10-Q 1 cpi6300410q.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [Mark one] [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2004 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 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 (IRS Employer Identification No.) of incorporation or organization) 10909 Vanowen Street, North Hollywood, California, 91605 (Address of principal executive offices) (Zip Code) (818) 623-1700 (Registrant's telephone number, including area code) Not Applicable (Former name, former address and former fiscal year, if changed since last report) 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 the number of shares outstanding of each of the issuer's classes of common stock, as of August 14, 2004. Common Stock $.0005 par value 23,740,964 (Class) (Number of shares) 2 CAMERA PLATFORMS INTERNATIONAL, INC. Part I FINANCIAL INFORMATION The financial statements presented herein have not been reviewed by the Company's independent public accountant as required by Regulation S-X, Rule 11-01(d). The Company has insufficient funds to pay amounts due to the Company's independent public accountant. As a result, the Company's independent public accountant is unable to complete the work necessary to issue a review report on the financial statements of the Company as of June 30, 2004. An amendment to this For 10-Q will be filed the the SEC as soon as the review report becomes available. CONTENTS

3 CAMERA PLATFORMS INTERNATIONAL, INC. BALANCE SHEETS

Not reviewed by the Company's independent public accountant. See accompanying notes to unaudited financial statements. 4 CAMERA PLATFORMS INTERNATIONAL, INC. STATEMENTS OF OPERATIONS (Unaudited)

Not reviewed by the Company's independent public accountant. See accompanying notes to financial statements. 5 CAMERA PLATFORMS INTERNATIONAL, INC. STATEMENTS OF CASH FLOWS (Unaudited)

Not reviewed by the Company's independent public accountant. See accompanying notes to unaudited financial statements. 6 CAMERA PLATFORMS INTERNATIONAL, INC. NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE 1 - BASIS OF PRESENTATION The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included. Operating results for the six-month period ended June 30, 2003 are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. For further information refer to the financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2002. 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, increased revenues to support the Company's operations. There is no assurance that revenues will increase, or that such increases will provide sufficient cash flows to meet the Company's working capital needs. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Leasing Operations The Company's leasing operations consist of operating and sales-type leases on a variety of equipment types, primarily camera cars, dollies and cranes, and other accessories. Under the operating lease method of accounting, the leased asset is recorded at cost and depreciated over its estimated useful life, using periods ranging from three to ten years. Rental payments are recognized as revenue as they become due under the terms of the operating lease agreements. 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. Not reviewed by the Company's independent public accountant. 7 CAMERA PLATFORMS INTERNATIONAL, INC. NOTES TO FINANCIAL STATEMENTS (Unaudited) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Cash Equivalents The Company considers all highly liquid investments held at financial institutions with maturity dates of three months or less at the time of acquisition to be cash equivalents. Per Share Data The Company has adopted Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share", which establishes new standards for computing and presenting basic and diluted earnings per share. Adoption of SFAS No. 128 does not have a material effect on the computation or presentation of per share data in the accompanying consolidated 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 $0 and $5,000 for the six months ended June 30, 2003 and 2002, respectively, and were recorded as part of selling, general and administrative expenses. 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 Not reviewed by the Company's independent public accountant. 8 CAMERA PLATFORMS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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 2003, the Company adopted FASB No. 143 "Accounting for Asset Retirement Obligations". This pronouncement has had 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. Not reviewed by the Company's independent public accountant. 9 CAMERA PLATFORMS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 3 - PROPERTY AND EQUIPMENT

The valuation allowance has been reduced by $41,000, which was recorded against and reduced depreciation expense for the six months ended June 30, 2004. 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 $315,000 and $234,000 at June 30, 2004 and December 31, 2003, respectively. These loans are with DOOFF, LLC. Two directors and principal shareholders of the Company are also principals of DOOFF, LLC. As of June 30, 2004, the Company was $396,000 in arrears in its interest payments to DOOFF, LLC. due under the terms of these loans. During 2003, 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 are evidenced by a note payable bearing interest at 10%, all due in October 2004. 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, 2003, 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 $4 million for California tax purposes, which expire from 2004 to 2013. 10 CAMERA PLATFORMS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) At June 30, 2004, total deferred tax assets, consisting principally of net operating loss carryforwards, amounted to approximately $8.8 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. 6. COMMITMENTS AND CONTINGENCIES Lease Effective April 1, 2004, the Company entered into a new lease for reduced space at its existing premises expires December 31, 2007. The lease of $7,000 per month 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. 7. SALES TO MAJOR CUSTOMERS AND GEOGRAPHIC AREAS No revenue derived from a single customer accounted for more than ten percent of total revenue during the quarters ending June 30, 2004 and 2003. No geographic area outside the United States accounted for more than ten percent of total sales during the last three years. 8. 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 June 30, 2004 and December 31, 2003. Not reviewed by the Company's independent public accountant. 11 Item 2. CAMERA PLATFORMS INTERNATIONAL, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Unaudited) SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. This Quarterly Report on Form 10-Q 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 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, whose members are directors and principal shareholders of the Company. The Company had overdrawn this line, owing $315,000 at June 30, 2004. At of Decemer 31, 2003, the company had $16,000 available under the line. In addition, the Company has failed to make interest payments totaling $396,000 to DOOFF, LLC. Ongoing operations have not been sufficient to meet the Company's cash needs, and there is no further credit avialable under the line of credit. If sufficient funds are not available, the Company may be required to curtail or cease operations. Not reviewed by the Company's independent public accountant. 12 CAMERA PLATFORMS INTERNATIONAL, INC. RESULTS OF OPERATIONS The following analysis compares the three months ended June 30, 2004 with the three months ended June 30, 2003, and the six months ended June 30, 2004 with the six months ended June 30, 2003. Second quarter 2004 results compared with second quarter 2003 The Company's total revenue for the second quarter increase slightly over the same period last year. The increase of $10,000 was attibutable to a $20,000 increase in camera car rentals offset by a $10,000 decline in the rental of Akela cranes. Dolly and crane rentals remained unchanged. Cost of rentals decreased by 2%. The Company's lower rental expense resulted in lower rental expenses allocated to the rental department, however, these reductions were offset in a large part by increases in insurance, commissions, and repairs. Corporate expenses were reduced slightly as a result of lower legal expenses. During 2003, the Company recognized $165,000 in gain as a result of the insured loss of an Akela crane while it was under rental contract. The crane was substantially depreciated on the Company's books. Six months ended June 30, 2004 results compared with six months ended June 30, 2003 Equipment rental revenue decreased 11% compared to the same six month period last year. The largest dollar-denominated decreases were associated with dolly and crane rentals. Car rental revenues increased by about 7%. Akela crane revenues continued to decline, falling $16,000 to $23,000. Cost of rentals remained unchanged. Commission, insurance and repair increases offset decreases in rent and payroll. General and administrative expenses decreased by $8,000. Legal and professional expense reductions offset savings in rent and insurance. 13 CAMERA PLATFORMS INTERNATIONAL, INC. International Sales International sales are not a material component of the Company's total revenues. 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. Item 3. 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 4. 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. 14 CAMERA PLATFORMS INTERNATIONAL, INC. (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 II - OTHER INFORMATION Item 1. Litigation. The Company is not party to any litigation. Item 3. Defaults on Senior Securities As of June 30, 2004, the Company was $396,000 in arrears in its interest payments to DOOFF LLC and had overdrawn its operating line of credit by $65,000 (see Note 4 to Financial Statements). Item 6. Exhibits and Reports on Form 8-K. (a) Exhibit 99.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (b) The Company filed no reports on Form 8-K during the quarter ended June 30, 2004. 15 CAMERA PLATFORMS INTERNATIONAL, INC. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CAMERA PLATFORMS INTERNATIONAL, INC. /s/ Martin Perellis Date: August 8, 2004 Martin Perellis Chief Executive Officer /s/ Herbert Wolas Date: August 8, 2004 Herbert Wolas Chairman of the Board and Chief Financial Officer 16

CAMERA PLATFORMS INTERNATIONAL INC 10-Q