U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ----- EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2000
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from: ______________
Commission File Number: 001-13217
THE ORLANDO PREDATORS ENTERTAINMENT, INC.
---------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Florida 91-1796903
- ------------------------------- ----------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
741 Front Street, Suite 140
Celebration, Florida 34747
--------------------------------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (407) 566-2493
Check whether the Registrant (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_____
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by court.
Yes_____ No_____
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: As of May 8, 2000 5,192,999 shares of
the Registrant's no par value Class A Common Stock and 1,000 shares of no par
value Class B Common Stock were outstanding.
Transitional Small Business Disclosure format: Yes[ ] No [X]
<PAGE>
ORLANDO PREDATORS ENTERTAINMENT, INC.
FORM 10-QSB
INDEX
Part I Financial Information Page
Item 1. Financial Statements:
Balance Sheets as of March 31, 2000 and December 31, 1999 1
Statements of Operations for the Three Months Ended 3
March 31, 2000 and 1999
Statements of Cash Flows for the
Three Months Ended March 31, 2000 and 1999 4
Notes to Financial Statements 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
Part II Other Information and Signatures 11
<PAGE>
THE ORLANDO PREDATORS ENTERTAINMENT, INC.
BALANCE SHEETS
ASSETS
March 31, December 31,
2000 1999
---------- ------------
(Unaudited)
CURRENT ASSETS:
Cash 261,010 $ 368,490
Accounts receivable, sponsorships 640,977 42,409
Accounts receivable, related party 54,417 54,417
AFL receivable, current portion 96,952 84,886
Accrued interest receivable, AFL 707,448 597,056
Inventory 30,458 29,807
Receivable from employees 36,691 26,431
Deferred acquisition costs 229,254 179,303
Deposits 10,251 60,000
Prepaid expenses 695,752 315,423
----------- -----------
Total Current Assets 2,763,210 1,758,222
----------- -----------
PROPERTY AND EQUIPMENT, at cost, net 592,570 445,342
EQUITY INVESTMENT IN AFL 4,032,650 4,032,650
AFL RECEIVABLE, net of current portion 1,869,019 1,881,085
MEMBERSHIP COST, net 1,832,328 1,844,765
OTHER INTANGIBLES, net 8,618 13,789
RESTRICTED INVESTMENT 100,000 100,000
OTHER ASSETS -- 900
----------- -----------
TOTAL ASSETS $11,198,395 $10,076,753
=========== ===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
1
<PAGE>
<TABLE>
<CAPTION>
THE ORLANDO PREDATORS ENTERTAINMENT, INC.
BALANCE SHEETS CONTINUED
LIABILITIES AND STOCKHOLDER'S EQUITY
March 31, December 31,
2000 1999
---------- ------------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 531,487 $ 474,947
Accrued interest, related party 9,788 10,336
Deferred revenue 1,991,351 722,638
Convertible debt - related party 125,000 125,000
Due to AFL 61,000 61,000
------------ ------------
Total Current Liabilities 2,718,626 1,393,921
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, 1,500,000 shares authorized; none
issued or outstanding
Class A Common Stock, 15,000,000 shares
authorized; 5,192,999 and 5,187,999 issued and
outstanding, respectively 10,136,399 10,126,400
Class B Common Stock, 1,000 shares authorized;
1,000 issued and outstanding 5,000 5,000
Additional paid-in capital 2,920,653 2,914,403
Accumulated (deficit) (4,582,283) (4,362,971)
------------ ------------
Total Stockholders' Equity 8,479,769 8,682,832
============ ============
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 11,198,395 $ 10,076,753
============ ============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
2
<PAGE>
THE ORLANDO PREDATORS ENTERTAINMENT, INC.
STATEMENTS OF OPERATIONS
For the Three For the Three
Months Ended Months Ended
March 31, 2000 March 31, 1999
-------------- --------------
(Unaudited) (Unaudited)
REVENUES:
Ticket $ -- $ --
Concession -- --
Playoff -- --
Advertising and promotion 2,943 3,171
League -- --
Telemarketing 8,927 46,989
Other -- --
----------- -----------
Total Revenue 11,870 50,160
----------- -----------
COSTS AND EXPENSES:
Operations
Playoff
Selling and promotional 1,969 2,444
League assessments
General and administrative 295,101 157,267
Telemarketing 5,372 46,746
Amortization 17,608 17,608
Depreciation 14,434 4,250
----------- -----------
Total Costs and Expenses 334,484 228,315
----------- -----------
OPERATING INCOME (LOSS) (322,614) (178,155)
OTHER INCOME (EXPENSES):
Interest expense, related party (3,116) --
Interest income 2,890 1,518
Interest income, AFL 110,392 112,350
Other expense (6,863) --
----------- -----------
Net Other Income (Expense) 103,303 113,868
----------- -----------
NET (LOSS) $ (219,311) $(64,287)
=========== ===========
NET (LOSS) PER SHARE-BASIC AND
DILUTED $ (0.04) $ (0.01)
=========== ===========
Weighted Average Number of Common
Shares Outstanding 5,129,999 5,095,520
=========== ===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
3
<PAGE>
THE ORLANDO PREDATORS ENTERTAINMENT, INC.
STATEMENTS OF CASH FLOWS
For the Three For the Three
Months Ended Months Ended
March 31, 2000 March 31, 1999
-------------- --------------
(Unaudited) (Unaudited)
CASH FLOWS FROM (TO) OPERATING ACTIVITIES:
Net Income (loss) $ (219,311) $ (64,287)
Adjustments to reconcile net (loss) to net cash from operating
activities:
Depreciation and amortization 32,042 $ 21,858
Loss on disposal of equipment -- --
Issuance of Class A common stock purchase warrants 6,250 --
Changes in assets and liabilities:
Accounts receivable (598,568) (873,689)
AFL, Interest income receivable (110,392) (112,350)
Employee receivable (10,260) (31,739)
Inventory (651) (12,125)
Prepaid expenses (380,329) (710,833)
Accounts receivable, related party -- 5,551
Other assets 51,331 (4,800)
Accounts payable and accrued expenses 56,540 106,762
Accounts payable and accrued expenses, related party (548) (25,661)
Deferred revenue 1,268,713 1,848,842
----------- -----------
Net Cash (Used) by Operating Activities 94,817 147,529
----------- -----------
CASH FLOWS FROM (TO) INVESTING ACTIVITIES:
Purchase of equipment (162,345) --
Sale of equipment -- --
Payment of acquisition costs (49,951) --
----------- -----------
Net Cash (Used) by Investing Activities (212,296) --
----------- -----------
CASH FLOWS FROM (TO) FINANCING ACTIVITIES:
Proceeds from issuance of Class A common stock 9,999 175,333
Payment of offering costs -- (21,750)
----------- -----------
Net Cash Provided by Financing Activities 9,999 153,583
----------- -----------
INCREASE (DECREASE) IN CASH (107,480) 301,112
Cash and Cash Equivalents at Beginning of Period 368,490 117,188
----------- -----------
Cash and Cash Equivalents at End of Period $ 261,010 $ 418,300
=========== ===========
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest $ 3,664 $ --
=========== ===========
Taxes $ -- $ --
=========== ===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENT
</TABLE>
4
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -----------------------------
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited financial statements include the accounts of The
Orlando Predators Entertainment, Inc. (the "Company"). The financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and in accordance with the instructions for
Form 10-QSB. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles.
In the opinion of management, the unaudited interim financial statements for the
three months ended March 31, 2000 are presented on a basis consistent with the
audited financial statements and reflect all adjustments, consisting only of
normal recurring accruals, necessary for fair presentation of the results of
such period.
The results for the three months ended March 31, 2000 are not necessarily
indicative of the results of operations for the full year. These financial
statements and related footnotes should be read in conjunction with the
financial statements and footnotes thereto included in the Company's Form 10-KSB
filed with the Securities and Exchange Commission for the period ended December
31, 1999.
Certain amounts in the prior period's financial statements have been
reclassified for comparative purposes to conform to the current year.
NOTE 2 - CONTINGENCIES
The AFL is party to a number of lawsuits arising in the normal course of
business. The Company is contingently liable for its share of the outcomes.
NOTE 3 - OPERATING SEGMENTS
The Company organizes its business units into two reportable segments: football
operations and telemarketing services. The football operations segment operates
the AFL team and the telemarketing services segment provides telemarketing
services to a related party and other sports franchises.
5
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -----------------------------
NOTE 3 - OPERATING SEGMENTS (Continued)
The Company's reportable business segments are strategic business units that
offer different products and services. The segments are managed together because
they utilize similar resources within the Company. Segment information for the
three months ended March 31, 2000 was as follows:
<TABLE>
<CAPTION>
Net Operating Identifiable Capital
Revenues Income Assets Expenditures
-------- ------ ------ ------------
<S> <C> <C> <C> <C>
Football operations $ 2,943 $ (319,059) $11,143,978 $ 162,345
Telemarketing services 8,927 3,555 54,417 --
----------- ----------- ----------- -----------
Totals $ 11,870 $ (322,614) $11,198,395 $ --
=========== =========== =========== ===========
Segment information for the three months ended March 31, 1999 was as follows:
Net Operating Identifiable Capital
Revenues Income Assets Expenditures
-------- ------ ------ ------------
Football operations $ 3,171 $ (178,398) $10,851,997 $ --
Telemarketing services 46,989 243 198,358 --
----------- ----------- ----------- -----------
Totals $ 50,160 $ (178,155) $11,050,355 $ --
=========== =========== =========== ===========
</TABLE>
NOTE 4 - SUBSEQUENT EVENTS
In April 2000, the Company settled a dispute with the League regarding the
payment terms of the Nth Agreement, as a result the Company will receive a
guaranteed amount of $480,000 per year and all additional monies received from
the League will go to the repayment of the remaining $1,965,971 owed to the
Company. Subsequently, the Company will continue to receive their pro rata share
of League revenues.
6
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
General
The Company is in the sports entertainment business and (i) owns and operates
the Orlando Predators (the "Predators" or the "team"), a professional arena
football team of the Arena Football League (the "AFL" or the "League") and (ii)
owns an additional 8.4% revenue interest in the League (in addition to its
League ownership through the Predators). Arena football is played in an indoor
arena on a padded 50-yard long football field using eight players on the field
for each team. Most of the game rules are similar to college or other
professional football game rules with certain exceptions intended to make the
game faster and more exciting.
The Company's strategy is to participate through the operation of the Predators
and through its league ownership in what the Company believes will be continued
significant growth of the AFL which in turn is expected to result in increased
revenue to the Company generated from (i) national (League) and regional (team)
broadcast contracts, (ii) national league sponsorship contracts, (iii) the sale
of additional League Membership fees, and (iv) increased fan attendance at AFL
games including Predators' games, together with appreciation in the value of the
Predators as an AFL team. The trend toward ongoing League growth was evidenced
by the announcement by the National Football League's ("NFL") purchase of an
option to acquire up to 49.9% of the League, and the sale of league memberships
during 1999.
At the team level, the Company's strategy is to increase fan attendance at
Predators' home games, expand the Predators' advertising and sponsorship base,
and contract with additional local and regional broadcasters to broadcast
Predators' games.
The Company currently derives substantially all of its revenue from the arena
football operations of the Predators. This revenue is primarily generated from
(i) the sale of tickets to the Predators' home games, (ii) the sale of
advertising and promotions to Predator sponsors, (iii) the sale of local and
regional broadcast rights to Predators' games, (iv) the Predators' share of
League contracts with national broadcast organizations and expansion team fees
paid through the AFL, (v) the sale of merchandise carrying the Predators' logos
and (vi) concession sales at Predators' home games. A large portion of the
Company's annual revenue is determinable at the commencement of each football
season based on season ticket sales and contracts with broadcast organizations
and team sponsors.
The operations of the team are year-round; however, the majority of revenues and
expenses are recognized during the AFL playing season, from April through August
of each year. The team begins to receive deposits in late August for season
tickets during the upcoming season. From August through April, the team sells
season tickets and collects revenue from all such sales. Selling, advertising
and promotions also take place from August through April, although these
revenues are not realized until after the season begins. Single game tickets and
partial advertising sponsorships are also sold during the season, primarily from
April to July. Additional revenues and expenses are recognized in August from
playoff games, if any.
In May 1999, the Company entered into a non-binding letter of intent to acquire
United Sports Ventures, Inc. ("USV"). USV wholly or partially owns and operates
the Quad City Mallards, the Rockford Ice Hogs and the Missouri River Otters of
the United Hockey League and the Mobile Bay Bears (AA affiliate of the San Diego
Padres) professional baseball club. The Company expects to complete the
acquisition by September 2000.
Except for the historical information contained herein, certain matters set
forth in this report are forward-looking statements within the meaning of the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. These forward-looking statements are subject to risks and uncertainties
that may cause actual results to differ materially. These risks are detailed
from time to time in the Company's periodic reports filed with the Securities
7
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
and Exchange Commission. These forward-looking statements speak only as of the
date hereof. The Company disclaims any intent or obligation to update these
forward-looking statements.
Results of Operations
Three Months Ended March 31, 2000 Compared To The Three Months Ended March 31,
1999
Revenues
- --------
The Company recognizes game revenues and expenses over the course of the season
(April through August).
The football division generated revenues for the three months ended March 31,
2000 were $2,943 which represented an decrease of $228 or 7% as compared to
revenues for the period ended March 31, 1999 of $3,171.
The telemarketing division also generated revenue of $8,927 for the three months
ended March 31, 2000 compared to $46,989 for the three months ended March 31,
1999. The division produced revenue from selling season tickets for the San Jose
SaberCats of the AFL and the Missouri River Otters of the UHL. The Company
anticipates the expansion of this division in the future to other teams in the
AFL, arenafootball2 (the AFL's minor league system began play in April 2000) and
other minor league hockey and baseball teams.
Selling and Promotional Expenses
- --------------------------------
Selling and promotional expenses of $1,969 decreased $475 or 19% for the three
months ended March 31, 2000 compared to $2,444 for the three months ended March
31, 1999. These expenses were related to selling team merchandise.
General and Administrative Expenses
- -----------------------------------
General and administrative expenses of $295,101 increased $137,834 or 88% for
the three months ended March 31, 2000 compared to $157,267 for the three months
ended March 31, 1999. This increase can be primarily attributed to the opening
of a new corporate office and legal fees associated with the Youngblood
settlement.
Interest Income/Expense
- -----------------------
Interest income during the three months ended March 31, 2000 was $113,282 as
compared to $113,868 for the three months ended March 31, 1999. The Company will
now record the majority of the monies received from the League as a reduction of
principle until approximately 4.6 million is received. Afterwards 100% of League
revenue related to the Nth Purchase Agreement will recognized as revenue.
Related party interest expense during the three months ended March 31, 2000 was
$3,116 as compared to $0 for the prior period. The interest expense during this
period was related to a loan from a stockholder of $125,000, which was used for
operating capital.
Liquidity and Capital Resources
- -------------------------------
Historically, the Company has financed net operating losses primarily with loans
from the team's former managing general partners and the sale of its securities.
During April 1998, the Company completed an offering of 40 units, with each unit
consisting of one $50,000 promissory note bearing interest at 7% per annum and
8
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
4,000 warrants to purchase the Company's Class A Common Stock expiring December
31, 2001. The notes were due on the earlier of December 31, 2001 or the closing
date of a public offering in excess of $5,000,000. A commission of $95,000 was
paid in connection with the transaction. Of the $2,000,000 (40units) promissory
notes, $1,050,000 (21 units) was sold to current stockholders or directors,
including $850,000 (17 units) to Monolith. Notes of $755,000 and accrued
interest of $5,573 were converted to 304,229 shares of the Company's Class A
Common Stock in the August 31, 1998 private placement. The remaining notes
payable and accrued interest of $1,295,774 were paid on September 1, 1998.
On August 11, 1998, the Company completed a private placement of 1,250,000
shares of its Class A Common Stock for $2,500,000 ($2.00 per share) with no
offering costs. These proceeds were used to complete the purchase of the equity
interests in the Arena Football League.
On August 31, 1998, the Company completed a private placement of 1,200,000
shares of its Class A Common Stock for $3,000,000 ($2.50 per share) and paid
offering costs of $749,557. Proceeds from this private placement were used to
pay off the outstanding bridge loans and interest. The remaining proceeds were
used for working capital needs.
In October 1998, the Company completed another private placement offering. It
consisted of one investor totaling $250,000 ($2.50 per share), with commissions
of 15% or $37,500 paid for 100,000 shares of Class A Common Stock. These
proceeds were used to fund current operations.
On November 5, 1998, the Company received a payment from the League in the
amount of $672,791. This payment represented expansion revenue related to the
Los Angeles expansion team that will begin play in 2000.
In January and February 1999, the Company completed another private placement
offering. It consisted of three investors totaling $145,000 ($2.50-$3.00 per
share), with commissions of 15% or $21,750 paid for 75,000 shares of Class A
common stock. These proceeds were used to fund current operations.
On September 26, 1999, the Company received a payment from the League in the
amount of $547,858. This represented expansion revenue related to the Chicago
expansion team that will begin play in 2001.
In June 1999, the Monolith Limited Partnership, ("Monolith"), a major
stockholder of the Company, loaned the Company $350,000, due in September 2002
with interest at 8% annually. The note was repaid in July 1999.
In July 1999, the Company issued a convertible note payable to a stockholder of
the Company for $250,000, convertible at $4.50 per share, due in September 2001
with interest at 10% annually. The Company granted warrants to purchase 25,000
shares of the Company's Class A common stock at $4.50 per share, which expire in
July 2004 in conjunction with the issuance of the note payable. In October 1999,
the company repaid $125,000 of the convertible note and 12,500 of the warrants
were canceled.
In October and November 1999, the Company received payments from the League in
the amount of $682,488. This represented expansion revenue related to the
Carolina membership that will begin play in 2000.
9
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
In November 1999, the Company completed another private placement offering. It
consisted of one investor totaling $100,000 ($2.00 per share), with commissions
of 10% or $10,000 paid for 50,000 shares of Class A common stock. These proceeds
were used to fund current operations.
The reduction of indebtedness using proceeds of the private placements improved
the Company's liquidity by reducing indebtedness required to be paid in the
future. The Company believes that cash flows from operations, along with
distributions related to its purchase of two equity interests in the AFL will
enhance the Company's future cash flows and satisfy the Company's anticipated
working capital requirements for at least the next 12 months. This will be
accomplished by the requirement that the AFL make a minimum principal and
interest payment to the Company in the amount of $480,000 annually.
Year 2000 Issue
Many computer systems and other equipment with embedded chips or microprocessors
may not be able to appropriately interpret dates after December 31, 1999 because
such systems use only two digits to indicate a year in the date field rather
than four digits. If not corrected, many computers and computer applications
could fail or create miscalculations, causing disruptions to the Company's
operations. In addition, the failure of customer and supplier computer systems
could result in interruption of sales and deliveries of key supplies or
utilities. Because of the complexity of the issues and the number of parties
involved, the Company cannot reasonably predict with certainty the nature or
likelihood of such impacts.
While the Company believes that its own internal assessment and planning efforts
with respect to its external service providers, suppliers, customers and
financial institutions are and will be adequate to address its Year 2000
concerns, there can be no assurance that these efforts will be successful or
will not have a material adverse effect on the Companies' operations. Costs in
connection with compliance were not significant.
To date, the Company has not experienced any interruptions with respect to the
Year 2000 issue, but cannot reasonably predict with certainty that they will not
experience any interruptions.
10
<PAGE>
PART II. OTHER INFORMATION AND SIGNATURES
- ------------------------------------------
ITEM 1. LEGAL PROCEEDINGS
In December 1998, Jack Youngblood, the Company's former President, filed
suit against the Company in the Circuit Court of the Ninth Judicial Circuit in
and for Orange County, Florida captioned Youngblood vs. The Orlando Predators
Entertainment, Inc., et al. (Case No. C98-10027-35). Mr. Youngblood alleges that
the Company breached its employment agreement with Mr. Youngblood by terminating
his employment for job abandonment and by issuing defamatory press releases. The
Company settled with Mr. Youngblood in March 2000 for an amount of $300,000. Mr.
Youngblood also retained his 34,500 stock options at an exercise price of $2.00
per share. The Company believes it will be reimbursed at a minimum of 50% of the
settlement by its D/O Insurance carrier plus 50% of its legal fees in excess of
the deductible.
In July 1999, the Arena Football League ("AFL") and all of its member teams
were joined as defendants in a civil action brought by Charlotte Arena Football
League, Inc., a former AFL team operator (the case is captioned Charlotte Arena
football, Ltd. et. al. vs. Arena Football League, Inc., et. al., United States
District Court for the Middle District of Florida) in which the Plaintiffs seek
damages for alleged violations of the Sherman Antitrust Act, for certain
tortious conduct, for breach of fiduciary duties and for civil conspiracy. The
complaint seeks damages against the defendants in amounts exceeding $300
million. Costs of defense and payment of any damages by the defendants will be
advanced by the AFL to be shared equally by all of the AFL teams. The Company
has been advised that the AFL believes the civil action is without merit and
intends to vigorously defend against it.
In February 2000, the Arena Football League ("AFL") and all of its member
teams, including the Company, were joined as defendants in a civil action
brought by several AFL players (the case is captioned James Guidry, et. al. vs.
Arena Football League L.L.C. et. al., United States District Court, District of
New Jersey, Case Number 00-533-HAA) in which plaintiffs seek damages for
violation of federal antitrust law, specifically Sections 1 and 2 of the Sherman
Antitrust Act. The complaint seeks damages against the defendants in an amount
to be determined and trebled, plaintiffs' cost of litigation and further relief,
as the court deems proper and equitable. Should the plaintiffs prevail, the
Company's operating expenses, results of operations and financial condition
could be materially and adversely affected.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
11
<PAGE>
PART II. OTHER INFORMATION AND SIGNATURES
- ------------------------------------------
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
Form 8-K
Effective January 28, 2000, Dr. Eric Margenau joined Orlando Predators
Entertainment, Inc. ("Company") in the capacity of Chief Executive Officer and a
Director. Dr. Margenau is the President and co-founder of United Sports
Ventures, Inc. ("USV") The Company signed a letter of intent in May 1999 to
acquire USV. The Company has engaged USV to provide management services in
connection with the Company's operation of its Orlando Predators Arena Football
League franchise and for general management services in the operation of the
Company until the acquisition is completed. The Company will pay USV a
management fee, commencing on June 30, 2000 of an amount equal to 30% of USV's
overhead costs in the event the acquisition does not occur.
Brett L. Bouchy, the departing President and Chief Executive Officer, will
remain with the Company as its liaison to the Arena Football League, pursuant to
a 36-month employment agreement, which calls for an annual salary of $50,000. In
addition, Mr. Bouchy will retain his options to purchase 817,080 shares of
common stock at $2.50 per share.
On February 23, 2000, James Guidry, et. al. vs. Arena Football League
L.L.C. et. al., United States District Court, District of New Jersey, Case
Number 00-533-HAA. See Item 1. Legal Proceedings.
12
<PAGE>
Signatures
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
THE ORLANDO PREDATORS ENTERTAINMENT, INC.
- -----------------------------------------
Registrant
/s/ Jeffrey L. Bouchy
- ------------------------------------------
Jeffrey L. Bouchy, Chief Financial Officer
Date: May 15, 2000
13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 261,010
<SECURITIES> 0
<RECEIVABLES> 2,243,933
<ALLOWANCES> 0
<INVENTORY> 30,458
<CURRENT-ASSETS> 2,763,210
<PP&E> 804,412
<DEPRECIATION> 203,243
<TOTAL-ASSETS> 11,198,394
<CURRENT-LIABILITIES> 2,593,627
<BONDS> 0
0
0
<COMMON> 10,141,399
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 11,198,394
<SALES> 11,870
<TOTAL-REVENUES> 11,870
<CGS> 1,969
<TOTAL-COSTS> (334,484)
<OTHER-EXPENSES> 103,303
<LOSS-PROVISION> (219,311)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (219,311)
<EPS-BASIC> (.04)
<EPS-DILUTED> (.04)
</TABLE>
