UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(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, 2002
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________ to ___________
Commission file number: 333-46828
CLIXTIX, INC.
(Exact name of small business issuer as specified in its charter)
NEW YORK 13-3526402
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
SUITE 1807-1501 BROADWAY, NEW YORK, NY 10036
(Address of principal executive offices)
(212) 768-2990
(Issuer's telephone number)
PHYLLIS MAXWELL'S GROUPS, INC.
(Former name, former address and former fiscal year,
if changed since last report)
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
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 a court.
Yes |_| No |_|
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
10,228,000 shares of common stock outstanding as of August 14, 2002
Transitional Small Business Disclosure Format (Check One): Yes |_| No |X|
CLIXTIX, INC
FORM 10-QSB
INDEX
Page
PART I FINANCIAL INFORMATION...............................................3
Item 1. Financial Statements
Independent Accountants' Review Report..............................3
Consolidated Balance Sheets.........................................4
Consolidated Statements of Operations...............................5
Consolidated Statements of Stockholders' Equity.....................6
Consolidated Statements of Cash Flows...............................7
Notes to Consolidated Financial Statements..........................8
Item 2. Management's Discussion and Analysis or Plan of Operation...........9
Part II OTHER INFORMATION..................................................15
Item 1. Legal Proceedings..................................................15
Item 2. Changes in Securities..............................................15
Item 3. Defaults Upon Senior Securities....................................15
Item 4. Submission of Matters to a Vote of Security Holders................15
Item 5. Other Information..................................................15
Item 6. Exhibits and Reports On Form 8-K...................................15
SIGNATURE PAGE...............................................................16
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
[Letterhead of Richard M. Prinzi, Jr., Certified Public Accountant]
INDEPENDENT ACCOUNTANT'S REVIEW REPORT
To the Board of Directors and Stockholders
Clixtix, Inc. and Subsidiary (Formerly Phyllis Maxwell's Group, Inc.)
1501 Broadway
Suite 1807
New York, NY 10036
We have reviewed the accompanying balance sheets of Clixtix, Inc. and Subsidiary
(Formerly Phyllis Maxwell's Group, Inc.) as of June 30, 2002 and the related
consolidated statements of operations for the three and six months periods ended
June 30, 2002 and 2001, and statements of stockholders' equity and cash flows
for the six month periods ended June 30, 2002 and 2001. These consolidated
financial statements are the responsibility of the Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with auditing standards generally accepted in the United States of America, the
objective of which is the expression of an opinion regarding the condensed
financial statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying condensed financial statements for them to be in
conformity with accounting principles generally accepted in the United States of
America.
The balance sheet of Clixtix, Inc. and Subsidiary (Formerly Phyllis Maxwell's
Group, Inc.) as of December 31, 2001, is presented herein; the related
statements of operations, stockholders' equity and cash flows for the year then
ended and the audit report dated March 6, 2001, not presented herein were
prepared by the Company's former auditor, Marden, Harrison & Kreuter in which an
unqualified opinion was expressed on those financial statements.
/s/ Richard M. Prinzi, Jr.
Brooklyn, NY
August 10, 2002
3
Clixtix, Inc and Subsidiary
(Formerly Phyllis Maxwell's Groups, Inc.)
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2002 2002
-------- ------------
(Unaudited)
ASSETS
Current Assets:
Cash $ 78,354 $ 19,365
Commissions receivable 132,317 103,539
Other assets 2,654 2,654
-------- --------
Total current assets 213,325 125,558
Loans receivable - stockholder 2,040 --
-------- --------
Total assets $215,365 $125,558
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $115,202 $ 39,708
Deferred taxes payable 23,220 12,420
-------- --------
Total liabilities 138,422 52,128
-------- --------
Commitments
Stockholders' equity
Common stock, $.001par value; 20,000,000
shares authorized, 10,228,000 shares issued
and outstanding at June 30, 2002 and
10,228,000 shares issued and outstanding
at December 31,2001 20,973 20,973
Additional paid-in capital 34,058 34,058
Retained earnings 21,912 18,399
-------- --------
Total stockholders' equity 76,943 73,430
-------- --------
Total liabilities and stockholders' equity $215,365 $125,558
======== ========
See accountants' review report and notes to financial statements.
4
Clixtix, Inc and Subsidiary
(Formerly Phyllis Maxwell's Groups, Inc.)
CONSOLIDATED STATEMENTS OF OPERATIONS
Six months Six months Three months Three Months
ended June 30, ended June 30, ended June 30, ended June 30,
2002 2001 2002 2001
-------------- -------------- -------------- --------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Commission revenue $ 164,712 $ 107,512 $ 88,384 $ 41,548
General and administrative expenses 144,465 108,833 87,060 52,879
------------ ------------ ------------ ------------
Income (loss) from operations 20,247 (1,321) 1,324 (11,331)
Interest income 266 2,390 71 1,251
------------ ------------ ------------ ------------
Income (loss) before income taxes 20,513 1,069 1,395 (10,080)
------------ ------------ ------------ ------------
Income taxes (benefit):
Current 6,200 728 -- --
Deferred 10,800 -- -- (2,500)
------------ ------------ ------------ ------------
17,000 728 -- (2,500)
------------ ------------ ------------ ------------
Net income (loss) $ 3,513 $ 341 $ 1,395 $ (7,580)
============ ============ ============ ============
Earnings per common share -
basic and diluted -- -- -- --
Weighted average common shares
outstanding - basic and dilutive 10,228,000 10,785,714 10,228,000 11,000,000
============ ============ ============ ============
See accountants' review report and notes to financial statements.
5
Clixtix, Inc and Subsidiary
(Formerly Phyllis Maxwell's Groups, Inc.)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Common Stock Additional Paid Retained
-------------------------- -In Capital Earnings Total
Shares Amount
----------- ----------- ----------- ----------- -----------
Six months ended June 30, 2002 (Unaudited):
Balances, December 31, 2001 10,228,000 $ 20,973 $ 34,058 $ 18,399 $ 73,430
Net income, six months ended -- -- -- 3,513 3,513
----------- ----------- ----------- ----------- -----------
Balances, June 30, 2002 10,228,000 20,973 34,058 21,912 76,943
=========== =========== =========== =========== ===========
Six months ended June 30, 2001 (Unaudited):
Balances, December 31, 2000 10,500,000 $ 20,100 $ 23,349 $ 23,933 $ 67,382
Issuance of 1,000,000 of $.001 par
value common stock at price of $.05 per
share, net issuance costs totaling $12,978 1,000,000 1,000 36,022 -- 37,022
Net income, six months ended -- -- -- 341 341
----------- ----------- ----------- ----------- -----------
Balances, June 30, 2001 $11,500,000 $ 21,100 $ 59,371 $ 24,274 $ 104,745
=========== =========== =========== =========== ===========
See accountants' review report and notes to financial statements.
6
Clixtix, Inc and Subsidiary
(Formerly Phyllis Maxwell's Groups, Inc.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months Six months
ended June 30, ended June 30,
2002 2001
--------- -----------
(Unaudited) (Unaudited)
Cash flows provided by (used in):
Operating activities:
Cash received from customers $ 193,490 $ 128,030
Cash paid to suppliers and employees (134,767) (108,833)
Interest received 266 2,390
Income tax paid -- (728)
--------- ---------
Net cash provided by (used in)
operating activities 58,989 20,859
--------- ---------
Financing activities:
Repayment of stockholder loan payable -- (7,870.00)
Proceeds from issuance of common stock -- 50,000.00
Expenses applicable to issuance of common stock -- (12,978.00)
--------- ---------
Net cash used provided by
financing activities -- 29,152
--------- ---------
Net increase (decrease) in cash 58,989 50,011
Cash, beginning of period 19,365 30,132
--------- ---------
Cash, end of period $ 78,354 $ 80,143
========= =========
See accountants' review report and notes to financial statements.
7
Clixtix, Inc and Subsidiary
(Formerly Phyllis Maxwell's Groups, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INCLUDING DATA APPLICABLE TO UNAUDITED PERIODS)
SIX MONTHS ENDED JUNE 30, 2002
1) In the opinion of the Company's management, the accompanying consolidated
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the financial position of
the Company as of June 30, 2002 and the results of operations and cash
flows for the six month periods ended June 30, 2002 and 2001. Because of
the possible fluctuations in the marketplace and in the entertainment
industry, operating results of the Company on a six-month basis may not be
indicative of operating results for the full year.
2) The Company is not aware of any pending or threatened legal proceedings
which could have a material adverse effect on its financial position or
results of operations.
3) Earnings per share:
Income Shares Per-share
(Numerator) (Denominator) Amount
---------- ---------- -----------
Six months ended June 30, 2002:
Basic EPS
Earnings available to common
stockholders $ 3,513 10,228,000 $ --
==========
Effective dilutive securities -- --
---------- ----------
Diluted EPS
Earnings available to common
stockholders $ 3,513 10,228,000 $ --
========== ========== ==========
Six months ended June 30, 2001:
Basic EPS
Earnings available to common
stockholders $ 341 10,785,714 $ --
==========
Effective dilutive securities -- --
---------- ----------
Diluted EPS
Earnings available to common
stockholders $ 341 10,785,714 $ --
========== ========== ==========
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The following discussion of our financial condition and results of
operations should be read in conjunction with the Condensed Consolidated
Financial Statements and Notes to those financial statements included in this
Quarterly Report and our Annual Report on Form 10KSB for the year ended December
31, 2001. This discussion contains forward-looking statements that involve risks
and uncertainties. Our actual results may differ materially from those
anticipated in these forward-looking statements as a result of various factors
including, but not limited to, those discussed in this Quarterly Report.
OVERVIEW
We were incorporated under the name Phyllis Maxwell's Groups, Inc. in New
York on April 18, 1989. On August 31, 2001, we filed a Certificate of Amendment
changing our name to Clixtix, Inc.
Our wholly owned subsidiary, Maxwell Group Entertainment, Inc., was
incorporated under the laws of New York on August 3, 2001.
On August 31, 2001, we and our subsidiary entered into an Agreement and
Plan of Reorganization (the "Agreement"). Under the terms of the Agreement, we
sold to our subsidiary all of our tangible and intangible assets appearing on
our balance sheet as of June 30, 2001 and our subsidiary assumed all of the
liabilities appearing on our balance sheet as of June 30, 2001 in consideration
for 100 shares of our subsidiary's common stock, which constitutes all of the
issued and outstanding stock of our subsidiary.
We, through our subsidiary, provide services for groups who are interested
in attending New York's Broadway and Off-Broadway productions. We are licensed
by the City of New York to resell tickets to Broadway and Off-Broadway theatre
performances. Typically, we buy group tickets on behalf of a customer group
(usually a minimum of 20 persons) and our fee is paid, with limited exceptions
by the theatre. These exceptions include Saturday night tickets, certain holiday
periods or if the group falls below 20 persons, in which case the fee is paid by
the customer. On occasion, as a special service for group customers, for an
additional fee, as few as two or four tickets may be purchased.
Revenue is not recognized by us until the date an invoice is generated.
Generally, our sales and billing processes are as follows:
A customer will contact us regarding the availability of theatre tickets.
We will then contact the box office by phone regarding the customer's inquiry.
If the ticket availability is satisfactory to the customer, we will send a
written confirmation to the theatre detailing the show date and number of
tickets needed. Once we receive the signed confirmation back from the theatre,
we send the customer an invoice that details the price of the tickets. The price
is fixed and determinable. Upon our receipt from the customer of the
non-refundable amount due per the invoice, we will immediately remit the funds
to the respective show's box office. At that time, we have completed our work
necessary to earn our fee from the theatre. After the funds are received by the
box office, it sends the tickets to the customer. Our fee is delivered to us by
the theatres after the date of the show's performance. Our fee is 9.45% of the
ticket price.
9
Box offices tend not to pay commission or give discounted ticket prices
for holiday and weekend performances. If customers wish to purchase tickets for
these periods, we may charge a commission that is, in that case, included in the
invoice amount. As such, in those instances, we receive our commission before
the date of the performance.
During the quarter ended June 30, 2002, we did not sustain any losses due
to cancellation of performances. The closing of any one show will not have a
material effect on our revenue stream, since each fee is based on a specific
date of performance. When productions close after a long theatre run, they tend
to announce the closing dates well in advance of the last performance.
We have been in operation since April 1988. Prior to 1989, Mrs. Maxwell
operated the same business as a sole proprietorship.
During 2001, we conducted an initial public offering in which we offered
and sold 1,000,000 shares of our common stock at a price of $0.05 per share for
total consideration of $50,000. Our proceeds from the sale of the shares were
$50,000. Such proceeds were to be utilized to substantially expand our website,
implement new marketing programs, and for the general expansion of our business
through the greater use of the internet as described below.
We had planned to inaugurate an Internet based marketing program that
would enable American ticket buyers who plan to visit other English speaking
countries to buy their tickets before leaving the United States and make
information on these venues readily available. The plan was also to enable
global buyers of individual tickets to purchase their tickets for Broadway and
Off-Broadway by the Internet before leaving for New York. All theatre
information is currently on our web sites for groups. The same information for
present and future shows would be necessary information for theatre goers to
plan their visits to New York.
We had also been looking into the possibility of establishing an e-mail
ticket distribution system to be organized between us, one of the ticket sellers
(e.g., Ticketmaster or Telecharge) with the cooperation of specific producers of
shows to have discounts and seat availabilities. This plan was in the formative
state and development had not begun. We have not initiated any discussions with
ticket sellers or producers.
We had also been exploring the organization of a hit theatre ticket club
for individual tickets to be sold on a subscription basis that would allow
ticket buyers in the New York area to buy 2 or 4 tickets in advance of the
theatre season. This plan has been successful when sold by New York
institutional theatres, touring companies and specific markets other than New
York. This plan would enable buyers to select three or four shows from different
producers rather than one theatre or one subscription house.
We had initially planned to develop the projects described above. However,
based on the events of September 11, 2001 and the subsequent negative effects on
the business and economic condition in New York City and specifically, on the
theater industry, we have decided to focus our efforts on our original business
practice.
10
We are currently on five web sites (two of our own and three others where
we are listed as a source for group Broadway ticket sales) and on approximately
400 search engines in the category of Broadway shows/Theatre Group Sales Agency
Entertainment. It is our intention to continue to be listed on every possible
search engine.
FOR THE QUARTER AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001
RESULTS OF OPERATIONS
For the quarter ended June 30, 2002, we had a net income of $1,395
compared to a net loss of ($7,580) for the quarter ended June 30, 2001. For the
six months ended June 30, 2002, we had a net income of $3,513 compared to a net
income of $341 for the six months ended June 30, 2001. Our increases in net
income can be attributed to the fact that our commission revenues increased by
113% from $41,548 for the quarter ended June 30, 2001 to $88,384 for the quarter
ended June 30, 2002. Our commission revenues increased by 53% from $107,512 for
the six months ended June 30, 2001 to $164,712 for the six months ended June 30,
2002. The increases in our commission revenues can be partly attributed to the
price increase of certain Broadway show ticket prices. During the quarter and
six months ended June 30, 2002, the ticket prices of certain shows including The
Producers and Mama Mia were approximately 10% higher at $100 per ticket as
compared to ticket prices in the quarter and six months ended June 30, 2001. As
ticket prices increase, our commissions on those tickets increase accordingly. A
significant factor affecting our level of commission revenues is the
availability of tickets for the shows in high demand. Customer demand is a
factor beyond our control, which varies from quarter to quarter. If our
customers are seeking to see shows for which there are few tickets available
(i.e. The Producers), we may have difficulty in obtaining such tickets which
would cause our commission revenues to decrease. In addition, the age of the
highly demanded shows also affects our ability to obtain tickets and, in turn,
our commission revenues. The longer a popular production has been running, the
less difficulty we face in obtaining and selling tickets.
Despite our increase in net income for the quarter and six month period
ended June 30, 2002, our general and administrative expenses increased by
$34,181, or 65%, from $52,879 for the quarter ended June 30, 2001 to $87,060 for
the quarter ended June 30, 2002. For the six months ended June 30, 2002, our
general and administrative expenses increased by $35,632, or 33%, from $108,833
for the six months ended June 30, 2001 to $144,465.
Our general and administrative expenses include, but are not limited to,
salaries, employee benefit programs, professional fees, travel and
entertainment, telephone, office rent and other office expenses.
Our increase in general and administrative expenses for the quarter and
six months ended June 30, 2002 can be largely attributed to our increase in
professional fees. Our professional fees increased by $26,896, or 3,720%, from
$723 for the quarter ended June 30, 2001 to $27,619 for the quarter ended June
30, 2002, and increased by $33,498, or 1,002% from $3,343 for the six months
ended June 30, 2001 to $36,841 for the six months ended June 30, 2002. The
increase in our professional fee expenses are comprised of our legal and
accounting fees. During the six months ended June 30, 2002, we filed a
registration statement on Form SB-2 on behalf of Phyllis Maxwell, our President,
pursuant to which she is offering to sell up to 1,341,200 shares of our common
stock which she currently owns on a no minimum basis. We incurred additional
legal and accounting costs in connection with the
11
preparation and filing of the registration statement in connection with such
offering. The registration statement became effective on April 9, 2002.
Our office expenses for the quarter and six months ended June 30, 2002
also increased. Specifically, for the quarter ended June 30, 2002, our office
expense increased by $5,551, or 3,154%, from $176 for the quarter ended June 30,
2001 to $5,727 for the quarter ended June 30, 2002. For the six months ended
June 30, 2002 our office expense increased by $2,502, or $78%, from $3,225 for
the six months ended June 30, 2001 to $5,727 for the six months ending June 30,
2002. These increases are due to the fact that during the quarter and six months
ended June 30, 2002, we upgraded our office computer equipment.
Despite our increases in professional fee and office expenses, our
expenses for employee benefits, telephone, and travel and entertainment
decreased for the quarter and six months ended June 30, 2002. Our equipment
rental expense decreased by $302, or 100%, from $302 for the quarter ended June
30, 2001 to $0 for the quarter ended June 30, 2002, and by $1,056 from $1,056
for the six month period ended June 30, 2001 to $0 for the six month period
ended June 30, 2002. During the six months ended June 30, 2001, the lease for
our office computer and printer matured. We subsequently purchased a new
computer and printer to replace the leased equipment. As such, our equipment
rental expenses for the quarter and six months ended June 30, 2002 decreased
significantly.
Our travel and entertainment expenses for the quarter ended June 30, 2002
decreased by $3,483, or 47%, from $7,350 in the quarter ended June 30, 2001 to
$3,867 for the quarter ended June 30, 2002. For the six months ended June 30,
2002, the travel and entertainment expenses decreased by $2,886 or 26%, from
$10,961 for the six months ended June 30, 2001 to $8,075 for the six months
ended June 30, 2002. The travel and entertainment expense is a discretionary
account and varies from period to period. In the six months ended June 30, 2002,
we conducted less travel and promotion than during the same period in 2001.
However, we expect additional travel to be conducted by the end of 2002.
We had an income tax benefit for the quarter ended June 30, 2001 of $2,500
as compared to income taxes of $0 for the quarter ended June 30, 2002. Our
income taxes for the six months ended June 30, 2002 increased by $16,272 from a
taxes of $728 for the six months ended June 30, 2001 to $17,000 for the six
months ended June 30, 2002. Our income taxes are calculated based on the
prescribed statutory rates based on our income before taxes for the specific
period.
LIQUIDITY AND CAPITAL RESOURCES
We ended the six month period ended June 30, 2002 with a cash position of
$78,354 as compared to a cash position of $80,143 for the six months ending June
30, 2001. Despite the fact that we received gross proceeds totaling $50,000 from
issuance of common stock during the six months ended June 30, 2001 as compared
to $0 for the six months ended June 30, 2002, we ended the six months ended June
30, 2002 with a cash position that was only 2.2% lower than our cash position as
at June 30, 2002. The fact that our cash position declined only slightly can be
attributed to the fact that during the six months ended June 30, 2002 the amount
of cash received from customers increased by $65,460, or 51%, from $128,030 for
the six months ended June 30, 2001 to $193,490 for the six month period ended
June 30, 2002. However, despite the increase in cash received from customers,
our cash
12
position as at June 30, 2002 decreased as compared to the six months ended June
30, 2001. A portion of this $1,789 decrease in our cash position is attributable
to the $25,934, or 24%, increase in cash paid to suppliers and employees in the
quarter ended June 30, 2002 as compared to the quarter ended June 30, 2001. Our
decreased cash position is also directly related to our 89% decrease in interest
received for the quarter ended June 30, 2002 as compared to the quarter ended
June 30, 2001. The interest is earned on our cash reserves. This decrease in
interest income can be largely attributed to the decreased interest rates during
the quarter ended June 30, 2002 as compared to the interest rates during the
second quarter of 2001.
Despite the reduction in business in the months following the events of
September 11, 2001, we felt the demand for theatre begin to stabilize by the end
of 2001. As such, we feel that our current cash flow is sufficient to satisfy
our current requirements through the year ending December 31, 2002.
However, we may require significant additional financial resources for any
future expansion, especially if the expansion is effected through the
acquisition of related businesses. It is not possible to quantify what amount
may actually be required. Although the demand for our services seems to have
stabilized, there is no assurance that this level of business will continue
throughout 2002. If needed, we may seek to obtain additional financing through
public or private equity offerings. If we are unable to generate the required
amount of additional capital, our ability to implement our expansion strategies
may be adversely affected. No specific plans exist for financing at this time.
VARIABLES AND TRENDS
Due to the possible fluctuations in the marketplace and the entertainment
industry, our operating results on a six month basis may not be indicative of
our operating results for a full year.
We have been conducting the same type of business activities for
approximately 12 years. Key variables in our industry are caused by the lack of
popularity or attraction of certain productions. However, prior to September 11,
2001, the demand to see Broadway and Off-Broadway productions had been constant.
Successful shows had been enjoying a longer run time (i.e. Cats ran for 18 years
and Miss Saigon ran for 9 years as of December 2000) and more people had been
going to see theatre.
In addition, there is a current trend of large, well financed companies
such as Disney, Clear Channel, Fox Theatricals and Dadger Theatricals furnishing
productions backed by substantial promotion dollars. In fact, Disney is
currently presenting three productions on Broadway and Clear Channel has
produced two productions with more scheduled in the coming season.
Our revenue stream is affected by the influx of tourism into New York City
and is directly dependent upon attendance levels at Broadway shows. The
terrorist attacks on the World Trade Center on September 11, 2001 had a severe
impact on the economic situation in New York City, especially with respect to
tourism and theatre. There have been several advertising campaigns undertaken as
well as promotions at many of the city's hotels and
13
restaurants in an effort to encourage tourism to New York City, which we believe
have been successful. Although tourism and theatre attendance have returned to
near normal levels, there is no assurance that such levels of tourism and
theatre attendance will continue. Continued lower levels of tourism and theatre
attendance may have adverse effects on our business.
New theatres and the "rebirth" of the Time Square area of New York City as
well as the subsequent tourist increase have promised more interest and business
in theatre. Assuming that the level of tourism and theatre attendance continue
to increase, all of these influences, changes and product development taking
place including the changes in Times Square, the participation of the business
giants and the promotion of all of live entertainment and the new theatres and
restoration of several elegant historic showplaces can only affect us
positively. Lion King (Disney) has been playing to 101% (standing room) capacity
for 4 years as of November. Cats and Miss Saigon closed after 18 years and 9
years, respectively. The longevity of several of the other shows (i.e. Rent, Les
Miserables, Phantom of the Opera and Chicago) have the potential to make for a
solid future for Broadway and Off-Broadway.
The trauma of September 11, 2001 affected the economic life of New York
City in many aspects. The theatre industry felt an impact as many shows closed
prematurely and others played to lower capacity. Some productions postponed
their openings until Spring 2002 and Fall 2002, cutting down the number of new
productions available for sale. By the end of 2001, the demand for theatre
tickets seemed to stabilize. However, it is unclear whether such demand will
continue given the generally unstable economic and political climate.
As at June 30, 2002, we employed a total of four employees of which two
are full time, one is part time and one serves as consultant. We may hire
additional employees during the year ending December 31, 2002 as our needs and
resources permit.
C. Forward Looking Statements
This report includes "Forward-Looking Statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. Any
statements that express or involve discussions with respect to predictions,
expectations, beliefs, plans, projections, objectives, assumptions or future
events or performance (often, but not always, using words or phrases such as
"expects" or "does not expect", "is expected", "anticipates" or "does not
anticipate", "plans", "estimates" or "intends", or stating that certain actions,
events or results "may", "could", "would", "might" or "will" be taken, occur or
be achieved) are not statements of historical fact and may be considered
"forward looking statements". These types of statements are included in the
section entitled "Management's Discussion and Analysis or Plan of Operation."
Forward-looking statements are based on expectations, estimates and projections
at the time the statements are made that involve a number of risks and
uncertainties which could cause actual results or events to differ materially
from those presently anticipated. Although we believe that the expectations
reflected in such forward-looking statements are reasonable, we can give no
assurance that such expectations will prove to have been correct.
14
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is not a party to any pending legal proceedings nor is any of
its property subject to pending legal proceedings.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
Not Applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not Applicable.
ITEM 5. OTHER INFORMATION.
Not Applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Not Applicable.
(b) No reports on Form 8-K were filed by us for the quarter ended June 30,
2002.
15
SIGNATURES
In accordance with the requirements of the Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date: August 14, 2002 CLIXTIX, INC.
By: /s/ Phyllis Maxwell
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Phyllis Maxwell, President
By: /s/ Richard Kelley
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Richard Kelley, Vice President
(principal financial officer,
principal accounting officer)
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