<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 20549
----------
FORM 10-K/A
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
For the fiscal year ended December 31, 1999
---------------------------------------------
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from to
----------- -----------
Commission file Number 0-14675
--------------
CAMERA PLATFORMS INTERNATIONAL, INC.
--------------------------------------------------------------------------------
(Name of Small Business Issuer in Its Charter)
<TABLE>
<CAPTION>
Delaware 95-4024550
<S> <C>
---------------------------------------------- ------------------------------------
(State or other Jurisdiction of Incorporation) (I.R.S. Employer Identification No.)
10909 Vanowen Street, N. Hollywood, CA 91605
---------------------------------------------- ------------------------------------
(Address of Principal Executive Offices) (Zip Code)
</TABLE>
(818) 623-1700
--------------------------------------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12(b) of the Exchange Act:
Name of Each Exchange
Title of Each Class on Which Registered
------------------- ---------------------
----------------------------------- -----------------------------------
----------------------------------- -----------------------------------
Securities registered under Section 12(g) of the Exchange Act:
COMMON STOCK - $.0005 PAR VALUE
--------------------------------------------------------------------------------
(Title of Class)
--------------------------------------------------------------------------------
(Title of Class)
<PAGE> 2
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for past 90 days.
Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at which the
common equity as sold, or the average bid and asked price of such common equity,
as of October 12, 2000 (See definition of affiliate in Rule 12b-2 of the
Exchange Act.) $4,515,978
Note. If determining whether a person is an affiliate will
involve an unreasonable effort and expense, the issuer may calculate the
aggregate market value of the common equity held by non-affiliates on
the basis of reasonable assumptions, if the assumptions are stated.
ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS
Check whether the issuer has filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court.
Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE REGISTRANTS
State the number of share outstanding of each of the issuer's classes of
common equity, as of the latest practicable date. 13,768,228
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and
the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document
is incorporated: (1) any annual report to security holders; (2) any proxy or
information statement; and (3) any prospectus filed pursuant to Rule 424(b) or
(c) of the Securities Act of 1933 ("Securities Act"). The listed documents
should be clearly described for identification purposes (e.g., annual report to
security holders for fiscal year ended December 24, 1980).
2
<PAGE> 3
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO FINANCIAL STATEMENTS AND RELATED NOTES
CAMERA PLATFORMS INTERNATIONAL, INC.
<TABLE>
<CAPTION>
CONTENT PAGE
------- ----
<S> <C>
INDEPENDENT AUDITORS' REPORT 4
CONSOLIDATED BALANCE SHEETS 5
CONSOLIDATED STATEMENTS OF OPERATIONS 6
CONSOLIDATED STATEMENTS OF CASH FLOWS 7
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT 8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 9
SUPPLEMENTARY INFORMATION 20
Schedules of Valuation and Qualifying Accounts 21
</TABLE>
3
<PAGE> 4
[LETTERHEAD OF ROSE, SYNDER & JACOB]
INDEPENDENT AUDITORS' REPORT
Board of Directors
Camera Platforms International, Inc.
We have audited the accompanying consolidated balance sheets of Camera Platforms
International, Inc. and subsidiaries (the "Company") as of December 31, 1999 and
1998, and the related consolidated statements of operations, shareholders'
deficit, and cash flows for the years then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits. The financial
statements of Camera Platforms International, Inc. and subsidiaries for the year
ended December 31, 1997 were audited by other auditors whose report dated March
12, 1998, expressed an unqualified opinion on those statements.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Camera Platforms
International, Inc. as of December 31, 1999 and 1998, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
We have also audited the Schedules of Valuation and Qualifying Accounts for each
of the two years in the period ended December 31, 1999. In our opinion, these
schedules present fairly, in all material respects, the information required to
be set forth therein.
/s/ Rose, Synder & Jacobs
Rose, Snyder & Jacobs
A Corporation of Certified Public Accountants
Encino, California
September 6, 2000
4
<PAGE> 5
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
ASSETS
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
CURRENT ASSETS
Cash $ 9,000 $ 26,000
Accounts receivable, less allowance for doubtful
accounts of $5,000 in 1999 and $2,000 in 1998 102,000 112,000
Current maturities of net investment in sale-type
lease and installment sale 34,000 43,000
Inventories 108,000 253,000
Prepaid expenses 115,000 97,000
---------- ----------
TOTAL CURRENT ASSETS 368,000 531,000
Property and equipment, net of depreciation,
amortization and rental asset valuation allowance 1,593,000 2,644,000
Net investment in sales-type lease and installment sale,
net of current maturities -- 38,000
Deposits and other assets 10,000 36,000
---------- ----------
TOTAL ASSETS $1,971,000 $3,249,000
========== ==========
</TABLE>
LIABILITIES AND SHAREHOLDERS' DEFICIT
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 8,000 $ 159,000
Accrued liabilities 267,000 71,000
Deferred revenue 6,000 29,000
------------ ------------
Total current liabilities 281,000 259,000
------------ ------------
Long term debt 1,500,000 1,500,000
Liabilities subject to compromise 5,073,000 4,731,000
COMMITMENTS AND CONTINGENCIES, note 12
Shareholders' deficit
Common stock $.0005 par value; 15,000,000 shares
authorized; 13,768,228 shares issued and outstanding 7,000 7,000
Additional paid-in capital 23,549,000 23,547,000
Accumulated deficit (28,439,000) (26,795,000)
------------ ------------
TOTAL SHAREHOLDERS' DEFICIT (4,883,000) (3,241,000)
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $ 1,971,000 $ 3,249,000
============ ============
</TABLE>
See independent auditors' report
and notes to consolidated financial statements.
5
<PAGE> 6
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
REVENUE
Net product sales $ 467,000 $ 607,000 $ 1,719,000
Revenue from rental operations 1,245,000 1,638,000 1,637,000
------------ ------------ ------------
1,712,000 2,245,000 3,356,000
EXPENSES
Cost of sales 305,000 445,000 1,172,000
Cost of rental operations 1,309,000 1,739,000 1,511,000
Selling, general and administrative 859,000 1,755,000 1,464,000
------------ ------------ ------------
2,473,000 3,939,000 4,147,000
Operating loss (761,000) (1,694,000) (791,000)
Interest expense, net (505,000) (560,000) (71,000)
Other income (expense), net (172,000) (11,000) 125,000
Impairment loss, note 17 (206,000) (1,147,000) --
------------ ------------ ------------
Net loss from continuing operations (1,644,000) (3,412,000) (737,000)
Net loss from
discontinued operations, note 16 -- (1,139,000) --
------------ ------------ ------------
Net loss $ (1,644,000) $ (4,551,000) $ (737,000)
============ ============ ============
Basic and diluted loss per share
Loss from continuing operations $ (0.12) $ (0.26) $ (0.06)
Loss from discontinued operations -- (0.09) --
------------ ------------ ------------
Net Loss $ (0.12) $ (0.35) $ (0.06)
============ ============ ============
Weighted average shares outstanding 13,768,228 13,145,228 12,418,228
============ ============ ============
</TABLE>
See independent auditors' report
and notes to consolidated financial statements.
6
<PAGE> 7
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss $(1,644,000) $(4,551,000) $ (737,000)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 672,000 898,000 408,000
(Gain) loss on disposal of equipment (11,000) 41,000 (155,000)
Impairment loss 206,000 1,197,000 --
Provision for doubtful accounts, net 18,000 86,000 12,000
Changes in assets and liabilities:
Accounts receivable (8,000) (21,000) 94,000
Net investment in lease and installment sale 47,000 51,000 (132,000)
Inventories 145,000 (571,000) (53,000)
Prepaid expenses (18,000) (164,000) (16,000)
Deposits and other assets 26,000 192,000 (128,000)
Accounts payable (159,000) 828,000 (87,000)
Deferred revenue (23,000) 17,000 12,000
Customer deposits 30,000 (12,000) (64,000)
Other current liabilities 519,000 142,000 (8,000)
----------- ----------- -----------
Net cash used in operating activities (200,000) (1,867,000) (854,000)
----------- ----------- -----------
INVESTING ACTIVITIES
Proceeds from sale of property and equipment 184,000 1,596,000 549,000
Purchases of property and equipment -- (2,917,000) (750,000)
Purchase of intangible assets -- (440,000) --
----------- ----------- -----------
Net cash provided (used) by investing activities 184,000 (1,761,000) (201,000)
----------- ----------- -----------
FINANCING ACTIVITIES
Principal payments
on revolving credit line, net -- -- (170,000)
Proceeds from borrowings of long-term debt 68,000 5,759,000 1,146,000
Principal payments on long-term debt (71,000) (2,187,000) (25,000)
Proceeds from option payment 2,000 -- --
Proceeds from sale of common stock -- 5,000 --
----------- ----------- -----------
Net cash provided (used) by financing activities (1,000) 3,577,000 951,000
----------- ----------- -----------
Net decrease in cash (17,000) (51,000) (104,000)
Cash at beginning 26,000 77,000 181,000
----------- ----------- -----------
Cash at end of year $ 9,000 $ 26,000 $ 77,000
=========== =========== ===========
Supplemental disclosure of cash flow information
Cash paid during the year for:
Interest $ 321,000 $ 456,000 $ 55,000
=========== =========== ===========
Income taxes $ 1,000 $ 1,000 $ 1,000
=========== =========== ===========
</TABLE>
See independent auditors' report
and notes to consolidated financial statements.
7
<PAGE> 8
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
Number of Common Paid-in Accumulated
Shares Stock Capital Deficit Total
---------- ------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1998 12,418,228 $6,000 $22,792,000 $(22,244,000) $ 554,000
Issuance of Common Stock 1,350,000 1,000 755,000 -- 756,000
Net loss for the year -- -- -- (4,551,000) (4,551,000)
---------- ------ ----------- ------------ -----------
Balance at December 31, 1998 13,768,228 7,000 23,547,000 (26,795,000) (3,241,000)
Net loss for the year -- -- -- (1,644,000) (1,644,000)
Option payment -- -- 2,000 -- 2,000
---------- ------ ----------- ------------ -----------
Balance at December 31, 1999 13,768,228 $7,000 $23,549,000 $(28,439,000) $(4,883,000)
========== ====== =========== ============ ===========
</TABLE>
See independent auditors' report
and notes to consolidated financial statements.
8
<PAGE> 9
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS
Camera Platforms International, Inc. ("CPI" or the "Company"), was
organized in the state of Delaware in 1985 to engage in the business of
leasing camera cars and other related equipment to motion picture and
television production companies. The Company designs, manufactures,
sells, rents and leases a wide variety of production equipment to the
film and video industries. The Company rents three varieties of camera
cars, and both rents and sells cranes, dollies, jib arms, remote heads,
and dolly track. The Company had only two subsidiaries, Shotmaker Sound,
Inc. and Shotmaker Dollies, Inc. and they both filed for protection
under Chapter 7 of the Federal Bankruptcy Code in 1999. Only Shotmaker
Sound, Inc. was operating in 1998, providing rehearsal studio, storage
and cartage services to recording artists, and its operations were
presented as discontinued operations (note 16).
PROCEEDING UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
As a result of continuing losses from operations, exacerbated by the
failure of the Company's strategy to increase its presence in the rental
market through acquisitions and production problems with its new Dolly,
the Company defaulted on various debt obligations. In 1999, the Company
began negotiations with Foothill Capital Corporation ("Foothill") and
other creditors to restructure the Company's debt.
Before the Company was able to effect any out-of-court restructuring, it
was served with a notice, on September 24, 1999, by the clerk of the
United States Bankruptcy Court that, on September 17, 1999, a petition
under Title 11, United States Code, was filed against the Company by
certain creditors praying for an order for relief under Title 11,
Chapter 7 or 11 of the United States Code.
On October 14, 1999, the Company filed an answer to the court in the
form of a Debtor's Consent to Entry of an Order for Relief Under Chapter
11 of Title 11 of the United States Code, and such an entry was ordered
by the United States Bankruptcy Court, Central District of California,
San Fernando Valley Division ("Bankruptcy Court"), on October 25, 1999,
under case number SV-99-20947 GM ("Bankruptcy Case"). At December 31,
1999, the Company is operating its business as debtor-in-possession
pursuant to the Bankruptcy Code.
Actions by creditors to collect pre-petition indebtedness are stayed and
other contractual obligations against the Company may not be enforced.
In addition, under the Bankruptcy Code, the Company may assume or reject
executory contracts, including lease obligations and employment
agreements. Parties affected by these rejections may file claims with
the Bankruptcy Court in accordance with the reorganization process.
Substantially all pre-petition liabilities are subject to settlement
under a plan of reorganization.
At a hearing held on November 16, 1999, before Judge Kathleen T. Lax,
the Bankruptcy Court entered orders granting authority to the Company,
among other things, to pay pre-petition and post petition employee
wages, salaries, benefits and other employee obligations, to pay vendors
and other providers in the ordinary course for goods and services
received after September 23, 1999.
As part of the Bankruptcy Case, the Company entered into an agreement
with Foothill Capital Corporation ("Foothill"), the Company's secured
lender, to use cash collateral on an interim basis. The agreement
authorizes the use of cash collateral solely to pay the Company's
ordinary and necessary business expenses of operation as set forth in a
budget mutually agreed upon between the parties. The stipulation calls
for, among other things, mandatory sales of deemed excess rental
equipment pursuant to an agreed upon schedule, with gross proceeds from
such sales to be remitted to a special account under the control of
Foothill, with all proceeds from such sales segregated until such time
as the claims of all potential secured parties are determined by the
Bankruptcy Court. In addition, the Company agreed to continue to pay
Foothill $5,000 per week, and to be bound by certain budget targets for
net income.
See independent auditors' report
and notes to consolidated financial statements.
9
<PAGE> 10
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS (Continued)
On January 11, 2000, a Chapter 11 status conference was held by the
Court. The court ruled at that hearing that March 15, 2000 will be set
as the bar date for filing proofs of claim and interest and that the
Company is to file its plan of reorganization and related disclosure
statement on or before April 1, 2000.
On March 8, 2000, a hearing was held on a debtor's emergency motion to
approve debtor-in-possession ("DIP") financing to allow the Company to
meet immediate working capital requirements. The motion was granted by
Judge Mund in an amount not to exceed $250,000. The financing is being
provided by DOOFF, Inc., the Company's secured lender (see below).
AGREEMENTS WITH CONSOLIDATED PRODUCTIONS, INC.
On February 7, 2000, Shotmaker Acquisition Corp. ("SAC"), entered into
an agreement with Consolidated Productions, Inc. ("Consolidated") by
which SAC and Consolidated agreed that SAC will transfer to Consolidated
4,000,000 shares of the Company's common stock currently held by SAC in
exchange for the following: Consolidated will purchase Foothill's entire
rights, title and interest in Foothill's loans to the Company;
Consolidated will provide $250,000 in working capital to the Company;
the Company will file a plan of reorganization, which will result in,
among other things, sufficient shares of the Company's common stock to
be issued to Consolidated, such that in aggregate Consolidated will own
49.9% of the total outstanding shares of the Company's common stock when
all the creditors receive their shares in accordance with the plan of
reorganization.
On February 8, 2000, Consolidated entered into an agreement with
Foothill by which Consolidated agreed to purchase, for $1,500,000,
Foothills' entire right, title and interest in Foothill's loans to the
Company, including Foothill's interest in any insurance policy, loss, or
payments therefrom. Several parties have asserted liens or security
interest in the Company's assets. The agreement called for the Company
to commence adversary proceedings to establish that Foothill's liens and
security interests are prior to all other asserted liens or security
interest. If a satisfactory decision regarding priority of lien
interests was not reached by May 15, 2000, Consolidated would either
waive this condition to closing, or the agreement will automatically
terminate. On February 23, 2000, Consolidated waived this condition and
closed the transaction. Subsequently, Consolidated assigned its rights
under the agreement to a new entity, DOOFF, LLC.
PLAN OF REORGANIZATION AND DISCLOSURE STATEMENT
On February 21, 2000, the Company filed the Debtor's Plan of
Reorganization and the related Disclosure Statement Describing Debtor's
Plan of Reorganization with the Bankruptcy Court. The Bankruptcy Court
approved the Plan as submitted on June 13, 2000. The plan divides the
creditors claims and proposes settlements to each class on the effective
date of the adoption of the plan as follows:
Administrative Claims in general: Each holder of an administrative claim
allowed by the Court shall receive, at the sole option of such holder,
cash equal to the amount of such claim or one share of the Company's New
Common stock for each $.25 in approved claims. Total administrative
claims included in accrued expenses is $110,000 at December 31, 1999.
Administrative claims include statutory fees; ordinary course
liabilities incurred post-petition; post-petition professional fees and
expenses incurred in conjunction with the Chapter 11 Case; United States
Trustee fees; and allowed tax claims. Allowed tax claims, will be paid
out in equal quarterly installments over a period of six years, with
interest at 9% per annum on the unpaid balance. The balance of allowed
tax claims included in accrued expenses is $63,000 at December 31, 1999.
See independent auditors' report
and notes to consolidated financial statements.
10
<PAGE> 11
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS (Continued)
Classes of Claims of Interest:
Class 1: Allowed Secured Claim of DOOFF, LLC ("DOOFF"). DOOFF, successor
in interest to Foothill, shall have an allowed secured claim of
$1,500,000 and shall retain its security interest in the pre-petition
collateral, which includes, without limitation, all of the debtor's
accounts receivable, inventory, equipment, and all tangible and
intangible assets. Interest only shall be paid monthly at the reference
rate plus 2% per annum for 10 years, commencing the first month
immediately following the effective date of reorganization. Consolidated
shall receive 4,000,000 shares of the new common stock of the Company.
The balance of DOOFF's claim, approximately $1,938,000, will be
classified as a General Allowed Unsecured Claim.
Class 2: Allowed Secured Claim of IPA/Airport Partners. IPA/Airport
Partners holds an impaired secured claim, and will be classified as a
General Allowed Unsecured Claim.
Class 3: Allowed Secured Claim of Prologis FDBA SCI- N.C. Prologis holds
an impaired secured claim, and will be classified as a General Allowed
Unsecured Claim.
Class 6: General Allowed Unsecured Claims. Unsecured claims will receive
one share of the new common stock of the Company for each $2.00 in
allowed claims held or the lesser of $250.00 or the amount of the
allowed class 6 claim.
Class 7: Holders of the Old Common Stock of the Company. The holders of
the old common stock of the Company will retain their interests subject
to the dilution provided for through the issuance of new common stock to
the other classes of claimants.
On April 2, 1999, the Company's wholly owned subsidiaries Shotmaker
Dollies, Inc. ("SDI") and Shotmaker Sound, Inc. ("Sound") filed for
protection under Chapter 7 of the federal Bankruptcy Code. Neither SDI
nor Sound have any assets.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Liquidity and Going Concern
The Company's losses and negative cash flows from operations raised
doubts about its ability to continue as a going concern and caused the
filing of the involuntary and voluntary bankruptcy petitions referred to
above (note 1). The Plan of Reorganization was approved by the
Bankruptcy Court in June 2000, relieving the Company from most of its
liabilities. Based on its activities subsequent to December 31, 1999,
the Company believes it will generate sufficient cash flows to meet its
remaining and current obligations as they become due. Also, the Company
has $250,000 available in working capital from DOOFF, Inc. (see note 1).
Based on these factors, management believes doubts about its ability to
continue as a going concern are alleviated.
See independent auditors' report
and notes to consolidated financial statements.
11
<PAGE> 12
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Principles of Consolidation
The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries. Significant intercompany
accounts and transactions have been eliminated in consolidation.
Leasing Operations
The Company's leasing operations consist of operating and sales-type
leases on a variety of equipment types, primarily camera cars, dollies
and cranes, and other accessories.
Under the operating lease method of accounting, the leased asset is
recorded at cost and depreciated over its estimated useful life, using
periods ranging from three to ten years. Rental payments are recognized
as revenue as they become due under the terms of the operating lease
agreements.
Revenue from certain qualifying lease contracts are accounted for as
sales-type leases wherein the present value of all payments are recorded
currently as revenue, and the related cost of the asset is charged to
cost of sales. Interest is recorded over the term of the related lease
agreement.
Inventories
Inventories are stated at the lower of cost or market. Cost is
determined utilizing the first-in, first-out method (note 17).
Property and Equipment
Property and equipment is stated at cost, less accumulated depreciation
and amortization. Depreciation and amortization is generally determined
using the straight-line method over the estimated useful life of the
property and equipment, using periods ranging from three to ten years.
(See note 17)
Research and Development
Research and development costs are charged to expense as incurred. Such
amounts are not material in any year presented.
Cash Equivalents
The Company considers all highly liquid investments held at financial
institutions with maturity dates of three months or less at the time of
acquisition to be cash equivalents.
Per Share Data
The Company has adopted Statement of Financial Accounting Standards
("SFAS") SFAS No. 128, "Earnings Per Share", which establishes new
standards for computing and presenting basic and diluted earnings per
share. Adoption of SFAS No. 128 does not have a material effect on the
computation or presentation of per share data in the accompanying
consolidated financial statements.
See independent auditors' report
and notes to consolidated financial statements.
12
<PAGE> 13
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Per Share Data (Continued)
The basic income (loss) per share is calculated based upon the weighted
average number of common shares outstanding during each year. Diluted
income (loss) per share is calculated based upon the weighted average of
shares of common stock outstanding and shares that would have been
outstanding assuming the issuance of common stock for all dilutive
potential common stock outstanding. The Company's outstanding stock
options represent the only dilutive potential common stock outstanding.
Concentration of Credit Risk
The Company's customers are principally engaged in the production of
motion pictures or television programming, or are suppliers to such
companies. Credit is extended based on an evaluation of the customer's
financial condition. Receivables arising from the granting of credit
under normal trade terms are generally due within 30 to 90 days and are
generally not collateralized. From time to time, the Company grants
extended terms, which are generally collateralized by a security
interest in the products sold. Collections of accounts receivable have
consistently been within management's expectations.
Advertising Costs
The Company expenses all advertising costs as incurred. Advertising
costs totaled $20,000, $124,000, and $191,000 for the years ended
December 31, 1999, 1998, and 1997, respectively, and were recorded as
part of selling, general and administrative expenses.
Equipment Leases
The Company's leasing operations consist primarily of short-term rentals
of camera cars, camera dollies and cranes. These rentals generally range
from one day to several weeks in duration, with occasional rentals of
several months. The Company also has a small number of camera car and
dollies on long-term operating leases of twelve to thirty-six months.
None of the rentals are noncancelable leases, and no contingent rentals
are included in the Company's consolidated statements of operations.
Stock-Based Compensation
The Company has adopted the disclosure-only provisions of SFAS 123,
"Accounting for Stock-Based Compensation", but applies APB No. 25 and
related interpretations in accounting for options granted under its
plan.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the consolidated
financial statements. Actual results could differ from those estimates
and such differences could be material to the consolidated financial
statements.
Reclassifications
Certain accounts in 1997 have been reclassified in order to conform to
the presentation in 1998 and 1999.
See independent auditors' report
and notes to consolidated financial statements.
13
<PAGE> 14
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
New Accounting Standards
The Company adopted SFAS No. 130, "Reporting Comprehensive Income" and
SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information" during 1999, with no material impact on the consolidated
financial statements. SFAS No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities" was
adopted during the first quarter of 1997. SFAS No. 129, "Disclosures of
Information about Capital Structure" and SFAS No. 128, "Earnings Per
Share" were adopted in the fourth quarter of 1997, with no material
effect on the consolidated financial statements.
The Company operates in a single business segment.
3. INVESTMENT IN SALES-TYPE LEASE AND INSTALLMENT SALE
The following lists the components of the investment in sales-type
lease and installment sale:
<TABLE>
<CAPTION>
1999 1998
------- -------
<S> <C> <C>
Minimum lease payments receivable $34,000 $81,000
Less: unearned income 6,000 29,000
------- -------
Net investment $28,000 $52,000
======= =======
</TABLE>
At December 31, 1999, lease and installment sale receivables are due
within one year.
4. INVENTORIES
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Work in process $ -- $136,000
Finished goods 108,000 117,000
-------- --------
$108,000 $253,000
======== ========
</TABLE>
5. PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Equipment available for lease $6,262,000 $6,523,000
Finished goods 355,000 390,000
Leasehold improvements 63,000 73,000
Furniture and fixtures 62,000 94,000
Automobiles and trucks 119,000 143,000
---------- ----------
6,861,000 7,223,000
---------- ----------
Less accumulated depreciation and amortization 4,726,000 4,037,000
Less rental asset valuation allowance 542,000 542,000
---------- ----------
5,268,000 4,579,000
---------- ----------
$1,593,000 $2,644,000
========== ==========
</TABLE>
See independent auditors' report
and notes to consolidated financial statements.
14
<PAGE> 15
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. PROPERTY AND EQUIPMENT (Continued)
Accumulated depreciation and amortization pertaining to equipment
available for lease amounted to $4,199,000 and $3,528,000 at December
31, 1999 and 1998, respectively.
6. ACQUISITIONS AND DISPOSITIONS
Third Encore
On January 1, 1999, the Company's wholly owned subsidiary, Shotmaker
Sound, Inc. ("Sound"), completed the purchase of the assets and
business of Third Encore ("3E"), a company which provides rehearsal
studio, storage and cartage services to recording artists. Sound
subsequently sold the assets and business of 3E to an unrelated third
party, effective February 1, 1999 (note 16).
On April 1, 1999, Sound filed bankruptcy under Chapter 7 of the
Bankruptcy Code as a no asset debtor.
Production Services - Atlanta
On April 6, 1998, the Company acquired the business of Production
Services - Atlanta, Inc. ("PSA") for a total consideration of $2.1
million consisting of (i) $1 million cash at closing, (ii) a $500,000
promissory note due in three years, interest payable quarterly at 8%,
and (iii) 600,000 shares of Company common stock, at an agreed upon
value of $1 per share. The promissory note was secured by a lien on the
acquired assets, subordinate to the lien of the Company's primary
lender. The $1 million cash at closing, together with $250,000 in
working capital, was funded by Foothill Capital Corporation
("Foothill"). The Foothill loan fully amortized over sixty months, with
interest payable monthly at the reference rate plus 2%. The Foothill
loan was collateralized by all the assets of PSA.
In October 1998, the Company ceased all PSA operations (note 16). On
November 10, 1998, all the assets of PSA were sold at auction. Prior to
the auction, Foothill noticed an event of default under its note, and
foreclosed on the assets. The Company recognized a $425,000 loss on the
disposition of the assets. In December 1998, the remaining amounts due
under the Foothill debt were restructured, together with all other
Foothill debt.
Fluid Images, Inc.
On May 27, 1998, the Company acquired all the stock of Fluid Images,
Inc., ("Fluid Images") an Oregon corporation, including all assets of
Fluid Images, the name "Akela Cranes", but excluding all liabilities
except certain accounts payable and debt of Fluid Images, for a
purchase price of $2.5 million. Immediately upon acquisition, Fluid
Images was liquidated and its assets and liabilities were assumed by
the Company. The consideration consisted of (i) $1 million cash at
closing, (ii) a $750,000 promissory note with $250,000 annual principal
reductions, interest only payable quarterly at 10%, and (iii) 750,000
shares of the Company's common stock, at an agreed upon value of $1 per
share. The promissory note is unsecured. The $1 million cash at closing
was funded by Foothill. The Foothill loan initially fully amortized
over sixty months, with interest payable monthly at the reference rate
plus 2%. The Foothill loan is collateralized by all the acquired
assets. Subsequently, the Company restated the value of the shares
issued to $.20 per share and recognized an impairment in the carrying
value of the acquired intangible assets of $342,000 (note 17).
See independent auditors' report
and notes to consolidated financial statements.
15
<PAGE> 16
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. LONG TERM DEBT
During the bankruptcy proceedings, it was determined that only
$1,500,000 was secured debt, and should not be converted into equity.
This loan was with Foothill at December 31, 1999, and was subsequently
transferred to DOOFF in February 2000. This loan bears interest at 2%
above the prime rate, interest payable monthly until the maturity date,
June 2010. This loan is secured by all the assets of the Company.
In March 2000, the Bankruptcy Court approved an interim working capital
financing from DOOFF for a total of $250,000, bearing interest at 10%.
8. LIABILITIES SUBJECT TO COMPROMISE
Liabilities subject to compromise refer to liabilities incurred prior
to the commencement of the Chapter 11 case. These liabilities consist
primarily of amounts outstanding under long-term debt, and also include
accounts payable, accrued interest, customer deposits and other accrued
expenses. These amounts represent the Company's best estimate of known
or potential claims to be resolved in connection with the Chapter 11
Case. Such claims remain subject to future adjustment based on
negotiations, actions of the Bankruptcy Court, further development with
respect to disputed claims, future rejection of additional executory
contracts or expired leases, determination as to the value of any
collateral securing claims, or other events.
Payment terms for these amounts, which are considered long-term
liabilities at this time, will be established in connection with the
Chapter 11 Case.
The principal categories of claims classified as liabilities subject to
compromise under the reorganization proceedings at December 31, 1999
are identified below.
<TABLE>
<CAPTION>
<S> <C>
Accounts payable $1,139,000
Customer deposits 48,000
Accrued expenses 447,000
Long-term debt 3,439,000
----------
$5,073,000
==========
</TABLE>
9. INCOME TAXES
The Company utilizes the liability method under SFAS No. 109 to account
for income taxes. Under this method, deferred tax assets and
liabilities are determined based on differences between financial
reporting and tax bases of assets and liabilities and are measured
using the enacted tax rates and laws expected to apply when the
differences are expected to reverse.
At December 31, 1999, the Company has net operating loss-carry forwards
of approximately $28 million for federal tax purposes, which expire
from 2000 to 2019. Because of statutory "ownership changes" the amount
of net operating losses which may be utilized in future years are
subject to significant annual limitations. The Company also has
operating loss carryforwards of approximately $4 million for California
tax purposes, which expire from 2000 to 2004. The Company also has
federal research and development credits of approximately $64,000,
expiring in 2001 and 2002, which may be used to offset future tax
liabilities.
See independent auditors' report
and notes to consolidated financial statements.
16
<PAGE> 17
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9. INCOME TAXES (Continued)
At December 31, 1999, total deferred tax assets, consisting principally
of net operating loss carryforwards, amounted to approximately $10
million. For financial reporting purposes, a valuation allowance has
been recognized in an amount equal to such deferred tax assets due to
the uncertainly surrounding their ultimate realization.
The effective tax rate differs from the U.S. Federal statutory rate
principally due to the valuation allowance recognized due to the
uncertainty surrounding the ultimate realization of deferred tax
assets.
10. RELATED PARTY TRANSACTIONS
Beginning in September 1998, a principal shareholder of the Company
agreed to loan approximately $200,000 to VA Industries, the
manufacturer of the Company's new hydraulic dolly, toward the
completion of the first production run of twelve dollies. The VA
Industries loan is being administered by the Company, and is secured by
the construction in process of the dollies at VA Industries. In
addition, the shareholder purchased accounts receivable at par from the
Company, from which the Company subsequently collected $62,000 and
failed to remit (note 17).
On August 10, 1999, the Company entered into a license agreement with
an affiliate to develop a web site, Shotmaker.com. This website was
financed by a principal shareholder and the Company has a right to
acquire the website for an amount equal to the total financed by the
principal shareholder.
11. COMMON STOCK AND STOCK OPTIONS
In 1998, 300,000 shares of common stock were supposed to be issued as a
signing bonus for a new president. The stock was never physically
issued due to non-payment of the stock transfer agent. In 1999 and
1998, the president also exercised options to purchase 300,000 and
500,000 shares of common stock, respectively. The stock was never
physically issued also due to non-payment of the stock transfer agent.
Stock options to purchase shares of common stock were granted to
certain officers and key employees as follows:
<TABLE>
<CAPTION>
Options Outstanding
Weighted Average Exercise
-----------------------------
Shares Price
------------ ------------
<S> <C> <C>
Outstanding at January 1, 1998 700,000 $ 0.12
Granted 1,200,000 $ 0.01
Exercised (500,000) $ 0.01
Terminated or expired (560,000) $ 0.12
------------ ------------
Outstanding at December 31, 1998 840,000 $ 0.03
============ ============
Granted 1,391,667 $ 0.21
Exercised (300,000) $ 0.01
Terminated or expired (400,000) $ 0.01
------------ ------------
Outstanding at December 31, 1999 1,531,667 $ 0.04
============ ============
</TABLE>
See independent auditors' report
and notes to consolidated financial statements.
17
<PAGE> 18
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
11. COMMON STOCK AND STOCK OPTIONS (Continued)
Options outstanding at December 31, 1999 expire between January 2001
and January 2005.
Vested options totaling 291,667, issued to Mr. Berardi, former
President of the Company, and included as outstanding at December 31,
1999 were tendered and rejected by the Company subsequent to Mr.
Berardi's resignation on January 6, 2000 (note 12).
Options are executory contracts as defined by the Bankruptcy Code, and
are subject to acceptance or rejection by the Company. The Company
rejected all stock option contracts except for one agreement providing
for 1,100,000 shares at $.25 per share, expiring in June 2003. These
options became exercisable at the approval date of the Reorganization
Plan by the Court.
Had compensation cost for the plan been determined based on the fair
value of the options at the grant dates consistent with the methodology
prescribed by SFAS 123, there would be no change to the Company's net
loss and loss per share.
12. COMMITMENTS AND CONTINGENCIES
Leases
In December 1996, the Company entered into a lease for its premises
which expired November 1999. The Company is now leasing the premises on
a month to month basis for $12,000 per month.
In September 1997, the Company's subsidiary, Shotmaker Dollies, Inc.,
entered into a sublease agreement for office and warehouse space
adjacent to its principal premises. Dollies filed for protection under
Chapter 7 of the Bankruptcy Code, and the lease was rejected under
provisions of the Bankruptcy Code which allow debtors to accept or
reject certain lease obligations.
In January 1998, as part of the purchase of 3E (note 6), Sound assumed
3E's existing building leases that require combined monthly rental of
$18,400 through January 2003. Sound was released from the lease
obligations under term of the sale of the assets of 3E on February 1,
1999.
Claims
As mentioned in note 8, liabilities subject to compromise is the
Company's best estimate. Proof of claims have been filed by creditors
who claim that the Company's indebtedness towards them is understated.
The Company is debating approximately $500,000 of unsecured claims and
$175,000 of administrative claims. The Company is also debating an
additional $900,000 in unsecured claims which is believed to be without
merit. It is reasonably possible that a change in the estimate will
occur in the near term. The Company believes it will prevail, but
should the Court rule in favor of the claimants, unsecured claims would
be converted into common stock at a rate of $2 of indebtedness for one
share, and administrative claims would become payable in cash. A former
president is also claiming options to purchase 291,667 shares of the
Company's common stock at a price of $0.07 per share. These option
agreements were rejected by the Company as executory contracts in
accordance with the Bankruptcy Court.
Contingent gain
In November 1998, the Company filed a claim with its insurance company
for assets that had been stolen. After rejecting the claim, the
insurance carrier settled for $235,000, which was received by the
Company in July 2000. The contingent gain was not recorded in the
Company's books at December 31, 1998 and 1999.
See independent auditors' report
and notes to consolidated financial statements.
18
<PAGE> 19
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
13. LITIGATION
All pending litigation is subject to an automatic stay as a result of
the bankruptcy filing. Based upon negotiation, adjudication or other
action by the Bankruptcy Court, amounts with respect to disputed claims
may increase the amounts of liabilities subject to compromise recorded
by the Company.
14. SALES TO MAJOR CUSTOMERS AND GEOGRAPHIC AREAS
No revenue derived from a single customer accounted for more than ten
percent of total revenue during 1999, 1998, or 1997. No geographic area
outside the United States accounted for more than ten percent of total
sales during the last three years.
15. FAIR VALUES OF FINANCIAL INSTRUMENTS
Management has determined that the estimated fair value of the
Company's financial instruments approximates the carrying amount of
such financial instruments in all material respects as of December 31,
1999 and 1998.
16. DISCONTINUED OPERATIONS
In October 1998, the Company ceased operations in Atlanta and
Nashville. Subsequently, on November 10, 1998, all the inventory and
equipment of the Atlanta and Nashville operations was sold at auction.
The Company recognized a $425,000 loss on the disposition, and a loss
of $603,000 from operations with respect to Atlanta and Nashville for
the year ended December 31, 1998. Revenue from these operations in 1998
totaled $330,000.
On February 1, 1999, the Company sold substantially all the assets of
its wholly owned subsidiary, Shotmaker Sound, Inc. ("Sound").
Subsequently, Sound filed for protection under Chapter 7 of the
Bankruptcy Code. Sound was deemed as a no asset debtor. The Company
recorded a loss on disposition of $68,000, and a loss of $43,000 from
operations of this subsidiary for the year ended December 31, 1998.
Total revenue from these operations totaled $578,000 for 1998. Revenue
from these operations were immaterial in 1999.
The disposition of these assets has been accounted for as discontinued
operations and accordingly, the operating results of the Atlanta and
Nashville operations and of Shotmaker Sound have been aggregated and
reported as discontinued operations in the accompanying consolidated
statement of operations. The operations of Atlanta and Nashville were
only in effect during fiscal 1998, and no restatement of prior years
financial statements is required.
17. IMPAIRMENT OF ASSETS
In 1998, the Company wrote-off $342,000 of goodwill related to the
purchase of Fluid Images, Inc. The Company also reduced the value
associated with the issuance of new shares of common stock by $600,000.
The total effect of these reductions was to write off purchased
goodwill of $942,000 for the year ended December 31, 1998. In 1998, the
Company also recorded an impairment loss of $640,000 to present its
inventory at fair market value, which was lower than the cost. Lastly,
the Company also wrote down its prepaid expenses by $165,000 in 1998
based on their estimated future benefits. Included in the above is
$410,000 related to monies paid to VA Industries for their work in
process for the new hydraulic dollies.
In 1999, the Company recorded an impairment loss on long lived assets
of $206,000 in accordance with SFAS No. 121, "Accounting for Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed of",
which was triggered by the bankruptcy filing. The fair value of fixed
assets subject to impairment was determined by an appraiser.
See independent auditors' report
and notes to consolidated financial statements.
19
<PAGE> 20
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
See independent auditors' report
and notes to consolidated financial statements.
20
<PAGE> 21
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
SCHEDULES OF VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
Balance Balance
January 1, Addition Deductions December 31,
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1997
Asset valuation allowance $ 542,000 $ -- $ -- $ 542,000
Allowance for doubtful accounts 34,000 46,000 (34,000) 46,000
Warranty liability 4,000 18,000 (22,000) --
------------- ------------- ------------- -------------
$ 580,000 $ 64,000 $ (56,000) $ 588,000
============= ============= ============= =============
YEAR ENDED DECEMBER 31, 1998
Asset valuation allowance 542,000 -- -- 542,000
Allowance for doubtful accounts 46,000 41,000 (85,000) 2,000
Warranty liability -- -- -- --
------------- ------------- ------------- -------------
$ 588,000 $ 41,000 $ (85,000) $ 544,000
============= ============= ============= =============
YEAR ENDED DECEMBER 31, 1999
Asset valuation allowance $ 542,000 $ -- $ -- $ 542,000
Allowance for doubtful accounts 2,000 3,000 -- 5,000
Warranty liability -- -- -- --
------------- ------------- ------------- -------------
$ 544,000 $ 3,000 $ -- $ 547,000
============= ============= ============= =============
</TABLE>
See independent auditors' report
and notes to consolidated financial statements.
21
<PAGE> 22
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
Exhibit
Number Description
------- -----------
27.1 Financial Data Schedule
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dated: October 13, 2000
CAMERA PLATFORMS INTERNATIONAL, INC
By: /s/ Martin Perellis
-----------------------------------
Name: Martin Perellis
Title: President and Principal
Financial and Accounting
Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following officers and directors of Camera
Platforms International, Inc., on behalf of the Company, in the capacities and
in the dates indicated.
October 13, 2000
/s/ Martin Perellis
-----------------------------------------
Martin Perellis
President, Principal Financial and
Accounting Officer and Director
22
