<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[Mark one]
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO 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.
(Debtor-in-possession as of October 25, 1999)
(Exact name of registrant as specified in its charter)
Delaware 95-4024550
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
10909 Vanowen Street, North Hollywood, California, 91605
(Address of principal executive offices) (Zip Code)
(818) 623-1700
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 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 the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of May 11, 2000.
Common Stock $.0005 par value 13,768,228
(Class) (Number of shares)
<PAGE>2
CAMERA PLATFORMS INTERNATIONAL, INC.
INDEX
<TABLE>
<CAPTION>
Page Number
<S> <C>
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements:
Condensed Consolidated Statement of Financial Position
at March 31, 2000, and December 31, 1999 3
Condensed Consolidated Statement of Operations for the
Three Months ended March 31, 2000 and 1999 4
Condensed Consolidated Statement of Cash Flows for the
Three Months ended March 31, 2000 and 1999 5
Notes to Condensed Consolidated Unaudited Financial
Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 13
PART II. OTHER INFORMATION 15
Item 1. Legal Proceedings 15
Signature Page 15
</TABLE>
<PAGE> 2
CAMERA PLATFORMS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Debtor-in-Possession)
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
<S> <C> <C>
ASSETS
Current Assets
Cash $37,000 $9,000
Accounts receivable, less allowance for doubtful
accounts of $5,000 in 2000 and $87,000 in 1999 106,000 102,000
Current maturities of net investment in
sales-type lease and installment sale 10,000 34,000
Inventories 821,000 819,000
Prepaid expenses 234,000 230,000
Total current assets 1,209,000 1,194,000
Property and equipment, net of accumulated
depreciation and a $542,000 rental asset
valuation allowance 1,647,000 1,799,000
Deposits and other noncurrent assets 24,000 21,000
$2,879,000 $3,014,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable 8,000 9,000
Accrued Liabilities 94,000 94,000
Debtor-in-Possession Loan 53,000 -
Deferred Revenue 3,000 6,000
Total current liabilities 158,000 109,000
Liabilities subject to compromise 6,415,000 6,415,000
Shareholders' Equity
Common stock?$.0005 par value; 15,000,000 shares
authorized; shares issued and outstanding:
13,768,228 in 2000 and 1999 7,000 7,000
Additional paid-in capital 23,549,000 23,549,000
Accumulated deficit (27,250,000)(27,066,000)
Total shareholders' equity (3,694,000) (3,510,000)
$2,879,00 $3,014,000
</TABLE>
Note: The balance sheet at December 31, 1999 was derived from the unaudited
financials statements of that date.
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE> 3
CAMERA PLATFORMS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31, 2000 March 31, 1999
<S> <C> <C>
Revenues
Net product sales $ - $ 52,000
Revenues from rental operations 280,000 305,000
280,000 357,000
Expenses
Cost of sales $ - 27,000
Cost of rental operations 302,000 361,000
Selling, general and administrative 95,000 320,000
397,000 708,000
Operating loss (117,000) (351,000)
Interest expense, net (64,000) (142,000)
Other income (expenses), net (3,000) 28,000
Net loss from discontinued operations - (52,000)
Net loss ($184,000) ($517,000)
Basic and diluted loss per share ($0.01) ($0.04)
Weighted average number of shares outstanding 13,768,228 13,768,228
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE> 4
CAMERA PLATFORMS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31, 2000 March 31, 1999
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) ($184,000) ($517,000)
Adjustments to reconcile net loss to net
Cash used in operating activities:
Depreciation and amortization 163,000 171,000
Gain on sale of equipment - (2,000)
Provision (credit) for doubtful accounts - (82,000)
Changes in assets and liabilities:
Accounts receivable (4,000) 121,000
Inventories (2,000) (17,000)
Installment sales 24,000 12,000
Prepaid expenses and other current assets (4,000) (38,000)
Deposits and other assets (3,000) 44,000
Accounts payable (1,000) (4,000)
Accrued liabilities - 17,000
Customer deposits - 132,000
Deferred revenue (3,000) 22,000
Net cash used in operating activities (14,000) (141,000)
INVESTING ACTIVITIES
Purchases of property and equipment (11,000) -
Net proceeds from sale of equipment - 148,000
Net cash provided by (used in) investing
activities (11,000) 148,000
FINANCING ACTIVITIES
Proceeds from borrowings from short-term debt 53,000 -
Repayment of borrowings from short-term debt - (2,000)
Proceeds from issuance of stock options - 2,000
Net cash provided by (used in) financing
activities 53,000 -
Net increase (decrease) in cash 28,000 (7,000)
Cash at beginning of period 9,000 26,000
Cash at end of period $37,000 $33,000
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest $64,000 $34,000
Income taxes - -
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE> 5
CAMERA PLATFORMS INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q and
Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all normal
recurring adjustments considered necessary for a fair presentation have been
included. Operating results for the three-month period ended March 31, 2000
are not necessarily indicative of the results that may be expected for the
year ending December 31, 2000. For further information refer to the
financial statements and footnotes thereto included in the Company's annual
report on Form 10-K for the year ended December 31, 1999.
NOTE 2 - PROCEEDINGS UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
On September 1, 1999, the Company engaged Workout Specialist, Inc., ("WSI") to
act on behalf of the Company in an attempt to reorganize its debts outside of
the formal bankruptcy process. The agreement between the Company and WSI is
for one year, and may be terminated by either party on thirty days written
notice. The agreement calls for compensation of $5,000 per month, and an
option to purchase 1,100,000 shares of the Company's stock at $.25 per share.
Walter Kornbluh of WSI commenced service as the general manager of the
Company. Before the Company could effectively formulate and implement a plan,
however, on September 24, 1999, Camera Platforms International, Inc. was
served with a notice 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 praying by certain creditors 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 Untied 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"). The Company is currently operating its
business as debtor-in-possession pursuant to the Bankruptcy Code.
Actions 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 and option 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 to be
voted upon by creditors and equity holders and approved by the Bankruptcy
Court. On February 21, 2000 the Company filed a reorganization plan that
<PAGE> 7
CAMERA PLATFORMS INTERNATIONAL, INC.
provides for emergence from bankruptcy in 2000. There can be no assurance
that the reorganization plan proposed by the Company will be confirmed by the
Bankruptcy Court, or that any such plan will be consummated. If such plan is
not accepted by the required number of creditors and equity holders, any
party in interest may subsequently file its own plan of reorganization. A
plan of reorganization must be confirmed by the Bankruptcy Court, upon
certain findings being made by the Bankruptcy Court which are required by the
Bankruptcy Code.
The Bankruptcy Court may confirm a plan notwithstanding the non-acceptance of
the plan by an impaired class of creditors or equity security holders if
certain requirements of the Bankruptcy Code are met. A plan of reorganization
could also result in holders of the Common Stock receiving no value for their
interests. Because of such possibilities, the value of the Common Stock of
the Company is highly speculative.
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 from September 24,
1999.
As part of the Bankruptcy Case, the Company entered into a stipulation 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.
On January 6, 2000, an order was entered granting the debtor's motion to use
cash collateral pursuant to the stipulation with Foothill.
On December 7, 1999 the meeting of creditors was held pursuant to Code Section
341(a). The Company and creditors appeared, and the Company's representatives
were examined by the representative of the Office of the United States Trustee,
as well as by creditors present.
On December 8, 1999, a hearing was held before Judge Mund to consider the
motion for appointment of a Chapter 11 trustee which was filed by one of the
Company's creditors. On December 22, 1999, Judge Mund ordered the motion
denied.
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.
<PAGE> 8
CAMERA PLATFORMS INTERNATIONAL, INC.
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. Judge Mund granted the motion in an amount not to
exceed $250,000. The financing is being provided by DOOFF, LLC., the Company's
secured lender (see below). As of March 31, 2000, $53,000 has been advanced
to the Company under the note.
AGREEMENTS WITH CONSOLIDATED PRODUCTIONS, INC.
On February 7, 2000, Shotmaker Acquisition Corp. ("SAC"), the majority
shareholder of the Company, entered into an agreement with Consolidated
Productions, Inc. "(Consolidated") by which SAC and Consolidated agreed that
SAC would transfer to Consolidated (or surrender to the Company) 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 right, title and
interest in Foothill's loans to the Company; Consolidated will provide $250,000
in working capital to the Company (see DIP financing motion above); 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 after the adoption of 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, Foothill's 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
calls for the Company to commence adversary proceeding 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 is not reached by May 15, 2000, Consolidated will 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. On April 18, 2000, a hearing was held before Judge Mund
in the Bankruptcy court regarding the adequacy of the Disclosure Statements
describing the Debtor's Plan of Reorganization. The court approved the
Disclosure Statement as containing adequate information and authorized the
Company to solicit votes with regard to the plan. The Court has scheduled
June 13, 2000 for a hearing date for confirmation of the plan, and has set
June 2, 2000 as the final date for objections to the plan.
The plan divides the creditors claims and proposes settlements to each class on
the effective date of the adoption of the plan as follows:
<PAGE> 9
CAMERA PLATFORMS INTERNATIONAL, INC.
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 to such claim or one share of the Company's New Common stock for each
$.25 in approved claims.
Administrative claims include statutory fees; ordinary course liabilities
incurred post-petition; post-petition profession fees and expenses incurred in
conjunction with the Chapter 11 Case; United States Trustee fees; and allowed
tax claims. Allowed tax claims, at the election of the debtor, maybe paid
out in equal quarterly installments over a period of six years, with interest
at 9% per annum on the unpaid balance.
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 Company'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. DOOFF shall receive 4,000,000 shares of the New Common stock
of the Company (in lieu of Old Common from SAC). The balance of DOOFF's
claim, approximately $1.938 million, 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. As indicated above, the prior control shareholder,
SAC, will be disproportionately diluted.
Any party in interest may object to the confirmation of the plan.
Voting of Claims and Interests:
The Court cannot confirm the Plan of Reorganization unless and until (1) at
<PAGE> 10
CAMERA PLATFORMS INTERNATIONAL, INC.
least one impaired class has accepted the plan and (2) all impaired classes
have voted to accept the plan, unless the plan is eligible to be confirmed by
"cramdown", as discussed below. A class of claims is considered to have
accepted the plan when more than one-half in number and at least two-thirds
in dollar amount of the claimants which actually voted, voted in favor of the
plan.
Even if all the impaired classes do not accept the proposed plan, the Court may
nonetheless confirm the plan if the non-accepting classes are treated in the
manner required by the Code. The process by which non-accepting classes are
forced to be bound by the terms of a plan is commonly referred to as
"cramdown". The Bankruptcy Code allows a plan to be "crammed down" if
certain requirements of the Code are met, and if the plan does not discriminate
unfairly and is fair and equitable. The Company may ask the Court to confirm
its plan of reorganization by cramdown on any impaired class which does not vote
to accept the plan.
At this time, it is not possible to predict the outcome of the Chapter 11 Case
or its effect on the Company's business. The plan of reorganization above may
be rejected, and alternative plans may or may not be proposed, accepted or
implemented. If it is determined that the liabilities subject to compromise
in the Chapter 11 Case exceed the fair market value of the assets, unsecured
claims may be satisfied at less than 100% of their face value and the equity
interest of the Company's shareholders may be severely diluted, or may have no
value.
NOTE 3 - INVENTORIES
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
<S> <C> <C>
Raw materials $ - $ -
Work in process 320,000 318,000
Finished goods 501,000 501,000
$821,000 $819,000
</TABLE>
NOTE 4 - PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
<S> <C> <C>
Rental equipment $6,262,000 $6,262,000
Machinery and equipment 366,000 355,000
Leasehold improvements 63,000 63,000
Furniture and fixtures 62,000 62,000
Automobiles and trucks 119,000 119,000
$6,872,000 $6,861,000
Less accumulated depreciation and amortization 4,683,000 4,520,000
Less rental asset valuation allowance 542,000 542,000
$1,647,000 $2,644,000
</TABLE>
<PAGE> 11
CAMERA PLATFORMS INTERNATIONAL, INC.
NOTE 5 - 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 reorganization proceedings are identified below.
<TABLE>
<CAPTION>
March 31, 2000
<S> <C>
Accounts payable $1,139,000
Customer deposits 48,000
Accrued expenses 317,000
Long-term debt 4,911,000
$6,415,000
</TABLE>
NOTE 6 - DEBTOR-IN-POSSESSION FINANCING
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, LLC., the Company's secured lender. The balance outstanding at
March 31, 2000 was $53,000.
NOTE 7 - LITIGATION
All pending litigation is subject to an automatic stay as a result of the
bankruptcy filing (Note 2). 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. Amounts past due which have been subject to litigation are included
in the amounts recorded as of March 31, 2000.
<PAGE> 12
NOTE 8 - INCOME TAXES
The Company utilizes the liability method 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 March 31 2000, the Company had net operating loss carry forwards of
approximately $23 million for federal tax purposes, which expire from 2000
to 2013. Because of statutory ownership changes, the amount of net operating
losses which may be utilized in future years is subject to significant annual
limitations. The Company has California net operating loss carry forwards
of approximately $3.5 million for tax purposes, which expire from 2000 to 2003.
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. At March 31, 2000, total deferred tax assets, consisting
principally of net operating loss carry forwards, amounted to approximately
$8 million. For financial reporting purposes, a valuation allowance has
been recognized in an amount equal to such deferred tax assets due to the
uncertainty 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.
<PAGE> 13
CAMERA PLATFORMS INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Unaudited)
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995.
This Annual Report on Form 10-K includes certain forward-looking statements
based upon management's beliefs, as well as assumptions made by and data
currently available to management. This information has been, or in the
future, may be included in reliance on the "safe harbor" provision of the
Private Securities Litigation Reform Act of 1995. These statements are
subject to a number of risks and uncertainties including, but not limited to,
the following: the ability of the Company to continue as a going concern;
the ability of the Company to generate sufficient cash revenue from
operations to pay current operating obligations, including its occupancy
costs; the ability of the Company to operate pursuant to the terms and
conditions of the agreement for the interim use of cash collateral with its
primary secured lender; the ability of the Company to operate successfully
under a Chapter 11 proceeding; approval of plans and activities by the
Bankruptcy Court; risks associated with operating a business in Chapter 11; the
ability of the Company to have approved its reorganization plan in the
Chapter 11 Case; adverse developments with respect to the Company's
liquidity or results of operations; the ability of the Company to obtain
products and services and negotiate terms with vendors and service providers
for current orders; the ability to develop, fund and execute an operating
plan for the Company; the ability of the Company to attract and retain
employees; competitive pressures from other camera car companies and grip
equipment rental companies which may affect the nature and viability of the
Company's business strategy; the ability of the Company to attract and retain
customers; and the absence of an active public trading market for the
Company's common stock.
Actual results may differ materially from those anticipated in any such
forward-looking statements. The Company undertakes no obligation to update
or revise any forward-looking statements to reflect subsequent events or
circumstances.
OVERVIEW
The Notes to Consolidate Financial Statements are an integral part of
Management's Discussion and Analysis of Financial Condition and Results of
Operations and should be read in conjunction herewith.
LIQUIDITY AND CAPITAL RESOURCES
As a result of continuing losses from operations exacerbated by the failure of
the Company's strategy to increase it presence in the rental market through
acquisitions of Fluid Images, Inc., and the assets of PSA in Nashville and
Atlanta coupled with cost overruns and production problems with its new
dolly, the Company defaulted on various debt obligations. In 1999, the
<PAGE> 14
CAMERA PLATFORMS INTERNATI0NAL, INC.
Company began negotiations with Foothill Capital Corporation ("Foothill") and
other creditors to restructure the Company's debt.
On September 1, 1999, the Company engaged Workout Specialist, Inc., ("WSI")
to act on behalf of the Company in an attempt to reorganize its debts outside
of the formal bankruptcy process. Before the Company could effectively
formulate and implement a plan, however, 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.
The Company is operating as a debtor-in-possession under Chapter 11 of the
Bankruptcy Code. The Company has been able to secure up to $250,000 in
debtor-in-possession ("DIP") financing provided by its secured lender, DOOFF,
LLC. Even with this financing, however, there remains a serious question as
o the Company's abilities to generate sufficient cash to continue operations.
RESULTS OF OPERATIONS
The following analysis compares the three months ended March 31, 2000, with the
three months ended March 31, 1999.
First quarter 2000 results compared with first quarter 1999
The Company's revenue for the first quarter decreased by 27% compared with the
same period of 1998. Camera car rentals increased by 10%. Dolly and crane
rentals decreased form $29,256 in 1998 to $21,055 in 1999, or almost 28%. Akela
crane rentals decreased 28% from $44,880 to $32,351.
As a result of the Company's bankruptcy filings and ongoing discussions and
negotiations with suppliers, there were no sales revenues for the quarter.
The gross margin on camera car rentals increased by 129%, due to lower
personnel and maintenance expenses. The gross margin on Akela rentals
decreased $26,000, due to the decrease in revenues and increases in
personnel and equipment rental expenses. The gross margin on dolly and
crane rentals decreased by $3,000, reflecting lower revenues offset by
substantially lower operating expenses.
Selling expenses decreased 52%, and general and administrative expenses
decreased approximately 76%, from $119,534 to $28,073 over the same quarter
of 1998. The reductions in general and administrative expenses reflected
substantially lower insurance, legal, accounting, and personnel expenses.
The net loss for the quarter was $184,000 compared with a loss of $517,000
for the same period of 1999.
<PAGE> 15
CAMERA PLATFORMS INTERNATIONAL, INC
International Sales
International sales are not a material component of the Company's total
revenues.
Inflation
Inflation has not had a material impact on the Company's operations to date,
and the Company believes it will not have a material effect on operations in
he next twelve months.
PART II - OTHER INFORMATION
Item 1. Litigation.
All pending litigation is subject to an automatic stay as a result of the
Chapter 11 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.
Item 6. Exhibits and Reports on Form 8-K.
The Company filed no reports on Form 8-K during the quarter ended
March 31, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CAMERA PLATFORMS INTERNATIONAL, INC.
/s/ William O. Fleischman
Date: May 11, 2000 William O. Fleischman
Chief Executive Officer
/s/ Ronald J. Riddle
Date: May 11, 2000 Ronald Riddle
Chief Operating Officer and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET, CONDENSED CONSOLIDATED STATEMENT OF INCOME
AND THE CONSOLIDATED STATEMENT OF CASH FLOW AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 37,000
<SECURITIES> 0
<RECEIVABLES> 111,000
<ALLOWANCES> (5,000)
<INVENTORY> 821,000
<CURRENT-ASSETS> 1,209,000
<PP&E> 6,330,000
<DEPRECIATION> (4,683,000)
<TOTAL-ASSETS> 2,879,000
<CURRENT-LIABILITIES> 158,000
<BONDS> 0
0
0
<COMMON> 7,000
<OTHER-SE> (3,701,000)
<TOTAL-LIABILITY-AND-EQUITY> 2,879,000
<SALES> 0
<TOTAL-REVENUES> 280,000
<CGS> 0
<TOTAL-COSTS> 397,000
<OTHER-EXPENSES> 3,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 64,000
<INCOME-PRETAX> (184,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (184,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (184,000)
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
