<PAGE> 1
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 quarterly period ended September 30, 1998
[ ] 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.)
366 San Miguel Dr.
Suite #210
Newport Beach, California 92660
(Address of Principal Executive Offices)
(949) 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 May 25, 1999, 500,000,000 shares of Common Stock, $0.05 par value per
share, were outstanding.
Transitional Small Business Disclosure Format: Yes [ ] No [X]
<PAGE> 2
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MPTV, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
(unaudited)
<TABLE>
<CAPTION>
SEPTEMBER 30 DECEMBER 31,
ASSETS 1998 1997
<S> <C> <C>
Property held for timeshare development $ 0 $16,218,585
Cash 42,264 19,303
Other Receivable 461,609 456,609
Other assets 593,334 593,634
Property and equipment 30,627 39,627
Total Assets $ 1,127,834 $17,327,758
LIABILITIES AND SHAREHOLDERS' EQUITY
All inclusive trust deed note payable $ 0 $13,492,996
Accounts payable and accrued expenses 625,749 562,065
Notes payable 7,001,082 6,570,582
Accrued interest 1,402,307 802,809
Other accrued liabilities 654,975 654,975
Due to related parties 78,971 78,971
Total Liabilities 9,763,084 22,162,398
Common stock - par value $.05 per share;
authorized 500,000,000; issued 285,186,612 14,259,331 11,196,036
Additional paid-in capital 19,101,453 21,584,748
Accumulated deficit (41,996,034) (37,615,424)
Total Shareholders' equity (8,635,250) (4,834,640)
Total Liabilities and Shareholders' equity $ 1,127,834 $17,327,758
</TABLE>
<PAGE> 3
MPTV, Inc. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
1998 1997 1998 1997
Revenue
<S> <C> <C> <C> <C>
Sales $ 0 $ 8,200 $ 0 $ 8,200
Other 0 4,020 0 1,474
Total Revenues $ 0 $ 12,220 $ 0 $ 9,674
Expenses
Sales Expenses 0 83,958 0 83,958
Excess of expenses over revenues
from incidental operations 0 31,684 0 10,294
General, administrative and consulting 1,053,023 3,682,850 95,913 977,726
Interest 601,998 1,044,217 259,968 306,394
Provisions for write-off 2,725,589 0 0 0
Total Expenses 4,380,610 4,842,709 355,881 1,378,372
Net loss ($4,380,610) ($4,830,489) ($355,881) ($1,368,698)
Net loss per share ($0.02) ($0.02) ($0.01) ($0.01)
Weighted average number of shares 241,120,453 194,714,728 275,519,945 220,987,375
outstanding
</TABLE>
<PAGE> 4
MPTV, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30
1998 1997
<S> <C> <C>
Cash Flows From Operating Activities:
Net loss $ (4,380,610) $ (3,461,791)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Issuance of common stock for services 0 1,425,000
Depreciation and amortization 9,000 159,000
Changes in assets and liabilities 658,482 (805,068)
Net Cash Used in Operating Activities (3,713,128) (2,682,859)
Cash Flows From Investing Activities:
Construction Deposits 0 131,205
Other assets 0 (205,121)
Write-off of timeshare property 16,218,585 0
Net Cash Provided by Investing Activities 16,218,585 0
Cash Flows From Financing Activities:
Proceeds from issuance of notes payable 1,000,500 5,313,250
Proceeds from sale of common stock 580,000 650,000
Principal repayments retirement on notes
payable (570,000) (3,148,250)
Write-off of Trust Deed notes payable (13,492,996) 0
Net Cash Provided by Financing Activities (12,482,496) 2,815,000
Net Increase (Decrease) in Cash $ 22,961 $ 132,141
Cash, beginning of period 19,303 35,341
Cash, end of period $ 42,264 $ 167,482
Supplemental Disclosure of
Cash Flow Information:
Cash paid for:
Interest $ 0 $ 499,572
</TABLE>
<PAGE> 5
MPTV, Inc. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(unaudited)
<TABLE>
<CAPTION>
Number Additional Total
of Common Paid-In Accumulated Stockholders'
Shares Stock Capital Deficit Equity
<S> <C> <C> <C> <C> <C>
Balances January 1, 1998 223,920,708 $11,196,036 $21,584,748 $(37,615,424) $(4,834,640)
Net loss for the nine months
ended September 30, 1998 0 0 0 (4,380,610) (4,380,610)
Notes payable converted 29,265,904 1,463,295 (1,213,295) 0 250,000
Payment of notes payable 30,000,000 1,500,000 (1,180,000) 0 320,000
Sale of stock 2,000,000 100,000 (90,000) 0 10,000
Balances, September 30, 1998 285,186,612 14,259,331 $19,101,453 $(41,996,034) $(8,635,250)
</TABLE>
<PAGE> 6
MPTV, Inc. and SUBSIDIARY
Notes to Condensed Consolidated Financial Statements
For the Nine Months Ended September 30, 1998 and 1997
Note 1 - Basis of Presentation
In the opinion of the Company's management, 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, 1998 and
the results of operations and cash flows for the nine months ended September
30, 1998 and 1997, 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 September 30, 1998 are not necessarily
indicative of results of operations to be expected for the year ending
December 31, 1998. Refer to the Company's Annual Report on Form 10- KSB
for the year ended December 31, 1997 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
$41,996,034. The Company is in default on certain of its secured notes
payable. The Company will also require capital for its timeshare development
and marketing activities, as well as capital for interest and administrative
expenses. Furthermore, freely tradable shares of common stock have been
improperly issued without registration under Federal and State securities
laws. Until resolved, the impact of such issuances, if any, on the
Company's ability to raise additional capital through the future issuances
of common stock is unknown. The successful refinancing of the Company's
debt and common stock is unknown. The successful refinancing of the
Company's debt and the obtainment of additional financing, the successful
development of the Company's properties, the successful completion of its
marketing program and its transition, ultimately, to the attainment of
profitable operations are necessary for the Company to continue operations
for the foreseeable future. These factors raise substantial doubt about
the Company's ability to continue as a going concern.
<PAGE> 7
MPTV, Inc. and SUBSIDIARY
Notes to Condensed Consolidated Financial Statements
For the Nine Months Ended September 30, 1998 and 1997
Note 2 - Property Held for Timeshare Development
In November, 1997, the First Trust Deed holder of the Lake Tropicana
property forced the property into receivership as a result of late payments
by the Company. This was reflected in the 1998 financial statements as a
write-off of the property, as the Company ceased rental operations and
development of timeshare units for sale in early 1998. The property, its
improvements, and all related debt were written off in 1998, and are
reflected as such in these financial statements, Should the Company obtain
new financing in order to reacquire the property, these write-offs will be
reversed.
Note 3 - Financing Commitment
During the nine months ended September 30, 1998, the Company issued various
notes aggregating $1,000,500 with interest at 10% per annum, and due on
demand and on various date in 1998 and 1999. The Company used such notes
to provide working capital for operations.
Note 4 - Stockholders' Equity
From time to time, the Board of Directors have authorized certain shares of
its common stock to be issued for services rendered by the Company's
consultants. During the nine months ended September 30, 1998 the Company
issued no stock. Notes payable with an aggregate value of $570,000 were
converted to stock during the period. The Company issued 59,265,904 shares
for notes payable, averaging $0.010 per share.
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 123 "Accounting for Stock Based Compensation"
("Statement No. 123"). Statement No. 123 is primarily a disclosure standard
for the Company because the Company will continue to account for employee
stock options under Accounting Principles Board Opinion No. 25. The
disclosure requirements for the Company required by Statement No. 123 began
January 1, 1996.
The Company has no employee stock options in which the exercise prices are
below market and, accordingly, there would be no compensatory effects which,
on a proforma basis, would have a material effect on the accompanying
financial statements.
<PAGE> 8
MPTV, Inc. and SUBSIDIARY
Notes to Condensed Consolidated Financial Statements
For the Nine Months Ended September 30, 1998 and 1997
Note 5 - Related Party Transactions
During the nine months ended September 30, 1998 the Company paid an officer
$207,000 as an advance on commission for future timeshare sales. Another
officer was paid a salary of $135,000. These payments were made pursuant to
the terms of the respective officer's Employment Agreement.
<PAGE> 9
ITEM 2. MANAGEMENT'S 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, 1998 Compared to September
30, 1997
At Setpember 30,1998, MPTV was in the development stage, with no significant
operating revenues to date. Revenues from the sale of timeshare units are
expected in late 1999. [The preceding sentence contains a forward looking
statement (hereinafter defined as "FLS"). Each of the forward looking
statements in this Quarterly Report on Form 10-QSB is subject to various
factors that could cause actual results to differ materially from the
results anticipated in such forward looking statement, as more fully
discussed in this Item 2 under "Forward Looking Statements"]. 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
$83,958 during the first nine months in 1997 to $-0- during the first nine
months in 1998. During the nine months ended September 30, 1998, the
Company significantly reduced certain expenses of Consolidated Resort
Enterprises, Inc., consisting primarily of the operation of the Lake
Tropicana Apartments. The expenses reduced included advertising, certain
salaries, commissions and professional and consulting fees. Other expenses
remained consistent through the year. In November, 1997, the First Trust
Deed holder took the Lake Tropicana property into receivership. No revenues
or expenses were recorded for Lake Tropicana rental activities in 1998.
The Company's general, administrative and consulting expenses in the nine
months ended September 30, 1998 equalled $1,053,023, a substantial decrease
from $3,682,850 for the comparable period in 1997. This decrease was due to
a significant decrease in financing fees (incurred as a result of the
Company's attempts to locate and obtain financing for the development of its
Lake Tropicana Resort), commissions and marketing expenditures, and the
suspension of operations concerning the development of Lake Tropicana.
MPTV also incurred interest expense of $1,044,217 in first nine months of
1997 as compared to $601,998 in the first nine months of 1998. Interest
costs incurred for the development of Lake Tropicana timeshares were
capitalized to property held from timeshare development during periods of
active development based on qualifying assets. The project ceased to be
under active development for accounting purposes in April 1995. As Lake
Tropicana went into receivership, interest payments related to the mortgages
on the property ceased. The 1998 interest consisted primarily of interest
related to notes payable.
<PAGE> 10
During the nine months ended September 30, 1998, the Company had a positive
net cash flow of $22,961. This net positive cash flow was comprised of
positive cash flow of $16,218,585 from investing activities offset by
negative cash flows of $3,713,128 from operating activities and negative cash
flows of $12,482,496 from financing activities. A substantial portion of
investing and financing activities consisted of the write-off of the Lake
Tropicana property ad its related debt. Should the Company obtain financing
to reacquire the property from receivership, this write-off will be reversed.
Liquidity and Capital Resources
The Company's consolidated financial statements at September 30, 1998 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.
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 interest in Lake Tropicana,
and the potential to raise additional debt and/or equity financing (see
below), management believes that there will be sufficient capital available
to complete existing contracts and projects (FLS). The financial statements
do not include any adjustments relating to the recoverability of recorded
asset amounts or the amounts of liabilities that might be necessary should
the Company be unable to continue as a going concern.
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 (FLS). 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 ( FLS ). 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 (FLS). The entire renovation project will require six phases and
approximately $7,000,000 to $8,000,000 to complete (FLS), of which
approximately $1,000,000 (excluding capitalized interest paid in cash of
$1,400,000) 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. Due to
liquidity and other financial concerns, phase one of the renovation was
delayed. Management currently anticipates completion of this phase in
September 1997, subject to obtaining the required financing (see below)(FLS).
After completing phase one of the renovation, the Company plans to commence
phases two and three, which will include the renovation of approximately
one-half of the 176 timeshare units.
<PAGE> 11
Funds for phase one of the renovation and project carrying costs have been
derived from equity private placements and loans arranged by the Company,
issuances of common stock to vendors and incurrence of unsecured debt. The
Company has deposited a portion of these funds with the holder of one of its
deeds of trust, to be held in trust for the development of the Lake
Tropicana project. The Company has also received a commitment to refinance
the existing notes secured by first and second deeds of trust on the project
(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 (FLS).
However, there can be no assurance 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.
Shares of the Company's freely tradable Common Stock may have been
improperly issued without registration under Federal and state securities
laws. In addition to administrative remedies which may be pursued by
governmental agencies, the recipients of these shares of Common Stock may
seek recovery of the purchase price of the stock plus interest through a
rescission offer, the amount of which cannot be presently determined, and
could have a material adverse impact on the Company's financial liquidity.
Management intends to file the necessary registration statement to register
these shares. There can be no assurances that the filing of these
registration statements will provide an adequate remedy. Until resolved,
the impact of such issuances, if any, on the Company's ability to raise
additional capital through the future issuances of Common Stock is unknown.
<PAGE> 12
Forward Looking Statements
The forward looking statements contained in the Quarterly Report on Form
10-QSB, including those contained in Item 2 - "Management's Discussion and
Analysis or Plan of Operation", are subject to various risks, uncertainties
and other factors that could cause actual results to differ materially from
the results anticipated in such forward looking statements. Included among
the important risks, uncertainties and other factors are those hereinafter
discussed.
MPTV has suffered recurring losses from operations and shows a need for
additional funding, which raises substantial concerns about its ability to
continue as a going concern. The Company has incurred cumulative net losses
of $41,996,034 since its inception, and is also in default on certain of
its secured and unsecured notes payable. In the event that the Company
cannot refinance or renegotiate these notes, it may be subject to collection
actions and foreclosure proceedings on its property currently being held for
timeshare development. MPTV requires capital to conduct its timeshare unit
development and marketing activities, and for operating expenses, interest
and note obligations. The Company's ability to continue as a going concern
is dependent upon its ability to obtain outside financing through the
issuance of either equity or debt securities and, ultimately, upon future
development of profitability through sales of timeshare units at Lake
Tropicana. While the Company is currently attempting to raise funds through
a private placement of debt securities, there can be no assurance that such
private placement will be successfully consummated or, if so, that it will
meet all future capital requirements of the Company. If additional funds
are required, the Company may offer additional or other securities for sale
or attempt to secure financing from banks or other financial institutions.
If significant indebtedness is then outstanding, the Company's ability to
obtain additional financing will be adversely affected. If and to the
extent the Company incurs additional indebtedness, debt service requirements
will have a negative effect on earnings. Further, if the Company is unable
to service its indebtedness and to renew or refinance such obligations on a
continuing basis, its ability to operate profitably will be materially
threatened. No assurance can be given that the Company will be able to
obtain additional funds from any source on satisfactory terms, if at all.
The availability of equity and debt financing to the Company is also
affected by, among other things, domestic and world economic conditions and
the competition for funds as well as the Company's perceived ability to
service such obligations should such financing be consummated. Rising
interest rates might affect the feasibility of debt financing that is
offered. Potential investors and lenders will be influenced by their
evaluations of the Company and its prospects and comparisons with
alternative investment opportunities. There can be no assurance that the
Company will be able to obtain financing on acceptable terms, if at all.
Shares of the Company's freely tradeable Common Stock may have been
improperly issued without registration under Federal and state securities
laws. In addition to administrative remedies which may be pursued by
governmental agencies, the recipients of these shares of Common Stock may
seek recovery of the purchase price of the stock plus interest through a
rescission offer, the amount of which cannot be presently determined and
could have a material adverse impact on the Company's financial position and
liquidity. Management intends to prepare and file the necessary registration
statement to register these shares. There can be no assurances that the
filing of these registration statements will provide an adequate remedy.
Until resolved, the impact of such issuance, if any, on the Company's
ability to raise additional capital through the future issuances of Common
Stock is unknown.
<PAGE> 13
On April 19, 1996, The NASDAQ Stock Market, Inc. ("NASDAQ"), which manages
the NASDAQ SmallCap Market Exchange (the "Exchange") on which the Company's
Common Stock was formerly listed and traded, informed management that the
Company had failed to meet certain listing maintenance requirements and had
not filed its Annual Report on Form 10-KSB within the required time frame.
NASDAQ gave the Company until May 20, 1996 to file such Annual Report and to
submit a plan detailing how the Company intended to meet the listing
maintenance requirements in the future. The Company filed the Annual Report
and submitted the required plan. On June 12, 1996, the Company received a
letter from NASDAQ informing the Company that its Common Stock was scheduled
to be delisted from the Exchange effective with the close of business on June
26, 1996 for failure to meet certain continuing listing requirements.
Although the Company currently satisfies the market float, number of market
makers and asset requirements, it does not meet the net worth or share price
criteria. The Company requested that NASDAQ conduct an oral hearing to
reconsider the decision to delist the Common Stock, and such hearing was
held on July 12, 1996 (the delisting was stayed pending the outcome of the
hearing). Management subsequently received a letter, dated July 17, 1996,
from NASDAQ, informing the Company that its securities were to be deleted
from the Exchange effective July 18, 1996. The Company has requested that
the NASDAQ Listing and Review Committee review this decision, but the
request will not operate as a stay to the deletion of the Common Stock. In
the meantime, the Common Stock is listed and traded on the OTC Bulletin
Board. There can be no assurance as to the outcome of the pending review.
As a result of such delisting, an investor could find it more difficult to
dispose of, or to obtain accurate quotations as to the market value of, the
Common Stock. In addition, subsequent to such delisting, trading in the
Common Stock is also subject to the requirements of Rule 15c2-6 and/or Rule
15g-9 promulgated under the Exchange Act. Under such Rules, broker/dealers
who recommend such low-priced securities to persons other than established
customers and accredited investors must satisfy special sales practice
requirements, including a requirement that they make an individualized
written suitability determination for the purchase and receive the
purchaser's written consent prior to the transaction. The Securities
Enforcement Remedies and Penny Stock Reform Act of 1990 also requires
additional disclosure in connection with any trades involving a stock
defined as a "penny stock" (generally, according to recent regulations
adopted by the Securities and Exchange Commission, any non-NASDAQ equity
security that has a market price of less than $5.00 per share, subject to
certain exemptions), including the delivery, prior to any penny stock
transaction, of a disclosure schedule explaining the penny stock market and
the risks associated therewith. Such requirements could severely limit the
market liquidity of the Common Stock and the ability of purchasers of the
Company's Common Stock to sell their securities in the open market.
The Company's timeshare resorts do not provide an exclusive solution for
potential purchasers, and such purchasers may choose alternative timeshare
resorts or vacation destinations. Many of the Company's competitors have
greater financial resources than the Company.
<PAGE> 14
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. Rasmussen (the
Company's former Chairman, Chief Executive Officer and a Director) and
Vellema. 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 parties entered into a settlement agreement effective March 1, 1996 (the
"Settlement Agreement"). Pursuant to the terms of the Settlement Agreement,
Gannaway will receive the sum of $600,000 to be paid over the term of four
years beginning with an initial payment of $25,000 to be paid on March 1,
1996; $15,000 on April 1, 1996; $15,000 on May 1,1996; $15,000 on June 1,
1996; $35,000 on July 1, 1996; and $35,000 on August 1, 1996. The Company
is currently in default with respect to the May, June, July and August
payments. From August 1, 1996 to August 1, 1999, Gannaway will receive (i)
monthly payments equal to $65.00 per timeshare interval sold in the
preceding month and (ii) semi-annual payments in the amount calculated by
amortizing the remaining balance of $460,000 over the term at 12% interest.
The entire balance will be due and payable on or before August 1, 1999.
The Settlement Agreement also provides that MPTV will transfer its video
productions assets in Florida and the Club Carib weeks to Gannaway, and the
litigation will be conditionally dismissed with prejudice (provided that the
court retains jurisdiction to enter final judgment upon default). Mutual
general releases will be exchanges by all parties with respect to all claims
and counterclaims.
In November, 1997, the First Trust Deed holder of the Lake Tropicana
property forced the property into receivership as a result of late payment
by the Company. This was reflected in the 1998 financial statements as a
write-off of the property, as the Company ceased the rental operations and
development of timeshare unites for sale in early 1998. Currently, the
Company is attempting to obtain new financing in order to reacquire the
property, resume development and begin sales of timeshare intervals.
<PAGE> 15
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.
Date: June 4, 1999 REGISTRANT:
MPTV, Inc.
By: /s/ JAMES C. VELLEMA
James C. Vellema
Chairman
(Principal Financial and Accounting
Officer)
Date: June 4, 1999 By: /s/ HURLEY C. REED
Hurley C. Reed
President
