U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ______________ to ______________
COMMISSION FILE NO. 0-23914
ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.
(Name of Small Business Issuer in its Charter)
DELAWARE 87-0521389
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
Incorporation or organization)
16055 Space Center Blvd., Suite 230
Houston, TX 77062
(Address of Principal Executive Officers)
ISSUER'S TELEPHONE NUMBER: (281) 486-6115
Not Applicable
(Former Name or Former Address, if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and
(2) has been subject to such requirements for the past 90 days.
(1) Yes [X] No [ ] (2) Yes [X] No [ ]
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PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check 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.
NOT APPLICABLE.
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the Registrant's classes of
common stock, as of the latest practicable date:
January 31, 1999
COMMON STOCK: 30,529,877
PART 1 - FINANCIAL INFORMATION
ITEM 1. Financial Statements
The financial Statements of the Registrant required to be filed with
this 10-QSB Quarterly Report were prepared by management and commence
on the following pages, together with Related Notes. In the opinion of
management, the Financial Statements fairly present the financial
condition of the Registrant.
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ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 1999
Note 1. - 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 10Q AND ITEM 10 OF REGULATION S-B.
ACCORDINGLY, THEY DO NOT INCLUDE ALL OF THE INFORMATION FOR 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 THREE-MONTH PERIOD ENDED JUNE 30, 1999 ARE NOT
NECESSARILY INDICATIVE OF THE RESULTS THAT MAY BE EXPECTED FOR THE YEAR ENDED
SEPTEMBER 30, 1999.
THE BOARD OF DIRECTORS ELECTED TO CHANGE THE FISCAL YEAR END TO SEPTEMBER 30;
THEREFORE, THE BASIS OF COMPARISON WILL BE 3RD QUARTER ENDING JUNE 1999 FOR YEAR
END 1999 TO 3RD QUARTER ENDING SEPTEMBER 1998 FOR YEAR END 1998.
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ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS JUNE SEPTEMBER
- ------ 1999 1998
(Unaudited) (Note)
Current Assets:
Cash $ (12,289) $ 6,740
Accounts Receivable 823,493 617,317
Retail Inventories 181,113 205,418
Prepaid Expenses 116,055 36,940
Other Current Assets 396,900 414
----------- -----------
$ 1,505,273 $ 866,829
Property and Equipment 9,685,938 7,831,623
Less: Accumulated Depreciation (3,288,892) (2,930,797)
----------- -----------
$ 6,397,047 $ 4,900,826
Other Assets 151,312 278,329
----------- -----------
TOTAL ASSETS $ 8,053,631 $ 6,045,984
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Accounts Payable and Accrued Expenses $ 744,624 $ 410,931
Notes Payable and Current Portion of Long-Term D 569,873 977,641
Other Current Liabilities 32,109 --
----------- -----------
$ 1,346,606 $ 1,388,572
=========== ===========
Long-Term Debt $ 3,518,263 $ 1,606,230
----------- -----------
Deferred Income Taxes
Stockholders' Equity
Common Stock $ 787,100 $ 29,485
Additional Paid-in Capital 5,383,998 5,049,988
Retained Earnings (2,982,336) (2,028,291)
----------- -----------
Total Shareholders Equity $ 3,188,762 $ 3,051,182
----------- -----------
Total Liabilities and Stockholders' Equity $ 8,053,631 $ 6,045,984
=========== ===========
See Notes to Condensed Consolidated Financial Statements
Note: Fiscal Year End Changed to September 30th
ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED
JUNE SEPTEMBER
1999 1998
Revenues $ 1,935,635 $ 1,906,815
Cost of Goods Sold 841,725 696,537
------------------- ------------------
Gross Profit 1,093,910 1,210,278
General and Administrative Expenses 797,703 1,134,490
Depreciation 115,357 100,943
Interest Expense 46,127 86,308
------------------- ------------------
(Loss) Before Income Taxes 134,723 (111,462)
Income Taxes 0 0
Net (Loss) 134,723 (111,462)
=================== ==================
Net (Loss) Per Share 0.004 $ (0.004)
=================== ==================
Weighted Average Shares Outstanding 30,529,877 29,484,108
=================== ==================
See Notes to Condensed Consolidated Financial Statements
ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED
JUNE SEPTEMBER
1999 1998
Revenues $ 5,014,841 $ 4,755,500
Cost of Goods Sold 2,469,364 1,958,182
------------------- ------------------
Gross Profit 2,545,477 2,797,318
General and Administrative Expenses 2,531,797 2,658,687
Depreciation 358,095 491,610
Interest Expense 185,179 168,144
------------------- ------------------
(Loss) Before Income Taxes (529,594) (521,123)
Income Taxes 0 0
Net (Loss) (529,594) (521,123)
=================== ==================
Net (Loss) Per Share 0.017 $ (0.018)
=================== ==================
Weighted Average Shares Outstanding 30,529,877 29,484,108
=================== ==================
See Notes to Condensed Consolidated Financial Statements
ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED
JUNE 30, 1999 SEPT. 30, 1998
Cash From Operations 277,287 $ (60,021)
Investing Activities
Purchase of property and equipment (631,508) (2,773,155)
Other (115,007)
----------------- ------------------
(354,221) (2,888,162)
Financing Activities
Borrowing and repayment of debt 420,819 424,374
Issuance of additional common stock 2,404,387
----------------- ------------------
420,819 2,828,761
Increase in Cash 66,598 (119,422)
Cash at Beginning of Period (78,887) 126,162
----------------- ------------------
(12,289) 6,740
================= ==================
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.
ITEM 2. -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations:
Three months ended June 30, 1999 compared to three months ended September 30,
1998.
General and administrative expenses decreased $336,787 from $1,134,490 to
$797,703 during the same quarter comparison for 1998. Even though there are
additional expenses generated by Hero's WaterWorld and PS&L due to the
additional government purchase orders there is an offset reflected in the
additional revenues generated by those entities. Also the accounts payable has
decreased due to intercompany payments of amounts by one company by another and
thus double booking of some expenses. These amounts were purged and reflect a
more accurate balance.
Depreciation expense for the third quarter of 1999 increased $259,341 from
$4,755,500 to $5,014,841 over the comparable period in 1998. This is due to the
increase of assets at the waterpark.
Revenues for the third quarter of 1999 increased by $28,820 from 1,906,815 for
third quarter ending September 1998 to $1,935,635 for third quarter ending June
30, 1999. The opening of the Hero's WaterWorld and increased purchases from the
military from Performance Sound & Light, inc. have accounted for the increases.
The addition of a website and on-line purchasing has been a substantial addition
to the earnings of PS&L. However,some of the increases in revenues accounted for
by Hero's WaterWorld and PS&L are offset by the closings of Hero's at Arlington
and loss of revenues from Bronco Bowl.
The long-term debt reflects the bridge loans from Capital Growth that will roll
up into the $5.3 million of Indentured Trust when and if funded. Increases in
Other Current Assets and Prepaid Interest are due to loan fees and other amounts
associated with the bridge loans.
Liquidity and Capital Resources
The Company believes that internally generated cash is sufficient to fund the
current level of operations. However, additional capital requirements needed for
planned growth and to reduce short term debt will require the Company to seek
additional outside financing. The Company has a financial agreement with Capital
Growth Planning of El Cajon, Ca. for $5.3 million in Indentured Trust. The
Company expects this funding to be completed during the next quarter but there
can be no assurances that this funding will close. This funding upon closing,
will retire all existing debt of the company to include certain bridge loans.
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PART II -- OTHER INFORMATION
Item 1. Legal Proceedings.
There are not material legal proceedings except as disclosed in the
10K-SB
As filed for 1998.
Item 2. Changes in Securities.
None; not applicable
Item 3. Defaults Upon Senior Securities.
None; not applicable
Item 4. Submission of Matters to a Vote of Security Holders.
None; not applicable
Item 5. Other Information
None; not applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits;
None
(b) Reports on Form 8-K
None
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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.
ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.
Date: August 14, 1999 By: /s/ JAMES D. BUTCHER
---------------------------------------
James D. Butcher
Chairman & CEO
Date: August 14, 1999 By: /s/ V.J. FARMER
---------------------------------------
V.J. Farmer
Controller
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