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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 March 31, 1998.
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[_] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
OF 1934
For the transition period from ________________ to __________________
Commission File No. 0-23914
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ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.
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(Name of Small Business Issuer in its Charter)
DELAWARE 87-0521389
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(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
16055 Space Center Blvd., Suite 230
Houston, TX 77062
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(Address of Principal Executive Officers)
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Issuer's Telephone Number: (281)486-6115
Not Applicable
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(Former Name or Former Address, if changed since last report)
Check whether the issuer (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 requirements for the past 90 days.
(1) Yes [X] No [_] (2) Yes [X] No [_]
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PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check 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.
Not Applicable.
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest practicable date:
May 13, 1998
Common stock: 24,942,321
PART 1 - FINANCIAL INFORMATION
ITEM 1. Financial Statements
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The financial Statements of the Registrant required to be filed with
this 10-QSB Quarterly Report were prepared by management and commence on the
following pages, together with Related Notes. In the opinion of management, the
Financial Statements fairly present the financial condition of the Registrant.
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ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
ASSETS 1998 1997
- ------ (UNAUDITED) (NOTE)
<S> <C> <C>
CURRENT ASSETS:
CASH $ 148,994.27 120,740.00
Accounts Receivable 412,368.11 411,926.00
RETAIL INVENTORIES 116,940.59 147,122.00
PREPAID EXPENSES 94,337.37 41,054.00
OTHER CURRENT ASSETS .00 8,500.00
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772,640.34 729,342.00
PROPERTY AND EQUIPMENT 6,720,661.09 4,145,052.00
LESS: ACCUMULATED DEPRECIATION (2,168,234.65) (1,958,654.00)
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4,552,426.44 2,186,398.00
OTHER ASSETS 61,020.45 66,622.00
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TOTAL ASSETS 5,386,087.23 2,982,362.00
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LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES:
ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 393,824.83 $ 378,253.00
NOTES PAYABLE AND CURRENT PORTION OF LONG-TERM DEBT 768,081.27 746,790.00
OTHER CURRENT LIABILITIES 41,665.96 11,770.00
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1,203,572.06 1,136,813.00
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LONG-TERM DEBT $ 1,318,492.70 $ 612,994.00
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Deferred Income Taxes
STOCKHOLDERS' EQUITY
COMMON STOCK $ 556,213.00 $ 21,878.00
ADDITIONAL PAIN-IN CAPITAL $ 3,877,458.92 $ 2,448,268.00
RETAINED EARNINGS (1,569,649.45) (1,237,591.00)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,386,087.23 $ 2,982,362.00
============== ==============
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE: THE BALANCE SHEET AT DECEMBER 31, 1997 HAS BEEN DERIVED FROM AUDITED
FINANCIAL STATEMENTS AT THAT DATE.
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ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED MARCH 31,
1998 1997
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Revenues $ 1,352,601 $ 1,578,569
Cost of Goods Sold 547,666 767,787
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Gross Profit 804,935 809,197
General and Administrative Expenses 614,386 630,219
Depreciation 91,151 133,714
Interest Expense 57,181 19,858
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(Loss) Before Income Taxes 42,217 25,406
Income Taxes 0 0
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Net (Loss) 42,217 25,406
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Net (Loss) Per Share $0.002 $0.01
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Weighted Average Shares Outstanding 24,942,321 20,730,590
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See Notes to Condensed Consolidated Financial Statements.
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ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
Three Months Ended March 31,
1998 1997
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Cash From Operations $ 120,740 $167,201
Investing Activities
Purchase of property and equipment (2,366,028) (100,652)
Other 0 0
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2,366.028 100.652
Financing Activities
Borrowing and repayment of debt 601,693 220,602
Issuance of additional common stock 2,360,000 0
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2,967,721 220,602
Increase In Cash 722,433 287,151
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See Notes To Condensed Consolidated Financial Statements
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ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 1998
Note 1. - Basis of Presentation
THE ACCOMPANYING UNAUDITED CONDENSED FINANCIAL STATEMENTS HAVE BEEN
PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES FOR INTERIM
FINANCIAL INFORMATION AND WITH THE INSTRUCTIONS TO FORM 10Q AND ITEM 10 OF
REGULATION S-B. ACCORDINGLY, THEY DO NOT INCLUDE ALL OF THE INFORMATION FOR
FOOTNOTES REQUIRED BY GENERALLY ACCEPTED ACCOUNTING PRINCIPLES FOR COMPLETE
FINANCIAL STATEMENTS. IN THE OPINION OF MANAGEMENT, ALL ADJUSTMENTS (CONSISTING
OF NORMAL RECURRING ACCRUALS) CONSIDERED NECESSARY FOR A FAIR PRESENTATION HAVE
BEEN INCLUDED. OPERATING RESULTS FOR THE THREE MONTH PERIOD ENDED MARCH 31,
1998 ARE NOT NECESSARILY INDICATIVE OF THE RESULTS THAT MAY BE EXPECTED FOR THE
YEAR ENDED DECEMBER 31, 1998.
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ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS:
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Three months Ended March 31,1998 compared to Three Months Ended March 31,1997.
General and administrative expenses decreased $15,833 over the same period in
1998.
Depreciation expense for the first quarter of 1998 decreased $ 42,563 over the
comparable period in 1997.
Interest expense increased $37,323 during the first quarter of 1998 from the
same period in 1997 due to higher short-term borrowings with the associated
higher interest costs and new debt associated with the acquisitions.
Additional stock of 4 million shares of restricted stock was issued. 1.1 million
shares of restricted stock was issued for 2 Mexican food restaurant locations.
One restaurant consists of 2,750 square feet is located in Seabrook Texas. The
second restaurant of 11,873 square feet is located in Houston Texas. 1.75
million shares of restricted stock was issued for Hero's which includes a 16,000
square foot building on 2.2 acres of land with an option to purchase an
additional 14.6 acres.
Revenues for the first quarter of 1998 decreased by $225,968 over the comparable
period for 1997. This decrease was due to decreases in StarGate, Inc. of
$319,197and Performance Sound and Light, Inc. of $163,475. The decrease was
partially offset by, Redfish Island Management, Inc.'s increase in revenues of
$78,697 and the recent acquisitions of Hero's Family Fun Center, Inc. with
revenues of $87,075 and ChaCho's Inc. with revenues of $45,160. Hero's revenues
are for 2/3 of the quarter and Chacho's for only two weeks.
Gross Profit for the first quarter of 1998 decreased $4,262 compared to the
first quarter of 1997.
However, the net profit increased by $16,811.
LIQUIDITY AND CAPITAL RESOURCES
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Due to the recent acquisitions and improved operations through management and
cost cutting measurers in 1997 the Company anticipates a working capital
surplus. The Company will continue additional short-term borrowings and
increased portion of long-term debt. Capital expenditure requirements for the
remainder of the year will require the Company to seek additional financing.
The Company is currently exploring various opportunities for outside financing
although there can be no assurances that these efforts will be successful.
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PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS.
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ON MAY 17, 1996, SUIT WAS FILED IN THE SUPERIOR COURT OF CALIFORNIA
AGAINST THE COMPANY, CERTAIN OFFICERS AND FORMER EMPLOYEES OF THE
COMPANY BY THE FORMER OWNER OF ONE OF THE COMPANY'S WHOLLY-OWNED
SUBSIDIARIES. THE SUIT ALLEGES BREACH OF CONTRACT AND NON-PAYMENT OF
AMOUNTS OWED RELATED TO THE ACQUISITION OF THE SUBSIDIARY. IN THE
OPINION OF THE COMPANY'S COUNSEL, THE SUIT IS WITHOUT MERIT AND THE
COMPANY INTENDS TO DEFEND ITSELF VIGOROUSLY.
ITEM 2. CHANGES IN SECURITIES.
----------------------
NONE; NOT APPLICABLE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
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NONE; NOT APPLICABLE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
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NONE; NOT APPLICABLE
ITEM 5. OTHER INFORMATION
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NONE; NOT APPLICABLE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
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(a) Exhibits;
NONE
(b) REPORTS ON FORM 8-K
NONE
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1939, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
ENTERTAINMENT TECHNOLOGIES &
PROGRAMS, INC.
DATE: MAY 14, 1998 BY: /s/ JAMES D. BUTCHER
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James D. Butcher, Chairman & CEO
DATE: MAY 14, 1998 BY: /s/ V. J. FARMER
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V. J. FARMER, CONTROLLER
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