` 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, 2004
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,
7to 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, 2005 was $830,933(based on the average bid and
aske 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, 2005.
2
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,
RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES 7
Item 6. SELECTED 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 29
Item 9A. CONTROLS AND PROCEDURES 29
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT 29
Item 11. EXECUTIVE COMPENSATION 30
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT 31
Item 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS 32
Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 32
PART IV
Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 33
SIGNATURES 34
3
CAMERA PLATFORMS INTERNATIONAL, INC.
PART I
Item 1 - Business
Camera Platforms International, Inc., a Delaware corporation, ("Shotmaker"
or "the Company") 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 COLLATERAL, THE AMITYVILLE HORROR,FORTY YEAR OLD VIRGIN,
BLACK DON, CONSTANTINE, and IF ONLY IT WERE TRUE. In addition, a number of
prime time television programs and series use Shotmaker equipment such as
GILMORE GIRLS, MALCOLM IN THE MIDDLE, FEAR FACTOR, GEORGE LOPEZ, ACCORDING TO
JIM and THE BERNIE MAC SHOW.
Products
The Shotmaker Camera Car fleet currently consists of 15 camera cars, which
include one Shotmaker "Elite Plus", four Shotmaker "Elites",
one Shotmaker "Premier Plus", two Shotmaker "Premiers", six Shotmaker
"Classics" and one Shotmaker "Standard". One Classic and one Standard are
located at Silvercup Studios in New York under a split rental agreement. All
the remaining camera cars are based at the Company's headquarters and rented
throughout the western United States. 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.
4
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 170-200-amp
AC 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.
5
CAMERA PLATFORMS INTERNATIONAL, INC.
Shotmaker Dollies, Cranes and Accessories
Major items of equipment in the Dollies and Cranes rental fleet include: 15
dollies (12 Super Panthers and 3 Mini Panthers); 12 Pegasus cranes; 9 jib arms
(7 super Jibs and 2 Mini Jibs); 2 Akela Jr. cranes; 3 Enlouva cranes;
approximately 150 feet of tubular dolly track. 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 62 feet.
6
CAMERA PLATFORMS INTERNATIONAL, INC.
Marketing, Competition, Intellectual Property and Awards
Marketing. The Company's marketing efforts are primarily conducted by
direct sales efforts and limited advertisements in trade publications.
Competition. No other company currently owns a fleet of camera cars as
large as the Company's. In recent years several small fleets
of camera cars have emerged featuring 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. 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 Plus.
The introduction and marketing of the Strada has been a significant factor
in the reduction in Akela crane revenues.
During the fourth quarter of 2004 and early 2005, the Company sold significant
number of Enlouva and Akela cranes, some of which were sold into the regional
rental market in which the Company operates. The Company no longer owns any
Akela Sr. cranes. It is expected that these sales will result in additional
competition for the Company's crane inventory.
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
7
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 two full-time employees at March 10, 2005. 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
approximately $104,000 per year, including common area maintenance and
utilities, property tax, and insurance. The Company's lease expires on
December 31, 2007.
Item 3 - Legal Proceedings
The Company is involved in certain legal actions and claims arising in the
ordinary course of business. It is the opinion of management, based on
advice of legal counsel, that such litigation and claims will be resolved
without material effect on the Company's financial position.
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 2004.
PART II
Item 5 - Market for Registrant's Common Equity,Related Stockholder Matters
and Issuer Purchases of Equity Securities
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
------ ---- ----
2002: 1st Quarter................................................ .0400 .0400
2nd Quarter................................................ .1800 .0400
3rd Quarter................................................ .0800 .0100
4th Quarter................................................ .0200 .0100
2003 1st Quarter................................................ .0300 .0200
2nd Quarter................................................ .0300 .0200
3rd Quarter................................................ .0300 .0300
4th Quarter................................................ .0300 .0300
2004 1st Quarter................................................ .0400 .0300
2nd Quarter................................................ .0300 .0300
3rd Quarter................................................ .0300 .0300
4th Quarter................................................ .0400 .0300
2005 1st Quarter................................................ .0300 .0300
8
CAMERA PLATFORMS INTERNATIONAL, INC.
As of March 10, 2005, 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 Financial Data
Year ended 12/31 2004 2003 2002 2001 2000
- ---------------- ---------- ---------- ---------- ---------- ----------
Revenues $644,000 $704,000 $784,000 $918,000 $1,069,000
Net Profit (loss) (105,000) (156,000) (756,000) (669,000) 907,000
Total assets 79,000 130,000 106,000 793,000 1,291,000
Long-term debt 693,000 1,734,000 1,725,000 1,702,000 1,572,000
Net income (loss) per
share of common stock ($0.01) ($0.01) ($0.03) ($0.03) $0.05
9
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,
2004 2003 2004 2003 2004 2003 2004 2003
-------------------- -------------------- -------------------- --------------------
Revenues $161,000 $216,000 $181,000 $171,000 $168,000 $144,000 $134,000 $173,000
Cost of sales and rentals 141,000 145,000 146,000 143,000 128,000 147,000 108,000 158,000
Selling, general and
administrative 56,000 53,000 51,000 58,000 38,000 63,000 80,000 90,000
-------- -------- -------- -------- -------- -------- -------- --------
Operating income (loss) (36,000) 18,000 (16,000) (30,000) 2,000 (66,000) (54,000) (75,000)
Interest expense, net (44,000) (43,000) (46,000) (41,000) (46,000) (40,000) (48,000) (44,000)
Other income
(expense), net - - 164,000 - - 183,000 1,000
---------- ---------- ---------- ---------- --------- -------- ---------- ----------
Net income (loss) ($80,000) ($25,000) ($62,000) $93,000 ($44,000) ($106,000) $81,000 ($118,000)
========== ========== ========== ========== ========= ======== ========== ==========
Net (loss) per share
of common stock ($0.01) ($0.00) ($0.00) ($0.00) ($0.00) ($0.00) $0.00 ($0.00)
Weighted average number
of shares outstanding 23,740,964 23,740,964 23,740,964 23,740,964 23,740,964 23,740,964 23,740,964 23,740,964
10
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 a $250,000 revolving line of credit from its secured
lender DOOFF, LLC. The Company has been in material non-compliance with
the terms of the loan, and its lender has indicated that no further funds
will be advanced. The Company owed $194,000 under the revolving line as of
December 31, 2004. In addition, the Company has failed to make interest
payments totaling $467,000 to DOOFF, LLC. In the past, ongoing operations
have not provided sufficient cash to meet the Company's ongoing obligations
as they have 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
11
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
2004 versus 2003
Year-to-date
During 2004, the Company's total revenues continued to decline, falling by
approximately 9% to $644,000. A 6% increase in camera car rental income was
far offset by the 44% decrease in dolly and crane rentals coupled with a
39% decrease in Akela crane rentals. Camera car rentals continued to account
for the majority of the Company's rental revenues, up to 81% from 70% in
2003. During the fourth quarter of 2004, the Company sold significant numbers
of Enlouva and Akela cranes. The proceeds were used to pay overdue interest
and principal to its lender, and for working capital. The Company is
re-focusing its marketing and technical efforts on its traditional camera
car business.
Costs of rentals decreased in all categories. The largest components of
decrease were in payroll and rent expense. During 2004, the Company entered
into a new lease agreement by which it reduced its space by approximatately
50%. Corporate expenses were down by $44,000, also primarily through reductions
in rent and payroll.
Fourth Quarter 2004 versus fourth quarter 2003
During the fourth quarter of 2004, dolly, crane and Akela revenues were down
by 68%. Camera car rentals were down by 9%. There was a commensurate reduction
in cost of rentals of 39% for the dolly, crane and Akela category, and a 22%
decrease in camera car cost of rentals. The decrease were a result of lower
payroll and reduced occcupany expenses, coupled with lower insurance expense.
Corporate expenses declined by $14,000, due to reduced insurance, and rent,
offset by higher tax and bad debt expenses.
2003 versus 2002
In 2003, revenues decreased by $79,000, or approximately 10%, as compared with
2002. $40,000 of this decrease is attributable to reduced rental days
for the Company's dollies and standard cranes and camera cars. Camera car
rentals decreased by 8% and Akela crane rentals increased by 5%. Dollies and
standard cranes decreased by 24%. "Runaway production", that is, production
moving outside the United States, continues to adversely affect the Company's
rental operations.
Cost of rentals decreased by 47% due primarily the reversal of a previously
recorded valuation allowance on rental assets, which offsets the depreciation
expense recorded for the period.
The gross margin increased by 132%, to $111,000, also primarily due to
depreciation expense being offset by the reversal of the previously
recorded valuation allowance on rental assets.
Selling, general and administrative expenses increased by $27,000, or
approximately 11% as compared to 2002. The increase was primarily due to
higher insurance premiums and increased rent.
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.
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CAMERA PLATFORMS INTERNATIONAL, INC.
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.
13
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
Report of Independent Registered Public Accounting Firm 14
Balance Sheets at
December 31, 2004 and 2003 15
Statements of Operations for the Years Ended
December 31, 2004, 2003 and 2002 16
Statements of Cash Flows for the Years Ended
December 31, 2004, 2003 and 2002 17
Statement of Shareholders' Deficit for the Years
ended December 31, 2004, 2003 and 2002 19
Notes to Financial Statements 20
Schedule II - Valuation and Qualifying Accounts for the
Years Ended December 31, 2004, 2003 and 2002 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
Report of Independent Registered Public Accounting Firm
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, 2004 and 2003,
and the related statements of operations, shareholders' deficit and
cash flows for the years ended December 31, 2004, 2003 and 2002.
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 the standards of the Public
Company Accounting Oversight Board (United States). 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 financial position of Camera Platforms
International, Inc. as of December 31, 2004 and 2003, and the results of its
operations and its cash flows for the years ended December 31, 2004, 2003
and 2002 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, 2004. 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 25, 2005
15
CAMERA PLATFORMS INTERNATIONAL, INC.
BALANCE SHEETS
December 31, 2004 and 2003
2004 2003
ASSETS
Current Assets
Cash $28,000 $1,000
Accounts receivable, less allowance for doubtful
accounts of $5,000 in 2003 and 2002 21,000 34,000
Prepaid expenses 8,000 36,000
------- -------
Total current assets $57,000 71,000
Property and equipment, net of depreciation,
amortization and rental asset valuation
allowance - Note 3 - 37,000
Deposits and other assets 22,000 22,000
-------- ----------
79,000 $130,000
======== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $18,000 $40,000
Accrued interest - Note 4 467,000 316,000
Accrued expenses 33,000 35,000
Accrued taxes 37,000 44,000
Note payable - related party - Note 4 25,000
------- -------
Total current liabilities 555,000 460,000
Long Term Debt - Related Party - Note 4 1,693,000 1,734,000
Commitments and Contingencies - Notes 5 and 8
Shareholders' Deficit
Common stock $.0005 par value; 100,000,000
shares authorized; 23,740,964 shares issued
and outstanding - Notes 1 and 7 12,000 12,000
Additional paid-in capital 27,037,000 27,037,000
Accumulated deficit (29,218,000 (29,113,000)
------------ ------------
Total shareholders' Deficit (2,169,000) (2,064,000)
----------- -----------
$79,000 $130,000
=========== ===========
SEE INDEPENDENT AUDITORS' REPORT AND NOTES TO FINANCIAL STATEMENTS.
CAMERA PLATFORMS INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
For the Years ended December 31, 2004, 2003 and 2002
2004 2003 2002
Revenues
Revenues from rental operations $644,000 $704,000 $784,000
Net product sales -- -- --
-------- ---------- ----------
644,000 704,000 784,000
Expenses
Cost of rental operations $523,000 593,000 1,128,000
Selling, general and administrative 225,000 264,000 237,000
--------- --------- ---------
748,000 857,000 1,365,000
Operating loss (104,000) (153,000) (581,000)
Interest expense, net (184,000) (168,000) (179,000)
Other income (expense) 6,000 - 4,000
Gain on sale of fixed assets - net - Note 3 177,000 165,000 --
---------- ---------- ----------
Loss loss (105,000) (156,000) (756,000)
========== ========== ==========
Basic and diluted income (loss) per share:
Loss from continuing operations ($0.01) ($0.01) ($0.03)
------- ------- -------
Net income (loss) ($0.01) ($0.01) ($0.03)
======= ======= =======
Weighted average shares outstanding 23,740,964 23,740,964 23,740,964
SEE INDEPENDENT AUDITORS' REPORT AND NOTES TO FINANCIAL STATEMENTS.
17
CAMERA PLATFORMS INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS
For the Years ended December 31,
2004 2003 2002
OPERATING ACTIVITIES
Net loss ($105,000) ($156,000) ($756,000)
Adjustments to reconcile net
loss to net cash used in operating
activities:
Depreciation and amortization 80,000 288,000 573,000
Change in rental asset valuation allowance (80,000) (288,000) --
(Gain) loss on disposal of equipment (177,000) (165,000) --
Changes in assets and liabilities:
Accounts and other receivables 13,000 2,000 93,000
Prepaid expenses 28,000 (16,000) 20,000
Deposits and other assets -- -- --
Accounts payable (21,000) (5,000) (13,000)
Accrued interest 151,000 149,000 82,000
Other current liabilities (10,000) -- (23,000)
--------- --------- ---------
Net cash used in operating activities (121,000) (191,000) (24,000)
INVESTING ACTIVITIES
Proceeds from disposal of property
and equipment 214,000 170,000 --
Purchases of property and equipment (14,000) --
-------- -------- -------
Net cash provided by (used in)
investing activities 214,000 156,000 --
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,
2004 2003 2002
FINANCING ACTIVITIES
Proceeds from borrowings of long-term debt 112,000 219,000 51,000
Principal payments on long-term debt (178,000) (210,000) (28,000)
Proceeds from sale of third party equipment -- 25,000 --
-------- -------- --------
Net cash provided (used) by financing activities (66,000) 34,000 23,000
Net increase (decrease) in cash 27,000 (1,000) (1,000)
Cash at beginning of year 1,000 2,000 3,000
------- ------- --------
Cash at end of year $28,000 $1,000 $2,000
Supplemental disclosure of cash flow information
Cash paid during the year for:
Interest $32,000 $18,000 $97,000
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, 2004, 2003 and 2002
Number of Common Paid-in Accumulated
Shares Stock Capital Deficit Total
Balance at
December 31, 2002 23,740,964 $12,000 $27,037,000 ($28,957,000) ($1,908,000)
Net loss for the year -- -- -- (156,000) (156,000)
Balance at
December 31, 2003 23,740,964 $12,000 $27,037,000 ($29,113,000) ($2,064,000)
Net loss for the year -- -- -- (105,000) (74,000)
Balance at
December 31, 2004 23,740,964 $12,000 $27,037,000 ($29,218,000) ($2,138,000)
========== ======= =========== ============= ============
SEE INDEPENDENT AUDITORS' REPORT AND NOTES TO FINANCIAL STATEMENTS.
20
CAMERA PLATFORMS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004
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. There is no assurance that additional cash will be provided
or that cash flow from operations will be sufficient to meet the Company's
obligations. DOOFF, LLC. the current lender, has indicated that it will no
longer fund the Company. The Company has sold some of its equipment in 2004,
and will liquidate more assets in 2005 in order to fund its operations.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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
21
CAMERA PLATFORMS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004
See independent auditors' report
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 and Acccounts Receivable
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.
The Company maintains an allowance for doubtful accounts for estimated losses
that may arise if any of its customers are unable to make required payments.
Management specifically analyzes the age of customer balances, historical bad
debt experience, customer credit-worthiness, and changes in customer payment
terms when making estimates of the uncollectability of the Company's trade
accounts receivable balances. If the Company determines that the financial
condition of any of its customers has deteriorated, whether due to
customer-specific or general economic issues, increases in the allowance may
be made. Accounts receivable are written of when all collection attempts
have failed.
Advertising Costs
The Company expenses advertising costs over the period it benefits, generally
12 months. Advertising costs expensed totaled $7,000, $4,000, and $10,000
for the years ended December 31, 2004, 2003, and 2002, respectively, and were
recorded as part of selling, general and administrative expenses. At December
31, 2004, 2003 and 2002 no advertising costs were capitalized.
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
22
CAMERA PLATFORMS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004
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 statement of operations.
Stock-Based Compensation
The Company has adopted the disclosure-only provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation", amended by SFAS No. 148, 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 financial statements.
New Accounting Standards
In December 2004, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 123 (revised 2004) "Share-Based Payment" ("SFAS 123R") which is a
revision of SFAS No. 123, "Accounting for Stock-Based Compensation." This
statement eliminates the option of using the intrinsic value method of
accounting for employee stock options (historically utilized by the Company),
which generally resulted in the recognition of no compensation cost. The
provisions of the SFAS No. 123R require the recognition of employee services
received in exchange for awards of equity instruments based on the grant-date
fair value of the awards as determined by option pricing models. The calculated
compensation cost is recognized over the period that the employee is required to
provide services per the conditions of the award. SFAS No. 123R is effective for
the Company July 1, 2005. The adoption of this statement will not have a
material impact on the Company's financial statements.
In December 2003, the FASB issued SFAS No. 132 (revised December 2003)
"Employers' Disclosures About Pensions and Other Post Retirement Benefits"
("SFAS No. 132"). This revised pronouncement retains the disclosure requirements
of SFAS No. 132. Additionally, the pronouncement requires additional disclosures
regarding the types of plan assets, investment strategy, measurement dates, plan
obligations, cash flows and components of net periodic benefit cost recognized
during interim periods for defined benefit pension plans and other defined
benefit post retirement plans. The Company adopted this pronouncement effective
December 31, 2003. Adoption did not have a material impact on the financial
statements of the Company.
In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities" ("SFAS No. 149"). SFAS No. 149
amends and clarifies accounting for derivative instruments, including certain
derivative instruments embedded in other contracts, and hedging activities under
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities"
("SFAS No. 133"). SFAS No. 149 clarifies the circumstances under which a
contract with an initial net investment meets the characteristics of a
derivative as discussed in SFAS No. 133. In addition, SFAS No. 149 clarifies
when a derivative contains a financing component that warrants special reporting
in the statement of cash flows. SFAS No. 149 is effective for contracts entered
into or modified after June 30, 2003, and for hedging relationships designated
after June 30, 2003. The adoption of this statement did not have a material
effect on the Company's financial statements.
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity"
("SFAS No. 150"). SFAS No. 150 requires certain financial instruments that
embody obligations of the issuer and have characteristics of both liabilities
and equity to be classified as liabilities. The provisions of SFAS No. 150 were
effective for financial instruments entered into or modified after May 31, 2003
and to all other instruments that exist as of the beginning of the first interim
financial reporting period beginning after June 15, 2003. The Company did not
have any financial instruments that met the provisions of SFAS No. 150;
therefore, the adoption of this statement did not have a material effect on the
Company's financial statements.
23
CAMERA PLATFORMS INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004
New Accounting Standards (Continued)
In November 2004, the FASB issued SFAS No. 151, "Inventory Costs -- an
amendment of ARB No. 43,Chapter 4"("SFAS No. 151") This statement clarifies the
criteria of "abnormal amounts" of freight, handling costs, and spoilage that are
required to be expensed as current period charges rather than deferred in
inventory. In addition, this statement requires that allocation of fixed
production overheads to the costs of conversion be based on the normal capacity
of the production facilities. SFAS No. 151 is effective for the Company July 1,
2005. The adoption of this statement will not have a material impact on the
Company's financial statements.
In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities" ("FIN 46"). FIN 46 requires unconsolidated variable
interest entities to be consolidated by their primary beneficiaries if the
entities do not effectively disperse the risks and rewards of ownership among
their owners and other parties involved. The provisions of FIN 46 were
applicable to all variable interest entities created after January 31, 2003 and
variable interest entities in which an enterprise obtains an interest in after
that date. For variable interest entities created before January 31, 2003, the
provisions were effective December 31, 2003. The Company did not create or
obtain any variable interest entities during 2003.
The Company elected early adoption of the provisions of FIN 46 related to
variable interest entities created prior to January 31, 2003 as of July 1, 2003.
The adoption of this interpretation did not have a material effect on the
Company's financial statements. In December 2003, the FASB issued a revision to
FIN 46; however, it had no impact on the Company's adoption.
In January 2004, FASB Staff Position ("FSP") No. 106-1, "Accounting and
Disclosure Requirements Related to the Medicare Prescription Drug, Improvement
and Modernization Act of 2003" ("FSP No. 106-1") was issued. Subsequently, FSP
No. 106-2 was issued, which amends FSP No. 106-1 and discusses the recognition
of the effects for the Medicare Prescription Drug, Improvement and Modernization
Act of 2003 (the "Medicare Modernization Act") in the accounting for
postretirement health care plans under SFAS No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," and in providing disclosures
related to the plan required by SFAS No. 132. The adoption of this pronouncement
did not have a material effect on the Company's financial statements.
In December 2004, the FASB issued FSP 109-1, "Application of FASB Statement
No. 109, Accounting for Income Taxes, to the Tax Deduction on Qualified
Production Activities Provided by the American Jobs Creation Act of 2004 ("FSP
109-1")." The American Jobs Creation Act of 2004 (the "AJCA") provides for a tax
relief for U.S. domestic manufacturers. FSP 109-1 states that tax benefit should
be recorded in the year in which it can be taken in the Company's tax return
rather than reflecting a deferred tax asset in the period the AJCA was enacted.
FSP 109-1 was effective upon issuance. Adoption of FSP 109-1 will not have a
material effect on the Company's financial statements.
In December 2004, the FASB issued FSP 109-2, "Accounting Disclosures
Guidance for the Foreign Earnings Repatriation Provision within the American
Jobs Creation Act of 2004 ("FSP 109-2"). The Foreign Earnings Repatriation
Provision Within the Act (the "Provision") provides a special limited-time
dividends received deduction on the repatriation of certain foreign earnings to
a U.S. taxpayer. FSP 109-2 states that a company should recognize the income tax
effect related to the Provision when it decides on a plan for reinvestment or
repatriation of foreign earnings. The Company does not expect that the
adoption of this provision will have a material impact on its 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.
24
CAMERA PLATFORMS INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004
3. PROPERTY AND EQUIPMENT
December 31,
2004 2003
Equipment available for lease $4,081,000 5,363,000
Machinery and equipment 90,000 116,000
Leasehold improvements 12,000 12,000
Furniture and fixtures 26,000 26,000
Automobiles and trucks 113,000 113,000
--------- ---------
4,322,000 5,630,000
Less accumulated depreciation and amortization $4,169,000 $5,339,000
Less rental asset valuation allowance 153,000 254,000
---------- ---------
-- $37,000
During 2003, equipment on lease with an original cost of $309,000 and
accumulated depreciation of $304,000 was stolen. The Company received $170,000
in insurance proceeds, realizing a gain of $165,000. Also during 2003, the
Company disposed of fully depreciated property and equipment with an original
cost of $1,083,000. No proceeds were received.
During 2004, the Company sold equipment with original costs totalling
$1,089,000 and accumulated depreciation of $1,067,000. The Company
received $214,000 and recorded a gain of $177,000, after adjustments
to the Company's valuation allowance.
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 $193,000 and $234,000 at
December 31, 2004 and 2003, respectively. These loans are with DOOFF, LLC.
As of December 31, 2004, the Company was $467,000 in arrears
in its interest payments to DOOFF, LLC. due under the terms of these loans.
DOOFF, LLC has noticed the Company that it is in material default under the
terms of the loan agreements, and that no further funds will be made
available to the Company.
One director and two principal shareholders of the Company are also principals
of DOOFF, LLC.
During 2004, the Company acted as a facilitator in selling equipment that
belonged to a director of the Company. The sales proceeds of $25,000 were
retained by the Company and were evidenced by a note payable bearing interest
at 10%, which was due and paid in October 2004.
See independent auditors' report
25
CAMERA PLATFORMS INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004
5. LITIGATION
The Company is involved in certain legal actions and claims arising in the
ordinary course of business. It is the opinion of management, based on
advice of legal counsel, that such litigation and claims will be resolved
without material effect on the Company's financial position.
6. 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, 2004, the Company has net operating loss-carry forwards of
approximately $25 million for federal tax purposes, which expire from 2006
to 2024. 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 $4 million for California tax purposes, which expire from 2005
to 2014.
At December 31, 2004, total deferred tax assets, consisting principally of
net operating loss carryforwards, amounted to approximately $8.7 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. It represents an increase in the valuation
allowance of $32,000 in 2004.
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.
See independent auditors' report
26
CAMERA PLATFORMS INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004
7. COMMON STOCK AND STOCK OPTIONS
Options Outstanding
Shares Weighted Avg. Exercise
Price
Outstanding and excercisable
at January 1, 2002 2,600,000 $0.17
Exercised -- --
Terminated or expired 1,100,000 $0.25
---------- -----
Outstanding and excersisable
at December 31, 2002 1,500,000 $0.11
Granted -- --
Exercised -- --
Terminated or expired -- --
--------- -----
Outstanding and excersisable
at December 31, 2003 1,500,000 $0.11
Granted -- --
Exercised -- --
Terminated or expired -- --
--------- -----
Outstanding and excersisable
at December 31, 2004 1,500,000 $0.11
========= =====
There are 1,500,000 options exercisable at December 31, 2004, and the weighted
average remaining contractual life of the options outstanding is 3.5 years.
8. COMMITMENTS AND CONTINGENCIES
Lease
On January 16,2004,Company entered into a new lease of its premises.
The lease expires December 31, 2007 and contains an option to extend the
term for five additional years contingent upon (1) The lessor exercising
its option to extend the master lease on the premisies beyond its current
December 31, 2007 expiration and (2) that the Company notify the lessor
in writing of its intention to renew prior to April , 2007 and (3) Argus
Pacific, the lessor of space contiguous to that occupied by the Company,
exercises its option to extend. 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 regard to this lease was approximately $104,000 in 2004.
Commencing January, 2005 the Company entered into an agreement with DOOFF LLC,
its secured lender by which DOOFF LLC occuppies approximately one-half of the
space leased by the Company. The Company will be recording the amount due to
it by DOOFF LLC under this agreement as a payment for past interest due.
Future minimum rental payments for the balance of the lease term
are as follows:
Year ending December 31:
2005 $ 84,000
2006 $ 84,000
2007 $ 84,000
See independent auditors' report
27
CAMERA PLATFORMS INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004
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 2004, 2003, or 2002. No geographic area outside the
United States accounted for more than ten percent of total revenue 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, 2004 and 2003.
See independent auditors' report
28
CAMERA PLATFORMS INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Balance Balance
January 1, Additions Deductions December 31,
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
======== == == ========
YEAR ENDED DECEMBER 31, 2003
Asset valuation allowance $542,000 -- 288,000 $254,000
Allowance for doubtful accounts 5,000 -- -- 5,000
-------- -- -------- --------
$547,000 $0 288,000 $259,000
======== == ======== ========
YEAR ENDED DECEMBER 31, 2004
Asset valuation allowance $254,000 -- 101,000 $153,000
Allowance for doubtful accounts 5,000 -- -- 5,000
-------- -- -------- --------
$259,000 $0 $101,000 $158,000
======== == ======== ========
See Independent Auditors' Report and Notes to the Consolidated Financial
Statements
29
CAMERA PLATFORMS INTERNATIONAL, INC.
Item 9 - Changes In and Disagreements with Accountants on Accounting or
Financial Disclosure
Not Applicable
Item 9A. 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.
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 10, 2004 for each
director and executive officer of the Company:
Name Age Position with the Company
Martin Perellis 59 Director, President, Chief Executive
and Chief Financial Officer
William O. Fleischman 59 Director
Rick Hicks 61 Director
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.
30
CAMERA PLATFORMS INTERNATIONAL, INC.
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 one officer of DOOFF, LLC, the Company's secured lender,
and one officer of SAC, a principal shareholder of the Company, serve 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 2004. There were no
options granted to any executive officer during 2004.
31
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, 2005.
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
32
CAMERA PLATFORMS INTERNATIONAL, INC.
beneficially by all directors, nominees and officers as a group as of
March 10, 2005.
Amount and Nature
Name of Beneficial Percent of
Beneficial Owner Ownership Class
Martin Perellis 6,684,054 (1) 27.3% (3)
William O. Fleischman 5,703,168 (2) 23.7% (3)
Rick Hicks 300,000 -
---------- -----
All officers and directors as a
group (3 persons) 12,687,222 51.0%
========== =====
(1) Consists of (a) 5,934,054 shares owned by the Perellis 2000 Trust of
which Mr. Perellis is a beneficiary, and (b) 900,000 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.
(2) 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.
(3) 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
A director of the Company, Mr. Martin Perellis, and a principal shareholder,
Mr. Herbert Wolas, are principals of DOOFF LLC, the Company's secured lender.
Item 14 - Principal Accountant Fees and Services
(1) Audit Fees - The aggregate fees billed for each of the last two fiscal
years for professional services rendered Rose, Snyder & Jacobs, the Company's
principal accountant, for the audit of the Company's annual financial
statements and review of the financials statements included in the
Company's Form 10-Q are as follows:
Billings for the Billings for the
Fiscal Year Ended Fiscal Year Ended
December 31, 2004 December 31, 2003
Rose, Snyder & Jacobs $26,395 $23,565
(2) Audit-Related Fees - No other Audit-Related fees were billed in the last
two fiscal years.
(3) Tax Fees - Tax preparation fees were $2,575 in 2004 and $2,500 in 2003.
(4) All Other Fees - No other fees were billed in the last two fiscal years.
(5) Prior the engagement of Rose, Snyder & Jacobs as the Company's independent
auditors, the Company's Board of Directors, acting as the Audit Committee,
approved the engagement and determined that Rose, Snyder & Jacobs was
qualified and independent in both fact and appearance. The Board of
Directors conducted a review of fees and compensation arrangements,
prior or current business relationships and other services performed by
Rose, Snyder & Jacobs for the Company in making this determination.
33
CAMERA PLATFORMS INTERNATIONAL, INC.
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.
31.1 Certification of Chairman of the Board and Chief Financial Officer
31.2 Certification of Chief Executive Officer
32 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, 2004.
(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.
34
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, 2005
CAMERA PLATFORMS INTERNATIONAL, INC
By: S/Martin Perellis
Martin Perellis
Chairman of the Board,
Chief Executive and Chief Financial 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, 2005 Chairman of the Board,
Chief Executive and Chief Financial Officer
By: S/Martin Perellis
Martin Perellis
March 10, 2005 Director
By: S/William O. Fleischman
William O. Fleischman
March 10, 2005 Director
By: S/Rick Hicks
Rick Hicks