UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 1999
[ ] TRANSITION REPORT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 For the Transition Period from _______________ TO _______________.
000-25563
(Commission File Numbers)
OUTLOOK SPORTS TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
DELAWARE 3949
(State or other jurisdiction of (Primary Standard Industrial
incorporation or organization) Classification Code Number)
</TABLE>
100 GRAND STREET, SUITE 5A
NEW YORK, NY 10013
(Address of principal executive offices)
(212) 966-0400
(Registrants' telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the Registrants (1) have filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
Registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days. YES [ X ] NO [ ]
As of September 10, 1999 4,393,266 shares of Common Stock, par value
$.01 per share, of Outlook Sports Technology, Inc. were issued and outstanding.
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
OUTLOOK SPORTS TECHNOLOGY, INC.
BALANCE SHEET
JULY 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
Current Assets:
<S> <C> <C>
Accounts receivable (net of allowances of $242,192) ........................... $ 51,413
Inventories ................................................................... 258,719
Prepaid expenses .............................................................. 23,400
------------
Total current assets ................................................... 333,532
Property and equipment (net of accumulated depreciation
of $235,740) .................................................................. 283,366
Debt issuance expense (net of accumulated amortization
of $40,000) ................................................................... --
------------
$ 616,898
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities:
<S> <C>
Accounts payable .............................................................. $ 1,599,571
Accrued expenses .............................................................. 1,383,719
Accrued wages and related expenses ............................................ 560,295
Accrued interest payable ...................................................... 259,993
Notes payable ................................................................. 735,641
Notes payable - related parties - current portion ............................. 100,000
------------
Total current liabilities .............................................. 4,639,219
Notes payable - related parties - long-term ..................................... 190,000
------------
4,829,219
Commitments and contingencies
Shareholders' Deficit:
Preferred stock; $.01 par value, 5,000,000 shares authorized,
none issued and outstanding ................................................. --
Common stock; Class A, $.01 par value, 15,000,000
shares authorized; 4,541,266 shares issued .................................. 45,413
Treasury stock; 168,000 Class A shares at cost ................................ ( 48,800)
Additional paid-in capital .................................................... 12,773,814
Accumulated deficit ........................................................... (16,982,748)
------------
Total shareholders' deficit ............................................ ( 4,212,321)
------------
$ 616,898
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
July 31, July 31,
--------------------------------------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue ...................................... $ 84,193 $ 440,474 $ 84,193 $ 129,706
----------- ----------- ----------- -----------
Costs and expenses:
Costs of sales ............................. 107,268 520,179 107,268 279,961
Research and development ................... 149,246 102,235 18,110 40,207
Selling, general and administrative expenses 3,298,901 2,755,609 2,344,271 1,144,001
----------- ----------- ----------- -----------
Total costs and expenses ............ 3,555,415 3,378,023 2,469,649 1,464,169
----------- ----------- ----------- -----------
Loss from operations ......................... (3,471,222) (2,937,549) (2,385,456) (1,334,463)
----------- ----------- ----------- -----------
Other income (expense):
Gain on sale of license .................... -- 413,997 -- 413,997
Interest expense ........................... ( 40,792) ( 325,636) ( 16,015) ( 180,909)
----------- ----------- ----------- -----------
( 40,792) 88,361 ( 16,015) ( 233,088)
----------- ----------- ----------- -----------
Net loss ..................................... $(3,512,014) $(2,849,188) $(2,401,471) $(1,101,375)
=========== =========== =========== ===========
Net loss per common share - basic and diluted $ (.85) $ (1.17) $ (.56) $ (.46)
=========== =========== =========== ===========
Weighted average common shares outstanding ... 4,126,006 2,425,197 4,294,088 2,413,506
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
July 31,
1999 1998
------------- ------------
Operating activities:
<S> <C> <C>
Net loss ........................................... $(3,512,014) $(2,849,188)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization .................. 96,885 74,700
Stock issued for services and to vendors ....... 1,632,790 --
Increase in allowances for doubtful accounts and
sales returns and allowances ................. 94,587 --
Changes in operating assets and liabilities:
Increase in accounts receivable .............. ( 146,000) ( 111,408)
Increase in inventories ...................... ( 32,915) ( 110,238)
Decrease in prepaid expenses ................. 10,347 14,731
Decrease in deposits and other current assets -- 34,607
Decrease in prepaid royalties ................ -- 133,319
Increase (decrease) in accounts payable and
accrued expenses ........................... ( 511,561) 152,762
----------- -----------
Net cash used in operating activities ................ (2,317,881) (2,660,715)
----------- -----------
Investing activities:
Capital expenditures ............................... ( 3,933) ( 301,905)
----------- -----------
Net cash used in investing activities ................ ( 3,933) ( 301,905)
----------- -----------
Financing activities:
Proceeds from line of credit ....................... 542 --
Advances from officers ............................. -- 17,500
Payments of advances from officers ................. ( 25,000) --
Proceeds from issuance of unsecured notes payable .. 665,000 3,555,000
Debt issuance costs ................................ -- ( 194,688)
Payments to factor ................................. ( 2,744) ( 280,138)
Proceeds from issuance of notes payable -
related parties .................................. 250,000 --
Repayment of unsecured notes payable ............... ( 690,000) ( 115,500)
Proceeds from sale of common stock pursuant
to initial public offering ....................... 2,543,300 --
Expenses of initial public offering ................ ( 604,784) --
Proceeds from sale of common stock ................. 215,000 --
Purchase of treasury stock ......................... ( 29,500) ( 19,300)
----------- -----------
Net cash provided by financing activities ............ 2,321,814 2,962,874
----------- -----------
Net increase in cash ................................. -- 254
Cash, beginning of period ............................ -- 1,367
----------- -----------
Cash, end of period .................................. $ -- $ 1,621
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid for interest ............................. $ 1,218 $ 47,924
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
(Continued)
<TABLE>
<CAPTION>
Supplemental disclosure of noncash investing and financing activities:
Six Months Ended
July 31,
1999 1998
-------------- --------
Issuance of 104,784 shares of common stock to a
professional golfer as consideration for debt owed
<S> <C> <C>
to such golfer ................................... $ -- $220,047
============== ========
Issuance of 11,500 shares of common stock in
connection with endorsement contracts ............ $ -- $ 67,500
============== ========
Issuance of 10,000 shares of Class A common stock
as debt issuance expense ......................... $ 50,000 $ --
============== ========
Issuance of 125,000 shares of common stock for
financial and investment services ................ $ -- $125,000
============== ========
Issuance of 44,669 shares of Class A common stock
as consideration for accrued liabilities ......... $ 223,345 $ --
============== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1999
(Unaudited)
NOTE 1 - Basis of Presentation
In the opinion of the Company, the accompanying unaudited
financial statements reflect all adjustments (which include
only normal recurring adjustments) necessary to present fairly
the financial position, results of operations and cash flows
for the periods presented. The results for interim periods are
not necessarily indicative of the results to be obtained for a
full fiscal year.
NOTE 2 - Inventories
-----------
Inventories consist of the following:
Components parts .................. $ 79,800
Clubs ............................. 139,216
Apparel, golf accessories and other 39,703
--------
$258,719
NOTE 3 - Property and Equipment
----------------------
Property and equipment consists of the following:
Furniture and fixtures . $468,974
Equipment .............. 51,132
--------
519,106
Accumulated depreciation 235,740
$283,366
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1999
(Unaudited)
NOTE 4 - Notes Payable
-------------
Notes payable consist of the following:
Unsecured notes payable to private investors,
due September 1998 ........................... $360,000
Unsecured line of credit, interest at the bank's
prime rate plus 2%, guaranteed by the
Company's President and Chief Executive
Officer, due on demand ....................... 35,641
Unsecured note payable to private investor,
interest at 5%, due June 2000 (1) ............ 300,000
Unsecured note payable, interest at 10.5%,
due December 1999 ........................... 40,000
$735,641
The lender will receive a royalty equal to 2% of gross sales of Tegra
titanium drivers, as defined. All royalties are payable quarterly. In addition
the lender was granted 50,000 warrants to purchase common stock expiring in
three years.
NOTE 5- Notes Payable - Related Parties
Notes payable to related parties consist of the following:
Long-term unsecured notes payable to the
Company's Chief Executive Officer, due
April 2004, interest at prime rate ................. $150,000
Long-term unsecured notes payable to the Company's
Chief Executive Officer, due March 2000, interest at
prime rate ......................................... 100,000
Long-term unsecured notes payable to the
Company's President and Chief Executive
Officer, interest at 7.5%, due by September 2002 ... 40,000
--------
290,000
Current portion ...................................... 100,000
--------
Long-term portion .................................... $190,000
========
In April 1999 the Company's Chief Executive Officer advanced $250,000 to
the Company in exchange for notes payable bearing interest at the prime rate of
interest. The first $100,000 of this advance is due on the earlier of March 1,
2000 or within five days following the closing of a public offering of equity
securities of the Company resulting in gross proceeds to the Company of
$5,000,000. The remaining $150,000 of this advance is due on the earlier of
April 20, 2004 or within five days following the closing of a public offering of
equity securities of the Company resulting in gross proceeds to the Company of
$5,000,000.
<PAGE>
OUTLOOK SPORTS TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1999
(Unaudited)
NOTE 6 - Shareholders' Deficit
---------------------
In March 1999, the Company agreed to reacquire 125,000 shares of Class A
common stock for $31,250. These shares were originally issued to Argent
Securities, Inc. in April 1998 in connection with a two year consulting
agreement. As at July 31, 1999 the Company purchased 118,000 of these shares for
$29,500.
During March and April 1999 the Company completed an initial public
offering of its Class A common stock. The Company sold 438,500 shares of Class A
common stock at $5.80 per share. Net proceeds to the Company were approximately
$1,768,000 inclusive of certain unpaid offering expenses.
In connection with the offering, the Underwriters were granted for a
nominal fee Common Stock Purchase Warrants entitling the Underwriters to
purchase up to 40,000 shares of Class A common stock at $9.57 per share.
On July 1, 1999 the Company entered into a five year consulting agreement
for management and financial advisory services. The agreement calls for the
issuance of 162,500 shares of the Company's common stock. Accordingly, the
Company recognized a charge of $1,381,250 in the current period as complete
payment for the five year period.
NOTE 7 - Subsequent Events
-----------------
In August 1999 the Company entered into a Letter of Intent with Madison &
Wall Financial Services, Inc. ("Madison"), a privately held full service,
financial public relations company. Under the Letter of Intent the Company and
Madison have agreed, subject to certain conditions, for the Company to acquire
100% of the outstanding shares of Madison in exchange for 9,000,000 shares of
the Company's Class A Common Stock. Among other conditions, the acquisition is
conditioned on the satisfactory completion of due diligence by both the Company
and Madison as well as approval by the Company's shareholders. If this
acquisition is consummated, the Company's primary business focus will become
providing financial public relations services.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
General
The statements contained in this report that are not historical are
forward looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act, including statements regarding the
Company's expectations, intentions, beliefs or strategies regarding the future.
All forward looking statements include the Company's statements regarding
liquidity, anticipated cash needs and availability and anticipated expense
levels. All forward looking statements included in this report are based on
information available to the Company on the date hereof, and the Company assumes
no obligation to update any such forward looking statement. It is important to
note that the Company's actual results could differ materially from those in
such forward looking statements.
The following analysis of the Company's financial condition as of and
for the six months ended July 31, 1999 and July 31, 1998 and for the quarter
ended July 31, 1999 and July 31, 1998 should be read in conjunction with the
Company's financial statements and notes thereto included elsewhere in this
report.
Results of Operations
Six Months ended July 31, 1999 compared to Six Months ended July 31, 1998
During the six months ended July 31, 1999, the Company achieved $84,193
sales compared to sales of $440,474 during the same period in 1998. Of the sales
during the six month period ended July 31, 1998, $22,395 were generated by sales
of HiPPO products and $418,079 by sales of Tegra products. Because the Company
sold its license to sell HiPPO products in the U.S. back to Hippo Holdings, Ltd.
in May of 1998, the Company does not expect to receive on a going forward basis,
any revenue from such brand and all sales since that point have been generated
by sales of Tegra products. Sales during the six month period ended July 31,
1999 were adversely affected due to the Company's minimal operating capital
position throughout the majority of this period. The absence of operating
capital prevented the Company from producing and from marketing its products.
Cost of sales during the six months ended July 31, 1999 totaled
$107,268 compared to $520,179 during the same period in 1998. The Company's lack
of operating capital necessitated the delay of sales efforts until after the
completion of the Company's initial public offering. Subsequent to the
completion of the Company's initial public offering sales efforts at the Company
recommenced. For the period in 1998, $28,895 reflects costs associated with air
freighting goods to the Company's warehouse in Miami, Florida. The cost of air
freight was necessitated by the Company's marginal working capital position
which limited the Company's ability to place orders as far in advance as would
otherwise be desirable or to maintain inventory to support demand. The Company's
shortage of working capital required the Company to attempt to shorten lead
times involved in production and shipping of goods in order to deliver product
as quickly as possible to its customers.
Research and development costs totaled $149,246 for the six months
ended July 31, 1999 as compared to $102,235 for the same period in 1998. This
increase is attributed primarily to timing of research and development
expenditures.
Selling, general and administrative expenses totaled $3,298,901 for the
six months ended July 31, 1999 as compared to $2,755,609 for the six months
ended July 31, 1998. This increase resulted primarily due to decreased payroll,
advertising, promotion, travel, professional fees and supplies and services
offset by non-cash charges primarily resulting from the issuance of common stock
under a five year management agreement entered into by the Company on July 1,
1999 with an unrelated third party.
<PAGE>
Quarter ended July 31, 1999 compared to Quarter ended July 31, 1998
During the quarter ended July 31, 1999, the Company achieved $84,193
sales compared to sales of $129,706 during the same period in 1998. All sales
during both periods came from the sale of Tegra products. Sales during the
quarter ended July 31, 1999 were adversely affected due to the Company's minimal
operating capital position throughout much of this period.
Cost of sales during the quarter ended July 31, 1999 totaled $107,268
compared to $279,961 during the same period in 1998. For the period in 1998,
$15,008 reflects costs associated with air freighting goods to the Company's
warehouse in Miami, Florida. The cost of air freight was necessitated by the
Company's marginal working capital position which limited the Company's ability
to place orders as far in advance as would otherwise be desirable or to maintain
inventory to support demand. The Company's shortage of working capital required
the Company to attempt to shorten lead times involved in production and shipping
of goods in order to deliver product as quickly as possible to its customers.
Research and development costs totaled $18,110 for the quarter ended
July 31, 1999 as compared to $40,207 for the same period in 1998. This decrease
is attributed primarily to timing of research and development expenditures.
Selling, general and administrative expenses totaled $2,344,271 for the
quarter ended July 31, 1999 as compared to $1,144,001 for the quarter ended July
31, 1998. This increase resulted primarily due to decreased payroll,
advertising, promotion, travel, professional fees and supplies and services
offset by non-cash charges primarily resulting from the issuance of common stock
under a five year management agreement entered into by the Company on July 1,
1999 with an unrelated third party.
Forecast
The Company sees softness in the golf market and believes that the best way
to protect shareholder value in the Company is to diversify its interests.
Accordingly, the Company is presently exploring a potential acquisition. On
August 25, 1999 the Company entered into a Letter of Intent with Madison & Wall
Financial Services, Inc. ("Madison"), a privately held full service, financial
public relations company. Under the Letter of Intent the Company and Madison
have agreed, subject to certain conditions, for the Company to acquire 100% of
the outstanding shares of Madison in exchange for 9,000,000 shares of the
Company's Class A Common Stock. Among other conditions, the acquisition is
conditioned on the satisfactory completion of due diligence by both the Company
and Madison as well as approval by the Company's shareholders. If this
acquisition is consummated, the Company's primary business focus will become
providing financial public relations services.
Year 2000 Compliance
Many existing computer systems and applications and other control
devices use only two digits to identify a year in the date field, without
considering the impact of the upcoming change in the century. As a result, as
year 2000 approaches, computer systems and applications used by many companies
may need to be upgraded to comply with "Year 2000" requirements. The Company
relies on its systems in operating and monitoring many significant aspects of
its business, including financial systems (such as general ledger, accounts
payable, accounts receivable, inventory and order management), customer
services, infrastructure and network and telecommunications equipment. The
Company also relies directly and indirectly on the systems of external business
enterprises such as customers, suppliers, creditors, financial organizations and
domestic and international governments. The Company currently estimates that its
costs associated with Year 2000 compliance, including any costs associated with
the consequences of incomplete or untimely resolution of Year 2000 compliance
issues, will not have a material adverse effect on the Company's business,
financial condition or results of operations. However, the Company has not
exhaustively investigated and does not believe it has fully identified the
impact of Year 2000 compliance and has not concluded that it can resolve any
issues that may arise in complying with Year 2000 without disruption of its
business or without incurring significant expense. In addition, even if the
Company's internal systems are not materially affected by Year 2000 compliance
issues, the Company could be affected through disruption in the operation of the
enterprises with which the Company interacts.
<PAGE>
Liquidity and Capital Resources
The Company's primary source of liquidity has historically consisted of
sales of equity securities and high yield debt borrowings. During the six months
ended July 31, 1999 the Company completed an initial public offering of its
Class A Common Stock. Through this offering, the Company sold a total of 438,500
shares of its Class A Common Stock. Net proceeds of this offering, were
approximately $1,768,000 inclusive of certain unpaid offering expenses.
Additionally, during this period the Company borrowed $250,000 from the
Company's Chief Executive Officer in exchange for notes payable bearing interest
at the prime rate of interest. The first $100,000 of this advance is due on the
earlier of March 1, 2000 or within five days following the closing of a public
offering of equity securities of the Company resulting in gross proceeds to the
Company of $5,000,000. The remaining $150,000 of this advance is due on the
earlier of April 20, 2004 or within five days following the closing of a public
offering of equity securities of the Company resulting in gross proceeds to the
Company of $5,000,000. During the quarter ended July 31, 1999, the Company also
raised $215,000 from the private sale of 53,750 shares of unregistered,
restricted Class A Common Stock to unaffiliated parties. Subsequent to the end
of the period, the Company borrowed approximately 112,000 from the Company's
Chief Executive Officer in exchange for notes payable bearing interest at the
prime rate of interest. This sum is due on December 1, 1999.
To date, we have expended a majority of our capital resources on the
development and execution of an infomercial to market and sell Tegra drivers.
The results of the campaign were far below our expectations. Upon the airing of
the infomercial, we projected that we would have revenues equal to 150% of the
amount of capital invested to air the infomercial. To date, revenues generated
from the airing of our infomercial have only been equal to the amount of capital
invested to air the infomercial. Thus, we have merely broken even from such
endeavors.
As a result, we believe that we will need to raise significant additional
capital from outside sources to execute our business plan and continue golf
operations. Presently, however, we do not believe that such capital resources
are available to us in the time frame necessary to continue operations. Thus, we
have determined that we will endeavor to seek business opportunities outside the
golf business and, possibly, divest our golf assets.
<PAGE>
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
No material proceedings commenced during the period and no material
developments occurred in any preexisting material proceeding.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
The Company made an initial public offering of its Class A Common Stock,
$.01 per share par value ("Common Stock") pursuant to a registration statement
declared effective by the Commission on March 16, 1999, File No. 333-58631
("Registration Statement"). The managing underwriter of the offering was Kashner
Davidson Securities Corporation. Including an over-allotment of 60,000 shares
and 40,000 shares underlying a warrant sold to the managing underwriter, the
Company registered 500,000 shares of Common Stock which had an aggregate price
of $2,900,000. The Company sold a total of 438,500 shares of the Common Stock
through the offering for an aggregate gross offering price of $2,543,300.
The following are the Company's expenses incurred in connection with the
issuance and distribution of the Common Stock in the offering from the effective
date of the Registration Statement to the ending date of the reporting period of
this 10-QSB:
<TABLE>
<CAPTION>
Expense Amount
<S> <C>
Underwriter's Discounts and Commissions $216,180
Expenses paid to or for the Underwriters $181,431
Other expenses $377,838
Total Expenses $775,449
</TABLE>
- -------------------
None of the foregoing expenses were paid, directly or indirectly, to any
director or officer of the Company or their associates, to any person who owns
10 percent or more of any class of equity securities of the Company, or to any
affiliate of the Company.
The net offering proceeds to the Company, after deducting for the foregoing
expenses were $1,767,852.
The following details the application of the net proceeds by the Company
from the sale of the Common Stock in the offering from the effective date of the
Registration Statement to the ending date of the reporting period of this
10-QSB:
<TABLE>
<CAPTION>
Item Amount
<S> <C>
Working Capital $449,852
Purchase of Inventory $141,000
Research and Development $131,000
Advertising and Marketing $321,000
Repayment of Debt $450,000
Repayment of Trade Payables $275,000
Total Application of Net Proceeds $1,767,852
----------
</TABLE>
<PAGE>
To date, the application of the net proceeds differs from the application
described in the Company's Registration Statement in the section "Use of
Proceeds" by the application of proceeds to the repayment of trade payables.
This change in application was necessitated by various facts, such as the
outcome of preexisting or the threat of initiation of legal proceedings and the
necessity of maintaining or mending certain necessary business relationships
which in management's estimation could only be accomplished through repayment of
these trade payables.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
The Company is presently exploring a potential acquisition. On August 25,
1999 the Company entered into a Letter of Intent with Madison & Wall Financial
Services, Inc. ("Madison"), a privately held full service, financial public
relations company. Under the Letter of Intent the Company and Madison have
agreed, subject to certain conditions, for the Company to acquire 100% of the
outstanding shares of Madison in exchange for 9,000,000 shares of the Company's
Class A Common Stock. Among other conditions, the acquisition is conditioned on
the satisfactory completion of due diligence by both the Company and Madison as
well as approval by the Company's shareholders. If this acquisition is
consummated, the Company's primary business focus will become providing
financial public relations services
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27: Financial Data Schedule
(b) Reports on Form 8-K
The Company filed a report on Form 8-K on June 4, 1999 reporting the entry
of a letter of intent for a potential acquisition contemplated by the Company.
This was the only report on Form 8-K filed by the Company during the three
months ended July 31, 1999.
<PAGE>
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 thereunto duly authorized.
OUTLOOK SPORTS TECHNOLOGY, INC.
Date: September __, 1999
By: /s/ Paul Berger
------------------------------
Paul Berger, Chairman, CEO
and Principal Accounting Officer
Date: September __, 1999
By: /s/ Jim Dodrill
------------------------------
Jim Dodrill, President,
General Counsel and Director
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
OUTLOOK SPORTS TECHNOLOGY, INC.
EXHIBIT 27 - Financial Statement Data
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> jan-31-2000
<PERIOD-END> jul-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 293,605
<ALLOWANCES> 242,192
<INVENTORY> 258,719
<CURRENT-ASSETS> 333,532
<PP&E> 519,106
<DEPRECIATION> 235,740
<TOTAL-ASSETS> 616,898
<CURRENT-LIABILITIES> 4,639,219
<BONDS> 0
0
0
<COMMON> 42,413
<OTHER-SE> (4,257,734)
<TOTAL-LIABILITY-AND-EQUITY> 616,898
<SALES> 84,193
<TOTAL-REVENUES> 84,193
<CGS> 107,268
<TOTAL-COSTS> 3,555,415
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 40,792
<INCOME-PRETAX> (3,512,014)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,512,014)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,512,014)
<EPS-BASIC> (.85)
<EPS-DILUTED> (.85)
</TABLE>
