<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934, for the Quarter Ended September 30, 1995.
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934, for the Transition Period from to
-------------- --------------
Commission file number 1-9748
- -------------------------------------------------------------------------------
AMERICAN FILM TECHNOLOGIES, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified its charter)
Delaware 23-2359277
- ------------------------------- ------------------------------
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) Number)
4105 Sorrento Valley Blvd., San Diego, CA 92121
- -------------------------------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number including area code
(619) 623-0830
- -------------------------------------------------------------------------------
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 Act of 1934
during the preceding 12 months (or 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 No X
---------- ----------
As of May 2, 1996, there were 69,567,310 shares of common stock outstanding.
<PAGE>
PART 1. FINANCIAL INFORMATION
American Film Technologies, Inc.
(Debtor In Possession)
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30, June 30,
1995 1995
(unaudited)
------------ ------------
<S> <C> <C>
Assets
Current Assets:
Cash $ 103,807 $ 10,584
Restricted cash 2,751,014 15,322
Accounts receivables 23,692 23,692
Other current assets 103,071 99,714
------------ ------------
Total current assets 2,981,584 149,312
Equipment and software, at cost, net 819,993 1,039,804
Film library, net 55,380 73,842
------------ ------------
$ 3,856,957 $ 1,262,958
============ ============
Liabilities and stockholders' equity/(deficit)
Current Liabilities:
Notes payable:
Bank Loans - in default $ 348,385 $ 598,385
Other loans 622,300 119,300
Accounts payable and accrued expenses 1,516,451 1,488,332
Accrued compensation 501,095 501,095
------------ ------------
Total current liabilities 2,988,231 2,707,112
Liabilities subject to compromise 1,642,211 1,642,211
------------ ------------
Total liabilities 4,630,442 4,349,323
Stockholders' equity/(deficit):
Preferred stock, $.001 par value:
Authorized shares - 10,000,000 at
September 30, 1995 and June 30, 1995:
issued and outstanding shares 695,250 at
September 30, 1995 and June 30, 1995 695 695
Common stock, $.002 par value:
Authorized shares - 90,000,000 at
September 30, 1995 and June 30, 1995:
issued and outstanding shares 30,410,802
at September 30, 1995 and June 30, 1995 60,822 60,822
Capital in excess of par value 13,526,767 13,526,767
Accumulated deficit (17,100,869) (16,674,649)
Subscription payable 2,739,100
------------ ------------
Total stockholders' equity/(deficit) (773,485) (3,086,365)
------------ ------------
$ 3,856,957 $ 1,262,958
============ ============
</TABLE>
See accompanying notes.
1
<PAGE>
American Film Technologies, Inc.
(Debtor In Possession)
Condensed Consolidated Statement of Operations
For the Three months ended September 30, 1995 and 1994
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Revenues:
Distribution revenues $0 $6,806
---------- ----------
0 6,806
Expenses:
Compensation and benefits - administrative
and officers 34,159 23,580
Selling, general and administrative 76,828 203,879
Interest expense 26,779 15,271
Depreciation and amortization 238,273 231,850
Reorganization items:
Professional fees 48,930 31,135
U.S. Trustee fees 1,250 500
---------- ----------
426,219 506,215
---------- ----------
Net loss ($426,219) ($499,409)
========== ==========
Net loss per share ($0.01) ($0.02)
========== ==========
Shares used in per share computation 30,410,802 27,510,802
========== ==========
</TABLE>
See accompanying notes.
2
<PAGE>
American Film Technologies, Inc.
(Debtor In Possession)
Condensed Consolidated Statements
of Cash Flows For the Three months ended
September 30, 1995 and 1994
(Unaudited)
<TABLE>
<CAPTION>
CASH FLOWS FROM OPERATION ACTIVITIES: 1995 1994
---------- ---------
<S> <C> <C>
Net income/(loss) ($426,219) ($499,409)
Adjustments to reconcile net (loss) to net cash
(used) by operating activities:
Depreciaiton and amortization 238,273 231,850
Changes in assets and liabilities:
Restricted cash (2,735,692) 1,325
Prepaids, deposits and other current
assets (3,357) 10,276
Accounts payable and accrued expenses 28,118 133,870
---------- ---------
Net cash (used) by operating activities (2,898,877) (122,088)
Cash Flows From Investing Activities:
-- --
---------- ---------
Net cash provided (used) by investing activities 0 0
Cash Flows From Financing Activities:
Principal payments on notes payable - bank (250,000) --
Prodeeds from notes payable - other 503,000 --
Proceeds from sale of common stock -- 130,000
Proceeds from common stock subscriptions 2,739,100 --
---------- ---------
Net cash provided by financing activities 2,992,100 130,000
Net increase in cash 93,223 7,912
Cash, beginning of period 10,584 25,980
---------- ---------
Cash, end of period $103,807 $33,892
Supplemental disclosures of cash flow information:
</TABLE>
See accompanying notes.
3
<PAGE>
AMERICAN FILM TECHNOLOGIES, INC.
(DEBTOR IN POSSESSION)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995 (UNAUDITED)
1. Reorganization Under Chapter 11
- ----------------------------------
Bankruptcy Proceedings and Basis of Presentation
On October 15, 1993, American Film Technologies, Inc. (the "Company") filed for
protection from its creditors under Chapter 11 of the United States Bankruptcy
Code. The Chapter 11 filing was the result of continuing defaults related to the
Company's loans, recurring operating losses and cash flow problems. The filing
of a Chapter 11 petition operates as a stay of, among other actions, the
commencement or continuation of a judicial administrative or other action or
proceeding that was or could have been initiated before the commencement of a
Chapter 11 case or the enforcement against the debtor or against the property of
the estate or a judgment obtained before the commencement of the case. Under
Chapter 11, substantially all pre-petition liabilities of debtors are subject to
settlement under a plan of reorganization. The consummation of a plan of
reorganization is dependent upon the satisfaction of numerous conditions,
including, among other things, the acceptance by several classes of interests
and confirmation by the Bankruptcy Court.
On October 6, 1995, the Company's Plan of Reorganization (the "Plan") was
approved by the Bankruptcy Court and became effective October 17, 1995. The
accompanying consolidated financial statements have been prepared in conformity
with principles of accounting applicable to a going concern. In the opinion of
management, all adjustments, consisting of normal recurring accruals, considered
necessary for a fair presentation have been included. For further information,
refer to the consolidated financial statements and footnotes thereto included in
the Company's annual report on Form 10-K for the year ended June 30, 1995. As
discussed below (see H. J. Meyers Agreement), the Company completed a private
placement of its common stock for $3.46 million and management intends to raise
additional funds to finance its ongoing operations. While management believes it
will be successful in its efforts, there are no assurances such additional funds
will be raised. No adjustments have been made to reflect the possible future
effects on the recoverability and classification of assets or the amount and
classification of liabilities that may result if the Company is unable to
continue as a going concern.
Further, the accompanying consolidated financial statements do not reflect any
adjustments relating to settlement of the claims or any class of creditors that
might be provided for in the Plan. Any adjustments relating to such settlements
will be recorded at such time as the Bankruptcy Court enters a final order
confirming the settlement of a disputed claim. See discussion under "Fresh Start
Accounting" below. The only effects of the bankruptcy proceedings reflected in
the accompanying financial statements as of September 30, 1995 and September 30,
1994 are that all accounts receivable and subscriptions receivable, related to
4
<PAGE>
the private placement, which have been collected have been deposited into
restricted escrow accounts and reflected as "Restricted cash" in the
accompanying consolidated balance sheet, "Liabilities subject to compromise,"
which are impaired prepetition liabilities in accordance with the Plan and
""Reorganization items" (including professional fees) have been specifically
identified on the accompanying consolidated statement of operations.
Plan of Reorganization
On October 6, 1995, the Company's Plan was approved by the Bankruptcy Court and
became effective October 17, 1995. Under the terms of the Plan, the following is
a summary of the treatment of each of the major classes of creditors and
stockholders:
<TABLE>
<CAPTION>
Estimated
Class of Amount of Distribution under the
Claims Claim Plan Status
- -------- --------- ---------------------- -------
<S> <C> <C> <C>
Class 1 $86,000 Cash payment in full Unimpaired
Employee on Effective Date
Priority
Claim
Class 2 $80,000 Cash payment on Distribution Unimpaired
Priority Date or, at the Company's
Claim discretion, over six years
plus interest
Class 3 $623,000 Cash payment on the Unimpaired
Comerica Effective Date plus interest
Claim and reasonable legal fees
Class 4 $500,000 Cash payment plus interest Unimpaired
Secured Claims on the Effective Date
Class 5 $122,000 $110,000 cash payment plus Impaired
DIP Financing interest on the Effective Date
Claims and remainder in one year note
Class 6 $6,000 Cash payment in full on Unimpaired
Convenience the Effective Date
Claims
Class 7 $1,697,000* Unsecured five year notes Impaired
Unsecured in full amount of allowed claim,
Claims with interest at 7%
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Estimated
Class of Amount of Distribution under the
Claims Claim Plan Status
- -------- --------- ---------------------- -------
<S> <C> <C> <C>
Class 8 N/A $10 cash on the Effective Date Impaired
Preferred Unexercised Series B, C and D
Stock Interest voting convertible interest will
be canceled
Class 9 N/A Retained, subject to dilution Impaired
Common
Stock Interest
Class 10 N/A Canceled Impaired
Other Equity
Interests
</TABLE>
* Amount does not include the Class 7 claim of Joseph Taritero, which had been
compromised pursuant to the terms of a prior stipulation and order. See 3.
Commitments and Contingencies.
H. J. Meyers Agreement
On May 3, 1995, the Company executed an agreement with H. J. Meyers and Co.,
Inc. ("Meyers") pursuant to which Meyers purchased an exclusive 90 day option
(beginning May 30, 1995) to purchase up to 51% of the Company's common stock for
$3 million. Upon approval of the Bankruptcy Court, on May 30, 1995, Meyers paid
the Company a non refundable fee of $150,000 for the option. The agreement
required Meyers to pay the $3 million to the Company upon the effective date of
the Company's Plan. Through a subsequent amendment to that agreement, Meyers
agreed to use its best efforts to increase the proceeds of the offering to $4
million which would result in net proceeds of $3.48 million to the Company. In
exchange for this possible increase, the Company agreed to issue an additional
3,800,000 shares to Meyers and its assignees. Meyers raised the money through a
private placement of the Company's common stock to "accredited investors," as
that term is defined by the Securities Act of 1933. As of October 31, 1995, the
closing date for the private placement, Meyers sold subscriptions totaling $3.46
million for the purchase of the Company's stock. As of April 26, 1996, the
Company had received net proceeds of $3.46 million, including the conversion of
a $300,000 bridge loan discussed below.
The Company agreed to grant a one-time demand and piggy back registration right.
For a period of two years from the Effective Date, (upon demand by at least 25%
of the new stockholders) the new stockholders can demand the Company to file a
registration statement with the SEC covering the reoffer and resale of its
shares (up to 38,982,508). Not withstanding the foregoing, if at any time prior
to exercise of the demand registration rights, the Company receives a letter of
6
<PAGE>
intent from an underwriter for a public equity offering of at least $5 million
of the Company's securities, then the demand registration right shall terminate.
On March 28, 1996, the Company entered into a letter of intent with Meyers (the
"Meyers Letter of Intent") under which Meyers confirmed its interest in
underwriting on a firm commitment basis a public offering of shares of the
Company's common stock. The Meyers Letter of Intent contemplates the negotiation
and execution of formal agreements relating to the proposed offering and
provides, among other things, that the Company will apply for listing on the
Nasdaq Small Cap Market and use its best reasonable efforts to maintain such
listing for not less than five years; that the Company, if requested, obtain
"key man" life insurance on the lives of designated officers of the Company and
that the Company shall have entered into a joint venture, business alliance or
business combination with an owner of content on terms acceptable to Meyers.
To enable the Company to fund certain obligations prior to the Effective Date,
on July 28, 1995, Meyers arranged a $500,000 bridge loan to the Company with
interest at 8% plus common stock at the rate of one half share for every dollar
of bridge loan. The loans are convertible into common stock at the same rate as
the private placement to the accredited investors. On the Effective Date,
$300,000 of the bridge loan was converted into the Company's common stock and
the remaining $200,000 was repaid. The $500,000 bridge loan is included in
Class 4 - Secured Claims mentioned above.
Fresh Start Accounting (Unaudited)
Under the provision of Statement of Position (SOP) 90-7, "Financial Reporting by
Entities in Reorganization under the Bankruptcy Code," issued in November 1990
by the American Institute of Certified Public Accountants, the Company has
prepared the accompanying unaudited pro forma balance sheet as of the Effective
Date, October 17, 1995 on the basis of "fresh start" reporting since the
reorganization value, as defined, was less than the total of all post-petition
liabilities and prepetition claims, and holders of voting immediately before
confirmation of the Plan received less than fifty percent of the voting stock of
the emerging entity. Under this concept, all assets and liabilities are restated
to reflect the reorganization value of the reorganized entity, which
approximates its fair value at the date of reorganization. The Company estimated
the fair value of the reorganized entity based on the proceeds received from the
private placement of approximately 56% of its common stock which was completed
on the Effective Date. In addition, the accumulated deficit of the Company is
eliminated and its capital structure is recast in conformity with the Plan. As
such, the accompanying unaudited consolidated pro forma balance sheet as of
October 17, 1995 represents that of a successor company which, in effect, is a
new entity with assets, liabilities and a capital structure having carrying
values not comparable with prior periods and with no beginning retained earnings
or deficit.
7
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Current Assets: Current Liabilities:
Cash $ 3,075,921 Notes payable:
Bank loans $ 348,000
Other loans 322,300
Other current assets 36,494
Accounts payable and
accrued expenses 1,471,467
Accrued compensation 729,000
----------- -----------
Total current assets 3,112,415 Total current liabilities 2,870,767
Equipment and software 514,739 Long-term debt 1,642,211
Film library 450,000
Reorganization value in
excess of amounts Common stock 139,115
allocable to identifiable Capital in excess of par 5,662,324
assets 6,237,263 -----------
----------- Total stockholders equity 5,801,439
$10,314,417 -----------
$10,314,417
</TABLE>
2. Summary of Significant Accounting Policies
- ----------------------------------------------
The Company's principal business is the production of color versions of motion
pictures and television programs originally produced in black-and-white. The
Company has produced colorized films for its own library and owns the copyrights
on eleven such films. These films are available for sale and or distribution.
Since the filing of its Chapter 11 Bankruptcy, the Company has not generated any
film colorization or animation production or new fee for service orders.
Consolidation
The consolidated financial statements include the accounts of Midtech de Mexico
S.A., the Company's wholly-owned Mexican subsidiary. Due to the lack of film
coloring activity, Midtech is not currently operational. All intercompany
transactions have been eliminated in consolidation.
Loss per Share
Loss per share has been calculated by dividing the net loss applicable to common
stock for the periods by the weighted average number of common stock outstanding
for the periods indicated. For the quarters ended September 30, 1995 and 1994,
no exercise of stock options was assumed because the exercise of such
equivalents would be anti-dilutive.
8
<PAGE>
3. Commitments and Contingencies
- --------------------------------
Taritero Claim. The Company's former Chief Executive Officer, Joseph Taritero,
sued the Company and certain of its former directors and officers in the
Superior Court of the State of California for the County of Los Angeles alleging
breach of contract and fraud and seeking damages "in excess of $686,000." Mr.
Taritero and the Company had executed a three year Employment Agreement in
December 1991 and Mr. Taritero served as Chief Executive Officer of the Company
from that time until his resignation in November 1992.
The Company had no funds to defend the action and had not retained counsel to do
so, and in May 1995, a default judgment was entered against the Company for
compensatory damages of $892,000 on a breach of contract. In accordance with the
Stipulation and Order from the Bankruptcy Court, the Company agreed to a full
and final settlement with Mr. Taritero for an amount of $275,000. In accordance
with the terms of the Plan, $125,000 was paid on the Effective Date, $75,000 was
paid in April 1996 and the remaining $75,000 is to be paid in October 1996. The
Company and Mr. Taritero have executed mutual general releases each in favor of
the other. Mr. Taritero also received a compensatory damage award of $892,000
and a punitive damage award of $8,125,000 solely against the former directors
and officers of the Company for fraud.
AFT de Mexico. Due to restraints on the utilization of the Company's cash
imposed by Comerica Bank, the Company's subsidiary, AFT de Mexico, missed its
payroll on October 8, 1993 and the employees began a work stoppage. As a result
of the strike, the Mexican employees filed a lien against the Company's
equipment located in Mexico. In August 1994, a Mexican court ruled in favor of
the workers, validating their lien on the equipment. In March 1995, the Mexican
Labor Board allowed the employees to execute their lien and granted them title
to the equipment. In June 1995, the Company's new subsidiary, Midtech de Mexico,
S.A., entered into a purchase agreement with the workers to purchase the
equipment back from the workers for $215,000, which has subsequently been paid.
9
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
---------------------------------------------------------------
This discussion should be read in conjunction with the consolidated
financial statements, related notes and management's discussion and analysis of
financial conditions and results of operations included in the Company's annual
report on Form 10-K for the year ended June 30, 1995.
Overview and Reorganization.
- ----------------------------
On October 15, 1993, the Company filed for protection under Chapter 11
of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware. On
October 6, 1995, the Company's Plan of Reorganization (the "Plan") was approved
by the Bankruptcy Court and became effective October 17, 1995 (the "Effective
Date"). In connection with the Plan, the Company has raised $3.46 million in new
capital in exchange for the issuance of common stock representing approximately
54% if its total outstanding common stock. For a detailed discussion of the
bankruptcy proceedings, see Note 1 in the Notes To Condensed Consolidated
Financial Statements.
From the filing of the bankruptcy to October 1995, AFT was funded
principally from the conversion of all of its Series A Preferred Stock and
64,750 shares of its Series B Preferred Stock into 15,237,500 shares of Common
Stock. The conversion generated $638,000 in additional capital. In addition, Mr.
Gerald Wetzler, AFT's principal shareholder during the bankruptcy period, and
Mr. Robert Bernhard, pursuant to a debtor in possession secured lending
arrangement, in their discretion, could make available to AFT up to an aggregate
of $150,000 (the "DIP Financing"). The maximum outstanding at any time under
the DIP Financing was $122,000 in July 1995.
The Company's production facility in Tijuana, Mexico initially closed
down in October 1993 due to a strike of its employees. It currently remains
closed because the Company has not resumed operations. In June 1995, the
Company's new subsidiary, Midtech de Mexico, renegotiated the lease of its
production facility in Tijuana. Current management believes a Mexican production
facility is advantageous to the strategic plan of the Company.
Success of the Company will, among other things, depend upon the
resumption of production in Mexico. That will require reemployment of selected
former Mexican employees. Since the Mexican operation was suspended in October
1993, the Company believes most of the former employees have found other jobs.
If Midtech is unable to rehire certain former employees, it will have to recruit
and train a new work force. That would delay the resumption of production and
increase the cost of production. As such, it could have a materially adverse
effect on the Company. Although the Company expects to benefit from the
devaluation of the peso, there is no assurance of how long those expected
benefits will last.
10
<PAGE>
Since emerging from bankruptcy, the Company has actively pursued new
product development and opportunities, as well as strategic alliances and
partners. Related to those efforts, the Company has engaged the ADASAR Group,
Inc. ("Adasar"). Adasar, through its principal, Dennis Levine, has sought new
product opportunities and strategic alliances on behalf of the Company.
On March 28, 1996, the Company entered into a letter of intent with
Meyers (the "Meyers Letter of Intent") under which Meyers confirmed its interest
in underwriting on a firm commitment basis a public offering of shares of the
Company's common stock. The Meyers Letter of Intent contemplates the negotiation
and execution of formal agreements relating to the proposed offering and
provides, among other things, that the Company will apply for listing on the
Nasdaq Small Cap Market and use its best reasonable efforts to maintain such
listing for not less than five years; that the Company, if requested, obtain
"key man" life insurance on the lives of designated executive officers of the
Company; and that the Company shall have entered into a joint venture, business
alliance or business combination with an owner of content on terms acceptable to
Meyers.
Results of Operations.
- ----------------------
Since the filing under Chapter 11 in October, 1993, the Company has not
generated any income from film colorization, animation or fee for service
orders. During the quarter ended September 30, 1995, the Company did not
recognize any income compared to income of approximately $7,000 for the quarter
ended September 30, 1994.
Expenses of approximately $426,000 for the quarter ended September 30,
1995 were relatively constant compared to expenses of approximately $506,000 for
the year ago quarter.
For the quarter ended September 30, 1995, the Company had a net loss of
approximately $426,000, or $0.01 cents per share, compared to a net loss of
approximately $499,000, or $0.02 cents per share, in the same quarter in the
prior year.
Liquidity and Capital Resources.
- --------------------------------
On October 6, 1995, the Company's Plan of Reorganization (the "Plan")
was approved by the bankruptcy court. The Plan became effective on October 17,
1995. In connection with this Plan, the Company completed a private placement of
$3.46 million, and management of the Company has expressed its intention to
raise additional funds to finance ongoing operations. The funds raised in the
private placement, as well as the additional funds to be raised by management,
are essential for the Company to continue operations, and no assurance can be
made that such additional funds can be raised. As noted above, the Company has
entered into a Letter of Intent with H. J. Meyers & Co., Inc. for the purpose of
raising additional capital through a public offering.
11
<PAGE>
PART II : OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings
- -------------------------
Taritero Claim. The Company's former Chief Executive Officer, Joseph
Taritero, sued the Company and certain of its former directors and officers in
the Superior Court of the State of California for the County of Los Angeles
alleging breach of contract and fraud and seeking damages "in excess of
$686,000." Mr. Taritero and the Company had executed a three year Employment
Agreement in December 1991 and Mr. Taritero served as Chief Executive Officer of
the Company from that time until his resignation in November 1992.
The Company had no funds to defend the action and had not retained
counsel to do so, and in May 1995, a default judgment was entered against the
Company for compensatory damages of $892,000 on a breach of contract. In
accordance with the Stipulation and Order from the Bankruptcy Court, the Company
agreed to a full and final settlement with Mr. Taritero for an amount totaling
$275,000. In accordance with the terms of the Plan, $125,000 was paid on the
Effective Date, $75,000 was paid in April 1996 and the remaining $75,000 is to
be paid in October 1996. The Company and Mr. Taritero have executed mutual
general releases each in favor of the other. Mr. Taritero also received a
compensatory damage award of $892,000 and a punitive damage award of $8,125,000
solely against the former directors and officers of the Company for fraud.
AFT de Mexico. Due to restraints on the utilization of the Company's
cash imposed by Comerica Bank, the Company's subsidiary, AFT de Mexico, missed
its payroll on October 8, 1993 and the employees began a work stoppage. As a
result of the strike, the Mexican employees filed a lien against the Company's
equipment located in Mexico. In August 1994, a Mexican court ruled in favor of
the workers, validating their lien on the equipment. In March 1995, the Mexican
Labor Board allowed the employees to execute their lien and granted them title
to the equipment. In June 1995, the Company's new subsidiary, Midtech de Mexico,
S.A., entered into a purchase agreement with the workers to purchase the
equipment back from the workers for $215,000, which has subsequently been paid.
12
<PAGE>
Item 2. Changes In Securities
- ------------------------------
None during the period. As a result of the Plan, all unexercised Series
B, C and D preferred stock was canceled and common stock was retained, subject
to dilution because of the private placement.
Item 3. Defaults Upon Senior Securities
- ----------------------------------------
None during the period. As a result of the Plan, Comerica Bank's
secured claim was repaid in November 1995. The amount of $582,193 paid to
Comerica included principal, accrued interest and reasonable legal fees.
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
None.
Item 5. Other Information
- --------------------------
As a result of the Plan, as of the Effective Date of the Plan, the
Company will adopt "fresh start" accounting, which will reflect the payment or
discharge of certain debts in accordance with the Plan. "Fresh start accounting"
allows a reorganized entity to reflect its reorganization value, which
approximates its fair value at the date of reorganization. In addition, the
accumulated deficit of the Company is eliminated and its capital structure is
recast in conformity with the Plan.
In February 1996, the Company elected Larry King and Steven Lefkowitz
to its Board of Directors. Mr. King is the host of CNN's "Larry King Live" and
Mutual Radio's "Larry King Show" and is a columnist for USA Today. Mr. Lefkowitz
is founder and President of Wade Capital Corporation, founded in 1990.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
None.
13
<PAGE>
Signatures
In accordance with 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.
AMERICAN FILM TECHNOLOGIES, INC.
Date: June 7, 1996 By: /s/ Gerald M. Wetzler //
--------------- -------------------------
Gerald M. Wetzler,
Chairman, Chief Executive Officer
Date: June 7, 1996 By: /s/ John J. Karl //
------------- --------------------
John J. Karl,
Principal Accounting Officer
14
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000819028
<NAME> AMERICAN FILM TECHNOLOGIES, INC.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 103,807
<SECURITIES> 0
<RECEIVABLES> 23,692
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,981,584
<PP&E> 5,291,376
<DEPRECIATION> (4,471,383)
<TOTAL-ASSETS> 3,856,957
<CURRENT-LIABILITIES> 2,988,231
<BONDS> 0
0
695
<COMMON> 60,822
<OTHER-SE> (835,002)
<TOTAL-LIABILITY-AND-EQUITY> 3,856,957
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 426,219
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 26,779
<INCOME-PRETAX> (426,219)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (426,219)
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
