Item 1 - Business
Camera Platforms International, Inc., a Delaware corporation, ("Shotmaker" or "the Company") rents camera cars and related production equipment used in the film and video industries. The Company rents three varieties of camera cars, together with tow dollies, process trailers and cranes used in conjunction with them.
Sale of Assets
On January 30, 2007, the Company entered into an Asset Purchase Agreement ("the Agreement") with Moving Vehicular Platforms, Inc. ("MVP") a California Corporation to sell substantially all of its assets. MVP agreed to pay a total purchase price of $500,000, of which $25,000 was received on December 13, 2006 as an option advance under a non-binding letter of intent. Another $25,000 was paid concurrently with the execution of the Agreement. The balance of the purchase price is due at closing. A condition of closing is that MVP shall have received a loan for the balance of the purchase price under substantially similar terms as those contemplated by a conditional commitment letter from City National Bank provided by MVP to the Company. The sale must close by April 30, 2007. The Company plans to use the net proceeds from the sale to make payments on loans made to it by DOOFF, LLC, a related party.
In addition, the Agreement calls for MVP to enter into a sublease agreement for the Company's premises at 10909 Vanowen Street in North Hollywood, California.
Immediately after the consummation of the asset sale, the Company will have no operating business or sources of revenues.
General
Shotmaker equipment has been used to film many of the top recent U.S. movies including Evan Almighty, Comanche Moon, No Country for Old Men, Valley of Elah, Resident Evil 3, and Chasers. In addition, a number of prime time television programs and series use Shotmaker equipment, such as CSI Miami, ER, Monk, Veronica Mars, Scrubs, Brothers and Sisters, and Repo. Commercials for Mazda, GMC, Clairol, Nissan, Ford, Acura, Mazda and other national and international brands were filmed using the Company's equipment. . Products
The Shotmaker Camera Car fleet currently consists of 7 camera cars, which include one Shotmaker "Elite Plus", two Shotmaker "Elites" (both non- operational), one Shotmaker "Premier Plus", and three Shotmaker "Classics". All the camera cars are based at the Company's headquarters and rented throughout the western United States. Camera cars are used in the motion picture, television and commercial industries to provide a stable base for cameras to film action scenes.
Accessory Equipment. The Company rents accessory equipment, including tow dollies and process trailers. Tow dollies are used to tow a car with its front two wheels inches off the ground. Process trailers carry the entire car behind the Shotmaker Camera Car on a platform, which can be expanded up to fourteen feet wide. The Company has available a custom motorcycle towing device which can tow two motorcycles side by side.
Marketing, Competition, Intellectual Property and Awards
Marketing. The Company's marketing efforts are primarily conducted by direct sales efforts and limited advertisements in trade publications.
CAMERA PLATFORMS INTERNATIONAL, INC.
Competition. In recent years several fleets of newer camera cars have emerged featuring AC electricity availability, greater generator power, more comfortable working environments for directors and cinematographers, and lower, o-the-ground process trailers, which have affected the Company's competitiveness and has resulted in reduced rental revenues.
During the fourth quarter of 2004 and continuing through 2006, the Company sold a significant number of Enlouva and Akela cranes, some of which were sold into the regional rental market in which the Company operates. The Company no longer owns any Akela cranes and has a limited inventory of Enlouva and Panther cranes. In 2006 the Company sold several camera cars, tow dollies and cranes to a Canadian company. As stated above, in January of 2007, the Company entered into an agreement to sell substantially all of its assets.
Patents and Trademarks. The Company has registered THE SHOTMAKER, AKELA, and ENLOUVA as trademarks in the United States, Canada, and Japan. Panther GmbH, an unrelated company, holds all patents and trademarks on its Panther products.
Employees. 	The Company had two full-time employees at February 20, 2007. The Company is not a party to any collective bargaining agreements and its employees are not represented by a labor union.
Item 1A.
Item 1A. Risk Factors
Company's equity securities are subject to a number of risks and uncertainties including, but not limited to, the following: continued failure of the Company to achieve profitable operations and to secure adequate liquidity and working capital to continue on-going operations; defaults on the Company's secured loans which leave the Company vulnerable to repossession of its equipment; developments with respect to the Company's liquidity or results of operations; the ability of the Company to obtain products and services and negotiate terms with vendors and service providers for current orders; the ability to develop, fund and execute an operating plan for the Company; the ability of the Company to attract and retain employees; competitive pressures from other camera car companies and grip equipment rental companies which may affect the nature and viability of the Company's business strategy; the ability of the Company to attract and retain customers; and the absence of an active public trading market for the Company's common stock. In January of 2007, the Company entered into an agreement to sell substantially all of its assets. Immediately after the consummation of the asset sale, the Company will have no operating business or sources of revenues.
Item 1B.
Item 1B. - Unresolved Staff Comments
NONE
Item 2
Item 2 - Properties
The Company's principal executive offices and place of business are located at 10909 Vanowen Street, North Hollywood, California 91605. The premises are leased and subleased from unaffiliated third parties for a gross rent of approximately $104,000 per year, including common area maintenance and utilities, property tax, and insurance. The Company's lease expires on December 31, 2007.
Item 3
Item 3 - Legal Proceedings
The Company is not involved in any legal proceedings.
CAMERA PLATFORMS INTERNATIONAL, INC.
Item 4
Item 4 - Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the fourth quarter of fiscal 2006.
PART II
Item 5
Item 5 - Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
The Company's common stock trades on the over-the-counter market under the symbol "CPFR". The table below sets forth the high and low bid prices for the Company's common stock. Bids represent inter-dealer prices, without retail mark-up, markdown or commissions, and may not represent actual transactions.
As of February 20, 2007, there were approximately 1500 beneficial owners of 23,740,964 outstanding shares of the Company's common stock, held by approximately 500 shareholders of record.
The Company has not paid a dividend on its common stock since inception.
CAMERA PLATFORMS INTERNATIONAL, INC.
Item 6
Item 6 - Selected Financial Data
CAMERA PLATFORMS INTERNATIONAL, INC. CONSOLIDATED SUMMARY OF QUARTERLY OPERATIONS (Unaudited)
CAMERA PLATFORMS INTERNATIONAL, INC.
Item 7
Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.
This Annual Report on Form 10-K includes certain forward-looking statements based upon management's beliefs, as well as assumptions made by and data currently available to management. This information has been, or in the future, may be included in reliance on the "safe harbor" provision of the Private Securities Litigation Reform Act of 1995. These statements are subject to a number of risks and uncertainties including, but not limited to, the following: adverse developments with respect to the Company's liquidity or results of operations; the ability of the Company to obtain products and services and negotiate terms with vendors and service providers for current orders; the ability to develop, fund and execute an operating plan for the Company; the ability of the Company to attract and retain employees; competitive pressures from other camera car companies and grip equipment rental companies which may affect the nature and viability of the Company's business strategy; the ability of the Company to attract and retain customers; and the absence of an active public trading market for the Company's common stock.
Actual results may differ materially from those anticipated in any such forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances.
Overview
The Notes to the Financial Statements are an integral part of Management's Discussion and Analysis of Financial Condition and Results of Operations and should be read in conjunction herewith.
ASSET SALE AGREEMENT
On January 30, 2007, the Company entered into an Asset Purchase Agreement ("the Agreement") with Moving Vehicular Platforms, Inc. ("MVP") a California Corporation to sell substantially all of its assets. MVP agreed to pay a total purchase price of $500,000, of which $25,000 was received on December 13, 2006 as an option advance under a non-binding letter of intent. Another $25,000 was paid concurrently with the execution of the Agreement. The balance of the purchase price is due at closing. A condition of closing is that MVP shall have received a loan for the balance of the purchase price under substantially similar terms as those contemplated by a conditional commitment letter from City National Bank provided by MVP to the Company. The sale must close by April 30, 2007. The Company plans to use the net proceeds from the sale to make payments on loans made to it by DOOFF, LLC, a related party.
In addition, the Agreement calls for MVP to enter into a sublease agreement for the Company's premises at 10909 Vanowen Street in North Hollywood, California.
Immediately after the consummation of the asset sale, the Company will have no operating business or sources of revenues.
SIGNIFICANT ACCOUNTING POLICIES
The Company reviews the accounting policies it uses in reporting its financial results on a regular basis. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to accounts receivable, property and equipment, rental assets, income taxes, contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. These estimates form the basis for the Company's judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Results may differ from these estimates if actual outcomes are different from the estimates on which the Company based its assumptions. These estimates and judgments are reviewed by management on an ongoing basis. The Company believes the following critical accounting policies
CAMERA PLATFORMS INTERNATIONAL, INC.
affect its more significant judgments and estimates used in the preparation of the Financial Statements of the Company.
Revenue Recognition - The Company recognizes revenue over the related equipment rental period using prices that are negotiated at the time of rental.
Allowance for Doubtful Accounts - the Company maintains allowances for doubtful accounts for estimated losses resulting from the inability or unwillingness of its customers to make required payments. If the financial condition of the Company's customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.
Rental Asset Valuation Allowance - The Company established a rental asset valuation allowance when the assets were put in service to consider the excess cost over their estimated fair market value based upon expected future rental revenue.
LIQUIDITY AND CAPITAL RESOURCES
The Company has a $250,000 revolving line of credit from its secured lender DOOFF, LLC. which matured in June, 2006, and a $1,500,000 term loan maturing in 2010. The Company has been in material non-compliance with the terms of these loans, and its lender has indicated that no further funds will be advanced. The Company owed $193,000 under the revolving line as of December 31, 2006. In addition, the Company has failed to make interest payments totaling $532,000 to DOOFF, LLC. In the past, ongoing operations have not provided sufficient cash to meet the Company's ongoing obligations as they have become due. The Company has reduced its workforce to two employees and has commensurately achieved reductions in its employee benefit expense, and rental and associated occupancy expenses. These cost reductions have not been sufficient to allow the company to operate with positive cash flows even with the lender's forbearance concerning payments due for interest and principal. The Company sold some of its equipment in both 2005 and 2006 and used the proceeds to fund its operations. On January 30, 2007, the Company entered into an agreement to sell substantially all of its assets to Moving Vehicular Platforms, Inc. for $500,000. The net proceeds from this sale will be used to pay obligations of the Company, including loans from DOOFF, LLC. Immediately after the consummation of the asset sale, the Company will have no operating business or sources of revenues.
The Company has not yet made any determination about future business plans once the asset sale is consummated. The Board of Directors is evaluating several possible options, including a possible transaction in which the Company sells or merges it public "shell" corporation with a private operating business.
STOCK OPTIONS
On July 1, 2001, the Board of Directors adopted the 2001 Stock Option Plan to provide for the issuance of incentive stock options and nonqualified stock options as a means of attracting, motivating and retaining directors, officers and key employees and consultants of the Company.
Concurrent with the adoption of the 2001 Stock Option, the Board of Directors authorized the issuance of options to purchase 300,000 shares of the Company's stock to each of the Company's five directors. The options were priced at $0.11, which was above the market price of the Company's stock at the date of issuance.
CAMERA PLATFORMS INTERNATIONAL, INC.
Results of Operations
2006 versus 2005
Total rental revenues were 5% higher in 2006 compared with 2005. Cost of rentals increased due to increased payroll and payroll-related expenses coupled with an increase in repair and maintenance due to the overhaul of a Shotmaker Classic. The total increase was $24,000, or 9%. Corporate expenses decreased by $17,000 due primarily to lower insurance costs. As stated in previous years, the Company faces competition from other camera car companies that have newer fleets together with remote head packages. This, coupled with a general over-capacity in the industry, has caused market share to decline. In addition, the Company carries the cost burden associated with being a public company and has insufficiently profitable operations to fund these expenses.
In addition, the Agreement calls for MVP to enter into a sublease agreement for the Company's premises at 10909 Vanowen Street in North Hollywood, California.
Immediately after the consummation of the asset sale, the Company will have no operating business or sources of revenues.
Fourth Quarter 2006 versus fourth quarter 2005
Total revenues for the fourth quarter of 2006 were up over 50% as compared to 2005. The increase was due to a three-month shoot using the Shotmaker Elite plus. There was an associated increase in gas and mileage and repairs. Corporate expenses were unchanged year to year. During the fourth quarter of 2005 the Company recorded a $50,000 gain on sale of equipment. Excluding that gain, the net loss for the fourth quarter of 2006 was $9,000 greater than 2005.
2005 versus 2004
During 2005, the Company's total rental revenue decreased by 49% from the previous year. 8% of this decrease was due to the sale of all of the Company's Akela cranes. In addition, Pegasus and Enlouva crane rentals decreased by $16,000, The largest decrease, however, was in the Company's core business of camera car rentals. Camera car rentals decreased from $523,000 in 2004 to $273,000 in 2005. The Company continues to face competition from camera car companies with newer fleets and larger electrical generating power. This, coupled with a general over-capacity in the industry, has caused market share to decline and average daily rental rates to remain stagnant.
Because much of the Company's cost of rentals are fixed costs, primarily comprised of rent, insurance, and payroll, camera car rental costs were reduced by only $56,000 from 2004 to 2005. With the elimination of Akela rentals and a substantial part of the dolly and crane rental business, total cost of rentals decreased by $291,000.
Corporate expenses were reduced by $94,000, primarily through reductions in payroll and insurance.
CAMERA PLATFORMS INTERNATIONAL, INC.
2004 versus 2003
During 2004, the Company's total revenues continued to decline, falling by approximately 9% to $644,000. A 6% increase in camera car rental income was far offset by the 44% decrease in dolly and crane rentals coupled with a 39% decrease in Akela crane rentals. Camera car rentals continued to account for the majority of the Company's rental revenues, up to 81% from 70% in 2003. During the fourth quarter of 2004, the Company sold significant numbers of Enlouva and Akela cranes. The proceeds were used to pay overdue interest and principal to its lender, and for working capital. The Company is re-focusing its marketing and technical efforts on its traditional camera car business.
Costs of rentals decreased in all categories. The largest components of decrease were in payroll and rent expense. During 2004, the Company entered into a new lease agreement by which it reduced its space by approximately 50%. Corporate expenses were down by $44,000, also primarily through reductions in rent and payroll.
Impact of Inflation
Inflation has not had a material impact on the Company's operations to date, and the Company believes it will not have a material effect on operations in the next twelve months.
Foreign Currency Transactions
All international sales are denominated and remitted in U.S. dollars, and all foreign transactions are settled within a short period of time. Accordingly, the Company does not anticipate that foreign currency fluctuations will have a material effect on operations in the next twelve months.
Item 7A
Item 7A - Quantitative and Qualitative Disclosures About Market Risk
The Company owns no financial instruments or other assets, nor has it entered into any contracts or commitments, which would expose it to market risks such as interest rate risk, foreign currency exchange rate risk or commodity price risk as required to be disclosed pursuant to Regulation S-K, Item 305, of the 1934 Securities Exchange Act, as amended.
CAMERA PLATFORMS INTERNATIONAL, INC.
Item 8
Item 8 - Financial Statements and Supplementary Data
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
ALL OTHER SCHEDULES FOR WHICH PROVISION IS MADE IN THE APPLICABLE ACCOUNTING REGULATION OF THE SECURITIES AND EXCHANGE COMMISSION ARE NOT REQUIRED UNDER THE RELATED INSTRUCTIONS OR ARE INAPPLICABLE, AND THEREFORE HAVE BEEN OMITTED.
Report of Independent Registered Public Accounting Firm
Board of Directors Camera Platforms International, Inc.
We have audited the accompanying balance sheets of Camera Platforms International, Inc. (the "Company") as of December 31, 2006 and 2005, and the related statements of operations, shareholders' deficit and cash flows for the years ended December 31, 2006, 2005 and 2004. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Camera Platforms International, Inc. as of December 31, 2006 and 2005, and the results of its operations and its cash flows for the years ended December 31, 2006, 2005 and 2004 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations, negative cash flows from operations, and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management's plans with regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
We have also audited the Schedules of Valuation and Qualifying Accounts for each of the three years in the period ended December 31, 2006. In our opinion, these schedules present fairly, in all material respects, the information required to be set forth therein.
Rose, Snyder & Jacobs A Corporation of Certified Public Accountants
Encino, California January 30, 2007
CAMERA PLATFORMS INTERNATIONAL, INC. BALANCE SHEETS December 31, 2006 and 2005
SEE INDEPENDENT AUDITORS' REPORT AND NOTES TO FINANCIAL STATEMENTS.
CAMERA PLATFORMS INTERNATIONAL, INC. STATEMENTS OF OPERATIONS For the Years ended December 31, 2006, 2005 and 2004
SEE INDEPENDENT AUDITORS' REPORT AND NOTES TO FINANCIAL STATEMENTS.
CAMERA PLATFORMS INTERNATIONAL, INC. STATEMENTS OF CASH FLOWS For the Years ended December 31,
SEE INDEPENDENT AUDITORS' REPORT AND NOTES TO FINANCIAL STATEMENTS.
CAMERA PLATFORMS INTERNATIONAL, INC. STATEMENTS OF CASH FLOWS, continued For the Years ended December 31,
SEE INDEPENDENT AUDITORS' REPORT AND NOTES TO FINANCIAL STATEMENTS.
CAMERA PLATFORMS INTERNATIONAL, INC. STATEMENT OF SHAREHOLDERS' EQUITY For the Years ended December 31, 2006, 2005 and 2004
SEE INDEPENDENT AUDITORS' REPORT AND NOTES TO FINANCIAL STATEMENTS.
CAMERA PLATFORMS INTERNATIONAL, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2006
1.	DESCRIPTION OF BUSINESS AND GOING CONCERN
Camera Platforms International, Inc. ("CPI" or the "Company"), was organized in the state of Delaware in 1985 to engage in the business of leasing camera cars and other related equipment to motion picture and television production companies. The Company designs, manufactures, rents and leases a wide variety of production equipment to the film and video industries.
The accompanying financial statements have been prepared on a going concern basis of accounting which contemplates continuity of operations, realization of assets, liabilities, and commitments in the normal course of business. The accompanying financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern.
The Company's losses, negative cash flows from operations and its working capital deficit raise substantial doubt about the Company's ability to continue as a going concern and the appropriateness of using the going concern basis, which is dependent upon, among other things, an additional cash infusion. There is no assurance that additional cash will be provided or that cash flow from operations will be sufficient to meet the Company's obligations. DOOFF, LLC. the current lender, has indicated that it will no longer fund the Company. In January 2007 the Company entered into a conditional agreement to sell all of its assets. See Note 13.
2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Property and Equipment
Property and equipment is stated at cost, less accumulated depreciation and amortization. Depreciation and amortization is generally determined using the straight-line method over the estimated useful life of the property and equipment, using periods ranging from three to ten years.
Cash Equivalents
The Company considers all highly liquid investments held at financial institutions with maturity dates of three months or less at the time of acquisition to be cash equivalents.
Per Share Data
The Company has adopted Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share", which establishes standards for computing and presenting basic and diluted earnings per share.
The basic income (loss) per share is calculated based upon the weighted average number of common shares outstanding during each year. Diluted income (loss) per share is calculated based upon the weighted average of shares of common stock outstanding and shares that would have been outstanding assuming the issuance of common stock for all dilutive potential common stock outstanding. The Company's outstanding stock options have not been included in the calculation of the weighted average shares of common stock as they would have an antidilutive effect.
See independent auditors' report
CAMERA PLATFORMS INTERNATIONAL, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2006 See independent auditors' report
2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Concentration of Credit Risk and Accounts Receivable
The Company's customers are principally engaged in the production of motion pictures or television programming, or are suppliers to such companies. Credit is extended based on an evaluation of the customer's financial condition. Receivables arising from the granting of credit under normal trade terms are generally due within 30 days and are generally not collateralized. Collections of accounts receivable have consistently been within management's expectations.
The Company maintains an allowance for doubtful accounts for estimated losses that may arise if any of its customers are unable to make required payments. Management specifically analyzes the age of customer balances, historical bad debt experience, customer credit-worthiness, and changes in customer payment terms when making estimates of the uncollectability of the Company's trade accounts receivable balances. If the Company determines that the financial condition of any of its customers has deteriorated, whether due to customer-specific or general economic issues, increases in the allowance may be made. Accounts receivable are written off when all collection attempts have failed.
Advertising Costs
The Company expenses advertising costs over the period it benefits, generally 12 months. Advertising costs expensed totaled $5,000, $6,000, and $7,000 for the years ended December 31, 2006, 2005, and 2004, respectively, and were recorded as part of selling, general and administrative expenses. At December 31, 2006, 2005 and 2004 no advertising costs were capitalized.
Stock-Based Compensation
In December 2004, the FASB issued SFAS No. 123(R),"Share-Based Payment". SFAS 123(R) amends SFAS No. 123,"Accounting for Stock-Based Compensation", and APB Opinion 25,"Accounting for Stock Issued to Employees." SFAS No.123(R) requires that the cost of share-based payment transactions (including those with employees and non-employees) be recognized in the financial statements. SFAS No. 123(R) applies to all share-based payment transactions in which an entity acquires goods or services by issuing (or offering to issue) its shares, share options, or other equity instruments (except for those held by an ESOP) or by incurring liabilities (1) in amounts based (even in part) on the price of the entity's shares or other equity instruments, or (2) that require (or may require) settlement by the issuance of an entity's shares or other equity instruments. This statement is effective for public companies qualifying as SEC small business issuers for the fiscal year beginning after December 15, 2005.
Effective January 1, 2006, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 123R, Share-Based Payment, using the modified prospective method. Under this method, compensation cost recognized during the year December 31, 2006 includes compensation cost for all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS No. 123 amortized over the remaining vesting period for such options. There were no options granted during the year ended December 31, 2006. The implementation of the provisions of SFAS No. 123R on January 1, 2006 resulted in no additional compensation costs.
See independent auditors' report CAMERA PLATFORMS INTERNATIONAL, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2006
Prior to January, the Companye accounted for employee stock options grants in accordance with APB No. 25, and had adopted only the disclosure provisions of SFAS No. 123, Accounting for Stock-Based Compensation. Accordingly, no stock based compensation expense was recognized for the year ended December 31, 2006 no options were granted during the period.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. The Company's management estimates the valuation for doubtful accounts, rental asset valuation allowance and the useful lives of property and equipment. Actual results could differ from those estimates and such differences could be material to the financial statements.
Recent Accounting Pronouncements
In September 2006, the SEC released Staff Accounting Bulletin No. 108, "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements" (SAB 108). SAB 108 provides interpretive guidance on the SEC's views regarding the process of quantifying materiality of financial statement misstatements. SAB 108 is effective for fiscal years ending after November 15, 2006. The adoption of this accounting pronouncement is not expected to have a material effect on the Company's financial statements.
In September 2006, the FASB issued FAS 157 (SFAS 157), "Fair Value Measurements". This standard defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007. The adoption of this accounting pronouncement is not expected to have a material effect on the Company's financial statements.
In July 2006, the FASB issued Interpretation No. 48 (FIN No. 48), "Accounting for Uncertainty in Income Taxes". This interpretation requires recognition and measurement of uncertain income tax positions using a "more-likely-than-not" approach. The provisions of FIN No. 48 are effective for fiscal years beginning after December 15, 2006. The adoption of this accounting pronouncement is not expected to have a material effect on the Company's financial statements.
In March 2006, the FASB issued FAS 156 (SFAS No. 156), "Accounting for Servicing of Financial Assets" - an amendment of FASB Statement No. 140. This standard clarifies when to separately account for servicing rights, requires servicing rights to be separately recognized initially at fair value, and provides the option of subsequently accounting for servicing rights at either fair value or under the amortization method. The standard is effective for fiscal years beginning after September 15, 2006 but can be adopted early as long as financial statements for the fiscal year in which early adoption is elected, including interim statements, have not yet been issued. The adoption of this accounting pronouncement is not expected to have a material effect on the Company's financial statements.
In February 2006, the FASB issued FAS 155 (SFAS No. 155), "Accounting for Certain Hybrid Financial Instruments" - an amendment of FASB Statement Nos. 133 and 140 This statement permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that would otherwise have to be accounted for separately. The new statement also requires companies to identify interests in securitized financial assets that are freestanding derivatives or contain embedded derivatives that would have to be accounted for separately, clarifies which interest-and principal-only strips are subject to Statement 133, and amend Statement 140 to revise the conditions of a
See independent auditors' report CAMERA PLATFORMS INTERNATIONAL, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2006
qualifying special purpose entity due to the new requirement to identify whether interests in securitized financial assets are freestanding derivatives or contain embedded derivates. This statement is effective for all financial instruments acquired or issued after the beginning of an entity's first fiscal year that begins after September 15, 2006, but can be adopted early as long as financial statements for the fiscal year in which early adoption is elected, including interim statements, have not yet been issued. The adoption of this accounting pronouncement is not expected to have a material effect on the Company's consolidated financial statements.
In March 2005, the FASB issued Interpretation No. 47 (FIN No. 47), Accounting for "Conditional Asset Retirement Obligations, an Interpretation of FASB Statement No. 143". This interpretation clarifies the timing for recording certain asset retirement obligations required by FASB Statement No. 143, "Accounting for Asset Retirement Obligations". The provisions of FIN No. 47 are effective for years ending after December 15, 2005. The adoption of this accounting pronouncement did not have a material effect on the Company's financial statements.
In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections - a replacement of Accounting Principles Board Opinion ("APB") Opinion No. 20 and FASB Statement No. 3". This statement applies to all voluntary changes in accounting principle and changes required by an accounting pronouncement where no specific transition provisions are included. SFAS 154 requires retrospective application to prior periods' financial statements of changes in accounting principle, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. Retrospective application is limited to the direct effects of the change; the indirect effects should be recognized in the period of the change. This statement carries forward without change the guidance contained in APB Opinion No. 20 for reporting the correction of an error in previously issued financial statements and a change in accounting estimate. However, SFAS 154 redefines restatement as the revising of previously issued financial statements to reflect the correction of an error. The provisions of SFAS 154 are effective for accounting changes and corrections of errors made in fiscal periods that begin after December 15, 2005, although early adoption is permitted. The adoption of this accounting pronouncement did not have a material effect on the Company's financial statements.
In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29". SFAS No. 153 is based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. APB Opinion No. 29, "Accounting for Nonmonetary Transactions," provided an exception to its basic measurement principle (fair value) for exchanges of similar productive assets. Under APB Opinion No. 29, an exchange of a productive asset for a similar productive asset was based on the recorded amount of the asset relinquished. SFAS No. 153 eliminates this exception and replaces it with an exception of exchanges of nonmonetary assets that do not have commercial substance. The provisions of this Statement are effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The adoption of this accounting pronouncement did not have a material effect on the Company's financial statements.
In November 2004, the FASB issued SFAS No. 151, "Inventory Costs, an amendment of Accounting Research Bulletin No. 43, Chapter 4". SFAS No. 151 requires that abnormal amounts of idle facility expense, freight, handling costs and wasted materials (spoilage) be recorded as current period charges and that the allocation of fixed production overhead to inventory be based on the normal capacity of the production facilities. SFAS No. 151 was effective for the fiscal year beginning on October 1, 2005. The adoption of this accounting pronouncement did not have a material effect on the Company's financial statements.
CAMERA PLATFORMS INTERNATIONAL, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2006
SEGMENT REPORTING
The Company operates in a single business segment. The Company leases and rents equipment for the motion picture, television and theatrical production and music industries.
Certain amounts from 2005 have been reclassified to conform to the 2006 presentation.
3. PROPERTY AND EQUIPMENT
During 2004, the Company sold equipment with original costs totaling $1,089,000 and accumulated depreciation of $1,067,000. The Company received $214,000 and recorded a gain of $177,000, after adjustments to the Company's valuation allowance.
During 2005, the Company sold fully depreciated equipment and trucks with original costs totaling $1,179,000. The Company received $125,000, recording a gain of $122,000 and adjusting the asset valuation allowance by $3,000.
During 2006, the Company sold fully depreciated equipment and trucks with original costs totaling $502,000. The Company received $120,000, recording a gain of the same amount.
4. NOTE PAYABLE - BANK
On June 14, 2006, the Company entered into a loan agreement with a non- affiliated bank. The Company borrowed $100,000 at prime (8.25% at December 31, 2006) with payments of $5,000 per month plus interest. The remaining unpaid balance is due June 10, 2007. The loan is guaranteed by a trust controlled by one of the principal shareholders of the Company. The loan proceeds were used to pay a portion of past due interest due to DOOFF LLC.
CAMERA PLATFORMS INTERNATIONAL, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2006
5. NOTES PAYABLE - RELATED PARTY
Notes payable - related party consist of (1) a $1,500,000 term loan, interest only payable monthly at 10% maturing June 2010, secured by all the assets of the Company and (2) a $250,000 revolving line of credit, interest only payable monthly at 10%, which matured June 2006 and also secured by all the assets of the Company. The balance outstanding on this line of credit was $193,000 at both December 31, 2006 and 2005. These loans are with DOOFF,LLC. One director and two principal shareholders of the Company are also principals of DOOFF, LLC. As of December 31, 2006, the Company was $500,000 in arrears in its interest payments to DOOFF, LLC. and was in default under the terms of these loans. DOOFF, LLC has the right, under the terms of the loans, to foreclose on the collateral. During the year ended December 31, 2006 the Company made interest payments to DOOFF LLC totaling $167,000 including an offset for subrented space of $44,000 (Note 8).
Also during 2006, the Company borrowed and repaid loans totaling $22,000 made by shareholders of the Company to fund short-term cash shortfalls.
6. LITIGATION
The Company is not involved in any litigation.
7. INCOME TAXES
The Company utilizes the liability method under SFAS No. 109 to account for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws expected to apply when the differences are expected to reverse.
At December 31, 2006, the Company has net operating loss-carry forwards of approximately $16 million for federal tax purposes, which expire from 2007 to 2026. Because of statutory "ownership changes" the amount of net operating losses which may be utilized in future years are subject to significant annual limitations. The Company also has operating loss carryforwards of approximately $1 million for California tax purposes, which expire from 2007 to 2016.
At December 31, 2006, total deferred tax assets, consisting principally of net operating loss carryforwards, amounted to approximately $5.6 million. For financial reporting purposes, a valuation allowance has been recognized in an amount equal to such deferred tax assets due to the uncertainly surrounding their ultimate realization. It represents an decrease in the valuation allowance of approximately $3 million in 2006 due to the expiration of a portion of the state loss carryfoward.
The effective tax rate differs from the U.S. Federal statutory rate principally due to the valuation allowance recognized due to the uncertainty surrounding the ultimate realization of deferred tax assets. During 2006, the Company recognized a reduction in the benefit from tax loss carryfowards, and a commensurate decrease in the valuation allowance, due to the expiration of tax loss carryforwards.
See independent auditors' report
CAMERA PLATFORMS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2006
8.	COMMON STOCK AND STOCK OPTIONS
There are 1,500,000 options exercisable at December 31, 2006, and the weighted average remaining contractual life of the options outstanding is 1.5 years.
9. COMMITMENTS AND CONTINGENCIES
Lease
On January 16, 2004, Company entered into a new lease of its premises. The lease expires December 31, 2007 and contains an option to extend the term for five additional years contingent upon (1) The lessor exercising its option to extend the master lease on the premisies beyond its current December 31, 2007 expiration and (2) that the Company notify the lessor in writing of its intention to renew prior to April, 2007 and (3) Argus Pacific, the lessor of space contiguous to that occupied by the Company, exercises its option to extend. The lease expense increases annually based on a cost of living index and the Company is also responsible for common area maintenance charges, utilities, property taxes and insurance. Rent expense with regard to this lease was approximately $98,000 in 2006.
Commencing January, 2005 the Company entered into an agreement with DOOFF LLC, its secured lender by which DOOFF LLC occupies approximately one-half of the space leased by the Company. The Company records the amount due to it by DOOFF LLC under this agreement as a payment for past due interest. Subrental income from DOOFF, LLC, which is reported as other income, offset $44,000 of accrued interest in 2006.
Future minimum rental payments for the balance of the lease term are as follows:
Year ending December 31:
2007 $ 95,000
See independent auditors' report
CAMERA PLATFORMS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2006
10. SALES TO MAJOR CUSTOMERS AND GEOGRAPHIC AREAS
No revenue derived from a single customer accounted for more than ten percent of total revenue during 2006, 2005, or 2004. No geographic area outside the United States accounted for more than ten percent of total revenue during the last three years.
11. FAIR VALUES OF FINANCIAL INSTRUMENTS
Management has determined that the estimated fair value of the Company's financial instruments approximates the carrying amount of such financial instruments in all material respects as of December 31, 2006 and 2005.
12. CONTRIBUTED MANAGEMENT SERVICES
The Company recorded the contribution of services from and on behalf of the Chief Executive and Chief Financial Officers valued at $36,000 in each of 2006 and 2005 and $12,000 in 2004, which was recorded as an expense and an increase to additional paid-in capital.
13. SUBSEQUENT EVENT - SALE OF ASSETS
On January 30, 2007, the Company entered into an Asset Purchase Agreement ("the Agreement") with Moving Vehicular Platforms, Inc. ("MVP") a California Corporation to sell substantially all of its assets. MVP agreed to pay a total purchase price of $500,000, of which $25,000 was received on December 13, 2006 as an option advance under a non-binding letter of intent. The funds were held by DOOFF LLC at year end. Another $25,000 was paid concurrently with the execution of the Agreement. The balance of the purchase price is due at closing. A condition of closing is that MVP shall have received a loan for the balance of the purchase price under substantially similar terms as those contemplated by a conditional commitment letter from City National Bank provided by MVP to the Company. The sale must close by April 30, 2007. The Company plans to use the net proceeds from the sale to make payments on loans made to it by DOOFF, LLC, a related party.
In addition, the Agreement calls for MVP to enter into a sublease agreement for the Company's premises at 10909 Vanowen Street in North Hollywood, California.
Immediately after the consummation of the asset sale, the Company will have no operating business or sources of revenues.
See independent auditors' report
CAMERA PLATFORMS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2006
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
See Independent Auditors' Report and Notes to the Consolidated Financial Statements
CAMERA PLATFORMS INTERNATIONAL, INC.
Item 9
Item 9 - Changes In and Disagreements with Accountants on Accounting or Financial Disclosure
	Not Applicable
Item 9A.
Item 9A. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of December 31, 2006. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective in alerting them on a timely basis to material information relating to our Company required to be included in our reports filed or submitted under the Exchange Act.
(b) Changes in Internal Controls
There were no significant changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal controls over financial reporting that occurred during the fourth quarter of fiscal 2006 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Item 9B.
Item 9B. Other Information
Not Applicable
PART III
Item 10
Item 10 - Directors and Executive Officers of the Registrant
The Company's by-laws provide for a range of one to nine directors and allow the Board of Directors to set the exact number of authorized directors within that range. The current number of authorized directors established by the Board of Directors is five. Directors are elected at each Annual Meeting of Shareholders to serve thereafter until their successors have been duly elected and qualified.
The following table provides certain information as of February 20, 2007 for each director and executive officer of the Company:
Martin Perellis has been a director since June 29, 2000. Mr. Perellis has been involved in the music and film industries for the past 30 years and is the founder and president of Consolidated Productions, Inc., a supplier of theatrical transportation, production and facilities services and of consulting services to a variety of domestic and international clients. Its current client roster includes Third Story Music and Akil Music. Mr. Perellis has also served in various executive capacities with personal management companies involved with such artists as Frank Zappa, Tom Waits, Captain Beefheart, Earth Wind and Fire, Martha and the Vandellas and the Jackson Five.
CAMERA PLATFORMS INTERNATIONAL, INC.
William O. Fleischman has been a director since October 10, 1996. Mr. Fleischman, in his individual capacity or through W/F Investment Corp and its affiliates, has substantial experience investing in and managing companies. Mr. Fleischman is also an attorney with offices in Century City.
Rick Hicks has been a director since June 11, 1998. Mr. Hicks is an attorney at law and principal at the law firm of Hicks, Recasens and Berman. He has been an attorney since 1973. He has been a consultant and frequent investor in a number of operating companies and real estate projects.
None of the officers or directors of the Company is related to any other officer or director of the Company. Officers are appointed by the Board of Directors and serve at the pleasure of the Board of Directors or until they resign. At present one officer of DOOFF, LLC, the Company's secured lender, and one officer of SAC, a principal shareholder of the Company, serve on the Company's Board of Directors.
COMPLIANCE WITH SECTION 16(a)
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's executive officers and directors and persons who own more than 10% of a registered class of the Company's equity securities to file with the Securities and Exchange Commission initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of commons stock and other equity securities of the Company, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% shareholders are required by Commission regulations to furnish the Company with copies of all Section 16(a) reports they file. To the best of the Company's knowledge (based solely upon a review of the Forms 3, 4, and 5 filed), no officer, director or 10% beneficial shareholder failed to file on a timely basis any reports required by Section 16(a) of the Securities Exchange Act of 1934, as amended.
CAMERA PLATFORMS INTERNATIONAL, INC.
Item 11
Item 11 - Executive Compensation
Compensation of Directors
Concurrent with the adoption of the 2001 Stock Option, the Board of Directors authorized the issuance of options to purchase 300,000 shares of the Company's stock to each of the Company's (then) five directors. The options were priced at $0.11, which was above the market price of the Company's stock at the date of issuance.
The Directors of the Company received no other compensation.
Compensation of Executive Officers
No executive officer received any compensation for 2006. There were no options granted to any executive officer during 2006.
Item 12
Item 12 - Security Ownership of Certain Beneficial Owners and Management Security Ownership of Certain Beneficial Owners
The following table sets forth information with respect to those persons known by the Company to own beneficially more than 5% of the Company's common stock as of February 20, 2007.
(1) Consists of (a) 5,934,054 share owned by the Wolas Family Limited Partnership. Mr. Wolas' children and a trust for the benefit of his grandchildren, and (b) 450,000 shares which would be issued upon the exercise of warrants issued to DOOFF, LLC in the aggregate amount of 900,000 warrants (Mr. Wolas owns 50% of the membership interest in DOOFF LLC), and (c) 300,000 shares which would be issued upon the exercise of stock options issued to Mr. Wolas as a director of the Company.
(2) Consists of (a) 5,934,054 shares owned by the Perellis 2000 Trust of which Mr. Perellis is a beneficiary, and (b) 450,000 shares which would be issued upon the exercise of warrants issued to DOOFF LLC in the aggregate amount of 900,000 warrants (Mr. Perellis owns 50% of the membership interest in DOOFF LLC), and (c) 300,000 shares which would be issued upon the exercise of stock options issued to Mr. Perellis as a director of the Company.
(3) Consists of (a) 5,403,168 shares of the Company's common stock owned by SAC, of which Mr. Fleischman's minor child is the owner of 64% of the outstanding shares, and (b)300,000 shares which would be issued upon the exercise of stock options issued to Mr. Fleischman as a director of the Company.
(4) Percentage is based on the shares of the Company's common stock which would be outstanding upon giving effect to the assumed exercise of the warrants and options referenced above.
Security Ownership of Management
The following table sets forth information with respect to shares of the Company's outstanding common stock which are owned beneficially by each director and nominee and the aggregate number of shares owned
CAMERA PLATFORMS INTERNATIONAL, INC.
beneficially by all directors, nominees and officers as a group as of February 20, 2007.
(1) Consists of (a) 5,934,054 shares owned by the Perellis 2000 Trust of which Mr. Perellis is a beneficiary, and (b) 900,000 shares which would be issued upon the exercise of warrants issued to DOOFF LLC in the aggregate amount of 900,000 warrants (Mr. Perellis owns 50% of the membership interest in DOOFF LLC), and (c) 300,000 shares which would be issued upon the exercise of stock options issued to Mr. Perellis as a director of the Company.
(2) Consists of (a) 5,403,168 shares of the Company's common stock owned by SAC, of which Mr. Fleischman's minor child is the owner of 64% of the outstanding shares, and (b)300,000 shares which would be issued upon the exercise of stock options issued to Mr. Fleischman as a director of the Company.
(3) Percentage is based on the shares of the Company's common stock which would be outstanding upon giving effect to the assumed exercise of the warrants and options referenced above.
Item 13
Item 13 - Certain Relationships and Related Transactions
A director of the Company, Mr. Martin Perellis, and a principal shareholder, Mr. Herbert Wolas, are principals of DOOFF LLC, the Company's secured lender.
Item 14
Item 14 - Principal Accountant Fees and Services
(1) Audit Fees - The aggregate fees billed for each of the last two fiscal years for professional services rendered by Rose, Snyder & Jacobs, the Company's principal accountant, for the audit of the Company's annual financial statements and review of the financials statements included in the Company's Form 10-Q are as follows:
(2) Audit-Related Fees - No other Audit-Related fees were billed in the last two fiscal years.
(3) Tax Fees - Tax preparation fees were $2,575 in 2006 and 2005.
(4) All Other Fees - No other fees were billed in the last two fiscal years.
(5) Prior the engagement of Rose, Snyder & Jacobs as the Company's independent auditors, the Company's Board of Directors, acting as the Audit Committee, approved the engagement and determined that Rose, Snyder & Jacobs was qualified and independent in both fact and appearance. The Board of Directors conducted a review of fees and compensation arrangements, prior or current business relationships and other services performed by Rose, Snyder & Jacobs for the Company in making this determination.
CAMERA PLATFORMS INTERNATIONAL, INC.
Item 15
Item 15 - Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a)	The financial statements and financial statement schedules filed as part of this report are listed on the Index to Financial Statements and Schedules on page 16.
(1) Incorporated by reference to the Company's Form 10-K Annual Report for the year ended December 31, 1987. (2) Incorporated by reference to the Company's Form 10-K Annual Report for the year ended December 31, 1988. (3) Incorporated by reference to the Company's Form 10-K Annual Report for the year ended December 31, 1989. (4)	Incorporated by reference to the Company's Registration Statement No. 33-37401 on Form S-8, filed on October 23, 1990. (5)	Incorporated by reference to the Company's Form 10-K Annual Report for the year ended December 31, 2000.
(b) Reports on Form 8-K
	The Company filed no reports on Form 8-K during the quarter ended December 31, 2006.
(c) Exhibits
All exhibits required by Item 601 of Regulation S-K have been filed.
(d) Financial Statement Schedules
All other financial statement schedules which are required by the regulations of the Securities and Exchange Commission are either inapplicable or are included as part of Item 8 herein.
CAMERA PLATFORMS INTERNATIONAL, INC. SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: February 20, 2007
CAMERA PLATFORMS INTERNATIONAL, INC
By: S/Martin Perellis Martin Perellis Chairman of the Board, Chief Executive and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
February 20, 2007 Chairman of the Board, Chief Executive and Chief Financial Officer By: S/Martin Perellis Martin Perellis
February 20, 2007 Director By: S/William O. Fleischman William O. Fleischman
February 20, 2007 Director By: S/Rick Hicks Rick Hicks