LV entertainment company scrambles to find financing

Financially beleaguered On Stage Entertainment Inc. of Las Vegas today said it has not completed its previously announced sale of 2 million shares of its common stock in private placements for a total of $1.5 million.

"While management continues to communicate with each of the investors on a daily basis, whom all state that they expect to fund the investment within the next few days, there can be no assurance that this investment will fund in the near future," On Stage said in a statement. "Meanwhile, the company continues its search for alternative sources of financing."

Separately, First Security Bank on June 28 sued On Stage and several subsidiaries in Clark County District Court, alleging they defaulted on a $1.03 million loan and several lease agreements totalling $925,913; and alleging fraudulent transfer of assets.

First Security attorney Bob Olson said the bank isn't accusing On Stage of fraud.

"But it is accusing On Stage affiliates of transferring On Stage's assets, which are pledged to First Security as collateral, from one entity to another without adequate consideration," said Olson.

On Stage earlier defaulted in June on a $14.15 million debt to its mortgage lender, Los Angeles-based Imperial Commercial Credit and Investment Corp. On Stage had used a $20 million credit line in 1998 to acquire several productions and properties.

An inability to secure financing halted On Stage's attempts in April to acquire the entertainment division of Casino Resource Corp. of Ocean Springs, Miss., for $13.8 million.

On Stage's first-quarter 1999 net losses widened to $884,000, from $529,000 a year ago.

On Stage operates shows around the nation including the Legends in Concert production at the Imperial Palace hotel-casino.

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