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, 2002
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 10, 2003 was $356,000 (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 10, 2003.
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CAMERA PLATFORMS INTERNATIONAL, INC.
CONTENTS
Page
PART I
Item 1. BUSINESS 3
Item 2. PROPERTIES 7
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 7a QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK 11
Item 8. FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA 13
Item 9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING OR FINANCIAL
DISCLOSURES 28
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT 28
Item 11. EXECUTIVE COMPENSATION 29
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT 30
Item 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS 30
ITEM 14. CONTROLS AND PROCEDURES 32
Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K 32
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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, Akela, Pegasus and Enlouva cranes, Panther
dollies, jib arms, and dolly track.
General
Shotmaker equipment has been used to film many of the top recent U.S. movies.
A partial list includes DAREDEVIL, TERMINATOR 3, CHARLIE'S ANGELS 2, LEGALLY
BLONDE 2, and SPIDERMAN. In addition, a number of prime time television
programs and series use Shotmaker equipment such as SCRUBS, FEAR FACTOR,
AMERICAN IDOL, C.S.I., AND J.A.G.
Products
The Shotmaker Camera Car fleet currently consists of 15 camera cars, which
include one Shotmaker "Elite Plus", four 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 Plus. In 2001 the Company converted an Elite camera
car to an Elite Plus camera car. A 200-amp AC fuel injected generator had
replaced the out-dated 500-amp DC generator and the 200-amp DC battery pack.
To lighten the car, the electric drive motor and rear steering capability was
removed. With the removal of these items the Elite Plus is more stabile and
responsive. The entire suspension system was modified to make for a smoother
ride. The Elite Plus still has the two-man or remote camera crane arm with a
maximum height of 23 feet and a front-mounted hydraulic platform that rises to
12 feet in height.
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CAMERA PLATFORMS INTERNATIONAL, INC.
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 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.
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. The Classics also have 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,
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CAMERA PLATFORMS INTERNATIONAL, INC.
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; 9 jib arms
(7 super Jibs and 2 Mini Jibs); 7 Akela cranes; 8 Enlouva cranes;
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 proved 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.
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. The Company has seven Akela cranes in its rental
inventory. 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.
The Company has 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
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CAMERA PLATFORMS INTERNATIONAL, INC.
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 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
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.
The former owners of the Akela crane have built a competitive crane called
the Strada with essentially the same characteristics as the Akela Senior.
The introduction and marketing of the Strada has been a significant factor
in the reduction in Akela crane revenues.
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
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CAMERA PLATFORMS INTERNATIONAL, INC.
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 5 employees at March 10, 2003. 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
$154,000 per year, including common area maintenance and utilities,
property tax, and insurance. The Company's lease expires on June 30, 2007.
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 2002.
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
------ ---- ----
2000 1st Quarter................................................ .3438 .2150
2nd Quarter................................................ .3750 .2150
3rd Quarter................................................ .1250 .0625
4th Quarter................................................ .3750 .2500
2001 1st Quarter................................................ .3750 .2500
2nd Quarter................................................ .1200 .0800
3rd Quarter................................................ .1200 .0500
4th Quarter................................................ .0600 .0400
2002: 1st Quarter................................................ .0400 .0400
2nd Quarter................................................ .1800 .0400
3rd Quarter................................................ .0800 .0100
4th Quarter................................................ .0200 .0100
2003 1st Quarter................................................ .0200 .0100
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CAMERA PLATFORMS INTERNATIONAL, INC.
As of March 10, 2003, there were approximately 1500 beneficial owners of
23,740,964 outstanding shares of the Company's common stock, held by
approximately 504 shareholders of record.
The Company has not paid a dividend on its common stock since inception.
Item 6 - Selected Consolidated Financial Data
Year ended 12/31 2002 2001 2000 1999 1998
- ---------------- ---------- ---------- ---------- ---------- ----------
Revenues $784,000 $918,000 $1,069,000 $1,712,000 $2,245,000
Net Profit (loss) (756,000) (669,000) 907,000 (1,644,000) (4,551,000)
Total assets 106,000 793,000 1,291,000 1,971,000 3,249,000
Long-term debt 1,725,000 1,702,000 1,572,000 1,500,000 6,231,000
Net income (loss) per
share of common stock ($0.03) ($0.03) $0.05 ($0.12) ($0.35)
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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,
2002 2001 2002 2001 2002 2001 2002 2001
-------------------- -------------------- -------------------- --------------------
Revenues $162,000 $284,000 $168,000 $279,000 $237,000 $185,000 $217,000 $170,000
Cost of sales and rentals 274,000 298,000 278,000 307,000 288,000 292,000 288,000 269,000
Selling, general and
administrative 51,000 70,000 66,000 71,000 52,000 63,000 68,000 79,000
-------- -------- -------- -------- -------- -------- -------- --------
Operating (loss) (163,000) (84,000) (176,000) (99,000) (103,000) (170,000) (139,000) (178,000)
Interest expense, net (44,000) (43,000) (46,000) (41,000) (44,000) (42,000) (45,000) (44,000)
Impairment loss on
long-lived assets - - - - - - - -
Other income
(expense), net - (12,000) - 3,000 (1,000) 115,000 5,000 (74,000)
---------- ---------- ---------- ---------- --------- -------- ---------- ----------
Net income (loss) ($207,000) ($139,000) ($222,000) ($137,000) ($148,000) ($97,000) ($179,000) ($296,000)
========== ========== ========== ========== ========= ======== ========== ==========
Net (loss) per share
of common stock ($0.01) ($0.01) ($0.01) ($0.01) ($0.01) ($0.00) ($0.00) ($0.01)
Weighted average number
of shares outstanding 23,740,964 23,740,964 23,740,964 23,740,764 23,740,964 23,740,964 23,740,964 23,740,964
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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 the 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. The Company had $25,000 and $48,000 of undrawn funds
available at December 31, 2002 and December 31, 2001 respectively. In
addition, the Company has failed to make interest payments totaling $167,000
to DOOFF, LLC. It is expected, but not certain, 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. If sufficient funds are
not available, the Company may be required to curtail or cease operations.
STOCK OPTIONS
On July 1, 2001, the Board of Directors adopted the 2001 Stock Option Plan to
provide for the issuance of incentive stock options and nonqualified stock
options as a means of attracting, motivating and retaining directors, officers
and key employees and consultants of the Company.
Concurrent with the adoption of the 2001 Stock Option, the Board of Directors
authorized the issuance of options to purchase 300,000 shares of the Company's
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CAMERA PLATFORMS INTERNATIONAL, INC.
stock to each of the Company's five directors. The options were priced at
$0.11, which was above the market price of the Company's stock at the date
of issuance.
Results of Operations
2002 versus 2001
In 2002, revenues decreased by $134,000, or approximately 15%, as compared
with 2001. The largest decrease, $52,000 is attributable to reduced
rental days for the Company's Akela cranes. Beginning in 2001, the
individuals from whom the Company acquired the Akela cranes have
introduced and marketed for rental new cranes which compete directly
with the Akela. In addition, continued "runaway production", that is,
production moving outside the United States, has particularly affected
the Company's Akela rentals. Although located throughout the United
States, the cranes are difficult and expensive to move to a remote
location for a single production usage. In addition to the reduced
revenues from Akela crane rentals, dolly and standard crane rentals
also declined by $35,000, or about 17%.
Costs of rentals decreased by 3%, due primarily to lower depreciation
expense. The gross negative margin decreased by 38% as primarily
fixed costs were applied to a reduced revenue base.
Selling, general and administrative expenses decreased by $46,000 from 2001,
primarily due to reduced payroll.
2001 versus 2000
The tragedy of September 11, 2001 adversely affected all television, feature
and commercial production throughout the nation. The terrorist action
negatively affected the Company's revenues during the third and fourth
quarters of 2001. In addition, continued loss of production days in Los
Angeles to Canada for feature film and commercials has contributed to a
general decline in business. Total revenues decreased by 14% from 2000.
Most of the decrease came from dolly and crane rentals. Camera cars rental
revenues were down 3% from 2000.
Cost of rentals decreased by 6% because of continued cost management.
Depreciation of equipment accounted for 52% of rental costs. The gross
negative margin on rentals increased from -$180,000 to -$248,000 because of
a high amount of fixed versus variable rental costs. Rental activities
generated a positive gross margin before depreciation of $359,000.
Selling, general and administrative expenses decreased by $86,000 from 2000.
Payroll decreased by $55,000 and advertising costs decreased by $31,000.
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 the first order of
the Company's hydraulic dolly was once again delayed; delivery was expected
in mid or late 2001. The Company has since abandoned the hydraulic dolly
program.
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.
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CAMERA PLATFORMS INTERNATIONAL, INC.
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.
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.
Item 7A - Quantitative and Qualitative Disclosures About Market Risk
The Company owns no financial instruments or other assets, nor has it entered
into any contracts or commitments, which would expose it to market risks such
as interest rate risk, foreign currency exchange rate risk or commodity
price risk as required to be disclosed pursuant to Regulation S-K, Item 305,
of the 1934 Securities Exchange Act, as amended.
Item 8 - Financial Statements and Supplementary Data
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
Page
Independent Auditors' Report 14
Balance Sheets at
December 31, 2002 and 2001 15
Statements of Operations for the Years Ended
December 31, 2002, 2001 and 2000 16
Statements of Cash Flows for the Years Ended
December 31, 2002, 2001 and 2000 17
Statement of Shareholders' Deficit for the Years
ended December 31, 2002, 2001 and 2000 19
Notes to Financial Statements 20
Schedule II - Valuation and Qualifying Accounts for the
Years Ended December 31, 2002, 2001 and 2000 27
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
INDEPENDENT AUDITORS' REPORT
Board of Directors
Camera Platforms International, Inc.
We have audited the accompanying balance sheets of Camera
Platforms International, Inc. (the "Company") as of
December 31, 2002 and 2001, and the related statements of
operations, shareholders' deficit and cash flows for the years ended
December 31, 2002, 2001 and 2000. 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 auditing standards generally accepted
in the United States of America. Those standards 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. as of December 31, 2002 and 2001, and the
results of their operations and their cash flows for the years ended December
31, 2002, 2001 and 2000 in conformity with accounting principles generally
accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has suffered recurring losses from
operations, negative cash flows from operations, and has a net capital
deficiency that raise substantial doubt about its ability to continue
as a going concern. Managment's plans with regard to these matters are
also described in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
We have also audited the Schedules of Valuation and Qualifying Accounts for
each of the three years in the period ended December 31, 2002. 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
January 21, 2003
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CAMERA PLATFORMS INTERNATIONAL, INC.
BALANCE SHEETS
December 31, 2002 and 2001
2002 2001
ASSETS
Current Assets
Cash $2,000 $ 3,000
Accounts receivable, less allowance for doubtful
accounts of $5,000 in 2002 and 2001 36,000 54,000
Other receivable - Note 3 - 75,000
Prepaid expenses 20,000 40,000
------- -------
Total current assets 58,000 172,000
Property and equipment, net of depreciation,
amortization and rental asset valuation
allowance - Note 3 26,000 599,000
Deposits and other assets 22,000 22,000
-------- ----------
$106,000 $793,000
======== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $43,000 $56,000
Accrued interest - Note 4 167,000 85,000
Accrued expenses 35,000 40,000
Accrued taxes 44,000 62,000
------- -------
Total current liabilities 289,000 243,000
Long Term Debt - Related Party - Note 4 1,725,000 1,702,000
Commitments and Contingencies - Note 7
Shareholders' Equity (deficit)
Common stock $.0005 par value; 100,000,000
shares authorized; 23,740,964 shares issued
and outstanding - Notes 1 and 6 12,000 12,000
Additional paid-in capital 27,037,000 27,037,000
Accumulated deficit (28,957,000) (28,201,000)
------------ ------------
Total shareholders' equity (deficit) (1,908,000) (1,152,000)
----------- -----------
$106,000 793,000
=========== ===========
SEE INDEPENDENT AUDITORS' REPORT AND NOTES TO FINANCIAL STATEMENTS.
CAMERA PLATFORMS INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
For the Years ended December 31, 2002, 2001 and 2000
2002 2001 2000
Revenues
Revenues from rental operations $784,000 $918,000 $1,059,000
Net product sales -- -- 10,000
-------- ---------- ----------
784,000 918,000 1,069,000
Expenses
Cost of rental operations 1,128,000 1,166,000 1,238,000
Cost of sales -- -- 1,000
Selling, general and administrative 237,000 283,000 369,000
--------- --------- ---------
1,365,000 1,449,000 1,608,000
Operating loss (581,000) (531,000) (539,000)
Interest expense, net (179,000) (170,000) (168,000)
Other income (expense), net 4,000 32,000 (254,000)
Loss from continuing operations (756,000) (669,000) (961,000)
--------- --------- -----------
Net income (loss) from
discontinued operations, Note 10 -- -- 235,000
Loss before extraordinary item (756,000) (669,000) (726,000)
Extraordinary item, Note 1 -- -- 1,633,000
---------- --------- ------------
Net income (loss) ($756,000) ($669,000) $907,000
========== ======== ============
Basic and diluted income (loss) per share:
Loss from continuing operations ($0.03) ($0.03) ($0.05)
Extraordinary item -- -- 0.09
Income (loss) from discontinued operations -- -- 0.01
------- ------- -------
Net income (loss) ($0.03) ($0.03) ($0.05)
======= ======= =======
Weighted average shares outstanding 23,740,964 23,740,964 18,850,225
SEE INDEPENDENT AUDITORS' REPORT AND NOTES TO FINANCIAL STATEMENTS.
17
CAMERA PLATFORMS INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS
For the Years ended December 31, 2002, 2001 and 2000
2002 2001 2000
OPERATING ACTIVITIES
Net income (loss) ($756,000) ($669,000) $907,000
Adjustments to reconcile net income
(loss) to net cash used in operating
activities:
Depreciation and amortization 573,000 607,000 647,000
(Gain) loss on disposal of equipment -- (60,000) 19,000
Gain on bankruptcy restructuring -- -- (1,633,000)
Changes in assets and liabilities:
Accounts and other receivables 93,000 6,000 --
Net investment in lease and
installment sale -- -- 34,000
Prepaid expenses 20,000 (10,000) 14,000
Deposits and other assets -- (2,000) (10,000)
Accounts payable (13,000) 6,000 28,000
Accrued interest 82,000 71,000 14,000
Deferred revenue -- -- (6,000)
Customer deposits -- -- 4,000
Other current liabilities (23,000) (36,000) (119,000)
Liabilities subject to compromise -- -- (53,000)
--------- -------- ---------
Net cash used in operating activities (24,000) (87,000) (48,000)
INVESTING ACTIVITIES
Proceeds from sale of property
and equipment -- -- 2,000
Purchases of property and equipment -- (51,000) (24,000)
-------- -------- -------
Net cash (used in)
investing activities -- (51,000) (22,000)
SEE INDEPENDENT AUDITORS' REPORT AND NOTES TO FINANCIAL STATEMENTS.
18
CAMERA PLATFORMS INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS, continued
For the Years ended December 31, 2002, 2001 and 2000
FINANCING ACTIVITIES
Proceeds from borrowings of long-term debt 51,000 152,000 165,000
Principal payments on long-term debt (28,000) (22,000) (93,000)
------- ------- --------
Net cash provided by financing activities 23,000 130,000 72,000
Net increase (decrease) in cash (1,000) (8,000) 2,000
Cash at beginning of year 3,000 11,000 9,000
------- ------- --------
Cash at end of year $2,000 $3,000 $11,000
Supplemental disclosure of cash flow information
Cash paid during the year for:
Interest $97,000 $99,000 $191,000
Income taxes $1,000 $1,000 $1,000
SEE INDEPENDENT AUDITORS' REPORT AND NOTES TO FINANCIAL STATEMENTS.
19
CAMERA PLATFORMS INTERNATIONAL, INC.
STATEMENT OF SHAREHOLDERS' EQUITY
For the Years ended December 31, 2002, 2001 and 2000
Number of Common Paid-in Accumulated
Shares Stock Capital Deficit Total
Balance at
December 31, 2000 23,740,964 $12,000 $27,037,000 ($27,532,000) $(483,000)
Net loss for the year -- -- -- (669,000) (669,000)
---------- ------- ----------- ------------- ----------
Balance at
December 31, 2001 23,740,964 $12,000 $27,037,000 ($28,201,000) ($1,152,000)
Net loss for the year -- -- -- (756,000) (756,000)
Balance at
December 31, 2002 23,740,964 $12,000 $27,037,000 ($28,957,000)($1,908,000)
========== ======= =========== ============= ============
SEE INDEPENDENT AUDITORS' REPORT AND NOTES TO FINANCIAL STATEMENTS.
20
CAMERA PLATFORMS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002
1. DESCRIPTION OF BUSINESS AND GOING CONCERN
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
companies. The Company designs, manufactures, rents and leases a wide variety
of production equipment to the film and video industries.
The accompanying financial statements have been prepared on a going concern
basis of accounting which contemplates continuity of operations, realization
of assets, liabilities, and commitments in the normal course of business.
The accompanying financial statements do not reflect any adjustments that
might result if the Company is unable to continue as a going concern.
The Company's losses, negative cash flows from operations and its working
capital deficit raise substantial doubt about the Company's ability to
continue as a going concern and the appropriateness of using the going
concern basis, which is dependent upon, among other things, an additional
cash infusion. The Company is currently negotiating an increase in the
amount of credit provided by DOOFF LLC. Management believes that this
increase should provide the additional cash required for the Company's
operations and the meeting of its obligations.
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
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 began 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
$5,126,000 before the above conversion, were converted into 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 Plan.
The Reorganization Plan approved by the Bankruptcy Court increased the
authorized number of common shares to 100,000,000.
On August 1, 2001, the Bankruptcy Court issued its Final Decree Pursuant to
Section 350 of the Bankruptcy Court, recognizing the completion of the
execution of the Reorganization Plan by the Company, ending the Bankruptcy
case and removing the Company from oversight by the Bankruptcy Court.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
See independent auditors' report
21
CAMERA PLATFORMS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002
Leasing Operations
The Company's leasing operations consist of operating 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.
Property and Equipment
Property and equipment is stated at cost, less accumulated depreciation and
amortization. Depreciation and amortization is generally determined using
the straight-line method over the estimated useful life of the property and
equipment, using periods ranging from three to ten years.
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.
See independent auditors' report
22
CAMERA PLATFORMS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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 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 not been included in the
calculation of the weighted average shares of common stock as they would have
an antidilutive effect.
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.
Advertising Costs
The Company expenses advertising costs over the period it benefits, generally
12 months. Advertising costs expensed totaled $10,000, $26,000, and $22,000
for the years ended December 31, 2002, 2001, and 2000, respectively, and were
recorded as part of selling, general and administrative expenses. At December
31, 2002, 2001 and 2000 advertising costs capitalized, primarily related to
magazine ads and exhibition costs amounted to $0, $7,000 and $11,000,
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
See independent auditors' report
23
CAMERA PLATFORMS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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 estimates 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.
New Accounting Standards
In 2001, the Company also adopted SFAS No. 140, "Accounting for Transfer and
Services of Financial Assets and Extinguishment of Liabilities", and FASB
No. 141, "Business Combinations" with no material impact on the financial
statements.
In 2002, the Company adopted FASB No. 142, "Goodwill and other Intangible
Assets"and FASB No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets:. These pronouncements had no material effect on the
Company's financial statements.
Starting in 2003, the Company is also subject to the provision of FASB No. 143,
"Accounting for Asset Retirement Obligations". This new pronouncement is
expected to have no material effect on the Company's financial statements.
The Company operates in a single business segment. The Company leases and
rents equipment for the motion picture, television and theatrical production
and music industries.
3. PROPERTY AND EQUIPMENT
December 31,
2002 2001
Equipment available for lease $6,417,000 $6,417,000
Machinery and equipment 348,000 348,000
Leasehold improvements 63,000 63,000
Furniture and fixtures 62,000 62,000
Automobiles and trucks 119,000 119,000
--------- ---------
7,009,000 7,009,000
See independent auditors' report
24
CAMERA PLATFORMS INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002
3. PROPERTY AND EQUIPMENT - CONTINUED
Less accumulated depreciation and amortization $6,441,000 $5,868,000
Less rental asset valuation allowance 542,000 542,000
--------- ---------
$26,000 $599,000
During 2001, $108,000 of equipment that were previously presented as
inventory and $71,000 of parts previously presented as prepaid expenses
were reclassified as equipment available for lease.
During 2001, equipment on lease with a cost of $87,000 and accumulated
depreciation of $72,000 was stolen. The Company negotiated a settlement
with its insurance company and was awarded $75,000. This amount was recorded
as a receivable at December 31, 2001 and the Company recognized a gain on
disposal of assets of $60,000. $70,000 of the amount was collected in 2002.
Accumulated depreciation and amortization pertaining to equipment available
for lease amounted to $5,850,000 and $5,279,000 at December 31, 2002 and 2001,
respectively. During the year ended December 31, 2000, the Company repossessed
equipment as settlement for an outstanding balance receivable of $42,000.
4. 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 at
10%, maturing June 2005 and also secured by all the assets of the Company.
The balance outstanding on this line of credit was $225,000 and $202,000 at
December 31, 2002 and 2001, respectively. These loans are with DOOFF, LLC.
Two directors and principal shareholders of the Company are also principals
of DOOFF, LLC. As of December 31, 2002, the Company was $167,000 in arrears
in its interest payments to DOOFF, LLC. due under the terms of these loans.
5. 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, 2002, the Company has net operating loss-carry forwards of
approximately $25 million for federal tax purposes, which expire from 2006
to 2022. 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 operating loss carryforwards of
approximately $3 million for California tax purposes, which expire from 2003
to 2012.
At December 31, 2002, total deferred tax assets, consisting principally of
net operating loss carryforwards, amounted to approximately $9 million. For
financial reporting purposes, a valuation allowance has been recognized in an
amount equal to such deferred tax assets due to the uncertainly 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, and the fact that the gain
on restructuring of debt recorded in 2000 was not taxable.
See independent auditors' report
25
CAMERA PLATFORMS INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002
6. 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 $0.25 per
share.
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 for 1,100,000 shares
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 grant.
Stock options to purchase shares of common stock were granted to certain
officers, key employees and consultants as follows:
Options Outstanding
Shares Weighted Avg. Exercise
Price
Outstanding at January 1, 2001 1,100,000 $0.25
Granted 1,500,000 $0.11
Exercised -- --
Terminated or expired -- --
---------- -----
Outstanding at December 31, 2001 2,600,000 $0.17
Granted -- --
Exercised -- --
Terminated or expired 1,100,000 $0.25
--------- -----
Outstanding at December 31, 2002 1,500,000 $0.11
========= =====
There are 1,500,000 options exercisable at December 31, 2002, and the weighted
average remaining contractual life of the options outstanding is 5.5 years.
SFAS No. 123, "Accounting for Stock-Based Compensation", requires pro forma
information regarding net income (loss)using compensation that would have
been incurred if the Company had accounted for its stock options under the
fair value in accordance with that statement. The fair value of options
granted, which as been estimated at $0 at the date of the grant, was
determined using the Black-Scholes pricing model using the following
assumptions:
Risk free interest rate 4.76%
Stock volatility factor .3
Weighted average expected option life 7 years
Expected dividend yield 0
7. COMMITMENTS AND CONTINGENCIES
Lease
On July 1, 2002 the Company entered into the five year option period on
the lease of its premises. The lease expense increases annually based on a
cost of living index and the Company is also responsible for common area
maintenance charges, utilities, property taxes and insurance.
Rent expense with respect to this lease was approximately $154,000
and $150,000 for the years ended December 31, 2002 and 2001, respectively.
Future minimum rental payments for the next five years are as follows:
Year ending December 31:
2003 $159,000
2004 $164,000
2005 $169,000
2006 $174,000
2007 $180,000
See independent auditors' report
26
CAMERA PLATFORMS INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002
8. SALES TO MAJOR CUSTOMERS AND GEOGRAPHIC AREAS
No revenue derived from a single customer accounted for more than ten percent
of total revenue during 2002, 2001, or 2000. No geographic area outside the
United States accounted for more than ten percent of total sales during the
last three years.
9. 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, 2002 and 2001.
10. DISCONTINUED OPERATIONS
In 2000, the Company received an insurance settlement of $235,000 on a claim
for inventory losses associated with the Company's former operations in
Nashville/Atlanta in 1998.
See independent auditors' report
27
CAMERA PLATFORMS INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Balance Balance
January 1, Additions Deductions December 31,
YEAR ENDED DECEMBER 31, 2000
Asset valuation allowance $542,000 -- -- $542,000
Allowance for doubtful accounts 5,000 -- -- 5,000
-------- ------ -- --------
$547,000 -- $0 $547,000
======== ====== == ========
YEAR ENDED DECEMBER 31, 2001
Asset valuation allowance $542,000 -- -- $542,000
Allowance for doubtful accounts 5,000 -- -- 5,000
-------- -- -- --------
$547,000 $0 $0 $547,000
======== == == ========
YEAR ENDED DECEMBER 31, 2002
Asset valuation allowance $542,000 -- -- $542,000
Allowance for doubtful accounts 5,000 -- -- 5,000
-------- -- -- --------
$547,000 $0 $0 $547,000
======== == == ========
See Independent Auditors' Report and Notes to the Consolidated Financial
Statements
28
CAMERA PLATFORMS INTERNATIONAL, INC.
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, 2002 for each
director and executive officer of the Company:
Name Age Position with the Company
Herbert Wolas 67 Chairman of the Board, Chief Financial Officer
Martin Perellis 57 Director, President, Chief Executive Officer
William O. Fleischman 57 Director
Rick Hicks 59 Director
Michael Sayres 72 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 and Akil Music. 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.
29
CAMERA PLATFORMS INTERNATIONAL, INC.
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.
COMPLIANCE WITH SECTION 16(a)
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the
Company's executive officers and directors and persons who own more than 10%
of a registered class of the Company's equity securities to file with the
Securities and Exchange Commission initial statements of beneficial ownership,
reports of changes in ownership and annual reports concerning their ownership
of commons stock and other equity securities of the Company, on Forms 3, 4
and 5 respectively. Executive officers, directors and greater than 10%
shareholders are required by Commission regulations to furnish the Company with
copies of all Section 16(a) reports they file. To the best of the Company's
knowledge (based solely upon a review of the Forms 3, 4, and 5 filed), no
officer, director or 10% beneficial shareholder failed to file on a timely
basis any reports required by Section 16(a) of the Securities Exchange Act
of 1934, as amended.
Item 11 - Executive Compensation
Compensation of Directors
Concurrent with the adoption of the 2001 Stock Option, the Board of Directors
authorized the issuance of options to purchase 300,000 shares of the Company's
stock to each of the Company's five directors. The options were priced at
$0.11, which was above the market price of the Company's stock at the date
of issuance.
The Directors of the Company received no other compensation.
Compensation of Executive Officers
No executive officer received any compensation for 2002. There were no
options granted to any executive officer during 2002.
30
CAMERA PLATFORMS INTERNATIONAL, INC.
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 10, 2003.
Amount and Nature
Name and Address of of Beneficial Percent of
Beneficial Owner Ownership Class
Herbert Wolas 6,684,054 (1) 27.3% (4)
1875 Century Park East, Suite 600
Los Angeles, CA 90067
Martin Perellis 6,684,054 (2) 27.3% (4)
7860 Torreyson Drive
Los Angeles, CA 90046
William O. Fleischman 5,703,168 (3) 23.7% (4)
1900 Avenue of the Stars, Suite 2410
Los Angeles, CA 90067
(1) Consists of (a) 5,934,054 share owned by the Wolas Family Limited
Partnership. Mr. Wolas' children and a trust for the benefit of his
grandchildren, and (b) 450,000 shares 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), and (c) 300,000 shares which would be issued upon the
exercise of stock options issued to Mr. Wolas as a director of the
Company.
(2) Consists of (a) 5,934,054 shares owned by the Perellis 2000 Trust of
which Mr. Perellis is a beneficiary, and (b) 450,000 shares 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), and (c) 300,000 shares which would
be issued upon the exercise of stock options issued to Mr. Perellis as a
director of the Company.
(3) Consists of (a) 5,403,168 shares of the Company's common stock owned by
SAC, of which Mr. Fleischman's minor child is the owner of 64% of the
outstanding shares, and (b)300,000 shares which would be issued upon
the exercise of stock options issued to Mr. Fleischman as a director
of the Company.
(4) Percentage is based on the shares of the Company's common stock which
would be outstanding upon giving effect to the assumed exercise of
the warrants and options referenced above.
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
31
CAMERA PLATFORMS INTERNATIONAL, INC.
beneficially by all directors, nominees and officers as a group as of
March 10, 2003.
Amount and Nature
Name of Beneficial Percent of
Beneficial Owner Ownership Class
Herbert Wolas 6,684,054 (1) 27.3% (4)
Martin Perellis 6,684,054 (2) 27.3% (4)
William O. Fleischman 5,703,168 (3) 23.7% (4)
Rick Hicks 300,000 -
Michael Sayres 300,000 -
---------- -----
All officers and directors as a
group (5 persons) 19,671,276 78.3%
========== =====
(1) Consists of (a) 5,934,054 share owned by the Wolas Family Limited
Partnership. Mr. Wolas' children and a trust for the benefit of his
grandchildren, and (b) 450,000 shares 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 LLF.), and (c) 300,000 shares which would be issued upon the
exercise of stock options issued to Mr. Wolas as a director of the
Company.
(2) Consists of (a) 5,934,054 shares owned by the Perellis 2000 Trust of
which Mr. Perellis is a beneficiary, and (b) 450,000 shares 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), and (c) 300,000 shares which would
be issued upon the exercise of stock options issued to Mr. Perellis as a
director of the Company.
(3) Consists of (a) 5,403,168 shares of the Company's common stock owned by
SAC, of which Mr. Fleischman's minor child is the owner of 64% of the
outstanding shares, and (b)300,000 shares which would be issued upon
the exercise of stock options issued to Mr. Fleischman as a director
of the Company.
(4) Percentage is based on the shares of the Company's common stock which
would be outstanding upon giving effect to the assumed exercise of
the warrants and options referenced above.
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.
32
CAMERA PLATFORMS INTERNATIONAL, INC.
Item 14 - Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure that
information required to be disclosed in the reports filed or
submitted under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in the SEC's rules
and forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information
required to be disclosed in the reports filed under the Exchange Act is
accumulated and communicated to management, to allow timely decisions
regarding required disclosures.
Within the 90 days prior to this report, the Company carried out an
evaluation under the supervision and with the participation of the
Company's management, including the Company's Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the design and
operation of the Company's disclosure controls and procedures. Based
upon and as of the date of that evaluation, the Company's Chief Executive
Officer and Chief Financial Officer concluded that the Company's
disclosure controls and procedures are effective to ensure that the
information required to be disclosed in the reports the Company files and
submits under the Exchange Act is recorded, processed, summarized, and
reported as and when required.
(b) Changes in Internal Controls
There were no changes in the Company's internal controls or in other
factors that could have significantly affected those controls subsequent
to the date of the Company's most recent evaluation.
Item 15 - 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 16.
Exhibits
3.1 (1) Certificate of Incorporation, as amended.
3.2 (2) By-Laws, as amended.
10.1 (3) Form of Non-Statutory Stock Option Agreement.
10.2 (4) Company's 1990 Stock Option Plan.
2.1 (5) Second Amended Plan of Reorganization dated as of April 17, 2000
21.1 Subsidiaries of Registrant.
99.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
(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.
(5) Incorporated by reference to the Company's Form 10-K Annual Report for
the year ended December 31, 2000.
(b) Reports on Form 8-K
The Company filed no reports on Form 8-K during the quarter ended
December 31, 2002.
(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.
33
CAMERA PLATFORMS INTERNATIONAL, INC.
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 10, 2003
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 10, 2003 Chairman of the Board and Chief Financial Officer
By: S/Herbert Wolas
Herbert Wolas
March 10, 2003 Director, President and Chief Executive Officer.
By: S/Martin Perellis
Martin Perellis
March 10, 2003 Director
By: S/William O. Fleischman
William O. Fleischman
March 10, 2003 Director
By: S/Rick Hicks
Rick Hicks
March 10, 2003 Director
By: S/Michael Sayres
Michael Sayres
34
CERTIFICATIONS
I, Herbert Wolas, certify that:
1. I have reviewed this annual report on Form 10-K of Camera Platforms,
Inc.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact necessary to make the statements made, in
light of circumstances under which such statements were made, not
misleading with respect to the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant is made known to
us by others within the entity, particularly during the period
in which this annual report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior
to the filing date of this annual report (the "Evaluation
Date"); and
c. presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses
in internal controls; and
b. any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
35
6. The registrant's other certifying officer and I have indicated in this
annual report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
March 10, 2003 By: /s/ Herbert Wolas
_____________________
Herbert Wolas
Chairman of the Board, and
Chief Financial Officer
36
CERTIFICATIONS
I, Martin Perellis, certify that:
1. I have reviewed this annual report on Form 10-K of Camera Platforms,
Inc.;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact necessary to make the statements made, in
light of circumstances under which such statements were made, not
misleading with respect to the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant is made known to
us by others within the entity, particularly during the period
in which this annual report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior
to the filing date of this annual report (the "Evaluation
Date"); and
c. presented in this annual our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses
in internal controls; and
b. any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
37
6. The registrant's other certifying officer and I have indicated in this
annual report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
March 10, 2003 By: /s/ Martin Perellis
_____________________
Martin Perellis,
President
and Chief Executive Officer