<PAGE> 1
FORM 8
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
AMENDMENT TO APPLICATION OR REPORT
Filed Pursuant to Section 12, 13 or 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
PARTECH HOLDINGS CORPORATION
(Exact name of registrant as specified in charter)
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items,
financial statements, exhibits or other portions of its Quarterly report
for the fiscal quarter ended January 31, 1994 as filed on Form 10-Q and
as set forth in the pages attached hereto:
Table of Contents
Item 1. Financial Statements
(a) Consolidated Balance Sheets as of January 31, 1994 and
April 30, 1993
(b) Statements of Consolidated Operations for the Three
Months and Nine Months Ended January 31, 1994 and 1993,
respectively
(c) Statements of Consolidated Cash Flows for the Three
Months and Nine Months Ended January 31, 1994 and 1993,
respectively
(d) Notes to Consolidated Financial Statements, Note 2,
Federal Income Tax
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations, Results of
Operations (not inclusive of Liquidity and Capital
Resources)
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this amendment to be signed on its
behalf by the undersigned, thereunto duly authorized.
PARTECH HOLDINGS CORPORATION
______________________________
(Registrant)
/s/ JOHN E. RAYL
By: ______________________________
John E. Rayl
Chief Executive Officer, President, Treasurer,
Principal Financial Officer, and Director
Date: July 15, 1994
<PAGE> 2
<TABLE>
PART I
Item 1. FINANCIAL STATEMENTS
--------------------
PARTECH HOLDINGS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
JANUARY 31, APRIL 30,
1994 1993
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 322,138 $ 143,164
Accounts receivable - related parties 159,269 108,318
Accounts and commissions receivable (net of allowance
for doubtful accounts of $3,148 and $0) 113,098 18,388
Notes receivable - related parties 128,714 129,000
Residuals, notes and accrued interest receivable 795,296 918,843
Equipment notes and accrued interest receivable 60,997,940 87,904,468
Leased property under capital lease, at cost (net of
accumulated amortization of $121,670,672
and $141,703,003, respectively) 31,386,903 44,291,407
Net investment in operating leases (net of
accumulated depreciation of $3,756,888 and
$2,271,639, respectively) 1,949,441 5,293,165
Property and equipment, at cost (net of accumulated
depreciation of $326,086 and $263,626, respectively) 628,368 374,962
Cost in excess of net assets acquired (net of
accumulated amortization of $1,053,428
and $957,067, respectively) 2,315,715 2,410,775
Investment in partnerships 45,498 45,498
Net investment in direct financing leases 2,194,564 3,330,791
Deferred organization, stock issuance and
other financing costs 67,099 27,678
Broadcasting rights 411,326 -
Other assets 80,750 171,305
------------- -------------
Total Assets $ 101,596,119 $ 145,167,762
============= =============
<FN>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>
2
<PAGE> 3
<TABLE>
PARTECH HOLDINGS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(CONTINUED)
<CAPTION>
JANUARY 31, APRIL 30,
1994 1993
<S> <C> <C>
LIABILITIES:
Accounts payable and accrued expenses $ 57,909 $ 90,450
Accounts payable - related parties 33,472 49,220
Note payable - related party - 625,000
Notes and accrued interest payable 2,367,137 3,514,047
Broadcasting rights payable 411,326 -
Discounted lease rentals and accrued interest payable 33,336,194 49,584,419
Capital lease obligations and accrued interest payable 61,007,448 87,910,364
Accrued officer compensation and interest payable 99,239 215,113
Unearned income - 10,902
Deferred income taxes 75,000 75,000
____________ ____________
Total Liabilities 97,387,725 142,074,515
------------ ------------
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value, 1,000,000 shares
authorized, none issued and outstanding
Common stock, $0.05 par value, 50,000,000 shares
authorized, 5,636,906 and 2,662,425, respectively,
issued 281,845 133,121
Common stock subscribed, $0.05 par value, 400,000
shares subscribed at April 30, 1993 - 20,000
Capital in excess of stated value 7,885,949 5,545,851
Retained deficit (3,947,812) (2,515,725)
------------ ------------
4,219,982 3,183,247
Common stock issued and unpaid - (90,000)
Treasury stock, at cost (11,588) -
------------ ------------
Total Stockholders' Equity 4,208,394 3,093,247
Total Liabilities and Stockholders' Equity$ ------------ ------------
$ 101,596,119 $145,167,762
============= ============
<FN>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>
<PAGE> 4
<TABLE>
PARTECH HOLDINGS CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED OPERATIONS
<CAPTION>
THREE MONTHS ENDED JANUARY 31,
_________________________________
1994 1993
<S> <C> <C>
REVENUES:
Rental income $ 5,421,626 $ 8,601,414
Commissions, fees and other income 199,164 164,632
Interest income 1,788,387 3,253,925
------------ ------------
Total Revenues 7,409,177 12,019,971
------------ ------------
COSTS AND EXPENSES:
Marketing, administrative and other operating expenses 414,103 266,825
Interest expense 2,766,941 4,997,120
Depreciation and amortization of property, equipment
and leased property under capital lease 4,470,153 6,867,978
Amortization of cost in excess of net assets acquired
and other intangible assets 35,231 30,865
------------ ------------
Total Costs and Expenses 7,686,428 12,162,788
------------ ------------
NET LOSS $(277,251) $(142,817)
============ ============
PRIMARY NET LOSS PER SHARE $ (0.05) $ (0.05)
FULLY DILUTED NET LOSS PER SHARE $ (0.05) $ (0.05)
AVERAGE NUMBER OF COMMON AND
COMMON EQUIVALENT SHARES:
Primary 5,634,871 2,650,701
Fully diluted 5,634,871 2,650,701
<FN>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>
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<TABLE>
PARTECH HOLDINGS CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED OPERATIONS
<CAPTION>
NINE MONTHS ENDED JANUARY 31,
_________________________________
1994 1993
<S> <C> <C>
REVENUES:
Rental income $ 18,292,767 $ 26,607,757
Commissions, fees and other income 288,821 285,876
Interest income 6,194,753 11,831,240
------------ ------------
Total Revenues 24,776,341 38,724,873
------------ ------------
COSTS AND EXPENSES:
Marketing, administrative and other operating expenses 1,182,216 616,192
Advisory services 219,665 -
Interest expense - related party 121,011 -
Interest expense 8,970,622 17,406,306
Depreciation and amortization of property, equipment
and leased property under capital lease 15,609,253 21,089,418
Amortization of cost in excess of net assets acquired
and other intangible assets 105,661 92,595
------------ ------------
Total Costs and Expenses 26,208,428 39,204,511
------------ ------------
LOSS BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING PRINCIPAL (1,432,087) (479,638)
Income tax benefit - (270,000)
------------ ------------
LOSS BEFORE CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPAL (1,432,087) (209,638)
CUMULATIVE EFFECT TO MAY 1, 1992 OF CHANGE
IN ACCOUNTING PRINCIPAL FOR INCOME TAXES - 180,000
------------ ------------
NET LOSS $ (1,432,087) $ (29,638)
============ ============
PRIMARY INCOME (LOSS) PER SHARE:
Income (loss) before cumulative effect of change in
accounting principal $ (0.29) $ 0.01
Cumulative effect of change in accounting principal 0.00 0.03
------------ ------------
PRIMARY NET INCOME (LOSS) PER SHARE $ (0.29) $ 0.04
============ ============
FULLY DILUTED INCOME (LOSS) PER SHARE:
Income (loss) before cumulative effect of change in
accounting principal $ (0.29) $ 0.01
Cumulative effect of change in accounting principal 0.00 0.03
------------ ------------
FULLY DILUTED NET INCOME (LOSS) PER SHARE $ (0.29) $ 0.04
============ ============
AVERAGE NUMBER OF COMMON AND
COMMON EQUIVALENT SHARES:
Primary 4,924,627 6,888,536
Fully diluted 4,924,627 6,888,668
<FN>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>
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<TABLE>
PARTECH HOLDINGS CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<CAPTION>
NINE MONTHS ENDED JANUARY 31,
_________________________________
1994 1993
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Commissions, fees and other receipts $ 312,457 $ 326,306
Marketing, administrative and other operating
payments (1,215,785) (889,803)
Interest receipts 33,587 29,622
Interest payments (187,840) (25,114)
----------- ---------
Net Cash Used for Operating Activities
(1,057,581) (558,989)
----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment to officer for loan - (10,125)
Investments in non consolidated affiliates (2,844) (1,206)
Purchases of property and equipment (320,910) (3,880)
Proceeds from the sale of property and equipment 55,327 631
Deferred organization costs (75,929) (50,214)
Escrow deposits for radio station acquisitions (90,000) -
----------- ---------
Net Cash Used for Investing Activities (434,356) (64,794)
----------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Deferred stock, debt issuance and other financing costs (12,646) (43,690)
Proceeds from issuance of stock 2,364,981 857,353
Principal payments under bank borrowings - (88,125)
Principal payments under other borrowings - (74,147)
Principal payments under radio station acquisition
financings (10,889) -
Principal payments under officer loans - (42,000)
Principal payments under related party loans (other
than officer loans) (625,000) -
Principal payments under capital lease obligations
and other financings (45,535) (4,147)
----------- ---------
Net Cash Provided By Financing Activities 1,670,911 605,244
----------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 178,974 (18,539)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 143,164 45,077
----------- ---------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $ 322,138 $ 26,538
=========== =========
<FN>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>
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<TABLE>
PARTECH HOLDINGS CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
RECONCILIATION OF NET LOSS
TO NET CASH USED FOR OPERATING ACTIVITIES
<CAPTION>
NINE MONTHS ENDED JANUARY 31,
_________________________________
1994 1993
<S> <C> <C>
Net loss $ (1,432,087) $ (29,638)
------------ ------------
Adjustments to reconcile net loss to net cash used for
operating activities:
Expenses and revenues not affecting operating activities:
Cumulative effect to May 1, 1992 of change in
accounting principal for income taxes - (180,000)
Depreciation and amortization of equipment,
and intangible assets 15,714,914 21,182,013
Deferred costs expensed and amortized 38,127 2,874
Advisory services paid in stock 189,665 -
Employee stock bonus 42,900 -
Rental income (18,292,767) (26,607,757)
Leasing interest income (6,180,819) (11,815,116)
Leasing interest expense 8,940,764 17,383,831
Changes in assets and liabilities:
Changes in accrued interest income 19,653 13,498
Changes in accrued interest expense (36,971) (2,639)
Changes in notes, accounts and
commissions receivable 56,910 31,891
Changes in other assets (7,925) (15,927)
Changes in accounts payable and
accrued expenses (116,574) (252,440)
Income taxes - (270,000)
Other 6,629 421
------------ ------------
Total Adjustments 374,506 (529,351)
------------ ------------
NET CASH USED FOR OPERATING ACTIVITIES $ (1,057,581) $ (558,989)
============ ============
<FN>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>
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<TABLE>
PARTECH HOLDINGS CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
SUPPLEMENTAL CASH FLOW INFORMATION
INVESTMENT IN FINANCE ASSETS. The Company acquires leased
equipment, equipment leases and lease receivables partially by assuming existing
financing. Also, the Company may sell or dispose of such assets with a
commensurate transfer of any related financing to the transferee. The net
decreases in assets and liabilities associated with the acquisition and
disposition of such equipment and equipment leases and the related
liabilities for the nine months ended January 31, 1994 and 1993 were as
follows:
<CAPTION>
Nine Months Ended January 31,
_________________________________
1994 1993
<S> <C> <C>
ASSETS:
Equipment notes and accrued interest receivable $ - $ (15,048,231)
Leased property under capital lease (net of
accumulated amortization) - (24,281,273)
Net investment in operating leases (715,565) 7,564,804
Net investment in direct financing leases 14,759,430 -
------------ -------------
Total Assets $ 14,043,865 $ 31,764,700
============ =============
LIABILITIES:
Notes and accrued interest payable $ 14,759,430 $ -
Discounted lease rentals and accrued interest payable $ (715,565) $ (16,716,469)
Capital lease obligations and accrued interest payable - (15,048,231)
------------ -------------
Total Liabilities $ 14,043,865 $ (31,764,700)
============ =============
</TABLE>
During the nine months ended January 31, 1994 the Company (1)
incurred $59,079 of debt and expended $19,449 in cash for the purchase of fixed
assets, (2) entered into a capital lease obligation for $7,670 for new
equipment, (3) issued 110,000 shares for $5,500 in cash and incurred $42,900
of compensation expense, (4) recorded broadcasting rights of $413,157 and
related broadcasting rights payable of an equivalent amount and (5) reduced
common stock issued and unpaid for $90,000, relieved a liability in the
amount of $40,000, charged capital in excess of stated value for $38,412 and
recorded $11,588 of treasury stock, without receiving or expending cash.
During the nine months ended January 31, 1994 the Company purchased assets
and liabilities, which included Net Investment in Direct Financing Leases of
$14,759,430 and Notes and Accrued Interest Payable of $14,759,430. Also,
during the nine months ended January 31, 1994 the Company disposed of Net
Investment in Operating Leases of $715,565 (net of $1,142,909 of accumulated
depreciation) and Discounted Lease Rentals and Accrued Interest Payable of a
commensurate amount. Also during the current nine months leasehold tenancy
positions terminated which reduced the gross value of Leased Property Under
Capital Lease by $32,936,834 and accumulated amortization by an equivalent
amount.
During the nine months ended January 31, 1993 the Company sold assets
and liabilities, which at the date of sale included Leased Property Under
Capital Lease of $23,530,628 (net of accumulated amortization of
$18,887,171), and Discounted Lease Rentals and Accrued Interest Payable of
$23,530,628 for a $10,000 reduction of debt. Also, during this same
period the Company had additional dispositions of assets and liabilities which
included Leased Property Under Capital Lease of $750,645 (net of accumulated
amortization of $422,326), Installment Notes and Accrued Interest Receivable
of $15,048,231, Discounted Lease Rentals and Accrued Interest Payable of
$750,645, and Capital Lease Obligations and Accrued Interest Payable of
$15,048,231. Acquisitions during the current period were comprised of Net
Investment in Operating Leases of $7,564,804, and Discounted Lease Rentals
and Accrued Interest Payable of $7,564,804. During the comparative nine
months leasehold tenancy positions terminated which reduced the gross value
of Leased Property Under Capital Lease by $47,958,678 and accumulated
amortization by a tantamount.
Also, during the nine months ended January 31, 1993, 100,000 warrants
were exercised for a $100,000 reduction in
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accrued compensation. Similarly, during third quarter of
fiscal 1993 the Company issued 217,704 shares of $0.05 per share
par value common stock to pay $81,056 of debt. Furthermore,
during the first three months of fiscal 1993, 90,000 warrants
were exercised and 90,000 shares were issued for which the
Company has recorded a receivable of $90,000. Additionally,
the Company incurred $2,634 of debt pursuant to the purchase of
office equipment during the comparative nine months.
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
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PARTECH HOLDINGS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. FEDERAL INCOME TAX
The income tax provision is reported using an asset and
liability approach and measuring the change in the tax asset or
liability. A deferred tax asset or liability generally arises
from changes in differences between financial reporting and
tax bases of all assets and liabilities (with exception related to
goodwill). A deferred tax asset will result in an income tax
benefit (before valuation allowance), conversely a deferred tax
liability will result in income tax expense. Previously
recorded deferred tax assets and liabilities are adjusted upon
any changes in enacted tax rates. Differences between financial
reporting and tax bases usually result from differences in timing
of income and expense recognition. A valuation allowance is
applied to a tax asset for any amount that does not meet
certain realizability criteria. A change in the amount of
valuation allowance that is applicable to the beginning of the
year balance is recognized in income from continuing operations,
increases in the valuation allowance are recognized as income
tax expense and decreases are recognized as income tax benefit.
The valuation allowance at the beginning of the year was $788,200
and increased $330,800.
As of January 31, 1994, the Company and its subsidiaries
reported an aggregate cumulative Federal income tax loss
carryforward of approximately $25,290,000, expiring through 2009.
As of January 31, 1993, the Company and its subsidiaries had
aggregate Federal tax net operating loss carryforwards of
approximately $22,768,000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company is in the process of acquiring several FM and AM
radio stations located in the Southeastern United States. The
Company presently operates one FM radio station in Shallotte,
North Carolina (serving the Wilmington, North Carolina and
Myrtle Beach, South Carolina markets), is in the process of
constructing one FM radio station in the Florida Keys, has
requests pending before the FCC for transfer of three FM radio
stations and one AM radio station all located in Florida, has
reached an agreement-in-principle for the purchase of four FM
radio stations and one AM station, and has offers pending
acceptance for the purchase of one FM radio station. The
Company expects that its acquisition activities will extend
well into calendar year 1994 and that significant revenues and
income will not be realized until all of the stations have been
acquired and integrated into a consolidated operation. During
the current period the Company has deferred $60,181 of such costs
that relate to the acquisition of broadcast properties and has
expensed $35,000 of previously deferred costs which relate to
abandoned acquisitions.
The frequency change and power upgrade to 25,000 watts for
the Company's Shallotte, North Carolina radio station was completed
early February, 1994. The sales staff has been increased in
order to cover the entire broadcast market. The Company has
started to penetrate new and larger advertising markets and
expects the station to turn profitable in five to six months.
The Company is continuing to manage its lease portfolios and
to acquire lease properties as and when suitable transactions
become available and is also pursuing the acquisition and
management of FM radio station broadcast properties.
The loss from operations for the nine months ended January 31,
1994 includes $340,676 of one time charges for interest and
advisory services. Without these charges, the loss from
operations would have been ($1,091,410). The loss from operations
includes $230,057 of broadcasting operating expenses in excess
of revenues.
Rental income and interest income is a function of the amount of
equipment in the Company's Portfolios which may change
substantially from year to year based upon the volume of Portfolio
acquisitions and dispositions. The Company's net earnings from
its Portfolios is minimal until the Operating Leases are
completed and the related Discounted Lease Rentals and Accrued
Interest Payable are paid. The following tables indicate the
comparative results of operations for the three and nine months
ended January 31, 1994 and 1993.
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<TABLE>
THREE MONTHS ENDED JANUARY 31, 1994 COMPARED TO THREE MONTHS ENDED JANUARY 31, 1993
<CAPTION>
Three Months Ended January 31, Amount of Change
-------------------------------- ------------------------------------
1994 1993 Dollars Percentage
<S> <C> <C> <C> <C>
Rental income $ 5,421,626 $ 8,601,414 $ (3,179,788) (37.0%)
Commissions, fees and other income $ 199,164 $ 164,632 $ 34,532 21.0%
Interest income $ 1,788,387 $ 3,253,925 $ (1,465,538) (45.0%)
Marketing, administrative and other
operating expenses $ 414,103 $ 266,825 $ 147,278 55.2%
Interest expense $ 2,766,941 $ 4,997,120 $ (2,230,179) (44.6%)
Depreciation and amortization of
equipment $ 4,470,153 $ 6,867,978 $ (2,397,825) (34.9%)
Loss before income taxes and
extraordinary item $ (277,251) $ (142,817) $ (134,434) (94.1%)
Net loss $ (277,251) $ (142,817) $ (134,434) (94.1%)
========================================================================================================================
NINE MONTHS ENDED JANUARY 31, 1994 COMPARED TO NINE MONTHS ENDED JANUARY 31, 1993
Three Months Ended January 31, Amount of Change
-------------------------------- ------------------------------------
1994 1993 Dollars Percentage
Rental income $ 18,292,767 $ 26,607,757 $(8,314,990) (31.3%)
Commissions, fees and other $ 288,821 $ 285,876 $ 2,945 1.0%
income $ 6,194,753 $ 11,831,240 $(5,636,487) (47.6%)
Interest income
Marketing, administrative and other
operating expenses $ 1,182,216 $ 616,192 $ 566,024 91.9%
Interest expense $ 8,970,622 $ 17,406,306 $(8,435,684) (48.5%)
Depreciation and amortization of
equipment $ 15,609,253 $ 21,089,418 $(5,480,165) (26.0%)
Loss before income taxes and
extraordinary item $ (1,432,087) $ (479,638) $ (952,449) (198.6%)
Net loss $ (1,432,087) $ (29,638) $(1,402,449) (4,731.9%)
========================================================================================================================
</TABLE>
The above costs reflect the activity of the Portfolios acquired by
the Company. As of January 31, 1994 Equipment Notes and Accrued Interest
Receivable, Leased Property Under Capital Lease and Net Investment in
Operating Leases were $60,997,940, $31,386,903 and $1,949,441, respectively,
compared to $87,904,468, $44,291,407 and $5,293,165, respectively, at April
30, 1993. Discounted Lease Rentals and Accrued Interest Payable, and Capital
Lease Obligations and Accrued Interest Payable were $33,336,194 and
$61,007,448, respectively, compared to $49,584,419 and $87,910,364,
respectively, at April 30, 1993. These and the above leasing revenue and
expense decreases are due to payments made as to the Company's existing
lease receivables and related obligations, which is a normal operating
circumstance, and sales of the lease portfolios. Such revenues and
expenses, and assets and liabilities are expected to change in future
periods from new properties being acquired (resulting in increases), and
for payments which will be received and made as to equipment and leases owned
or disposed of, as the case may be (resulting in decreases).
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As the Company is, in part, in the business of acquiring, managing and
selling Portfolio properties, the Company anticipates that it will acquire and
will dispose of large amounts of such property in future years. The acquisition
and disposition of these properties will result in substantial periodic
fluctuations of revenues and expenses and will also result in periodic changes
in the Company's assets and liabilities in equivalent proportions.
The Company earns commissions, fees and other income from transactions
which fluctuates substantially from one comparable period to the next. The
Company believes that its relationship with its lease origination customers
remains good, however, none of these companies are presently underwriting
business in volumes sufficient to assure that the Company will have access to
future suitable Portfolio purchases. The Company will continue to pursue
Portfolio acquisitions on suitable terms as and when available, however, there
is no assurance that the current economic environment will be easing in the
near term sufficiently strong enough for the Company's customers to return to
their pre-1991 lease origination volumes.
The Company has recorded in the accompanying income statement as
commissions, fees and other income $121,406 of broadcasting advertising
revenue, which includes recognition of $40,409 of barter transaction revenue
and has recognized $39,258 of barter transaction expense included in
marketing, administrative and other operating expenses.
Effective on February 23, 1994, Mark S. Manafo ceased to be a Director,
Chief Operating Officer and employee of Partech Communications Group, Inc.
("PCG"), a wholly-owned subsidiary of the Company, and all of PCG's
subsidiaries. Mr. Manafo's options to purchase 160,000 shares of Partech's
stock terminated on February 23, 1994 and his options to purchase 90,000 shares
will terminate three (3) months thereafter.
During the nine months ended January 31, 1994 the Company earned
$45,000 from partnerships which are partially owned by a nonconsolidated
affiliate of which an officer of the Company is a general partner. The Company
has incurred $4,050 for leasing a vehicle from its Chief Executive Officer and
has leased such vehicle to the Chief Operating Officer of a subsidiary for
$2,450.
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