UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended February 28, 1997
----------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 14 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
--------------- ----------------
Commission file number 0-19817
Creative Programming and Technology Ventures, Inc.
--------------------------------------------------
(Exact name of registrant as specified in its charter)
Colorado 84-1236669
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
(303) 694-5324
---------------------------------------------------
(Registrant's telephone number, including area code)
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 report(s), and (2) has been suhject to such filing
requirements for the past 90 days.
YES [ X ] NO [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS.
Indicate by check mark whether the registrant filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by court.
YES [ ] NO [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 3,110,379 common shares as of
March 19, 1997.
<PAGE>
CREATIVE PROGRAMMING AND TECHNOLOGY VENTURES, INC.
AND SUBSIDIARIES
INDEX
PART I. PART 1, ITEM 1: FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET AS OF
FEBRUARY 28, 1997 (UNAUDITED) 1
CONSOLIDATED STATEMENTS OF OPERATIONS FOR
THREE MONTHS ENDED FEBRUARY 28, 1997
AND FEBRUARY 29, 1996 (UNAUDITED) 3
CONSOLIDATED STATEMENTS OF OPERATIONS FOR
SIX MONTHS ENDED FEBRUARY 28, 1997
AND FEBRUARY 29, 1996 (UNAUDITED) 4
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR SIX MONTHS ENDED FEBRUARY 28, 1997 (UNAUDITED) 5
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
SIX MONTHS ENDED FEBRUARY 28, 1997 AND
FEBRUARY 29, 1996 (UNAUDITED) 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 8
PART 1, ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS
PART II. OTHER INFORMATION
ITEMS 1 THROUGH 6
<PAGE>
CREATIVE PROGRAMMING AND TECHNOLOGY VENTURES, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (UNAUDITED)
FEBRUARY 28, 1997
ASSETS
Current assets:
Cash and cash equivalents $5,572,197
Investment 14,365
Prepaid expenses 35,355
Note receivable under sale of discontinued
operations 71,564
----------
Total current assets 5,693,481
----------
Property and equipment, net 8,681
----------
Other assets:
Restricted cash 700,000
Organization costs and other 8,486
----------
708,486
----------
Total assets $6,410,648
==========
See notes to consolidated financial statements. 1
<PAGE>
CREATIVE PROGRAMMING AND TECHNOLOGY VENTURES, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (UNAUDITED) (CONTINUED)
FEBRUARY 28, 1997
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade $ 59,935
Accrued income taxes 41,000
-----------
Total current liabilities 100,935
-----------
Shareholders' equity:
Preferred stock, par value $0.01;
authorized 10,000,000 shares, issued and
outstanding 1,000,000 (aggregate liquidation
preference $10,000) 10,000
Common stock, par value $0.01; authorized
50,000,000 shares, issued 3,131,379 shares 31,314
Capital in excess of par 8,138,195
Deficit (1,869,796)
-----------
Total shareholders' equity 6,309,713
-----------
Total liabilities and shareholders' equity $ 6,410,648
===========
See notes to consolidated financial statements. 2
<PAGE>
CREATIVE PROGRAMMING AND TECHNOLOGY VENTURES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED FEBRUARY 28, 1997
AND FEBRUARY 29, 1996
1997 1996
------------ -----------
Revenues $ $ 30,000
Cost of sales 132,134
----------- -----------
(102,134)
Selling general and administrative
expenses 155,942 569,684
----------- -----------
Operating loss (155,942) (671,818)
Other credits (charges):
Investment income 78,806 32,682
Interest expense (6,671)
----------- -----------
Loss before income tax benefit (77,136) (645,807)
Income tax benefit 2,000
----------- -----------
Net loss $ (75,136) $ 645,807
=========== ===========
Net loss per common share $ (0.02) $ (0.20)
=========== ===========
Weighted average number
of common shares 3,176,102 3,251,831
=========== ===========
See notes to consolidated financial statements. 3
<PAGE>
CREATIVE PROGRAMMING AND TECHNOLOGY VENTURES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
SIX MONTHS ENDED FEBRUARY 28, 1997
AND FEBRUARY 29, 1996
1997 1996
----------- -----------
Revenues $ $ 80,560
Cost of sales 321,151
----------- -----------
(240,591)
Selling general and administrative
expenses 391,371 1,288,917
----------- -----------
Operating loss (391,371) (1,529,508)
Other credits (charges):
Investment income 140,967 83,868
Interest expense (18,647) (12,719)
----------- -----------
Loss before gain on sale of subsidiary
and income taxes (269,051) (1,458,359)
Gain on sale of subsidiary (Note 2) 4,508,278
----------- -----------
Income (loss) before income taxes 4,239,227 (1,458,359)
Income taxes (41,000)
----------- -----------
Net income (loss) $ 4,198,227 $(1,458,359)
=========== ===========
Net income (loss) per common share $ 1.31 $ (0.44)
=========== ===========
Weighted average number
of common shares 3,193,185 3,337,805
=========== ===========
See notes to consolidated financial statements. 4
<PAGE>
<TABLE>
<CAPTION>
CREATIVE PROGRAMMING AND TECHNOLOGY VENTURES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)
SIX MONTHS ENDED FEBRUARY 28, 1997
Preferred stock Common stock
--------------------- --------------------- Capital
Shares Amount Shares Amount excess of par Deficit Total
------ ------ ------ ------ ------------- ----------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances,
September 1, 1996 1,000,000 $ 10,000 3,210,079 $ 32,101 $ 8,222,937 $(6,068,023) $ 2,197,015
Repurchase and
retirement of common
stock (Note 3) (78,700) (787) (84,742) (85,529)
Net income 4,198,227 4,198,227
--------- -------- --------- -------- ------------ ------------ ------------
Balances,
February 28, 1997 1,000,000 $ 10,000 3,131,379 $ 31,314 $ 8,138,195 $(8,138,195) $ 6,309,713
========= ======== ========= ======== =========== =========== ===========
See notes to consolidated financial statements. 5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CREATIVE PROGRAMMING AND TECHNOLOGY VENTURES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED FEBRUARY 28, 1997
AND FEBRUARY 29, 1996
1997 1996
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 4,198,227 $(1,458,359)
----------- -----------
Adjustment to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization 2,419 166,589
Gain on sale of subsidiary (4,508,278)
Loss on investments 27,474
Write-off of project costs 17,232
(Increase) decrease in assets:
Accounts receivable 35,464
Work-in-progress 24,440
Prepaid expenses (8,764) (112,566)
Other assets 13,828 16,360
Increase (decrease) in liabilities:
Accounts payable (74,310) (198,705)
Other current liabilities (56,767) (21,351)
Accrued income taxes 41,000
----------- -----------
Total adjustments (4,590,872) (45,063)
----------- -----------
Net cash used in operating activities: (392,645) (1,503,422)
----------- -----------
Cash flows from investing activities:
Proceeds from sale of subsidiary,
net of $700,000 cash held in escrow 5,907,448
Capital expenditures (180,516)
Purchase of treasury bills (15,169)
Proceeds from sales of treasury bills 1,149,691
Proceeds from maturity of treasury bills 35,000 600,000
Proceeds from maturity of certificates of deposits 281,000 131,000
Payments received on note receivable 39,643
Project costs (633,384)
----------- -----------
Net cash provided by investing activities 6,247,922 1,066,791
----------- -----------
(Continued) 6
</TABLE>
<PAGE>
CREATIVE PROGRAMMING AND TECHNOLOGY VENTURES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (CONTINUED)
SIX MONTHS ENDED FEBRUARY 28, 1997
AND FEBRUARY 29, 1996
1997 1996
----------- -----------
Cash flows from financing activities:
Payment of notes payable (511,527) (77,113)
Proceeds from issuance of notes payable 35,180
Principal payments of capital lease
obligations (5,210) (21,962)
Purchase and retirement of common stock (85,529) (134,853)
----------- -----------
Net cash used in financing activities (602,266) (198,748)
----------- -----------
Net increase (decrease) in cash 5,253,011 (635,379)
Cash and cash equivalents, beginning 319,186 1,302,292
----------- -----------
Cash and cash equivalents, ending $ 5,572,197 $ 666,913
=========== ===========
Supplemental disclosure of cash flows information:
Cash paid for interest $ 25,213 $ 12,719
=========== ===========
Supplemental schedule of non-cash investing and financing activities:
In December 1995, the Company acquired $32,322 in fixed assets through
capital lease obligations.
See notes to consolidated financial statements. 7
<PAGE>
CREATIVE PROGRAMMING AND TECHNOLOGY VENTURES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SIX MONTHS ENDED FEBRUARY 28, 1997
AND FEBRUARY 29, 1996
1. The interim financial statements:
These interim financial statements have been prepared by Creative
Programming and Technology Ventures, Inc. ("CPTV", the "Company") and, in
the opinion of management, reflect all material adjustments which are
necessary to a fair statement of results for the interim period
presented. Certain information and footnote disclosures made in the
Company's Form 10-KSB have been condensed or omitted for the interim
statements. Certain costs are estimated for the full year and allocated
to interim periods based on activity associated with the interim period.
Accordingly, such costs are subject to year-end adjustment. It is the
Company's opinion that, when the interim statements are read in
conjunction with the Company's financial statements for the year ended
August 31, 1996 included in Form 10-KSB, the disclosures are adequate to
make the information presented a fair presentation of the Company's
financial condition. The results of operations for the six months ended
February 28, 1997 are not necessarily indicative of the results to be
expected for the full year.
2. Sale of the Company's interest in ODDWORLD and certain assets of Alexandria:
On September 13, 1996, the Company sold its entire interest in ODDWORLD to
an unrelated third party for $7,000,000 less unpaid expenses incurred as
of August 16, 1996. In addition, Alexandria conveyed all of its
assignable assets to ODDWORLD which have been included in the sale.
Shareholder approval of this transaction occurred on November 15, 1996.
From August 16, 1996, through the date of shareholder approval, the
purchaser made advances to ODDWORLD of $225,210. These advances were made
for the purpose of providing working capital and to fund the operations
of ODDWORLD subsequent to August 16, 1996. As a result of the approval of
this transaction and pursuant to the provisions of the purchase
agreement, the purchaser became responsible for all liabilities of
ODDWORLD incurred subsequent to August 16, 1996 including the $225,210 of
advances, thus, the consolidated financial statements of the Company do
not include expenses or liabilities incurred by ODDWORLD subsequent to
August 16, 1996.
8
<PAGE>
CREATIVE PROGRAMMING AND TECHNOLOGY VENTURES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (CONTINUED)
SIX MONTHS ENDED FEBRUARY 28, 1997
AND FEBRUARY 29, 1996
2. Sale of the Company's interest in ODDWORLD and certain assets of Alexandria
(continued):
The purchase agreement requires that 10% of the purchase price ($700,000)
be retained in a hold back escrow account, until September 1998, to
provide the purchaser with potential recourse against the Company for any
valid future claims arising regarding any of the representations and
warranties made to the purchaser by the Company. As stipulated in the
agreement, the purchaser may make no claim unless the total of all
damages suffered exceeds $100,000, but all potential future claims will
be capped at $2,000,000.
The Company received $6,128,088 of cash (the purchase price of $7,000,000
net of unpaid expenses of $171,912 and net of the $700,000 held in escrow
of ODDWORLD as of August 16, 1996) in exchange for the Company's interest
in ODDWORLD and the assets of Alexandria conveyed to ODDWORLD. In
addition, $220,640 of transaction expenses were incurred and these have
been netted against the $6,128,088 to give net cash received on the sale
of $5,907,448. At September 13, 1996, the Company's interest consisted of
accounts receivable of $2,734, property and equipment of $701,075 project
costs of $1,827,680, other assets of $61,616, notes payable to financial
institutions of $225,822, capital lease obligations of $19,958, accounts
payable of $186,790, and accrued salaries and other expenses of $61,365.
The sale results in a gain of $4,508,278. The Company used $500,000 of
the sale proceeds to repay notes payable, shareholders.
3. Repurchase and retirement of common stock:
During the quarter ended February 28, 1997, the Company repurchased 78,700
shares of its common stock in the open market for $85,529. These shares
were subsequently canceled.
9
<PAGE>
PART 1, ITEM 2:
MANAGEMENT'S DISCUSSION AND ANALYSIS
Overview
On September 13, 1996, Creative Programming and Technology Ventures, Inc.
("CPTV" or the "Company") sold its entire interest in its Off World
Entertainment, Inc. (d.b.a. OddWorld Inhabitants) subsidiary to GT Interactive
Software Corporation (the "GT Transaction"). This transaction culminated on
November 15, 1996 with the proceeds of this sale (outside of $700,000 in
restricted cash in escrow) being available to CPTV on November 18, 1996. The
Company has to date invested the proceeds in short-term government backed
instruments.
Financial Condition, Liquidity and Capital Resources
After payment of corporate overhead and expenses associated with the GT
Transaction, and costs related to potential future business opportunities, CPTV
has current working capital in excess of $5,500,000 and shareholders equity in
excess of $6,300,000. Subsequent to the closing of the GT Transaction, CPTV has
focused its efforts towards investigating new business opportunities. The
Company is now in the mature stages of due diligence on a couple of prospective
transactions. Such a transaction, if brought to fruition, would result in the
shareholders of CPTV having an interest in a new line of business outside of
interactive video game publishing sector.
As previously disclosed, the Board also believes it prudent to seek out the
guidance and direction of its public shareholders on several important business
issues. If after a reasonable period of time the Board of Directors has not been
able to bring to closure any of its prospective new business targets, the Board
will consider the alternatives of paying cash dividends to shareholders or
pursue a full liquidation of the Company. CPTV's actions are in part being
10
<PAGE>
driven by stock market regulatory bodies who have decided to challenge (or hold
a hearing on) CPTV's continued NASDAQ listing, based on unilateral
interpretation of certain listing standards. CPTV will hold an Annual
Shareholders Meeting on April 17, 1997 and as described in the proxy statement
for that meeting, the Company is considering the possible liquidation and
dissolution of the Company and seeking shareholder response on that issue. The
proxy also outlines in detail a number of other important matters of corporate
governance to be considered by the shareholders.
Results of Operations
CPTV reported operating results for the second quarter ended February 28,
1997 recognizing a net loss of $75,136 or $.02 per share as compared to a net
loss of $645,807 or $.20 per share for second quarter February 1996. The loss
reflects basic ongoing operating and reporting costs as compared to the 1996
operating loss at which period the Company had significantly more operating
expense.
For the six months ended February 28, 1997, due to the non-recurring
receipts associated with the GT divestiture, the Company reported net income of
$4,198,227 or $1.31 per share as compared to a loss of $1,458,359 or $0.44 for
the same period ended in 1996. Interest income amounted to approximately $73,000
on all cash balances. This income was offset by ongoing operating, reporting,
and other expenses associated with due diligence of business prospects CPTV is
actively evaluating.
11
<PAGE>
SIGNATURE PAGE
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.
Creative Programming and Technology Ventures, Inc.
By: /S/ GARY R. VICKERS
----------------------------------------------
Gary R. Vickers, President
Date: April 14, 1997
--------------------------------------------
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the
consolidated balance sheet and statement of operations for the six months ended
February 28, 1997 for Creative Programming and Technology Ventures, Inc. and
Subsidiaries.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-END> FEB-28-1997
<CASH> 5,572,197
<SECURITIES> 14,365
<RECEIVABLES> 71,564
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,693,481
<PP&E> 19,761
<DEPRECIATION> 11,080
<TOTAL-ASSETS> 6,410,648
<CURRENT-LIABILITIES> 100,935
<BONDS> 0
0
10,000
<COMMON> 31,314
<OTHER-SE> 6,268,399
<TOTAL-LIABILITY-AND-EQUITY> 6,309,713
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 391,371
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,647
<INCOME-PRETAX> 4,239,227
<INCOME-TAX> 41,000
<INCOME-CONTINUING> 4,198,227
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,198,227
<EPS-PRIMARY> 1.31
<EPS-DILUTED> 1.31
</TABLE>
