**U.S. SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON,DC 20549**

 

**FORM 10-QSB**

 

**(MarkOne)**

 
| ý | **Quarterly report pursuant to Section 13 or 15 (d) of the  Securities Exchange Act of 1934** |
|--------|-----------------------------------------------------------------------------------------------|

 

**Forthe quarterly period ended September 30, 2001**

 
| o | **Transition report pursuant to Section 13 or 15 (d) of the  Exchange Act** |
|---|-----------------------------------------------------------------------------|

 

**For the Transition period from________ to __________**

 

**Commissionfile number    0-29402**

 

**ON STAGE ENTERTAINMENT, INC.**

(Exact Name ofSmall Business Issuer as Specified in Its Charter)

 

| ***NEVADA***                                                    |   | ***88-0214292***                   |
|-----------------------------------------------------------------|--------|------------------------------------|
| (State or Other  Jurisdiction of Incorporation or Organization) |   | (IRS Employer  Identification No.) |
|                                                            |   |                               |
| **4625  W. NEVSO DRIVE, LAS VEGAS, NEVADA**                     |   | **89103**                          |
| (Address of  Principal Executive Offices)                       |   | (Zip Code)                         |
|                                                            |   |                               |
| **(702) 253-1333**                                              |
| (Issuer’s  Telephone Number, Including Area Code)          |

 

 

(Former Name,Former Address and Former Fiscal Year, if Changed Since Last Report)

 

Check whether theissuer:  (1) has filed all reportsrequired to be filed by Section 13 or 15 (d) of the Exchange Act of 1934 duringthe preceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.

 

Yes         ý            No           o

 

**APPLICABLEONLY TO CORPORATE ISSUERS**

 

The number of sharesoutstanding of the issuer’s common stock, par value $0.01 per share, as ofNovember 13, 2001, was 11,307,930.

 

 

**ON STAGEENTERTAINMENT, INC. AND SUBSIDIARIES**

 

**TABLE OFCONTENTS**

 
| **Part I.** | **Financial Information** |  
 

 

 
 

Item1. Consolidated Financial Statements

  
 

 
 

Balance  sheets

 
 

Statements  of operations

 
 

Statements  of cash flows

 
 

Statements  of stockholders’ equity

 
 

Notes  to financial statements

 

 

 
**Item  2. Management’s Discussion and Analysis Of Financial Condition and Results of Operations**
  
 
**Part  II.****Other  Information**
 
 

Item 1. Legal  Proceedings

 
 

Item  2. Changes  in Securities

 
 

Item  3. Defaults  Upon Senior Securities

 
 

Item  4. Submission  of Matters to a Vote of Security Holders

 
 
**Item  5. Other  Information**
 
 

Item  6.Exhibits  and Reports on Form 8-K

 
 

 
 

Signatures

 
 

This document contains certain forward-looking statements that aresubject to risks and uncertainties. Forward-looking statements include certaininformation relating to potential new show openings, the potential markets forOn Stage’s expansion of existing and potential gaming and tourist markets,exposure to various trends in the gaming industry, On Stage’s acquisition plansand the benefits anticipated from these acquisitions, business strategy,outstanding litigation matters and the defenses available, the seasonality of business,and liquidity issues, as well as information contained elsewhere in thisreport, where current statements are preceded by, followed by or include thewords "believes," "expects," "anticipates" orsimilar expressions. For these statements, On Stage claims the protection ofthe safe harbor for forward-looking statements contained in the PrivateSecurities Litigation Reform Act of 1995. The forward-looking statements inthis document are subject to risks and uncertainties that could cause theassumptions underlying the forward-looking statements and the actual results todiffer materially from those expressed in or implied by the statements.

**PART I.   FINANCIAL INFORMATION**

** **

**Item1.  Consolidated Financial Statements**

** **

**On StageEntertainment, Inc. and Subsidiaries**

**Consolidated Balance Sheets**

 

 

 

**December 31,**

 

**September 30,**

 

 

 

 

 

**2001**

 

Assets

 

**2000**

 

**(unaudited)**

 

Current assets

 

 

 

 

 

Cash and cash  equivalents

 

$

517,353

 

$

1,540,223

 

Accounts  receivable, net

 

561,239

 

759,478

 

Inventory

 

89,996

 

127,680

 

Deposits

 

166,092

 

283,659

 

Prepaid and  other assets

 

291,652

 

451,813

 

Note receivable  from officer

 

-0-

 

173,811

 

Total current  assets

 

1,626,332

 

3,336,664

 

Property,  equipment and leasehold improvements

 

6,185,424

 

6,777,596

 

Less:  Accumulated depreciation and amortization

 

(5,346,133

)

(6,002,601

)

Property,  equipment and leasehold improvements, net

 

839,291

 

774,995

 

Direct  acquisition costs

 

100,000

 

-0-

 

Show rights, net  of accumulated amortization of $146,367

 

-0-

 

3,617,364

 

 

 

$

2,565,623

 

$

7,729,023

 

Liabilities and  Stockholders’ Deficit

 

 

 

 

 

Current  liabilities

 

 

 

 

 

Accounts payable

 

$

1,625,040

 

$

329,573

 

Accrued payroll  and other liabilities

 

1,316,329

 

2,451,632

 

Convertible  debentures, net of beneficial conversion

 

700,000

 

141,692

 

Current  maturities of long-term debt

 

600,000

 

600,000

 

Total current  liabilities

 

4,241,369

 

3,522,897

 

Long-term debt,  less current maturities

 

551,798

 

78,298

 

Total  liabilities

 

4,793,167

 

3,601,195

 

Commitments and  contingencies

 

-0-

 

-0-

 

Series A  Convertible Preferred Stock, par value $.01 per share, 10,000,000 shares  authorized; 1,852,632 issued and outstanding, liquidation price $8,000,000

 

-0-

 

8,023,514

 

Stockholders’  equity (deficit)

 

 

 

 

 

Common stock,  par value $0.01 per share, 100,000,000 shares authorized, and 11,307,930  shares issued and outstanding

 

113,079

 

113,079

 

Additional  paid-in capital

 

12,652,111

 

16,754,991

 

Accumulated  deficit

 

(14,992,734

)

(20,763,756

)

Total  stockholders’ deficit

 

(2,227,544

)

(3,895,686

)

 

 

$

2,565,623

 

$

7,729,023

 

 

See notes to consolidated financial statements.

 
****
**On Stage Entertainment, Inc. and Subsidiaries**

**Consolidated Statements of Operations**

 

 

 

**Three months endedSeptember 30,**

 

 

 

**2000**

 

**2001**

 

 

 

**(Unaudited)**

 

**(Unaudited)**

 

Net revenues

 

$

6,393,371

 

$

7,322,046

 

 

 

 

 

 

 

Costs of revenues

 

5,086,094

 

6,089,059

 

 

 

 

 

 

 

Gross profit

 

1,307,277

 

1,232,987

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

Selling, general and administrative

 

1,040,183

 

751,236

 

Depreciation and amortization

 

254,843

 

256,152

 

 

 

 

 

 

 

Total operating expenses

 

1,295,026

 

1,007,388

 

 

 

 

 

 

 

Operating income (loss)

 

12,251

 

225,599

 

 

 

 

 

 

 

Interest income (expense), net

 

(32,651

)

(41,782

)

Other income (expense)

 

292,956

 

-0-

 

Loss on disposition of property, plant and equipment

 

(298,118

)

-0-

 

 

 

 

 

 

 

Net income (loss) before extraordinary item

 

(25,562

)

183,817

 

Extraordinary item – troubled debt restructuring loss

 

(56,591

)

-0-

 

Net income (loss)

 

(82,153

)

183,817

 

 

 

 

 

 

 

Deemed dividends for preferred stock

 

-0-

 

(1,000,000

)

Dividends accreted for preferred stock

 

-0-

 

(32,500

)

Dividends accrued for preferred stock

 

-0-

 

(258,000

)

 

 

 

 

 

 

Net loss applicable to common shares

 

(82,153

)

(1,106,683

)

 

 

 

 

 

 

Basic and diluted loss per share from continuing  operations

 

(0.00

)

(0.10

)

 

 

 

 

 

 

Basic and diluted loss per share from extraordinary item

 

(0.01

)

-0-

 

 

 

 

 

 

 

Basic and diluted loss per common share

 

(0.01

)

(0.10

)

 

 

 

 

 

 

Basic and diluted average number of common shares  outstanding

 

7,226,808

 

11,307,930

 

 

See notes to consolidated financial statements.

 

**On Stage Entertainment, Inc. and Subsidiaries**

**Consolidated Statements of Operations**

 

 

 

**Nine months endedSeptember 30,**

 

 

 

**2000**

 

**2001**

 

 

 

**(Unaudited)**

 

**(Unaudited)**

 

Net revenues

 

$

19,650,618

 

$

17,818,257

 

 

 

 

 

 

 

Costs of revenues

 

15,978,060

 

15,899,863

 

 

 

 

 

 

 

Gross profit

 

3,672,558

 

1,918,394

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

Selling, general and administrative

 

2,372,970

 

1,946,393

 

Depreciation and amortization

 

1,456,665

 

800,951

 

 

 

 

 

 

 

Total operating expenses

 

3,829,635

 

2,747,344

 

 

 

 

 

 

 

Operating loss

 

(157,077

)

(828,950

)

 

 

 

 

 

 

Interest income (expense), net

 

(1,890,380

)

(382,167

)

Other income (expense)

 

292,956

 

-0-

 

Loss on disposition of property, plant and equipment

 

(303,974

)

-0-

 

 

 

 

 

 

 

Net income (loss) before extraordinary item

 

(2,058,475

)

(1,211,117

)

Extraordinary item – troubled debt restructuring loss

 

(6,918,309

)

-0-

 

Net income loss

 

(8,976,784

)

(1,211,117

)

 

 

 

 

 

 

Deemed dividends for preferred stock

 

-0-

 

(4,014,905

)

Dividends accreted for preferred stock

 

-0-

 

(65,000

)

Dividends accrued for preferred stock

 

-0-

 

(480,000

)

 

 

 

 

 

 

Net loss applicable to common shares

 

(8,976,784

)

(5,771,022

)

 

 

 

 

 

 

Basic and diluted loss per share from continuing  operations

 

(0.28

)

(0.51

)

 

 

 

 

 

 

Basic and diluted loss per share from extraordinary item

 

(0.96

)

-0-

 

 

 

 

 

 

 

Basic and diluted loss per common share

 

(1.24

)

(0.51

)

 

 

 

 

 

 

Basic and diluted average number of common shares  outstanding

 

7,226,808

 

11,307,930

 

 

See notes to consolidated financial statements.

 

**On Stage Entertainment, Inc. and Subsidiaries**

**Consolidated Statements of Cash Flows**

 

**Increase (Decrease) in Cash and Cash Equivalents**

 

 

 

**Nine months endedSeptember 30,**

 

 

 

**2000**

 

**2001**

 

 

 

**(Unaudited)**

 

**(Unaudited)**

 

Cash flows from operating activities

 

 

 

 

 

Net loss

 

(8,976,784

)

(1,211,117

)

Adjustments to reconcile net loss to net cash used in  operating activities:

 

 

 

 

 

Depreciation and amortization

 

1,456,665

 

800,951

 

Direct acquisition costs

 

597,328

 

-0-

 

Write off of debt financing costs

 

927,190

 

-0-

 

Write down of assets held for sale and subject to  foreclosure

 

6,918,309

 

-0-

 

Loss on disposal of property, plant and equipment

 

303,974

 

-0-

 

Amortization of beneficial conversion

 

-0-

 

79,667

 

Increase/decrease in -

 

 

 

 

 

Accounts receivable

 

606,039

 

(198,251

)

Inventory

 

47,158

 

(37,684

)

Deposits

 

(64,765

)

(81,298

)

Prepaid and other assets

 

(59,765

)

(158,274

)

Accounts payable and accrued expenses

 

(653,867

)

(1,295,467

)

Accrued payroll and other liabilities

 

57,337

 

655,315

 

Total adjustments

 

10,135,603

 

(235,041

)

 

 

 

 

 

 

Net cash provided by (used in) operating activities

 

1,158,819

 

(1,446,158

)

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

Proceeds from sale of assets

 

2,000,000

 

-0-

 

Advances on notes receivable from officer

 

(149,292

)

(173,811

)

Acquisition of show rights

 

-0-

 

(250,000

)

Capital expenditures

 

(107,770

)

(592,175

)

 

 

 

 

 

 

Net cash provided by (used in) investing activities

 

1,742,938

 

(1,015,986

)

 

 

 

 

 

 

Cash used in financing activities

 

 

 

 

 

Repayment on long term borrowing

 

(2,481,104

)

(473,500

)

Notes payable to officer

 

-0-

 

-0-

 

Cash received on notes payable to officer

 

21,371

 

-0-

 

Conversion of debentures

 

-0-

 

58,514

 

Proceeds received from convertible debentures

 

-0-

 

650,000

 

Proceeds from issuance of Series A preferred stock

 

-0-

 

6,700,000

 

Repayment of short term borrowing

 

-0-

 

(3,450,000

)

 

 

 

 

 

 

Net cash provided by (used in) financing activities

 

(2,459,733

)

3,485,014

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

442,024

 

1,022,870

 

Cash and cash equivalents at beginning of period

 

374,587

 

517,353

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

 

816,611

 

1,540,223

 

 

Seenotes to consolidated financial statements.

 

 

**Supplemental disclosure of cash flow information**

 

 

 

 

 

 

 

 

 

 

 

Cash paid during the period for –

 

 

 

 

 

 

 

 

** **

 

** **

Interest

 

10,380

 

302,558

 

 

 

 

 

 

 

Income  taxes

 

-0-

 

-0-

 

 

See notes to consolidated financial statements.

 

**SupplementalSchedule of Non-Cash Investing and Financing Activities**

 

The issuanceof $7,958,514 of SeriesA Convertible Preferred Stock resulted in a deemed dividend of $4,014,905.

 

Accretion ofdiscount and fees on Series A Convertible Preferred Stock of $65,000.

 

Accrueddividends of $480,000 on Series A Convertible Preferred Stock were recognized.

 

Issuance of$1,350,000 convertible debentures resulted in a beneficial conversion of$87,975.

 

Issuance ofshort-term note of $3,450,000 (and cash of $350,000) to acquire intangible showrights.

 
****
**On Stage Entertainment, Inc. and Subsidiaries**

**Consolidated Statements of Stockholders’ Equity****(Deficit)**

 

 

 

**Common Stock**

 

**Additional Paid in**

 

**Accumulated**

 

 

 

 

 

**Shares**

 

**Amount**

 

**Capital**

 

**Deficit**

 

**Total**

 

Balance, January 1, 2001

 

11,307,930

 

$

113,079

 

$

12,652,111

 

$

(14,992,734

)

$

(2,227,544

)

 

 

 

 

 

 

 

 

 

 

 

 

Deemed dividends recognized on Series A  Convertible Preferred Stock

 

-

 

-

 

2,812,800

 

(2,812,800

)

-

 

Accrued dividends on Series A Convertible  Preferred Stock

 

-

 

-

 

-

 

(30,000

)

(30,000

)

Beneficial conversion on Convertible Debentures

 

-

 

-

 

87,975

 

-

 

87,975

 

Net loss

 

-

 

-

 

-

 

(1,017,844

)

(1,017,844

)

 

 

 

 

 

 

 

 

 

 

 

 

Balance March 31, 2001

 

11,307,930

 

$

113,079

 

$

15,552,886

 

$

(18,853,378

)

$

(3,187,413

)

 

 

 

** **

 

** **

 

** **

 

** **

 

 

Deemed dividends recognized on Series A  Convertible Preferred Stock

 

-

 

-

 

202,105

 

(202,105

)

-

 

Accrued dividends on Series A Convertible  Preferred Stock

 

-

 

-

 

-

 

(192,000

)

(192,000

)

Dividends accreted on Series A Convertible  Preferred Stock

 

-

 

-

 

-

 

(32,500

)

(32,500

)

Net loss

 

-

 

-

 

-

 

(377,090

)

(377,090

)

 

 

 

 

 

 

 

 

 

 

 

 

Balance June 30, 2001

 

11,307,930

 

$

113,079

 

$

15,754,991

 

$

(19,657,073

)

$

(3,789,003

)

 

 

 

 

 

 

 

 

 

 

 

 

Deemed dividends recognized on Series A  Convertible Preferred Stock

 

-

 

-

 

1,000,000

 

(1,000,000

)

-

 

Accrued dividends on Series A Convertible  Preferred Stock

 

-

 

-

 

-

 

(258,000

)

(258,000

)

Dividends accreted on Series A Convertible  Preferred Stock

 

-

 

-

 

-

 

(32,500

)

(32,500

)

Net income (loss)

 

-

 

-

 

-

 

183,817

 

183,817

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance September 30, 2001

 

11,307,930

 

$

113,079

 

$

16,754,991

 

$

(20,763,756

)

$

(3,895,686

)

 

See notes toconsolidated financial statements.

 

**On StageEntertainment, Inc. and Subsidiaries**

**Notes to Consolidated FinancialStatements**

**September 30, 2001**

 

**Basis of Presentation**

 

The financial statements included in this report include the accountsof On Stage Entertainment, Inc., a publicly traded Nevada corporation and itssubsidiaries: Legends in Concert, Inc., a Nevada corporation; On StageMarketing, Inc., a Nevada corporation; On Stage Theaters, Inc., a Nevadacorporation; Wild Bill’s California, Inc., a Nevada corporation; On StageMerchandise, Inc., a Nevada corporation; On Stage Events, Inc., a Nevadacorporation; On Stage Casino Entertainment, Inc., a Nevada corporation; OnStage Productions, Inc., a Nevada corporation; On Stage Theaters North MyrtleBeach, Inc., a Nevada corporation; and On Stage Theaters Surfside Beach, Inc.

 

In the opinion of the management of On Stage Entertainment, Inc. andits subsidiaries, the accompanying unaudited consolidated financial statementsinclude all normal adjustments considered necessary to present fairly thefinancial position as of September 30, 2001, and the results of operations andcash flows for the nine months ended September 30, 2001 and 2000. Interimresults are not necessarily indicative of the results for the full year. Theconsolidated financial statements and notes are presented as permitted by Form10-QSB and should be read in conjunction with Management’s Discussion andAnalysis of Financial Condition and Results of Operations and the auditedconsolidated financial statements and notes included in our Form 10-KSB for thefiscal year ended December 31, 2000.

 

**(1)       PrivatePlacement**

 

During late 2000 and early 2001, OnStage raised  $700,000 and $650,000,respectively, from accredited private investors to assist with meeting itscapital requirements, paying for expenses associated with its restructuring,and making deposits for the acquisition of Country Tonite and the livelicensing rights for Ripley’s. This private placement was issued in the form ofconvertible debentures, which accrue interest at the rate of ten percent (10%)per annum and feature a conversion rate of $0.79.  The market price of the stock in relation to the conversion priceof these convertible debentures created a beneficial conversion amount of$87,975, which is amortized over two years. The maturity dates for  $700,000 of the convertible debentures areNovember and December 2001, and the maturity dates for  $650,000 of the convertible debentures areJanuary and February 2003.

 

On Stage offered the holders of thedebentures convertible into common stock the choice to either (a) maintain theoriginal agreement with respect to the notes, or (b) exchange the debentureswith Series A Preferred Stock which contains the right to convert the preferredstock into common stock at $0.50 per share, and receive preferential dividends,payable quarterly in arrears at a rate of 12% annum, until conversion.  On June 1, 2001, $1,200,000 of the$1,350,000 in convertible debentures were exchanged for Series A PreferredStock.  The market price of the commonstock on the day of the transaction in relation to the conversion price of thepreferred stock resulted in a deemed dividend of $202,105.

 

**(2)       Acquisitionof Country Tonite**

 

In February 2001, On Stage acquired substantially all the assets of CRCof Branson, Inc. and Country Tonite Enterprises, Inc., which primarilyconsisted of all of their rights and title in and to Country Tonite, for apurchase price of $3,800,000.  Theassets acquired were transferred to Country Tonite Branson, LLC, a wholly-ownedsubsidiary of On Stage.  Country Toniteis an award-winning theatrical production, which has been presented in Branson,Missouri and Pigeon Forge, Tennessee.

 

The terms of the agreement called for initial payments of $100,000 onNovember 21, 2000, $250,000 on January 29, 2001, $150,000 on February 15, 2001and $500,000 on March 15, 2001, with the balance of $2,800,000 due on July 31,2001, with interest at ten percent (10%) payable monthly.  On Stage took over management of the show inBranson, Missouri in March 2001. On August 2, 2001, On Stage satisfied, infull, its 10% interest bearing note payable by remitting cash payments totaling$2,800,000, plus accrued and unpaid interest.

 

On Stage also acquired the right to oversee the Country Toniteproduction in Pigeon Forge, Tennessee for quality control purposes.  However, the rights to present the PigeonForge show were previously licensed to an unrelated third party and were notincluded in this acquisition.

 

The acquisition has been accounted for as a purchase and, accordingly,the operating results of Country Tonite have been included in our consolidatedfinancial statements since the date of acquisition. The show rights acquired(approximately $3,764,000) are being amortized on a straight-line basis over 15years.

 

The following unaudited pro formaconsolidated results of operations for the nine months ended September 30, 2000and 2001 assume the acquisition occurred as of January 1, 2000:

 

 

 

**Quarter ended**

 

**Quarter ended**

 

 

 

**September 30, 2001**

 

**September 30, 2000**

 

Net revenues

 

$

7,322,046

 

$

8,195,664

 

Net income (loss)  from continuing operations

 

58,805

 

(8,548,923

)

Loss per common  share:

 

 

 

 

 

Basic and  diluted

 

(0.12

)

(1.15

)

 

 

 

**Nine months ended**

 

**Nine  months ended**

 

 

 

**September 30, 2001**

 

**September 30, 2000**

 

Net revenues

 

$

17,818,257

 

$

23,616,835

 

Net loss from  continuing operations

 

(1,377,949

)

(8,465,872

)

Loss per common  share:

 

 

 

 

 

Basic and  diluted

 

(0.53

)

(1.16

)

 

Country Tonite had no revenue for themonths of January 2000 and 2001, as the show was closed during the off-seasonmonth.

 

**(3)       ConvertiblePreferred Stock**

 

On February 28, 2001, On Stage entered into an agreement withMcCown De Leeuw & Co., Inc., a private equity investment firm("MDC"), pursuant to which MDC agreed to invest up to $20,000,000 inOn Stage in the form of convertible preferred securities.  According to the terms of the MDCinvestment, MDC will have an opportunity to stage its funding in four separateinvestments of $6.0 million, $4.0 million, $5.0 million, and $5.0 million,respectively.  The second and third tranchesof the investment are in the form of warrants exercisable during the next ten(10) years at the option of On Stage, contingent on, among other things, itsachieving certain EBITDA levels.   Thefourth tranche is exercisable by On Stage during the next ten (10) years onlyafter funding of the third tranche.  Theconvertible preferred securities bear dividends at the rate of twelve percent(12%) per annum (10% cash plus 2% paid in kind), carry a liquidation preferenceof $5.00 per share, and are convertible into common stock of On Stage at aconversion price of $0.50 or $0.75 per share, depending on certainfactors.  A change in control provisioncould under certain circumstances require the redemption of the preferredstock.

 

The first $6,000,000 investment was made on March 13, 2001, with theissuance of 1,200,000 shares of Series A Convertible Preferred Stock with aface value of $6,000,000 which was issued at a 5% discount of the facevalue.  In connection with thetransaction, the Company agreed to reimburse MDC for fees and expenses incurredwith the transaction, in the amount of $500,000, and agreed to pay MDC atransaction fee of $500,000.  These feeswere deducted from the gross proceeds of the first investment funding resultingin net proceeds from the Series A Convertible Preferred Stock of$4,700,000.  For accounting purposes,the fees and expenses are being accreted over a 10 year period of time and willresult in the Series A Convertible Preferred Stock accreting to its liquidationvalue. The conversion terms of the Series A Convertible Preferred Stockresulted in a deemed dividend of $2,812,800.

 

On March 13, 2001, On Stage entered into an advisory services agreementwith MDC. On Stage agreed to pay MDC a fee of $250,000 for services rendered throughMarch 30, 2002, and thereafter, a fee for each fiscal quarter equal to thegreater of $62,500 or one-fourth of one percent (0.25%) of On Stage’s grossrevenues reported for the four most recent fiscal quarters then ended.  In no event shall the fee exceed $95,000 forany one fiscal quarter.  This agreementexpires on March 13, 2006.

 

On August 1, 2001, MDC funded its second investment in On Stage byexercising warrants (per the terms of the prior MDC investment) for 400,000shares of Series A Convertible Preferred Stock in the amount of$2,000,000.  The conversion terms of theSeries A Convertible Preferred Stock resulted in a deemed dividend of$1,000,000.  At the time, On Stage’sfinancial performance failed to meet the minimum EBITDA thresholds set forth inthe agreement as a condition to MDC’s obligation to fund the secondinvestment.   However, MDC agreed toconsummate the funding on the condition that MDC receive a warrant to purchasean additional 400,000 shares of On Stage’s Series A  Convertible Stock at an exercise price of $0.00001 exercisablefor a 10-year period.  The warrant mayonly be exercised if On Stage fails to meet its cumulative EBITDA targets forthe 2002 and 2003 calendar years.  Thus,MDC’s $2,000,000 investment will be convertible into either 4,000,000 commonshares, or, if On Stage fails to achieve certain EBITDA targets, 8,000,000common shares.  On Stage used theinvestment to fund the last $2,800,000 payment for the acquisition of CountryTonite due on July 31, 2001.

 

**(4)       OsmondFamily Theater**

 

In March 2001, On Stage entered into a 33-month lease with OFT, LTD, tolease the Osmond Family Theater in Branson, Missouri beginning on April 1, 2001and continuing through December 31, 2003. The annual rental is $400,000, payable in monthly installments ofapproximately $33,333.

 

**(5)       Lossper share**

 

Statement of Financial Accounting Standard No.128, Earnings per Share, provides for the calculation of Basic and Dilutedearnings per share. Basic earnings per share includes no dilution and iscomputed by dividing income available to common shareholders by the weightedaverage number of common shares outstanding for the period. Diluted earningsper share reflect the potential dilution of securities that could share in theearnings of the entity, similar to fully diluted earnings per share.

 

For the nine months endedSeptember 30, 2000, potential dilutive securities representing 1,224,850outstanding stock options and 3,660,155 outstanding warrants are not included,since their effect would be anti-dilutive. For the nine months ended September30, 2001, potential dilutive securities representing 1,464,850 outstandingstock options and 4,410,155 outstanding common stock warrants and 1,852,632shares of preferred stock, which are convertible into 18,526,326 of commonshares, are not included, since their effect would be anti-dilutive.  Furthermore, On Stage has preferred stockwarrants which convert into 13,600,000 shares of preferred stock which furtherconvert into 27,200,000 shares of common stock contingent upon On Stageachieving certain EBITDA levels.  Thesepotential dilutive securities are not included, since their effect would beanti-dilutive.

 

(**6)       Segmentinformation**

 

The following information is presented in accordance with SFAS No. 131.

 

On Stage derives its net revenues from five business units categorizedby three reportable segments:

 

•      Casinos.  The Casinos segment primarily sells live theatrical productionsto casinos for fixed fees.  The Casinossegment operates the Legends show at the Imperial Palace in Las Vegas, Nevada,and at Bally’s Park Place in Atlantic City, New Jersey.

•      Production Services.  The Production Services segment sellstechnical equipment and services to commercial clients.  However, the Production Services segment’sprimary focus is to provide technical support for all of the Casinos, Theaters,Events and Merchandise segments.

 

•      Theaters.  The Theaters segment rents live theaters and dinner theaters inurban and resort tourist locations.  TheTheaters segment derives revenues from the sale of tickets along with food andbeverages to patrons who attend the live theatrical productions.

•      Events.  The Events segment sells live theatrical productions tocommercial clients, which include corporations, theme and amusement parks andcruise lines for fixed fees.  Revenuesgenerated from the Events segment are included in the Casinos segment.

•      Merchandise.  The Merchandise segment sells merchandiseand souvenir photography products to patrons who attend the Casinos, Theaters,and Events productions.  Revenuesgenerated from the merchandise segment are included in the Theaters segment.

 

In addition to these five business units, On Stage reports corporateoverhead costs through a separate segment, On Stage Entertainment (“OSE”).

 

The accounting policies of the reportable operating segments are thesame as those described in the Summary of Accounting Policies contained in theAnnual Report on Form 10-KSB for the fiscal year ended December 31, 2001.  On Stage’s management evaluates theperformance of its operating segments based upon the profit or loss fromoperations.

 

On Stage's reportable segments are strategic business units becauseeach business unit services a different market or performs a specializedfunction in support of a given market.

 

The following table sets forth the segment profit (loss) and assetinformation:

 

 

 

**For the quarter ended September 30, 2000**

 

 

 

**Casino**

 

**ProductionServices**

 

**Theaters**

 

**OSE**

 

**Total Consolidated**

 

Revenues from external  customers

 

$

2,347,545

 

$

3,643

 

$

4,042,183

 

$

-0-

 

$

6,393,371

 

Interest expense

 

(194

)

-0-

 

(51,704

)

84,549

 

32,651

 

Depreciation and amortization

 

99,219

 

28,129

 

78,509

 

48,986

 

254,843

 

Segment profit (loss)

 

291,490

 

(227,724

)

179,512

 

(325,431

)

(82,153

)

Segment fixed assets

 

3,169,863

 

922,744

 

8,675,413

 

1,822,567

 

14,590,587

 

Additions to long-lived assets

 

10,789

 

532

 

5,819

 

12,637

 

29,777

 

 

 

 

 

**For the quarter ended September 30, 2001**

 

 

 

**Casino**

 

**ProductionServices**

 

**Theaters**

 

**OSE**

 

**Total Consolidated**

 

Revenues from external  customers

 

$

1,832,690

 

$

2,900

 

$

5,486,456

 

$

-0-

 

$

7,322,046

 

Interest expense

 

106

 

-0-

 

32,734

 

8,942

 

41,782

 

Depreciation and amortization

 

79,315

 

18,632

 

126,506

 

31,699

 

256,152

 

Segment profit (loss)

 

548,895

 

(233,456

)

632,132

 

(763,754

)

183,817

 

Segment fixed assets

 

2,966,584

 

938,759

 

1,722,259

 

1,149,994

 

6,777,596

 

Additions (deletions/transfers)  to long-lived assets

 

(36,159

)

75,726

 

77,597

 

15,899

 

133,063

 

 

 

 

 

**For the nine months ended September 30, 2000**

 

 

 

**Casino**

 

**ProductionServices**

 

**Theaters**

 

**OSE**

 

**Total Consolidated**

 

Revenues from external  customers

 

$

7,307,227

 

$

27,718

 

$

12,315,673

 

$

-0-

 

$

19,650,618

 

Interest expense

 

1,834

 

-0-

 

1,757,811

 

130,735

 

1,890,380

 

Depreciation and amortization

 

299,276

 

82,275

 

320,383

 

754,731

 

1,456,665

 

Segment profit (loss)

 

1,599,911

 

(640,241

)

(8,119,537

)

(1,816,917

)

(8,976,784

)

Segment fixed assets

 

3,169,863

 

922,744

 

8,675,413

 

1,822,567

 

14,590,587

 

Additions to long-lived assets

 

18,853

 

14,503

 

54,549

 

19,865

 

107,770

 

 

 

 

 

**For the nine months ended September 30, 2001**

 

 

 

**Casino**

 

**ProductionServices**

 

**Theaters**

 

**OSE**

 

**Total Consolidated**

 

Revenues from external  customers

 

$

5,381,743

 

$

7,120

 

$

12,429,394

 

$

-0-

 

$

17,818,257

 

Interest expense

 

1,115

 

-0-

 

171,456

 

209,596

 

382,167

 

Depreciation and amortization

 

278,013

 

75,216

 

316,234

 

131,488

 

800,951

 

Segment profit (loss)

 

1,608,895

 

(751,576

)

56,839

 

(2,125,275

)

(1,211,117

)

Segment fixed assets

 

2,966,584

 

938,759

 

1,722,259

 

1,149,994

 

6,777,596

 

Additions (deletions/transfers) to long-lived assets

 

(1,139

)

82,625

 

441,072

 

69,617

 

592,175

 

 

**(7)       Impact ofTerrorist Activities**

 

On Stage’s business depends on the free flow of products and servicesthrough the channels of commerce. Recently, in response to terrorists’ activities and threats aimed at theUnited States, transportation, mail, financial and other services have beenslowed or stopped altogether. Further delays or stoppages in transportation,mail, financial or other services could have a material adverse effect on ourbusiness, results of operations and financial condition.  Furthermore, we may experience an increasein operating costs, such as costs for transportation, insurance and security asa result of the activities and potential activities.  We may also experience delays in receiving payments from payersthat have been affected by the terrorist activities and potential activities.  The United States economy in general, andtourism-dependent businesses in particular, are being adversely affected by theterrorist activities and potential activities and any economic downturn couldadversely impact our results of operations, impair our ability to raise capitalor otherwise adversely affect our business.

 

**(8)       New AccountingPronouncements**

 

In June 2001, the Financial Accounting Standards Board (the"FASB") finalized FASB Statements No. 141, *Business Combinations* (SFAS141)*,*and No. 142, *Goodwill and Other Intangible Assets* (SFAS 142)*.*SFAS141 requires the use of the purchase method of accounting and prohibits the useof the pooling-of-interests method of accounting for business combinationsinitiated after June 30, 2001. SFAS 141 also requires that On Stage recognizeacquired intangible assets apart from goodwill if the acquired intangibleassets meet certain criteria. SFAS 141 applies to all business combinationsinitiated after June 30, 2001 and for purchase business combinations completedon or after July 1, 2001. It also requires, upon adoption of SFAS 142, that OnStage reclassify the carrying amounts of intangible assets and goodwill basedon the criteria in SFAS 141.

 

SFAS 142 requires, among other things, that companies no longeramortize goodwill, but instead test goodwill for impairment at least annually.In addition, SFAS 142 requires that On Stage identify reporting units for thepurposes of assessing potential future impairments of goodwill, reassess theuseful lives of other existing recognized intangible assets, and ceaseamortization of intangible assets with an indefinite useful life. An intangibleasset with an indefinite useful life should be tested for impairment inaccordance with the guidance in SFAS 142. SFAS 142 is required to be applied infiscal years beginning after December 15, 2001 to all goodwill and otherintangible assets recognized at that date, regardless of when those assets wereinitially recognized. SFAS 142 requires On Stage to complete a transitional goodwillimpairment test six months from the date of adoption. On Stage is also requiredto reassess the useful lives of other intangible assets within the firstinterim quarter after adoption of SFAS 142.

 

On Stage’s previous business combinations were accounted for using thepurchase method. As of September 30, 2001, the net carrying amount of showrights is $3,617,364. Amortization expense during the nine-month period endedSeptember 30, 2001 was $146,367. Currently, On Stage is assessing but has not yetdetermined how the adoption of SFAS 141 and SFAS 142 will impact its financialposition and results of operations.

 

In August 2001, the FASB issued SFAS No. 143, *Accounting for Asset RetirementObligations*.  SFAS No. 143requires the fair value of a liability for an asset retirement obligation to berecognized in the period in which it is incurred if a reasonable estimate offair value can be made.  The associatedasset retirement costs are capitalized as part of the carrying amount of thelong-lived asset.  SFAS No. 143 iseffective for fiscal years beginning after June 15, 2002.  On Stage believes the adoption of thisStatement will have no material impact on its financial statements.

 

In October 2001, the FASB issued SFAS No. 144*, Accounting for the Impairment orDisposal of Long-Lived Assets*. SFAS No. 144 requires that those long-lived assets be measured at thelower of carrying amount or fair value less cost to sell, whether reported incontinuing operations or in discontinued operations. Therefore, discontinuedoperations will no longer be measured at net realizable value or includeamounts for operating losses that have not yet occurred. SFAS No. 144 iseffective for financial statements issued for fiscal years beginning afterDecember 15, 2001, and, generally, are to be applied prospectively.  On Stage believes the adoption of thisStatement will have no material impact on its financial statements.

 

**(9)       Loan toChairman and Founder**

 

On March 30, 2001, the Board of Directors authorized On Stage to makean advance of $150,000 to John W. Stuart, its Chairman and founder, which is tobe repaid within two years, bears interest at the rate of 12% per annum and isevidenced by a promissory note in favor of On Stage.  In consideration for this loan, Mr. Stuart agreed to use thefunds to regain certain shares of his stock in On Stage, which he previouslypledged in connection with a margin loss. Once the shares were regained, theywere delivered to On Stage as additional security for the repayment of the advance.In further consideration for the advance, Mr. Stuart entered into apost-employment non-compete agreement in favor of On Stage.

 

**(10)    Option Pool**

 

At the Stockholders’ Annual Meeting on March 30, 2001, the stockholdersapproved a 2,500,000 increase to the option pool, which options are to beissued at the discretion of the Board of Directors as an incentive tomanagement, employees and Board members.

 

**(11)    Chief FinancialOfficer**

 

On May 1, 2001, On Stage hired Margaret Ann Freman to serve as OnStage’s Senior Vice President and Chief Financial Officer, effective May 21,2001.  Her compensation package includesan annual base salary of $135,000, and an agreement for options to purchase150,000 shares of On Stage’s common stock at an exercise price of $0.58.

 

**(12)    CompensationCommittee**

 

At the Special Meeting ofthe Board of Directors held March 30, 2001, the Board elected Robert Hellman toserve as the Chairman of the compensation committee, with Greg McIntosh andChris Frigon serving as additional members. The compensation committee held itsfirst meeting at the special board meeting on March 30, 2001, and approved anincrease in the salary of Timothy J. Parrott, President and Chief ExecutiveOfficer, from $120,000 per annum to $250,000, effective April 1, 2001 and aone-year employment contract for Jeffrey Victor, Executive Vice President andChief Operating Officer.

 

**Item2. Management’s Discussion and Analysis of Financial Condition and Results ofOperations**

 

This document contains certain forward-looking statements that aresubject to risks and uncertainties. Forward-looking statements include certaininformation relating to potential new show openings, the potential markets forOn Stage's productions, the expansion of existing and potential gaming andtourist markets, exposure to various trends in the gaming industry, acquisitionplans and the benefits anticipated from these acquisitions, business strategy,outstanding litigation matters and the available defenses, the seasonality ofits business, and liquidity issues, as well as information contained elsewherein this report where current statements are preceded by, followed by or includethe words "believes," "expects," "anticipates" orsimilar expressions.  For thesestatements, On Stage claims the protection of the safe harbor forforward-looking statements contained in the Private Securities LitigationReform Act of 1995. The forward-looking statements in this document are subjectto risks and uncertainties that could cause the assumptions underlying theforward-looking statements and the actual results to differ materially fromthose expressed in or implied by the statements.

 

The most important factors that could prevent On Stage from achievingits goals and cause the assumptions underlying the forward-looking statementsand the actual results to differ materially from those expressed in or impliedby those forward-looking statements include the information provided under theheading "Description of Business-Risk Factors" in Item 1 of itsAnnual Report on Form 10-KSB for the year ended December 31, 2000, as well asthe following:

 

•      The dependence on its flagship Legends inConcert production and its principal production venues;

•      The ability to successfully produce andmarket new productions and to manage the growth associated with the any newproductions;

•      Risks associated with its acquisitionstrategy, including its ability to successfully identify, complete andintegrate strategic acquisitions;

•      The ability to meet its commitments,obtain alternative and additional financing on commercially reasonable terms;

•      The competitive nature of the leisure andentertainment industry and the ability to continue to distinguish its services;

•      Fluctuations in quarterly operatingresults and the highly seasonal nature of its business;

•      The ability to reproduce the performance,likeness and voice of various celebrities without infringing on the publicityrights of those celebrities or their estates, as well as its ability to protectits intellectual property rights;

•      The ability to avoid future litigation;and

•      The results of operations which depend onnumerous factors, including the commencement and expiration of contracts, thetiming and amount of new business generated by On Stage, its revenue mix, thetiming and level of additional selling, general and administrative expense andthe general competitive conditions in the leisure and entertainment industry aswell as the overall economy.

**Results of Operations**

 

The following tables set forth the results of operationsfor the reportable segments indicated:

 

 

 

**For  the quarter ended September 30, 2000**

 

 

 

 

 

 

**Casino**

 

**ProductionServices**

 

**Theaters**

 

**OSE**

 

**Total Consolidated**

 

Net revenues

 

2,347,545

 

3,643

 

4,042,183

 

-0-

 

6,393,371

 

Cost of revenues

 

1,844,086

 

203,238

 

3,038,770

 

-0-

 

5,086,094

 

Gross profit (loss)

 

503,459

 

(199,595

)

1,003,413

 

-0-

 

1,307,277

 

Selling, general and administrative

 

90,880

 

-0-

 

464,451

 

484,852

 

1,040,183

 

Depreciation and amortization

 

99,219

 

28,129

 

78,509

 

48,986

 

254,843

 

Operating income (loss)

 

313,360

 

(227,724

)

460,453

 

(533,838

)

12,251

 

Interest income (expense), net

 

194

 

-0-

 

51,704

 

(84,549

)

(32,651

)

Loss on disposal of fixed assets

 

(22,064

)

-0-

 

(276,054

)

-0-

 

(298,118

)

Other income (expense)

 

-0-

 

-0-

 

-0-

 

292,956

 

292,956

 

Net income (loss) before extraordinary item

 

291,490

 

(227,724

)

236,103

 

(325,431

)

(25,562

)

Extraordinary item – troubled debt restructuring loss

 

-0-

 

-0-

 

(56,591

)

-0-

 

(56,591

)

Net income (loss)

 

291,490

 

(227,724

)

179,512

 

(325,431

)

(82,153

)

 

 

 

 

 

**For  the quarter ended September 30, 2000**

 

 

 

 

**Casino**

 

**ProductionServices**

 

**Theaters**

 

**OSE**

 

**Total Consolidated**

 

Net revenues

 

1,832,690

 

2,900

 

5,486,456

 

-0-

 

7,322,046

 

Cost of revenues

 

1,176,465

 

217,724

 

4,694,870

 

-0-

 

6,089,059

 

Gross profit (loss)

 

656,225

 

(214,824

)

791,586

 

-0-

 

1,232,987

 

Selling, general and administrative

 

27,909

 

-0-

 

214

 

723,113

 

751,236

 

Depreciation and amortization

 

79,315

 

18,632

 

126,506

 

31,699

 

256,152

 

Operating income (loss)

 

549,001

 

(233,456

)

664,866

 

(754,812

)

225,599

 

Interest income (expense), net

 

(106

)

-0-

 

(32,734

)

(8,942

)

(41,782

)

Net income (loss)

 

548,895

 

(233,456

)

632,132

 

(763,754

)

183,817

 

 

 

 

 

**For  the quarter ended September 30, 2000**

 

 

 

 

**Casino**

 

**ProductionServices**

 

**Theaters**

 

**OSE**

 

**Total Consolidated**

 

Net revenues

 

7,307,227

 

27,718

 

12,315,673

 

-0-

 

19,650,618

 

Cost of revenues

 

5,051,374

 

585,684

 

10,341,002

 

-0-

 

15,978,060

 

Gross profit (loss)

 

2,255,853

 

(557,966

)

1,974,671

 

-0-

 

3,672,558

 

Selling, general and administrative

 

332,768

 

-0-

 

815,795

 

1,224,407

 

2,372,970

 

Depreciation and amortization

 

299,276

 

82,275

 

320,383

 

754,731

 

1,456,665

 

Operating income (loss)

 

1,623,809

 

(640,241

)

838,493

 

(1,979,138

)

(157,077

)

Interest income (expense), net

 

(1,834

)

-0-

 

(1,757,811

)

(130,735

)

(1,890,380

)

Loss on disposal of fixed assets

 

(22,064

)

-0-

 

(281,910

)

-0-

 

(303,974

)

Other income (expense)

 

-0-

 

-0-

 

-0-

 

292,956

 

292,956

 

Net income (loss) before extraordinary item

 

1,599,911

 

(640,241

)

(1,201,228

)

(1,816,917

)

(2,058,475

)

Extraordinary item – troubled debt restructuring loss

 

-0-

 

-0-

 

(6,918,309

)

-0-

 

(6,918,309

)

Net income (loss)

 

1,599,911

 

(640,241

)

(8,119,537

)

(1,816,917

)

(8,976,784

)

 

 

 

 

**For  the quarter ended September 30, 2000**

 

 

 

 

 

**Casino**

 

**ProductionServices**

 

**Theaters**

 

**OSE**

 

**Total Consolidated**

 

Net revenues

 

5,381,743

 

7,120

 

12,429,394

 

-0-

 

17,818,257

 

Cost of revenues

 

3,398,130

 

683,480

 

11,818,253

 

-0-

 

15,899,863

 

Gross profit (loss)

 

1,983,613

 

(676,360

)

611,141

 

-0-

 

1,918,394

 

Selling, general and administrative

 

95,590

 

-0-

 

66,612

 

1,784,191

 

1,946,393

 

Depreciation and amortization

 

278,013

 

75,216

 

316,234

 

131,488

 

800,951

 

Operating income (loss)

 

1,610,010

 

(751,576

)

228,295

 

(1,915,679

)

(828,950

)

Interest income (expense), net

 

(1,115

)

-0-

 

(171,456

)

(209,596

)

(382,167

)

Net income (loss)

 

1,608,895

 

(751,576

)

56,839

 

(2,125,275

)

(1,211,117

)

 

**Quarter Ended September 30, 2000 versus Quarter EndedSeptember 30, 2001**

 

***Net Revenues***. Revenues were approximately $7,322,000for the quarter ended September 30, 2001 compared to  $6,393,000 for the quarter ended September 30, 2000, an increaseof $929,000, or 14.5%. Revenues are derived from five principal operatingsegments: Casinos, Events, Merchandise, Production Services, and Theaters.Revenues from Events are included in the Casinos segment, and revenues from Merchandiseare included in the Theaters segment.

 

Casino revenues were approximately $1,833,000 for the quarter endedSeptember 30, 2001 compared to $2,348,000 for the quarter ended September 30, 2000, a decrease of$515,000, or 21.9%. This decrease in revenues was primarily attributable to adecrease in limited engagements and corporate events for the quarter ascompared to last year.

 

Production Services revenues were approximately $2,900 for the quarterended September 30, 2001 compared to $3,600 for the quarter ended September 30,2000, a decrease of $700, or 19.4%. The decrease was primarily attributable toa reduction in equipment rental revenues.

 

Theaterrevenues were approximately $5,486,000 for the quarter ended September 30, 2001compared to  $4,042,000 for the quarterended September 30, 2000, an increase of $1,444,000, or 35.7%.  The increase was primarily attributable tothe new shows, Country Tonite and Ripley’s, opening in Branson, Missouri, andpartially offset by the discontinuation of the shows in Orlando, Florida. 

***Costs of Revenues***.Total costs of revenues were $6,089,000 for the quarter ended September 30,2001 compared to $5,086,000 for the quarter ended September 30, 2000, anincrease of  $1,003,000, or 19.7%. Costsof revenues increased to 83.2% of net revenues for the quarter ended September30, 2001, as compared to 79.6% for the quarter ended September 30, 2000. Thisincrease in costs of revenues as a percentage of revenues was primarilyattributable to the discontinuation of the shows in Orlando, Florida (which ranin 2000 but not in 2001), and the inclusion of Country Tonite operations.

 
******
***Selling, General andAdministrative****.* Selling, general and administrativecosts were approximately $751,000 for the quarter ended September 30, 2001 ascompared to $1,040,000 for the quarter ended September 30, 2000, a decrease of$289,000, or 27.7%. Selling, general and administrative costs decreased to10.2% of revenues for the quarter ended September 30, 2001, as compared to16.3% for the quarter ended September 30, 2000.

 

***Depreciation and Amortization***. Depreciation and amortization for thequarter ended September 30, 2001 increased slightly by $1,000, or less than 1%,as compared to the quarter ended September 30, 2000.

 

***Operating Income (Loss)****.* Operating income was approximately $226,000 for the quarter endedSeptember 30, 2001 compared to operating income of $12,000 for the quarterended September 30, 2000, an increase in operating income of $214,000.  The increase was primarily attributable toan increase in operating income at Branson Legends and limited engagements forthe quarter.

 

***Interest Expense, Net***. Interest expense for the quarter endedSeptember 30, 2001 increased by $9,000, as compared to the quarter endedSeptember 30, 2000.

 

***Income Taxes***. At September 30, 2001,On Stage had federal net operating loss carryforwards of approximately$19,202,889. Under Section 382 of the Internal Revenue Code, certainsignificant changes in ownership that On Stage is currently undertaking mayrestrict the future utilization of these tax loss carryforwards.  Because On Stage cannot determine that it ismore likely than not to recognize the deferred tax assets, they have provided afull valuation allowance on the deferred tax assets.

 

***Nine Months Ended September 30, 2000 versus Nine MonthsEnded September 30, 2001***

 

***Net Revenues***. Revenues were approximately $17,818,000for the nine months ended September 30, 2001 compared to $19,651,000 for thenine months ended September 30, 2000, a decrease of $1,833,000, or 9.3%.Revenues are derived from five principal operating segments: Casinos, Events,Merchandise, Production Services, and Theaters. Revenues from Events areincluded in the Casinos segment, and revenues from Merchandise are included inthe Theaters segment.

 

Casino revenues were approximately $5,382,000 for the nine months endedSeptember 30, 2001 compared to $7,307,000 for the nine months ended September 30, 2000, a decrease of$1,925,000, or 26.3%. This decrease was primarily attributable to a decrease inlimited engagements and corporate events.

 

Production Services revenues were approximately $7,000 for the ninemonths ended September 30, 2001 compared to $28,000 for the nine months endedSeptember 30, 2000, a decrease of $21,000, or 75.0%. The decrease was primarilyattributable to a reduction in equipment rental revenues.

 

Theaterrevenues were approximately $12,429,000 for the nine months ended September 30,2001 compared to  $12,316,000 for thenine months ended September 30, 2000, an increase of $113,000, or less than 1%.

 

***Costs of Revenues***.Total costs of revenues were $15,900,000 for the nine months ended September30, 2001 compared to $15,978,000 for the nine months ended September 30, 2000,a decrease of  $78,000, or less than 1%.Costs of revenues increased to 89.2% of net revenues for the nine months endedSeptember 30, 2001, as compared to 81.3% for the nine months ended September30, 2000. This increase in costs of revenues as a percentage of revenues wasprimarily attributable to the seasonality of the business, the discontinuationof the shows in Orlando, Florida (which ran in 2000 but not in 2001), and theinclusion of Country Tonite operations.

 

***Selling, General andAdministrative****.* Selling, general and administrativecosts were approximately $1,946,000 for the nine months ended September 30,2001 as compared to $2,373,000 for the nine months ended September 30, 2000, adecrease of $427,000, or 17.9%. Selling, general and administrative costsdecreased to 10.9% of net revenues for the nine months ended September 30, 2001as compared to 12.1% for the nine months ended September 30, 2000.

 

***Depreciation and Amortization***. Depreciation and amortization for thenine months ended September 30, 2001 decreased by $656,000, or 45.0%, ascompared to the nine months ended September 30, 2000. The decrease wasprimarily due to the discontinuation of On Stage’s shows in Orlando, Floridaand related foreclosures of certain assets.

 

***Operating Loss****.* Operating loss was approximately $829,000 for the nine months endedSeptember 30, 2001 compared to an operating loss of  $157,000 for the nine months ended September 30, 2000, anincrease of $672,000, or 428%.  Theincrease in operating loss was primarily attributable to a decrease in limitedengagements and corporate events.

 

***Interest Expense, Net***. Interest expense for the nine monthsended September 30, 2001 decreased by $1,508,000, as compared to the ninemonths ended September 30, 2000. The decrease was primarily due to therestructuring of the outstanding debts with Imperial Credit Commercial MortgageInvestment Corp. (“ICCMIC”) and First Security Bank.

 

***Income Taxes. ***AtSeptember 30, 2001, On Stage had federal net operating loss carryforwards ofapproximately $19,202,889. Under Section 382 of the Internal Revenue Code,certain significant changes in ownership that On Stage is currently undertakingmay restrict the future utilization of these tax loss carryforwards.  Because On Stage cannot determine that it ismore likely than not to recognize the deferred tax assets, they have provided afull valuation allowance on the deferred tax assets.

 

**Seasonalityand Quarterly Results**

 

On Stage’s business has been, and is expected to remain, highlyseasonal, with the majority of its revenue being generated during the months ofApril through October. Part of its business strategy is to increase sales intourist markets that experience their peak seasons from November through March,so as to offset this seasonality in revenues.

 

The following table sets forth On Stage’s net revenue for each of thelast seven quarters ended September 30, 2001:

 

 

 

**Net Revenues  ($ in thousands)**

 

 

 

 

 

 

 

 

 

 

 

 

 

**March 31,**

 

**June 30,**

 

**September 30,**

 

**December 31,**

 

Fiscal 2000

 

$

6,106

 

$

7,151

 

$

6,393

 

$

4,487

 

Fiscal 2001

 

$

4,026

 

$

6,470

 

$

7,322 

 

 

 

 

**Liquidityand Capital Resources**
* **General*
On Stage hashistorically met its working capital requirements through a combination of cashflow from operations, equity and debt offerings and traditional bank financing.On Stage’s financial projections for the fiscal years ending December 31, 2001,2002 and 2003, forecast that it will have net operating profits.  To ensure this result, On Stage has takensignificant cost-cutting measures, including a reduction in staff to cutoverhead by approximately $425,000 per year, elimination of unnecessarywarehouse space for an annual savings of approximately $35,000, and othermeasures that amount to approximately $150,000 annually.  As such, On Stage anticipates, based on itsproposed plans and assumptions relating to its operations, that its currentcash and cash equivalent balances, and anticipated revenue from operations, aresufficient to fund its ongoing operations.

 
**Cash Flow**
For the nine months ended September 30, 2000, On Stage had net cashprovided by operations of approximately $1,159,000.  As of September 30, 2000, On Stage had approximately $817,000 incash and cash equivalents.  The cashprovided by operations was primarily attributable to the write down of assetsand write off of debt financing costs, offset by the net loss for the period.

 

For the nine months ended September 30, 2001, On Stage had net cashused in operations of approximately $1,446,000. As of September 30, 2001, OnStage had approximately $1,540,000 in cash and cash equivalents.  The cash used in operations for the ninemonths ended September 30, 2001 was primarily attributable to the decrease ofaccounts payable and accrued expenses.

 

The net cash provided by investing activities for the nine months endedSeptember 30, 2000 of approximately $1,743,000 was primarily attributable tothe proceeds from the sales of assets. The net cash used in investingactivities for the nine months ended September 30, 2001, of $1,016,000, wasprimarily attributable to capital expenditures, in addition to the acquisitionof show rights.

 

Net cash used in financing activities for the nine months endedSeptember 30, 2000 of approximately $2,460,000 was primarily attributable torepayment of line of credit and long-term debt.  Net cash provided by financing activities for the nine monthsended September 30, 2001 of approximately $3,485,000, was primarilyattributable to the proceeds from the issuance of convertible debentures andSeries A Convertible Preferred Stock, partially offset by the repayment on short-termborrowings.

 
***Working Capital***
At September 30, 2000, On Stage had a working capital deficit ofapproximately $17,048,000 which resulted primarily from the reclassification ofthe ICCMIC mortgage loan to current liabilities.  At September 30, 2001 On Stage had a working capital deficit ofapproximately $186,000 which resulted primarily from an increase in accruedexpenses, partially offset by an increase in cash and cash equivalents.

 

**PARTII. OTHER INFORMATION**

 

**Item1.  Legal Proceedings**

 

None

 

**Item2. Changes in Securities**

 

On August 1, 2001, MDC funded its second investment in On Stage byexercising warrants (per the terms of the prior MDC investment) for Series AConvertible Preferred Stock in the amount of $2,000,000.  At the time, On Stage’s financialperformance failed to meet the minimum EBITDA thresholds set forth in theagreement as a condition to MDC’s obligation to fund the secondinvestment.  MDC initially denied OnStage’s $2,000,000 funding request, the proceeds of which On Stage planned toutilize to fund the last $2,800,000 payment for the acquisition of CountryTonite due on July 31, 2001.  MDCsubsequently agreed to consummate the funding in exchange for the receipt of awarrant to purchase 400,000 shares of On Stage’s Series A  Convertible Stock at an exercise price of$0.00001 for a ten (10) year period, which may only be exercised in the eventOn Stage fails to make its cumulative EBITDA targets for the 2002 and 2003calendar years.  Thus, MDC’s $2,000,000investment will be convertible into either 4,000,000 common shares, or, in thecase On Stage fails to make certain EBITDA targets, 8,000,000 common shares.

 

The sales of theabove securities were considered to be exempt from regulations under theSecurities Act of 1933, as amended, in reliance on Sections (2) and RegulationD promulgated thereunder as transaction by an issuer not involving a publicoffering.

 

**Item3.  Defaults Upon Senior Securities**

 

None

 

**Item4.   Submission of Matters to a Vote ofSecurity Holders**

 

None

 

**Item 5.  Other Information**

 

None

 

**Item 6.Exhibits & Reports on Form 8-K**

 

(a)              Exhibits

 
**10.1      EmploymentAgreement dated September 27, 2000 between Jeffrey Victor  and On Stage Entertainment, Inc.***
10.2      Confidentiality and Non-competitionAgreement dated November 13, 2001 between Jeffrey Victor  and On Stage Entertainment, Inc.

 

(b)              Reports on Form 8-K

 

                   None

*      Management or compensatory contractrequired to be filed as an exhibit.

 
****
**SIGNATURES**

 

Inaccordance with the requirements of the Exchange Act, the registrant causedthis report to be signed on its behalf by the undersigned, thereunto dulyauthorized.

 

 

 

ON STAGE ENTERTAINMENT, INC.

 

 

 

 

 

 

 

 

 

 

Date: November 13, 2001

 

 

By:

/s/ Timothy J. Parrott

 

 

 

 

Timothy J. Parrott

 

 

 

 

President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

Date: November 13,  2001

 

 

By

/s/ Margaret Ann Freman

 

 

 

 

Margaret Ann Freman

 

 

 

 

Senior Vice President and Chief Financial Officer

  |
|-------------|---------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|