APRIL 3, 2000 - MYSTIC, CONNECTICUT
- Charityville.com has named USA Video Interactive
At a press conference March 30 in Toronto, Charityville.com announced it had signed an agreement with Stone Canyon Pictures to obtain all rights to the taketakes.com website and the exclusive Internet rights to the action adventure feature film, "Legion." The taketakes.com website, currently in development, will feature live footage, updated weekly, from behind the scenes with commentary and outtakes from feature film productions such as "Woman Wanted," starring Academy Award winner Holly Hunter, Kiefer Sutherland, Michael Moriarty and produced by Damian Lee, president of Stone Canyon Pictures.
Charityville.com expects to roll
out its new taketakes.com website and its full range of services
in June. USA Video Interactive, as Charityville.com's
TORONTO, June 12 /PRNewswire/ --
New Cinema Partners Inc. (OTC Bulletin Board: NCPP) is proud to announce the appointment of a new Chairman of the Board and Chief Executive Officer (CEO), Mr. Damian Lee. At the same time, the Company has acquired 100% interest in Stone Canyon Pictures, a successful entertainment development and holding company founded, inspired and operated by Mr. Lee.
New Cinema intends to enhance and grow its interests in family entertainment. The addition of Stone Canyon Pictures adds a new dimension to the overall corporate strategy. Stone Canyon holds an undivided 100% interest in a substantial inventory of intellectual and completed film properties which is currently being evaluated and will become an asset of New Cinema Partners, Inc.
Damian Lee is one of Canada's most prolific and commercially successful independent film producers. His track record also incorporates major writing and directing credits. Mr. Lee has developed a strategy to incorporate traditional filmed entertainment with Internet and e-commerce applications for New Cinema.
His selected writing and/or producing credits include Watchers for Universal, which went into three sequels; Ski School, a perennial teen favorite, which also went into sequel; Death Wish V, starring Charles Bronson; Jungle Boy; Baby on Board starring Judge Reinhold and Carol Kane and Fun, which won two Special Jury Awards at the Sundance Film Festival.
His directing credits include Ski School; Trail of a Serial Killer starring Chris Penn and Michael Madsen; Last Man Standing; Food of the Gods.
He recently completed Woman Wanted, which won Best Picture in the Slam Dunk Festival at the Sundance Film Festival this year, starring academy award winner Holly Hunter, Kiefer Sutherland and Michael Moriarty; Mercy starring Ellen Barkin and Peta Wilson and Captured starring Dolph Lundgren.
Currently he is producing and directing Legion for Lions Gate, a $6.5 million thriller set in Costa Rica and starring Dolph Lundgren and Armand Assante; producing Envy, a $7 million comedy with Lions Gate, starring Damon Wayans and he is producing/directing, with Steven Seagal, Blood on the Moon, a $22 million action thriller, which also features Steven Seagal in the lead role.
He is now completing post production on the literary classic Crime and Punishment starring Academy Award winner Vanessa Redgrave, John Hurd and Crispin Glover. The picture is intended to premier at the Moscow Film Festival this summer.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). In particular, when used in the proceeding discussion, the words "plan," "confidant that," "believe," "expect," or "intend to," and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Act and are subject to safe harbor created by the Act. Such statements are subject to certain risks and uncertainties and actual results could differ materially from those expressed in any forward-looking statements.
For further information: Damian Lee, Chairman and Chief Executive Officer
TEL: (416) 367-8299, FAX (416)
TORONTO, Oct. 18, 2000/PRNewswire/ - New Cinema Partners Inc. (OTC BB:NCPP) is pleased to announce that Damian Lee, Chairman, has reported to the Board of Directors that he has completed final negociations for the production and distribution of "Legion", a 6.5 million action/adventure film starring Dolph Lundgren. "Legion" is a co-operative creative effort between Mr. Lee and Mr. Lundgren, who co-authored the script. Mr. Lee will be directing the picture.
Lions Gate Entertainment is to be the distributor of the film and will guarantee a minimum of $1.5 million in North American presales. Overseas presales, currently under final negociations, are estimated to generate a minimum of $5 million. Mr. Lundgren's adventure films have proven to be especially lucrative in the overseas markets.
New Cinema Partners is currently securing the development phase financing required to carry the picture into production under standard industry terms. Under these terms the development phase investors are "first in and first out". At the same time the investors and the Company enjoy the benefits of ongoing residual income from the picture.
Several other projects under development are also close to production financing and distribution arrangements and will be announced as the details are negociated.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). In Particular, when used in the proceeding discussion, the words "plan", "confidant that", "believe", "expect", or "intent to", and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Act and are subject to safe harbour created by the Act. Such statements are certain to certain risks and uncertainties and actual results could differ materially from those those expressed in any forward-looking statements.
SOURCE: New Cinema Partners
Toronto, Nov. 7, 2000 - Damian Lee, Chairman of the Board of New Cinema Partners is pleased to announce a strategic alliance with Movie Partners, Inc. ("MPI").
Based in North Hollywood California, MPI operates various entertainment related web sites, the most prominent of which is "moviepartners.com".
The Letter of Agreement provides that Movie Partners will offer New Cinema advertising and consulting services as well as access to multiple databases which have been generated by moviepartners.com and related web sites over the last three years. Moviepartners.com generates up to 300,000 unique visitors per month whose sole interest in visiting the site is in the writing, producing, distributing and financing of independent films.
MPI will initially feature "Legion" and NCPP as a new sponsor of all MPI web site properties for the purpose of generating new interest in the finance and development projects of NCPP. NCPP will be given access to and use of responses generated from MPI's popular investor forum.
Additionally, MPI will broadcast the NCPP message to the entire Movie Partners data base (leads generated on MPI websites for the last three years) and all responses will be forwarded to NCPP. In addition, NCPP will enjoy the right of first refusal to co-produce, finance or otherwise participate in literally hundreds of film projects hosted or on file in the MPI Filmmaker database. MPI will assist in the general exposure of a series of Nevada based LLC (Limited Liability Corporation) Private Placements which NCPP will undertake to finance its future development projects.
Damian Lee said "the relationship with Movie Partners is a perfect fit with our long term goals and plans and I look forward to completing the formal agreement prior to November, 15th as outlined in the Letter Agreement."
Source: New Cinema Partners
The DAs Friend
by R. Scott Moxley
Di Carlo is a millionaire Newport Beach businessman as well as a political supporter, business partner and friend of the countys first-term district attorney, Anthony J. "Tony" Rackauckas. But some of Rackauckas own agents say they suspect Di Carlo is tied to organized crimesomething Di Carlo, who has never been charged with a crime, vociferously denies.
Di Carlo is a 64-year-old Pennsylvania native who, by his own admission, has found himself on the business end of organized-crime investigations for the past 24 years. But in 1998, he found a new friend in Rackauckas. Then a superior court judge, Rackauckas was running for district attorney. Di Carlos family contributed $3,500 to the campaign, and suddenly Di Carlo the outsider was an insider. Within months of his victory, Rackauckas went into a short-lived Internet business with Di Carlo and has spent the night at Di Carlos $3 million estate on Harbor Island in Newport Beach. Their wives became good friends, Rackauckas says.
So when Di Carlo found himself in big trouble last year, he went to his friend the DA.
Di Carlo told Rackauckas he had worked in 1999 or 2000 as a consultant for Toronto-based New Cinema Partners. New Cinema is a relatively young company registered in Nevada and operating in Hollywood. During his work there, Di Carlo asserts, he uncovered suspicious financial arrangements and major violations of federal securities laws. For reasons that remain unclear, Di Carlo says he severed his relationship with the company and attempted to return $150,000 in fees and expenses. (New Cinema Partners officials did not respond to several requests for comment.)
Thats when his trouble began. Di Carlo asserts that a New Cinema investorwhom Rackauckas told the Weekly has direct family ties to a major New York City-based organized-crime syndicatewanted the money returned to him, not to company coffers. To press his point, the man allegedly told Di Carlo he knew the whereabouts of two of Di Carlos out-of-state children and expressed insincere concern for their safety.
Di Carlo wanted his friend Rackauckas to assign investigators to the case. The DA turned the matter over to his agents in the countys organized-crime unit. But Rackauckas says his agentsthe same agents who had been investigating Di Carlo for decades didnt believe Di Carlos story. They quickly turned the tables, investigating Di Carlo not as a victim of a mob shakedown but as a suspect himself.
Enraged, Di Carlo called Rackauckas to tell him to get the investigators to back off. Rackauckas asked his agents what they had on Di Carlo; he asserts the agents had nothing, and he pulled them off the case.
A year later, in February 2001, the conflict over Di Carlos case went from hushed conversations in the hallways of the DAs Santa Ana headquarters to the pages of The Orange County Register and the Los Angeles Times. But it was a highly sanitized version, a story reduced to intraoffice politics, personality conflicts or a petty scandal in which Rackauckas used his authority to stop the investigation of a man whose family made generous contributions to the DAs 1998 political campaign. Three of Rackauckas prosecutors ultimately called on the state attorney general to investigate their boss.
But both papers ignored the more intriguing allegation: that some of Rackauckas own agents think Di Carlo is not just a political supporter but also a mobster.
Is he? Both Rackauckas and his critics cite Di Carlos experience with the New Cinema investor as evidence for their opposing positions. Rackauckas says the New Cinema story demonstrates his friend Di Carlo "is nothing other than an honest businessman" who went to law enforcement when he became the victim of a mob shakedown.
But Rackauckas agents say Di Carlos run-in with an alleged mob figure after working at New Cinema Partners is consistent with his pattern of contacts with questionable associates. In the early 1980s, Di Carlo asserts that a hitman planned to kill him at the Balboa Bay Club in Newport Beach. A few years later, Di Carlo found himself entangled in a sensational bribery case involving his partner, Anaheim businessman W. Patrick Moriarity. Prosecutors investigated but never charged Di Carlo in that case, though Moriarity was convicted of bribing state senators.
And now comes Di Carlos encounter with the angry New Cinema Partners investor, whom Rackauckas insists is a low-ranking mobster. Last year, the film company landed veteran Hollywood producer, director and screenwriter Damian Lee. Perhaps best known for writing and producing Death Wish V, starring Charles Bronson, Lee was reportedly working on thriller flicks with Dolph Lundgren and Steven Seagal and a Damon Wayans comedy when he quit last month as president and chairman of the board after only nine months on the job. Company officials offered no explanation for Lees departure but said they will hire an investment-banking firm to "explore solutions to address the current situation."
Maybe its time for a name change at New Cinema Partners, Inc. (OTCBB: NCPP). Maybe they could just drop the Cinema and call themselves New Partners. It would probably make sense since New Cinema Partners doesnt make movies, and it never did. What does the Company do? It looks for merger partners and announces acquisitions.
And then it cancels them.
At least that has been the recent pattern. New Cinema Partners has announced at least six such transactions in the past year, but it has yet to close on any of them. In fact, as best we can determine, the Company has not completed a deal since July 2000, when it made an unsuccessful attempt to get into the movie business.
The Company did not start out in cinema. It was formed in February 1998, as Valance 9 Development, with plans to develop software products for the Internet. But Valance 9 produced no revenues, and so, in August 1999 the Company decided to get into the movie business, through a reverse-merger with a Canadian company called New Cinema Partners.
New Cinema was not actually in the motion picture industry, but it did have aspirations of stardom. The Company hoped to develop, operate, locate, design, construct, manage, and operate high tech specialized theater venues, including digital interactive movies, IMAX films and other specialized films. In the end, however, it was unable to finance or develop any of these operations.
But the Company was determined to get into the motion picture business. On July 4, 2000, it acquired certain scripts and storylines from Ontario 1255234, also known as Stone Canyon Pictures.
July 4th may seem an unlikely date for a Nevada corporation like New Cinema Partners to pull off a major acquisition, but the Companys offices, and its officers, are located in Toronto, Canada, where Independence Day (also known as Canada Day) is celebrated on July 1st.
As part of the transaction, the Company turned control over to one of the principals of Stone Canyon, Damian Lee, who was named Chief Executive Officer and Chairman of the Board of New Cinema. Mr. Lee had been a producer and director of (and sometimes actor in) mostly low-budget films, including such titles as Abraxas, Guardian of the Universe (a 1990 film starring now-Minnesota Governor Jesse Venture as an alien cop) and Ski School (the title is self-explanatory). He also had produced a 1999 feature called Woman Wanted, starring Holly Hunter and Kiefer Sutherland and directed by Kiefer Sutherland.
Lee never produced, directed, or acted in, a movie for New Cinema Partners. Low-budget is one thing, but no budget is quite another, and New Cinema had virtually no money. At the end of February 2000, New Cinema had just $99 in the bank. By February 28, 2000, the bank account was up to $1999. That certainly was not enough to finance a motion picture not even a short one.
Funding proved to be an ongoing obstacle. According to the Companys Form 10-Q for the period ended November 30, 2001, New Cinemas operations, including its attempted foray into the movie business, had been funded by the Company's management and investments from stockholders in the amount of xxxx.
Thats right. The Form 10-Q actually said that the funding had been xxxx. If public reports are supposed to provide information for investors, this disclosure fell woefully short.
In any event, xxxx was not enough, and Damian Lee was not the answer. Plans to collaborate on a film called Yellow Cab, and other film projects, were soon abandoned. Stone Canyon ran into a stone wall. Unable to raise adequate funds for any productions, Mr. Lee resigned on March 12, 2001, leaving the Company, once again, in search of a business.
So Long Cinema
On June 4, 2001, New Cinema announced that it had hired Paradigm Capital Consulting Corporation to find a new venture partner. The Company did not indicate where Paradigm was located, or provide any information about that firms track record. A June 4th press release described Paradigm as a boutique investment banking consulting firm with small and large clients consisting of Private and Public companies as well as Institutional and Private investors. None of those private or public companies were identified.
One week after revealing the new Paradigm relationship, the Company announced that, with Paradigms help, it would be moving in a new direction. A June 11th press release claimed that Paradigm would raise $500,000, in U.S. dollars so that New Cinema could find a partner in the shipping and logistics industry. Soon, the Company was declaring plans to acquire Imperial Logistics, a Canadian-based freight management company, and reporting that Paradigm was taking the necessary steps to raise the required funding.
The deal would have given Imperial Logistics control of the Company, but it seemed doomed from the start. A draft of the acquisition agreement was signed by mistake, and later cancelled because of several pertinent business issues. The closing date, originally scheduled for August 31, 2001, was extended to November 30, 2001 so that due diligence related to the financing could be completed. Imperial Logistics had the right to terminate the agreement if $500,000 in Canadian dollars could not be raised by November 30th.
Still, the Company was optimistic, saying at one point that Paradigm had agreed to raise $100 million for Imperial Logistics. In the end, however, raising even $500,000 in Canadian dollars (about $325,000 in U.S. dollars) proved too difficult a task. On October 30, 2001, New Cinema stated that the Imperial Logistics transaction had been cancelled because the private placement could not be funded on time.
The Imperial Logistics acquisition failed, but all of those press releases had created interest in the Companys stock. On June 4th, when the Paradigm relationship was first revealed, New Cinema stock jumped from 9 cents to a high of 20 cents, before closing for the day at 15 cents per share. Almost 1.4 million shares of New Cinema were traded that day. Fewer than 200,000 shares had traded the previous day.
By October 31st, the day after the deal was abandoned, shares were trading at just 5 cents.
Is There a Doctor in the Cinema?
The logistics business, like films, was now history. So, apparently, was Paradigm, whose name was no longer featured in the Companys press releases. New Cinema would not be moving freight, but that did not mean it was not moving along. In fact, the Company did not skip a beat. After revealing that the Imperial Logistics transaction was off, the October 30th press release went on to explain that the Company had instead decided to acquire a medical credit card company, Medi Q Dent Credit Card. Cinema Partners would no longer be making movies, opening theaters, or shipping goods. Instead it would be offering a valued added credit card for consumers to use when paying for medical and dental services.
The Company never got around to providing those details. The acquisition was quietly abandoned when, according to New Cinema, Medi Q Dents representations could not be verified.
Cementing a New Relationship
On February 19, 2002, New Cinema announced its next partner LCTC Enterprises, Inc. Once again, the business plan had changed. This time the Company said it would become a cement manufacturer, by acquiring components of a large scale cement plant, that LCTC had valued at $35 million, in U.S. currency.
The plan called for the ventures first cement plant to be built at an undisclosed location in the Caribbean. According to the Company, LCTC already had acquired a cement plant (presumably in North America) which would be dismantled, and then reassembled in the Caribbean. New Cinema claimed that LCTC had projected first year revenues for the Caribbean plant at $35 million to $ 65 million, and gross profits at $20 million to $30 million all in U.S. currency, of course.
New Cinema planned to pay for the assets by issuing common stock, although it did not say how many shares would be issued, or to whom. At the end of the day management positions would be turned over to former LCTC personnel, and the Company would change its name to Cemcorp International, or some other non-cinematic name.
According to Martin Lapedus, New Cinemas Chief Financial Officer, [t]he capital required for the business is nominal in relation to the amount of assets and the business opportunity as presented by LCTC. Still, a key question remained to be answered. Where would the Company get funds to set up the Caribbean operation? Even nominal funding is steep when you have no money. At the end of November 2001, New Cinema had no cash and no current assets.
Despite this precarious financial position, New Cinemas February 19th press release quoted an LCTC representative, Rob Bailey, who purportedly said that an initial source of funds had been identified, and predicted that $2.5 million to $5 million in traditional merchant debt financing could be raised for the Caribbean project.
This enthusiasm begged another important question. Was LCTC in any better financial shape than New Cinema? The Companys public filings and press releases did not provide any detailed audited financial information about the condition of LCTC. A March 4th press release reiterated claims that the Company would be getting assets valued at approximately $35 million. But a Form 8-K filed by New Cinema on March 1, 2002, did not contain any financial statements for the business that was being acquired.
The March 4th press release also promised that New Cinema would be scheduling a shareholders meeting in the near future so that shareholders can vote on the acquisition.
There was no need for a meeting. By early April 2002 New Cinema was on to something else. On April 8, 2002 the Company announced that the LCTC transaction was dead. New Cinema acknowledged that it had not received any independent valuation of the LCTC assets. So forget about cement plants, medical credit cards, logistics operations and the movies. New Cinema was going to become an information technology company instead.
What was the next merger candidate? Would New Cinema finally consummate a deal? Would the Company that started out as Valance 9 finally identify, and acquire a revenue producing business?
We will examine those questions, and more, in the exciting sequel to this article coming soon on Stock Patrol.
NEW CINEMA PARTNERS, INC. (OTCBB:
NCPP) Part II NO CINEMA FOR NEW CINEMA
For New Cinema Partners, Inc. (OTCBB: NCPP), the movie business is history. So, apparently, are the logistics and shipping industry, medical-dental credit cards, and Caribbean cement plants. As we saw in Part I of this series, New Cinema Partners has pursued, and abandoned, plans to enter each of those businesses. See New Cinema Partners, Inc. Part I Changing Partners
Still, the beat goes on for the Company, which started out in February 1998 as Valance 9 Development. Back then movies were not even a glimmer in its corporate eye. The Company intended to get into the technology sector, through software development. That all changed, however, in August 1999, when Valance 9 was taken over by a private Canadian company called New Cinema Partners. Two years later, control of the Company was turned over to Damian Lee, an experienced director and producer of low-budget films.
And just like that, New Cinema was in the movie business. But not really. New Cinema had no money, and it never was able to raise the funds necessary for even a single production. Lee resigned as New Cinemas CEO in March 2001, and the Company was back in search of a business plan.
The quest goes on. What was next for the Company after movies, logistics, credit cards and cement manufacturing? Why not return to its origins, seeking a technology partner or two?
By April 2002, the Company was moving on again with plans to acquire Verifox Technologies, Inc.
An April 8th press release described Verifoxs business in broad make that vague terms. It claimed that Verifox generated business opportunities related to authentication solutions for financial service providers for a multitude of electronic financial transaction types. New Cinema went on to say that Verifox has developed unique market-driven authentication solutions, which create revenue generating business opportunities for eBanks via Secured Digital Services.
Investors who were looking for a clearer explanation of Verifoxs business were left scratching their heads. New Cinema may have suspected that this description was somewhat obscure. The Company promised that it would release more information about Verifox, the technology and the business plan as soon as all aspects are made clear subject to due diligence review.
Despite that promise, press releases issued on April 10th and 25th offered no further material information about the Verifox business. Despite the lack of detail, the April 25th press release confirmed New Cinema had signed a formal agreement to acquire Verifox. The Company did not disclose any terms of the transaction, but promised to file a Form 8-K with those details.
That proved unnecessary. On May 15th, New Cinema disclosed that the Verifox deal had been cancelled because the Companys Board of Directors found it unpalatable. The Company gave no further details - which somehow seemed consistent.
Back To Show Biz - Briefly
New Cinema was not letting any grass grow under its acquisition-seeking feet. The May 15th press release that said goodbye to Verifox also said hello to the acquisition of Mediall Tech, Co. Ltd. of South Korea. New Cinema was headed back into the entertainment business.
After all, once you get show business in your blood
According to the May 15th press release, Mediall provides custom-made CDs and DVDs from vending machines through the Internet and by satellite. The Company did not describe the terms of the proposed acquisition, or provide any financial information about Mediall. Instead, once again, it promised to release more details as soon as all aspects are made clear subject to due diligence review.
Those details never arrived. On May 21st New Cinema announced that it had sent representatives to South Korea with the share exchange agreement to be signed and ratified by Mediall Tech. They must have gotten distracted. On May 25th the Company conceded that it would not proceed with the Mediall acquisition because
[i]n a turn of events, a representative traveling in Korea on behalf of The Company uncovered the opportunity to acquire another Korean company which the Company believes to have a greater financial outlook than Mediall Tech.
Which is something like the groom falling in love with his cab driver on the way to his wedding. It sounds like the plot for a low-budget movie. If only Damian Lee were still running the show.
At Wits End
New Cinema Partners newest partner (its sixth in the past year) is Witnet Co. Ltd. Witnet is a South Korean software development and integration company, whose activities appear to focus on the wireless Internet. According to the Company, Witnet has developed several proprietary products, including the Mobilclick system, a process that allows Personal Computers (PCs) to be controlled by Personal Digital Assistants (PDAs) that are connected to the wireless Internet.
The Company said that it would acquire Witnet in exchange for 55 million shares of New Cinema stock. That should give the former Witnet owners control of the public company. (As of February 28, 2002, only about 31 million shares of New Cinema common stock had been issued).
A few intriguing details about the deal emerged in a Form 8-K filed by New Cinema on June 3, 2002. New Cinema was not the first suitor for Witnet. On May 24, 2002 Witnet entered into a Letter of Intent with a company called Travellers International Inc. The Form 8-K did not outline the terms of that Letter of Intent, but presumably it provided for the merger of Travellers and Witnet. The next day, May 25th, New Cinema issued the press release saying it had abandoned Mediall to pursue Witnet.
By May 27th, according to the Form 8-K, Travellers had assigned the Witnet Letter of Intent to New Cinema, in exchange for 10 million shares of New Cinema common stock. Based upon recent stock prices (about 20 cents a share) that fee could be worth $2 million.
Who controls Travellers? Why did Travellers sign, and then assign, the Witnet Letter of Intent within one day? The Company offered no information about Travellers, did not reveal how it learned of the deal, and offered no explanation for the series of whirlwind turnarounds from Mediall to Witnet, and from Travellers to New Cinema.
The Form 8-K claimed that Witnet owns 20 percent of Chase Bank in Korea, but offers nothing to suggest any affiliation between that Chase Bank and the one which is familiar to U.S. investors. Nor did the Form 8-K contain any audited financial information about Witnet.
These shifting Witnet agreements and the related press releases seemed to have an impact on New Cinema shares. The Companys common stock increased by 50%, from 10 cents to 15 cents on May 29th, on volume of 419,200 shares. The next day, shares jumped to 20 cents, as volume swelled to over 1.7 million shares. Share prices have continued to climb, hitting 24 cents on June 7th, and volume remains high.
Meanwhile, New Cinema has continued to issue press releases. On June 10th, the Company said that it expected to receive Witnets audited financial statements by the following week. The Company also noted that it was preparing to file required notification of the transaction with Korean governmental authorities, as required by the Korean Foreign Investment Promotion Act. Under that Act, the Korean Minister of Commerce, Industry and Energy must determine whether to accept said notices, and reply within the time periods stipulated by Presidential Decree.
A June 12th press release stated that New Cinema had received signed powers of attorney representing a majority of the Witnet shareholders agreeing to the transaction. While the Company says that this is an important step, several significant hurdles remain, including additional due diligence, governmental approval and the consent of the New Cinema shareholders. And, of course, those Witnet audited financial statements still must be delivered and reviewed.
In the interim, investors remain in the dark when it comes to the financial condition of Witnet. The Companys financial status is quite a different matter but the news is not good. New Cinema was scheduled to file its Form 10-K Annual Report for the year ended February 28, 2002 at the end of May, but sought a 15 day extension. Then, on June 12th the Company filed a Form 8-K, disclosing that it had terminated its auditors on May 24, 2002, and retained a new accounting firm, as of June 6th.
On June 13th, New Cinema finally filed the February 2002 Annual Report. It showed that the Company had no cash, no current assets and no revenues. In fact, the only assets listed on the Companys balance sheet were intangible assets, consisting of those scripts and storylines purchased from Stone Canyon Pictures. New Cinema values them at $1 million.
The Form 10-K did clear up one issue. As we noted in Part I of this series, the Companys November 2001 Form 10-Q indicated that New Cinemas operations had been funded by the Company's management and investments from stockholders in the amount of xxxx. The Form 10-K fills in those xxxx, stating that the funding had been $245,818 for the year ended February 28, 2001 (which was subsequently converted into New Cinema stock) and $52,643 for the year ended February 28, 2002 (which can be converted into stock in the future).
The Form 10-K reiterates the plan to acquire Witnet, but acknowledges the Companys failure to consummate its prior deals with Mediall Tech, LCTC, Verifox and Imperial Logistics, and concedes that there can be no assurance that the Company will complete the acquisition of Witnet.
Indeed, New Cinema acknowledges that [t]here is no guarantee that the Company will be successful at completing any such acquisition or merger.
So what will happen if the Witnet deal suffers the same fate as those other aborted transactions? New Cinema can always start looking for a new venture. By now it knows the drill, and so do its shareholders.
If Witnet doesnt work out, maybe New Cinema should consider a return to the movie business. The ongoing odyssey of a company in search of a business might make for a compelling plot.
Someone get us Damian Lees phone number!