<PAGE>
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 November 30,1996 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.)
3970 RCA Blvd., Suite 7010
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 November 30,1996
Common Stock, Par Value $.0001, 6,000,000 Shares
<PAGE>
U S Amateur Sports, Inc. Form lO-QSB
November 30, 1996
INDEX
PART I FINANCIAL INFORMATION PAGE NO.
--------------------- --------
ITEM 1 FINANCIAL STATEMENTS
Balance Sheets:
November 30, 1996 and
May 31, 1996 F2
Statements of Operations:
For the Six Month Periods Ended November
30, 1996 and 1995 F3
Statements of Operations:
For the Three Month Periods Ended November
30, 1996 and 1995 and the period from
June 14, 1995 (Date of Inception)
to November 30, 1996 F4
Statements of Cash Flow's:
For the Six Month Periods Ended November
30, 1996 and 1995 and the period from
June 14, 1995 (Date of Inception)
to November 30, 1996 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
<PAGE>
U S AMATEUR SPORTS, INC.
(A Development Stage Company)
BALANCE SHEETS
November 30, 1996 and May 31, 1996
<TABLE>
<CAPTION>
November 30, 1996 May 31, 1996
----------------- ------------
ASSETS (Unaudited) (Audited)
<S> <C> <C>
Cash $ 930 $ 4,587
Accounts and advances receivable 16,967 10,545
Inventories 77,808 84,968
Prepaid expense 9,821 13,821
Property and equipment 60,774 67,342
Rights to technology and associated
trademarks 39,546 44,291
Proprietary manuals -- --
Deferred charges 6,719 8,020
_________ _________
TOTAL ASSETS $ 212,565 $ 233,574
========= =========
LIABILITIES
Accounts payable $ 16,211 $ 30,294
Note payable 61,295 61,295
Loans from stockholders 130,750 122,500
Accrued interest 14,967 6,033
_______ _______
TOTAL LIABILITIES 223,223 220,122
--------- ---------
STOCKHOLDERS' EQUITY
Common stock, $.0001 par value,
50,000,000 shares authorized,
6,000,000 shares issued and outstanding 600 600
Additional paid-in capital 211,740 175,704
Deficit accumulated during the
development stage (222,998) (162,852)
_______ _______
TOTAL STOCKHOLDERS' EQUITY (10,658) 13,452
-------- -------
TOTAL LIABILITIES
_________ _________
& STOCKHOLDERS' EQUITY $ 212,565 $ 233,574
========= =========
</TABLE>
See notes to financial statements.
<PAGE>
U S AMATEUR SPORTS, IN C.
(A Development Stage Company )
STATEMENTS OF OPERATIONS
Six-Month Periods Ended November 30, 1996 and 1995 and the
Period from June 14, 1994 (Date of Inception) to November 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Six Months Six Months June 14, 1994
Ended Ended (Inception) to
November 30, 1996 November 30, 1995 November 30, 1996
----------------- ----------------- -----------------
<S> <C> <C> <C>
SALES $ 30,022 $ -- $ 33,470
Cost of goods sold 14,896 -- 17,215
______ ________ ______
GROSS PROFIT 15,126 -- 16,255
EXPENSES
Freight 1,286 -- 1,286
Research and
development -- 267 17,841
Professional fees 22,822 1,250 39,510
Advertising and
promotion 2,146 175 6,871
Travel 8,946 -- 23,018
Rent 4,692 2,160 17,470
Office, Telephone
and Other Operating
Expenses 12,547 941 39,720
Interest 8,934 -- 14,967
Depreciation 7,853 2,756 21,043
Amortization 6,046 44,633 57,527
______ ______ _______
TOTAL EXPENSES 75,272 52,182 239,253
________ _________ __ _______
NET LOSS $( 60,146) $( 52,182) $(222,998)
======== ======== =========
</TABLE>
See notes to financial statements.
<PAGE>
U S AMATEUR SPORTS, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Three-Month Periods Ended November 30, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
November 30, 1996 November 30, 1995
----------------- -----------------
<S> <C> <C>
SALES $ 15,939 $ --
Cost of goods sold 8,563 --
______ ______
GROSS PROFIT 7,376 --
EXPENSES
Freight 991 --
Professional fees 9,024 --
Advertising and promotion 320 175
Travel 6,527 --
Rent 2,572 1,080
Office, Telephone
and Other Operating Expenses 6,871 810
Interest 4,547 --
Depreciation 3,942 1,378
Amortization 3,023 650
______ ______
TOTAL EXPENSES 37,817 4,093
______ ______
NET LOSS $(30,441) $(4,093)
====== ======
</TABLE>
See notes to financial statements.
<PAGE>
U S AMATEUR SPORTS, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Six-Month Periods Ended November 30, 1996 and 1995
and the Period from June 14, 1994 (Date of Inception) to November 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Six Months Six Months June 14, 1994
Ended Ended (Inception) to
Nov. 30, 1996 Nov. 30, 1995 Nov. 30, 1996
------------- ------------- -------------
<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss $ (60,146) $ (52,182) $ (222,998)
Reconciling adjustments:
Amortization 6,046 44,633 57,527
Depreciation 7,853 2,756 21,044
(Increase) in receivables (6,422) -- (16,967)
Decrease in inventories 7,160 -- --
Decrease(increase) in
prepaid expense 4,000 (5,821) (9,821)
Increase(decrease) in
accounts payable (14,082) 7,461 16,211
Increase in accrued
interest 8,934 -- 14,967
NET CASH USED BY ______ ______ ______
OPERATING ACTIVITIES (46,657) (3,153) (140,037)
CASH FLOWS FROM
INVESTING ACTIVITIES
Purchase of inventories -- -- (77,808)
Acquisition of property and
equipment (1,286) -- (81,818)
Purchase of technology and
trademarks -- -- (47,455)
Development of proprietary
manuals -- -- (43,333)
Organization costs paid -- -- (13,004)
NET CASH USED BY ______ ______ ______
INVESTING ACTIVITIES (1,286) -- (263,418)
CASH FLOWS FROM
FINANCING ACTIVITIES
Capital contributions 36,036 7,600 212,340
Note payable -- -- 61,295
Loans from stockholders 8,250 3,250 130,750
NET CASH PROVIDED BY ______ ______ ______
FINANCING ACTIVITIES 44,286 10,850 404,385
______ ______ ______
NET INCREASE
(DECREASE) IN CASH (3,657) 7,697 930
CASH AT BEGINNING OF PERIOD 4,587 1,110 --
______ ______ ______
CASH AT END OF PERIOD $ 930 $8,807 $ 930
====== ====== ======
</TABLE>
See notes to financial statements.
<PAGE>
U S AMATEUR SPORTS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
For the Six-Month Period Ended November 30, 1996
and the Period from June 14, 1994 (Date of Inception) to November 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Common Stock
------------
Number of Shares Additional Total
Issued and Par Paid-in Accumulated Stockholders'
Outstanding Value Capital Deficit Equity
----------- ----- ------- ------- -----------
<S> <C> <C> <C> <C> <C>
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
contributions,
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
contributions,
six months
ended
November 30,
1996 -- -- 36,036 -- 36,036
Net loss,
six months
ended
November 30,
1996 (60,146) (60,146)
_______ ______ ________ ________ ________
Balance,
November 30,
1996 $ 600 $ .0001 $ 211,740 $(222,998) $(10,658)
======= ======= ========= ========== =========
</TABLE>
See notes to financial statements.
<PAGE>
U S AMATEUR SPORTS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
November 30, 1996 and 1995
(Unaudited)
NOTE A: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
- ---------------------
The Accompanying unaudited condensed financial statements have been prepared
in accordance with generally accpected 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 priciples for
complete financial statements. In the opinion of management, all adjustments
(consisting of normal reoccuring accurals) considered necessary for a fair
presentation have been included. Operating results for the six month period
ended November 30, 1996 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.
<PAGE>
At November 30, 1996, 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 that resulted in a
backlog of orders.
Expansion of the Internet web site for the USA SportsNet business unit and
testing of the Saf-T-Net software bundle 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 November 30, 1996 and 1995:
<TABLE>
<CAPTION>
November 30, 1996 November 30, 1995
----------------- -----------------
<S> <C> <C>
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 --
______ ______
Total cost 81,818 30,393
Less: accumulated depreciation (21,044) (7,089)
________ ________
Total net property and equipment $ 60,774 $ 23,304
======== ========
<CAPTION>
The useful lives assigned to property and equipment to compute depreciation
are:
<S> <C>
Computer hardware 5 years
Computer software 5 years
Furniture, fixtures and equipment 7 years
Tools, dies and fixtures 5 years
</TABLE>
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 $6,285 and $3,684, at November 30, 1996 and 1995,
respectively.
NOTE G: ACCOUNTS PAYABLE
Accounts payable consist of professional fees and miscellaneous trade
payables.
NOTE H: NOTE 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 $61,295 as of November 30,
1996. 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.
NOTE I: LOANS FROM STOCKHOLDERS
The Company's stockholders have loaned the Company $130,750 as of November 30,
1996 as bridge financing in anticipation of a public offering of the Company's
stock. Of this amount, $38,000 has been loaned in return for an unsecured,
non-interest-bearing note with no stated repayment terms, and $92,750 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.
<PAGE>
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 November 30,
1996, two of these business units, USA SportsNet and USA Performance Products,
have commenced operations.
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 in the amount of $61,295. Initial 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.
A third 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. As of November 30, 1996, the Company continues to test this
product which is designed to allow simplified, protected access to the World
Wide Web and enable parents to restrict their children from access to adult
content and other undesirable material on the Internet. 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.
Liquidity and Capital Resources
- -------------------------------
At November 30, 1996, current assets had declined to $105,526 from a
balance of $113,921 at May 31, 1996, the prior fiscal year end. However,
accounts payable decreased from $30,294 to $16,211 during the same period.
The remaining liabilities of the Company consisted of the note discussed above
and loans from stockholders, payment of both of which are designated as uses
of proceeds in the Company's public offering.
<PAGE>
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.
Results of Operations
- ---------------------
Comparison of the Six Months Ended November 30, 1996 with the Six Months
------------------------------------------------------------------------
Ended November 30, 1995
-----------------------
Revenue for the period ended November 30, 1996 was $30,022, while no
revenue was 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 $60,146 was posted during the period ended November 30, 1996
compared to a net loss of $52,182 during the prior year period. This increase
resulted from the recording of professional fees that were $21,572 higher than
in the prior year period, an increase of $8934 in interest expense and an
increase of $11,606 in expenses related to opening of a new office in June,
1996. These increased expenses offset a contribution of $15,126 in gross
profit resulting from the commencement of sales activity and a decrease in
amortization of $38,587. The latter decrease was created by the prior year
recording of the amortization over one year of certain pre-opening costs.
Comparison of the Three Months Ended November 30, 1996 with the Three
---------------------------------------------------------------------
Months Ended November 30, 1995
------------------------------
Revenue in the three months ended November 30, 1996 was $15,939, while no
revenue was recorded during the same period of the prior year. This revenue
was derived from sales of the paintball marker. However, the Company's net
loss during the current year period was $30,441 compared to $4,093 during the
same period of the prior year. Gross profit of $7,376 was offset by increases
in professional fees, travel costs related to attendance at paintball trade
shows, higher interest expense and costs related to opening of the new
office.
<PAGE>
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 on Form 8-K - none
<PAGE>
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.
(Regiatrant) U S Amateur Sports, Inc.
BY(Signature) /s/ Gerald V. Bergman
(Date) January 15, 1997
(Name and Title) Gerald V. Bergman,
Chief Financial Officer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-1997
<PERIOD-END> NOV-30-1996
<CASH> 930
<SECURITIES> 0
<RECEIVABLES> 16,967
<ALLOWANCES> 0
<INVENTORY> 77,808
<CURRENT-ASSETS> 0
<PP&E> 60,774
<DEPRECIATION> 0
<TOTAL-ASSETS> 212,565
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 6,000,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 212,565
<SALES> 30,022
<TOTAL-REVENUES> 30,022
<CGS> 14,896
<TOTAL-COSTS> 75,272
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,934
<INCOME-PRETAX> (60,146)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (60,146)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
