<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A1
-------------------------------
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported):
JUNE 30, 1997
-------------------------------
WHEELS SPORTS GROUP, INC.
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 0-22321 56-2007717
(State of Incorporation) (Commission File No.) (I.R.S. Employer
Identification No.)
149 GASOLINE ALLEY
MOORESVILLE, NORTH CAROLINA 28115
(Address of principal executive offices)
(704) 662-6442
(Registrant's telephone number, including area code)
<PAGE> 2
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) In accordance with Item 7(a)(1), the Registrant hereby files
the required financial statements of Diamond Sports Group,
Inc.
(b) In accordance with Item 7(b)(2), the Registrant hereby files
required proforma financial information on the Registrant and
Diamond Sports Group, Inc. The proforma financial information
on the Registrant and Diamond Sports Group, Inc. for the six
months ended June 30, 1997 was filed with the Registrant's
Form 10-QSB\A1 for the quarter ended June 30, 1997 and is
incorporated herein by reference.
(c) The following exhibits are furnished herewith in accordance
with the provisions of Item 601 of Regulation S-K:
<TABLE>
<CAPTION>
Reg. S-K
Exhibit No. Description Item No.
- ----------- ----------- --------
<S> <C> <C>
+2.1 Agreement and Plan of Reorganization among Diamond Sports Group, 2
Inc., the Company, Wheels Sports Group Acquisition, Inc., a wholly
owned subsidiary of the Company, and the four shareholders of
Diamond Sports Group, Inc.
+2.2 Registration Rights Agreement among the Company and Messrs. Randy 2
E. Duncan, H. Edward Hickman, Robert J. Diachenko and A. Thad
Lewallen, III.
*99.1 Financial Statements of Diamond Sports Group, Inc.
*99.2 Proforma Financial Statements of Diamond Sports Group, Inc. and the
Registrant
</TABLE>
- ----------
+ Previously filed with the Company's Form 8-K filed on July 15, 1997.
* Filed herewith.
2
<PAGE> 3
SIGNATURES
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 hereunto duly authorized.
WHEELS SPORTS GROUP, INC.
Date: March 31, 1998 By: /s/ F. SCOTT M. CHAPMAN
--------------------------------------------
F. Scott M. Chapman, Chief Financial Officer
3
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
Reg. S-K
Exhibit No. Description Item No.
- ----------- ----------- --------
<S> <C> <C>
+2.1 Agreement and Plan of Reorganization among Diamond Sports Group, 2
Inc., the Company, Wheels Sports Group Acquisition, Inc., a wholly
owned subsidiary of the Company, and the four shareholders of Diamond
Sports Group, Inc.
+2.2 Registration Rights Agreement among the Company and Messrs. Randy 2
E. Duncan, H. Edward Hickman, Robert J. Diachenko and A. Thad
Lewallen, III.
*99.1 Financial Statements of Diamond Sports Group, Inc.
*99.2 Proforma Financial Statements of Diamond Sports Group, Inc. and the
Registrant
</TABLE>
- -------------------
+ Previously filed with the Company's Form 8-K filed on July 15, 1997.
* Filed herewith.
<PAGE> 1
EXHIBIT 99.1
FINANCIAL STATEMENTS OF
DIAMOND SPORTS GROUP, INC.
for the six month period ended June 30, 1997 (unaudited)
and the year ended December 31, 1996
<PAGE> 2
CONTENTS
<TABLE>
<CAPTION>
Pages
-----
<S> <C>
Report of Independent Accountants
for the year ended December 31, 1996 1
Financial Statements:
Balance Sheets 2
Statements of Operations and Accumulated Deficit 3
Statements of Cash Flows 4
Notes to Financial Statements 5-8
</TABLE>
<PAGE> 3
[COOPERS & LYBRAND LETTERHEAD]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
Diamond Sports Group, Inc.:
We have audited the accompanying balance sheet of Diamond Sports Group, Inc. as
of December 31, 1996, and the related statement of operations and accumulated
deficit and statement of cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Diamond Sports Group, Inc. as
of December 31, 1996 and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.
The balance sheet of Diamond Sports Group, Inc. as of June 30,1997, and the
related statement of operations and accumulated deficit and statement of cash
flows for the six month period then ended have not been audited and,
accordingly, we do not express an opinion on them.
As explained in Note 8 to the financial statements, Diamond Sports Group, Inc.
was acquired on June 30, 1997.
/s/ COOPERS & LYBRAND L.L.P.
Greensboro, North Carolina
January 16, 1998
1
<PAGE> 4
DIAMOND SPORTS GROUP, INC.
BALANCE SHEETS
as of June 30, 1997 (unaudited) and December 31, 1996
----------
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1997 1996
----------- -----------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 77,281 $ 47,916
Receivables:
Trade 248,323 55,463
Other 32,248 40,000
Inventories 291,082 28,807
Advance hospitality payments 146,517 88,196
----------- -----------
Total current assets 795,451 260,382
Property and equipment, net 341,508 332,777
Other assets 1,749 2,143
----------- -----------
Total assets $ 1,138,708 $ 595,302
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt $ 2,670 $ 2,670
Line of credit 240,000 40,000
Capital lease obligation 298,879 298,879
Accounts payable 283,250 100,072
Accrued expenses 16,225 7,484
Deferred revenue 361,404 255,844
Other liabilities 22,400 --
----------- -----------
Total current liabilities 1,224,828 704,949
Long term debt 4,328 5,087
----------- -----------
Total liabilities 1,229,156 710,036
----------- -----------
Stockholders equity:
Class A common shares, no par value, 50,000 shares authorized,
10,000 shares issued and outstanding 10 10
Class B common shares, 50,000 shares authorized,
10,000 shares issued and outstanding 10 10
Shareholder loans receivable (12,989) (12,989)
Accumulated deficit (77,479) (101,765)
----------- -----------
Total stockholders equity (deficit) (90,448) (114,734)
----------- -----------
Total liabilities and stockholders equity $ 1,138,708 $ 595,302
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE> 5
DIAMOND SPORTS GROUP, INC.
STATEMENTS OF OPERATIONS AND
ACCUMULATED DEFICIT
for the six month period ended June 30, 1997 (unaudited)
and the year ended December 31, 1996
----------
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
----------- -----------
(UNAUDITED)
<S> <C> <C>
Net sales $ 1,211,996 $ 1,084,198
Cost of goods sold 833,617 834,369
----------- -----------
Gross profit 378,379 249,829
Selling, general and administrative expenses 330,847 321,802
----------- -----------
Operating income (loss) 47,532 (71,973)
Other income (expense):
Interest expense (24,750) (11,332)
Other income, net 1,504 3,080
----------- -----------
Net income (loss) 24,286 (80,225)
Accumulated deficit at beginning of year (101,765) (21,540)
----------- -----------
Accumulated deficit at end of year $ (77,479) $ (101,765)
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE> 6
DIAMOND SPORTS GROUP, INC.
STATEMENTS OF CASH FLOWS
for the six month period ended June 30, 1997 (unaudited)
and the year ended December 31, 1996
----------
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
------------ ------------
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net income/(loss) $ 24,286 $ (80,225)
Adjustments to reconcile net income/loss to net cash used in operating
activities:
Depreciation and amortization 12,458 9,607
Change in operating assets and liabilities:
Trade receivables (192,860) (55,443)
Other receivables 7,752 (40,000)
Inventories (262,275) (28,807)
Advance hospitality payments (58,321) 54,654
Other noncurrent assets 394 448
Accounts payable and accrued expenses 191,919 52,385
Deferred revenue 105,560 86,994
Other liabilities 22,400 --
------------ ------------
Net cash used in operating activities (148,687) (387)
------------ ------------
Cash flows from investing activities:
Purchases of property and equipment (21,189) (30,811)
------------ ------------
Net cash used in investing activities (21,189) (30,811)
------------ ------------
Cash flows from financing activities:
Loans from officers -- (8,000)
Borrowings under line of credit 200,000 65,000
Proceeds from issuance of long term debt -- 48,671
Payments on line of credit -- (25,000)
Repayment of long term debt (759) --
Shareholder loan receivable -- (12,989)
------------ ------------
Net cash provided by financing activities 199,241 67,682
------------ ------------
Increase in cash and cash equivalents 29,365 36,484
Cash and cash equivalents at beginning of year 47,916 11,432
------------ ------------
Cash and cash equivalents at end of year $ 77,281 $ 47,916
============ ============
Supplemental disclosures of cash flow information:
Cash paid during the year for interest $ 24,750 $ 11,332
============ ============
Non-cash investing and financing activities:
Long term debt issued for vehicle -- $ 8,775
============
Capital lease -- $ 298,879
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE> 7
DIAMOND SPORTS GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
for the six month period ended June 30, 1997 (unaudited)
and the year ended December 31, 1996
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION:
Diamond Sports Group, Inc. (the "Company") is a North Carolina corporation
headquartered in Charlotte, North Carolina. The Company is engaged in
merchandising NASCAR oriented products and providing motor sports-related
hospitality management and corporate promotions.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF ACCOUNTING: The Company uses the accrual basis of accounting.
INTERIM FINANCIAL DATA: The interim financial data with respect to June 30,
1997 have been prepared without audit; however, in the opinion of
management, all adjustments (which are normal and recurring) necessary to
present fairly the financial position, results of operations and cash flows
at June 30, 1997 and for the six month period then ended, have been made.
The results for six months ended June 30, 1997 are not necessarily
indicative of the results of operations for a full year.
CASH AND CASH EQUIVALENTS: The Company's cash and cash equivalents are
placed in a major domestic bank which limits the amount of credit exposure.
Periodically throughout the year, the Company has maintained balances in
excess of federally insured limits of $100,000. Cash equivalents consist of
money market funds.
INVENTORIES: Inventories are stated at lower of cost or market with cost
determined by the first-in, first-out method.
PROPERTY AND EQUIPMENT: Property and equipment are stated at cost.
Depreciation is computed by using the straight-line method over the
estimated useful lives. Expenditures for repairs and maintenance are
charged to expense as incurred. The costs of major renewals and betterments
are capitalized. The cost of property and equipment and accumulated
depreciation are removed from the accounts upon retirement or other
disposition with any resulting gain or loss reflected as other income or
expense.
FINANCIAL INSTRUMENTS: The Company estimates the fair value of existing
debt using rates currently available to the Company for debt with similar
terms and remaining maturities.
REVENUE RECOGNITION: Sales and related costs for the merchandising business
are recognized at the time of shipment to customers and in the case of
hospitality and other services at the time the NASCAR racing event takes
place.
5
<PAGE> 8
DIAMOND SPORTS GROUP, INC.
NOTES TO FINANCIAL STATEMENTS, continued
for the six month period ended June 30, 1997 (unaudited)
and the year ended December 31, 1996
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
INCOME TAXES: The financial statements do not include a provision for
income taxes because the taxable income or loss is included in the income
tax returns of the individual shareholders under the S corporation
election.
COMMON STOCK: The Company was incorporated on July 21, 1995; 50,000 shares
of Class A and 50,000 shares of Class B were authorized. All rights and
limitations of Class A and Class B are the same except Class B shares have
no voting power.
SHAREHOLDER LOANS RECEIVABLE: The receivable represent non-interest bearing
advances to shareholders without maturity.
USE OF ESTIMATES: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
3. PROPERTY AND EQUIPMENT:
Property and equipment consisted of the following:
<TABLE>
<CAPTION>
June 30, 1997 December 31, 1996
------------- -----------------
(unaudited)
------------
<S> <C> <C>
Building under capital lease $ 298,879 $ 298,879
Land and building improvements 19,345 11,800
Office machinery and equipment 35,400 22,544
Automobiles 8,775 8,775
------------ ------------
362,399 341,998
Less accumulated depreciation and amortization (20,891) (9,221)
------------ ------------
$ 341,508 $ 332,777
============ ============
</TABLE>
6
<PAGE> 9
DIAMOND SPORTS GROUP, INC.
NOTES TO FINANCIAL STATEMENTS, continued
for the six month period ended June 30, 1997 (unaudited)
and the year ended December 31, 1996
4. FINANCING ACTIVITIES:
LINE OF CREDIT - The Company maintains a line of credit totaling $350,000
at June 30, 1997 and $200,000 at December 31, 1996 with Wachovia Bank of
North Carolina, N.A. (the "Bank") bearing interest based on the Bank's
prime rate (8.5% at June 30, 1997 and 8.25% at December 31, 1996) plus 1%,
collateralized by substantially all of the Company's assets. Interest rates
are established on the date the Company draws on the line of credit and are
adjusted periodically. At June 30, 1997 and December 31, 1996, $240,000 and
$40,000, respectively, was outstanding on this line of credit. The line of
credit is guaranteed by the officers of the Company. The line of credit
contains various covenants, the most restrictive of which require the
Company to maintain life insurance on certain Diamond Sports Group, Inc.
officers.
LONG TERM DEBT - Long term debt at June 30, 1997 and December 31, 1996
consists of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
------------ ------------
(unaudited)
<S> <C> <C>
8.45% note with interest and principal
payable in monthly installments due
November 1999 $ 6,998 $ 7,757
Less: current maturities 2,670 2,670
------------ ------------
$ 4,328 $ 5,087
============ ============
</TABLE>
Long-term debt is stated at cost plus accrued interest which approximates
fair value.
The aggregate maturities of long term debt are as follows:
<TABLE>
<CAPTION>
December 31, 1996
-----------------
<S> <C>
1997 $ 2,670
1998 2,670
1999 2,417
------------
$ 7,757
============
</TABLE>
7
<PAGE> 10
DIAMOND SPORTS GROUP, INC.
NOTES TO FINANCIAL STATEMENTS, continued
for the six month period ended June 30, 1997 (unaudited)
and the year ended December 31, 1996
5. TRANSACTIONS WITH RELATED PARTIES:
The Company entered into a lease for its building on October 1, 1996 with a
company owned by three out of four of the Diamond Sports Group
shareholders. The lease term was for three years with an option to purchase
the building during the lease and a mandatory purchase requirement by the
end of 1999. The lease was capitalized using a rate of 9%. Minimum monthly
lease payments were $2,400. Lease payments, representing interest, made
during the six-month period ended June 30, 1997 and the year ended December
31, 1996 were $14,700 and $9,200, respectively. During August 1997, the
right to purchase the building for $308,000 was exercised, accordingly, the
capital lease obligation has been classified as current.
In 1996, the Company repaid a $8,000 loan from an officer of the Company.
The loan was originated in 1995 and the proceeds were used for working
capital.
At October 8, 1996, the Company advanced one officer $3,500. At October 10,
1996, the Company advanced Par 3 Partners, a partnership comprised of three
shareholders of the Company, $2,089. At December 31, 1996, the Company
advanced three officers $8,000. The aforementioned advances are reflected
as reductions of shareholders equity in the balance sheet at June 30, 1997
and December 31, 1996.
6. LEASES:
The Company leases a vehicle under a noncancelable operating lease with
original terms for 30 months. This lease has an option to purchase the
vehicle at fair value at the end of the lease term.
Rent expense totaled approximately $2,439 for the six months ended June 30,
1997 and $4,878 for the year ended December 31, 1996. As of December 31,
1996, future minimum lease commitments are as follows:
<TABLE>
<CAPTION>
Year ending December 31:
<S> <C>
1997 $4,878
1998 2,033
</TABLE>
8
<PAGE> 11
DIAMOND SPORTS GROUP, INC.
NOTES TO FINANCIAL STATEMENTS, continued
for the six month period ended June 30, 1997 (unaudited)
and the year ended December 31, 1996
7. CONCENTRATIONS OF CREDIT RISK:
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of trade accounts
receivable. Although the Company sells its products and services to a
significant number of customers, certain major third-party customers
comprise substantially all of the customer base. If the financial condition
of these customers significantly deteriorates, the Company's operating
results could be adversely affected. As of December 31, 1996, approximately
74% of trade receivables were concentrated with seven customers. Although
the Company does not require collateral, it performs ongoing evaluations of
its customers' financial condition to reduce credit risk. In addition,
approximately 50% of 1996 net sales were to one customer.
8. SUBSEQUENT EVENTS:
Merger: On June 30, 1997, all of the Class A and Class B Common shares of
the Company was acquired by Wheels Sports Group, Inc., a publicly-held
North Carolina corporation in exchange for 485,000 shares of Wheels Sports
Group, Inc. common stock.
9
<PAGE> 1
EXHIBIT 99.2
Unaudited Pro Forma Consolidated Financial Statements
The accompanying unaudited financial statements of Wheels Sports Group, Inc.
present the Company's financial position at December 31, 1996 and results of
operations and cash flows for the year then ended, giving retroactive effect to
the June 30, 1997 acquisition of Diamond Sports Group, Inc. Diamond Sports
Group, Inc. was acquired for 485,000 shares of the Company's stock in a
transaction which was accounted for as a pooling of interests.
During 1996, both the Company and Diamond Sports Group, Inc. were Subchapter S
corporations and so were not subject to income tax. The accompanying financial
statements include a pro forma tax provision as though both entities had been
subject to tax at statutory rates.
<PAGE> 2
WHEELS SPORTS GROUP, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Wheels Sports Diamond Pro Forma
Group, Inc. Sports Group, Inc. Consolidated
------------- ------------------ ------------
<S> <C> <C> <C>
Net sales $ 4,782,999 $ 1,084,198 $ 5,867,197
Cost of sales 2,873,361 834,369 3,707,730
----------- ----------- -----------
Gross margin 1,909,638 249,829 2,159,467
Selling, general and administrative expenses 1,059,653 321,802 1,381,455
Other (income), net (978) (3,080) (4,058)
----------- ----------- -----------
Operating income/(loss) 850,963 (68,893) 782,070
Interest expense 23,075 11,332 34,407
----------- ----------- -----------
Net income/(loss) $ 827,888 $ (80,225) $ 747,663
=========== =========== ===========
Pro forma data:
Net income/(loss) as reported 827,888 (80,225) 747,663
Pro forma income tax expense/(benefit) 331,155 (32,090) 299,065
----------- ----------- -----------
Pro forma net income/(loss) 496,733 (48,135) 448,598
=========== =========== ===========
Pro forma income/(loss) per share 0.23 (0.10) 0.16
=========== =========== ===========
Weighted average number of shares used
to compute per share data 2,144,640 485,000 2,804,640
=========== =========== ===========
</TABLE>
<PAGE> 3
WHEELS SPORTS GROUP, INC.
UNAUDITED PRO FORMA COMBINED STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Wheels Sports Diamond Pro Forma
Group, Inc. Sports Group, Inc. Consolidated
------------- ------------------ ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income/(loss) $ 827,888 $ (80,225) $ 747,663
Adjustments to reconcile net loss to net cash flows used in
operating activities:
Depreciation and amortization 39,099 9,607 48,706
Provision for allowances for doubtful
accounts and returns 39,000 39,000
Loss on disposition 1,490 1,490
Changes in operating assets and liabilities:
Accounts receivable, net of allowances (1,292,805) (95,443) (1,388,248)
Interest receivable (2,468) (2,468)
Prepaid expense (11,000) (11,000)
Inventories (541,274) (28,807) (570,081)
Advance hospitality payments 54,654
Customer deposits 6,994 6,994
Other noncurrent assets 448
Accounts payable 963,038 52,385 1,015,423
Accrued expenses 4,654 4,654
Deferred revenue 86,994 86,994
----------- ----------- -----------
Net cash provided by/(used in) operating activities 34,616 (387) (20,873)
----------- ----------- -----------
Cash flows from investing activities:
Acquisition of property and equipment (10,130) (30,811) (40,941)
Notes receivable originated (115,436) (115,436)
Notes receivable repayments 20,000 20,000
----------- ----------- -----------
Net cash (used in) investing activities (105,566) (30,811) (136,377)
----------- ----------- -----------
Cash flows from financing activities:
Borrowings on line of credit 65,000
Repayments on line of credit (25,000)
Proceeds from long term debt 261,250 48,671 309,921
Payments on long term debt (48,346) (48,346)
Loans from shareholders 150,000 150,000
Purchase of treasury stock (25,000) (25,000)
Offering costs (248,778) (248,778)
Loans from shareholders (8,000) (8,000)
Increase in loans to shareholders (12,989) (12,989)
----------- ----------- -----------
Net cash provided by financing activities 89,126 67,682 116,808
----------- ----------- -----------
Net increase in cash 18,176 36,484 54,660
Cash, beginning of year 191,658 11,432 203,090
----------- ----------- -----------
Cash, end of year $ 209,834 $ 47,916 $ 257,750
=========== =========== ===========
Supplemental disclosure of cash paid for interest $ 18,854 11,332 30,186
=========== =========== ===========
Non-cash investing and financing activities:
Vehicles assumed by shareholders, net book value $ 2,613 2,613
=========== =========== ===========
Vehicle traded in, net book value $ 18,889 18,889
=========== =========== ===========
Long term debt discharged on vehicle traded in $ 20,012 (8,775) 11,237
=========== =========== ===========
Capital lease $ 15,955 298,879 314,834
=========== =========== ===========
</TABLE>
<PAGE> 4
WHEELS SPORTS GROUP, INC.
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Wheels Sports Diamond Consolidated
Group, Inc. Sports Group, Inc. Adjustments Pro Forma
------------- ------------------ ---------------- ------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash $ 209,834 $ 47,916 $ $ 257,750
Accounts receivable, net of allowances 2,006,127 95,463 2,101,590
Interest receivable 2,468 2,468
Prepaid expense 11,000 11,000
Inventories 541,274 28,807 570,081
Advance hospitality payments 88,196 88,196
----------- --------- ---------- -----------
Total current assets 2,770,703 260,382 3,031,085
Property and equipment, net 118,871 332,777 451,648
Land held for sale 127,968 127,968
Other assets 248,778 2,143 250,921
----------- --------- ---------- -----------
Total assets $ 3,266,320 $ 595,302 $ -0- $3,861,622
=========== ========= ========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ $ 40,000 $ $ 40,000
Current maturities of long term debt 261,306 2,670 263,976
Loans from shareholders and officers 150,000 150,000
Customer deposits 6,994 6,994
Accounts payable 1,659,296 100,072 1,759,368
Accrued expenses 17,455 7,484 24,939
Deferred revenue 255,844 255,844
Capital lease obligation 2,704 298,879 301,583
----------- --------- ---------- -----------
Total current liabilities 2,097,755 704,949 2,802,704
Long-term debt, net of current portion 124,960 5,087 130,047
Note payable to stockholder
Capital lease obligation 12,409 12,409
----------- --------- ---------- -----------
Total liabilities 2,235,124 710,036 2,945,160
----------- --------- ---------- =----------
Stockholders' equity:
Preferred stock
Note receivable from World of Racing, Inc. (95,436) (95,436)
Shareholder loans receivable (12,989) (12,989)
Common stock, 2,635,000 shares outstanding 21,500 20 4,830 26,350
Additional paid in capital 344,500 (4,830) 339,670
Retained earnings 760,632 (101,765) 658,867
----------- --------- ---------- -----------
Total stockholders' equity 1,031,196 (114,734) 916,462
----------- --------- ---------- -----------
Total liabilities and
stockholders' equity $ 3,266,320 $ 595,302 $ -0- $3,861,622
=========== ========= ========== ==========
</TABLE>
