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Microcap & Penny Stocks : New Sky Communications (NSKY) -- Ignore unavailable to you. Want to Upgrade?

To: Donster who wrote (2551)	9/28/1998 9:33:00 PM
From: Donster	Read Replies (9) \| Respond to of 2601

To all: Here's what NSKY CEO Carl Reynolds and I discussed by telephone earlier this evening: He is aware that we want to see figures in PRs and he will include them in the future when they are finalized and available. He could not do so in the last PR because of the nature of the agreement with Winchester. As Reynolds told me, Winchester has an option to secure the production financing for Face Facts. For acquiring the financing (estimated at between $3-$5 million), part of the agreement calls for Winchester to get the domestic and foreign distribution of Face Facts. There is a specified time for Winchester to get the financing or New Sky can acquire it elsewhere. The latter option is not likely since Winchester is as interested as we are in getting this project made. And we're not looking at a long time frame here either. Discussions and plans call for principle photography to begin in February, with completion a couple of months after that. And, with the distribution already being handled, we could be attending the premiere of this one by the end of next summer. What will that mean, from a financial standpoint, for NSKY? Reynolds said it all depends on the terms of the financing. The final agreement is not yet in place but, when it is, it will include some up-front pre-production money as well as the percentage of the profits that NSKY will receive as co-producer. For example, NSKY is getting 33 percent of Freak's distribution profits (production costs are already paid). Depending on the final deal, that would not be an unrealistic percentage for Face Facts. What would happen to any funds NSKY derives from their distribution deals? Reynolds pointed out that much would depend on how a movie is received by the public, but he used an example of $5 million to $10 million coming to New Sky. His first priority would be the $150,000 company debt. After that, decisions would have to be made which would definitely include "spreading out the risk." He does not foresee New Sky becoming a financier of a project, but instead prefers to be the developer (acquiring the movie rights to books, plays, etc.) Five million could be used to develop four or five different projects, with minimal risk. In other words, let others put up the financing and do the distribution and we will take our co-producer percentage. "We could also consider paying a dividend with some of the funds on hand," he said. When can we expect another PR and what will it contain? Again, depending on the outcome of current negotiations, the next PR could be very soon (especially based on the frequency of previous NSKY PRs). The next PR will either be on Freak (distribution deal or film festival) or Face Facts (finacing deal completed). As he said, he is aware that we want to see figures in future PRs and he will include them if they are available at the time. "I will not issue PRs every day or so," said Reynolds. "They soon become meaningless. When I issue a PR, it will have substance." Where do we stand on our current three projects? "Freak Talks About Sex" will have its final cut (completed version) the first week in October. Several distributors who saw the original version are interested, including the distributor of Steve Zahn's last movie, October Films. Reynolds said that New Sky is not only looking at the Sundance Film Festival but at others as well. But he then said that the film festivals may not be necessary because a distribution deal my preclude the need to attend them. He did not want to go into any more details than that, because of the nature of current negotiations. Face Facts, of course, is currently in the hands of Winchester for a financial deal which could come almost any time and would include a PR. Production plans were discussed above. PRs will also announce connections on this one (cast, crew, etc.) when they are finalized. The Hell Candidate, at $50 million to $75 million, will be NSKY's first big-budget movie, and is planned for release Halloween night of the year 2000. Due to the nature of the story line, there is a lot of Hollywood interest here. Co-executive producer Leonard Shapiro has taken the point in securing financing for this one. A revised screen play is being worked on now which should be completed within a month. As for the company shares, Reynolds says there are 193 million outstanding of 200 million authorized (as reported in the latest 10-Q), with approximately 125 million now in the float. There are no plans to issue any more stock. He also said it would be premature to think about the company buying back shares. Much would depend on the amount of revenue the company derives and whether it would be better used on developing projects. He emphasized that there will absolutely be NO REVERSE SPLIT. He says it would not be good for the stockholders and is not needed. He is happy with the way things are progressing now and he won't even consider it. That's about it folks, except that we have a fully reporting company with very little debt that is in the business of producing movies. And we are getting into it in a big way. We also have a CEO and a public relations firm that are very communicative with shareholders. IMO, this is a tremendous opportunity for us. Donster