<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
X Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act
- ---- of 1934
For the nine months ended September 30, 1995
____ Transition Report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the transition period from _________ to ________
Commission File Number 0-16545
MPTV, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
Nevada 88-0222781
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
3 Civic Plaza
Suite #210
Newport Beach, California 92660
(Address of Principal Executive Offices)
(714) 760-6747
(Registrant's Telephone Number, Including Area Code)
Check whether the Registrant: (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 the past 90 days.
Yes X No
--- ---
As of October 31, 1995, 30,911,721 shares of Common Stock, $0.05 par value
per share, were outstanding.
- --------------------------------------------------------------------------------
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
2
<PAGE>
MPTV, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1995 AND DECEMBER 31, 1994
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
ASSETS 1995 1994
---------- --------------- -------------
<S> <C> <C>
Timeshare property held for sale $15,141,246 $15,203,202
Cash 4,853 14,243
Receivables 115,435 56,788
Land held for investment 490,668 490,668
Other assets 212,779 103,175
Deferred financing costs 2,001,468 757,685
--------------- -------------
$17,966,449 $16,625,761
--------------- -------------
--------------- -------------
LIABILITIES AND SHAREHOLDERS' EQUITY
--------------------------------------
All inclusive trust deed note payable $8,139,399 $8,206,381
Accounts payable and accrued expenses 2,545,491 2,146,025
Notes payable 4,122,039 3,785,232
--------------- -------------
14,806,929 14,137,638
--------------- -------------
Common stock - par value $.05 per share;
authorized 50,000,000; issued 22,105,830
and 13,978,191 1,430,837 698,910
Additional paid-in capital 22,333,045 18,834,515
Accumulated deficit (20,307,112) (16,748,052)
Services to be rendered (104,500) (104,500)
Stock subscriptions receivable (192,750) (192,750)
--------------- -------------
Total Shareholders' equity 3,159,520 2,488,123
--------------- -------------
$17,966,449 $16,625,761
--------------- -------------
--------------- -------------
</TABLE>
3
<PAGE>
MPTV, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
OCT. 22, 1992
(Incorporation)
TO NINE MONTHS ENDED THREE MONTHS ENDED
SEPT. 30, 1995 SEPT. 30 SEPT. 30
---------------------- -------------------------
1995 1994 1995 1994
---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Revenue
Other $135,894 $65,576 $75,781 $19,820 $25,634
-------------- ---------- ---------- ----------- ----------
Expenses
Excess of expenses over revenues
from incidental operations 1,387,744 16,540 833,607 (12,308) 68,432
General and administrative 6,030,249 3,600,239 817,504 1,521,266 186,436
Interest 12,990 7,857 3,979 2,725 1,426
Reorganization items 14,596 0 0 0 0
Provisions for write-off 13,346,879 0 0 0 0
-------------- ---------- ---------- ----------- ----------
20,792,458 3,624,636 1,655,090 1,511,683 256,294
-------------- ---------- ---------- ----------- ----------
Net loss before minority interest (20,656,564) (3,559,060) (1,579,309) (1,491,863) (230,660)
Minority interest in loss of consolidated subsidiary 349,452 0 130,500 0 0
-------------- ---------- ---------- ----------- ----------
Net loss ($20,307,112) ($3,559,060) ($1,448,809) ($1,491,863) ($230,660)
-------------- ---------- ---------- ----------- ----------
-------------- ---------- ---------- ----------- ----------
Net loss per share ($1.28) ($0.17) ($0.13) ($0.06) ($0.02)
-------------- ---------- ---------- ----------- ----------
-------------- ---------- ---------- ----------- ----------
Weighted average number of shares outstanding 15,843,424 21,297,456 11,433,113 25,361,276 12,172,808
-------------- ---------- ---------- ----------- ----------
-------------- ---------- ---------- ----------- ----------
</TABLE>
4
<PAGE>
MPTV, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
OCT. 22, 1992
(Incorporation)
TO NINE MONTHS ENDED
SEPT. 30, 1995 SEPT. 30
---------------- --------------------------
1995 1994
------------- ------------
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net loss ($20,307,112) ($3,559,060) ($1,448,809)
Adjustments to reconcile net loss to net
cash used in operating activities:
Issuance of common stock for services 2,050,045 1,449,393 1,164,775
Depreciation and amortization 568,226 173,183 520,279
Minority interest (349,452) 0 (130,500)
Provisions for write-offs 13,346,879 0 0
Changes in assets and liabilities (412,973) 1,158,998 (2,172,621)
------------- -------------- -------------
Net Cash Used in Operating Activities (5,104,387) (777,486) (2,066,876)
------------- -------------- -------------
Cash Flows From Investing Activities:
Other assets (1,174,135) ($1,243,783) ($1,100,196)
Pre-acquisition costs paid in connection
with purchase of real estate (35,365) 0 0
Purchase of furniture and equipment (78,530) 0 0
Cash received in connection with MPTV
merger 70,112 0 0
------------- -------------- -------------
Net Cash Used in Investing Activities (1,217,918) (1,243,783) (1,100,196)
------------- -------------- -------------
Cash Flows From Financing Activities:
Proceeds from issuance of notes payable 989,810 336,807 670,916
Proceeds from sale of common stock 4,093,863 1,742,064 2,158,827
Proceeds from collection of subscription
receivables 0 0 498,571
Advances from MPTV prior to merger 589,360 0 0
Principal repayments on notes payable (126,537) (66,982) (332,703)
Net advances from (to) affiliates, net (25,826) 0 0
Capital contribution received by joint venture 806,488 0 0
------------- -------------- -------------
Net Cash Provided by Financing Activities 6,327,158 2,011,889 2,995,611
------------- -------------- -------------
Net Increase (Decrease) in Cash 4,853 (9,390) (171,461)
Cash, beginning of period 0 14,243 185,224
------------- -------------- -------------
Cash, end of period $4,853 $4,853 $13,763
------------- -------------- -------------
------------- -------------- -------------
Supplemental Disclosure of Cash Flow Information:
Cash paid for:
Interest $1,098,194 $565,877 $277,207
------------- -------------- -------------
------------- -------------- -------------
Taxes $1,600 $0 $0
------------- -------------- -------------
------------- -------------- -------------
</TABLE>
See note 3 for supplemental disclosure of non-cash investing and financing
activities.
5
<PAGE>
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
Services
Number Additional Services Rendered Stock Total
of Common Paid-In to be Accumulated for Stock Subscription Stockholders'
Shares Stock Capital Rendered Deficit Issued Receivable Equity
---------- -------- ----------- --------- ------------- ---------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balances,
January 1, 1995 13,978,191 $698,910 $18,834,515 ($132,000) ($16,748,052) $27,500 ($192,750) $2,488,123
Net loss for the six
months ended
September 30, 1995 0 0 0 0 (3,559,060) 0 0 (3,559,060)
Common stock issued
for services and
compensaton 4,601,277 230,064 1,219,329 0 0 0 0 1,449,393
Common stock sold 7,538,530 376,927 1,365,137 0 0 0 0 1,742,064
Common stock issued
for loan origination 1,800,000 90,000 783,000 0 0 0 0 873,000
Common stock issued to
pay notes 698,723 34,936 131,064 0 0 0 0 166,000
----------- ----------- ------------ ----------- ------------ ------------ ----------- -----------
Balances,
September 30, 1995 28,616,721 $1,430,837 $22,333,045 ($132,000) ($20,307,112) $27,500 ($192,750) $3,159,520
----------- ----------- ------------ ----------- ------------ ------------ ----------- -----------
----------- ----------- ------------ ----------- ------------ ------------ ----------- -----------
</TABLE>
6
<PAGE>
MPTV, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
NOTE 1 - BASIS OF PRESENTATION
In the opinion of the management of MPTV, Inc., a Nevada corporation (the
"Company"), the accompanying unaudited condensed consolidated financial
statements include all adjustments consisting of only normal recurring
adjustments necessary for a fair presentation of the Company's financial
position at September 30, 1995 and the results of operations and cash flows for
the nine months ended September 30, 1995 and 1994, respectively. Although the
Company believes that the disclosures in these financial statements are adequate
to make the information presented not misleading, certain information normally
included in financial statements prepared in accordance with generally accepted
accounting principles has been condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission. Results of operations
for the nine months ended September 30, 1995 are not necessarily indicative of
results of operations to be expected for the year ending December 31, 1995.
Refer to the Company's Annual Report on Form 10-KSB for the year ended December
31, 1994 for additional information.
The accompanying condensed consolidated financial statements have been
prepared assuming the Company will continue as a going concern, which
contemplates, among other things, the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company is in the
development stage and has incurred cumulative net losses of $20,307,112 since
its incorporation. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Successful development of the Company's
properties, successful completion of its marketing program, and transition,
ultimately, to the attainment of profitable operations are dependent upon the
Company obtaining adequate financing. Management plans to refinance the Lake
Tropicana debt and obtain redevelopment and improvement funding necessary to
enable the Company to prepare the Lake Tropicana property for the marketing and
sale of timeshare units; however, there can be no assurance that such funding
can be obtained on terms acceptable to the Company, if at all. The accompanying
condensed consolidated financial statements do not include any adjustments that
may result from the outcome of this uncertainty.
NOTE 2 - ACQUISITION OF MINORITY INTEREST IN JOINT VENTURE
On February 24, 1994, MPTV acquired the 45% minority interest in the Lake
Tropicana venture from Pacific D.N.S., ("Pacific") for an aggregate purchase
price of $3,737,291, consisting of an 8% promissory note for $1,868,645.50,
collateralized by a Deed of Trust on Lake Tropicana and guaranteed by MPTV, and
400,000 shares of the Company's common stock valued at $1,868,645.50 (see
below). MPTV agreed to register said shares under the Securities Act of 1993,
as amended, no later than October 31, 1994. If these shares were not registered
by that date, Pacific had the right to cancel the transaction, and return the
shares for Pacific's joint venture interest purchased by MPTV. In the event
that the proceeds to Pacific from the sale of the shares were less than
$1,868,545.50, MPTV agreed to issue to Pacific, and register pursuant to the
Securities Act of 1993, that number of additional shares which, if registered
and sold,
7
<PAGE>
MPTV, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
would yield proceeds, together with those received from the sale of the original
shares, equal to $1,868,645.50. Accordingly, the value of the 400,000 common
shares was based on the guaranteed value referred to above upon registration and
sale of such securities.
As a result of the Company's acquisition of the minority interest on
February 24, 1994, Pacific's minority interest in the loss in the venture is
reflected in the statement of operations for the period January 1, 1994 to
February 24, 1994.
On March 22, 1995, the Company and Pacific agreed to convert the guaranteed
value of the 400,000 common shares of $1,868,645.50, into a non-interest bearing
note payable to Pacific subject to certain terms and conditions, one of which
was the consummation of the Consortium refinancing agreement, (see below).
NOTE 3 - FINANCING COMMITMENT
On January 12, 1995, the Company received a financing commitment for up to
$8,600,000 from Consortium International, Inc., ("Consortium"), an unrelated
entity, to refinance certain indebtedness and provide funds to complete
improvements for the Lake Tropicana property. The Company paid a commitment
fee comprised of $30,000 and 100,000 shares of common stock valued at
approximately $25,000 (Note 4) at the time the commitment was issued by the
lender. The Company was required to satisfy a number of conditions precedent
to the closing of the transaction, including but not limited to obtaining
working capital of $750,000 at the time of close. The Company fulfilled all of
these obligations; however, on August 23, 1995, the Company terminated
negotiations with Consortium as the funding had not occurred as of that date
(the last written extension requested by Consortium). The Company's management
decided to pursue negotiations with another lender for a similar loan secured by
a first mortgage on the property. The Company has received assurances that the
new transaction can be completed in time to allow timeshare sales and earnings
to occur in the fourth quarter of 1995.
Attorneys for the Company are exploring available legal and equitable remedies
for the failure to fund the Consortium loan.
NOTE 4 - STOCKHOLDERS' EQUITY
The Company has raised funds through certain private placements and
placements pursuant to Regulation S promulgated under the Securities Act of
1933, as amended. During the nine months ended September 30, 1995, the Company
issued and sold an aggregate of 7,538,530 shares of its common stock for
$1,742,064 (net of commissions), as reflected in the accompanying condensed
consolidated statement of stockholders' equity.
8
<PAGE>
MPTV, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
During the nine months ended September 30, 1995, the Company issued 698,723
shares of its common stock in satisfaction of notes payable for $166,000.
During the nine months ended September 30, 1995, the Company issued
1,800,000 shares of its common stock relating to certain loans payable or loans
currently in negotiation, valued at approximately $873,000. Such amount has
been deferred as a financing cost in the accompanying balance sheet and will be
amortized over the life respective of the loans.
From time to time, the Board of Directors has authorized certain shares of
the Company's common stock to be issued for services rendered by the Company's
consultants. During the nine months ended September 30, 1995, the Company
issued 4,601,277 shares for services valued at an average of $0.32 per share,
with an aggregate value of $1,449,393. The fair value was determined by
management based on the closing price of the Company's common stock as quoted on
the Nasdaq Small Cap Market, less a discount for restrictions on
transferability.
NOTE 5 - RELATED PARTY TRANSACTIONS
During the nine months ended September 30, 1994, the Company paid an
officer $200,000 as an advance on commission for future timeshare sales. Two
other officers were paid salaries of $127,500 and $97,500, respectively. These
payments were made pursuant to the terms of each officer's employment agreement.
During the nine months ended September 30, 1995, the Company continued to
have minimal operating revenue. As a result one salaried officer was paid
$90,000 cash during the period, and one officer was issued 480,000 shares of
common stock in lieu of $92,256 due him for back salary and expenses. The
officer with commission draw rights was paid $123,077, deferring all other
compensation.
9
<PAGE>
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The following discussion and analysis should be read together with the
Condensed Consolidated Financial Statements and Notes thereto included elsewhere
herein.
RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1995 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1994
At September 30, 1995, MPTV was in the development stage, with no
significant operating revenues to date. Revenues from the sale of timeshare
units are expected in late 1995. Revenue from rentals of the Lake Tropicana
Apartments are considered incidental to the business of development and sale of
timeshare intervals and these are netted against related expenses in the
accompanying statements of operations for the periods presented therein. Other
revenues are unrelated to the business activities currently in development.
Expenses in excess of revenues of incidental operations decreased from
$833,607 to $16,540 during the first nine months in 1995 versus 1994. The
decrease in 1995 was attributable to the Company's significant reduction of
certain expenses of CRE, consisting primarily of the operation of the Lake
Tropicana Apartments. The expenses reduced included advertising, certain
salaries, commissions and professional and consulting fees, which had been
incurred in the first quarter of 1994 prior to achieving economics of scale
after the merger with MPTV.
The Company's general and administrative expenses in the nine months ended
September 30, 1995 increased from the comparable period in 1994 from $817,504 to
$3,600,239, due to the issuance of Common Stock to third parties pursuant to
certain consulting agreements.
MPTV also incurred interest expense of $7,857 in the first nine months of
1995 as compared to $3,979 in the first nine months of 1994. Interest costs
incurred for the acquisition and development of Lake Tropicana timeshares are
capitalized to timeshare units held for sale. During the periods ended
September 30, 1995 and 1994, the Company capitalized approximately $395,000 and
$104,894, respectively. In the first nine months of 1995, increased amounts
were capitalized versus the comparable period in 1994 due to additional finance
costs incurred during such periods.
Based on the above factors, MPTV's net loss increased to $3,559,060 for the
nine months ended September 30, 1995 from $1,448,809 for the comparable period
in 1994. Net loss per share equaled $0.17 per share for the nine months ended
September 30, 1995 as compared to $0.13 per share for the comparable period in
1994, due to a significant increase in the number of shares of common stock
outstanding in 1995.
LIQUIDITY AND CAPITAL RESOURCES
The Company's condensed consolidated financial statements at September 30,
1995 and for the period then ended have been presented on the basis that the
Company is a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. Continuation of
the Company as a going concern is dependent upon the Company raising additional
financing and achieving and sustaining profitable operations, of which there can
be no assurance. Because of the uncertainties regarding the Company's ability
to achieve these goals, no assurance can be given that the Company will be able
to continue in existence. Based on the Company's acquisition of CRE and its
interest in Lake Tropicana, and the potential to raise additional equity (see
below), management believes that there will be sufficient capital available to
complete existing contracts and projects. The financial statements do not
include any adjustments relating to the recoverability of recorded assets
amounts or the amounts of liabilities that might be necessary should the Company
be unable to continue as a going concern.
10
<PAGE>
The planned renovation program for the Lake Tropicana project is intended
to appeal to family-oriented visitors to Las Vegas and includes major common
area improvements such as landscaping, parking and a decorative security wall,
as well as construction of a reception area and activity center and installation
of a new roof and porches, the rebuilding of the main pool and construction of
two additional pools and a tennis court. The Company also anticipates
undertaking a complete renovation of the timeshare units, including kitchens,
bathroom fixtures, air conditioning, wall and floor coverings and complete
furniture and fixture packages. Management currently estimates that timeshare
unit renovations will cost approximately $38,000 per unit, while common area
renovations will require an additional $1,000,000. The entire renovation
project will require six phases and approximately $7,000,000 to $8,000,000 to
complete, of which approximately $750,000 has been expended to date. In April
1994, the Company commenced phase one of the project, which involved renovation
of the first 16 timeshare units and the construction of a sales facility, and
management currently anticipates completion of this phase in February, 1996,
subject to obtaining the required financing (see below). Phases two and three
include the renovation of approximately one-half of the 176 timeshare units.
Architects retained by the Company are currently preparing plans for the purpose
of soliciting fixed bids for remaining phases of the renovations.
The funds for phase one of the renovation and project carrying costs have
been derived from equity private placements conducted by the Company (see below)
and issuances of Common Stock to vendors. The Company is currently negotiating
for a commitment to refinance the existing note secured by a first deed of
trust (see below), which financing would provide partial releases of
condominiums. These release provisions facilitate the phasing of the Lake
Tropicana project for conveyance to timeshare purchasers. The Company then
intends to utilize the proceeds from timeshare sales (derived from the $100
million end-loan financing of timeshare receivables, for which the Company has
received a letter of commitment, subject to the completion of definitive
documents and due diligence procedures, from Stanford Investors Ltd.) plus cash
flow from operations, to fund the remainder of the renovations. However, there
can be no assurance that the Company will receive financing adequate to complete
renovations. In the event that the Company does not receive financing, it would
be unable to complete the renovation of Lake Tropicana, which would seriously
impair the Company's ability to sell timeshare units in the project. If the
Company is unable to sell timeshare units in Lake Tropicana, the potential value
of Lake Tropicana as a rental property would be substantially lower than the
potential value if sold in timeshare intervals. Furthermore, sales of timeshare
units require registration or other regulatory compliance in the State of Nevada
and certain other states where such units may be sold. The Company has
completed the process of complying with applicable regulations to sell interval
units in Lake Tropicana in Nevada, except for the posting of bonds to activate
the public permit.
On October 11, 1994, CRE filed a petition under Chapter 11 of the United
States Bankruptcy Code. Management determined that the filing was required to
enable CRE to restructure and refinance the Lake Tropicana debt. MPTV
successfully negotiated this restructuring and in March 1995, the U.S.
Bankruptcy Court granted an Unconditional Order to Dismiss the proceedings
subject to a 180-day bar on the refiling of a Chapter 11 case. Since the
dismissal, management has devoted significant efforts to refinancing the all-
inclusive trust deed notes payable, to enable the Company to continue
development of the timeshare units.
During the nine months ended September 30, 1995, the Company had a net
negative cash flow of $9,390. This net negative cash flow was comprised of
positive cash flow of $2,011,889 from financing activities (consisting primarily
of the sale of Common Stock in private placements) offset by negative cash flows
of $1,243,783 from investing activities and $777,496 from operating activities.
The Company raised funds through certain private placements and offshore
private placements pursuant to Regulation S promulgated under the Securities Act
of 1933. During the nine months ended September 30, 1995, the Company raised an
aggregate of $1,742,064 from issuing an aggregate of 7,538,530 shares of common
stock in these financings.
11
<PAGE>
On January 12, 1995, the Company received a financing commitment for
up to $8,600,000 from Consortium International, Inc., ("Consortium"), an
unrelated entity, to refinance certain indebtedness and provide funds to
complete improvements for the Lake Tropicana property. The Company paid a
commitment fee comprised of $30,000 and 100,000 shares of common stock valued at
approximately $25,000 (Note 4) at the time the commitment was issued by the
lender. The Company was required to satisfy a number of conditions precedent
to the closing of the transaction, including but not limited to obtaining
working capital of $750,000 at the time of close. The Company fulfilled all of
these obligations; however, on August 23, 1995, the Company terminated
negotiations with Consortium as the funding had not occurred as of that date
(the last written extension requested by Consortium). The Company's management
decided to pursue negotiations with another lender for a similar loan secured by
a first mortgage on the property. The Company has received assurances that the
new transaction can be completed in time to allow timeshare sales and earnings
to occur in the fourth quarter of 1995.
Attorneys for the Company are exploring available legal and equitable remedies
for the failure to fund the Consortium loan.
12
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
On March 14, 1994, Albert C. Gannaway, Jr., the founder and former
officer, director and principal stockholder of the Company, and Gannaway
Productions, Ltd. (collectively, "Gannaway") filed a Complaint in the Superior
Court of Orange County, California against the Company and Messrs. Raymond
Rasmussen, a Director and the former Chairman and Chief Executive Officer of the
Company, and James C. Vellema, the Company's current Chairman and Chief
Executive Officer and a principal stockholder. The Complaint sought to enforce
the terms of a settlement agreement allegedly entered into by the Company and
Gannaway in 1993 to resolve certain asserted or potential claims by Gannaway
that (i) he was entitled to additional shares of the Company's Common Stock to
be received pursuant to an option or, in the alternative, a lower option price;
(ii) the Company was indebted to Gannaway for prior loans, cost advances or
wages in excess of the amounts shown on the Company's books and records; and
(iii) certain duplicating or other equipment being used by the Company belonged
to Gannaway, and demanded damages for an alleged breach of video distribution
agreements, an accounting under said agreements and rescission of the
distribution agreements. The Complaint also sought punitive damages for fraud
in the above-referenced alleged settlement agreement. In response, the Company
filed a Demurrer and Motion to Strike Portions of the Complaint on April 14,
1994, and set a hearing thereon for May 10, 1994. Prior to said hearing,
however, Gannaway filed an amended Complaint and the Company filed a Demurrer to
the amended Complaint and set a hearing thereon for July 12, 1994. In July
1994, however, Gannaway voluntarily dismissed the Complaint without prejudice.
On September 9, 1994, Gannaway filed a Complaint (Case No. Ct 94-6153) in
the Circuit Court in and for Orange County Florida, raising substantially the
same claims as those set forth above. In October, 1994, the Company filed an
Answer to said Complaint denying Gannaway's claims. The Company also filed a
Counterclaim on the same date for (i) rescission of the above-referenced
settlement agreement; (ii) rescission of certain video distributor agreements;
(iii) damages (including punitive damages) for fraud; (iv) damages (including
punitive damages) for breach of fiduciary duty; (v) damages for illegal
corporate loans; (vi) damages for negligence; and (vii) on accounting. Gannaway
has filed a motion to amend the Complaint and to add James C. Vellema as a
defendant and to assert claims of conspiracy to commit fraud and for negligent
misrepresentation. On or about February 9, 1995 a Motion for Partial Summary
Judgment was filed by the Plaintiff and was denied by the court on July 7, 1995.
Gannaway has indicated that he will be filing a Motion for Reconsideration
regarding the denial by the Court of the Motion for Partial Summary Judgement.
The parties are currently conducting discovery. The Company has vigorously
denied all allegations raised by Gannaway, and intends to vigorously pursue its
counterclaims.
On October 11, 1994, CRE filed a petition under Chapter 11 of the United
States Bankruptcy Code. Management determined that the filing was required to
enable CRE to restructure and refinance the Lake Tropicana debt. MPTV
successfully negotiated this restructuring and in March 1995, the U.S.
Bankruptcy Court granted an Unconditional Order to Dismiss the proceedings
subject to a 180-day bar on the refiling of a Chapter 11 case. Since the
dismissal, management has devoted significant efforts to refinancing the all-
inclusive trust deed notes payable, to enable the Company to continue
development of the timeshare units.
Item 6. Exhibits and Reports on Form 8-K
(a) Not Applicable
(b) On September 11, 1995, the Registrant filed a Current Report on Form
8-K, reporting the termination of its negotiations with Consortium.
No financial statements were filed with such Current Report.
13
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.
REGISTRANT:
Date: MPTV, INC.
By: /s/ James C. Vellema
-------------------------------------------
James C. Vellema
Chairman
(Principal Financial and Accounting Officer)
Date: By: /s/ Hurley C. Reed
-------------------------------------------
Hurley C. Reed
President
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 4,853
<SECURITIES> 0
<RECEIVABLES> 115,435
<ALLOWANCES> 0
<INVENTORY> 15,141,246<F1>
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 17,966,449
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 23,763,882
0
0
<OTHER-SE> (297,250)
<TOTAL-LIABILITY-AND-EQUITY> 17,966,449
<SALES> 0
<TOTAL-REVENUES> 65,576
<CGS> 0
<TOTAL-COSTS> 3,616,779
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,857
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,559,060)
<EPS-PRIMARY> (0.17)
<EPS-DILUTED> 0
<FN>
<F1>14 REPRESENTS TIMESHARE PROPERTY HELD FOR SALE.
</FN>
</TABLE>
