NEW YORK — Cinergi Pictures Entertainment Inc., in the process of being liquidated, reported Tuesday a sharply increased second-quarter loss of $7.7 million — compared with $716,000 a year ago — on 24% lower revenue of $17 million.
The higher loss partly reflects Cinergi’s shutdown of its film production activities and partly a $2.6 million writedown on the value of its special-effects facility. With no film production going on, Cinergi can’t add overhead and interest costs to film costs on its balance sheet so the overhead and interest costs have to be directly written off in the profit statement.
The company said it wrote down its special-effects facility, which is on the market, in line with an accounting standard. The facility is losing money, Cinergi said.
Cinergi also reported the progress of the liquidation of the company. The major element in the process, the sale of its library to Disney, is yet to close and the two companies have agreed to extend a deadline for the completion of the sale from Sept. 15 to an undecided date in the fourth quarter.
Deadline’s come and gone
Cinergi also revealed that no qualified bids were received for the company’s 20 development projects by the Aug. 15 deadline and as a result the $4.75 million offer from company chairman Andrew Vajna will be accepted.
Cinergi said in a Securities & Exchange Commission filing Tuesday that it had $30.2 million in cash at the end of the second quarter. It also said that the winding down of its activities has prompted staff cuts and the company will reduce the office space it leases by 50% within a few weeks.