other Information and Signatures NEW SKY COMMUNICATIONS, INC. Item 1. Legal Proceedings - None. Item 2. Change in Security - None. Item 3. Defaults upon Senior Securities - None. Item 4. Submission of matters to a vote of securities holders - None. Item 5. Other information - None. 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. NEW SKY COMMUNICATIONS, INC. Date: August 7, 2000. /S/ CARL R. REYNOLDS -------------------- Carl R. Reynolds President/ Treasurer/Chief Financial Officer /S/ CARL R. REYNOLDS - -------------------- DIRECTOR - -------- AUGUST 7, 2000 - -------------- Date Page 12 EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
5 6-MOS DEC-31-2000 JAN-1-2000 JUN-30-2000 0 0 0 0 0 0 0 0 1,284,566 276,208 0 19,374 0 0 988,984 1,284,566 0 0 0 18,913 0 0 0 (18,913) 0 (18,913) 0 0 0 (18,913) 0 0
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