-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B4buffPOnr2qycCoOQBkzC20DQuf+JlSXFWAGojiIIiAg+wcnNLc3LKaLfgeYOBp 4OOMmBZ1Q37SpNb3vo90ew== 0001000096-97-000015.txt : 19970115 0001000096-97-000015.hdr.sgml : 19970115 ACCESSION NUMBER: 0001000096-97-000015 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961130 FILED AS OF DATE: 19970114 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CREATIVE PROGRAMMING & TECHNOLOGY VENTURES INC CENTRAL INDEX KEY: 0000913160 STANDARD INDUSTRIAL CLASSIFICATION: GAMES, TOYS & CHILDREN'S VEHICLES (NO DOLLS & BICYCLES) [3944] IRS NUMBER: 841236669 STATE OF INCORPORATION: CO FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-22762 FILM NUMBER: 97505261 BUSINESS ADDRESS: STREET 1: 7900 E UNION AVE STE 1100 CITY: DENVER STATE: CO ZIP: 80237 BUSINESS PHONE: 3036945324 MAIL ADDRESS: STREET 1: 7900 EAST UNION AVE STREET 2: STE 1100 CITY: DENVER STATE: CO ZIP: 80237 10QSB 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended November 30, 1996 ---------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 14 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to --------------- ---------------- Commission file number 0-19817 Creative Programming and Technology Ventures, Inc. -------------------------------------------------- (Exact name of registrant as specified in its charter) Colorado 84-1236669 - ------------------------------- ---------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) (303) 694-5324 --------------------------------------------------- (Registrant's telephone number, including area code) 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 report(s), and (2) has been suhject to such filing requirements for the past 90 days. YES [ X ] NO [ ] APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS. Indicate by check mark whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by court. YES [ ] NO [ ] APPLICABLE ONLY TO CORPORATE ISSUERS Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 3,210,079 common shares as of December 31, 1996. CREATIVE PROGRAMMING AND TECHNOLOGY VENTURES, INC. AND SUBSIDIARIES INDEX PART I. PART 1, ITEM 1: FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEET AS OF NOVEMBER 30, 1996 (UNAUDITED) 1 CONSOLIDATED STATEMENTS OF OPERATIONS FOR THREE MONTHS ENDED NOVEMBER 30, 1996 AND 1995 (UNAUDITED) 3 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY FOR THREE MONTHS ENDED NOVEMBER 30, 1996 (UNAUDITED) 4 CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THREE MONTHS ENDED NOVEMBER 30, 1996 AND 1995 (UNAUDITED) 5 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 7 PART 1, ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS 9 PART II. OTHER INFORMATION ITEMS 1 THROUGH 6 CREATIVE PROGRAMMING AND TECHNOLOGY VENTURES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (UNAUDITED) NOVEMBER 30, 1996 ASSETS Current assets: Cash and cash equivalents $5,534,497 Interest receivable 14,267 Investment 14,365 Certificate of deposit 281,000 Prepaid expenses 21,170 Note receivable under sale of discontinued operations 84,200 ---------- Total current assets 5,949,499 ---------- Property and equipment, net 9,719 ---------- Other assets: Restricted cash 700,000 Note receivable under sale of discontinued operations, net of current portion 7,481 Organization costs and other 8,831 ---------- 716,312 ---------- Total assets $6,675,530 ========== (Continued) 1 CREATIVE PROGRAMMING AND TECHNOLOGY VENTURES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (UNAUDITED) (CONTINUED) NOVEMBER 30, 1996 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable, trade $ 111,890 Accrued income taxes 43,000 Accrued expenses and other 50,262 ----------- Total current liabilities 205,152 ----------- Shareholders' equity: Preferred stock, par value $0.01; authorized 10,000,000 shares, issued and outstanding 1,000,000 (aggregate liquidation preference $10,000) 10,000 Common stock, par value $0.01; authorized 50,000,000 shares, issued 3,210,079 shares 32,101 Capital in excess of par 8,222,937 Deficit (1,794,660) ----------- Total shareholders' equity 6,470,378 ----------- Total liabilities and shareholders' equity $ 6,675,530 =========== See notes to consolidated financial statements. 2 CREATIVE PROGRAMMING AND TECHNOLOGY VENTURES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) THREE MONTHS ENDED NOVEMBER 30, 1996 AND 1995 1996 1995 ----------- ----------- Revenues $ $ 50,560 Cost of sales 189,017 ----------- ----------- (138,457) Selling general and administrative expenses 235,429 719,233 ----------- ----------- Operating loss (235,429) (857,690) Other credits (charges): Investment income 62,161 51,186 Interest expense (18,647) (6,048) ----------- ----------- Loss before gain on sale of subsidiary and income taxes (191,915) (812,552) Gain on sale of subsidiary (Note 2) 4,508,278 ----------- ----------- Income (loss) before income taxes 4,316,363 (812,552) Income taxes 43,000 ----------- ----------- Net income (loss) $ 4,273,363 $ (812,552) =========== =========== Net income (loss) per common share $ 1.33 $ (0.24) =========== =========== Weighted average number of common shares 3,210,079 3,424,317 =========== ============ See notes to consolidated financial statements. 3 CREATIVE PROGRAMMING AND TECHNOLOGY VENTURES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) THREE MONTHS ENDED NOVEMBER 30, 1996
Preferred stock Common stock -------------------- --------------------- Capital Shares Amount Shares Amount excess of par Deficit Total ------ ------ ------ ------ ------------- ----------- ------ Balances, September 1, 1996 1,000,000 $ 10,000 3,210,079 $ 32,101 $ 8,222,937 $(6,068,023) $ 2,197,015 Net income 4,273,363 4,273,363 --------- -------- --------- -------- ---------- ----------- ----------- Balances, November 30, 1996 1,000,000 $ 10,000 3,210,079 $ 32,101 $ 8,222,937 $(1,794,660) $ 6,470,378 ========= ======== ========= ======== =========== =========== =========== See notes to consolidated financial statements. 4
CREATIVE PROGRAMMING AND TECHNOLOGY VENTURES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) THREE MONTHS ENDED NOVEMBER 30, 1996 AND 1995 1996 1995 ----------- ----------- Cash flows from operating activities: Net income (loss) $ 4,273,363 $ (812,552) ----------- ----------- Adjustment to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 1,038 80,656 Gain on sale of subsidiary (4,508,278) Loss on investments 33,749 Write-off of project costs 17,232 (Increase) decrease in assets: Accounts receivable 55,464 Interest receivable (14,269) Unbilled receivable 24,440 Prepaid expenses 5,421 (83,375) Other current assets 10,008 Other assets 13,828 Increase (decrease) in liabilities: Accounts payable (22,355) (223,753) Other current liabilities (6,505) (18,398) Accrued income taxes 43,000 ----------- ----------- Total adjustments (4,488,120) (103,977) ----------- ----------- Net cash used in operating activities: (214,757) (916,529) ----------- ----------- Cash flows from investing activities: Proceeds from sale of subsidiary, net of $700,000 cash held in escrow 5,907,448 Capital expenditures (134,256) Purchase of treasury bills (15,169) Proceeds from maturity of treasury bills 35,000 600,000 Payments received on note receivable 19,526 Project costs (314,906) ----------- ----------- Net cash provided by (used in) investing activities 5,946,805 150,838 ----------- ----------- (Continued) 5 CREATIVE PROGRAMMING AND TECHNOLOGY VENTURES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (CONTINUED) THREE MONTHS ENDED NOVEMBER 30, 1996 AND 1995
1996 1995 ----------- ----------- Cash flows from financing activities: Payment of notes payable (511,527) (32,778) Proceeds from issuance of notes payable 11,552 Principal payments of capital lease obligations (5,210) (9,848) Purchase and retirement of common stock (62,511) ----------- ----------- Net cash used in financing activities (516,737) (93,585) ----------- ----------- Net increase (decrease) in cash 5,215,311 (859,276) Cash and cash equivalents, beginning 319,186 1,302,292 ----------- ----------- Cash and cash equivalents, ending $ 5,534,497 $ 443,016 =========== =========== Supplemental disclosure of cash flows information: Cash paid for interest $ 25,213 $ 6,048 =========== ===========
See notes to consolidated financial statements. 6 CREATIVE PROGRAMMING AND TECHNOLOGY VENTURES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) THREE MONTHS ENDED NOVEMBER 30, 1996 AND 1995 1. The interim financial statements: These interim financial statements have been prepared by Creative Programming and Technology Ventures, Inc. ("CPTV", the "Company") and, in the opinion of management, reflect all material adjustments which are necessary to a fair statement of results for the interim period presented. Certain information and footnote disclosures made in the Company's Form 10KSB have been condensed or omitted for the interim statements. Certain costs are estimated for the full year and allocated to interim periods based on activity associated with the interim period. Accordingly, such costs are subject to year-end adjustment. It is the Company's opinion that, when the interim statements are read in conjunction with the Company's financial statements for the year ended August 31, 1996 included in Form 10KSB, the disclosures are adequate to make the information presented a fair presentation of the Company's financial condition. The results of operations for the three months ended November 30, 1996 are not necessarily indicative of the results to be expected for the full year. 2. Sale of the Company's interest in ODDWORLD and certain assets of Alexandria: On September 13, 1996, the Company sold its entire interest in ODDWORLD to an unrelated third party for $7,000,000 less unpaid expenses incurred as of August 16, 1996. In addition, Alexandria conveyed all of its assignable assets to ODDWORLD which have been included in the sale. Shareholder approval of this transaction occurred on November 15, 1996. From August 16, 1996, through the date of shareholder approval, the purchaser made advances to ODDWORLD of $225,210. These advances were made for the purpose of providing working capital and to fund the operations of ODDWORLD subsequent to August 16, 1996. As a result of the approval of this transaction and pursuant to the provisions of the purchase agreement, the purchaser became responsible for all liabilities of ODDWORLD incurred subsequent to August 16, 1996 including the $225,210 of advances, thus, the consolidated financial statements of the Company do not include expenses or liabilities incurred by ODDWORLD subsequent to August 16, 1996. 7 CREATIVE PROGRAMMING AND TECHNOLOGY VENTURES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) THREE MONTHS ENDED NOVEMBER 30, 1996 AND 1995 2. Sale of the Company's interest in ODDWORLD and certain assets of Alexandria (continued): The purchase agreement requires that 10% of the purchase price ($700,000) be retained in a hold back escrow account, until September 1998, to provide the purchaser with potential recourse against the Company for any valid future claims arising regarding any of the representations and warranties made to the purchaser by the Company. As stipulated in the agreement, the purchaser may make no claim unless the total of all damages suffered exceeds $100,000, but all potential future claims will be capped at $2,000,000. The Company received $6,128,088 of cash (the purchase price of $7,000,000 net of unpaid expenses of $171,912 and net of the $700,000 held in escrow of ODDWORLD as of August 16, 1996) in exchange for the Company's interest in ODDWORLD and the assets of Alexandria conveyed to ODDWORLD. In addition, $220,640 of transaction expenses were incurred and these have been netted against the $6,128,088 to give net cash received on the sale of $5,907,448. At September 13, 1996. The Company's interest consisted of accounts receivable of $2,734, property and equipment of $701,075 project costs of $1,827,680, other assets of $61,616, notes payable to financial institutions of $225,822, capital lease obligations of $19,958, accounts payable of $186,790, and accrued salaries and other expenses of $61,365. The sale results in a gain of $4,508,278. The Company used $500,000 of the sale proceeds to repay notes payable, shareholders. 8 PART I, Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS Overview - -------- On September 13, 1996, Creative Programming and Technology Ventures, Inc. ("CPTV" or the "Company") sold its entire interest in its Oddworld Entertainment, Inc. subsidiary to GT Interactive Software Corp. (the "GT Transaction"). As a result of the completion of the GT transaction, CPTV's liquidity and capital resources changed significantly after September 13, 1996. CPTV, which had seen substantial operating deficits associated with the expense of producing its own advanced interactive game, was able to sell its investment and shed the associated liabilities while recognizing a substantial economic gain. In summary effect, CPTV sold assets in which it had a total debt and equity investment of approximately $3,700,000 for net cash of $6,128,088. The Company also received a return of approximately $316,000 it had posted as collateral securing certain associated liabilities which were assumed by GT in connection with the GT Transaction. Costs of the transaction expensed during fiscal 1996 were approximately $85,000, and an additional approximately $131,000 were recognized and expensed in the current quarter. $520,800 was paid to retire certain indebtedness owed to affiliates, including interest. The sale resulted in a gain to CPTV of $4,273,363. Cash in the account of $700,000 was retained in a two-year escrow account. Financial Condition, Liquidity and Capital Resources - ---------------------------------------------------- As a result of the completion of the GT Transaction, CPTV has a working capital in excess of $5,700,000 and shareholders equity in excess of $6,400,000, as compared with an historical working capital deficit of more than $450,000 and shareholders equity of less than $2,200,000 at August 31, 1996. Consequently, CPTV has renewed opportunities to invest in a new growth opportunity. CPTV has begun the process of evaluating possible business opportunities and transactions but is at a very early stage at considering any new business opportunity. Such a transaction will possibly give the shareholders of CPTV an interest in a related or new line of business and the opportunity to grow with the business combination. If after a reasonable period of time the Board of Directors has not identified any business combinations that it believes its shareholders will support, the Board will consider the alternatives of paying cash dividends to shareholders, or recommending to the shareholders a full liquidation of the Company. Any dividend or liquidation would have tax consequences on shareholders which the Board would have to consider at the time.In the meantime, CPTV Board recognized that its stock price is a substantial discount to its book value and authorized a stock repurchase program on December 19, 1996. The primary motivation of the buyback plan is to add value to those shareholders who have chosen to retain their interest in CPTV as an investment vehicle, and to take advantage of what management believes is an advantageous CPTV share price that currently trades at a significant discount to its cash value. During the period in which CPTV seeks out new and evaluates new business opportunities the company projects sharply declining operating expenses as it now employs only two full-time people. CPTV intends to rely on outside professional services for as much of its operations as it can practically outsource and to seek new business opportunities through a select group of advisors that it is evaluating. CPTV has invested its cash in short-term government backed instruments which are yielding approximately 4.8% and management believes that this interest income will offset a substantial portion of CPTV's direct operating overhead, thereby helping to preserve equity during the period of evaluation. 9 Results of Operations - --------------------- In the first quarter ended November 30, 1996, CPTV recognized net income of more than $4,200,000 or $1.33 per share as compared to a net loss of $(812,552) or $(.24) per share for the same quarter the previous year. This gain was due to the GT Transaction described above, a non-recurring event. In November 30, 1995, CPTV was still in the process of building the game and adding value to its investment in OddWorld which was a non-revenue producing and capital intensive event which accounts for the significant variability in First Quarter operating results. The First Quarter, November 30, 1996, balance sheet also reflects approximately $312,000 in additional operating expenses and professional legal and accounting fees primarily attributable to the GT transaction and the year-end auditing and accounting cost. The additional cost reflects the bulk of the changes from our August 31, 1996, pro-forma balance sheet, which cut off final phase expenses associated with the GT closing, to our actual November 30, First Quarter end financials. 10 SIGNATURE PAGE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized Creative Programming and Technology Ventures, Inc. BY: /S/ GARY R. VICKERS ------------------------------------------- Gary R. Vickers, President Date: January 14, 1997 ------------------------------------------- 11 EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AND STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED NOVEMBER 30, 1996 FOR CREATIVE PROGRAMMING AND TECHNOLOGY VENTURES, INC. AND SUBSIDIARIES AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS AUG-31-1996 NOV-30-1996 5,534,497 295,365 105,948 0 0 5,949,499 19,761 10,042 6,675,530 205,152 0 0 10,000 32,101 6,428,277 6,675,530 0 0 0 0 235,429 0 18,647 4,316,363 43,000 4,273,363 0 0 0 4,273,363 1.33 1.33
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