teee_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

R	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended: November 30, 2012

£	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from to.

Commission file number 0-10093

Golf Rounds.com, Inc.

(Exact name of registrant as specified in its charter)

Delaware		59-1224913
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

111 Village Parkway, Building #2, Marietta, Georgia 30067

(Address of principal executive offices) (Zip Code)

770-951-0984

(Registrant’s telephone number)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Check 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 R No £

State the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: As of January 16, 2013, the issuer had 3,567,377 shares of common stock, par value $.01 per share, outstanding.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated filer o	Non-accelerated filer o	Smaller reporting company þ
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes R No £

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements	F-1
	Condensed Consolidated Balance Sheets	F-1
	Condensed Consolidated Statements of Operations	F-2
	Condensed Consolidated Statement of Stockholders’ Deficiency	F-3
	Condensed Consolidated Statements of Cash Flows	F-4
	Notes to Condensed Consolidated Financial Statements	F-5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5
Item 4T.	Controls and Procedures	6

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings*
Item 1A.	Risk Factors*
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds*
Item 3.	Defaults Upon Senior Securities*
Item 4.	Submission of Matters to a Vote of Security Holders*
Item 5.	Other Information*
Item 6.	Exhibits	7

	SIGNATURES	8

	EXHIBIT INDEX

	Exhibit 31.1
	Exhibit 32.1

____________

*	Omitted in accordance with the instruction to Part II of Form 10-Q because the item is inapplicable or the answer to the item is negative.

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

GOLF ROUNDS.COM, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

	November 30, 2012			August 31, 2012
	(Unaudited)
Assets

Current assets:
Cash and cash equivalents	$	244		$	334
Prepaid expenses		3,315			5,190
Total current assets		3,559			5,524

Total assets	$	3,559		$	5,524

Liabilities and Stockholders’ Deficiency

Current liabilities:
Accounts payable and accrued expenses (including $53,700 and $43,500
due to related parties, respectively)	$	79,921		$	49,714
Total current liabilities		79,921			49,714

Stockholders’ deficiency:
Common stock, $0.01 par value; 12,000,000 shares authorized,
3,567,377 shares issued and outstanding		35,673			35,673
Additional paid-in capital		3,178,550			3,178,550
Accumulated deficit		(3,290,585	)		(3,258,413	)
Total stockholders’ deficiency		(76,362	)		(44,190	)

Total liabilities and stockholders’ deficiency	$	3,559		$	5,524

See accompanying notes to condensed consolidated financial statements.

F-1

GOLF ROUNDS.COM, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	For the Three			For the Three
	Months Ended			Months Ended
	November 30, 2012			November 30, 2011

Expenses:
General, administrative and other	$	32,172		$	29,137
Total operating expenses		32,172			29,137

Loss from operations		(32,172	)		(29,137	)

Other income:
Interest income		-			15
Total other income		-			15

Net loss	$	(32,172	)	$	(29,122	)

Net loss per common share - basic and diluted	$	(0.01	)	$	(0.01	)

Weighted average number of common shares outstanding - basic and diluted		3,567,377			3,567,377

See accompanying notes to condensed consolidated financial statements.

F-2

GOLF ROUNDS.COM, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIENCY

FOR THE THREE MONTHS ENDED NOVEMBER 30, 2012

(Unaudited)

					Additional					Total
	Common Stock				Paid-In		Accumulated			Stockholders'
	Shares		Amount		Capital		Deficit			Deficiency

Balance, August 31, 2012		3,567,377	$	35,673	$	3,178,550	$	(3,258,413	)	$	(44,190	)
Net loss		-		-		-		(32,172	)		(32,172	)
Balance, November 30, 2012		3,567,377	$	35,673	$	3,178,550	$	(3,290,585	)	$	(76,362	)

See accompanying notes to condensed consolidated financial statements.

F-3

GOLF ROUNDS.COM, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Three			For the Three
	Months Ended			Months Ended
	November 30, 2012			November 30, 2011

Cash flows from operating activities:
Net loss	$	(32,172	)	$	(29,122	)
Adjustments to reconcile net loss to net cash used in operating activites:
Changes in operating assets and liabilities:
Decrease in prepaid expenses		1,875			2,500
Increase (decrease) in accounts payable and accrued expenses		30,207			21,535
Net cash used in operating activities		(90	)		(5,087	)

Net decrease in cash and cash equivalents		(90	)		(5,087	)

Cash and cash equivalents - beginning		334			53,401

Cash and cash equivalents - ending	$	244		$	48,314

See accompanying notes to condensed consolidated financial statements.

F-4

GOLF ROUNDS.COM, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED NOVEMBER 30, 2012 AND 2011

(Unaudited)

NOTE 1 — BASIS OF PRESENTATION

(A)	Interim Financial Statements

The accompanying unaudited condensed consolidated balance sheet of Golf Rounds.com, Inc. and its wholly owned subsidiary, DPE Acquisition Corp. (collectively, the “Company”), as of November 30, 2012, and the unaudited condensed consolidated statements of operations for the three months ended November 30, 2012 and 2011, the unaudited condensed consolidated statements of cash flows for the three months ended November 30, 2012 and 2011, and the unaudited condensed consolidated statement of stockholders’ deficiency for the three months ended November 30, 2012 reflect all material adjustments which, in the opinion of management, are ordinary and necessary for a fair presentation of results for the interim periods. Certain information and footnote disclosures required under generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. The Company believes that the disclosures are adequate to make the information presented not misleading. The condensed consolidated balance sheet information as of August 31, 2012 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K. These condensed consolidated financial statements should be read in conjunction with the year-end audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended August 31, 2012, as filed with the Securities and Exchange Commission on December 13, 2012.

The results of operations for the three months ended November 30, 2012 and 2011 are not necessarily indicative of the results to be expected for the entire fiscal year or for any other period.

(B)	Principles of Consolidation

The condensed consolidated financial statements include the accounts of Golf Rounds.com, Inc. and its wholly owned subsidiary DPE Acquisition Corp. (formed on September 2, 2003). Intercompany transactions and accounts have been eliminated in consolidation.

(C)	Loss Per Share

Net loss per common share is based on the weighted average number of shares of common stock outstanding during each period. Common stock equivalents, including 360,000 and 520,000 stock options for the three months ended November 30, 2012 and 2011, respectively, are not considered in diluted loss per share because the effect would be anti-dilutive.

(D)	Use of Estimates

In preparing condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates.

(E)	Fair Value of Financial Instruments

The carrying amounts of certain financial instruments, including cash and cash equivalents, prepaid expenses, and accounts payable and accrued expenses approximate their fair values because of the short-term maturity of these instruments.

F-5

GOLF ROUNDS.COM, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED NOVEMBER 30, 2012 AND 2011

(Unaudited)

NOTE 2 — GOING CONCERN

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. During the three months ended November 30, 2012, the Company had a net loss of $32,172, used cash in operations of $90, and had no revenues from operations. Currently, the Company’s working capital is not sufficient to last for more than 12 months. As a result, the Company’s independent registered public accounting firm, in its report on the Company’s August 31, 2012 consolidated financial statements, has raised substantial doubt about the Company’s ability to continue as a going concern. These factors among others indicate that the Company may be unable to continue as a going concern. The Company’s existence is dependent upon management’s ability to effect a business combination with a target business and/or obtain additional funding sources. There can be no assurance that the Company’s financing efforts will result in profitable operations or the resolution of the Company’s liquidity problems. The accompanying financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

NOTE 3 — RELATED PARTY TRANSACTIONS

On March 1, 2000, the Company executed a month-to-month agreement to sub-lease office space and share office equipment and a bookkeeper’s time for $900 a month from R. D. Garwood, Inc. (“Garwood”). The Company’s President/Treasurer/Secretary is the Chief Financial Officer of Garwood. During the year ended August 31, 2011, the Company was given two months of free rent. The Company’s expense for these shared facilities and bookkeeping services was $2,700 and 2,250 for the three months ended November 30, 2012 and 2011, respectively.

As of November 30, 2012, accounts payable and accrued expenses include $16,200 for rent and $37,500 for officer’s salary. As of August 31, 2012, accounts payable and accrued expenses include $13,500 for rent and $30,000 for officer’s salary.

NOTE 4 — STOCKHOLDERS’ DEFICIENCY

Stock Options

A summary of the Company’s stock option activity during the three months ended November 30, 2012 is presented below:

					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
	No. of		Exercise		Contractual		Intrinsic
	Shares		Price		Term		Value
Balance outstanding at August 31, 2012		360,000	$	0.67
Granted		-
Exercised		-
Forfeited		-
Expired		-
Balance outstanding at November 30, 2012		360,000	$	0.67		2.7	$	-

Exercisable at November 30, 2012		360,000	$	0.67		2.7	$	-

F-6

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Forward-looking statements

When used in this Report, words or phrases such as “will likely result,” “management expects,” “we expect,” “will continue,” “is anticipated,” “estimated” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any such forward-looking statements, each of which speaks only at the date made. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. We have no obligation to publicly release the result of any revisions which may be made to any forward-looking statements to reflect anticipated or unanticipated events or circumstances occurring after the date of such statements. Forward-looking statements involve a number of risks and uncertainties including, but not limited to, general economic conditions, our ability to find a suitable company to effect a business combination with, competitive factors and other risk factors as set forth in Exhibit 99.1 of our Annual Report on Form 10-KSB for the year ended August 31, 2008.

The following discussion should be read in conjunction with the condensed consolidated financial statements and related notes included in this Report.

Our Ability to Continue as a Going Concern

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. During the three months ended November 30, 2012, the Company had a net loss of $32,172, used cash in operations of $90, and had no revenues from operations. These factors among others indicate that the Company may be unable to continue as a going concern. The Company’s existence is dependent upon management’s ability to effect a business combination with a target business and/or obtain additional funding sources. There can be no assurance that the Company’s financing efforts will result in profitable operations or the resolution of the Company’s liquidity problems. The accompanying financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

Overview

General

Golf Rounds.com, Inc. (the “Company”) was incorporated in 1968 as a Delaware corporation, which is also authorized to conduct business in Georgia. Until the fourth quarter of fiscal 1992, the Company was engaged in the wholesale distribution of aluminum alloys, steel and other specialty metals under the name American Metals Service, Inc. In the fourth quarter of fiscal 1992, the Company liquidated its assets and did not conduct any business operations until May 1999. In May 1999, the Company acquired the assets of PKG Design, Inc., the developer of two (2) sports - related Internet websites: golfrounds.com and skiingusa.com. In connection with the acquisition of these websites, the Company changed its name to Golf Rounds.com, Inc.

In August 2001, the Company ceased operations of its golfrounds.com and skiingusa.com websites since continued maintenance of these websites was not a productive use of the Company’s resources.

On September 19, 2003, the Company and its wholly owned subsidiary, DPE Acquisition Corp., (formed on September 2, 2003), entered into an agreement and plan of reorganization and merger with Direct Petroleum Exploration, Inc. (“DPE”), which was not consummated. The Company continues to maintain the subsidiary for use in any other potential future acquisition. This subsidiary is currently inactive and has no operations.

On September 17, 2010, the Company declared a special cash dividend of $0.50 per share of common stock issued and outstanding to be paid on October 21, 2010 to stockholders of record as of September 30, 2010 using cash from its general funds. On October 21, 2010, the aggregate dividend paid was $1,783,689.

Our Business Plan

Our current business plan is to serve as a vehicle for the acquisition of or merger or consolidation with another company (a “target business”). We intend to use our capital stock, debt or a combination of these to effect a business combination with a target business which we believe has significant growth potential. The business combination may be with a financially stable, mature company or a company that is in its early stages of development or growth, which could include companies seeking to obtain capital and to improve their financial stability.

We will not restrict our search to any particular industry. Rather, we may investigate businesses of essentially any kind or nature and participate in any type of business that may, in our management’s opinion, meet our business objectives as described in this report. We emphasize that the description in this report of our business objectives is extremely general and is not meant to restrict the discretion of our management to search for and enter into potential business opportunities. We have not chosen the particular business in which we will engage and have not conducted any market studies with respect to any business or industry for you to evaluate the possible merits or risks of the target business or the particular industry in which we may ultimately operate. To the extent we enter into a business combination with a financially unstable company or an entity in its early stage of development or growth, including entities without established records of sales or earnings, we will become subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, to the extent that we effect a business combination with an entity in an industry characterized by a high level of risk, we will become subject to the currently unascertainable risks of that industry. An extremely high level of risk frequently characterizes certain industries that experience rapid growth. In addition, although we will endeavor to evaluate the risks inherent in a particular industry or target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.

Critical Accounting Policies and Use of Estimates

The preparation of our condensed consolidated financial statements requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenue and expense, and the disclosure of contingent assets and liabilities. We evaluate our estimates and assumptions on an ongoing basis. We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe that it is important for investors to be aware that there is a particularly high degree of subjectivity involved in estimating the fair value of stock-based compensation, that the expenses recorded for stock-based compensation in the Company’s financial statements may differ significantly from the actual value realized by the recipients of the stock awards, and that the expenses recorded for stock-based compensation will not result in cash payments from Golf Rounds.com.

Results of Operations

We have had no revenues (other than interest and dividend income) since 1992 and will not generate any revenues (other than interest and dividend income) until, at the earliest, the completion of a business combination.

Three months ended November 30, 2012 compared to three months ended November 30, 2011

Other income (interest) for the three months ended November 30, 2012 decreased to $0 from $15 for the three months ended November 30, 2011, a decrease of 100%. The decrease in interest income was due to fewer funds invested in money market fund investments in the current year.

General, administrative and other expenses for the three months ended November 30, 2012 increased to $32,172 from $29,137 for the three months ended November 30, 2011, an increase of 10.4%. The increase was due to higher legal expenses of $3,255, stockholder service expenses of $557, bank charges of $43, offset by lower directors and officers liability insurance expenses of $625, payroll expenses of $191, and taxes and licenses expense of $4.

General, administrative and other expenses for the three months ended November 30, 2012 consisted of audit and accounting fee expenses of $10,000, payroll expenses of $7,500, legal expenses of $6,977, stockholder service expenses of $2,921, office sharing expenses of $2,700, directors and officers liability insurance expenses of $1,875, taxes and license expenses of $109, and bank charges of $90.

Liquidity and Capital Resources

General

As of November 30, 2012, cash and cash equivalents were $244, which includes $185 invested in various money market accounts with a weighted average yield of 0.013% and $59 in a non-interest bearing checking account. As of November 30, 2012, there was a working capital deficiency of $76,362.

The Company’s total liabilities at November 30, 2012 were $79,921, which was comprised of accrued liabilities of $54,027.

Cash flows used in operating activities for the three months ended November 30, 2012 of $90 stems from a net loss of $32,172, offset by a decrease in prepaid expenses of $1,875 and an increase in accounts payable and accrued expenses of 30,207.

Currently, our working capital is not sufficient to last for more than 12 months. If we acquire a business, our-post acquisition capital needs may be more substantial and our current capital resources may not be sufficient to meet our requirements. We currently believe that if we need capital in the future, we will be able to raise capital through sales of equity and institutional or investor borrowings, although we cannot assure you we will be able to obtain such capital. We anticipate that after any acquisition we may complete in accordance with our business plan, we will use substantially all our then existing working capital to fund the operations of the acquired business. In addition, we believe that any new business operations may require additional capital to fund its operations.

Contractual obligations

The Company has no material contractual obligations other than those relating to employment as described in our Annual Report on Form 10-K for the year ended August 31, 2012.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 4T. CONTROLS AND PROCEDURES.

Disclosures and Procedures

Pursuant to Rules adopted by the Securities and Exchange Commission, the Company carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rules. This evaluation was done as of the end of the period covered by this report under the supervision and with the participation of the Company’s principal executive officer (who is also the principal financial officer). There have been no significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of the evaluation. Based upon that evaluation, he believes that the Company’s disclosure controls and procedures are effective in gathering, analyzing and disclosing information needed to ensure that the information required to be disclosed by the Company in its periodic reports is recorded, summarized and processed timely. The principal executive officer is directly involved in the day-to-day operations of the Company.

This Quarterly Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Quarterly Report.

Changes in Internal Controls

There was no change in the Company’s internal control over financial reporting that was identified in connection with such evaluation that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II

OTHER INFORMATION

ITEM 6. EXHIBITS.

Exhibit 31.1		Section 302 Certification of President and Treasurer

Exhibit 32.1		Section 906 Certification

101.INS **		XBRL Instance Document

101.SCH **		XBRL Taxonomy Extension Schema Document

101.CAL **		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF **		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB **		XBRL Taxonomy Extension Label Linkbase Document

101.PRE **		XBRL Taxonomy Extension Presentation Linkbase Document

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURE

In accordance with the requirements of the Exchange Act, the registrant caused this Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.

	GOLF ROUNDS.COM, INC.

Date: January 22, 2013	By:	/s/ Robert H. Donehew
		Robert H. Donehew
		President (Principal Executive Officer) and
		Treasurer (Principal Financial Officer)