-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HcbK5bBwmzO32Y7Ahxe21OLXNJtxuL2189/J9duIeXDE1ZAepRkusmaxhH/HWp7k kxRcY8hhafFFrynpWEr22A== 0001000459-97-000005.txt : 19970430 0001000459-97-000005.hdr.sgml : 19970430 ACCESSION NUMBER: 0001000459-97-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970228 FILED AS OF DATE: 19970429 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: US AMATEUR SPORTS INC CENTRAL INDEX KEY: 0001000459 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-AMUSEMENT & RECREATION SERVICES [7900] IRS NUMBER: 650538051 STATE OF INCORPORATION: FL FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-96638-A FILM NUMBER: 97589587 BUSINESS ADDRESS: STREET 1: 3790 RCA BLVD STREET 2: SUITE 7010 CITY: PALM BEACH GARDENS STATE: FL ZIP: 33410 BUSINESS PHONE: 4076224395 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED February 28, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 OR THE TRANSITION PERIOD FROM _____________ TO ____________ Commission file number 33-96638-A ---------- U S Amateur Sports, Inc. ____________________________________________________ (Exact name of registrant as specified in its charter) Florida 65-0538051 __________________________________________________________ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3932 RCA Blvd., Suite 3902 Palm Beach Gardens, Florida 33410 _______________________________________ (Address of principal executive offices) (Zip code) (561) 622-4395 __________________________________________________ (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No __ The number of shares outstanding of registrant's classes of common equity, as of February 28, 1997 Common Stock, Par Value $.0001, 6,000,600 Shares U S Amateur Sports, Inc. Form 10-QSB February 28, 1997 INDEX PART I FINANCIAL INFORMATION PAGE NO. ---------------------- ITEM 1 FINANCIAL STATEMENTS Balance Sheets: February 28, 1997 and May 31, 1996 F2 Statements of Operations: For the Nine Month Periods Ended February 28, 1997 and February 29, 1996 F3 and the Period from June 14, 1995 (Date of Inception) to February 28, 1997 Statements of Operations: For the Three Month Periods Ended February 28, 1997 and February 29, 1996 F4 Statements of Cash Flows: For the Nine Month Periods Ended February 28, 1997 and February 29, 1996 and the Period from June 14, 1995 (Date of Inception) to February 28, 1997 F5 Statement of Stockholders' Equity F6 Notes to Financial Statements F7 ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 3 PART II OTHER INFORMATION ITEMS 1-6 4 U S AMATEUR SPORTS, INC. (A Development Stage Company) BALANCE SHEETS February 28, 1997 and May 31, 1996
February 28, 1997 May 31, 1996 ----------------- ------------ ASSETS (Unaudited) (Audited) Cash $ 1,690 $ 4,587 Accounts and advances receivable 16,206 10,545 Inventories 78,156 84,968 Prepaid expense 3,000 13,821 Property and equipment 56,834 67,342 Rights to technology and associated trademarks 37,173 44,291 Proprietary manuals -- -- Deferred charges 6,069 8,020 _______ _______ TOTAL ASSETS $ 199,128 $ 233,574 ======= ======= LIABILITIES Accounts payable $ 33,387 $ 30,294 Notes payable 59,195 61,295 Loans from stockholders 142,350 122,500 Accrued interest 19,573 6,033 _______ _______ TOTAL LIABILITIES 254,505 220,122 ------- ------- STOCKHOLDERS' EQUITY Common stock, $.0001 par value, 50,000,000 shares authorized, 6,000,600 shares issued and outstanding 600 600 Additional paid-in capital 215,340 175,704 Deficit accumulated during the development stage (271,317) (162,852) _________ _________ TOTAL STOCKHOLDERS' EQUITY (55,377) 13,452 --------- -------- TOTAL LIABILITIES _________ _________ & STOCKHOLDERS' EQUITY $ 199,128 $ 233,574 ========= =========
See notes to financial statements U S AMATEUR SPORTS, INC. (A Development Stage Company) STATEMENTS OF OPERATIONS Nine-Month Periods Ended February 28, 1997 and February 29, 1996 and the Period from June 14, 1994 (Date of Inception) to February 28, 1997 (Unaudited)
Nine Months Nine Months June 14, 1994 Ended Ended (Inception) to February 28, February 29, February 28, 1997 1996 1997 ------------ ------------ ----------- SALES $ 41,400 $ 728 $ 44,848 Cost of goods sold 21,450 447 23,769 ______ ______ ______ GROSS PROFIT 19,950 281 21,079 EXPENSES Freight 2,748 -- 2,748 Research and development -- 267 32,222 Professional fees 37,203 4,750 53,891 Advertising and promotion 2,146 545 6,871 Travel 13,637 4,086 27,709 Rent 7,369 3,240 20,147 Office, Telephone and Other Operating Expenses 30,909 2,467 58,082 Interest 13,541 2,087 19,574 Depreciation 11,793 4,971 24,983 Amortization 9,069 2,741 60,550 _______ ______ _______ TOTAL EXPENSES 128,415 25,154 292,396 __________ __________ __________ NET LOSS $(108,465) $( 24,873) $(271,317) ========== ========== ==========
See notes to financial statements. U S AMATEUR SPORTS, INC. (A Development Stage Company) STATEMENTS OF OPERATIONS Three-Month Periods Ended February 28, 1997 and February 29, 1996 (Unaudited)
Three Months Three Months Ended Ended February 28, February 29, 1997 1996 ------------ ------------ SALES $ 11,378 $ 728 Cost of goods sold 6,554 447 ______ ______ GROSS PROFIT 4,824 281 EXPENSES Freight 1,462 -- Professional fees 14,381 (1,500) Advertising and promotion -- 370 Travel 4,691 4,086 Rent 2,677 720 Office, Telephone and Other Operating Expenses 18,362 1,733 Interest 4,607 2,087 Depreciation 3,940 3,134 Amortization 3,023 1,441 ______ ______ TOTAL EXPENSES 53,143 12,071 __________ __________ NET LOSS $( 48,319) $( 11,790) ========== ==========
See notes to financial statements. U S AMATEUR SPORTS, INC. (A Development Stage Company) STATEMENTS OF CASH FLOWS Nine-Month Periods Ended February 28, 1997 and February 29, 1996 and the Period from June 14, 1994 (Date of Inception) to February 28, 1997 (Unaudited)
Nine Months Nine Months June 14, 1994 Ended Ended (Inception) to February 28, February 29, February 28, 1997 1996 1997 ------------ ------------ ------------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (108,465) $ (24,873) $ (271,317) Reconciling adjustments: Amortization 9,069 2,741 60,550 Depreciation 11,793 4,971 24,983 (Increase) in receivables (5,660) (4,607) (16,205) Decrease in inventories 6,812 -- -- Decrease(increase) in prepaid expense 10,821 (13,154) (3,000) Increase(decrease) in accounts payable 3,093 10,025 33,387 Increase in accrued interest 13,540 2,087 19,573 NET CASH USED BY ________ ________ _________ OPERATING ACTIVITIES (58,997) (22,810) (152,029) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of inventories -- (11,639) (78,156) Acquisition of property and equipment ( 1,286) (50,140) (81,818) Purchase of technology and trademarks -- (47,455) (47,455) Development of proprietary manuals -- (43,333) Organization costs paid -- -- (13,004) NET CASH USED BY ________ _________ _________ INVESTING ACTIVITIES ( 1,286) (109,234) (263,766) CASH FLOWS FROM FINANCING ACTIVITIES Capital contributions 39,636 7,600 215,940 Note payable ( 2,100) 61,295 59,195 Loans from stockholders 19,850 63,500 142,350 NET CASH PROVIDED BY ______ _______ _______ FINANCING ACTIVITIES 57,386 132,395 417,485 ______ _______ _______ NET INCREASE (DECREASE) IN CASH (2,897) 351 1,690 CASH AT BEGINNING OF PERIOD 4,587 1,110 -- __________ __________ __________ CASH AT END OF PERIOD $ 1,690 $ 1,461 $ 1,690 ========== ========== ==========
See notes to financial statements. U S AMATEUR SPORTS, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENT OF STOCKHOLDERS' EQUITY For the Nine-Month Period Ended February 28, 1997 and the Period from June 14, 1994 (Date of Inception) to February 28, 1997 (Unaudited)
Common Stock ------------ Number of Shares Additional Total Issued and Par Paid-in Accumulated Stockholders' Outstanding Value Capital Deficit Equity --------------- ----- ------- --------- ---------- Balance at inception -- -- -- -- -- Issuance of common stock $ 600 $ .0001 $ 168,104 $ -- $ 168,704 Net loss, year ended May 31, 1995 -- -- -- (105,740) (105,740) _______ ______ ________ ________ ________ Balance, May 31, 1995 600 .0001 168,104 (105,740) 62,964 Capital contri- butions, year ended May 31, 1996 -- -- 7,600 -- 7,600 Net loss, year ended May 31, 1996 -- -- -- (57,112) (57,112) _______ ______ ________ ________ ________ Balance, May 31, 1996 600 .0001 175,704 (162,852) 13,452 Capital contri- butions, nine months ended February 28, 1997 -- -- 39,636 -- 39,636 Net loss, nine months ended February 28, 1997 (108,465) (108,465) _______ ______ ________ ________ ________ Balance, February 28, 1997 $ 600 $ .0001 $ 215,340 $(271,317) $(55,377) ========== ======= ========= ========== =========
See notes to financial statements. U S AMATEUR SPORTS, INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS February 28, 1997 and February 29, 1996 (Unaudited) NOTE A: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation - --------------------- The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine month period ended February 28, 1997 are not necessarily indicative of the results that may be expected for the year ending May 31, 1997. For further information, refer to the financial statements and footnotes thereto included in the Company's registration statement declared effective by the Securities and Exchange Commission on November 21, 1996. Depreciation - ------------ The cost of property and equipment is depreciated over the estimated useful lives of the related assets. Depreciation is computed using the straight- line method for financial reporting purposes and an accelerated method for tax purposes. Amortization - ------------ Proprietary manuals which are considered pre-opening costs have been amortized over a one year period. Rights to technology and associated trademarks are amortized using the straight-line method over five years. Deferred charges also are amortized using the straight-line method over five years. Inventories - ----------- Inventories are stated at the lower of cost or market. See Note C. Adjustments - ----------- These interim financial statements include all adjustments which in the opinion of management are necessary in order to make the financial statements not misleading. All adjustments are of a normal recurring nature. NOTE B: DEVELOPMENT STAGE OPERATIONS The Company was incorporated on June 14, 1994. Activities since inception have included research, feasibility studies, development of business plans and operating procedures, acquisition analysis, raising of capital, promotion, identification of key executives and administrative functions. On January 5, 1996, the Company acquired the assets of Performance Paintball Products, Inc. of Riviera Beach, Florida in exchange for a note in the amount of $101,295. The assets consist of inventory, property and equipment necessary to conduct the business of producing the Viper M1 paintball marker and related accessories. Included in the purchase were exclusive rights to use of the Viper name and related technology. At February 28, 1997, the Viper marketing program, including use of internet web sites, publication of articles in leading paintball industry magazines, demonstrations at trade shows, distribution of manuals, brochures and other marketing materials to dealers and establishment of a telemarketing department, had created demand for the Viper M1 marker and accessories that resulted in a backlog of orders. Expansion of the Internet web site for the USA SportsNet business unit continued. The initial public offering of the Company's common stock for up to $9,000,000 was made effective by the Securities and Exchange Commission on November 21, 1996. The offering consists of 30,000 units of common stock at $300 per unit, each unit consisting of 50 shares. Sale of the stock by the Company's officers on a best efforts basis was scheduled for an offering period of 180 days, subject to extension for an additional 90 days. NOTE C: INVENTORIES Inventories consist of merchandise acquired for sale by the Company's USA SportsNet business unit in addition to paintball markers and accessories. Inventories are carried at cost which is considered to be less than market value. NOTE D: PROPERTY AND EQUIPMENT The following is a summary of property and equipment recorded in the financial statements at cost less depreciation as of February 28, 1997 and February 29, 1996:
February 28, 1997 February 29, 1996 ----------------- ----------------- Computer hardware $ 10,542 $ 10,542 Computer software 10,564 9,964 Furniture, fixtures and equipment 10,572 9,887 Tools, dies and fixtures 50,140 50,140 ______ ______ Total cost 81,818 80,533 Less: accumulated depreciation (24,984) (9,306) ______ ______ Total net property and equipment $ 56,834 $ 71,227 ========= ========= The useful lives assigned to property and equipment to compute depreciation are: Computer hardware 5 years Computer software 5 years Furniture, fixtures and equipment 7 years Tools, dies and fixtures 5 years
NOTE E: PROPRIETARY MANUALS Proprietary manuals include detailed programs for development and operation of a multi-sport recreational complex and athletic training and fitness curricula. Amounts paid to outside parties totaling $43,333 for work performed on these manuals have been capitalized. However, since they are considered pre-opening costs, they have been amortized over a one-year period resulting in accumulated amortization of $43,333. NOTE F: DEFERRED CHARGES Deferred charges consist of organization costs in the amount of $13,004 less accumulated amortization of $6,935 and $4,334, at February 28, 1997 and February 29, 1996, respectively. NOTE G: ACCOUNTS PAYABLE Accounts payable consist of professional fees and miscellaneous trade payables. NOTE H: NOTES PAYABLE In connection with the asset purchase discussed in NOTE B, the Company recorded a note payable in the initial amount of $101,295. Subsequent payments totaling $40,000 reduced the balance to $46,795 as of February 28, 1997. Interest is accrued on the unpaid balance of the note at the rate of 10%. The balance of principal and interest was initially due on December 31, 1996, but the due date has been extended to June 30, 1997. There are no other payment requirements, and there is no prepayment penalty. On December 16, 1996, the Company borrowed $2,400.00 from Amateur Athletes of America, Inc. The note bears interest at the rate of 12.25% per annum with the balance of principal and interest due to be paid no later than December 31, 1997. On February 20, 1997, the Company borrowed $10,000 from Wizard Capital Associates payable upon demand by the holder. The note bears interest at the rate of 15% per annum. NOTE I: LOANS FROM STOCKHOLDERS The Company's stockholders have loaned the Company $142,350 as of February 28, 1997. Of this amount, $28,000 has been loaned in return for an unsecured, non-interest-bearing note with no stated repayment terms, $5,000 has been loaned under a non-interest-bearing demand note, and $109,350 has been loaned under unsecured notes bearing interest at the prime rate plus 4.0% with repayment to be made from proceeds of the public offering. NOTE J: RECOVERABILITY OF ASSETS AND GOING CONCERN The Company's financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company's continued existence is dependent upon the success of its public offering, its ability to secure other financing, or its ability to generate sufficient cash flows through operations to meet its operating costs and repay current obligations as they come due. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION US Amateur Sports, Inc. is a development stage sports entertainment, internet marketing and sales company. Its primary mission is to develop sports-related products and services designed for the training, well-being and entertainment of amateur athletes. The Company has established five business units. As of February 28, 1997, two of these business units, USA SportsNet and USA Performance Products, have commenced operations. In addition, the Company is developing camps, clinics and other events that will be sited at a planned sports complex to be constructed by a third business unit, USA Sportsplex. USA Performance Products has experienced a demand for its first sports product, the Viper M1 paintball marker, that the Company cannot meet without an increase in production by the Company's manufacturing subcontractor. This production increase is dependent on the ability of the subcontractor to obtain outside financing or the ability of US Amateur Sports to pay the balance of a note due to the subcontractor with a current balance of $46,795 plus accrued interest of $7,064. Proceeds of the public offering described below are designated for payment of this note. If the public offering is unsuccessful, the Company will be dependent on securing other outside financing in order to satisfy the note obligation. USA SportsNet offers sports-related merchandise and services through its web site on the Internet. Although the web site is planned for use as a marketing vehicle for a broad array of company- and client-owned products, its primary use to date is to generate sales of the Viper M1 paintball marker. Another business unit, Saf-T-Net, has developed a software package to be marketed to youth sports organizations as a method of raising funds for their activities. Whether Saf-T-Net becomes operational depends on the success of the Company's public offering. The remaining business units, USA Fitness & Sports Arena and USA Sportsplex, are only proposed. Future development is dependent on the success of the public offering. However, as first steps in the development of activities that are expected to be offered within the planned facilities, the Company has scheduled a series of camps and clinics offered to high school basketball players and has acquired the rights to the high school football All American Bowl. The All American Bowl is an East vs. West all-star football game played by young men who have graduated from high school and committed to college teams, but have not yet begun their college playing careers. The participants, selected from high school teams across the United States, are considered to be the most talented football players at their age level. Although the Company determines who is selected, the players are drawn from a pool of individuals who have been recognized as All Americans by Parade Magazine, USA Today, Street & Smith and others. The 1997 All American Bowl, scheduled for July 5, 1997, is planned as the inaugural event of the National High School Sports Classics series which will include all-star games and championship team events in a wide range of high school sports. Liquidity and Capital Resources - ------------------------------- At February 28, 1997, current assets had declined to $99,052 from a balance of $113,921 at May 31, 1996, the prior fiscal year end. Accounts payable increased from a balance of $30,294 to $33,387 during the same time period. The remaining liabilities of the Company included the note discussed above and loans from stockholders, payment of both of which are designated as uses of proceeds from the Company's public offering. In addition, $2,400 is owed under a note agreement with a due date of no later than December 31, 1997, and $10,000 is owed under a note payable upon demand by the holder. The Company's initial public offering was made effective by the Securities and Exchange Commission on November 21, 1996. The offering is made for up to $9,000,000 and consists of 30,000 units at a price of $300.00 per unit with no minimum offering requirement. The Company is offering the units through its officers on a "best efforts" basis. If the maximum is not sold within the initial 180 day offering period, the Company reserves the right to continue to offer the remaining securities for a period of up to an additional ninety days. The Company may seek additional outside financing if the sale of the stock is not adequate to meet its operational requirements. If only a minimal number of units is sold in the Company's public offering, the Company's continued existence will be dependent on its ability to secure such financing. Only a minimal number of units has been sold as of February 28, 1997. Results of Operations - --------------------- Comparison of the Nine Months Ended February 28, 1997 with the Nine Months -------------------------------------------------------------------------- Ended February 29, 1996 ----------------------- Revenue for the period ended February 28, 1997 was $41,400 compare to $728 of revenue recorded during the same period of the prior year. This increase is attributable to commencement of sales of the Viper M1 paintball marker. A net loss of $108,465 was posted during the period ended February 28, 1997 compared to a net loss of $24,873 during the prior year period. Increases were recorded in all expense categories with the exception of research and development. Of a total expense increase of $103,261, professional fees accounted for $32,453. Interest rose $11,454 due to increased borrowing. Depreciation grew $6,822 due to the acquisition of tools and dies for manufacture of the paintball marker, and amortization increased $6,328 as a result of the acquisition of the rights to the paintball marker technology. Growth in other expenses was created by the commencement of the sales and marketing of the paintball marker and the opening of an office in June, 1996. The increased expenses offset gross profit which rose from $281 for the nine months ended February 29, 1996 to $19,950 for the nine months ended February 28, 1997. Comparison of the Three Months Ended February 28, 1997 with the Three Months ---------------------------------------------------------------------------- Ended February 29, 1996 ----------------------- Revenue in the three months ended February 28, 1997 was $11,378 compared to $728 of revenue recorded during the same period of the prior year. This revenue was derived from sales of the paintball marker and related accessories. However, the Company's net loss during the current year period was $48,319 compared to $11,790 during the same period of the prior year. Gross profit of $4,824 was offset by increases in all expense categories. Expenses increased due to the commencement of operations primarily related to the sale of the paintball marker, while production of the marker and realization of revenues during the current year period were stalled by the financial inability of the manufacturing subcontractor to satisfy demand. OTHER INFORMATION PART II ITEM 1. Legal Proceedings. The Company knows of no material pending legal proceedings to which the Company is a party or which any of its business units are the subject and no such proceedings are known to the Company. ITEM 2. Changes in Securities. None ITEM 3. Defaults Upon Senior Securities. None ITEM 4. Submission of Matters to a Vote of Security Holders. None ITEM 5. Other Information. None ITEM 6. Exhibits and Reports on Form 8-K. (a) Exhibits - None (b) Reports - None EX-27 Financial Data Schedule SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunder duly authorized. (Registrant) U S Amateur Sports, Inc. BY (Signature) /s/ Gerald V. Bergman (Date) April 15, 1997 (Name and Title) Gerald V. Bergman, EX-27 2
5 3-MOS MAY-31-1997 FEB-28-1997 1,690 0 16,206 0 78,156 99,052 56,834 0 199,128 254,505 0 0 0 6,000,600 0 199,128 11,378 11,378 6,554 53,143 0 0 4,607 (48,139) 0 0 0 0 0 (48,319) (.01) (.01)
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