LOS ANGELES, April 18 -- Financially strapped Carolco Pictures has revealed it will have to sell off additional assets or file for bankruptcy in order to stay in business through the end of the year. Carolco, producer of such big-budget hits as 'Terminator 2: Judgment Day' and 'Basic Instinct,' blamed much of its cash-flow problems on the unexpected delay in the release of 'Cutthroat Island,' the only movie in production last year at Carolco. 'Cutthroat Island,' a pirate movie starring Geena Davis, was scheduled to have been released in July, but the film directed by Davis' husband, Renny Harlin, is not ready and won't hit theaters until late fall at the earliest. In documents filed with the Securities and Exchange Commission on Monday, Carolco reported a net loss of $43.5 million for 1994 and a total revenue of $59.3 million, mostly from video sales and TV licensing fees for Carolco's past hits. A Carolco spokesman declined to comment Tuesday on the SEC filing. Carolco's cash reserves dropped 52 percent last year, from $56.7 million in 1993 to 27.3 million as of last December, according to the filing. To cover its operating expenses over the next few months, the company is considering bringing in new equity partners, selling the rights to its film library and restructuring its debt through a Chapter 11 bankruptcy filing. Film industry analysts speculated Carolco, an independent company whose investors include Japan's Pioneer Electronics, would have trouble attracting new sources of financing. The company's strategy of betting big on costly, high-profile films has fallen out of favor in Hollywood as other independent companies have found success by turningout a steady stream of movies with budgets in the $25 million to $40 million range.
According to the SEC filing, Carolco predicts 'Cutthroat Island' will cost $80 million by the time it is completed, and the company's fortunes now hinge on the film's performance at the box office. Last October, Carolco was forced to sell off the rights to the two other major films it was developing to come up with the money needed to finance 'Cutthroat Island.'