<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 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
<PAGE>
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
<PAGE>
U S AMATEUR SPORTS, INC.
(A Development Stage Company)
BALANCE SHEETS
February 28, 1997 and May 31, 1996
<TABLE>
<CAPTION>
February 28, 1997 May 31, 1996
----------------- ------------
ASSETS (Unaudited) (Audited)
<S> <C> <C>
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
========= =========
</TABLE>
See notes to financial statements
<PAGE>
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)
<TABLE>
<CAPTION>
Nine Months Nine Months June 14, 1994
Ended Ended (Inception) to
February 28, February 29, February 28,
1997 1996 1997
------------ ------------ -----------
<S> <C> <C> <C>
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)
========== ========== ==========
</TABLE>
See notes to financial statements.
<PAGE>
U S AMATEUR SPORTS, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Three-Month Periods Ended February 28, 1997 and February 29, 1996
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
February 28, February 29,
1997 1996
------------ ------------
<S> <C> <C>
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)
========== ==========
</TABLE>
See notes to financial statements.
<PAGE>
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)
<TABLE>
<CAPTION>
Nine Months Nine Months June 14, 1994
Ended Ended (Inception) to
February 28, February 29, February 28,
1997 1996 1997
------------ ------------ -------------
<S> <C> <C> <C>
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
========== ========== ==========
</TABLE>
See notes to financial statements.
<PAGE>
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)
<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
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)
========== ======= ========= ========== =========
</TABLE>
See notes to financial statements.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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:
<TABLE>
<CAPTION>
February 28, 1997 February 29, 1996
----------------- -----------------
<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 50,140
______ ______
Total cost 81,818 80,533
Less: accumulated depreciation (24,984) (9,306)
______ ______
Total net property and equipment $ 56,834 $ 71,227
========= =========
<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 $6,935 and $4,334, at February 28, 1997 and
February 29, 1996, respectively.
<PAGE>
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.
<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 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.
<PAGE>
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
<PAGE>
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.
<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 - None
EX-27 Financial Data Schedule
<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.
(Registrant) U S Amateur Sports, Inc.
BY (Signature) /s/ Gerald V. Bergman
(Date) April 15, 1997
(Name and Title) Gerald V. Bergman,
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-1997
<PERIOD-END> FEB-28-1997
<CASH> 1,690
<SECURITIES> 0
<RECEIVABLES> 16,206
<ALLOWANCES> 0
<INVENTORY> 78,156
<CURRENT-ASSETS> 99,052
<PP&E> 56,834
<DEPRECIATION> 0
<TOTAL-ASSETS> 199,128
<CURRENT-LIABILITIES> 254,505
<BONDS> 0
0
0
<COMMON> 6,000,600
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 199,128
<SALES> 11,378
<TOTAL-REVENUES> 11,378
<CGS> 6,554
<TOTAL-COSTS> 53,143
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,607
<INCOME-PRETAX> (48,139)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (48,319)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
