<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
[ x ] Annual report pursuant to Section 13 or 15(D) of the Securities
Exchange Act of 1934 (Fee Required)
[ ] Transitional report pursuant to Section 13 or 15(D) of the Securities
Exchange Act of 1934 (No Fee Required)
COMMISSION FILE NUMBER: 0-16545
MPTV, Inc.
(Name of small business issuer in its charter)
Nevada 88-0222781
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
366 San Miguel Drive, Suite 210
Newport Beach, California 92660
(Address of principal executive offices) (Zip Code)
(949) 760-6747
(Registrant's telephone number, including area code)
Securities registered under Section 12(b) of the Exchange Act:
(Title of each class)
None
Securities registered under Section 12(g) of the Exchange Act:
(Title of each class)
Common Stock, $.01 par value
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 [ ]
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB [ ].
The issuer had no significant revenues for its fiscal year ended
December 31, 1997.
As of October 31, 2000, 1,324,804,554 shares of Common Stock, $0.01
parvalue per share, were outstanding. The aggregate market value, held by
non-affiliates, of shares of the Common Stock, based upon the average of the bid
and asked prices for such stock on that date, was approximately $39,744,150.
Transitional Small Businesss Disclosure Format: Yes [ ] No [X]
<PAGE> 2
MPTV, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
with
INDEPENDENT AUDITORS' REPORT THEREON
<PAGE> 3
<TABLE>
<CAPTION>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<S> <C>
Independent Auditor's Report 2
Consolidated Financial Statements:
Consolidated Balance Sheets 3
Consolidated Statements of Operations 4
Consolidated Statement of Stockholders'
Deficit 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7-14
</TABLE>
<PAGE> 4
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
MPTV, Inc.
We have audited the accompanying consolidated balance sheet of MPTV, Inc.
("MPTV"), and subsidiaries as of December 31, 1997, and the related
consolidated statements of operations, stockholders' deficit and cash flows
for the year then ended. These consolidated financial statements are the
responsibility of MPTV's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of MPTV,
Inc. and subsidiaries as of December 31, 1997, and the results of their
operations and their cash flows for the year ended December 31, 1997.
The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. Prior
financial statements of MPTV, Inc. and subsidiaries included explanatory
paragraphs that raised substantial doubt about the company's ability to
continue as a going concern. In addition, these financial statements
contained paragraphs explaining the improper issuance of stock and MPTV's
failure to maintain NASDAQ SmallCap listing requirements. As discussed
in the notes to consolidated financial statements, MPTV has incurred
cumulative net losses of $37,615,242 since its inception. In addition
and as discussed in the notes to the consolidated financial statements,
shares of freely tradable common stock 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. Accordingly, no provision
for any rescission offer that may occur has been reflected in the
accompanying consolidated financial statements. MPTV has also failed to
meet certain listing maintenance requirements established by NASDAQ Stock
Market, Inc. ("NASDAQ"), and has had it's stock delisted from the NASDAQ
SmallCap market exchange. Furthermore, MPTV is in default on certain of
its debt obligations and requires significant additional amounts of capital
for its timeshare development and marketing activities to resume. MPTV also
requires continual capital infusions to pay for operating expenses, interest,
and note payable obligations. These factors raise substantial doubt about
MPTV's ability to continue as a going concern. The consolidated financial
statements do not include any adjustments that might result from the outcome
of these uncertainties.
Sarna & Company
Westlake Village, California
November 6, 2000
<PAGE> 5
MPTV, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1997
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Cash $ 19,303
Property Held for Timeshare Development 16,218,585
Property and Equipment 39,627
Other Receivables 277,509
Other Assets 593,634
Due from Related Parties 179,100
------------
Total Assets $ 17,327,758
============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Liabilities
All Inclusive Trust Deed Note Payable $ 13,492,996
Notes Payable 6,570,582
Accrued interest 802,809
Other Accrued Liabilities 654,975
Accounts Payable and Accrued Expenses 562,065
Due to Related Parties 78,971
------------
Total Liabilities $ 22,162,398
------------
Commitments and Contingencies (see notes)
Stockholders' deficit:
Common stock, $.05 par value, 500,000,000
shares authorized, 223,920,708 issued $ 11,196,036
Additional paid-in capital 21,584,748
Accumulated deficit <37,615,424>
------------
Total stockholders' deficit $ <4,834,640>
------------
Total liabilities and stockholders'
deficit $ 17,327,758
============
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE> 6
MPTV, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
Revenue $ 11,620
Other Income 5,020
-----------
Total Revenue $ 16,640
-----------
Expenses
Sales Expenses $ 83,958
General, administrative, and consulting 4,294,723
Interest 1,240,599
Incidentals 84,565
-----------
Total Expenses $ 5,703,845
-----------
Net Loss $<5,687,205>
===========
Net Loss per share $ <0.03>
===========
Weighted average number of
shares outstanding 202,016,223
===========
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE> 7
MPTV, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 1997
<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, 1997 162,406,691 $ 8,120,335 $22,365,449 $<31,928,219> $<1,442,435>
Common Stock Issued
For Services
And Compensation 8,064,909 403,246 1,041,754 0 1,445,000
Common Stock Issued
For Cash 53,449,108 2,672,455 <1,822,455> 0 850,000
Net Loss for the
Year ended
December 31, 1997 - - - <5,687,205> <5,687,205>
----------- ----------- ----------- ------------ -----------
Balances,
December 31, 1997 223,920,708 $11,196,036 $21,584,748 $<37,615,424> $<4,834,640>
=========== =========== =========== ============ ===========
</TABLE>
See Notes to Consolidated Financial Statements
5
<PAGE> 8
MPTV, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
Cash Flows From Operating Activities:
Net Loss $<5,687,205>
Adjustments to Reconcile Net Loss to Net
Cash Used by Operating Activities:
Issuance of Common Stock for Services 1,445,000
Depreciation and Amortization 313,800
Changes in Assets and Liabilities <483,665>
-----------
Net Cash Used In Operating Activities $<4,412,070>
-----------
Cash Flows from Investing Activities:
Construction Deposits $ 624,400
Other Assets <350,443>
Purchase of Furniture and Equipment <12,925>
-----------
Net Cash Provided By Investing Activities $ 261,032
-----------
Cash Flows From Financing Activities:
Proceeds from Issuance of Notes Payable $ 6,433,250
Proceeds from Sale of Common Stock 850,000
Principal Repayments of Notes Payable <3,148,250>
-----------
Net Cash Provided By Financing Activities $ 4,135,000
-----------
Net Decrease in Cash $ <16,038>
Cash, beginning of period 35,341
-----------
Cash, end of period $ 19,303
===========
Cash Paid For:
Interest $ 732,534
===========
</TABLE>
See Notes to Consolidated Financial Statements
6
<PAGE> 9
MPTV, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The consolidated financial statements include the accounts of MPTV, INC,
Consolidated Resort Services, INC. and Consolidated Resort Enterprises,
INC. (collectively referred to as "MPTV" or as "The Company"). All material
intercompany balances have been eliminated. Certain limited reclassification
and format changes have been made to prior year's amounts to conform to the
current year presentation.
The consolidated financial statements are presented in accordance with
generally accepted accounting principals, which require management to make
estimates regarding asset valuations and their realization, the outcome of
litigation and other matters that affect the reported amounts and disclosure
of contingencies in the financial statements. Estimates, by their nature,
are based on judgment and available information. As such, actual results
could differ materially from those estimates.
The consolidated financial statements of MPTV have been prepared assuming
that MPTV 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. MPTV has incurred cumulative net losses of
$37,615,242 since its inception on October 1992. MPTV is in default on
certain of its secured and unsecured notes payable. In the event that MPTV
cannot refinance or renegotiate the notes, it may be subject to foreclosure
proceedings on its property currently being held for timeshare development.
The company requires capital for its contemplated timeshare development and
marketing activities to take place. MPTV also requires capital for operating
expenses and interest and note obligations. In addition MPTV has at certain
times, issued shares of its common stock without proper registration under
Federal and state securities laws. 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 the obtainment of additional
financing, the successful development of the company's contemplated 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. The ability to successfully resolve these
factors raise substantial doubt about the company's ability to continue as a
going concern.
The consolidated financial statements of MPTV do not include any adjustments
that may result from the outcome of these aforementioned uncertainties.
7
<PAGE> 10
MPTV, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
PRO FORMA COMPENSATION EXPENSE
MPTV accounts for costs of stock-based compensation in accordance with APB
No. 25 Accounting for Stock Issued to Employees rather than the fair value
based method in SFAS No. 123 Accounting for Stock Based Compensation. No
grants of stock options were issued by MPTV and accordingly no Pro Forma
compensation expense is reported.
Improper Issuances of Common Stock
Shares of freely tradable common stock have been issued without proper
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. Accordingly, no provision for any
rescission offer that may occur has been reflected in the accompanying
consolidated financial statements. Management of MPTV intends to eventually
file the necessary registration statements to register these shares. There
can be no assurances that the filings of these registration statements will
provide an adequate remedy.
Property and Equipment
Property and equipment are being depreciated on a straight-line basis over
five to seven years. Expenditures for maintenance and repairs are charged
to operations, as incurred, while betterments are capitalized.
Revenue Recognition
The Company plans to recognize revenues from sales of timeshare units upon
the execution of a contract and receipt of a down payment of at least 10%,
and when proceeds are assured and all conditions precedent to closing have
been performed by the parties. Costs applicable to the sale of Timeshare
Property will be allocated to individual intervals on the basis of their
relative sales value.
Incidental rental revenues will be recognized as earned.
8
<PAGE> 11
MPTV, INC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Income Taxes
The Company accounts for its income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" Under
Statement 109, a liability method is used whereby deferred tax assets and
liabilities are determined based on temporary differences between bases used
for financial reporting and income tax reporting purposes. Income taxes are
provided based on tax rates in effect at the time such temporary differences
are expected to reverse. A valuation allowance is provided for certain
deferred tax assets if it is more likely than not, that the Company will not
realize the tax assets through future operations.
Fair Value of Financial Instruments
Financial Accounting Standards Statement No. 107, "Disclosures About Fair
Value of Financial Instruments," requires the Company to disclose, when
reasonably attainable, the fair values of its assets and liabilities, which
are deemed to be financial instruments. The Company's financial instruments
consist primarily of its secured and unsecured notes payable and certain
investments. Management has determined that it is not practicable to estimate
fair value of its secured and unsecured notes payable because of the complexity
of the debt arrangements and the lack of an active market with which to obtain
reasonable comparables for the terms and interest rates of such debt.
Per Share Information
The Company computes per share information by dividing the net loss for the
Recently Issued Accounting Pronouncements
Recently issued accounting pronouncements will have no significant impact on
the Company and its reporting methods.
9
<PAGE> 12
MPTV, INC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOTE 2 - PROPERTY HELD FOR TIMESHARE DEVELOPMENT
In November 1997, the First Trust Deed Holder of the Lake Tropicana property,
the company's primary asset, forced the property into receivership as a
result of late payments by MPTV. This foreclosure is reflected in the
financial statements as of a write-off of the property. The company has
ceased rental operations and development of timeshare units for sale. The
property, its improvements, and all related debt were written off and are
reflected as such in these financial statements.
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment consists of the following at December 31, 1997:
<TABLE>
<S> <C>
Property and equipment $ 108,879
Less accumulated depreciation <69,252>
---------
Net Property and Equipment $ 39,627
=========
</TABLE>
NOTE 4 - NOTES PAYABLE STOCKHOLDERS'
Notes payable to stockholders' at December 31, 1997 consists of numerous
unsecured loans that accrue annual interest at rates that vary between 8%
and 12% per annum. These notes mature monthly throughout 1999 and are in a
continual state of extension and renegotiation.
NOTE 5 - ACCRUED INTEREST
Accrued interest consists of interest owing on notes payable as of
December 31, 1997.
10
<PAGE> 13
MPTV, INC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOTE 6 - RELATED PARTY TRANSACTIONS
A summary of related party transactions at December 31, 1997 is as follows:
<TABLE>
<S> <C>
Due From
Advances receivable officer/shareholder,
Unsecured, accruing no interest, due
Upon demand $ 158,000
Advances related entities, accruing no
interest 10%, due upon demand 21,100
---------
Total due from related parties $ 179,100
=========
Due to
Note payable related entities,
unsecured, payable upon
demand $ 78,971
=========
</TABLE>
NOTE 7 - STOCKHOLDERS' EQUITY
Common Stock
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 year ended December 31, 1997 the company issued
8,064,909 shares of stock, at a value of $1,445,000 for services rendered.
Stock Options and Warrants
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.
11
<PAGE> 14
MPTV, INC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOTE 8 - PROVISION FOR INCOME TAXES
The provision for income taxes for the year ended December 31, 1997,
represents the minimum state income tax expense of the Company, which is
not considered significant.
A reconciliation of estimated federal income taxes to the provision for
income taxes is as follows:
<TABLE>
<S> <C>
Federal Benefit $ 12,365,000
State benefit, net - 0 -
Less change in valuation
account for realization
of benefit $(12,365,000)
------------
Total provision for
income taxes $( - 0 - )
============
</TABLE>
Because of the "change in ownership" provisions of the Tax Reform Act of
1986, the utilization of the Company's net operating loss carry forwards
prior to the merger on December 20, 1993 are subject to annual limitation
of approximately $2,000,000. In addition, the Company experienced a
substantial change in ownership due to issuances of its common stock. As
a result, the Company will experience an additional limitation of its
annual utilization of net operating losses. Net operating loss carry
forwards for Federal and state tax reporting purposes are approximately
$37,000,000.
NOTE 9 - COMMITMENTS AND CONTINGENCIES
Operating Leases
The company has sublet new administrative office space for a one-year
period expiring June 3, 1998. Monthly rent under this lease is $3,301.
This lease requires no other payments.
12
<PAGE> 15
MPTV, INC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Litigation
In 1998, and in prior years, the company has been the defendant in certain
lawsuits. In 1995, the founder and former officer, director and principal
(the "Plaintiff") of MPTV filed a Complaint against the Company to enforce
a settlement. In exchange MPTV issued 328,800 shares of its common stock,
subject to certain registration rights. The Company had not registered such
shares. In February 1996, the Company settled with the Plaintiff agreeing
to pay $600,000 in damages. The Company recorded a provision for loss
totaling $256,000 relating to this settlement in the 1995 consolidated
statement of operations. The Company has reflected the entire $600,000
settlement obligation in other accrued liabilities on the consolidated
balance sheet at December 31, 1997. This obligation has not been paid.
In March 1996, the Company received an unfavorable judgment in litigation
with a former consultant related to a compensation dispute. The judgment
provides for the Company to pay the former consultant approximately $282,000.
The Company filed a motion for a rehearing and received an Order from the
Court denying said motion. Management has recorded a provision for loss
totaling $112,000 relating to this settlement in the 1995 consolidated
statement of operations. The Company has reflected the entire $282,000
settlement obligation in other accrued liabilities and accrued expenses on
the consolidated balance sheet at December 31, 1997.
Management feels that other pending lawsuits are without merit and therefore
no reserves for their possible outcomes have been established.
Consulting Agreements
The company has entered into a variety of consulting agreements, which have
terms for up to a year, certain of which are renewable. The agreements
provide for the delivery of assorted services relating to the reacquisition
and financing of the Lake Tropicana timeshare project as well as other
management issues. Certain of the agreements require the monthly payment of
consulting fees in the form of cash or stock.
13
<PAGE> 16
MPTV, INC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOTE 10 - SUBSEQUENT EVENTS
Subsequent to December 31, 1997, the Company has issued a significant number
of shares of its common stock for cash and services rendered.
In June 1999, the company entered into an agreement with All Star Resorts,
Inc. (a Nevada Corporation) in a joint venture to form Lake Trop, LLC, a Nevada
Limited Liability Company. The purpose of Lake Trop, LLC is to release the
Lake Tropicana property from receivership, and construct and develop the Lake
Tropicana property in Las Vegas. MPTV, Inc. and its subsidiaries issued
170,000,000 shares of stock with an aggregate value of $1,750,000 as its
initial investment in Lake Trop, and provided an additional $500,000 cash
investment.
In August 1999, the Company's board of directors elected to reduce the par
value of the Company's common stock to $0.01, and to increase authorized shares
to 950,000,000. This was done to more accurately reflect the Company's equity
position after several years of issuing stock below par, and to provide for the
future raising of capital through issuance of common stock.
Year 2000 Compliance
The Year 2000 issue is the result of computer programs having been written
using two digits (rather than four) to define years. Computers or other
equipment with date-sensitive software may recognize "00" as 1900 rather than
2000. This could result in system failures or miscalculations. If the Company
or significant customers, suppliers or other third parties fail to correct
Year 2000 issues, the Company's ability to operate could be affected.
The following disclosure is pursuant to the Year 2000 Readiness and
Disclosure Act.
MPTV'S Year 2000 program is designed to minimize the possibility of Year 2000
interruptions. Any such interruption may have a material adverse impact on the
Company's future operating results. The Company established procedures to
identify and assess systems and processes vulnerable to Year 2000 problems.
The Company also developed procedures to monitor levels of compliance within
its stated goals of compliance.
In each area of vulnerability, various testing and readiness methodologies are
being used to identify and correct suspect systems, processes or supplier
interfaces. The Company has met its Year 2000 compliance goals prior to
December 31, 1999.
14
<PAGE> 17
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.
Date: November 28, 2000 MPTV, Inc.
By: /s/ HURLEY C. REED
Hurley C. Reed,
Chairman
(Principal Financial and Accounting
Officer)
