FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended: September 30, 1996
Commission File Number: 0-15754
CREATIVE TECHNOLOGIES CORP.
(Exact name of registrant as specified in its charter)
NEW YORK 11-2721083
(State or other jurisdiction of(IRS Employer Identification Number)
incorporation of organization)
170 53rd Street, Brooklyn, New York 11232
(Address of principal executive offices) (Zip Code)
(718) 492-8400
(Registrant's telephone number, including area code)
(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 the latest practicable date.
Common Stock, Par Value $.09
2,611,384
(Title of each class)
(Outstanding at September 30, 1996)
CREATIVE TECHNOLOGIES CORP.
INDEX
PART I - FINANCIAL INFORMATION PAGE
Item 1. Condensed Financial Statements
(Unaudited)
Balance Sheet as at September 30, 1996 3
Statements of Operations
for the Three & Nine Months ended
September 30, 1996 and September 30, 1995 4
Statement of Stockholders' Equity
for the Nine Months ended September 30, 1996 5
Statements of Cash Flows
for the Nine Months ended
September 30, 1996 and September 30, 1995 6
Notes to Condensed Financial Statements 7-9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10-13
PART II - OTHER INFORMATION
Item 2. Change In Securities
14
Item 4.Submission of Matters to a Vote of Securities Holders
14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
Exhibit 27
Financial Data Schedule 16
CREATIVE TECHNOLOGIES CORP.
CONDENSED BALANCE SHEET
AS AT SEPTEMBER 30, 1996
(Unaudited)
Assets
Current assets:
Cash and equivalents $ 37,000
Accounts receivable-net
1,690,000
Inventories 3,009,000
Prepaid expenses and other assets
418,000
Total Current Assets
5,154,000
Fixed assets - at cost (less accumulated depreciation
and amortization of $1,819,000)
1,892,000
Intangible and other assets
144,000
Deferred tax benefit 45,000
Total $ 7,235,000
Liabilities
Current liabilities:
Notes payable $ 3,868,000
Accounts payable and accrued expenses 1,470,000
Total Current Liabilities 5,338,000
Note Payable - Fleet Capital Corporation 200,000
Total Liabilities
5,538,000
Stockholders' Equity
Preferred stock- 1996- (12% cumulative) $.01 par value;
authorized 10,000 shares; issued and outstanding 600 shares at
redemption value of $1,000 per share 600,000
Preferred stock- 1996-A- (12% cumulative) $.01 par value,
authorized 10,000 shares, issued and outstanding 1,170 shares
at redemption value of $1,000 per share 1,170,000
Common stock - $.09 par value; authorized
20,000,000 shares; issued and outstanding
2,611,000 shares 235,000
Additional paid - in capital
8,869,000
Deficit (9,177,000)
Total Stockholders' Equity 1,697,000
Total $7,235,000
See notes to condensed financial statements
CREATIVE TECHNOLOGIES CORP.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
Net Sales $1,227,000 $3,831,000$3,998,000$12,408,000
Cost of Sales 784,000 2,321,000 2,235,0006,099,000
Gross Profit 443,000 1,510,000 1,763,0006,309,000
Operating Expenses:
Selling, general and administrative expenses968,000 1,414,0002,651,000
3,909,000
Warehousing expense 302,000 0 937,000 0
Advertising expense 4,000 1,465,000 229,0004,027,000
Interest expense 133,000 273,000 563,000 787,000
1,407,000 3,152,000 4,380,0008,723,000
Loss before provision for income taxes and
extraordinary item (964,000) (1,642,000)(2,617,000)(2,414,000)
Provision for income taxes 36,000
0 36,000 0
Loss before extraordinary item (1,000,000)(1,642,000)(2,653,000)(2,414,000)
Extraordinary item
Gain-debt settlement net of tax 0 0 1,1
50,000 0
Net Loss
$(1,000,000) $(1,642,000)$(1,503,000)$(2,414,000)
Loss attributable to
common shareholders $(1,025,000)$(1,642,000)
$(1,534,000) $(2,414,000)
Loss before extraordinary item per
common share $ (.39)
$ (.97) $ (1.04) $ (1.43)
Extraordinary item per common share $ $
$ .45 $ _
Fully diluted extraordinary item per
common share $
$ $ .45 $ _
Primary loss per common share $ (.39) $
(.97) $ (.59) $ (1.43)
See notes to condensed financial statements.
CREATIVE TECHNOLOGIES CORP.
CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30,1996
(Unaudited)
Preferred Stock Common Stock
Additional
Number of Number of Par Paid-in
Shares Value Shares Value Capital Deficit
Balance December 31, 1995 7,501,000 $225,000$8,577,000
$(7,674,000)
Stock issued for assumption
of debt in connection with
loan settlement March 1996 333,000 10,000 324,000
One-for-three reverse stock split
September 1996 (5,223,000)
Sale of preferred stock:
1996 600 $600,000
1996-A 450 450,000
Conversion of debt into 1996-A
preferred stock 720 720,000
Preferred stock dividend accrued (32,000)
Net loss
(1,503,000)
Balance September 30, 1996 1,770 $1,770,000 2,611,000
$235,000 $8,869,000 $(9,177,000)
See notes to condensed financial statements.
CREATIVE TECHNOLOGIES CORP.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
1996 1995
Net cash provided by (used in) operating activities $117,000$(5,822,000)
Cash flows from investing activities:
Acquisition of fixed assets (97,000) (596,000)
Acquisition of intangibles 0
(55,000)
Net cash used in investing activities (97,000) (651,000)
Cash flows from financing activities:
Net (repayment)borrowing of revolving credit facility(2,658,000)4,500,000
Proceeds from notes payable 2,858,000 2,730,000
Repayment of notes payable (2,054,000) (1,333,000)
Exercise of options 0 10,000
Proceeds from sale of common stock 50,000
830,000 Proceeds from sale of
preferred stock 1,050,,000
0
Net cash (used in) provided by financing activities (754,000) 6,737,000
Net (decrease) increase in cash (734,000) 264,000
Cash at beginning of period 771,000 417,000
Cash at end of period $ 37,000$ 681,000
Supplemental disclosures of cash flow information
Interest paid $603,000 $ 704,000
Taxes paid 0
$364,000
The Company issued 720 shares of the 1996-A preferred stock for $720,000 of
debt.
See notes to condensed financial statements.
CREATIVE TECHNOLOGIES CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB 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 adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the nine month period
ended September 30, 1996 are not necessarily indicative of the results that
may be expected for the year ending December 31, 1996. For further
information, refer to the financial statements and footnotes thereto included
in the Company's annual report on Form 10-KSB for the year ended December 31,
1995. For the three and nine month periods ending September 30, 1996 and
1995, all earnings per share amounts give effect to the one-for-three reverse
stock split as explained in Note D.
Note B - Inventories
Inventories, which are stated at the lower of cost (first-in, first-out) or
market are summarized as follows:
September 30, 1996
Finished Goods $1,621,000
Work in Process and Parts 1,388,000
Total $3,009,000
Note C- Note Payable - Fleet Capital Corp.
In April of 1995 the Company obtained a line of credit and a term loan from
Fleet Capital Corporation ("Fleet") for $14,000,000 and $1,000,000,
respectively. Interest was being charged on both of these loans at a rate of
1% above prime and was collateralized by substantially all of the assets of
the Company and the term loan was personally guaranteed by a stockholder. At
September 30, 1995 and thereafter the Company was in default of certain terms
of the agreement.
Effective November 1, 1995 the Company and Fleet entered into a Post Default
Agreement which among other things allowed Fleet to continue to extend
financing to the Company under the credit facility at reduced advance rates
against collateral up to $5,500,000.
CREATIVE TECHNOLOGIES CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
In March of 1996, the Company entered into an agreement with the bank to pay
off its indebtedness and release both the Company and the bank from any
future obligations. The Company borrowed additional funds to pay off the
indebtedness. The resulting settlement which occurred March 8, 1996, is
summarized as follows:
Paid by the Company $1,500,000
Note payable - non-interest bearing issued by
the company due not later than March 8, 1998 200,000
Assumed by a stockholder of the Company
during March 1996 in exchange for 333,000
shares of common stock333,000
Reduction of indebtedness due to settlement1,550,000
Loan balance subject to settlement $3,583,000
The gain to the Company due to this settlement amounted to $1,150,000 net of
income tax effect.
Note D-
On September 4, 1996 shareholders approved an amendment to the Certificate of
Incorporation of the Company to effect a one-for-three reverse stock split of
all of the authorized and outstanding Common Stock. On that date the Company
had authorized 20,000,000 shares of Common Stock, $.03 par value and there
were issued and outstanding 7,834,000 shares of Common Stock. After the one-
for-three reverse stock split the authorized shares of Common Stock of the
Company remains at 20,000,000 shares. Except for the receipt of cash in lieu
of fractional interest, the reverse stock split did not affect any
shareholders proportionate equity interest in the Company.
The reverse stock split reduced the number of then outstanding Shares, as
indicated in the table below and provided for a corresponding increase in the
par value from $.03 per Share to $.09 per Share. In connection with the
reverse stock split, shareholders received one share of, or cash for any
resulting fractional share, or both, in exchange for three then outstanding
Shares.
Class of Stock Outstanding Before Split
Outstanding After Split
Common Stock 7,834,000
2,611,000
The number of outstanding shares after the reverse stock split is
approximate. Except for changes resulting from the reverse stock split and
the increase in the par value from $.03 to $.09 par value, the rights and
privileges of holders of Shares of Common Stock remained the same, both
before and after the reverse stock split.
CREATIVE TECHNOLOGIES CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
Note E- Preferred Stock - 1996 - (12% Cumulative)
The Company amended its Certificate of Incorporation to designate a new class
of 10,000 shares of 1996 preferred stock $ .01 par value and a new class of
10,000 shares of 1996-A preferred stock $.01 par value, from 5,000,000
shares of preferred stock previously authorized. During June, 1996 the
Company issued 600 shares of the 1996 preferred stock for $600,000 of debt
owed to David Guttmann and related entities. During September, 1996 the
Company issued 720 shares of the 1996-A preferred stock for $720,000 of debt
owed to a company owned by David Guttmann and Barry Septimus, the husband of
a principal stockholder of the Company and sold 450 shares of the 1996-A
preferred stock for $450,000 to various Common stockholders of the Company
including David Guttmann and Barry Septimus. Each share of 1996 and 1996-A
preferred stock is subject to mandatory redemption two years from date of
issuance at $1,000 per share plus unpaid dividends payable in cash, common
stock or any combination thereof at the option of the Company. At any time
prior to redemption the preferred stockholders can at their option convert
their 1996 preferred stock into 333 shares of common stock and their 1996-A
preferred stock into 1142 shares of common stock for each share of preferred
stock held. The 1996 and 1996-A preferred stock are each entitled to a
cumulative dividend of $120 per share per annum and shall be payable in
quarterly installments on the first day of January, April, July and October
commencing January 1, 1997. At September 30, 1996, $32,000 of 1996 preferred
stock dividends were accrued.
Note F - Income Taxes
The Company's net operating loss carry forwards for income tax reporting
purposes aggregated approximately $7,672,000 as of December 31, 1995.
Note G - Product Liability and Litigation
The Company received notice that several consumers claim to have suffered
finger injuries while using one of the Company's appliance products. The
claims are covered by the Company's product liability insurance carrier. The
Company redesigned the appliance in August 1992, and believes that the
modification made should minimize the possibility of such injury. The
Consumer Product Safety Commission (the "CPSC") has made a preliminary
determination that the Company's appliance product represents a "substantial
product hazard" as that term is defined in the Consumer Product Safety Act.
The Company has disputed this preliminary determination and is currently
involved in negotiations with the CPSC to try to resolve this matter. The
Company believes that the ultimate resolution of this matter will not have a
material effect on its financial condition.
In November 1995, the Company filed a lawsuit against a vendor seeking
damages of $1,700,000 for breach of contract and breach of warranty with
respect to the vendor's manufacturing of certain products. In January 1996,
the vendor denied the allegations in the complaint and counterclaimed for
$1,400,000 predicated primarily upon allegations that the Company wrongfully
canceled pending purchase orders. This matter has been settled and did not
have a material effect on the Company's financial condition.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
The Company is engaged in the design, manufacture, marketing and distribution
of niche consumer products. The Company currently sells electric motor-
driven pasta machines and a food griller. Since January 1, 1996 the Company
is also the exclusive distributor of Brabantia International ("Brabantia")
products in the United States. These products include high quality bread
boxes, step-on pails, waste paper baskets, ironing boards, 2 and 3 step
stools, and a complete line of kitchen tools and other household items.
Brabantia, headquartered in the Netherlands, is a leading manufacturer of top
of the line houseware products in Europe. Its products are sold in 68
countries throughout the world. The Company also signed an exclusive
agreement October 1, 1996 with Soehnle, a leading German company, to
distribute their bathroom scales. Marketing activities have begun but no
sales are expected until 1997.
For the nine month period ending September 30, 1996, net cash provided by
operating activities was $117,000, $97,000 was used in investing activities
and net cash of $754,000 was used in financing activities. As a result, for
the nine month period ending September 30, 1996 cash decreased by $734,000 to
$37,000. The accounts receivable decreased to $1,690,000 at September 30,
1996 from $2,907,000 at December 31, 1995, reflecting high collections and
relatively low sales volume during the first nine month period. The accounts
payable and other liabilities decreased to $1,470,000 at September 30, 1996
from $1,664,000 at December 31,1995.
The Company amended its Certificate of Incorporation to designate a new class
of 10,000 shares of 1996 preferred stock $ .01 par value and a new class of
10,000 shares of 1996-A preferred stock $.01 par value, from 5,000,000
shares of preferred stock previously authorized and during June, 1996 issued
600 shares of the 1996 preferred stock for $600,000 of debt owed to David
Guttmann and related entities. During September, 1996 the Company issued 720
shares of the 1996-A preferred stock for $720,000 of debt owed to a company
owned by David Guttmann and Barry Septimus, the husband of a principal
stockholder of the Company and sold 450 shares of the 1996-A preferred stock
for $450,000 to various Common stockholders of the Company including David
Guttmann and Barry Septimus. Each share of 1996 and 1996-A preferred stock
is subject to mandatory redemption on June 1, 1998 and October 1, 1998,
respectively at $1,000 per share plus unpaid dividends payable in cash,
common stock or any combination thereof at the option of the Company. At
any time prior to redemption the preferred stockholders can at their option
convert their 1996 preferred stock into 333 shares of common stock and their
1996-A preferred stock into 1142 shares of common stock for each share of
preferred stock held. The 1996 and 1996-A preferred stock are each entitled
to a cumulative dividend of $120 per share per annum and shall be payable in
quarterly installments on the first day of January, April, July and October
commencing January 1, 1997. At September 30, 1996, $32,000 of 1996 preferred
stock dividends were accrued.
Until April 1995, the Company sold substantially all of its trade receivables
at various levels of recourse to Rosenthal & Rosenthal (the"factor"). On
April 19, 1995, the Company ceased the factoring arrangement with Rosenthal &
Rosenthal and instead obtained a one year credit facility from Fleet Capital
Corporation ("Fleet") in the total amount of $15,000,000, consisting of a one
year term loan of $1,000,000 and a revolving credit facility for the
remainder. The term loan was payable in twelve equal installments and was
personally guaranteed by David Guttmann, the Chief Executive Officer. Loans
on the revolving credit facility were available in amounts equal to 70% of
the Eligible Accounts Receivables plus the lesser of $7,500,000 or the sum of
the Eligible Inventory. The Company paid a closing fee of $100,000 to Fleet
and $120,000 to a finder. In February 1996, the Company and Fleet agreed to
discontinue the banking relationship. During March 1996 the Company repaid
Fleet $1,500,000 and executed a non-interest bearing unsecured two year note
to Fleet in the amount of $200,000. In addition, David Guttmann assumed the
payment of the remainder of the term loan in the total amount of $333,000.
In order to repay Fleet the workout amount, the Company obtained short term
loans of $1,000,000 from several individuals. The loans provided for
interest at 2% per month plus expenses. The Company derived a pre-tax profit
on the workout of $1,550,000. The Company is seeking to obtain a new line of
credit in order to repay the short term loans and for working capital. The
Company issued 333,000 shares during March 1996 to the designees to David
Guttmann in consideration for their assumption of the term note in the amount
of $333,000.
During the second quarter of 1996 the Company borrowed $650,000 net of
repayments from David Guttmann and related entities repayable within three
months. These funds, together with funds received from various individuals
this quarter, were used to repay $650,000 to certain individuals who had
loaned the Company this amount for the Fleet workout and for working capital
purposes. Effective June 1996 $600,000 of debt owed to David Guttmann and
related entities was exchanged for 600 shares of 1996 preferred stock .
During the Third quarter the company received $433,000 from various common
stockholder's of the Company including David Guttmann and Barry Septimus. Of
this amount $270,000 together with $180,000 previously loaned to the Company
was used to purchase 450 shares of 1996-A preferred stock- 12% cumulative.
$143,000 of loans, net of repayments, received this quarter were used for
working capital purposes. At September 30, 1996 the Company had notes
payable in the amount of $1,000,000 payable on demand to an entity whose
principal is a director of the Company. At September 30, 1996, the Company
also had $2,868,000 of notes outstanding to various individuals and
shareholders of the Company. Interest on loans of $3,868,000 vary from 18%
to 12% per annum. Loans amounting to $3,859,000 are guaranteed by David
Guttmann and Barry Septimus.
The Company expects to fund future operations by obtaining bank lines of
credit, if available, borrowing money privately and cash flows from
operations.
At September 30, 1996, the Company had outstanding approximately $175,000 in
commercial letters of credit covering production and importation of the Grill
Express.
The Company has reduced expenses by cutting its administrative staff, closing
its assembly plant in Brooklyn, New York and moving the manufacture of the
Pasta Machine and Grill Express to a more reliable factory in China, cutting
back or eliminating the use of outside consulting services and otherwise
reducing overhead. In addition, certain key employees have taken voluntary
pay cuts.
Results of Operations
The Company had net sales of $1,227,000 and $3,998,000 respectively for the
three and nine month periods ending September 30, 1996 as compared to net
sales of approximately $3,831,000 and $12,408,000 for the three and nine
month periods ending September 30, 1995. The decrease in sales for the
comparative three and nine month periods is attributable to continued
softness in demand for the Grill Express and Pasta Machine offset by sales
applicable to the introduction of the Brabantia product line. For the three
and nine month periods ending September 30, 1996 sales of electric products
were approximately 46% and 70% respectively with non - electric products
representing the remainder in each period. For the three and nine month
periods ending September 30, 1995 electric products represented 100% of
sales.
Gross profit margins for the third quarters ending September 30, 1996 and
September 30,1995 were 36.1% and 39.4% respectively. Gross profit margins
for the nine month periods ending September 30, 1996 and September 30, 1995
were 44.1% and 50.8% respectively. The decrease in gross profit margins is
attributable to margins being lower on the imported Brabantia product line
where the Company acts as a distributor as opposed to higher gross profit
margins on its own manufactured products. These lower gross profit margins
were offset by certain expenses previously considered part of cost of sales
when the Company was assembling and manufacturing products in its Brooklyn
facility and are now being classified as Warehousing Expense. The benefit of
high gross profit margins in 1995 was offset by media purchases (advertising
expense) associated with infomercial sales which are part of operating
expenses. Profit margins on sales after cost of sales and media purchases
for the third quarters ending September 30, 1996 and September 30, 1995 were
35.8% and 1.2% respectively and for the nine month periods ending September
30, 1996 and September 30, 1995 were 38.4% and 18.4% respectively
representing management's decision to reduce expenditures for the airings of
the infomercial during the first three quarters of 1996.
Selling, general and administrative expenses were $968,000 and $1,414,000 or
78.9% and 36.9% respectively of net sales in the three month periods ending
September 30, 1996 and September 30, 1995. The selling, general and
administrative expenses were $2,651,000 or 66.3% in the nine month period
ending September 30, 1996 as compared to $3,909,000 or 31.5% for the nine
month period ending September 30, 1995. The reduction in expenses reflects
the effect of management's cost cutting program although the higher
percentage of these expenses to net sales reflect the reduction in net sales
from 1995 to 1996.
The Company is no longer assembling and manufacturing its products in its
Brooklyn facility. As a result, certain expenses previously shown as cost of
sales are now classified as Warehousing Expense. During the three and nine
month periods ending September 30, 1996 these expenses amounted to $302,000
and $937,000 respectively compared to $460,000 and $1,555,000 which were
included in cost of sales in the comparable periods of the prior year.
Advertising expenses for the three and nine month periods ending September
30, 1996 were $4,000 and $229,000 respectively compared to $1,465,000 and
$4,027,000 for the comparable periods of the prior year. The decrease in
advertising expenses were due to management's decision to reduce expenditures
for the airings of the infomercial during the first three quarters of 1996.
Interest expense in the three month periods ending September 30, 1996 and
September 30, 1995 was $133,000 and $273,000 respectively. This decrease of
$140,000 is primarily due to lower borrowings. For the nine month periods
ending September 30, 1996 and September 30, 1995 interest expense was
$563,000 and $787,000 respectively. The decrease of $224,000 was primarily
due to lower borrowings in the second and third quarters of 1996 verses 1995,
the Fleet debt settlement in the first quarter of 1996 and lower interest
rates on debt owed Fleet during the first quarter verses interest rates on
debt owed a factor in the comparative quarter of the prior year.
The settlement of the Fleet debt during the three month period ending March
31, 1996 resulted in a gain to the Company of $1,550,000 reduced by
applicable income taxes of $400,000 or a net gain after income taxes of
$1,150,000 as follows:
Loan balance subject to settlement $3,583,000
Paid by the Company (1,500,000)
Note payable issued by the Company
non-interest bearing, due not later than March 8, 1996 (200,000)
Debt assumed by a stockholder of the Company during March 1996
in exchange for 333,000 shares of common stock. (333,000)
Gain on debt settlement before income tax 1,550,000
Income Tax 400,000
Net gain on debt settlement $1,150,000
Due to the foregoing, the Company reported for the three and nine month
periods ending September 30, 1996, a loss before extraordinary gain of
$1,000,000 and $2,653,000 respectively compared to a loss before
extraordinary gain of $1,642,000 and $2,414,000 respectively in the
comparable periods of the prior year. For the three and nine month periods
ending September 30, 1996 the Company reported a net loss of $1,000,000 and
$1,503,000 respectively compared to a net loss of $1,642,000 and $2,414,000
respectively in the comparable periods of the prior year.
PART II OTHER INFORMATION
Item 2. Change In Securities
On September 4, 1996 the shareholders approved an amendment to the
Certificate of Incorporation of the Company to effect a one-for-three reverse
stock split. The reverse stock split reduced the amount of outstanding
shares of Common Stock from 7,834,000 shares to 2,611,000 shares. The par
value was increased from $.03 to $.09 per share.
In June and September 1996 the Company issued 600 shares and 1170 shares of
preferred stock, respectively for $1,000 per share. The shares of
Preferred Stock are preferred as to assets over the shares of Common Stock so
that, in the event of the voluntary or involuntary liquidation, dissolution
or winding up of the Company, the holders of the Preferred Stock shall be
entitled to receive out of the assets of the Company, before any
distribution, is made to the holders of the Common Stock an amount equal to
$1,000 per share of Preferred Stock plus all accrued but unpaid dividends.
Item 4. Submission of Matters to a Vote of Securities Holders
The annual meeting of the shareholders of the Company was held on September
4, 1996. David Guttmann, David Refson, Benjamin Sporn and Richard Helfman
were each elected directors of the Company. The shareholders also approved a
three-for-one reverse stock split. 5,402,971 votes were cast for the split,
83,432 votes were cast against the split and 18,106 votes abstained.
Item 6. a. Exhibits
Exhibit 27. Financial Data Schedule
b. Reports on Form 8-K
The Registrant did not file reports on Form
8-K during the nine months ended September 30, 1996.
CREATIVE TECHNOLOGIES CORP.
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.
CREATIVE TECHNOLOGIES CORP.
Registrant
Dated : November 12, 1996 By: S/David Guttmann
David Guttmann, CEO