Bad News for Oklahoma's Film Industry
Diversify for film 'n' profit
By Don Mecoy
Business Writer
Oklahoma's only publicly traded movie company has agreed to acquire two medical companies, a deal that will move Graymark Productions' focus away from the making of low-budget films, the Oklahoma City company said Thursday.
Graymark, based in downtown Oklahoma City, has produced five movies since the company went public in 2005 but never has been profitable.
Graymark has agreed to exchange common stock for ownership interests in Apothecary RX LLC, which owns eight pharmacies in Oklahoma, Missouri and Minnesota, and Sleep Holdings LLC, which owns seven sleep diagnosis centers in Oklahoma and Texas.
Graymark Chairman John Simonelli said the deal should close within a few months, and the transaction should turn the company's fortunes around.
"This will put us strongly into profitability and it increases our revenues dramatically,” Simonelli said. "We feel this is going to make our shareholders money, and that's what we're in business for.”
Deficit gets bigger
Two Graymark insiders, major shareholder Roy T. Oliver and director Stanton Nelson, hold controlling interests in the companies that will be merged into Graymark, the company said. Stanton serves as vice president of R.T. Oliver Investment Co., a privately held energy and real estate company controlled by Oliver, who owned 11.7 percent of Graymark's outstanding shares as of Dec. 31.
Simonelli, who owned 12.1 percent of Graymark's outstanding shares on Dec. 31, is Graymark's only full-time employee.
The movie production company lost $2.2 million last year and then posted a $181,356 net loss in the first three months of 2007, regulatory filings show. The company has generated an accumulated deficit of more than $4 million.
Graymark commenced operations in August 2001, but didn't generate revenue from a movie production until it had signed distribution deals in 2005 for "Cloud 9,” a Burt Reynolds comedy, according to the company's regulatory filings. The company has completed filming four other movies, "The Hunt,” "Surveillance,” "Soul's Midnight” and "Fingerprints.”
The company was formed to turn out low-budget movies, costing from $250,000 to $3 million to produce. After the planned merger, the name of the company likely will change, but no name has been selected, Simonelli said.
"The problem is that we originally formed the company to be in the movie industry, and we made five films, and it just takes so long to get those out in marketplace,” Simonelli said. "It was not working well for shareholders.”
Gray Frederickson, Graymark's president and chief operating officer, likely won't head the merged company. Frederickson, an Academy Award-winning producer, is part of Graymark's production team, which also included director Fritz Kiersch and casting director Fred Roos. Kiersch and Roos are on Graymark's board of directors.
"I know that Gray is very interested in keeping the film industry alive here in Oklahoma, and he has my support in doing that, and we will do whatever we can,” Simonelli said. "But it probably will be outside Graymark. We probably will not be doing that in the public entity.”
Graymark Productions's shares traded sporadically on the over-the-counter market, recently selling for 30 cents a share.
Originally Posted by JWil
Bookmarks