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In the
Springfield project we had secured a creative alternative to the
financing issue by entering into a building leaseback, whereby Bass
Pro would fund the theatre construction and Bella Films LLC, our
affiliate, would leaseback the theatre. As mentioned in our last
report, for Bella to achieve this lease and funding we had to grant
control to Bass Pro over the timing of the development and construction.
Bass Pro has
not settled on the final design and timing for the major expansion
which they are planning for the area where the Bella Films Imax
project is to be located and built by Bass Pro. This lack of clear
definition as to the timing, and the potential for further delays
beyond our control, has forced the Company and IMAX to evaluate with
Bass Pro the best course of action given the circumstances.
It was
determined by Bella to focus our efforts on the greatest opportunity
given our limited resources. In our Springfield agreement and
negotiations with IMAX we had a limited window open to transfer the
Springfield agreement to another site.
The resolution
and opportunity for the Company was to assure a transfer of the
payments made to IMAX for the system under the Springfield project to
credit toward our Monterey project, and thus mutually terminate the
current agreements in Springfield to be able to focus on Monterey,
leaving open the door to return to Springfield, if and when Bass Pro
may be ready in the future. This resolution has been recently agreed
in principle by all three parties with the documentation being
prepared for execution within the next 30 days.
Although this
resolution preserves the payments made to IMAX through the
Springfield agreement, the transfer created the technical need to
review the goodwill related to the Springfield Project. On the basis
that this project will be terminated, the Directors of the Company
have decided to make a provision against the entire carrying value of
the goodwill in relation to this project, which was referred to in
the beginning of this statement. |
