UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the quarterly period ended MARCH 31, 2001
or
[ ] Transition Report Pursuance to Section 13 or 15(d) of the Securities
Exchange act of 1934.
For the transition period from __________ to__________
Commission File Number 0-23782
RENAISSANCE ENTERTAINMENT CORPORATION
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(Exact name of registrant as specified in its charter)
COLORADO 84-1094630
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
275 CENTURY CIRCLE, SUITE 102, LOUISVILLE, COLORADO 80027
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(Address of principal executive offices) (Zip Code)
(303) 664-0300
---------------
(Registrant's telephone number, including area code)
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(Former Address)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[ X ] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of May 11, 2001, Registrant had 2,144,889 shares of common stock, $.03 Par
Value, outstanding.
INDEX
PAGE
NUMBER
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PART I. FINANCIAL INFORMATION
Item I. Financial Statements
Review Report of Independent Certified Public Accountant 3
Balance Sheets as of March 31, 2001 (Unaudited) 4
and December 31, 2000
Statements of Operations for the Three Months
Ended March 31, 2001 and 2000
(Unaudited) 5
Statements of Cash Flows for the Three Months
Ended March 31, 2001 and 2000
(Unaudited) 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II. OTHER INFORMATION 13
-----------------------------
This report contains forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the
Securities Act of 1933, as amended, and is subject to the safe harbors created
by those sections. These forward-looking statements are subject to significant
risks and uncertainties, including those identified in the section of this Form
10-QSB entitled "Factors That May Affect Future Operating Results," which may
cause actual results to differ materially from those discussed in such
forward-looking statements. The forward-looking statements within this Form
10-QSB are identified by words such as "believes," "anticipates," "expects,"
"intends," "may," "will" and other similar expressions. However, these words are
not the exclusive means of identifying such statements. In addition, any
statements which refer to expectations, projections or other characterizations
of future events or circumstances are forward-looking statements. The Company
undertakes no obligation to publicly release the results of any revisions to
these forward-looking statements which may be made to reflect events or
circumstances occurring subsequent to the filing of this Form 10-QSB with the
Securities and Exchange Commission ("SEC"). Readers are urged to carefully
review and consider the various disclosures made by the Company in this report
and in the Company's other reports filed with the SEC that attempt to advise
interested parties of the risks and factors that may affect the Company's
business.
2
REVIEW REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
The Board of Directors
Renaissance Entertainment Corporation
Louisville, Colorado
We have reviewed the accompanying balance sheet of Renaissance Entertainment
Corporation as of March 31, 2001, and the related statements of operations and
cash flows for the three months then ended, in accordance with Statements on
Standards issued by the American Institute of Certified Public Accountants. All
information included in these financial statements is the representation of the
management of Renaissance Entertainment Corporation.
A review of interim financial statements consists principally of inquiries of
Company personnel responsible for financial matters and analytical procedures
applied to financial data. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.
As discussed in the notes to the financial statements, certain conditions
indicate that the Company may be unable to continue as a going concern. The
accompanying financial statements do not include any adjustments to the
financial statements that might be necessary should the Company be unable to
continue as a going concern.
Schumacher & Associates, Inc.
Certified Public Accountants
2525 Fifteenth Street, Suite 3H
Denver, Colorado 80211
May 8, 2001
3
RENAISSANCE ENTERTAINMENT CORPORATION
BALANCE SHEETS
ASSETS
March 31, December 31,
2001 2000
----------------- -------------------
(Unaudited)
Current Assets:
Cash and equivalents $ 193,696 $ 1,002,804
Accounts receivable (net) 5,261 7,286
Inventory 106,038 104,532
Note receivable, current portion 16,534 17,400
Prepaid expenses and other 670,329 258,121
------------------ ------------------
Total Current Assets 991,858 1,390,143
Property and equipment, net of accumulated depreciation 3,942,982 3,914,210
Goodwill 405,453 418,122
Note receivable, net of current portion 124,389 128,679
Other assets 781,936 773,303
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TOTAL ASSETS $ 6,246,618 $ 6,624,457
================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 851,754 $ 558,261
Notes payable, current portion 1,370,853 1,370,836
Unearned income 419,047 193,668
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Total Current Liabilities 2,641,654 2,122,765
Lease obligation payable 4,035,423 3,991,494
Notes payable, net of current portion 115,380 145,880
Other 252,790 246,865
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Total Liabilities 7,045,247 6,507,004
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Stockholders' Equity:
Common stock, $.03 par value, 50,000,000 shares authorized,
2,144,889 and 2,144,889 shares issued and outstanding
at March 31, 2001 and December 31, 2000, respectively 64,346 64,346
Additional paid-in capital 9,430,827 9,430,827
Accumulated earnings (deficit) (10,293,802) (9,377,720)
------------------ -------------------
Total Stockholders' Equity (798,629) 117,453
------------------ -------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,246,618 $ 6,624,457
================== ===================
The accompanying notes are an integral part of the financial statements.
4
RENAISSANCE ENTERTAINMENT CORPORATION
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31
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2001 2000
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REVENUE:
Sales $ 2,807 $ 3,144
Faire operating costs 149 -0-
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Gross Profit 2,658 3,144
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OPERATING EXPENSES:
Salaries 374,252 338,244
Depreciation and amortization 87,842 87,204
Other operating expenses 348,563 376,843
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Total Operating Expenses 810,657 802,291
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Net Operating (Loss) Income (807,999) (799,147)
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Other Income (Expenses):
Interest income 20,874 17,239
Interest (expense) (140,338) (131,780)
Other income (expense) 11,387 18,315
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Total Other Income (Expenses) (108,077) (96,226)
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Net Income (Loss) to Common Stockholders $(916,076) $(895,373)
=============== ================
Net Income (Loss) per Common Share $ (0.43) $ (0.42)
=============== ================
Weighted Average Number of Common Shares Outstanding 2,144,889 2,144,889
=============== ================
The accompanying notes are an integral part of the financial statements.
5
RENAISSANCE ENTERTAINMENT CORPORATION
STATEMENTS OF CASH FLOWS (Unaudited)
Three Months ended
March 31,
---------------------------------------
2001 2000
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Cash Flows from Operating Activities:
Net income (Loss) $ (916,076) $ (895,373)
----------- -----------
Adjustments to reconcile net income (Loss)
to net cash provided by operating
activities:
Depreciation and amortization 87,842 87,204
(Increase) decrease in:
Accounts Receivable 2,025 (9,137)
Inventory (1,506) 0
Prepaid expenses and other (421,314) (264,107)
Increase (decrease) in:
Accounts payable and accrued expenses 293,493 (14,710)
Unearned revenue and other 231,304 163,599
----------- -----------
Total adjustments 191,844 (37,151)
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Net Cash Provided by Operating
Activities (724,232) (932,524)
----------- -----------
Cash Flows from Investing Activities:
Acquisition of property and equipment (98,322) (1,664)
----------- -----------
Net Cash (Used in) Investing Activities (98,322) (1,664)
----------- -----------
Cash Flows from Financing Activities:
Proceeds from notes payable 69,667 350,000
Principal payments on notes payable (56,221) (9,063)
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Net Cash Provided by Financing Activities 13,446 340,937
----------- -----------
Net Increase (Decrease) in Cash (809,108) (593,251)
Cash, beginning of period $ 1,002,804 $ 1,049,044
----------- -----------
Cash, end of period $ 193,696 $ 455,793
=========== ===========
Interest paid $ 140,338 $ 131,780
=========== ===========
The accompanying notes are an integral part of the financial statements.
6
RENAISSANCE ENTERTAINMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS
March 31, 2001 (Unaudited)
1. UNAUDITED STATEMENTS
The balance sheet as of March 31, 2001, the statements of operations
and the statements of cash flows for the three month periods ended
March 31, 2001 and 2000, have been prepared by the Company without
audit. In the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present fairly the
financial position, results of operations and changes in financial
position at March 31, 2001 and for all periods presented, have been
made.
These statements should be read in conjunction with the Company's
Annual Report on Form 10-KSB for the year ended December 31, 2000,
filed with the Securities and Exchange Commission.
2. CALCULATION OF EARNINGS (LOSS) PER SHARE
The earnings (loss) per share is calculated by dividing the net income
(loss) to common stockholders by the weighted average number of common
shares outstanding.
3. BASIS OF PRESENTATION - GOING CONCERN
The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles, which contemplates
continuation of the Company as a going concern. Prior to fiscal 2000,
the Company had sustained operating losses and has a net capital
deficiency.
In view of these matters, realization of certain assets in the
accompanying balance sheet is dependent upon continued operations of
the Company, which in turn is dependent upon the Company's ability to
meet its financial requirements, raise additional capital as needed,
and the success of its future operations.
7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The following discussion should be read in conjunction with the Company's
Consolidated Financial Statements, including the footnotes for the fiscal period
ended December 31, 2000.
The Company presently owns and produces four Renaissance Faires: the Bristol
Renaissance Faire in Kenosha, Wisconsin, serving the Chicago/Milwaukee
metropolitan region; the Northern California Renaissance Pleasure Faire, serving
the San Francisco Bay and Sacramento metropolitan areas; the Southern California
Renaissance Pleasure Faire in Devore, California serving the greater Los Angeles
metropolitan area; and the New York Renaissance Faire serving the New York City
metropolitan area.
The Renaissance Faire is a re-creation of a Renaissance village, a fantasy
experience transporting the visitor back into sixteenth century England. This
fantasy experience is created through authentic craft shops, food vendors and
continuous live entertainment throughout the day, both on the street and the
stage, including actors, jugglers, jousters, magicians, dancers and musicians.
On January 28, 2000, the Company announced the closure of the Virginia
Renaissance Faire located in Fredericksburg, Virginia. The Virginia Renaissance
Faire has had a negative impact on the Company's cash flow and net income since
its opening in 1996. The Company has granted a party an option to purchase the
250 acres of land on which the Faire is located and anticipates a closing date
before the end of the third quarter 2001.
On April 6, 2000 the Company entered into an Asset Purchase Agreement with
Willows Fare, LLC which conveyed the Company's interest in certain assets
previously used by the Bristol Faire in its food operation. As part of this
agreement, Willows Fare, LLC was granted a seven-year concession agreement with
the Bristol Faire to operate as a food vendor. The purchase price of the assets
was $300,000, half of which was paid upon execution of the agreement. The
Company holds a 10% promissory note for the balance of $150,000. Payments of
principal and interest began August 1, 2000 based on a 7-year amortization with
a balloon payment on October 31, 2003.
The Company has a lease for the 2001 Faire season to operate the New York Faire
in Sterling Forest. The Company has a one-year lease for the 2001 Faire season
to operate the Northern California Faire at the same location used in 1999 and
2000, in Vacaville. On June 27, 2000, the Company signed a twenty-year lease
with San Bernardino County Parks and Recreation Department, securing a long-term
home for the Southern California Renaissance Faire. The Company has a long-term
lease expiring in 2017 for the Bristol Faire site. The Company is currently
seeking to purchase property or obtain a long-term lease for the Northern
California Faire and New York Faire sites for the 2002 season and beyond. It is
critical to the financial condition of the Company, that it obtain long-term
leases or purchase property for its Northern California and New York Faires.
The Company had a working capital deficit of ($1,649,796) as of March 31, 2001.
The Company has negotiated a short-term loan that will provide working capital
in the amount of $200,000 for use in opening it's 2001 Faire season. This loan
requires a 1% origination fee, 15% interest and matures on June 30, 2001. These
funds will be provided by Charles S. Leavell ($100,000), Chairman of
8
the Board of Directors and one other director. As of the filing date of this
report, none of the funds available have been borrowed. See "LIQUIDITY AND
CAPITAL RESOURCES."
RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 2001, COMPARED TO THREE
MONTHS ENDED MARCH 31, 2000
The results of operations of the Company for the quarter ended March 31 always
reflect a significant loss, due to the fact that there are no substantial
revenues during this period, while some expenses at each of the Company's Faire
locations continue throughout the year, as do corporate expenses.
Operating expenses increased $8,366 or 1%, from $802,291 in 2000 to $810,657 in
2001. Salary and wage expense increased $36,008 or 11% from $338,244 in 2000 to
$374,252 in 2001. Certain salary and wage cost savings that were concentrated in
the first quarter of 2000, such as expenses associated with the layoff of
personnel, were not planned for nor realized in 2001. Other operating expenses
decreased $28,280 or 8% from $376,843 in 2000 to $348,563 in 2001 representing
the continued efforts by management to restructure and lower expenses.
Depreciation and amortization expense increased $638 or 1% from $87,204 in 2000
to $87,842 in 2001.
As a result of the foregoing, net operating loss (before interest charges and
other income) increased $8,852 or 1% from a loss of ($799,147) for the 2000
period to a loss of ($807,999) for the 2001 period.
Interest income increased $3,635 from $17,239 in 2000 to $20,874 in 2001.
Interest expense increased $8,558 from $131,780 in 2000 to $140,338 in 2001.
Other income decreased $6,928 from $18,315 in 2000 to $11,387 in 2001.
Net loss to common stockholders increased $20,703 or 2%, from a loss of
($895,373) for the 2000 period, to a loss of ($916,076) for the 2001 period.
Finally, net (loss) per common share increased from a loss of ($.42) for the
2000 period to a loss of ($.43) for the 2001 period, based on 2,144,889 weighted
average shares outstanding during the 2000 and 2001 periods.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital deficit widened during the quarter ended March 31,
2001, from ($732,622) at December 31, 2000 to ($1,649,796) at March 31, 2001.
The Company's working capital requirements are greatest during the period from
January 1 through May 1, when it is incurring start-up expenses for its first
Faire of the season, the Southern California Faire.
The Company has negotiated a short-term loan that will provide working capital
in the amount of $200,000 for use in opening it's 2001 Faire season. This loan
requires a 1% origination fee, 15% interest and matures on June 30, 2001. These
funds will be provided by Charles S. Leavell ($100,000), Chairman of the Board
of Directors and one other director. As of the filing date of this report, none
of the funds available have been borrowed.
During the first six months of fiscal 2000, the Company raised capital in the
amount of $575,000 through the issuance of 12% subordinated promissory notes.
The funds were provided by Charles S. Leavell ($250,000), Chairman of the Board
of Directors, J. Stanley Gilbert ($225,000), President and a Director, and one
other investor. The notes were issued in units, each unit consisting of two
promissory notes of equal principal, identical in nature except that one note is
convertible to
9
common stock at a price of $0.30 per share. Interest is due and payable
quarterly and the notes mature August 31, 2001.
During 1999, the Company secured a second mortgage on its Virginia real estate
that was to mature December 31, 2000. In December, 2000, the Company negotiated
an extension of the maturity date of this note with the lender. The new terms of
the loan require principal and interest payments of approximately $17,500 in
January 2001 and July through August 2001. Interest payments approximating
$6,500 are due February through June 2001. The final payment of approximately
$575,000 is due September 1, 2001. This loan provides for interest at 13% per
annum.
While the Company believes it has adequate capital to fund anticipated
operations for fiscal 2001, it believes it may need to obtain additional working
capital for future periods.
Reviewing the change in financial position over the quarter, current assets,
largely comprised of cash and prepaid expenses, decreased from $1,390,143 at
December 31, 2000 to $991,858 at March 31, 2001, a decrease of $398,285 or 29%.
Of these amounts, cash and cash equivalents decreased from $1,002,804 at
December 31, 2000 to $193,696 at March 31, 2001. Accounts receivable decreased
from $7,286 at December 31, 2000 to $5,261 at March 31, 2001. Prepaid expenses
(expenses incurred on behalf of the Faires) increased from $258,121 at December
31, 2000 to $670,329 at March 31, 2001. These costs are expensed once the Faires
are operating.
Current liabilities increased from $2,122,765 at December 31, 2000, to
$2,641,654 at March 31, 2001, an increase of $518,889 or 24%. During the
quarter, accounts payable and accrued expenses increased $293,493 or 53%.
Unearned income, which consists of the sale of admission tickets to upcoming
Faires, and deposits received from craft vendors for future Faires, increased
from $193,668 at December 31, 2000 to $419,047 at March 31, 2001. The revenue is
recognized once the Faires are operating. The Company's notes payable accounts
for $1,370,853 of the total current liabilities at March 31, 2001. This amount
is largely attributable to the aforementioned second mortgage on the Virginia
property ($600,000) and the working capital loan ($575,000) that both mature
before the end of the third quarter of 2001.
Stockholders' Equity decreased from $117,453 at December 31, 2000 to ($798,629)
at March 31, 2001, a decrease of $916,082. This decrease is due to the net loss
incurred during the first quarter.
Although inflation can potentially have an effect on financial results, during
2000 and the first three months of fiscal 2001 it caused no material affect on
the Company's operations, since the change in prices charged by the Company and
by the Company's vendors has not been significant.
The lease with the County of San Bernardino requires the Company to complete
certain capital projects on an annual basis. These projects include items such
as the construction of a perimeter fence, planting trees, developing flower and
water gardens, planting grass, installing infrastructure and constructing
buildings for use at the Faire. The Company is in the process of obtaining bids
on the required projects for 2001 but estimates that the cost of these items
should not exceed $500,000. The Company has no additional significant
commitments for capital expenses during the fiscal year ending December 31,
2001. See "Factors That May Affect Future Operating Results-Need for Additional
Capital" regarding the Company's financing requirements.
FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS
10
In addition to the other information contained in this report, prospective
investors should carefully consider the following factors in evaluating the
Company and its business.
RECENT LOSSES. Until 2000, the Company had incurred operating losses
since fiscal 1995. Although the Company was profitable in 2000, the net
profit of $136,973 is not substantial. For the quarter ended March 31, 2001,
the Company reported a net loss of ($916,076). The Company typically reports
a loss for the first quarter of any operating season because ongoing
operating expenses are incurred without any offsetting revenue generating
activities. There is no assurance that the Company will remain profitable in
any subsequent period.
NEED FOR ADDITIONAL CAPITAL. The Company had a working capital deficit
of ($1,649,796) as of March 31, 2001. See "MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS." The Company has negotiated a
short-term loan that will provide working capital in the amount of $200,000 for
use in opening it's 2001 Faire season. This loan requires a 1% origination fee,
15% interest and matures on June 30, 2001. These funds will be provided by
Charles S. Leavell ($100,000), Chairman of the Board of Directors and one other
director. As of the filing date of this report, none of the funds available have
been borrowed. Based on the Company's planned operations for 2001, the Company
believes it has adequate capital to fund operations for 2001, to fund required
capital expenditures during the year and to repay the second mortgage on the
Virginia property and other short-term indebtedness. To the extent that
operations do not provide the necessary working capital during 2001, the Company
may need to obtain additional capital for 2001 and future fiscal periods.
Additional capital may be sought through borrowings or from additional equity
financing. Such additional equity financing may result in additional dilution to
investors. In any case, there can be no assurance that any additional capital
can be satisfactorily obtained if and when required.
POSSIBLE SUSPENSION OF NORTHERN CALIFORNIA FAIRE. In 1999 and 2000, the
Northern California Renaissance Pleasure Faire was held on the site of the
original Nut Tree Farm in Vacaville, California under a one-year lease. The
Company has negotiated an additional one-year lease for 2001 to operate the
Faire at the same location, the Nut Tree Farm. The Company is seeking a
long-term lease agreement at a location that would provide expense savings by
allowing the Faire structures to remain in place year-round and provide the
opportunity for additional income-generating events other than the Renaissance
Faire. There can be no assurance that the Company will be successful in
obtaining a long-term lease, or that it will be on terms acceptable to the
Company. Should the Company be unable to operate a Northern Renaissance Faire it
could have a material adverse effect on the Company's business, results of
operations and financial condition.
POSSIBLE RELOCATION OF NEW YORK FAIRE. The Company has a lease for the
2001 Faire season to operate the New York Faire in Sterling Forest. The Company
is negotiating with the owner of the Sterling Forest property and investigating
other possible locations for the New York Faire. However, there can be no
assurance that the Company will be successful in securing a site for the New
York Faire for the 2002 season, or that such arrangements will be on terms
acceptable to the Company. Should the Company be unable to operate a New York
Renaissance Faire it could have a material adverse effect on the Company's
business, results of operations and financial condition.
COMPETITION. The Company faces significant competition from numerous
organizations throughout the country which offer Renaissance Faires and other
entertainment events, including amusement parks, theme parks, local and county
fairs and festivals, some of which possess significantly greater resources than
the Company, and in many cases, greater expertise and industry contacts. The
Company estimates that there are currently 20 major Renaissance Faires produced
11
each year. In addition, the Company estimates that there are 100 minor
Renaissance Faire events held throughout the United States each year, ranging in
duration from one day to two weekends.
LACK OF TRADEMARK PROTECTION. Because of the large number of existing
Renaissance Faires, the Company is not able to rely upon trademark or service
mark protection for the name "Renaissance Faire." As a result, there is no
protection against others using the name "Renaissance Faire" for the production
of entertainment events similar to those produced by the Company. The Company's
own Faires could be negatively impacted by association with substandard
productions.
PUBLIC LIABILITY AND INSURANCE. As a producer of a public entertainment
event, the Company has exposure for claims of personal injury and property
damage suffered by visitors to the Faires. To date, the Company has experienced
only minimal claims, which it has been able to resolve without litigation. The
Company maintains comprehensive liability insurance which it considers to be
adequate against this risk; however, there can be no assurance that a
catastrophic event or claim which could result in damage or liability in excess
of this coverage will not occur.
DEPENDENCE UPON VENDORS. A substantial portion of the Company's
revenues generated at each Faire is derived from arrangements that the Company
has with vendors who construct elaborate booths at the Faires and sell a variety
of food, crafts and souvenirs. This arrangement consists of either a fixed
rental paid by the vendors to the Company, or a percent of revenues. In either
case, the success of a Faire is dependent upon the Company's ability to attract
responsible vendors who sell high quality goods.
SEASONALITY. The Company's Renaissance Faires are located in
traditionally seasonal areas which attract the greatest number of visitors
during the warm weather months in the spring, summer, and early fall. Unless the
Company acquires or develops additional Faire sites in areas which are
counter-seasonal to the present sites located in temperate climates, the
Company's revenues and income will be highly concentrated in the six months
ending October 31st of each year.
DEPENDENCE UPON WEATHER. Each Renaissance Faire operated by the Company
is scheduled for a finite period, typically consecutive weekends during a seven
to nine-week period, which are determined substantially in advance in order to
facilitate advertising and other promotional efforts. The success of each Faire
is directly dependent upon public attendance, which is directly affected by
weather conditions. While each of the Company's Faires are open, rain or shine,
poor weather, or even the forecast of poor weather, can result in substantial
declines in attendance and, as a result, loss of revenues. Further, as the
Renaissance Faires are outdoor events, they are vulnerable to severe weather
conditions that can cause damage to the Faire's infrastructure and buildings, as
well as injuries to patrons and employees. Risks associated with the weather are
beyond anyone's control, but have a direct and material impact upon the relative
success or failure of a given Faire.
LICENSING AND OTHER GOVERNMENTAL REGULATION. For each Faire operated by
the Company, it is necessary for the Company to apply for and obtain permits and
other licenses from local governmental authorities controlling the conduct of
the Faire, service of alcoholic beverages, service of food, health, sanitation,
and other matters at the Faire sites. Each governmental jurisdiction has it's
own regulatory requirements that can impose unforeseeable delays or impediments
in preparing for a Faire production. While the Company has been able to obtain
all necessary permits and licenses in the past, there can be no assurance that
future changes in
12
governmental regulation or the adoption of more stringent requirements may
not have a material adverse impact upon the Company's future operations.
FAIRE SITES. In 2001, the Company currently has leases for each of it's
four Renaissance Faires. The terms and conditions of each lease will vary by
location, and to a large extent, are beyond the control of the Company. Further,
there can be no assurance that the Company will be able to continue to lease
existing Faire sites on terms acceptable to the Company, or be successful in
obtaining other sites on favorable locations. The Company's dependence upon
leasing Faire sites creates a substantial risk of fluctuation in the Company's
operations from year to year.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None.
Item 2. CHANGES IN SECURITIES
None.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
Item 5. OTHER INFORMATION
None.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
The Company was not required to file a report on Form 8-K
during the quarter ended March 31, 2001.
13
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
RENAISSANCE ENTERTAINMENT CORPORATION
Dated: MAY 10, 2001 /s/ CHARLES S. LEAVELL
-----------------------------------
Charles S. Leavell, Chief Executive
and Chief Financial Officer
/s/ SUE E. BROPHY
-----------------------------------
Sue E. Brophy, Chief Accounting
Officer
14