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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 MARCH 31, 1999
[_] 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
ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.
(Name of Small Business Issuer in its Charter)
DELAWARE 87-0521389
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
Incorporation or organization)
16055 Space Center Blvd., Suite 230
Houston TX 77062
(Address of Principal Executive Officers)
ISSUER'S TELEPHONE NUMBER: (281) 486-6115
Not Applicable
(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:
January 31, 1999
COMMON STOCK: 30,382,857
PART 1--FINANCIAL INFORMATION
ITEM 1. Financial Statements
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.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 30,1999
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, 1999 are not
necessarily indicative of the results that may be expected for the year ended
September 30, 1999.
The board of directors elected to change the fiscal year end to September 30;
therefore, the basis of comparison will be 2nd quarter ending March 1999 for
year end 1999 to 2nd quarter ending June 1998 for year end 1998.
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ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31 JUNE 30
1999 1998
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ASSETS (Unaudited) (Note)
- ------
<S> <C> <C>
Current Assets:
Cash $ (10,215.48) $ 222,328.00
Accounts Receivable 492,365.39 435,308.00
Retail Inventories 187,171.85 161,137.00
Prepaid Expenses 314,583.59 131,586.00
Other Current Assets 131,497.40 -
-------------- --------------
1,115,402.75 950,359.00
Property and Equipment $ 8,751,894.05 $ 8,280,103.00
Less: Accumulated Depreciation 3,173,534.85 (2,220,177.00)
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5,578,359.20 6,059,926.00
Other Assets 386,250.28 812,710.00
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TOTAL ASSETS $ 7,080,012.23 $ 7,822,996.00
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LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Accounts Payable and Accrued Expenses $ 514,456.47 $ 353,016.00
Notes Payable and Current Portion of Long-Term Debt 143,741.90 474,569.00
Other Current Liabilities 203,677.97 20,932.00
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861,876.34 848,517.00
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Long-Term Debt 3,176,691.92 2,045,594.00
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Deferred Income Taxes -
Stockholders' Equity
Common Stock $ 787,100.00 $ 556,213.00
Additional Paid-in Capital 5,383,997.74 5,914,265.00
Retained Earnings (3,129,653.77) (1,541,593.00)
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A17 Total Stockholders Equity 3,041,443.97 4,928,885.00
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Total Liabilities and Stockholders' Equity $ 7,080,012.23 $ 7,822,996.00
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</TABLE>
See Notes to Condensed Consolidated Financial Statements
Note: Fiscal Year End Changed to September 30th
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ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED
MARCH JUNE
1999 1998
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Revenues $ 1,531,489 $ 1,546,889
Cost of Goods Sold 831,969 618,026
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Gross Profit 699,520 928,863
General and Administrative Expenses 787,792 795,570
Depreciation 136,708 52,355
Interest Expense 88,724 52,364
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(Loss) Before Income Taxes (313,776) 28,574
Income Taxes 0 0
Net (Loss) (313,776) 28,574
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Net (Loss) Per Share (0.011) $ 0.002
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Weighted Average Shares Outstanding 30,382,857 29,484,108
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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, 1999 JUNE 30, 1998
Cash From Operations (120,058) $ 120,740
Investing Activities
Purchase of property and equipment (1,605,211) (4,614,787)
Other 0
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(1,725,269) 2,366,028
Financing Activities
Borrowing and repayment of debt 1,687,702 1,453,113
Issuance of additional common stock 4,562,459
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1,687,702 6,015,572
Increase in Cash (37,567) 1,521,525
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Cash at Beginning of Period 27,353
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(10,214)
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SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
SIX MONTHS ENDED
MARCH 1999 JUNE 1998
Revenues $ 3,091,272 $ 2,897,569
Cost of Goods Sold 1,627,874 1,165,692
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Gross Profit 1,463,398 1,731,877
General and Administrative Expenses 1,734,611 1,408,385
Depreciation 242,738 143,506
Interest Expense 139,053 109,195
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(Loss) Before Income Taxes (653,004) 70,791
Income Taxes 0 0
Net (Loss) (653,004) 70,791
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Net (Loss) Per Share (0.222) $ 0.002
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Weighted Average Shares Outstanding 30,382,857 29,484,108
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See Notes to Condensed Consolidated Financial Statements
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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:
Three months ended March 31, 1999 compared to three months ended June 30, 1998.
General and administrative expenses decreased $48,371 from $795,570 to $747,199
during the same quarter comparison for 1998, even though the cost of legal,
interest and cost of financing increased due to preparation for the opening of
Hero's WaterWorld on May 28, 1999.
Depreciation expense for the second quarter of 1999 increased $84,353 from
$52,355 to $136,708 over the comparable period in 1998. This is due to the
acquisition of new equipment for NiteLife installations at Osan AirBase, Korea;
Davis Moffit AirBase, Arizona; and Barksdale AirBase, Louisiana plus the Hero's
WaterWorld in Midland, Tx.
Revenues for the second quarter of 1999 increased by $21,402 from $1,546,889 for
second quarter ending June 1998 to $1,525,487 for second quarter ending March
31, 1999. It is not a fair comparison due to the change in fiscal year structure
to compare these quarter endings as our business is highly seasonal and second
quarter 1998 includes a much more favorable time of year for games and outdoor
activities. Also, revenues for Hero's in Arlington are included in the June 1998
numbers and that location has been closed.
Amortized costs of $40,000 per quarter to shut down certain Hero's locations
will be completed by September 30, 1999 which is the end of the fiscal year.
Accounts Payable and Accrued Expenses are up $161,440 from $353,016 in June 1998
to $514,456 in March 1999. These amounts are again comparing off season and peak
season numbers.
Liquidity and Capital Resources
The Company believes that internally generated cash is sufficient to fund the
current level of operations. However, additional capital requirements needed for
planned growth and to reduce short term debt will require the Company to seek
additional outside financing. The Company has signed a financial agreement with
Capital Growth Planning of El Cajon, Ca. for $5.1 million in convertible debt.
The Company expects this funding to be completed during the next quarter but
there can be no assurances that this funding will close.
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PART II--OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
There are no material legal proceedings except as disclosed in the
10K-SB as filed for 1998.
ITEM 2. CHANGES IN SECURITIES.
None; not applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None; not applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None; not applicable
ITEM 5. OTHER INFORMATION
None; not applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits;
27 Financial Data Schedule
(b) Reports on Form 8-K
None
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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.
ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.
By: /s/ James D. Butcher
--------------------------------
James D. Butcher, Chairman & CEO
Date: May 14,1999
By: /s/ V. J. Farmer
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V.J. Farmer, Controller
Date: May 14, 1999
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