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, 2004
|_| 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 incorporation or organization)
Identification No.)
Suite 1807-1501 Broadway, New York, NY 10036
(Address of principal executive offices)
(212) 768-2990
(Issuer's telephone number)
NA
(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 March 31, 2003
Transitional Small Business Disclosure Format (Check One):Yes |_| No |X|
1
CLIXTIX, INC
FORM 10-QSB
INDEX
Page
PART II. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) 3
Condensed Consolidated Balance Sheet 4
Condensed Consolidated Statements Of Operations 5
Condensed Consolidated Statements Of Cash Flows 6
Notes To The Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis or Plan of Operation. 11
Item 3. Controls and Procedures 17
PART II - OTHER INFORMATION 18
Item 1. Legal Proceedings. 18
Item 2. Changes in Securities and Use of Proceeds. 18
Item 3. Defaults Upon Senior Securities. 18
Item 4. Submission of Matters to a Vote of Security Holders. 18
Item 5. Other Information. 18
Item 6. Exhibits and Reports on Form 8-K. 18
SIGNATURE PAGE 19
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
3
CLIXTIX, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
June 30, 2004 June 30, 2003
(Unaudited) (Unaudited)
------------- -------------
Assets
Current assets:
Cash $ -- $ 27,879
Commissions receivable 63,110 32,931
Other assets 2,654 2,654
-------- --------
Total current assets 65,764 63,464
Intangible asset
Customer list, net of amortization 138,704 --
-------- --------
Total assets $204,468 $ 63,464
======== ========
Liabilities & Stockholders' Deficiency
Current liabilities:
Accounts payable and accrued liabilities $104,945 $ 52,317
Current portion of debt 14,755
--------
Total current liabilities 119,700 52,317
Long-term liabilities:
Loans from officers 39,727 --
Long-term debt 59,018 --
-------- --------
Total liabilities 218,445 52,317
-------- --------
Stockholders' deficiency:
Common stock, $.0001 par value;
20,000,000 authorized shares;
10,228,000 shares issued and outstanding 1,023 1,023
Additional paid-in capital 54,008 54,008
Deficit -69,008 -43,884
-------- --------
Total stockholders' deficiency -13,977 11,147
-------- --------
Total liabilities and stockholders' deficiency $204,468 $ 63,464
======== ========
The accompanying notes are an integral part of these condensed
consolidated financial statements.
4
CLIXTIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For The Six Months For The Three Months
Ended June 30, Ended June 30,
2004 2003 2004 2003
---- ---- ---- ----
Commission revenue $ 200,082 $ 80,763 $ 116,370 $ 47,168
General and Administrative
Expenses 232,034 96,004 106,358 44,951
------------ ------------ ------------ ------------
Income (loss) from operations (31,952) (15,241) 10,012 2,217
Interest income -- 76 -- 37
------------ ------------ ------------ ------------
Net income (loss) $ (31,952) $ (15,165) $ 10,012 $ 2,254
============ ============ ============ ============
Income (loss) per common share -
basic and diluted $ (.00) $ (.00) $ .00 $ .00
============ ============ ============ ============
Weighted average number of common shares
outstanding - basic and diluted 10,228,000 10,228,000 10,228,000 10,228,000
============ ============ ============ ============
The accompanying notes are an integral part of these condensed
consolidated financial statements.
5
CLIXTIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For The Six Months
Ended June 30,
--------------
2004 2003
---- ----
Cash flows from operating activities:
Net cash provided by (used in) operating
activities $ 60,580 $ (24,527)
----------- -----------
Cash flows from investing activities -- --
----------- -----------
Cash flows from financing activities:
Cash overdraft (20,080) --
Related party loan (4,273) --
Repayment of loan (36,227) --
----------- -----------
Net cash used in financing activities (60,580) --
----------- -----------
Net decrease in cash -- (24,527)
Cash and cash equivalents - beginning of period -- 52,406
----------- -----------
Cash and cash equivalents - end of period $ -- $ 27,879
=========== ===========
The accompanying notes are an integral part of these condensed
consolidated financial statements.
6
CLIXTIX, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. NATURE OF OPERATIONS AND BASIS OF CONSOLIDATION
The accompanying unaudited interim condensed consolidated financial
statements have been prepared in accordance with accounting principles
generally accepted in the United States of America for interim financial
information and with the instructions to Form 10-QSB of Regulation S-B.
They do not include all information and footnotes required by accounting
principles generally accepted in the United States of America for complete
financial statements. The interim unaudited consolidated financial
statements should be read in conjunction with the financial statements for
the year ended December 31, 2003, which is included in the Company's
Annual Report on Form 10-KSB filed with the Securities and Exchange
Commission on April 14, 2004. In the opinion of management, all
adjustments considered necessary for a fair presentation, consisting
solely of normal recurring adjustments, have been made. Operating results
for the six months ended June 30, 2004 are not necessarily indicative of
the results that may be expected for the year ending December 31, 2004.
Clixtix, Inc. (the "Company") formerly Phyllis Maxwell's Group, Inc.
("Maxwell Group") is licensed by the City of New York to resell group
tickets to Broadway and off-Broadway performances.
The accompanying consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiary, Maxwell Group Entertainment,
Inc. ("Maxwell Entertainment"). In August 2001, Maxwell Entertainment was
formed. During August 2001, Maxwell Group transferred its net assets to
Maxwell Entertainment for all of its issued and outstanding common stock,
forming a wholly-owned subsidiary. On the same day of the transfer of
these assets, the Company amended its certificate of incorporation and
changed its name to Clixtix, Inc. All inter-company accounts and
transactions have been eliminated in consolidation.
GOING CONCERN
As shown in the consolidated financial statements, the accumulated deficit
at June 30, 2004 amounted to $69,008 and the Company experienced net
losses of $31,952 and $15,165, for the six month period ended June 30,
2004 and 2003, respectively. Management believes that over the next 12
months, its operations will be sustained by its current operations and the
new business acquired from the customer list purchased in 2003. The
Company's current
7
management and operations have been in existence for many years and have
accumulated a great deal of experience in this industry. Management is
committed to support the Company with loans or capital contributions, as
needed over the next 12 months.
The accompanying financial statements do not include any adjustments that
might result from the eventual outcome of the risks and uncertainties
described above.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CONTROL BY PRINCIPAL STOCKHOLDERS
The directors, executive officers and their affiliates or related parties,
own beneficially and in the aggregate, the majority of the voting power of
the outstanding shares of the common stock of the Company. Accordingly,
the directors, executive officers and their affiliates, if they voted
their shares uniformly, would have the ability to control the approval of
most corporate actions, including increasing the authorized capital stock
of the Company and the dissolution, merger or sale of the Company's assets
or business.
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 reported amounts of asset and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
SIGNIFICANT ESTIMATES
Several areas require management's estimates relating to uncertainties for
which it is reasonably possible that there will be a material change in
the near term. The more significant areas requiring the use of management
estimates related to valuation of commissions receivable, the note payable
incurred and the customer list acquired by the Company and its useful
life.
3. DEFERRED INCOME TAXES
The Company has a carryforward loss for income tax purposes of
approximately $69,000 that may be offset against future taxable income.
The carryforward loss expires in the year 2024. Due to the uncertainty
regarding the success of the future operations, management has valued the
deferred tax asset allowance, for the six months ended June 30, 2004, at
100% of the related deferred tax asset.
8
4. COMMITMENTS AND CONTINGENCIES
The Company leases office space under an operating lease expiring in April
2010. Minimum future rental payments under this lease are as follows:
Year Ended Amount
---------- ------
2004 $ 16,354
2005 16,354
2006 16,354
2007 16,354
2008 16,354
Subsequent to 2008 47,847
-----------
Total $ 129,617
===========
EARN-OUT PROVISION
Pursuant to an Agreement, as part of an earn-out provision, the Company,
based on future commissions received from one former customer on the
acquired customer list, may be liable to pay the seller up to an
additional $36,000 in 2004. Management's current estimate is that it is
reasonably possible that some earn-out payment will be made from future
commissions earned from this one customer in 2004. As of the date of these
financial statements, the total earn-out to be paid is unknown.
5. SUBSEQUENT EVENT
Management is currently exploring several opportunities for the Company to
either merge or acquire another company. As of the date of these financial
statements, no agreements have been made.
9
CLIXTIX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
INCLUDING DATA APPLICABLE TO UNAUDITED PERIODS)
THREE MONTHS ENDED JUNE 30, 2004
1) In the opinion of the Company's management, the accompanying condensed
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, 2004 and the results of operations and cashflows for
the six month periods ended June 30, 2004 and 2003. 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.
10
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, 2003.
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
11
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. 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, 2004, 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.
Based on the events of September 11, 2001, New York City and specifically, on
the theater industry, sustained a negative financial impact. As both New York
City and specifically, the theater industry, continue to recover, we will
continue to focus our efforts on our core business practice. New York City
reported tourism statistics forecasts total visitors to exceed levels achieved
prior to the events of September 11, 2001.
Pursuant to an Asset Purchase Agreement dated as of September 23, 2003 (the
"Asset Purchase Agreement") by and among Clixtix, Inc, Vic Cantor Theatre Party
Services, Inc., a New York corporation and Harold Fishkin, the sole shareholder
of VCT, Clixtix acquired certain of the assets of VCT in consideration of the
payment of an aggregate purchase price of $164,000. The Purchase Price was paid
(a) $54,000 by certified check and (b) the balance by delivery of a three year
promissory note payable in equal monthly installments commencing on December 23,
2003. Based upon certain threshold ticket sales being achieved over the next 12
months, VCT has the ability to "earn" and additional $36,000, which if paid
would increase the aggregate Purchase Price to $200,000.
VCT has been engaged in the business of group and individual ticket sales for
theatrical and other events in the New York City area. In accordance with the
terms of the Asset Purchase Agreement, each of VCT and Harold Fishkin has agreed
not to compete with Clixtix for a period of five years.
We are currently on several web sites and numerous search engines in the
category of Broadway shows/Theatre Group Sales Agency Entertain-
12
ment. It is our intention to continue to be listed on every possible search
engine.
FOR THE QUARTER AND SIX MONTHS ENDED JUNE 30, 2004 AND JUNE 30, 2003 RESULTS OF
OPERATIONS
For the quarter ended June 30, 2004, we had a net income of $10,012 compared to
a net income of $2,254 for the quarter end June 30, 2003. For the six months
ended June 30, 2004, we had a net loss of $(31,952) compared to a net income of
($15,185) for the six months ended June 30, 2003.
Our increase in net income for the three months ending June 30, 2004 can be
attributed to the fact that our commission revenues increased 247% from $47,168
for the quarter ended June 30, 2003 to $116,370 for the quarter ended June 30,
2004. Our commission revenues increased by 248% from $80,763 for the six months
ended June 30, 2003 to $200,082 for the six months ended June 30, 2004.
Our increase in net loss and resulting losses for the six months ending June 30,
2004 can be attributed to the increased commission expense related to the buyout
payments related to the acquisition of the Vic Cantor Theatre Party Services,
Inc. and an increase of number personnel and base salaries and corresponding
payroll taxes and employee benefits.
The rise in total commissions was attributed to the acquisition of the new
business acquired and from the customer list purchased in 2003, but a
significant factor can be partly attributed to the recovery of the economic
recession experienced in the New York City tourism and travel industry. Customer
demand is a factor beyond our control, which varies from quarter to quarter
dependent upon availability of new shows. A majority of our customers are repeat
customers seeking only new shows. A majority of the current long-running shows
opened during prior periods from which our customers have already purchased
tickets reducing current demand affecting earned commissions.
Another 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, Avenue Q, Wicked, Boys from OZ Hairspray), 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 commission revenues from $47,168 for the quarter ended
June 30, 2003 to $116,370 for the quarter ended June 30, 2004, our general and
administrative expenses also increased 236.6% from $44,951 for the quarter ended
June 30, 2003 to $106,358 for the quarter ended June 30, 2004.
Our commission revenues increased 248% from $80,763 for the six months ended
June 30, 2003 to $200,082 for the six months ended June 30, 2004, and our
general and administrative expenses increased 241.7% from
13
$96,004 for the six months ended June 30, 2003 to $232,034 for the six months
ended June 30, 2004.
Our general and administrative expenses include, but are not limited to,
salaries, employee benefit programs, professional fees, travel and
entertainment, telephone, office rent and offices expenses. Overall increases in
general and administrative expenses can be attributed to the increase in new
business and employees associated with the purchase of the new business and
customer lists in 2003.
Another significant in increase in general and administrative expenses for the
quarter and six months ended June 30, 2004 can be largely attributed to our
increase in professional fees. Our professional fees increased 200% from $7,540
for six months ended June 30, 2003 to $15,100 for six months ended June 30,
2004. Although our legal fees decreased 30% from $4,850 for six months ended
June 30, 2003 to $3,400 for six months ended June 30, 2004, our accounting fees
increased 468% from $2,500 for six months ended June 30, 2003 to $11,700 for six
months ended June 30, 2004 as a result of additional accounting services
associated with a change in accounting firms.
Our offices expenses for the quarter and six months ended June 30, 2004 also
increased 15.9% from $7,060 for six months ended June 30, 2003 to 8,816 for six
months ended June 30, 2004. Our salaries and payroll expenses for the quarter
and six months ended June 30, 2004 increased 182% from $51,024 for six months
ended June 30, 2003 to $93,003 for six months ended June 30, 2004. Our employee
health insurance expenses for the quarter and six months ended June 30, 2004
increased 9.4% from $5,424 for six months ended June 30, 2003 to $7,994 for six
months ended June 30, 2004. Our rent expenses for the quarter and six months
ended June 30, 2004 decreased 16.2% from $10,046 for six months ended June 30,
2003 to $8,423 for six months ended June 30, 2004.
In addition, our telephone expenses for the quarter and six months ended June
30, 2004 also increased 28% from $3,790 for six months ended June 30, 2003 to
$4,853 for six months ended June 30, 2004. Our postage expenses for the quarter
and six months ended June 30, 2004 also increased 9.5% from $2,020 for six
months ended June 30, 2003 to $2,233 for six months ended June 30, 2004. Our
travel and entertainment expenses for the quarter and six months ended June 30,
2004 decreased 72.2% from $5,972 for six months ended June 30, 2003 to $1,661
for six months ended June 30, 2004. Our miscellaneous expenses for the quarter
and six months ended June 30, 2004 also decreased 65.5% from $10,001 for six
months ended June 30, 2003 to $3,450 for six months ended June 30, 2004.
No change was made in our income tax expense for the quarter and six months
ended June 30, 2004 of $0 as compared to income taxes of $0 for the six months
ended June 30, 2003. 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, 2004 with a cash position of $0 as
compared to a cash position of $27,879 for the six months ending June 30, 2003.
14
Our cash position decline can be attributed to the fact that during the six
months ended June 30, 2004 an amount equal to $36,227 of cash used to reduce
long-term debt obligations and $4,273 of cash used to repay a related loan.
A significant portion of this decrease in our cash position was attributed to
$10,749 paid in commissions payable under the acquisition of the business of Vic
Cantor Theatre Party Services, Inc. and the buyout payments totaling $36,227.
A portion of this $27,879 decrease in our cash position was attributed to $8,149
increase in cash paid to suppliers versus the cash received from customers in
the exchanged of tickets services. The decrease in cash paid was also attributed
to a $43,128 increase in cash paid to suppliers and employees from $118,783 in
the six months ended June 30, 2003 as compared to $161,911 the six months ended
June 30, 2004. This was offset by a increase of commissions receivable from $
38,272 in the six months ended June 30, 2003 as compared to -$ 14,245 the six
months ended June 30, 2004.
Despite the reduction in business in the months following the events of
September 11, 2001, and subsequent reductions in customer bookings, the
stabilization of the theatrical industry in 2002 and the increase in tourism and
revenues in the theatrical industry in 2003-2004, and advance bookings will be
sufficient to satisfy our current requirements through the year ending December
31, 2004.
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 or
significantly increase throughout 2003. 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 three 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 over 13
years. Key variables in our industry are caused by the lack of popularity or
attraction of certain productions. However, as a general matter, the demand to
see Broadway and Off-Broadway productions has been constant. Currently running
on Broadway are 27 productions as of May 5, 2003.
Successful shows are enjoying a longer run time (i.e., Cats ran for 18
years; Les Miserables, 16 years). In addition, currently long running
productions Phantom of the Opera has run over 15.5 years; Rent, 8 years; Beauty
and the Beast, 10 years; Lion King, 6 years. Prior to
15
September 11, 2001, more people had been going to see theatrical productions.
In addition, there is a current trend of large, well financed companies
such as Disney Theatrical Productions, Clear Channel Entertainment, Clear
Channel's subsidiary SFX Entertainment, Fox Theatricals and Dodger Theatricals,
Dodger Holdings furnishing productions backed by substantial promotion dollars.
In fact, Disney is currently presenting three productions on Broadway and Clear
Channel Entertainment has several productions.
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 during the remainder of 2001
and 2002, especially with respect to tourism and theatre. Immediately following,
several advertising campaigns undertaken as well as promotions at many of the
city's hotels and restaurants encouraged tourism and theatre attendance in New
York City, which have been successful. However, there is no assurance that the
levels of tourism and theatre attendance will return to levels that existed
prior to September 11, 2001. Despite New York City's current leading rank
amongst tourist destinations to major U.S. Cities, unforeseen events could
impact tourism without warning and negatively impact tourism and theatre
attendance would 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 tourism increases have promised more interest and
business in theatre. Assuming that the level of tourism and theatre attendance
and total box office grosses continues to increase, all of these influences,
changes and product development taking place including the ongoing changes in
Times Square, the participation of the business giants and the promotion of all
of live entertainment can only affect us positively. Lion King (Disney) has been
playing to an average of 99% of its box office capacity after 6 years. Les
Miserables closed after 16 years. The longevity of several of the other shows
(i.e., Lion King, Beauty and the Beast, Phantom of the Opera, Chicago and Stomp)
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.
The Total Paid Attendance for Broadway in 2002 and 2003 decreased from
11.4 million to 11.1 million and during 2003-2004 season increased to 11.6
million. The Cumulative Box Office Gross increased from $721 million for the
2002-2003 Broadway theatre season to 771 million for the 2003-2004 Broadway
theatre season. The Total Playing Weeks, the measure of productivity of Broadway
as measured by the overall number of logged weeks performed, decreased from
1,544 to 1451. The results of 2003-2004 Broadway season have increased
substantially from the year ended 1993 with a Total Paid Attendance of
7,642,860, Cumulative Box Office Gross of $333,316,961 and the overall logged
weeks of 981.
16
A total of 39 new productions opened on Broadway during the current
2003-2004 theatrical season and compared to 36 new productions for the 2002-2003
theatrical season.
A total of 36 productions previously running on Broadway closed during the
2003-2004 theatrical season and compared to 47 productions that closed during
the entire 2002-2003 theatrical season totaled 47 productions.
New York continues to be one of the top tourist destinations in the United
States. In 2002, New York City was ranked as the top U.S. Destination by
Hotels.com for the 2003-2004 winter destination followed by Las Vegas and
Orlando. In 2002, 35.3 million tourists journeyed to New York an overall growth
after the events September 11, 2001. The highest reported year was 1999 with
36.4 million visitors with a significant gain from U.S. domestic visitors and a
significant reduction in foreign visitors.
However, it is unclear whether such demand will continue given the
generally unstable economic and political climate.
As at December 31, 2003, we had employed a total of three employees of
which all are full time, and the company has two consultants. We may need to
hire additional employees during the year ending December 31, 2004 if our needs
and resources permit.
Item 3. Controls and Procedures
The chief executive officer and the principal financial officer of the
Registrant have concluded based on their evaluation as of a date within 90 days
prior to the date of the filing of this Report, that the Registrant's disclosure
controls and procedures are effective to ensure that information required to be
disclosed by the Registrant in the reports filed or submitted by it under the
Securities Act of 1934, as amended, is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission's rules and forms, and include controls and procedures designed to
ensure that information required to be disclosed by the Registrant in such
reports is accumulated and communicated to the Registrant's management,
including the president, as appropriate to allow timely decision regarding
required disclosure.
There were no significant changes in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to the date of
such evaluation.
Our management believes that a control system, no matter how well designed and
operated, cannot provide absolute assurance that the objectives of the control
system are met, and no evaluation of controls can provide absolute assurance
that all control issues and instances of fraud, if any, within a company have
been detected.
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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) Exhibits
31.1 Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)
31.2 Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)
32.1 Certification by the Chief Executive Officer pursuant to 18 U.S.C. 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification by the Chief Financial Officer pursuant to 18 U.S.C. 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(b) On April 30, 2004, we filed FORM 8-K disclosing the resignation on April 27,
2004 of Richard M. Prinzi, Jr. CPA and the engagement of on April 28, 2004, of
Livingston, Wachtel & Co., LLP as the principal accountant to audit the
Company's financial statements for the year ended December 31, 2003.
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SIGNATURE PAGE
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 17, 2004 CLIXTIX, INC.
By: /s/ "Phyllis Maxwell"
Phyllis Maxwell, President
By: /s/ "Richard Kelley"
Richard Kelley, Vice President
(principal financial officer,
principal accounting officer)
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