Commission File
Number 333-6388
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 1O-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1998
VIVA GOLF MANUFACTURING, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
Florida 65-0594832
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
737 N.E. 70th Street
Boca Raton, Florida 33487
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code: (800) 216-4083
Check whether issuer (1) filed in 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 requirement for the past 90 days. Yes |_| No |X|
Number of shares of Common Stock outstanding as of December 31, 1998: 11,700,000
Transitional Small Business Disclosure Format (Check One): Yes |X| No |_|
<PAGE>
VIVA GOLF MANUFACTURING, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
<PAGE>
TABLE OF CONTENTS
Page
----
Independent Auditor's Report 1
Balance Sheet 2
Statement of Income and Retained Earnings 3
Statement of Cash Flows 4
Statement of Changes in Stockholders' Equity 5
Notes to Financial Statements 6-8
<PAGE>
BAUM & COMPANY, P.A.
Certified Public Accountants
1515 University Drive - Suite 209
Coral Springs, Florida 33071
(954) 752-1712
INDEPENDENT AUDITORS REPORT
The Board of Directors
Viva Golf Manufacturing, Inc.
We have audited the accompanying balance sheet of Viva Golf Manufacturing, Inc.
and Subsidiary (A Development Stage Company) as of November 30, 1998 and the
related statement of income, cash flows and changes in stockholder's equity for
the eight months 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 audits 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 present fairly, in all material
respects, the financial position of Viva Golf Manufacturing, Inc. and Subsidiary
(A Development Stage Company) at November 30, 1998 and the statement of income,
cash flows and changes in stockholder's equity for the eight months then ended
in conformity with generally accepted accounting principles.
/s/ Baum & Company, PA
January 8, 1999
Coral Springs, Florida
<PAGE>
VIVA GOLF MANUFACTURING, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
NOVEMBER 30, 1998
ASSETS
Current Assets
Cash in Bank $ 1,431
Inventory (Note 1) 4,062
--------
5,493
Property, Plant & Equipment (Net) (Note 1 and 2) 1,006
Other Assets
Infomercial Costs 147,913
Organization costs (Net of Amortization of $4,669) (Note 1) 5,331
--------
153,244
--------
Total Assets $159,743
========
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities
Note payable - (Note 6) $150,000
Loan Payable (Note 4) 86,083
Accrued expenses 1,154
--------
237,237
--------
Stockholders Equity
Common Stock, par value $.001
50,000,000 shares authorized;
11,700,000 shares, issued and
outstanding 11,700
Accumulated Deficit during development stage (89,194)
--------
(77,494)
--------
Total Liabilities & Stockholders Equity $159,743
========
See Accountants Report and Notes to the Financial Statements.
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<PAGE>
VIVA GOLF MANUFACTURING, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE EIGHT MONTH PERIOD ENDED NOVEMBER 30, 1998
Development
Stage
-----------
Revenues $ -0-
Operating Expenses
Interest 1,154
Office & administration 8
Depreciation & amortization 1,577
--------
2,739
--------
Net (Loss) (2,739)
Accumulated deficit - beginning (86,455)
--------
Accumulated deficit - ending $(89,194)
========
Earnings per share nil
========
See Accountants Report and Notes to the Financial Statements.
-3-
<PAGE>
VIVA GOLF MANUFACTURING, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE EIGHT MONTHS ENDED NOVEMBER 30, 1998
Cash Flows from Operations:
Net Income (Loss) $ (2,739)
Adjustments to reconcile net income
income used for Operations:
Depreciation & amortization 1,515
Changes in Assets and Liabilities:
Increase in accrued expenses 1,154
--------
Net Cash used by Operations: (70)
Cash Flows from investment activities:
Acquisition of informercial (147,913)
Cash Flows from Financing Activities:
Note Receivable 150,000
Repayment of stockholder loans (586)
--------
149,414
--------
Net increase in cash 1,431
Cash in Bank - Beginning -0-
--------
Cash in Bank - Ending $ 1,410
========
See Accountants Report and Notes to the Financial Statements.
-4-
<PAGE>
VIVA GOLF MANUFACTURING, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE EIGHT MONTHS ENDED NOVEMBER 30, 1998
Additional
Common Stock Paid-In- Accumulated
Shares Amount Capital Deficit
------ ------------ ---------- -----------
Balance, August 12, 1996 1,700,000 $ 1,700 $ -0- $ -0-
Issuance of Common
Stock in Acquisition 15,000,000 15,000 -0- -0-
Retirement of Common Stock (5,000,000) (5,000) -0- -0-
Net Loss -0- -0- (48,711)
----------- --------- ------- ---------
Balance March 31, 1997 11,700,000 11,700 -0- (48,711)
Net Loss (16,215)
----------- --------- ------- ---------
Balance-March 31, 1998 11,700,000 $ 11,700 $ -0- $ (64,926)
Net Loss (2,739)
----------- --------- ------- ---------
Balance-November 30, 1998 11,700,000 $ 11,700 $ -0- $ (67,665)
=========== ========= ======= =========
See Accountant's Report and Notes to the Financial Statements.
-5-
<PAGE>
VIVA GOLF MANUFACTURING, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1998
NOTE 1 - BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business and Organization
The Company was organized under the laws of the State of Florida on
May 3, 1989. On August 12, 1996, the Company acquired Viva
International Products, Inc. by issuing stock to the sole
shareholder of the Company. As a result of this acquisition, the
Company (formerly Federal Tax Lien, Inc.) changed its name to Viva
Golf Manufacturing, Inc. and merged the operations of Viva
International Products, Inc. into its Company.
The Company on August 12, 1996, had virtually no assets at the time
of acquisition. The Company was non-operational since inception.
The acquired company has incurred various intangible costs involved
in the development of its proprietary line of golf clubs.
The Company has elected March 31 as its year end.
The Company is in the development stage and requires substantial
capital for marketing, advertising, tooling and production. The
future success of the Company is dependent on its ability to obtain
working capital to achieve these objectives. The Company is still
considered to be in the developmental stage.
Fixed Assets
Fixed Assets are stated at cost and depreciated over their estimated
allowable useful lives (5 to 10 years), using the straight-line
method. Expenditures for major renewals and betterments that extend
the useful lives of fixed assets are capitalized. Expenditures for
maintenance and repairs are charged to expense as incurred.
Income Taxes
In February 1992, the Financial Accounting Standards Board issued
Statement on Financial Accounting Standards 109 of "Accounting for
Income Taxes." Under Statement 109, deferred tax assets and
liabilities are recognized for the estimated future tax consequences
attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax
basis.
Research and Development Costs
Research and development costs are being expensed as incurred.
Inventory
Inventory is stated at the lower of cost or market.
-6-
<PAGE>
VIVA GOLF MANUFACTURING, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1998
(Continued)
NOTE 1 - BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization Costs
The Company has incurred various expenditures in the formation of
its corporate and organizational structure. Upon commencement of its
operations the deferred costs will be amortized over a period of no
greater than sixty (60) months. Amortization commenced in August
1996.
Earnings Per Share
Earnings per share are computed by dividing net income (loss) for
the period by the weighted average of common shares that are
outstanding.
Management 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 revenues and expenses. The actual outcome of the
estimates could differ from the estimates made in the preparation of
the financial statements.
NOTE 2 - PROPERTY, PLANT AND EQUIPMENT
Computer Equipment $1,825
Less: accumulated depreciation 819
------
$1,006
======
NOTE 3 - CAPITAL TRANSACTIONS
On April 17, 1990, the Company received a letter of effectiveness
from the Securities and Exchange Commission for its registration
pursuant to a S-18 filing. The underwriting of its public common
stock was unsuccessful, but 170,000,000 shares of its common stock
were issued to the organizing group.
On April 16, 1996, the Company recapitalized by reducing its
authorized stock from 500,000,000 shares; .00001 par value to
50,000,000 shares; .001 par value. Pursuant to corporate resolution
dated April 16, 1996, the Company approved a reverse split of its
common stock 100 to 1. Effectively the 170,000,000 shares
outstanding was reduced to 1,700,000 shares.
On August 12, 1996, the Company issued 15,000,000 shares to acquire
100% of the outstanding common shares of Viva International
Products, Inc. via a stock for stock exchange.
On September 5, 1996, the Company changed its name to Viva Golf
Manufacturing, Inc.
-7-
<PAGE>
VIVA GOLF MANUFACTURING, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1998
(Continued)
NOTE 3 - CAPITAL TRANSACTIONS
On December 10, 1996, the Board of Directors approved a resolution
whereby five million shares held by a principal shareholder was
retired in order to induce investment financing. The shareholder's
loan account was credited with this transaction for par value of
stock retired.
NOTE 4 - LOAN PAYABLE - STOCKHOLDERS
The stockholders have advanced funds and incurred expenditures on
behalf of the reorganization of the Company. The balance of loans
due to stockholders are with interest accrued at 8%, unsecured with
no scheduled repayment.
NOTE 5 - ASSET ACQUISITION
On October 22, 1998, the Company acquired the assets of Viva Golf
USA Corp. from Green Machine Management LTD (Bahamian I.B.C.) for a
convertible note of $150,000. The assest consists primarily of a
thirty minute T.V. informercial marketing Viva Golf Clubs.
NOTE 6 - NOTE RECEIVABLE
As explained in Note 5, the Company issued a $150,000 note due in
one year, unsecured and bearing interest at 8% per annum. The holder
may elect to convert the note into 300,000 shares of common stock,
exercisible within one year.
NOTE 7 - RELATED PARTY
A stockholder provides consulting services to the company and his
compensation is based on the future performance of the Company.
Additionally, the stockholder is also a stockholder in the companies
involved in the transaction described in Note 5.
-8-
<PAGE>
2. Management Discussion and Analysis of Financial Condition and Results
of Operations
Registrant has insignificant operations or substantial assets and intends to
seek out and obtain candidates with which it can merge or whose operations or
assets can be acquired through the issuance of common stock and possibly debt of
a combination thereof. The Company acquired the assets of the marketing and
distribution company, VIVA Golf USA, Corp., with a $150,000 Convertible Note on
October 22, 1998, in a attempt to consolidate and attract a merger or
acquisition. The non-controlling VIVA Golf USA Corp. shareholders were paid one
share of VGMI Common Stock for each two shares held in that transaction.
The Registrant has approximately 100 shareholders.
It is the present expectation of the Management of Registrant that in connection
with any such merger or acquisition of operations or assets that the Management
of Registrant will be transferred to the new controlling shareholders. The
Management of Registrant intends to negotiate covenants with any such company or
controlling shareholders that it/they will maintain Registrant's registration
with the Securities and Exchange Commission, comply with the terms of its
Articles of Incorporation and Bylaws in all respects, maintain and promote an
orderly market in Registrant's Common Stock and otherwise treat Registrant's
shareholders fairly.
Liquidity and Capital Resources
Registrant is a development-stage company and has conducted limited business
operations. The Company's cash resources and liquidity are extremely limited.
The Company has no assets to use as collateral to allow the Company to borrow,
and there is no available external funding source other than loans from
shareholder which has agreed to provide up to $10,000 for expenses connected
with the attempt to find a business combination partner. If no combination
partner is found in 24 months, Registrant will experience severe cash flow
difficulties. Registrant's principal needs for capital are for Securities and
Exchange Commission reporting requirements, bookkeeping, and professional fees.
6. Exhibits and Reports on Form 8K
(a) Exhibit 27 - Financial Data Schedule There were no financial changes
between November 30, 1998 and December 31, 1998.
(b) The Company Filed No Reports on Form 8K During the Period.
In accordance with the requirements of the Exchange Act, the Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
VIVA Golf Manufacturing Inc.
March 9, 1999 /s/ Ralph T. Woolbright
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Date Ralph T. Woolbright
Director/CFO
