U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 2000
[ ] TRANSITION REPORT PURSUANT SECTION 13 OF 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________________ to __________________
Commission file number 333-61533
PROform golf, inc.
(Exact name of small business issuer as specified in its charter)
Delaware 84-1334921
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
5335 West 48th Avenue, Denver, Colorado 80212
(Address of principal executive offices)
(303) 458-1000
(Issuer's telephone number)
Proformance Research Organization, Inc.
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the last practicable date:
5,810,115 shares of Common Stock, $.0001 par value, as of
June 30, 2000
Transitional Small Business Disclosure Format (check one); Yes No X
Exhibit index on page 14 Page 1 of 18 pages
1
<PAGE>
PROform golf, inc.
(fka Proformance Research Organization, Inc.)
Balance Sheet
June 30, 2000
(unaudited)
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current assets
Cash $ 7,143
Accounts Receivable 6,000
Due from employees 6,960
Prepaid Expenses 16,500
-----------
Total current assets 36,603
Property and equipment - net of accumulated depreciation 84,487
Other assets 313
-----------
$ 121,403
===========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities
Accounts payable $ 361,958
Accrued expense 299,151
Current portion of long term debt 8,933
Related party payable 25,839
Notes and bonds payable 10,000
Notes and bonds payable, related parties 1,925,724
Deferred revenue and deposits payable 391,348
-----------
Total current liabilities 3,022,953
-----------
Long term debt
Convertible notes payable, related parties 533,432
Notes payable 5,579
-----------
Total Long term debt 539,011
-----------
Commitments and contingencies
Stockholders' deficiency
Preferred stock, Series A, convertible, cumulative, $.0001 stated value,
1,000,000 shares authorized, none issued and outstanding -
Preferred stock, Series B, convertible, cumulative, $.0001 stated value,
1,000,000 shares authorized, none issued and outstanding -
Preferred stock, Series C, convertible, cumulative, $.0001 stated value,
2,000,000 shares authorized, 202,000 issued and outstanding 20
Common stock, $.0001 par value, 20,000,000 shares authorized,
5,810,115 shares, issued and outstanding 581
Additional paid in capital 4,362,170
Accumulated deficit (7,803,332)
-----------
Total stockholders' deficiency (3,440,561)
-----------
$ 121,403
===========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
PROform golf, inc.
(fka Proformance Research Organization, Inc.)
Statements of Operations
For the six months and three months ended June 30, 2000 and 1999
(unaudited)
<TABLE>
<CAPTION>
Six months Ended Three months Ended
2000 1999 2000 1999
------------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
Revenue $ 656,080 $ 425,517 $ 119,384 $ 178,602
Cost of revenues 168,492 113,949 59,211 53,841
------------- ------------ ------------- -------------
Gross profit 487,588 311,568 60,173 124,761
------------- ------------ ------------- -------------
Operating expenses
Sales, general and administrative 1,149,016 1,342,640 575,812 759,814
Depreciation 7,410 5,105 3,705 900
------------- ------------ ------------- -------------
Total operating expenses 1,156,426 1,347,745 579,517 760,714
------------- ------------ ------------- -------------
Operating (loss) (668,838) (1,036,177) (519,344) (635,953)
Interest expense 91,314 49,290 45,497 18,244
------------- ------------ ------------- -------------
(Loss) from continuing operations (760,152) (1,085,467) (564,841) (654,197)
Discontinued operations
(Loss) from operations of Team Family segment, estimated
to be disposed of on or before December 31, 1999 - (1,700) - -
------------- ------------ ------------- -------------
Net (Loss) $ (760,152) $(1,087,167) $ (564,841) $ (654,197)
============= ============ ============= =============
Per share information
Weighted average shares outstanding 5,520,365 4,369,463 5,742,282 4,056,028
============= ============ ============= =============
(Loss) per common share
(Loss) from continuing operations $ (0.14) $ (0.25) $ (0.10) $ (0.16)
(Loss) from discontinued operations NIL NIL NIL NIL
------------- ------------ ------------- -------------
Net (loss) per common share $ (0.14) $ (0.25) $ (0.10) $ (0.16)
============= ============ ============= =============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
PROform golf, inc.
(fka Proformance Research Organization, Inc.)
Statements of Cash Flows
For the six months ended June 30, 2000 and 1999
(unaudited)
<TABLE>
<CAPTION>
2000 1999
----------------- -----------------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) $ (760,152) $ (1,087,167)
Adjustments to reconcile net loss
to net cash (used in) operating activities:
Depreciation and amortization 7,410 5,105
Changes in assets and liabilities (100,358) 471,320
----------------- -----------------
Net cash (used in) operating activities (853,100) (610,742)
----------------- -----------------
Cash flows from investing activities:
Purchase of fixed assets (25,612) (4,411)
----------------- -----------------
Net cash (used in) investing activities (25,612) (4,411)
----------------- -----------------
Cash flows from financing activities:
Proceeds from notes and bonds payable, related party - 632,100
Payment on notes and bonds payable, related party (98,776)
Net proceeds from issuance of stock 891,040 0
Proceeds from note and bonds payable 96,399 0
Payments on note and bonds payable (5,969)
----------------- -----------------
Net cash provided by financing activities 888,663 626,131
----------------- -----------------
Net increase in cash 9,951 10,978
Beginning - cash (2,808) 4,770
----------------- -----------------
Ending - cash $ 7,143 $ 15,748
================= =================
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
PROform golf, inc.
(fka Proformance Research Organization, Inc.)
Notes to Unaudited Financial Statements
ACCOUNTING POLICIES
Basis of presentation - The accompanying unaudited financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and Item 310 (b) of Regulation S-B. 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 only of normal recurring adjustments)
necessary for a fair presentation of the financial information for the periods
indicated have been included. The results of operations for the periods
presented are not necessarily indicative of the results to be expected for the
full year.
Net loss per share - The net loss per share amounts are based on the weighted
average number of common shares outstanding for the period. Potential common
shares and the computation of diluted earnings per share are not considered, as
their effect would be anti-dilutive.
NOTES AND BONDS PAYABLE, RELATED PARTIES
Pursuant to agreements entered into $1,689,500 of the notes and bonds payable
will convert to the Company's $.0001 par value common stock upon the effective
date of an offering allowing for the public trading of that common stock.
STOCKHOLDERS' EQUITY
Preferred Stock
During the six months ended June 30, 2000 the Company issued 12,000 shares of
its Series C Preferred Stock for $30,000 in cash. There were no issuance costs.
Common Stock
During the six months ended June 30, 2000 the Company issued 632,000 shares of
its $.0001 par value Common Stock for $650,000 in cash. There was no issuance
cost. Additionally, the Company issued 59,000 shares of its $.0001 par value
Common Stock valued at an average price of $1.20 per share as inducements for
loan funds received and the agreement to convert certain loans to common stock;
40,000 shares of its $.0001 par value Common Stock for consulting services
rendered; and 10,000 shares of its $.0001 par value Common Stock as inducement
to purchase Series C Preferred Stock.
During the six months ended June 30, 2000 a related party converted a $100,000
note payable into 70,000 shares of $.0001 par value Common Stock.
5
<PAGE>
CONTINUING LOSSES, DEFICIT IN EQUITY AND NEGATIVE WORKING CAPITAL
The financial statements have been prepared in conformity with generally
accepted accounting principles, which contemplates continuation of the company
as a going concern. However, the Company has sustained substantial operating
losses in recent years. In addition, the Company has used substantial amounts of
working capital in its operations. Further, at June 30, 2000, current
liabilities exceeded current assets by $2,986,350 and total liabilities exceeded
total assets by $3,440,561.
These circumstances raise substantial doubt about the Company's ability to
continue as a going concern. The ability of the Company to continue operations
as a going concern is dependent upon its success in (1) obtaining additional
capital; (2) paying its obligations timely; and (3) ultimately achieving
profitable operations. The financial statements do not include any adjustments,
which might result from the outcome of these uncertainties.
SUBSEQUENT EVENTS
Subsequent to June 30, 2000, the Company amended its articles of incorporation
to change the name of the Company to PROform golf, inc.
On August 11, 2000 the Company completed the registration of approximately
2,839,800 shares of its $.0001 par value Common Stock. Of the shares registered,
747,800 shares will be issued to holders of convertible notes payable totaling
$1,689,500 and 202,000 shares will be issued to holders of the Company's Series
C Preferred Stock. Additionally, 690,000 existing common shares and 1,200,000
shares of common stock underlying warrants to purchase common shares were
included in the registration statement.
Subsequent to June 30, 2000, creditors in the amount of $150,000 agreed to
settle their accounts payable for 150,000 shares of the Company's $.0001 par
value Common Stock.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
OVERVIEW
Over the past three years, we have expanded from five Destination Golf
Schools to 26 Destination Golf Schools, which are under contract for full or
partial year operation. We had expected to be financed in May of 1999 and the
delay in financing created a cash-flow problem due to the financial commitments
that had been made to each of these facilities. We have tried to alleviate the
problem by reducing our expenses, asking our creditors to convert promissory
notes into equity investments, increasing our revenues, and seeking additional
equity investments.
Originally, most site contracts for our Destination Golf Schools
provided for a fixed amount of monthly rent. As of June 30, 2000, all of our
site contracts provide for rent on a per student basis, reducing our fixed
costs. In the future, we intend to negotiate only contracts which provide for
rent on a per student basis. We have also attempted to reduce our expenses by
reducing the number of full-time employees and relying upon distributors to
market and sell our products.
In order to develop our distributor network, we made a strategic
decision to open several sites for our Destination Golf Schools, despite the
fact that there are significant one-time and recurring expenses associated with
opening each site, and despite the fact that our existing sites were not
operating at capacity. As of June 30, 2000, we had 24 distributors covering 36
of 100 territories. We believe that adding additional sites makes our Premium
Links(TM) packages more valuable because it enables corporate purchasers to
redeem the lessons at locations nationwide.
For each Destination Golf School, we hire a site manager and a number
of certified instructors based on anticipated demand. We provide training for
our site managers and certified instructors at our expense. We believe these
steps are necessary to establish the infrastructure to achieve our goal of
becoming the world's largest golf school. Our business plan and infrastructure
have been developed in an attempt to capitalize upon economies of scale which we
believe we can achieve through acquisitions of additional golf schools. At our
present stage of development, our operations are too small to benefit from these
economies of scale.
Management believes that there are many single-location golf school and
multiple-site golf school operations whose owners may see certain advantages to
being part of a larger organization with several locations. Management believes
that we can acquire such existing golf schools using a combination of stock and
as little cash as possible. We believe the acquisition of currently operating
golf schools will significantly increase our revenue base. We are currently in
various stages of discussions with approximately 45 companies that represent
almost 100 sites. However, as of the date of this report, there are no
understandings, agreements, or arrangements for any acquisitions. If we are able
to secure the necessary financing, our plan is to expand to 200 Destination Golf
Schools over the next three years.
7
<PAGE>
Our Destination Golf Schools have opened at varying times over the past
three years. Management expects decreased revenues from Destination Golf School
operations in May and September each year. We close down some of our warm
weather sites in May, with the staff of those sites moving to a summer site, and
close our summer sites in September, with the staff returning to their warm
weather sites. In each case, we expect a one week lag between the closing of one
site and the opening of the other site. As of June 30, 2000, we had 26
Destination Golf Schools under contract for full or partial year operation.
Also, our operations are subject to the effects of inclement weather from time
to time even during the seasons that they are open. As a result of changes in
the number of facilities open from period to period, closing certain of the
Destination Golf Schools during local off-seasons, and overall seasonality of
the golf business, results of operations for any particular period may not be
indicative of the results of operations for any other period.
In an effort to reduce interest expenses and debt payments, some of the
persons to whom we have issued promissory notes agreed to convert those notes
into common stock. On August 11, 2000, the date our registration statement was
declared effective by the Securities and Exchange Commission, those notes were
converted to shares of our common stock.
RESULTS OF OPERATIONS
NET LOSS. We incurred net losses of $564,841 and $760,152 for the three
and six months ended June 30, 2000, as compared to losses of $654,197 and
$1,087,167 for the comparable 1999 fiscal periods, decreases of approximately
14% and 30%, respectively. The decreased three-month loss for 2000 is due
primrily to decreased operating expenses. Revenues decreased by $59,218 in the
current year, but operating expenses also decreased by $181,197. The decreased
six-month net loss is due primarily to increased revenues and decreased
operating expenses during the 2000 period. Operating expenses decreased by 14%
during the six months ended June 30, 2000, from $1,347,745 in 1999 to $1,156,426
in 2000.
TOTAL REVENUE. We had total revenue of $656,080 for the six months
ended June 30, 2000, compared to $425,517 of total revenue for the comparable
1999 fiscal period. The increase in total revenue was attributable primarily to
the development of our Corporate Sales, selling our Premium Links(TM) corporate
golf school packages, and the development of our distributor network. Also, as
explained below in "Seasonality," we experience increased activity in the winter
months. Revenues for the three months ended June 30, 2000 were lower than
expected, showing a 33% decrease from last year, due to fewer distributorship
sales.
COST OF REVENUE. Cost of revenues for the six months ended June 30,
2000 was $168,492 or 26% of total revenue, compared to $113,949 or 27% of total
revenue for the 1999 period. Cost of revenues consists primarily of instructor
salaries and site fees (calculated on a "per head" basis). Cost of revenues
increased as a percentage of total revenues for the three months ended June 30,
2000 (50% in 2000 compared to 30% in 1999) due to an increase in personnel
costs directly related to revenue.
8
<PAGE>
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses, consisting primarily of marketing and advertising
expenses, expenses associated with recruiting and training Destination Golf
School site managers and instructors, salaries for administrative, sales and
marketing staff, and rent at our headquarters, decreased slightly to $1,149,016
for the six months ended June 30, 2000 from $1,342,640 for 1999, and $575,812
for the three months ended June 30, 2000 from $759,814 for 1999.
LIQUIDITY AND CAPITAL RESOURCE
The cash requirements of funding our operations and expansion have
exceeded cash flow from operations. At June 30, 2000, our working capital
deficiency was $2,986,350, as compared to $3,206,485 at December 31, 1999. To
date, we have satisfied our capital needs primarily through debt and equity
financing.
At June 30, 2000, short-term notes payable and bonds was $1,925,724. Of
this amount, $1,689,500 was paid on August 11, 2000, by issuing 747,800 shares
of common stock.
We filed a registration statement for a public offering which was
declared effective in February 1999. Due to material changes during the term of
the offering, we did not complete that offering. Since we were in need of cash
for ongoing operations, we incurred additional short-term debt, sold Series C
preferred stock and common stock, and issued warrants exercisable for shares of
common stock. We determined that it would be in our best interests not to
proceed with an initial public offering, but instead to register shares to be
issued to our creditors, holders of the Series C preferred stock, certain common
shareholders, and the common shares issuable upon exercise of certain warrants.
Our registration statement was declared effective by the Securities and Exchange
Commission on August 11, 2000. On that date, all of the outstanding shares of
Series C preferred stock were converted automatically into 202,000 shares of
common stock. As mentioned above, on August 11, 2000, $1,689,500 in short-term
notes payable and bonds was paid by converting the debt into 747,800 shares of
common stock.
Subsequent to June 30, 2000, creditors in the amount of $150,000 agreed
to settle their accounts payable for 150,000 shares of the Company's $.0001 par
value Common Stock.
Of the $539,011 in long-term debt outstanding at June 30, 2000,
$533,432 is payable to persons who are stockholders in the Company, and bears
interest at a fixed rate of 8%, is unsecured and is convertible (principal and
unpaid interest) into our common stock at a rate of $1.00 per share at anytime.
The notes are due on January 1, 2003; however, the holders of the notes may
require us to redeem the notes, in whole or in part, upon the first two
anniversary dates of the notes (January 1, 2001 and January 1, 2002), by giving
notice to us at least 90 days before the anniversary date. We are required to
register, under the Securities Act, the shares into which the notes may be
converted. The notes may be prepaid without penalty. If we default on the
note(s), the holder(s) are entitled one share of our common stock for every $100
per month for each month the note(s) are in default. The remainder of our
long-term debt relates to a note for an automobile which bears interest at the
rate of 8.9% and is payable in 42 monthly installments.
As of June 30, 2000, there were 19 remaining installments.
9
<PAGE>
Since we have already received cash proceeds from the issuance of our
stock, our existing operations must be able to generate enough cash to cover
existing commitments and obligations, such as lease rent for the facilities,
instructors' salaries, and officers' salaries. We are obligated under a
five-year employment agreement to pay William D. Leary, our president, an annual
salary of $120,000.
As described above, at June 30, 2000, we had a significant working
capital deficit. Therefore, our business plan is dependent upon our ability to
increase the number of our Destination Golf Schools and we will need to raise
additional capital to fund our operations and to take advantage of any expansion
opportunities. In that event, we cannot assure you that additional capital would
be available at all, at an acceptable cost, or on a basis that would be timely
to allow us to finance our operations or any expansion opportunities.
As stated in the notes to the financial statements, at June 30, 2000,
our current liabilities exceeded current assets by $2,986,350 and our total
liabilities exceeded total assets by $3,440,561. These factors, among others,
raise substantial doubt about our ability to continue as a going concern.
In an effort to reduce our fixed expenses, on June 30, 2000, we reduced
our full-time staff by eight persons. We estimate the reduction in employees
will result in a savings of approximately $20,000 per month.
SEASONALITY
Throughout much of the United States, the golf business is seasonal,
operating primarily in the summer and additionally in the spring and fall.
However, in much of the Southern United States, golf is played either year-round
or all year except for the summer. This is primarily due to an outdoor playing
season limited by inclement weather or excessive heat. We believe that business
at our Destination Golf Schools will be seasonal with increased activity in the
winter as students take winter vacations to warm weather destinations, and
decreased activity in the summer. In particular, we expect decreased revenues
from Destination Golf School operations in May and September each year. We
anticipate the closing of our warm weather sites in May, with the staff of those
sites moving to a summer site, and anticipate closing our summer sites in
September, with the staff returning to their warm weather sites. In each case,
we expect a one week lag between the closing of one site and the opening of the
other site. For example, our site manager and certified instructors for Wildfire
will generally move to Pole Creek or Haymaker for the summer and the staff from
Rhodes Ranch in Las Vegas will move to Lake Okoboji, Iowa for the summer. Of our
26 current Destination Golf Schools, three facilities will close during the
summer, 19 will be open only during the summer, and the remaining four will be
open year-round.
Also, our operations are subject to the effects of inclement weather
from time to time even during the seasons that they are open. The timing of any
new facility openings, the seasons our facilities are open, the effects of
unusual weather patterns and the seasons in which students
10
<PAGE>
are inclined to attend golf schools are expected to cause our future results of
operations to vary significantly from quarter to quarter.
Accordingly, period-to-period comparisons will not necessarily be
meaningful and should not be relied on as indicative of future results. In
addition, our business and results of operations could be materially and
adversely affected by future weather patterns that cause our sites to be closed,
either for an unusually large number of days or on particular days on which we
had booked a special event or a large number of students. Because most of the
students at our Destination Golf Schools attend the school on vacation, the
student may not be able to or interested in rescheduling attendance at one of
our sites. As a result, student-days lost to inclement weather may truly
represent a loss, rather than merely a deferral, of revenue.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In addition to the cases described below, there are other collection
cases which have been filed against us in Denver County Court,
Denver, Colorado. These cases are either pending or have been reduced
to judgment.
On December 29, 1999, Robert J. McNamara filed suite in Denver County
Court, Denver, Colorado, asserting claims for actual and exemplary
damages, attorney's fees, and costs arising from allegations of
breach of contract, failure to repay promissory note, fraud, and
exemplary damages. As part of a settlement, we paid Mr. McNamara
$7,750 and Mr. McNamara dismissed his claims on February 5, 2000,
with prejudice and grated a full release to us.
On January 28, 2000, Imperial Palace Casino Inc. filed suit against
us in the District Court of Clark County, Nevada, asserting claims
for damages, interest, attorney's fees and costs arising from alleged
nonpayment of hotel room and other charges. A default judgment was
entered by the court on May 9, 2000, in the amount of $15,552.40 plus
postjudgment interest.
During the quarter ended June 30, 2000, we had four lawsuits filed
against us, as follows:
On May 22, 2000, a claim was filed against us by The Pressroom, Inc.
in the Small Claims Court for Denver, County, Colorado. The
Pressroom, Inc. alleged that we failed to pay for goods and services
provided to us by The Pressroom, Inc., and was seeking $2,632.68 in
damages plus interests and costs. We settled this case by paying
$2,901.09 and it was dismissed with prejudice on July 17, 2000.
On or about June 7, 2000, a complaint was filed against us by Tim
O'Hara Photography, Inc. in Denver County Court, Denver, Colorado.
The plaintiff has
11
<PAGE>
alleged that we failed to pay for photography work performed for us.
Tim O'Hara Photography, Inc. is seeking damages of $2,876.18, plus
interest, costs and any other items allowed by law or agreement. A
judgement was entered against us on July 10, 2000, and a garnishment
has been issued against our bank account in the amount of $2,992.18.
On or about June 19, 2000, a complaint was filed against us by
Continental Collection Agency, as assignee of Sterling Point
Apartments, in Arapahoe County Court, Littleton, Colorado.
Continental Collection Agency asserted a claim for damages of
$1,006.62, interest, and any other items allowed by law or agreement,
plus costs and attorney's fees arising out of alleged non-payment of
rent by us. We settled this case on August 17, 2000, in exchange for
a dismissal with prejudice of the claim, each party bearing its own
costs and fees.
On June 22, 2000, a complaint was filed against us and William D.
Leary, the president and a director and controlling shareholder of
PROform golf, inc., by Communigraphics Corporation in the District
Court for the City and County of Denver, Colorado. Communigraphics
Corporation has alleged breach of contract, breach of account, breach
of guaranty, and wrongful retention of products and services based
upon an alleged failure to pay for brochures, folders, postcards and
inserts printed by Communigraphics Corporation. Communigraphics
Corporation is seeking damages of $47,418.04, plus interest at 18%,
costs and attorneys' fees. Our response to Communigraphics
Corporation's claims is due August 25, 2000. We are attempting to
settle these claims; however, if we are unable to settle these claims
we intend to defend ourselves against them.
In addition to these cases, a claim was filed against us in the Small
Claims Court for Denver County, Colorado, on August 10, 2000 by
Bonnie MacDonald. Ms. MacDonald claims that we have failed to repay a
bridge loan in the amount of $5,000. She is seeking damages of $5,000
plus interest and costs. The Company intends to attempt to settle
this case with Ms. MacDonald.
Given our present financial situation, we cannot give any assurances
that there will not be additional lawsuits filed against us. In the
event a creditor obtains a judgment against us, and that creditor
were to seek enforcement of such judgment, that creditor could force
us into bankruptcy and/or we may be forced to cease operations. In
addition, a group of creditors, collectively, without obtaining a
judgment, may be able to force us into bankruptcy and/or to cease
operations.
Also, if a creditor were to obtain a judgment against us, that
creditor may seek to satisfy the judgment from the funds we receive
from students purchasing our classes. In such an event, we may not
have sufficient cash to pay the golf course at which the class is to
be offered and the course may refuse to grant us access and we would
not have sufficient funds to refund the purchase price to the
student. Any such action could cause us to lose customers, revenues
and course sites, and we could be forced to cease operations.
12
<PAGE>
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
During the quarter ended June 30, 2000, the registrant issued 44,000
shares of common stock for $50,000 in cash. There was no issuance
cost. Additionally, the registrant issued 31,000 shares of common
stock valued at $30,760 per share as inducements for loan funds
received and the agreement to convert certain loans to common stock.
The registrant also issued 40,000 shares of common stock at a deemed
value of $1.00 per share for services valued at $40,000, and 10,000
shares of common stock as inducements to purchase shares of Series C
preferred stock at a deemed value of $1.00 per share.
The sale and issuance of the shares of common stock were deemed to be
exempt from registration under Section 4(2) of the Securities Act of
1933. Appropriate legends were affixed to the stock certificates
issued in the above transactions. The securities were offered and
sold by the registrant without any underwriters. All of the
purchasers were deemed to be sophisticated with respect to an
investment in securities of the registrant by virtue of their
financial condition and/or relationship to members of management of
the registrant.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
ITEM 5. OTHER INFORMATION
Not Applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A) EXHIBITS
<TABLE>
<CAPTION>
Regulation Consecutive
S-B Number Exhibit Page Number
<S> <C> <C>
3.1 Amended and Restated Certificate of Incorporation (2) N/A
3.1a Articles of Amendment dated July 25, 2000 (2) N/A
3.1b Statement of Series C Preferred Stock (2) N/A
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Regulation Consecutive
S-B Number Exhibit Page Number
<S> <C> <C>
3.2 Bylaws (2) N/A
3.2a Amendment to Section 3.1 of the Company's Bylaws (2) N/A
4.1 Reference is made to Exhibits 3.1, 3.1a, 3.1b, 3.2 and 3.2a (2) N/A
10.1 Distribution Agreement between the Company and Dave Bisbee, dated N/A
August 22, 1996 (2)
10.2 Distribution Agreement between the Company and William D. Leary (2) N/A
10.3 Lease between Fernal Inc. and William D. Leary and the Company, dated N/A
May 1, 1997, as amended by an Addendum to Lease between Mach One and
World Associates, Inc. dated April 4, 1998 (2)
10.4 Common Stock Purchase Agreement with Proformance Research N/A
Organization/Weiner, Inc. dated July 15, 1998 (2)
10.5 Sublease dated April 21, 1998 between Mach One Corporation and N/A
Proformance Research Organization, Inc. (2)
10.6 Employment Agreement between the Company and William D. Leary dated N/A
July 1, 1998 (2)
10.7 Consulting Services Agreement between Sunkyong U.S.A., Inc. and the N/A
Company dated May 6, 1997 (2)
10.8 Amendment to Common Stock Purchase Agreement with Proformance N/A
Research Organization/Weiner, Inc. dated November 2, 1998 (2)
10.9 Consulting Agreement between the Company and J. Paul Consulting dated N/A
March 1, 2000 (2)
10.10 Convertible Promissory Note dated November 9, 1999 between the Company N/A
and John C. Weiner (2)
10.11 Convertible Promissory Note dated December 31, 1999 between the N/A
Company and William D. Leary, as amended (2)
10.12 Convertible Promissory Note dated March 27, 2000 between the Company N/A
and John C. Weiner (2)
10.13 Form of Distribution Agreement (2) N/A
11 Statement re: computation of per share earnings See the
Financial
Statements
27 Financial Data Schedule 17
----------------------------
</TABLE>
14
<PAGE>
(1) Incorporated by reference to the exhibits filed with the Registration
Statement on Form SB-2, File No. 333-61533.
(2) Incorporated by reference to the exhibits filed with the Registration
Statement on Form SB-2, File No. 333-42438.
B) REPORTS ON FORM 8-K:
None.
15
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
PROform golf, inc.
(Registrant)
Date: August 21, 2000 By: /s/ William D. Leary
-----------------------------------
William D. Leary, President
16
<PAGE>
Exhibit 27
Financial Data Schedule
17
