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1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number: 0-14675
CAMERA PLATFORMS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-4024550
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10909 Vanowen Street, North Hollywood, California 91605
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (818) 623-1700
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock - $.0005 par value
(Title of class)
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
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not 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-K or any amendment to
this Form 10-K. [ X ]
The aggregate market value of the voting stock held by non-affiliates of the
registrant on March 15, 2001 was $427,819(based on the average bid and
asked price of Common Stock in the over-the-counter market on that date).
23,740,964 shares of registrant's Common Stock, $.0005 par value, were
outstanding on March 15, 2001.
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CAMERA PLATFORMS INTERNATIONAL, INC.
CONTENTS Page
PART I
Item 1. BUSINESS 3
Item 2. PROPERTIES 6
Item 3. LEGAL PROCEEDINGS 7
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 7
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS 7
Item 6. SELECTED CONSOLIDATED FINANCIAL DATA 8
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 10
Item 8. CONSOLIDATED FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA 13
Item 9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING OR FINANCIAL
DISCLOSURES 32
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT 32
Item 11. EXECUTIVE COMPENSATION 33
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT 34
Item 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS 35
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K 36
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CAMERA PLATFORMS INTERNATIONAL, INC.
PART I
Item 1 - Business
Camera Platforms International, Inc., a Delaware corporation,
("Shotmaker" or "the Company") designs, manufactures, rents and leases
a wide variety of production equipment to the film and video industries.
The Company rents three varieties of camera cars and the Akela crane,
and both rents and sells Pegasus and Enlouva cranes, Panther and the
Company's own "Shotmaker Blue" dollies, jib arms, and dolly track.
CHAPTER 11 PROCEEDINGS
On June 18, 2000, the United States Bankruptcy Court, Central District
of California, San Fernando Valley Division ("Bankruptcy Court") entered
an order confirming the Company's Second Amended Plan of Reorganization
(the "Reorganization Plan"). On June 29, 2000, the Reorganization Plan
became effective and the Company emerged from bankruptcy reorganization
proceedings. Those proceedings had begun on September 17, 1999 when an
involuntary petition was filed by certain creditors for relief under the
Chapter 7 or 11 of the United States Bankruptcy Code.
Pursuant to the Reorganization Plan, DOOFF LLC, the Company's largest
secured and unsecured creditor, received 49.9% of the total outstanding
shares of the Company's common stock after the adoption of the
Reorganization Plan. The Company's previous largest shareholder,
Shotmaker Acquisition Corp., surrendered 4,000,000 shares of common
stock to the Company. General unsecured creditors received one share of
common stock of the Company for each $2.00 in allowed claims. In total,
the Company issued 13,972,736 and redeemed 4,000,000 shares of common
stock as part of the Reorganization Plan.
General
Shotmaker equipment has been used to film many of the top recent U.S.
movies. A partial list includes PEARL HARBOR, MISSION IMPOSSIBLE 2,
DR. DOOLITTLE 2, BOUNCE, and SWORDFISH. In addition, a number of prime
time television programs and series use Shotmaker equipment such as NASH
BRIDGES, BUFFY THE VAMPIRE SLAYER, TOUCHED BY AN ANGEL, and MALCOLM IN
THE MIDDLE.
Products
The Shotmaker Camera Car fleet currently consists of 15 camera cars, which
include five Shotmaker "Elites", one Shotmaker "Premium Plus", two
Shotmaker "Premiers", six Shotmaker "Classics" and one Shotmaker "Standard".
All the camera cars are based at the Company's headquarters and rented
throughout the Western United States except two cars operating under a
split rental agreement in New York City. Camera cars are used in the
motion picture, television and commercial industries to provide a stable
base for cameras to film action scenes.
The Shotmaker Elite. The Company has manufactured five top-of-the-line Elite
camera cars. The Elite is a custom-built camera car with numerous positions
for mounting cameras. The car contains a built-in foldaway
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CAMERA PLATFORMS INTERNATIONAL, INC.
two-man camera crane with a maximum height of 23 feet. This crane can be
in motion while the car is moving at speeds up to 50 mph. The car also has
a front-mounted hydraulic platform that rises to 12 feet in height. There is
a built-in 500-amp DC generator and a 200-amp DC battery pack. The car runs
on both gas and a silent electric drive. The Elite has a special air-ride
suspension system that minimizes camera movement, and a six-wheel
configuration, which allows the vehicle to crab sideways. The car is
approximately 23 feet in length and weighs approximately 22,000 lbs.
The Shotmaker Premier Plus. This is a modified Classic with a self-leveling
center post. The center post is adaptable to Technocrane, Enlouva, Pegasus,
and most other popular cranes in the industry. The Plus also offers a 200
Amp AC generator.
The Shotmaker Premier. The Company has modified some of its Classics by
adding a crane arm. The non-collapsible two-man or remote crane arm on the
Premier enables film crews to shoot action scenes while on the move from
ground level to 21 feet in height. With the addition of the Company's
"Video Turret", the Premier can be used for television productions,
sporting events, parades and other functions for which a light crane arm
vehicle is required. The Premier is approximately 22 feet in length and
weighs approximately 15,000 lbs. During the second quarter of 2001, the
first Elite will be modified with a 200 Amp AC generator.
The Shotmaker Classic. Each Classic built by the Company has an auxiliary
camera platform that can be mounted on the front or sides of the Classic.
These cars do not have a built-in crane arm, but a standard portable crane
can be used on each vehicle. The Classic has three axles and air suspension
for a smooth and steady ride. As of December 31, 1998 all of the Classics
have been modified with independent 70-200 amp AC/DC generators. The
Classic has a self-leveling suspension system that provides added stability.
The Classic weighs approximately 11,000 lbs and is approximately 22 feet
in length.
The Shotmaker Standard. The Standard is a lightweight, two-axle insert car.
The Standard has a front platform, top of cab platform, and numerous positions
behind the cab for mounting cameras. Besides being a basic insert car, the
Standard can be used for high speed running shots.
Accessory Equipment. The Company rents accessory equipment, including tow
dollies and process trailers. Tow dollies are used to tow a car with its
front two wheels inches off the ground. Process trailers carry the entire
car behind the Shotmaker Camera Car on a platform, which can be expanded up
to fourteen feet wide. The Company has available a custom motorcycle towing
device which can tow two motorcycles side by side. The Company also offers
remote heads, lamp heads and ballasts for use on its Shotmaker camera cars.
Shotmaker Dollies, Cranes and Accessories
Major items of equipment in the Dollies and Cranes rental fleet include:
19 dollies (13 Super Panthers and 3 Mini Panthers); 12 Pegasus cranes;
10 jib arms (8 super Jibs and 2 Mini Jibs); 7 Akela cranes; 8 Enlouva cranes;
6 Shotmaker Blue dollies (4 Falcons and 2 Eagles); approximately 650 feet of
tubular dolly track. The Company is aggressively looking for new products to
add to its rental fleet. Dollies are mobile devices operating on tracks or
wheels which provide a stable base for cameras to film. Cranes are used in
the motion picture, television and commercial industries, both indoor and
outdoors, to provide a base for cameras moving from ground level to heights
of as much as 85 feet.
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CAMERA PLATFORMS INTERNATIONAL, INC.
Shotmaker Blue Dollies. The Company delivered the first of its manufactured
hydraulic dollies in March 1999. The Company is in the process of completing
twelve Blue Dollies that are in various stages of manufacture.
Akela Cranes. Akela cranes are the longest and highest cranes available.
The Akela comes in three versions: Akela Plus (97' length), Akela Sr.
(57' to 84') and Akela Jr. (41' to 62'). The Akela offers the versatility
of going from ground level to six stories high in a single move, and
substitutes for many helicopter shots. As of March 15, 2001, the Company
had seven Akela cranes in its rental inventory, six of which were
operational. The cranes are located in California, Canada, and France.
Enlouva Cranes. In late 1996, the Company acquired exclusive worldwide
rights to manufacture, lease and sell Enlouva cranes. Enlouva cranes are
used for shots with remote heads allowing cameras to be controlled by an
operator on the ground. The Enlouva crane is a streamlined, compact crane
that incorporates a number of revolutionary design features. Manufactured
from aircraft quality aluminum, it is extremely lightweight, completely
modular, and can be assembled by two people in less than 15 minutes without
tools. It is highly stable and has a maximum lens height of over 26 feet.
With a minimum overhead clearance of less than seven feet, the unit can be
used in areas inaccessible to other cranes. It supports all 35mm, 16mm and
video cameras, and can be used in combination with most dolly and track
systems, camera cars, boats and trains. A small number of Enlouva III's
are currently available for rent through the Company's competitors or
individual camera operators or grips. The Enlouva IV incorporates a number
of design improvements including a lighter fulcrum, improved brakes, a
smaller profile and an easier transport system. The Company has completed
the manufacturing of thirteen of these new generation of cranes. As of
March 20, 2001, the Company had eight Enlouva IV cranes in its rental fleet.
Panther Equipment. Panther's Pegasus Crane is the first fully convertible
camera crane that is lightweight, remarkably stable, and capable of being
assembled without tools. The Pegasus Crane can take a camera operator and
a fully loaded camera up to a 31-foot lens height, and can be swiftly
converted from a standard crane to a remote head crane with a lens height
of over 36 feet.
The Super Panther Dolly is an electro-mechanical camera dolly used to mount
a film or video camera and up to two operators. Its innovative digital
electronics allow for precise vertical movements along its center-post column.
The ascent and descent of the column is operated by a hand-held remote control,
which allows the camera operator, dolly grip or camera assistant to move the
column. Built into the remote control is the capability to program up to 200
movements, which sequentially repeat the upward or downward movement, the rate
of speed and the distance. The column supports two operators and a camera.
The Mini Panther Dolly is also an electro-mechanical dolly precisely operated
by digital electronics. The Mini Panther's column supports 175 lbs, whereas
the Super Panther supports over half a ton. While the Super Panther has five
variable speeds, the Mini Panther has one. The dolly rides two operators,
with the camera on the center post. The Mini also has interchangeable columns:
a motorized unit; a two-stage hand crank column; and a pneumatic version for
television studio work.
The Panther Super Jib is an arm, which is positioned on the center-post of the
Super Panther. The Super
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CAMERA PLATFORMS INTERNATIONAL, INC.
Jib is in fact a mini-crane, capable of taking a
camera operator and camera to a 12-foot lens height. The Super Jib can be
assembled in less than seven minutes, minimizing down time in production.
The Panther Mini Jib is a lightweight arm that floats a camera system.
The Mini Jib can be attached to any Panther dolly.
Marketing, Competition, Intellectual Property and Awards
Marketing. The Company's marketing efforts are primarily conducted by
direct sales efforts, limited advertisements in trade publications, and
participation in various trade exhibitions.
Competition. No other company currently owns a fleet of camera cars as
large or as sophisticated as the Company's. There are no other camera cars
currently on the market, which have a built-in camera crane, hydraulic
front platform and the towing capability of the Company's Elites. Management
believes the Company is the industry leader for manufacturing and leasing
camera cars and mobile camera cranes. However, in recent years several small
fleets of camera cars have emerged, which include AC electricity availability
and greater generator power, which have affected the Company's rental
revenues.
Two firms, Chapman and J. L. Fisher, Inc. ("Fisher"), dominate the rental
market for dollies. Chapman and Fisher are both participants in the rental
market for cranes, but no single competitor is dominant in crane rentals.
Both Chapman and Fisher are Los Angeles-based companies that are engaged
exclusively in the rental and leasing business. Shotmaker is the third
largest dolly and crane company in the United States. There are also a
number of smaller competitors, usually offering one or more specialized
niche products.
Patents and Trademarks. The Company has registered THE SHOTMAKER, AKELA,
AND ENLOUVA as trademarks in the United States, Canada, and Japan. Panther
GmbH, an unrelated company, holds all patents and trademarks on its Panther
products.
Awards. During 1997, the Company received the Society of Operating
Cameramen's technical achievement award for its Elite camera car.
The Company received a Scientific and Engineering Award in 1986 from
the Academy of Motion Picture Arts & Sciences for the development of
the Elite Camera Car. In 1991, the division was also honored with a
Primetime Emmy Award from the Television Academy of Arts & Sciences
for Outstanding Achievement in Engineering. The Super Panther dolly
received the 1990 Scientific and,Engineering Award from the Academy
of Motion Picture Arts and Sciences.
Employees. The Company had 7 employees at March 15, 2001. The Company is
not a party to any collective bargaining agreements and its employees are
not represented by a labor union.
Item 2 - Properties
The Company's principal executive offices and place of business are located
at 10909 Vanowen Street, North Hollywood, California 91605. The premises are
leased and subleased from unaffiliated third parties for a gross rent of
$144,000 per year, including common area maintenance and water expenses.
The Company's lease expires on June 30, 2002. The lease includes a five
and one half year option under the same terms and conditions.
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CAMERA PLATFORMS INTERNATIONAL, INC.
Item 3 - Legal Proceedings
The Company is not currently party to any legal proceedings.
Item 4 - Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the fourth
quarter of fiscal 2000.
PART II
Item 5 - Market for Registrant's Common Equity and Related Stockholder
Matters
The Company's common stock trades on the over-the-counter market
under the symbol "CPFR". The table below sets forth the high and low bid
prices for the Company's common stock. Bids represent inter-dealer prices,
without retail mark-up, markdown or commissions, and may not represent
actual transactions.
Period High Low
1998: 1st Quarter............. 1.2500 .2500
2nd Quarter.............. .5625 .1875
3rd Quarter.............. .3443 .1875
4th Quarter.............. .2500 .1875
1999: 1st Quarter.............. .6875 .1565
2nd Quarter.............. .2500 .875
3rd Quarter.............. .4375 .125
4th Quarter.............. .1250 .0625
2000 1st Quarter.............. .3438 .2150
2nd Quarter.............. .3750 .2150
3rd Quarter.............. .1250 .0625
4th Quarter.............. .3750 .2500
2001 1st Quarter.............. .3750 .2500
As of March 15, 2001, there were approximately 1500 beneficial owners of
23,740,964 outstanding shares of the Company's common stock, held by
approximately 475 shareholders of record.
The Company has not paid a dividend on its common stock since inception.
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CAMERA PLATFORMS INTERNATIONAL, INC.
Item 6 - Selected Consolidated Financial Data
Year ended December 31, 2000 1999 1998 1997 1996
Revenues $1,069,000 $1,712,000 $2,245,000 $3,356,000 $3,321,000
Net Income(loss) 907,000 (1,644,000)(4,551,000) (737,000)(1,883,000)
Total assets 1,291,000 1,971,000 3,249,000 2,498,000 2,431,000
Long-term debt 1,572,000 1,500,000 6,231,000 811,000 250,000
Net gain (loss) per
Share of common stock $0.05 ($0.12) ($0.35) ($0.06) ($0.15)
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CAMERA PLATFORMS INTERNATIONAL, INC.
CONSOLIDATED SUMMARY OF QUARTERLY OPERATIONS
(Unaudited)
Quarter ended Quarter ended Quarter ended Quarter ended
March 31, June 30, September 30, December 31,
2000 1999 2000 1999 2000 1999 2000 1999
Revenues $280,000 $357,000 $264,000 $536,000 $252,000 $499,000 $273,000 $320,000
Cost of sales and
rentals 302,000 388,000 301,000 489,000 321,000 428,000 315,000 309,000
Selling, general and
Administrative 95,000 320,000 90,000 211,000 93,000 175,000 91,000 153,000
Operating(loss) (117,000) (351,000) (127,000) (164,000) (162,000) (104,000) (133,000) (142,000)
Interest expense, net (64,000) (142,000) (58,000) (148,000) (41,000) (140,000) (5,000) (75,000)
Gain (loss) on
Discontinued
Operations - (52,000) - - - 50,000 235,000 2,000
Impairment loss on
long-lived assets - - - - - - - (206,000)
Other income
(expense), net (3,000) 28,000 (40,000) 17,000 199,000 28,000 (410,000) (245,000)
Gain recognized on
Reorganization 1,633,000
Net income (loss) ($184,000) ($517,000) ($225,000) ($295,000) ($4,000) ($166,000) $1,320,000 ($666,000)
Net (loss) per share
of common stock ($0.01) ($0.04) ($0.01) ($0.02) ($0.00) ($0.02) $0.07 ($0.03)
Weighted average
Number of shares
Outstanding 13,768,228 13,768,228 13,879,258 13,768,228 23,740,964 13,768,228 23,740,964 13,768,228
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CAMERA PLATFORMS INTERNATIONAL, INC.
Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995.
This Annual Report on Form 10-K includes certain forward-looking statements
based upon management's beliefs, as well as assumptions made by and data
currently available to management. This information has been, or in the
future, may be included in reliance on the "safe harbor" provision of the
Private Securities Litigation Reform Act of 1995. These statements are
subject to a number of risks and uncertainties including, but not limited to,
the following: adverse developments with respect to the Company's liquidity
or results of operations; the ability of the Company to obtain products and
services and negotiate terms with vendors and service providers for current
orders; the ability to develop, fund and execute an operating plan for the
Company; the ability of the Company to attract and retain employees; competitive
pressures from other camera car companies and grip equipment rental companies
which may affect the nature and viability of the Company's business strategy;
the ability of the Company to attract and retain customers; and the absence of
an active public trading market for the Company's common stock.
Actual results may differ materially from those anticipated in any such
forward-looking statements. The Company undertakes no obligation to update
or revise any forward-looking statements to reflect subsequent events or
circumstances.
Overview
The Notes to Consolidated Financial Statements are an integral part of
Management's Discussion and Analysis of Financial Condition and Results
of Operations and should be read in conjunction herewith.
Liquidity and Capital Resources
The Company has secured a $250,000 revolving line of credit from its secured
lender DOOFF LLC. At December 31, 2000 the Company had $178,000 of undrawn
funds available. It is expected that ongoing operations together with funds
available under this credit line will provide sufficient cash to meet the
Company's ongoing obligations as they become due.
Results of Operations
2000 versus 1999
The prolonged SAG - AFTRA strike, which impacted production of television
commercials in Southern California negatively affected the Company's revenues
during 2000. Total rental revenues decreased by 15% from 1999. Camera car
rentals decreased by 7%; dolly and crane rentals decreased by 19% and Akela
crane rentals decreased by 27% from 1999.
Product sales ceased to be a source of revenue for the Company in 2000.
The Company failed to reach a new agreement with Panther (Germany) to
distribute its dollies, cranes, parts and accessories. Completion of
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CAMERA PLATFORMS INTERNATIONAL, INC.
the first order of the Company's hydraulic dolly was once again delayed,
with delivery expected in mid or late 2001.
Costs of rentals decreased by 5%. Depreciation of equipment accounted for
51% of rental costs. The gross negative margin on rentals increased from
- -$64,000 to -$180,000; however, because of depreciation, rental activities
generated a positive gross margin before depreciation of $448,000.
Selling, general and administrative expenses decreased by $490,000 to
$369,000. Legal and accounting expenses were reduced by $205,000 as a
result of the large expenses recognized in 1999 related to the Company's
bankruptcy filing. Payroll and related expenses decreased by $152,000.
There were across-the-board decreases in costs of occupancy, insurance,
supplies and utilities.
Interest expense was reduced from $505,000 to $168,000 as a result of the
debt restructuring achieved by the reorganization.
The Company recognized a $1,633,000 gain as a result of the restructuring
of its pre-petition debt pursuant to the Reorganization Plan. In addition,
it recognized a $235,000 gain from discontinued operations, resulting from
an insurance settlement received on a claim for inventory losses associated
with the Company's former operations in Nashville/Atlanta.
There is a threatened strike of the Writers Guild in May 2001 and the Screen
Actors Guild in July 2001. Depending on the outcome of settlement
negotiations and the length of any potential strike, revenues during
Such a strike would negatively impact gross revenues and the results of
operations during 2001.
1999 versus 1998
Product sales continued to decrease in 1999, down 23% from 1998. During much
of 1999, the Company was unable to promote Panther's Pegasus cranes and
dollies or their parts and accessories because of the termination of the
Company's prior exclusive agreement with Panther and ongoing disputes with
Panther related to outstanding debts owed to Panther. The Company was unable
to generate sufficient working capital to complete seven Enlouva cranes, which
were in various states of completion. In addition, the Company was unable to
exploit early interest in its "Blue" hydraulic scissor arm dolly because of
insufficient working capital or credit availability to complete production.
Rentals revenues also decreased from 1998, dropping 24%. Rentals of camera
cars were down 8%, Akela crane rentals increased 24%, from $268,000 to
$333,000. The large decrease in rentals was caused primarily from lower
rentals of Panther dollies and cranes, which were off $275,000 from 1998,
and reduced revenues for dolly track, which decreased from $256,000 in 1998
to $68,000 in 1999. The decrease in track revenues was caused by a dispute
between the Company and the makers of Precision and Cadillac track, which
resulted in the termination of the split rental agreement between the
two companies.
Total revenues decreased by 24% from $2,245,000 in 1998 to $1,712,000
in 1999.
Cost of sales decreased 31%, tracking the lower sales figures. Gross
margins on sales remained the same.
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CAMERA PLATFORMS INTERNATIONAL, INC.
Cost of rental operations decreased 24% from the prior year. The decrease
was largest in the third and fourth quarters of 1999, reflective of the
Company's ongoing cost-cutting measures as a reaction to its working
capital difficulties.
Selling, general and administrative expenses were down 51% from the previous
year. Expenses were down in all categories of expenses, with the exception
of legal and accounting, reflective of the Company's legal expenses incurred
both prior to and after the filing of the Chapter 11 case, and its continuing
accrual of audit expenses, recognizing the necessity of completing audits of
current and prior years when such funds are available.
Interest expense decreased from $560,000 in 1998 to $505,000 in 1999.
The decrease was due to the filing of the Chapter 11 Case and the resultant
stay of the long-term debts of the Company.
In 1998, the Company recorded a loss of $1,139,000 due to the closures of
Atlanta, Nashville and New York operations.
The Company's net loss decreased 64% from $4,551,000 in 1998 to $1,644,000
in 1999. The net loss per basic and diluted share of common stock decreased
from $0.35 in 1998 to $0.12 in 1999.
Impact of Inflation
Inflation has not had a material impact on the Company's operations to date,
and the Company believes it will not have a material effect on operations
in the next twelve months.
Foreign Currency Transactions
All international sales are denominated and remitted in U.S. dollars, and all
foreign transactions are settled within a short period of time. Accordingly,
the Company does not anticipate that foreign currency fluctuations will have
a material effect on operations in the next twelve months.
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CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBISIDIARIES
Item 8 - Financial Statements and Supplementary Data
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
Page
Consolidated Financial Statements:
Independent Auditors' Report 14
Consolidated Statements of Financial Position at
December 31, 2000 and 1999 15
Consolidated Statements of Operations for the Years Ended
December 31, 2000, 1999 and 1998 16
Consolidated Statements of Cash Flows for the Years Ended
December 31, 2000, 1999 and 1998 17
Consolidated Statement of Shareholders' Equity for the Years Ended
December 31, 2000, 1999 and 1998 19
Notes to Consolidated Financial Statements 20
Schedule II - Valuation and Qualifying Accounts for the
Years Ended December 31, 2000, 1999 and 1998 31
ALL OTHER SCHEDULES FOR WHICH PROVISION IS MADE IN THE APPLICABLE ACCOUNTING
REGULATION OF THE SECURITIES AND EXCHANGE COMMISSION ARE NOT REQUIRED UNDER
THE RELATED INSTRUCTIONS OR ARE INAPPLICABLE, AND THEREFORE HAVE BEEN
OMITTED.
14
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
INDEPENDENT AUDITORS' REPORT
Board of Directors
Camera Platforms International, Inc.
We have audited the accompanying consolidated balance sheets of Camera
Platforms International, Inc. and subsidiaries (the "Company")as of
December 31, 2000 and 1999, and the related consolidated statements of
operations, shareholders' deficit and cash flows for the years ended
December 31, 2000, 1999, and 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standard 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 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 financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Camera
Platforms International, Inc. and subsidiaries as of December 31, 2000 and
1999, and the results of their operations and their cash flows for the years
ended December 31, 2000, 1999 and 1998 in conformity with generally accepted
accounting principles.
We have also audited the Schedules of Valuation and Qualifying Accounts for
the period ended December 31, 2000. In our opinion, these schedules
present fairly, in all material respects, the information required to be
set forth therein.
Rose, Snyder & Jacobs
A Corporation of Certified Public Accountants
Encino, California
February 21, 2001
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CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCEE SHEETS
DECEMBER 31, 2000 AND 1999
December 31 2000 1999
ASSETS
Current Assets
Cash $11,000 9,000
Accounts receivable, less allowance for
doubtful accounts of $5,000 in 2000
and 1999 60,000 102,000
Current maturities of net investment in
sales-type lease and installment sale,
Note 3 - 34,000
Inventories 108,000 108,000
Prepaid expenses 101,000 115,000
------- -------
Total current assets 280,000 368,000
Property and equipment, net of depreciation,
amortization and rental asset valuation
allowance - Note 4 991,000 1,593,000
Deposits and other assets 20,000 10,000
------- ---------
$1,291,000 $1,971,000
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $50,000 $ 8,000
Accrued liabilities 89,000 267,000
Accrued taxes 63,000 63,000
Deferred revenue - 6,000
Total current liabilities 202,000 281,000
Long Term Debt - Note 6 1,572,000 1,500,000
Liabilities subject to compromise - Note 7 - 5,073,000
Commitments and contingencies - Note 10
Shareholders' Equity (deficit)
Common stock $.0005 par value;
100,000,000 shares authorized;
23,740,964 shares issued and outstanding -
Notes 1 and 9 12,000 7,000
Additional paid-in capital 27,037,000 23,549,000
Accumulated deficit (27,532,000) (28,439,000)
------------ ------------
Total shareholders' equity (deficit) (483,000) 4,883,000)
----------- -----------
$1,291,000 $1,971,000
=========== ===========
SEE INDEPENDENT AUDITORS' REPORT AND NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS.
16
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
2000 1999 1998
Revenues
Net product sales $10,000 $467,000 $607,000
Revenues from rental operations 1,059,000 1,245,000 1,638,000
--------- --------- ---------
1,069,000 1,712,000 2,245,000
Expenses
Cost of sales 1,000 305,000 445,000
Cost of rental operations 1,238,000 1,309,000 1,739,000
Selling, general and administrative 369,000 859,000 1,755,000
--------- --------- ---------
1,608,000 2,473,000 3,939,000
Operating loss (553,000) (761,000) (1,694,000)
Interest expense, net (168,000) (505,000) (560,000)
Other income (expense), net, Note 7 (254,000) (172,000) (11,000)
Impairment loss, Note 14 - (206,000) (1,147,000)
-------- -------- ---------
Loss from continuing
operations (961,000) (1,644,000) (3,412,000)
Net income (loss) from
discontinued operations, Note 13 235,000 - (1,139,000)
--------- ---------- -----------
Net loss before extraordinary item (726,000) (1,644,000) (4,551,000)
Extraordinary item, Note 7 4,277,000 - -
--------- ---------- -----------
Net income (loss) $907,000 ($1,644,000) ($4,551,000)
Basic and diluted income (loss)
per share
(Loss) from continuing operations ($0.05) ($.12) ($0.26)
Extraordinary item $0.09 - -
Gain (loss) from discontinued
operations $0.01 - ($0.09)
Net income(loss) $0.19 ($0.12) ($0.35)
Weighted average shares outstanding 18,850,225 13,768,228 13,145,228
SEE INDEPENDENT AUDITORS' REPORT AND NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
17
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
2000 1999 1998
OPERATING ACTIVITIES
Net income(loss) $907,000 ($1,644,000) ($4,551,000)
Adjustments to reconcile net income
(loss) to net cash used in
operating activities:
Depreciation and amortization 647,000 672,000 898,000
(Gain) loss on disposal of equipment 19,000 (11,000) 41,000
Impairment loss on long-lived assets - 206,000 1,197,000
Provision for doubtful accounts, net - 18,000 86,000
Gain on bankruptcy restructuring (1,633,000) - -
Changes in assets and liabilities:
Accounts receivable - (8,000) (21,000)
Net investment in lease and
installment sale 34,000 47,000 51,000
Inventories - 145,000 (571,000)
Prepaid expenses 14,000 (18,000) (164,000)
Deposits and other assets (10,000) 26,000 192,000
Accounts payable 42,000 (159,000) 828,000
Deferred revenue (6,000) (23,000) 17,000
Customer deposits 4,000 30,000 (12,000)
Other current liabilities (119,000) 519,000 142,000
Liabilities subject to compromise (53,000) - -
Net cash provided by
(used in) operating activities (48,000) (200,000) (1,867,000)
INVESTING ACTIVITIES
Proceeds from sale of property
and equipment 2,000 184,000 1,596,000
Purchases of property and equipment (24,000) - (2,917,000)
Purchase of intangible assets - - (440,000)
Net cash provided (used)by
investing activities (22,000) 184,000 (1,761,000)
FINANCING ACTIVITIES
Proceeds from borrowings of long-term debt 165,000 68,000 5,759,000
SEE INDEPENDENT AUDITORS' REPORT AND NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
18
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIAIRES
CONSOLIDATED STATEMENTS OF CASH FLOWS, continued
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
Principal payments on long-term debt (93,000) (71,000) (2,187,000)
Proceeds from option payment - 2,000 -
Net cash provided (used) by financing
activities 72,000 (1,000) 3,577,000
Net increase (decrease) in cash 2,000 (17,000) ($51,000)
Cash at beginning of year 9,000 26,000 77,000
Cash at end of year $11,000 $9,000 $26,000
Supplemental disclosure of cash flow
information
Cash paid during the year for:
Interest $191,000 $321,000 $456,000
Income taxes $1,000 $1,000 $1,000
SEE INDEPENDENT AUDITORS' REPORT AND NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
19
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 2000, 1999 AND 1998
Number of Common Paid-in Accumulated
Shares Stock Capital Deficit Total
Balance at
December 31, 1998 $13,768,228 7,000 $23,547,000 ($26,795,000) ($3,241,000)
Net loss for the year (1,644,000) (1,644,000)
Option payment - - 2,000 2,000
Balance at
December 31, 1999 13,768,228 7,000 23,549,000 (28,439,000) (4,883,000)
Issuance of Common
Stock, Notes 1 and 9 13,972,736 5,000 3,486,000 - 3,493,000
Cancellation of Common
Stock, Notes 1 and 9 4,000,000 (2,000) 2,000 - -
Net income for the year - - - 907,000 907,000
Balance at
December 31, 2000 23,740,964 $12,000 $27,037,000 ($27,532,000) ($483,000)
SEE INDEPENDENT AUDITORS' REPORT AND NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
20
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000
NOTE 1 - DESCRIPTION OF BUSINESS
Camera Platforms International, Inc. ("CPI" or the "Company"), was organized
in the state of Delaware in 1985 to engage in the business of leasing camera
cars and other related equipment to motion picture and television production.
The Company designs, manufactures rents and leases a wide variety of
production equipment to the film and video industries. The Company rents
three varieties of camera cars,in addition to cranes, dollies, jib arms,
and dolly track. The Company had only two subsidiaries, Shotmaker
Sound and Shotmaker Dollies, Inc. and they both filed for protection under
Chapter 7 of the Federal Bankruptcy Code in 1999. Shotmaker Sound operated
in 1998, providing rehearsal studio, storage and cartage services to
recording artists and its operations were presented as discontinued
operations(Note 13).
PROCEEDINGS UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
On June 18, 2000, the United States Bankruptcy Court, Central District of
California, San Fernando Valley Division ("Bankruptcy Court") entered
an order confirmed the Company's Second Amended Plan of Reorganization
9the "Reorganization Plan"). On June 29, 2000, the Reorganization Plan
became effective and the Company emerged from bankruptcy reorganization
proceedings. Those proceedings had begun on September 17, 1999 when an
involuntary petition was filed by certain creditors for relief under the
Chapter 7 or 11 of the United States Bankruptcy Code.
Pursuant to the Reorganization Plan, DOOFF LLC, the Company's secured
and largest unsecured creditor, received 49.9% of the total outstanding
shares of the Company's common stock after the adoption of the Reorganization
Plan. The Company's previous largest shareholder, Shotmaker Acquisition
Corp., surrendered 4,000,000 shares of common stock to the Company.
General unsecured creditors received one share of common stock of the
Company for each $2.00 in allowed claims. Liabilities subject to
compromise in an adjusted amount of $4,976,000 after the conversion of
$150,000 of convertible debt, were converted to 2,488,034 shares of
common stock. In total, the Company issued 13,972,736 and redeemed
4,000,000 shares of common stock as part of the
Reorganization Plan.
For the year ended December 31, 2000, the Company recognized a gain of
$1,633,000 and a contribution of capital of $3,493,000 related to the
restructuring of certain pre-petition debt pursuant to the
Reorganization Plan.
The Reorganization Plan approved by the Bankruptcy Court increased the
authorized number of common shares to 100,000,000.
see Independent Auditors' Report
21
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Liquidity
The Company has secured a $250,000 revolving line of credit from its secured
lender DOOFF LLC (see Note 6). At December 31, 2000 the Company had $178,000
of undrawn funds available. It is expected that ongoing operations together
with funds available under this credit line will provide sufficient cash to
meet then Company's ongoing obligations as they become due.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiaries. Significant intercompany accounts and
transactions have been eliminated in consolidation.
Leasing Operations
The Company's leasing operations consist of operating and sales-type leases
on a variety of equipment types, primarily camera cars, dollies and cranes,
and other accessories.
Under the operating lease method of accounting, the leased asset is recorded
at cost and depreciated over its estimated useful life, using periods ranging
from three to ten years. Rental payments are recognized as revenue as they
become due under the terms of the operating lease agreements.
Revenues from certain qualifying non-cancelable lease contracts are accounted
for as sales-type leases wherein the present value of all payments are recorded
currently as revenues, and the related cost of the asset is charged to cost
of sales. Interest is recorded over the term of the related lease agreement.
Inventories
Inventories are stated at the lower of cost or market. Cost is determined
utilizing the first-in, first-out method (see Note 14).
see Independent Auditors' Report
22
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Property and Equipment
Property and equipment is stated at the lower of cost or net realizable
value, less accumulated depreciation. Depreciation is generally determined
using the straight-line method over the estimated useful life of the
equipment, using periods ranging from three to ten years.
Research and Development
Research and development costs are charged to expense as incurred.
Such amounts are not material in any year presented.
Cash Equivalents
The Company considers all highly liquid investments held at financial
institutions with maturity dates of three months or less at the time
of acquisition to be cash equivalents.
Per Share Data
The Company has adopted Statement of Financial Accounting Standards
("SFAS") No. 128, "Earnings Per Share", which establishes new
standards for computing and presenting basic and diluted earnings per
share. Adoption of SFAS No. 128 does not have a material effect on the
computation or presentation of per share data in the accompanying
consolidation financial statements.
The basic income (loss) per share is calculated based upon the weighted
average number of common shares outstanding during each year. Diluted
income (loss) per share is calculated based upon the weighted average
of shares of common stock outstanding and shares that would have been
outstanding assuming the issuance of common stock for all dilutive
potential common stock outstanding. The Company's outstanding stock
options have note been included in the calculation of the weighted
average of shares of common stock as they would have an anti-dilutive
effect.
Reclassification
Certain amounts in 1999 have been reclassified to conform to the
presentation in 2000.
Concentration of Credit Risk
The Company's customers are principally engaged in the production of motion
pictures or television programming, or are suppliers to such companies.
Credit is extended based on an evaluation of the customer's financial condition.
Receivables arising from the granting of credit under normal trade terms are
generally due within 30 to 90 days and are generally not collateralized.
From time to time, the Company grants extended terms, which are generally
collateralized by a security interest in the products sold. Collections of
accounts receivable have consistently been within management's expectations.
see Independent Auditors' Report
23
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Advertising Costs
The Company expenses all advertising costs as incurred. Advertising costs
totaled $22,000, $20,000, and $142,000 the years ended December 31, 2000,
1999, and 1998, respectively, and were recorded as part of selling, general
and administrative expenses. At December 31, 2000 and 1999 advertising
cost capitalized, primarily related to magazine ads and exhibition
costs amount to $11,000 and $0 respectively.
Equipment Leases
The Company's leasing operations consist primarily of short-term rentals of
camera cars, camera dollies and cranes. These rentals generally range from
one day to several weeks in duration, with occasional rentals of several months.
None of the rentals are noncancelable leases, and no contingent rentals are
Included in the Company's consolidated statements of operations.
Stock-Based Compensation
The Company has adopted the disclosure-only provisions of SFAS 123,
"Accounting for Stock-Based Compensation", but applies APB No. 25 and
related interpretations in accounting for options granted under its plan.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the consolidated
financial statements. The Company's management estimated the valuation
for doubtful accounts, rental asset valuation allowance and the
useful lives of property and equipment. Actual results could differ from
those estimates and such differences could be material to the consolidated
financial statements.
see Independent Auditors' Report
24
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
New Accounting Standards
The Company will adopt SFAS No. 130, "Reporting Comprehensive Income",
SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information" and SFAS No. 132, "Employers' Disclosures about Pensions
and Other Postretirement Benefits during 1998, with no material impact
on the consolidated financial statements. The Company also adopted
SFAS No. 136, "Transfer of Assets to a Not-for-Profit Organization
or Charitable Trust that raises or holds Contributions for Others", and
SFAS No. 133 and No. 138, "Accounting for Certain Derivative Instruments
and Certain Hedging Activities" in 2000, with no material impact on
the consolidated financial statements.
The Company operates in a single business segment. The Company designs,
manufactures, leases and rents equipment for the motion picture, television
and theatrical production and music industries.
NOTE 3 - INVESTMENT IN SALES-TYPE LEASE AND INSTALLMENT SALE
The following lists the components of the investment in sales-type lease
and installment sale:
December 31,
2000 1999
Minimum lease payments receivable.............. - $34,000
Less: Unearned income.......................... - 6,000
Net investment................................. - $28,000
Investment in sales-type lease and installment sale matured during 2000.
NOTE 4 - PROPERTY AND EQUIPMENT
December 31,
2000 1999
Equipment available for lease $6,274,000 $6,262,000
Machinery and equipment 348,000 355,000
Leasehold improvements 63,000 63,000
Furniture and fixtures 62,000 62,000
Automobiles and trucks 119,000 119,000
------- -------
$6,866,000 $6,861,000
see Independent Auditors' Report
25
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000
NOTE 4 - PROPERTY AND EQUIPMENT (continued)
Less accumulated depreciation and amortization 5,333,000 4,726,000
Less rental asset valuation allowance 542,000 542,000
-------- --------
$991,000 $1,593,000
Accumulated depreciation and amortization pertaining to equipment available for
lease amounted to $4,852,777 and $3,993,236 at December 31, 2000 and 1999,
respectively.
NOTE 5 - ACQUISITIONS AND DISPOSITIONS
THIRD ENCORE
On January 1, 1998, the Company's wholly owned subsidiary, Shotmaker Sound, Inc.
("Sound"), completed the purchase of the assets and business of Third Encore
("3E"), a company which provides rehearsal studio, storage and cartage services
to recording artists. Sound subsequently sold the assets and business of 3E to
an unrelated third party, effective February 1, 1999.
On April 1, 1999, Sound filed bankruptcy under Chapter 7 of the Bankruptcy
Code as a no asset debtor.
PRODUCTION SERVICES-ATLANTA
On April 6, 1988, the Company acquired the business of Production
Services-Atlanta, Inc. ("PSA") for a total consideration of $2.1 million.
In October, 1998, the Company ceased all PSA operations (Note 13).
On November 10, 1998, all the assets of PSA were sold at auction.
Prior to the auction, the secured lender noticed an event of default under
its note, and foreclosed on the assets. The Company recognized a $425,
loss on the disposition of the assets.
FLUID IMAGES, INC
On May 27, 1998, the Company acquired all the stock of Fluid Images, Inc.,
("Fluid Images") an Oregon corporation, including all assets of Fluid Images,
the name "Akela Cranes", but excluding all liabilities except certain accounts
payable and debt of Fluid Images, for a purchase price of $2.5 million.
Immediately upon acquisition, Fluid Images was liquidated and its assets
and liabilities were assumed by the Company. The consideration consisted
of (i) $1 million cash at closing and(ii) a $750,000 promissory note and
see Independent Auditors' Report
26
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000
NOTE 5 - ACQUISITIONS AND DISPOSITIONS (continued)
(iii) 750,000 shares of the Company's common stock, at an agreed upon value
of $1 per share. Subsequently, the Company restated the value of the shares
issued to $.20 per share and recognized an impairment in the carrying value
of the acquired assets of $342,000.
NOTE 6 - LONG TERM DEBT AND RELATED PARTY TRANSACTIONS
Long term debt consists of (1) a $1,500,000 term loan, interest only payable
monthly at 10% maturing June 2010, secured by all the assets of the Company
and (2) a $250,000 revolving line of credit, interest only payable monthly
10%, maturing June 2005 and also secured by all the assets of the Company.
These loans are with DOOFF LLC. The balance outstanding on the line of
credit was $72,000 and $0 at December 31, 2000 and 1999, respectively.
Two directors and principal shareholders of the Company are also principals
of DOOFF LLC.
NOTE 7 - LIABILITIES SUBJECT TO COMPROMISE AND EXTRAORDINARY ITEM
Liabilities subject to compromise refer to liabilities incurred prior to the
commencement of the Chapter 11 case. These liabilities consist primarily
of amounts outstanding under long-term debt, and also include accounts payable,
accrued interest, customer deposits and other accrued expenses. These amounts
represented the Company's best estimate of known or potential claims to be
resolved in connection with the Chapter 11 Case. The principal categories
of claims which were classified as liabilities subject to compromise under
the reorganization proceeding are identified below.
Accounts Payable $1,139,000
Customer Deposits 48,000
Accrued Expenses 317,000
Long-Term Debt 3,439,000
$5,073,000
In connection with the Reorganization Plan confirmed by the Court
(Note 1), creditors with pre-petition liabilities received one share
of the Company's common stock for each $2 in liability. As a result
of the confirmation of the Reorganization Plan in June 2000, the
Company recognized a $1,633,000 extraordinary gain on restructuring
when the adjusted liabilities subject to compromise in the amount of
$4,976,000 after the conversion of $150,000 of convertible debt
were converted into common stock. The adjustment to liabilities
subject to compromise, together with the reorganization costs,
excluding the gain on restructuring, amounted to $233,000 for the
year ended December 31, 2000, and is included in other expense.
see Independent Auditors' Report
27
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000
NOTE 8 - INCOME TAXES
The Company utilizes the liability method under SFAS No 109 to account for
income taxes. Under this method, deferred tax assets and liabilities are
determined based on differences between financial reporting and tax bases
of assets and liabilities and are measured using the enacted tax rates and
laws expected to apply when the differences are expected to reverse.
At December 31, 2000, the Company has net operating loss carryforwards of
approximately $30 million for federal tax purposes, which expire from 2001
to 2020. Because of statutory "ownership changes" the amount of net
operating losses which may be utilized in future years are subject to
significant annual limitations. The Company also has net operating loss
carryforwards of approximately $4 million for California tax purposes,
which expire from 2001 to 2005. The Company also has federal research
and development credits of approximately $64,000, expiring in 2001 and 2002,
which may be used to offset future tax liabilities.
At December 31, 2000, total deferred tax assets, consisting principally
of net operating loss carryforwards, amounted to approximately $10 million.
For financial reporting purposes, a valuation allowance has been recognized
in an amount equal to such deferred tax assets due to the uncertainty
surrounding their ultimate realization.
The effective tax rate differs from the U.S. Federal statutory rate
principally due to the valuation allowance recognized due to the uncertainty
surrounding the ultimate realization of deferred tax assets.
NOTE 9 - COMMON STOCK AND STOCK OPTIONS
During 2000, a creditor holding convertible debt of $150,000 converted its
note into 600,000 shares of common stock at an agreed conversion price of
$.025 per share.
Stock option to purchase shares of common stock were granted to certain
officers, key employees and consultants as follows:
Options Outstanding
Weighted Avg. Exercise
Shares Price
Outstanding at January 1, 1999 840,000 $0.03
Granted 1,391,000 $0.21
Exercised (300,000) $0.01
Terminated or expired (400,000) $0.01
--------- -----
Outstanding at December 31, 1999 1,531,000 $0.20
see Independent Auditors' Report
28
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000
NOTE 9 - COMMON STOCK AND STOCK OPTIONS (continued)
Granted - -
Exercised - -
Terminated or expired (431,000) $0.09
--------- ----
Outstanding at December 31, 2000 1,100,000 $0.25
Options are executory contracts as defined by the Bankruptcy Code, and
are subject to acceptance or rejection by the Company. The Company
rejected all stock option contracts except for one agreement providing
1,100,000 share at $.25 per share, expiring in June 2003. These options
became exercisable at the approval date of the Reorganization Plan by the
Court. Options were granted under the Reorganization Plan at not less than
the fair market value of the stock on the date of the grant.
Had compensation cost for the plan been determined based on the fair value
of the options at the grant dates consistent with the methodology prescribed
by SFAS 123, there would be no change to the Company's net loss and loss
per share.
NOTE 10 - COMMITMENTS AND CONTINGENCIES
Leases
On January 2, 2001, the Company entered into a lease for its premises that
expires on June 30, 2002. The lease of $12,000 per month includes a five
and one half year option under the same terms and conditions.
Litigation
The Company is not currently party to any legal proceedings.
NOTE 11 - SALES TO MAJOR CUSTOMERS, GEOGRAPHIC AREAS AND CONCENTRATION
No revenues derived from a single customer accounted for more than ten percent
of total revenues during 2000, 1999, or 1998. No geographic area outside
the United States accounted for more than ten percent of total sales during
the last three years. The Company does business with the film and video
industries. Strikes have impacted the Company in the past, and the
threatened strikes of the Writers Guild and the Screen Actors Guild
could have a negative effect on the Company's revenue and results of
operations in 2001.
see Independent Auditors' Report
29
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000
NOTE 12 - FAIR VALUES OF FINANCIAL INSTRUMENTS
Management has determined that the estimated fair value of the Company's
financial instruments approximates the carrying amount of such financial
instruments in all material respects as of December 31, 2000 and 1999.
NOTE 13- DISCONTINUED OPERATIONS
In October 1998, the Company ceased operations in Atlanta and Nashville.
Subsequently, on November 10, 1998 all the inventory and equipment of
the Atlanta and Nashville operations was sold at auction. The Company
recognized a $425,000 loss on the disposition, and a loss of $603,000
from operations with respect to Atlanta and Nashville for the year ended
December 31, 1998. Revenue from these operations in 1998 totaled $330,000.
In 2000, the Company received an insurance settlement of $235,000 on a
claim for inventory losses associated with the Company's operations
in Nashville/Atlanta in 1998.
On February 1, 1999, the Company sold substantially all the assets of its
wholly owned subsidiary, Shotmaker Sound, Inc. ("Sound"). Subsequently,
Sound filed for protection under Chapter 7 of the Bankruptcy Code.
Sound was deemed a no asset debtor. The Company recorded a loss on
disposition of $68,000 and a loss of $43,000 from operations of this
subsidiary for the year ended December 31, 1998. Total revenue from these
operations totaled $578,000 for 1998. Revenues from these operations
were immaterial in 1999.
The disposition of these assets has been accounted for as discontinued
operations and accordingly, the operating results of the Atlanta and
Nashville operations and of Shotmaker Sound have been aggregated and
reported as discontinued operations in the accompanying consolidated
statement of operations.
NOTE 14 - IMPAIRMENT OF ASSETS
In 1998, the Company wrote off $342,000 of goodwill related to the
of Fluid Images, Inc. The Company also reduced the value associated
with the issuance of new shares of common stock by $600,000. The total
effect of these reductions was to write off purchased goodwill of $942,000
for the year ended December 31, 1998. In 11998, the Company also recorded
an impairment loss of $640,000 to present its inventory at fair market value,
which was lower than the cost. Lastly, the Company also wrote down its
30
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000
14. IMPAIRMENT OF ASSETS (Continued)
In 1999, the Company recorded an impairment loss on long lived assets of
$206,000 in accordance with SFAS No. 121, "Accounting for Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed of",
which was triggered by the bankruptcy filing. The fair value of fixed
assets subject to impairment was determined by an independent appraisal.
see Independent Auditors' Report
31
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Balance Balance
January 1, Additions Deductions December 31,
YEAR ENDED DECEMBER 31, 1998
Asset valuation allowance $542,000 - - $542,000
Allowance for doubtful accounts 46,000 41,000 (85,000) 2,000
-------- ------ -------- --------
$588,000 $41,000 ($85,000) $544,000
YEAR ENDED DECEMBER 31, 1999
Asset valuation allowance $542,000 - - $542,000
Allowance for doubtful accounts 2,000 3,000 - 5,000
------- ------ ------- ------
$544,000 - - $547,000
YEAR ENDED DECEMBER 31, 2000
Asset valuation allowance $542,000 $542,000
Allowance for doubtful accounts 5,000 5,000
------- ------ ------- -------
$547,000 - - $547,000
32
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
Item 9 - Changes In and Disagreements with Accountants on Accounting or
Financial Disclosure
Not Applicable
PART III
Item 10 - Directors and Executive Officers of the Registrant
The Company's by-laws provide for a range of one to nine directors
and allow the Board of Directors to set the exact number of authorized
directors within that range. The current number of authorized directors
established by the Board of Directors is five. Directors are elected at
each Annual Meeting of Shareholders to serve thereafter until their
successors have been duly elected and qualified.
The following table provides certain information as of March 15, 2001, for
each director and executive officer of the Company:
Name Age Position with the Company
Herbert Wolas 65 Chairman of the Board, Chief Financial Officer
Martin Perellis 55 Director, President, Chief Executive Officer
William O. Fleischman 55 Director
Rick Hicks 57 Director
Michael Sayres 70 Director
Herbert Wolas has been a director since June 29, 2000. Mr. Wolas was admitted
to the California State Bar in 1961. Mr. Wolas is a well respected bankruptcy
practitioner and began his career as an associate with Quittner, Stutman &
Treister (now Stutman Treister & Glatt). Subsequently, he became one of the
founding partners of Robinson & Wolas; Robinson, Wolas & Diamant; Wolas,
Diamant & Brill; one of the founders of Wolas, Soref & Ickowicz, and
presently principal of the Law Offices of Herbert Wolas.
Martin Perellis has been a director since June 29, 2000. Mr. Perellis has been
involved in the music and film industries for the past 30 years and is the
founder and president of Consolidated Productions, Inc., a supplier of
theatrical transportation, production and facilities services and of
consulting services to a variety of domestic and international clients.
Its current client roster includes Third Story Music, Akil Music, and the
Montreux Music Festival (Tokyo, Japan) and the Montreux Music Festival Tour
2001. Mr. Perellis has also served in various executive capacities with
personal management companies involved with such artists as Frank Zappa,
Tom Waits, Captain Beefheart, Earth Wind and Fire, Martha and the Vandellas
and the Jackson Five.
William O. Fleischman has been a director since October 10, 1996. Mr.
Fleischman, in his individual capacity or through W/F Investment Corp and
its affiliates, has substantial experience investing in and managing companies.
Mr. Fleischman is also an attorney officed in Century City.
Rick Hicks has been a director since June 11, 1998. Mr. Hicks is an attorney
at law and principal at the law firm of Hicks, Recasens and Berman. He has
been an attorney since 1973. He has been a consultant and frequent investor
in a number of operating companies and real estate projects.
33
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
Michael Sayres has been a director since June 29, 2000. Mr. Sayres is a private
investor and consultant. From 1950-1970, he served as Vice President and
Controller of Revlon, Inc., international division. From 1970-72, he served
as Vice President and Corporate Controller of Revlon, Inc. From 1972-1986,
he served as Senior Vice President-Corporate Development and Director of
Revlon, Inc. From 1986 to present has served as director and consultant
with International Products Corp., a manufacturer and distributor of
hospital supplies.
None of the officers or directors of the Company is related to any other
officer or director of the Company. Officers are appointed by the Board
of Directors and serve at the pleasure of the Board of Directors or until
they resign. At present two officers of DOOFF, LLC, the Company's secured
lender, and one officer of SAC, a principal shareholder of the Company,
serves on the Company's Board of Directors.
Item 11 - Executive Compensation
Compensation of Directors
Directors of the Company serve without compensation.
Compensation of Executive Officers
The following tables set forth information concerning the compensation of the
Company's Chief Executive Officer and those other executive officers of the
Company whose salary and bonus exceeded $100,000 during 2000 (the "Named
Executive Officers"). The table below sets forth information regarding
the compensation of each listed officer for the last three fiscal years.
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts Other All
Annual Annual Restricted Other
Compen- Stock Options/ LTIP Compen-
Name and Salary Bonus sation Award(s) SAR's Payouts sation
Principal Position Year ($) ($) ($) ($) (#) ($) ($) ($)
- ------------------- ---- -------- ------- ------- ----- ------ ------ ------- --------
Philip Berardi 1999 43,757 291,667 14,245
C.E.O. 2000 1,154 10,000
W.O. Fleischman 1999 -
C.E.O. 2000 -
Martin Perellis 2000 -
C.E.O.
In 2000, there were no grants of stock options to the Named Executive Officers.
Additionally, none of the Named Executive Officers has been granted options in
prior years which are currently outstanding.
34
Item 12 - Security Ownership of Certain Beneficial Owners and Management
Security Ownership of Certain Beneficial Owners
The following table sets forth information with respect to those persons
known by the Company to own beneficially more than 5% of the Company's
common stock as of March 15, 2001.
Amount and Nature
Name and Address of of Beneficial Percent of
Beneficial Owner Ownership Class
Herbert Wolas 6,384,054 (1) 25.9%
1875 Century Park East, Suite 600
Los Angeles, CA 90067
Martin Perellis 6,384,054 (2) 25.9%
7860 Torreyson Drive
Los Angeles, CA 90046
William O. Fleischman 5,403,168 (3) 22.7%
1900 Avenue of the Stars, Suite 2410
Los Angeles, CA 90067
(1) Consists of (a) 5,934,054 shares owned by the Wolas Family Limited
Partnership, Mr. Wolas' children and a trust for the benefit of his
grandchild are the aggregate, and (b) 450,000 which would be issued upon
the exercise of warrants issued to DOOFF LLC in the aggregate amount
of 900,000 warrants. Mr. Wolas owns 50% of the membership interest in
DOOFF LLC.
(2) Consists of (a) 5,934,054 shares owned by the Perellis 2000 Trust
of which Mr. Perellis is the beneficiary and (b)450,000 which would be
issued upon the exercise of warrants issued to DOOFF LLC in the aggregate
amount of 900,000 warrants. Mr. Perellis owns 50% of the membership
interest in DOOFF LLC.
(3) Mr. Fleischman's minor child is the owner of 70% of the outstanding
shares of SAC, which owns 5,403,168 shares of the Company's common
stock.
Security Ownership of Management
The following table sets forth information with respect to shares of the
Company's outstanding common stock which are owned beneficially by each
director and nominee and the aggregate number of shares owned beneficially
by all directors, nominees and officers as a group as of March 15, 2001.
Amount and Nature
Name and Address of of Beneficial Percent of
Beneficial Owner Ownership Class
Herbert Wolas 6,384,054 (1) 25.9%
Martin Perellis 6,384,054 (2) 25.9%
William O. Fleischman 5,403,168 (3) 22.7%
--------- -----
18,171,276 74.5%
(1) Consists of (a) 5,934,054 shares owned by the Wolas Family Limited
Partnership, Mr. Wolas' children and a trust for the benefit of his
grandchild are the aggregate, and (b) 450,000 which would be issued upon
the exercise of warrants issued to DOOFF LLC in the aggregate amount of
900,000 warrants. Mr. Wolas owns 50% of the membership interest in
35
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
DOOFF LLC.
(2) Consists of (a) 5,934,054 shares owned by the Perellis 2000 Trust
of which Mr. Perellis is the beneficiary and (b)450,000 which would be
issued upon the exercise of warrants issued to DOOFF LLC in the aggregate
amount of 900,000 warrants. Mr. Perellis owns 50% of the membership
interest in DOOFF LLC.
(3) Mr. Fleischman's minor child is the owner of 70% of the outstanding
shares of SAC, which owns 5,403,168 shares of the Company's common
stock.
Item 13 - Certain Relationships and Related Transactions
Two directors of the Company, Mr. Herbert Wolas and Mr. Martin Perellis
are principals of DOOFF LLC, the Company's secured lender. DOOFF LLC has
lent the Company (1)$1,500,000 in the form of a term loan, interest
payable monthly at 10%, maturing June 2010, secured by all the assets
of the Company, and (2) $250,000 in the form of a revolving line of
credit, interest only payable monthly at 10%, maturing June 2005 and
also secured by all the assets of the Company. The balance outstanding
on the revolving line of credit was $72,000 at December 31, 2000.
One director of the Company, Mr. William O. Fleischman is an officer of SAC,
a principal shareholder of the Company.
36
PART IV
Item 14 - Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) The financial statements and financial statement schedules filed as part
of this report are listed on the Index to Financial Statements and
Schedules on page 13.
Exhibits
2.1 Second Amended Plan of Reorganization dated as of April 17, 2000
3.11 Certificate of Incorporation, as amended.
3.22 By-Laws, as amended.
10.13 Form of Non-Statutory Stock Option Agreement.
10.24 Company's 1990 Stock Option Plan.
21.1 Subsidiaries of Registrant.
1 Incorporated by reference to the Company's Form 10-K Annual Report
for the year ended December 31, 1987.
2 Incorporated by reference to the Company's Form 10-K Annual Report
for the year ended December 31, 1988.
3 Incorporated by reference to the Company's Form 10-K Annual Report
for the year ended December 31, 1989.
4 Incorporated by reference to the Company's Registration Statement
No. 33-37401 on Form S-8, filed on October 23, 1990.
(b) Reports on Form 8-K
The Company filed no reports on Form 8-K during the quarter ended
December 31, 2000.
(c) Exhibits
All exhibits required by Item 601 of Regulation S-K have been filed.
(d) Financial Statement Schedules
All other financial statement schedules which are required by the
regulations of the Securities and Exchange Commission are either
inapplicable or are included as part of Item 8 herein.
37
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Dated: March 15, 2001 CAMERA PLATFORMS INTERNATIONAL, INC
By: S/Martin Perellis
Martin Perellis
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following officers and directors of Camera
Platforms International, Inc., on behalf of the Company, in the capacities
and in the dates indicated.
March 15, 2001 Chairman of the Board and Chief Financial Officer
By: S/Herbert Wolas
Herbert Wolas
March 15, 2001 Director, President and Chief Executive Officer.
By: S/Martin Perellis
Martin Perellis
March 15, 2001 Director By: S/William O. Fleischman
William O. Fleischman
March 15, 2001 Director By: S/Rick Hicks
Rick Hicks
March 15, 2001 Director By: S/Michael Sayres
Michael Sayres
38
CAMERA PLATFORMS INTERNATIONAL, INC. AND SUBSIDIARIES
EXHIBIT 21.1
SUBSIDIARIES OF REGISTRANT
As of December 31, 2000 Camera Platforms International, Inc., had
two wholly owned subsidiaries, Shotmaker Dollies, Inc., and Shotmaker
Sound Inc., both of which are incorporated in the State of California.