-----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, SOXYXrvW6fkhuJT0X7cSjlfKaDFUOry9eEDkVmmZ+6kpb3FpSWaRKX3IulByVAxt HfUsoDQkR0uOolHOhGoGPA== 0000909012-99-000591.txt : 19991115 0000909012-99-000591.hdr.sgml : 19991115 ACCESSION NUMBER: 0000909012-99-000591 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW SKY COMMUNICATIONS INC CENTRAL INDEX KEY: 0000771999 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE PRODUCTION [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: 99749327 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 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 September 30, 1999 ------------------------ 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 incorporation or organization) Identification 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 November 1, 1999 PART 1 - FINANCIAL INFORMATION Item 1. Financial Statements. Item 2. Management's Discussion and Provide the information required Analysis of Financial Condition by Rule 10-01 of Regulation S-X and Results of Operations. (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 Nine months ending 9/30/99 & 9/30/98 3 Consolidated Balance Sheet As of 9/30/99 & 12/31/98 4 & 5 Statement of Cash Flows Nine months ended 9/30/99 & 9/30/98 6 Management's Discussion of Statement of Income and Financial Condition 7 - 10 PART II - OTHER INFORMATION & SIGNATURES 10 Financial Data Summary 11 Page 2 NEW SKY COMMUNICATIONS, INC. STATEMENT OF INCOME (LOSS) (UNAUDITED)
For Three Months Ended For Nine Months Ended ---------------------- --------------------- September 30, September 30, September 30, September 30, 1999 1998 1999 1998 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 $ 8,240 $ 7,758 $ 27,085 $ 60,637 -------- -------- -------- -------- Income (Loss) Before Other Income and Related Expenses $ (8,240) $ (7,758) $(27,085) $(60,637) -------- -------- -------- -------- Other Income (Loss) $ 0 $ 0 $ 0 $ 0 -------- -------- -------- -------- Income (Loss) $ (8,240) $ (7,758) $(27,085) $(60,637) ======== ======== ======== ======== Net Per Common Share NIL NIL NIL NIL ======== ======== ======== ========
Page 3 NEW SKY COMMUNICATIONS, INC. BALANCE SHEET (As of September 30, 1999 and December 31, 1998)
ASSETS September 30, 1999 December 31, 1998 (Unaudited) (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 1,159,166 1,159,166 ---------- ----------- Total Property and Equipment 1,159,166 1,159,166 Less: Accumulated Depreciation 0 0 ---------- ----------- Net Property and Equipment 1,159,166 1,159,166 ---------- ----------- Other Assets 125,400 100,400 ---------- ----------- TOTAL ASSETS $1,284,566 $ 1,259,566 ========== ===========
Page 4 NEW SKY COMMUNICATIONS, INC. BALANCE SHEET (As of September 30, 1999 and December 31, 1998)
LIABILITIES AND STOCKHOLDERS' EQUITY September 30, 1999 December 31, 1998 (Unaudited) (Audited) ------------------ ----------------- Current Liabilities: Accounts Payable $ 181,425 $ 154,340 Notes Payable 25,000 0 Leases 2,068 2,068 Accrued Expenses 41,017 41,017 ----------- ----------- Total Current Liabilities $ 249,510 $ 197,425 ----------- ----------- Stockholders' Equity: Common Stock $.0001 Par Value 200,000,000 Shares Authorized 193,736,923 Shares Issued and Outstanding (193,736,923 Shares on September 30, 1999) $ 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 (4,946,346) (4,919,261) ----------- ----------- Total Stockholders' Equity 1,035,056 1,062,141 ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,284,566 $ 1,259,566 =========== ===========
Page 5 NEW SKY COMMUNICATIONS, INC. Statement Of Cash Flows Nine Months Ended September 30, 1999 and September 30, 1998
Nine Months Ended Nine Months Ended September30, 1999 September 30, 1998 ----------------- ------------------ Operating Activities: Net Income (Loss) $(27,085) $(60,637) 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 52,085 36,086 Amortization of Film Costs 0 30,000 -------- -------- Net Cash Provided (Used) $ 25,000 $ 5,449 -------- -------- Investing Activities: Additional Film Inventory $ 0 $ (5,505) Investment in Web site 25,000 0 -------- -------- Net Cash Provided (Used) $(25,000) $ (5,505) -------- -------- Financing Activities: Net Cash Provided (Used) $ 0 $ 0 -------- -------- Increase (Decrease) In Cash and Cash Equivalents $ 0 $ (56) Cash and Cash Equivalents at Beginning of Period $ 0 $ 56 -------- -------- Cash and Cash Equivalents at End of Period $ 0 $ 0 ======== ========
Page 6 STATEMENT OF MANAGEMENT In the opinion of management, the accompanying unaudited financial statements contain all adjustments necessary to present fairly the financial position of the Company as of September 30, 1999 and the results of operations and cash flows for the nine months then ended. 1(A) During the quarter, the Company and it's Co-Producing partner, Syracuse Productions, LLC, have been screening their film "FREAK TALKS ABOUT SEX" for potential distributors and purchasers of rights in the film. In October, the film was screened at the Hamptons International Film Festival and placed second in the audience choice awards and received an Honorable Mention from the jury, which included the actor, William Hurt. After the end of the quarter, the producers agreed in principle with HBO for a debut of the film as a Cinemax Friday Night Premiere starting December 17, 1999. The producers believe that the wide exposure the film will receive by the limited screening on Cinemax will enhance the subsequent sale of other rights in the film, including home video, foreign, internet and other television and does not preclude a theatrical release of the film.. "FREAK TALKS ABOUT SEX" is a comedy starring Steve Zahn, who has recently appeared in "OUT OF SIGHT" and "YOU'VE GOT MAIL" and will star in the current Miramax film "HAPPY TEXAS" and Josh Hamilton, who has recently appeared in the NBC mini-series "THE 60'S." The Company owns one-third of the profits of the film after the investors recoup their investment plus twenty percent (20%). For proprietary reasons, the Company may not disclose the budget of the film and by contractual provision may not disclose the amount received from HBO for the rights to the film.. The Company continued pursuing production of its film property "THE GODMOTHER" (formerly "RESPECT YOUR GODFATHER"). The film is a comedy co-written by, among others, Joel and Ethan Coen, who have previously written "RAISING ARIZONA," "THE BIG LEBOWSKI" and "FARGO." The Company has received letters of intent, subject to availability and negotiation of contract terms, to appear in the film from Katherine Helmond, star of television's "SOAP" and "WHO'S THE BOSS?", Alex Rocco, best known for his role as Moe Green in "THE GODFATHER" and Max Casella, co-star of the recent feature film "ANALYZE THIS" and "DOOGIE HOWSER" on television. Both Helmond and Rocco starred in the Company's previous film, "LADY IN WHITE." The Company is attempting to raise financing for production of the film. Page 7 During the first quarter of 1998, 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. Successful coverage of "STAR WARS: THE PHANTOM MENACE" and "SOUTH PARK" have significantly raised the page views of the site. The site has retained an advertising broker to procure additional advertising. The interest was purchased for $25,000.00, which The Movie Place will expend 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, 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 were annexed to the Form 10-Q for the period ending March 31, 1999. The Company hopes to help 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. During the quarter, Movieplace.com, Inc. began developing plans to debut a movie critics program weekly on the internet site starting in early 2000. The program will consist of a panel of movie critics, including Movie Place's own critic, Mike Cidoni, discussing recently released films. The ultimate goal would be to have the program syndicated as a weekly television show.. The Company entered into a distribution agreement for a so-called "Director's Cut" of its feature film "LADY IN WHITE" which was released on DVD format during the first quarter of 1998. All remaining outstanding distribution agreements on the film expire in 2002 or 2003, 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. Page 8 Management believes that the Company has no material risk or costs associated with the Year 2000 problem as its records are not computerized. The Company cannot assess the risk of third-party vendors or licensees of films already in release, but the Year 2000 problem could affect the accounting of any licensees to the Company for royalties. The Company does intend to inquire of any potential future licensees regarding their Year 2000 compliance as part of the negotiations for any licensing or royalty agreement. 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 and 1998 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 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 and 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 worldwide rights in all media, 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 profitability of an independent production company can vary greatly year-to-year and project to project. 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. Page 9 1(B) Financial Condition - 1. Working capital is inadequate (Current Ratio is nil). In the near term, the Company will be dependent on revenues from its share of profits, if any, derived from the film "FREAK TALKS ABOUT SEX" and producers' fees, if any, payable from the budget of any film that gets into production. In the meantime, the Company keeps its expenses at a minimum. 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. 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: November 12, 1999. /S/ Carl R. Reynolds -------------------- Carl R. Reynolds President/ Treasurer/ Chief Financial Officer /s/ Carl R. Reynolds - -------------------- Director - -------- November 12, 1999 - ----------------- Date Page 10 EX-27 2 FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-1999 JAN-01-1999 SEP-30-1999 0 0 0 0 0 0 0 0 1,284,566 249,510 0 0 0 19,374 1,015,682 1,284,566 0 0 0 27,085 0 0 0 (27,085) 0 (27,085) 0 0 0 (27,085) 0 0
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