SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE
ACT OF 1934
For the transition period from ________ to __________
Commission file number
- ---------
United Raceways, Inc.
- -------------------------------------
(Name of small business issuer in its charter)
Delaware 95-4695878
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.
860 Via de la Paz, Suite E-1 Pacific Palisades, CA 90272
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (310) 230-6100
Check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes [X] No[ ]
Number of shares outstanding of each of the issuer's classes of common
stock, as of November 15, 1999: 718,400 shares of common stock, par
value $.01.
UNITED RACEWAYS, INC.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements------------------------------3
Balance Sheet-------------------------------------3
Statement of Operations for the Nine Months Ended September
30, 1999 and for the Period From May 29,1998 (Date of
Inception) to September 30, 1999------------------4
Statement of Changes in Stockholders' Deficiency
for the Period from May 29, 1998 (Date of Inception)
to September 30, 1999-----------------------------5
Statement of Cash Flows
For the Nine Months Ended September 30, 1999
and for the Period from May 29, 1998 (Date of Inception)
to September 30, 1999-----------------------------6
Notes to Financial Statements
as of September 30, 1999--------------------------7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations----11
PART II - OTHER INFORMATION
SIGNATURES---------------------------------------12
PART 1 - FINANCIAL STATEMENTS
Item 1: FINANCIAL STATEMENTS
UNITED RACEWAYS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
SEPTEMBER 30, 1999
ASSETS
CASH $ 130
$ 130
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 61,946
Total liabilities 61,946
STOCKHOLDERS' DEFICIENCY
Common stock, $.01 par value; 10,000,000 shares authorized,
718,400 shares issued and outstanding 7,184
Accumulated deficit during development stage (69,000)
Total stockholders' deficiency (61,816)
$ 130
UNITED RACEWAYS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
AND FOR THE PERIOD FROM MAY 29, 1998 (DATE OF INCEPTION)
TO SEPTEMBER 30, 1999
CUMULATIVE FROM
MAY 29, 1998 NINE MONTHS
(INCEPTION) TO ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 1999
INCOME $ - $ -
EXPENSES:
Compensation 60,000 60,000
Consulting fees 2,500 -
Organization expense 184 -
Professional fees 5,134 1,005
Transfer agent fees 876 -
Corporate filing fees 196 72
Bank service fees 110 40
Total expenses 69,000 61,117
NET LOSS $ (69,000) $ (61,117)
Weighted average number of
shares outstanding during
period - basic and diluted 704,704 718,400
Net loss per common share -
Basic and diluted (0.0979) (0.0851)
UNITED RACEWAYS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY
FOR THE PERIOD FROM MAY 29, 1998 (DATE OF INCEPTION)
TO SEPTEMBER 30, 1999
Common Stock Additional Deficit Total
Paid-in Accumulated
Capital During
Development
Stage
Common stock $7,184 $ - $ - $7,184
issuance
Net loss for
the period
ended - - (7,883) (7,883)
December 31,
1998
Balance at
December 31, 7,184 - (7,883) (699)
1998
Net loss for
the nine
months ended - - (61,117) (61,117)
September
30, 1999
Balance at
September $7,184 $ - $(69,000) $ (61,816)
30, 1999
UNITED RACEWAYS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
AND FOR THE PERIOD FROM MAY 29, 1998 (DATE OF INCEPTION)
TO SEPTEMBER 30, 1999
CUMULATIVE FROM MAY NINE MONTHS ENDED
29, 1998 (INCEPTION) SEPTEMBER 30, 1999
TO SEPTEMBER 30, 1999
NINE MONTHS ENDED
SEPTEMBER 30, 1999
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net (loss) $ (69,000) $(61,117)
Adjustments to
reconcile net (loss)
to net cash (used in)
operating activities:
(Increase) decrease in
accounts payable and 61,946 61,005
accrued expenses
Net cash (used in)
operating activities (7,054) (112)
CASH FLOWS FROM
INVESTING ACTIVITIES: ____-____ _______-_____
CASH FLOWS FROM
FINANCING ACTIVITIES:
Proceeds from issuance
of common stock 7,184__ ____-_______
Net cash provided by
financing activities 7,184__ -___
NET CHANGE IN CASH 130 (112)
CASH, beginning of
period -____ 242___
CASH, end of period $ 130 $ 130
UNITED RACEWAYS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Organization and Business Operations
United Raceways, Inc. (a development stage company) ("the
Company") was incorporated in Delaware on May 29, 1998 to engage
in, conduct or promote any lawful business activity for which
corporations may be organized under Delaware Law. At June 30,
1999, the Company had not yet commenced any formal business
operations, and all activity to date relates to the Company's
formation and proposed fund raising. The Company's fiscal year
end is December 31.
The Company's ability to commence operations is contingent upon
its ability to achieve its business plan and raise the capital it
will require through the issuance of equity securities, debt
securities, bank borrowings or a combination thereof.
B. Use of Estimates
The preparation of the 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.
C. Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company
considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.
D. Income Taxes
The Company accounts for income taxes under the Financial
Accounting Standards Board of Financial Accounting Standards No.
109, "Accounting for income Taxes" ("Statement 109"). Under
Statement 109, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing
assets and liabilities and their respective tax basis. Deferred
tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled.
Under Statement 109, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date. There was no
current or deferred income tax benefit arising from the Company's
net operating loss at June 30, 1999 because any deferred tax
benefit has been fully offset by a valuation allowance.
E. Stock Options
In accordance with the Statement of Financial Accounting
Standards No. 123 ("SFAS 123") the Company has elected to account
for Stock Options under Accounting Principles Board Option No. 25
("APB Opinion No. 25") and related interpretations.
F. Earnings Per Share
Net loss per common share is computed using the weighted average
common shares outstanding as defined by Statement of Financial
Accounting Standards, No. 128, "Earnings per Share".
NOTE 2 - STOCKHOLDERS' DEFICIENCY
A. Common Stock
The Company is authorized to issue 10,000,000 shares of common
stock at $.01 par value. The Company issued 700,000 shares for
cash and 18,400 shares for organizational expenses.
On July 14, 1998, the Company's Board of Directors authorized the
Company to issue and sell up to 1,000,000 shares of common stock
pursuant to Rule 504 of Regulation D under the Securities Act of
1933. The resolution remains in effect as of the date of this
report.
B. Stock Options
On August 1, 1999, the board of Directors granted stock options
to key employees and directors to purchase common stock of the
Company.
The Company applies APB Opinion No. 25 and related
interpretations in accounting for its stock options.
Accordingly, no compensation cost has been recognized for options
issued as of September 30, 1999. Had compensation cost for the
Company's stock-based compensation been determined on the fair
value at the grant dates for award, consistent with Statement of
Accounting Standards No. 123, "Accounting for Stock Based
Compensation" (Statement No. 123) the Company's net loss for the
nine months ended September 30, 1999 and for the period from May
29, 1998 (inception) to September 30, 1999 would have been
increased to the pro-forma amounts indicated below.
UNITED RACEWAYS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1999
NOTE 2 - STOCKHOLDERS' DEFICIENCY - CONT'D
9/30/99 Inception to
9/30/99
Net loss As reported $(61,117) (69,000)
Pro forma $ (99,829) (107,712)
Net loss per
share As reported $ (.0851) (.0979)
Pro forma $(.1390) (.1528)
The effect of applying Statement No. 123 is not likely to be
representative of the effects on reported net loss for future years due
to, among other things, the effects of vesting.
For financial statement disclosure purposes, the fair market value of
each stock option grant is estimated on the date of grant using the
minimum value method in accordance with Statement No. 123 using the
following weighted-average assumptions: expected dividend yield 0%,
risk-free interest rate of 5.532%, and expected term of two years.
A summary of the Company's Plan as of September 30, 1999 and changes
during the year is presented below:
Number of Shares Weighted-Average
Exercise Price
Stock Options
Balance at beginning
of period - -
Granted 200,000 $1.00
Exercised - -
Forfeited - -
Balance at end of
period 200,000 $1.00
Options exercisable at
end of period 200,000 $1.00
Weighted average fair
value of options
granted during the
period $.19
UNITED RACEWAYS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1999
NOTE 2 - STOCKHOLDERS - DEFICIENCY - CONT'D
The following table summarizes information about options
outstanding at September 30, 1999:
Options Outstanding Options Exercisable
Range of Number Weighted- Weighted Number Weighted
Exercise Outstanding Average Average Exercisable Average
Price at June 30, Remaining Exercise At June 30, Exercise
1999 Contractual Price 1999 Price
Life
$1.00 $200,000 2.0 $1.00 200,000 $1.00
Through the date of this report, outstanding stock options
totaled 200,000.
NOTE 3 - OFFICER COMPENSATION
On August 1, 1999, effective January 1, 1999, the Company entered
into an agreement with two officers providing for an annual
salary of $60,00 per officer. Payment of the salaries has been
deferred until there is sufficient cash flow in the Company.
Once cash flow begins, the salary will be paid to the individuals
on a monthly basis. As of September 30, 1999, $60,000 in
salaries has been accrued.
Item II: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion of the results of operations and
financial condition should be read in conjunction with the audited
financial statements and related notes appearing subsequently
under the caption "Financial Statements".
Cautionary Statement on Forward-Looking Statements
From time to time, the Company makes oral and written statements
that may constitute "forward-looking statements" as defined in the
Private Securities Litigation Reform Act of 1995 (the "PSLRA") or by
the Commission in its rules, regulations and releases. The Company
desires to take advantage of the "safe harbor" provisions in the PSLRA
for forward-looking statements made from time to time, including, but
not limited to, the forward-looking statements relating to the Company
contained in this Form 10-SB registration statement.
The Company cautions readers that any such forward-looking
statements made by or on behalf of the Company are based on
management's current expectations and beliefs but are not guarantees
of future performance. Actual results could differ materially from
those expressed or implied in the forward-looking statements.
The Company was formed on May 29, 1998 and is in the development
stage. To date, the Company has not conducted any business
operations or had any sales revenue. To accomplish its business
objectives, the Company intends to locate and enter into strategic
business combinations in the motor car race tract industry. The
Company has no plans to purchase or sell any significant
equipment. There will be no change in the number of employees.
Liquidity and Capital Resources
The Company currently believes that it has adequate cash
resources to fund current operations. There can be no assurance,
however, that the Company's actual capital needs will not exceed
anticipated levels, or that the Company will generate sufficient
revenues to fund its operations in the absence of other sources.
In July 1998, the Company received $7,000 from the sale of
718,400 shares of common stock in an offering which was exempt from
registration pursuant to Regulation D, Rule 504 of the Securities Act
of 1933, as amended (the "Act").
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
UNITED RACEWAYS, INC.
(Registrant)
Date: November 15, 1999 By: /s/ Calvin Shieh
----------------------
Calvin Shieh, Chief
Executive Officer
(Duly Authorized Signatory)
Date: November 15, 1999 By: /s/ Wayne Story
---------------------
Wayne Story, Chief
Financial Officer
(Duly Authorized Signatory)
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