U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the
Securities Exchange Act of 1934
UNITED RACEWAYS,INC.
(Name of Small Business Issuer in its charter)
Delaware 95-4695878
- ------------------------------- -----------------
(State or other jurisdiction of (I.R.S. I.D. No.)
incorporation or organization)
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
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
------------------- ------------------------------
None
Securities to be registered under Section 12(g) of the Act:
Common Stock $.01 par value
---------------------------
(Title of class)
<PAGE>
UNITED RACEWAYS, INC.
Form 10-SB
Table of Contents Page
PART 1
Item 1. Description of Business .......................... 1
Item 2. Management's Discussion and Analysis
of Financial Conditions and Results of Operation.. 1
Item 3. Description of Property........................... 3
Item 4. Security Ownership of Certain Beneficial
Owners and Management............................. 3
Item 5. Directors, Executive Officers, Promoters
and Control Persons............................... 5
Item 6. Executive Compensation............................ 6
Item 7. Certain Relationships and Related Transactions.... 7
Item 8. Description of Securities......................... 7
PART II
Item 1. Market Price of and Dividends on the Registrant's
Common Equity and other Stockholder Matters....... 8
Item 2. Legal Proceedings................................. 8
Item 3. Changes in and Disagreements with Accountants..... 8
Item 4. Recent Sales of Unregistered Securities........... 8
Item 5. Indemnification of Directors and Officers......... 9
PART F/S
Financial Statements............................................... F-1
PART III
Item 1. Index to Exhibits and Description of Exhibits..... 10
Signature Page..................................................... 11
i
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PART 1
Item 1. Description of Business.
United Raceways, Inc. (the "Company") was incorporated on May 29, 1998 in
the State of Delaware. The Company's principal business is in the motor car
sports industry. The Company's principal objective is to acquire independently
owned motor car race tracks in the United States and Canada. The Company plans
to acquire and refurbish motor sports facilities throughout the United States
and Canada. The Company intends to increase overall patronage by utilizing its
promotional and marketing expertise to take advantage of opportunities in
attractive new markets. The Company intends to create a national chain of high
quality, family oriented raceways with brand-name recognition. The Company
intends to take advantage of a fragmented sporting sub-industry and employ an
aggressive consolidation scheme. Operations will remain at the local management
level, but the holding company management will be responsible for mergers and
acquisitions and nationwide marketing.
The Company intends to see that the highest standards for safety and track
maintenance will be enforced so as to foster a corporate reputation for safety
and well groomed, state-of-the- art facilities, and intends to increase customer
patronage by sponsoring regional and national championship events and televised
celebrity races, as well as non-stock car related entertainment events.
The Company intends to attract major advertising sponsors. The Company
believes that the promotional and advertising expenditures of major sponsors
will provide it with a wide variety of indirect marketing and other benefits.
Accordingly, the Company plans to invest significant resources to develop
long-term relationships with leading consumer products and manufacturing
companies.
The Company has generally been inactive since inception. Its only
activities have been organizationally directed at developing its business plan
and conducting a preliminary search into acquisition of motor car race tracks.
The Company has no full-time employees and owns no real estate.
Item 2. 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".
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.
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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.
The Company anticipates that it will be able to acquire control over many
of the race tracks which it anticipates will be interested in becoming
affiliated with the Company in exchange for stock in the Company. The Company
also anticipates becoming associated with several well known race car drivers
who will act as consultants to the Company and assist it in obtaining corporate
endorsements and sponsors to assist in acquisition of race tracks, and in
arranging private funding for the Company.
In July 1998, the Company received $7,000 from the sale of 700,000 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"),
and issued 18,400 shares for organizational expenses paid.
The Company remains in the development stage and, since inception, has
experienced no significant change in liquidity or capital resources or
stockholder's equity other than the receipt of proceeds in the amount of $7,000
from its inside capitalization funds. Substantially all of such funds have been
used to pay expenses incurred by the Company.
The Company intends to seek to carry out its plan of business as discussed
herein. In order to do so, it will require additional capital to pay ongoing
expenses, including legal and accounting fees incurred in conjunction with
preparation and filing of this registration statement on Form 10-SB, and in
conjunction with future compliance with its on-going reporting obligations.
Results of operations
During the period from May 29, 1998 (inception) through June 30, 1999, the
Company has engaged in no significant operations other than organization
activities, acquisition of capital and preparation for registration of its
securities under the Securities Exchange Act of 1934, as amended (the "'34
Act"). No revenues were received by the Company during this period.
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For the current fiscal year, the Company anticipates incurring a loss as a
result of expenses associated with registration and compliance with reporting
obligations under the '34 Act, and expenses associated with locating and
evaluating acquisition candidates in the sports motor car racing industry. The
Company anticipates that until a business combination is completed with an
acquisition candidate, it will not generate revenues. The Company may also
continue to operate at a loss after completing a business combination, depending
upon the performance of the acquired business.
Need for Additional Financing
The Company's existing capital will not be sufficient to meet the Company's
cash needs, including the costs of completing its registration and complying
with its continuing reporting obligations under the '34 Act. Accordingly,
additional capital will be required.
No commitments to provide additional funds have been made by management or
other stockholders, and the Company has no plans, proposals, arrangements or
understandings with respect to the sale or issuance of additional securities
prior to the location of a merger or acquisition candidate. Accordingly, there
can be no assurance that any additional funds will be available to the Company
to allow it to cover its expenses. Notwithstanding the foregoing, to the extent
that additional funds are required, the Company anticipates receiving such funds
in the form of advancements from current shareholders without issuance of
additional shares or other securities, or through the private placement of
restricted securities rather than through a public offering.
Regardless of whether the Company's cash assets prove to be inadequate to
meet the Company's operational needs, the Company might seek to compensate
providers of services by issuances of stock in lieu of cash. For information as
to the Company's policy in regard to payment for consulting services, see
"CERTAIN RELATIONSHIPS AND TRANSACTIONS."
Year 2000 issues are not currently material to the Company's business,
operations or financial condition, and the Company does not currently anticipate
that it will incur any material expenses to remedy Year 2000 issues it may
encounter. However, Year 2000 issues may become material to the Company
following its completion of a business combination transaction. In that event.
the Company will be required to adopt a plan and budget for addressing such
issues.
Item 3. Description of Property
The Company leases executive offices at 860 Via de la Paz, Suite E-1,
Pacific Palisades, California, pursuant to a month to month lease, at a monthly
rental of $500.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
As of August 31, 1999, the Company had 718,400 issued and outstanding
shares of Common Stock. The following table sets forth as of August 31, 1999,
certain information regarding beneficial ownership of the Common Stock by (i)
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<PAGE>
those persons beneficially holding more than five percent of the Company's
Common Stock, (ii) the Company's directors who beneficially own shares of the
Common Stock, (iii) the officers named in the Summary Compensation table below,
and (iv) all of the Company's directors and officers as a group.
Name and Address Amount of Shares Percent
of Beneficial Owner (1) of Beneficial Owner of Class
- ------------------------ ------------------- --------
Appletree Investment Company Ltd. 336,791 46.88
Anglo Irish Trust (I.O.M.)
69 Athol Street
Douglas, Isle of Man IM1 1JE
Kevin Welch 75,000 10.44
626 Santa Monica Blvd.
Santa Monica, CA 90401
Deremie Enterprises Ltd. 50,000 6.96
Aluminum Tower, 5th Floor
2 Limasol Ave.
Nicosia 2003, Cypress
Mid America Capital Corp. 25,000 3.5
716 Norwest Midland Bldg.
401 Second Avenue South
Minneapolis, MN 56401
George Todt 4,053 *
23741 Harbor Vista
Malibu, CA 90265
James Walters 2,908 *
14724 Ventura Blvd
Sherman Oaks, CA 91423
All officers and directors 6,961 *
as a group (2 persons)
*Less than one (1%) percent
- ---------------------------
(1) For purposes of the table, a person is considered to "beneficially own" any
shares with respect to which he/she directly or indirectly has or shares voting
or investment power or of which he or she has the right to acquire the
beneficial ownership within 60 days. Unless otherwise indicated and subject to
applicable community property law, voting power and investment power are
exercised solely by the person named above or shared with members of his or her
household.
4
<PAGE>
Item 5. Directors, Executive Officers, Promoters and Control
Persons.
The directors and executive officers of the Company and their ages as of
the date of this document are as follows:
Name Age Position
- ----- ----- ----------
Larry Todt(1) 47 President, Director
George Todt(1) 46 Secretary, Director
James Walters 46 Vice President, Treasurer
& Director
The Directors named above will serve until the next annual meeting of the
Company's stockholders or until their successors are duly elected and have
qualified. Directors will be elected for one-year terms at the annual
stockholders' meeting. Officers will hold their positions at the pleasure of the
board of directors, absent any employment agreement, of which none currently
exist or are contemplated. There is no arrangement or understanding between any
of the directors or officers of the Company and any other person pursuant to
which any director or officer was or is to be selected as a director or officer,
and there is no arrangement, plan or understanding as to whether non-management
shareholders will exercise their voting rights to continue to elect the current
directors to the Company's board. There are also no arrangements, agreements or
understandings between non-management shareholders and management under which
non-management shareholders may directly or indirectly participate in or
influence the management of the Company's affairs.
The directors and officers will devote their time to the Company's affairs
on an "as needed" basis, which, depending on the circumstances, could amount to
as little as two hours per month, or more than forty hours per month, but more
than likely will fall within the range of five to ten hours per month. There are
no agreements or understandings for any officer or director to resign at the
request of another person, and none of the officers or directors are acting on
behalf of, or will act at the direction of, any other person.
Larry Todt owned and operated a construction company in the Midwest from
1975 to December 1996. During that time was involved in multi-million dollar
projects and managed the activities of more than two hundred personnel. He has
held the position of Vice President of Business Development for ISPI, Inc., a
privately held internet company, from January, 1997 to the present.
George Todt, has been Managing Member of PageOne Business Productions, LLC
since its formation in March 1996. PageOne is an internet based financial and
consulting form specializing in high-tech start-up and emerging growth
companies. Mr. Todt's experience over the past 15 years includes working with 10
5
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start-up companies, raising venture capital, and arranging strategic
partnerships and initial public offerings. He has researched, developed and
implemented marketing and sales training programs in several industries. Mr.
Todt also gained extensive experience in management in various companies. He was
Chief Executive Officer of Todt Companies, Cape Girardeau, Missouri, from 1987
to 1990. During this time, his company grew from 29 to 130 employees, and annual
sales grew from $2 million to $8 million. Mr. Todt also has been an
international consultant in the areas of technology exchanges and rights.
James Walters is President of Kellogg & Andelson, Los Angeles' largest
local privately owned accounting firm. Mr. Walters began his business career in
1976 as an accountant at Kellogg & Andelson. In 1980 he was elected partner and
was promoted to Managing Partner in 1984. In 1995 Mr. Walters was elected
Chairman of the Board and is currently responsible for the overall management of
the 100 person firm. In addition to managing Kellogg & Andelson, he has assisted
the firm's clients with the preparation for their Initial Public Offerings, as
well as with their acquisition and consolidation strategies. He has extensive
experience in the planning, design, installation and review of financial
management information systems. In addition, Mr. Walters has consulted with many
middle-sized companies in several different industries. Mr. Walters has founded,
owned and managed companies in Commercial Photography, Corporate Events, Auto
Repair and Concrete Molding industries.
Conflicts of Interest
None of the officers of the Company will devote more than a portion of his
time to the affairs of the Company. There will be occasions when the time
requirements of the Company's business conflict with the demands of the
officers' other business and investment activities. Such conflicts may require
that the Company attempt to employ additional personnel. There is no assurance
that the services of such persons will be available or that they can be obtained
upon terms favorable to the Company.
Item 6. Executive Compensation.
Compensation for the officers of the Company is presented below. There are
no other benefits or compensation provided.
Larry Todt, President and James Walters, Vice President each receive a salary of
$5,000 per month for an annual salary of $60,000, payment of which has been
deferred until proceeds are available for payment. In addition, each of them has
an option to purchase 100,000 shares of the Company's common stock, par value
$.01 at an option exercise price of $1.00 per share, exercisable commencing
August 1, 1999, and terminating June 30, 2001.
- ---------------------
(1) Larry Todt and George Todt are cousins
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The following table shows all the cash compensation paid by the Company as
well as certain other compensation paid during the fiscal years indicated. No
Executive Officer has received compensation from the Company since its
inception. Until the Company acquires additional capital, it is not anticipated
that any officer or director will receive compensation from the Company other
than reimbursement for out-of pocket expenses incurred on behalf of the Company.
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation Awards Payouts
- ------------------------------------------------------------------- ------------------------- -----------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other
Name and Annual Restricted All Other
Principal Compen- Stock Options LTIP Compen-
Position Year Salary($) Bonus($) sation($) Awards($) SARs Payouts($) sation($)
- ------------------------------------------------------------------- ------------------------- -----------------------
<S> <C>
None.
</TABLE>
Option/SAR Grants in Last Fiscal Year. There were no option/SAR Grants in the
last fiscal year.
Compensation of Directors
The Company's directors serve without compensation.
Item 7. Certain Relationships and Related Transactions.
No officer, director, promoter, or affiliate of the Company has or proposes
to have any direct or indirect material interest in any asset proposed to be
acquired by the Company through security holdings, contracts, options, or
otherwise.
It is not currently anticipated that any salary, consulting fee, or
finder's fee shall be paid to any of the Company's directors or executive
officers.
Item 8. Description of Securities.
Common Stock
The Company has authorized 10,000,000 shares of Common Stock par value
$.01. Each outstanding Share of Common Stock is entitled to one vote, either in
person or by proxy, on all matters that may be voted upon by the owners thereof
at meetings of the stockholders.
The holders of Common Stock (i) have equal ratable rights to dividends from
funds legally available therefor, when, and if declared by the Board of
Directors of the Company; (ii) are entitled to Share ratably in all of the
assets of the Company available for distribution to holders of Common Stock upon
liquidation, dissolution or winding up of the affairs of the Company; (iii) do
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<PAGE>
not have preemptive, subscription or conversion rights, or redemption or sinking
fund provisions applicable thereto; and (iv) are entitled to one non-cumulative
vote per Share on all matters on which stockholders may vote at all meetings of
stockholders.
All of the issued and outstanding shares of Common stock are, and all
unissued shares when sold will be, duly authorized, validly issued, fully paid
and non-assessable. To the extent that additional shares of the Company's common
stock are issued, the relative interests of the then existing shareholders may
be diluted.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common
Equity and Other Shareholder Matters
(a) Market Information
The Company's Common Stock ($.01 par value), all of which are one class, is
not publicly traded.
(b) Holders
The approximate number of record holders of the Company's Common Stock as
of August 31, 1999 was 311, inclusive of those brokerage firms and/or clearing
houses holding the Company's common shares for their clientele (with each such
brokerage house and/or clearing house being considered as one holder). The
aggregate number of shares of Common Stock outstanding as of August 31, 1999 was
718,400 shares.
(c) Dividends
The Company has not paid or declared any dividends upon its Common Stock
since its inception and, by reason of its present financial status and its
contemplated financial requirements, does not contemplate or anticipate paying
any dividends upon its Common Stock in the foreseeable future.
Item 2. Legal Proceedings
The Company is not presently a party to any material litigation, nor to the
Company's knowledge is such litigation threatened.
Item 3. Changes in and Disagreements with Accountants
The Company has had no changes in or disagreements with accountants on
accounting or financial disclosure.
Item 4. Recent Sales of Unregistered Securities.
The following unregistered securities of the Company have been issued in
the past three years:
8
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1. On June 24, 1998, the Company issued 9,200 restricted shares to each of
two affiliates. The shares were exempt from registration pursuant to
Section 4(2) of the Securities Act of 1933, as amended (the "Act").
2. On July 17, 1998, the Company issued 75,000 restricted shares to an
affiliate. The shares were exempt from registration pursuant to Section
4(2) of the Act.
3. On July 18, 1998, the Company issued 425,000 restricted shares to an
affiliate. The shares were exempt from registration pursuant to Section
4(2) of the Act.
4. On July 19, 1998, the Company issued 75,000 restricted shares to an
affiliate. The shares were exempt from registration pursuant to Section
4(2) of the Act.
5. On August 5, 1998, the Company issued 50,000 free-trading shares to
each of two non-affiliates pursuant to an exemption from registration
under Regulation D, Rule 504 of the Act.
6. On August 5, 1998, the Company issued 25,000 restricted shares to an
affiliate. The shares were exempt from registration pursuant to Section
4(2) of the Act.
Item 5. Indemnification of Directors and Officers
The Certificate of Incorporation and Bylaws of the Company contain
provisions limiting or eliminating the liability of directors of the Company to
the Company or its stockholders to the fullest extent permitted by the General
Corporation law of Delaware and indemnifying officers and directors of the
Company to the fullest extent permitted by the General Corporation Law of
Delaware. Insofar as indemnification for liabilities arising under the Act may
be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Act, and will
be governed by the final adjudication of such issue.
9
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PART F/S
The Financial Statements of United Raceways, Inc. required by
Regulation S-B commence on page F-1 hereof in response to Part F/S of the
Registration Statement on Form 10-SB, and are incorporated herein by reference.
PART III
Items 1 & 2. Index to Exhibits and Description of Exhibits
2.a Articles of Incorporation with Amendments*
2.b By-Laws*
* previously filed
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SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
UNITED RACEWAYS, INC.
Date: October 12, 1999 By:
----------------- ------------------------------
Larry Todt, President
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UNITED RACEWAYS, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENT
AS OF JUNE 30, 1999
<PAGE>
UNITED RACEWAYS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
--------
PAGE 1 - ACCOUNTANTS' REVIEW REPORT
PAGE 2 - BALANCE SHEET AS OF JUNE 30, 1999
PAGE 3 - STATEMENT OF OPERATIONS FOR THE SIX MONTHS
ENDED JUNE 30, 1999 AND FOR THE PERIOD FROM
MAY 29, 1998 (INCEPTION) TO JUNE 30, 1999
PAGE 4 - STATEMENT OF CHANGES IN STOCKHOLDERS'
DEFICIENCY FOR THE PERIOD FROM MAY 29,1998
(INCEPTION) TO JUNE 30, 1999
PAGE 5 - STATEMENT OF CASH FLOWS FOR THE SIX MONTHS
ENDED JUNE 30, 1999 AND FOR THE PERIOD FROM
MAY 29, 1998 (INCEPTION) TO JUNE 30, 1999
PAGES 6 - 7 - NOTES TO FINANCIAL STATEMENTS AS OF
JUNE 30, 1999
<PAGE>
ACCOUNTANTS' REVIEW REPORT
To the Board of Directors of:
United Raceways, Inc.
(A Development Stage Company)
We have reviewed the accompanying balance sheet of United Raceways, Inc (A
Development Stage Company) as of June 30, 1999 and the related statements of
operations, changes in stockholders' deficiency and cash flows for the six
months then ended and for the period from May 29, 1998 (inception) to June 30,
1999, in accordance with Statements on Standards for Accounting and Review
Services issued by the American Institute of Certified Public Accountants. All
information included in these financial statements is the representation of the
management of United Raceways, Inc.
A review consists principally of inquiries of company personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.
/s/ WEINBERG & COMPANY, P.A.
-----------------------------
WEINBERG & COMPANY, P.A.
Boca Raton, Florida
September 24, 1999
<PAGE>
UNITED RACEWAYS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF JUNE 30, 1999
ASSETS
Cash $ 170
----------
TOTAL ASSETS $ 170
==========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
LIABILITIES
Accounts payable and accrued expenses $ 61,946
----------
Total liabilities 61,946
----------
STOCKHOLDERS' DEFICIENCY
Common Stock, $.01 par value, 10 million
shares authorized 718,400 issued and
outstanding 7,184
Accumulated deficit during development stage (68,960)
----------
Total Stockholders' Deficiency (61,776)
----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 170
==========
See accompanying notes to financial statements.
2
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UNITED RACEWAYS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND FOR THE
PERIOD FROM MAY 29, 1998(INCEPTION) TO JUNE 30, 1999
CUMULATIVE FROM
MAY 29, 1998 SIX MONTHS
(INCEPTION) TO ENDED
JUNE 30, 1999 JUNE 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 70 -
------------ -------------
Total expenses 68,960 61,077
------------ -------------
NET LOSS $ (68,960) $ (61,077)
- -------- ============ =============
Weighted average number of
shares outstanding during
period-basic and diluted 704,704 718,400
============ =============
Net loss per common share -
basic and diluted (.0979) (.0852)
============ =============
See accompanying notes to financial statements.
3
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UNITED RACEWAYS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN
STOCKHOLDERS' DEFICIENCY
FOR THE PERIOD FROM MAY 29, 1998
(INCEPTION) TO JUNE 30, 1999
Deficit
Additional Accumulated
Common Paid-In During Devel-
Stock Capital opment Stage Total
------ ------- ------------ -----
Common stock issuance $ 7,184 $ - $ - $ 7,184
Net loss for the
period ended
December 31, 1998 - - ( 7,883) ( 7,883)
------- ---------- -------- --------
BALANCE AT
DECEMBER 31, 1998 7,184 - ( 7,883) ( 699)
Net loss for
the six months
ended June 30, 1999 - - (61,077) (61,077)
------- ---------- -------- --------
BALANCE AT
JUNE 30, 1999 $ 7,184 $ - $(68,960) $(61,766)
======= ========== ======== ========
See accompanying notes to financial statements.
4
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UNITED RACEWAYS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
AND FOR THE PERIOD FROM MAY 29, 1998
(INCEPTION) TO JUNE 30, 1999
CUMULATIVE FROM
MAY 29, 1998 SIX MONTHS
(INCEPTION)TO ENDED
JUNE 30, 1999 JUNE 30, 1999
------------- -------------
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss $ (68,960) $ (61,077)
Adjustments to reconcile
net loss to net cash used
by operating activities:
Increase in accounts payable/
accrued expenses 61,946 61,005
----------- -----------
Net cash used in
operating activities ( 7,014) ( 72)
----------- -----------
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 -
----------- -----------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 170 ( 72)
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD - 242
----------- -----------
CASH AND CASH EQUIVALENT -
END OF PERIOD $ 170 $ 170
=========== ===========
See accompanying notes to financial statements.
5
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UNITED RACEWAYS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 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.
6
<PAGE>
UNITED RACEWAYS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONT'D
E. Stock Options
In accordance with 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 June 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
six months ended June 30, 1999 and for the period from May 29, 1998
(inception) to June 30, 1999 would have been increased to the pro-forma
amounts indicated below.
Inception
6/30/99 to 6/30/99
Net loss As reported $(61,077) ( 68,960)
Pro forma $(99,829) (107,712)
Net loss per share As reported $( .0852) ( .0979)
Pro forma $( .1390) ( .1528)
7
<PAGE>
UNITED RACEWAYS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 1999
NOTE 2 - STOCKHOLDERS' DEFICIENCY - CONT'D
B. Stock Options - Cont'd
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 June 30, 1999 and changes during
the year is presented below:
Weighted-
Number of Average
Shares 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
=========
The following table summarizes information about options outstanding at
June 30, 1999:
Options Outstanding Options Exercisable
- --------------------------------------------------- ------------------------
Weighted-
Number Average Weighted Number Weighted
Range of Outstanding Remaining Average Exercisable Average
Exercise at June 30, Contractual Exercise At June 30, Exercise
Price 1999 Life Price 1999 Price
----- ---- ---- ----- ---- -----
$ 1.00 200,000 Years 2.0 $ 1.00 200,000 $1.00
Through the date of this report, outstanding stock options totaled
200,000.
8
<PAGE>
UNITED RACEWAYS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 1999
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
$60,000 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
June 30, 1999, $60,000 in salaries has been accrued.
9
<PAGE>
UNITED RACEWAYS, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENT
AS OF DECEMBER 31, 1998
<PAGE>
UNITED RACEWAYS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
-----------------------------------------------
PAGE 1 - INDEPENDENT AUDITORS' REPORT
PAGE 2 - BALANCE SHEET AS OF DECEMBER 31, 1998
PAGE 3 - STATEMENT OF OPERATIONS FOR THE
PERIOD FROM MAY 29, 1998
(INCEPTION) TO DECEMBER 31, 1998
PAGE 4 - STATEMENT OF CHANGES IN STOCKHOLDERS'
DEFICIENCY FOR THE PERIOD FROM MAY 29,1998
(INCEPTION) TO DECEMBER 31, 1998
PAGE 5 - STATEMENT OF CASH FLOWS FOR THE PERIOD
FROM MAY 29, 1998 (INCEPTION) TO
DECEMBER 31, 1998
PAGES 6 - 7 - NOTES TO FINANCIAL STATEMENTS AS OF
DECEMBER 31, 1998
<PAGE>
[Logo] Weinberg & Company, P.A.
Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of:
United Raceways, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheet of United Raceways, Inc. (a
development stage company) as of December 31, 1998 and the related statements of
operations, changes in stockholders' deficiency and cash flows for the period
from May 29, 1998 (inception) to December 31, 1998. 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 balance sheet is 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 United Raceways, Inc. (a
development stage company) as of December 31, 1998 and the results of its
operations and its cash flows for the period from May 29, 1998 (inception) to
December 31, 1998, in conformity with generally accepted accounting principles.
/s/ Weinberg & Company, P.A.
----------------------------
WEINBERG & COMPANY, P.A.
Boca Raton, Florida
July 19, 1999
Town Executive Center - 6100 Glades Road - Suite 314 - Boca Raton, Florida 33434
Telephone (561) 487-5765 - Telefax (561) 487-5766
Email: [email protected] - Website: www.cpaweinberg.com
Members: American Institute of CPA's/
Division of Firms Florida Institute of CPA's
<PAGE>
UNITED RACEWAYS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF DECEMBER 31, 1998
ASSETS
Cash $ 242
----------
TOTAL ASSETS $ 242
==========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
LIABILITIES
Accounts payable and accrued expenses $ 941
----------
Total liabilities 941
----------
STOCKHOLDERS' DEFICIENCY
Common Stock, $.01 par value, 10 million
shares authorized 718,400 issued and
outstanding 7,184
Accumulated deficit during development stage (7,883)
----------
Total Stockholders' Deficiency (699)
----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 242
==========
See accompanying notes to financial statements.
<PAGE>
UNITED RACEWAYS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM MAY 29, 1998
(INCEPTION) TO DECEMBER 31, 1998
Income $ -
Expenses
Consulting fees 2,500
Organization expense 184
Professional fees 4,129
Transfer agent fees 876
Corporate filing fees 124
Bank service fees 70
--------------
Total expenses 7,883
--------------
NET LOSS $ (7,883)
==============
See accompanying notes to financial statements.
<PAGE>
UNITED RACEWAYS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN
STOCKHOLDERS' DEFICIENCY
FOR THE PERIOD FROM MAY 29, 1998
(INCEPTION) TO DECEMBER 31, 1998
Deficit
Additional Accumulated
Common Paid-In During Devel-
Stock Capital opment Stage Total
------- ---------- ------------- -------
Common stock issuance $ 7,184 $ - $ - $ 7,184
Net loss for the
period ended
December 31, 1998 - - (7,883) (7,883)
------- --------- ----------- -------
BALANCE AT
DECEMBER 31, 1998 $ 7,184 $ - $ (7,883) $ (699)
======= ========= =========== =======
See accompanying notes to financial statements.
<PAGE>
UNITED RACEWAYS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM MAY 29, 1998
(INCEPTION) TO DECEMBER 31,1998
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss $ (7,883)
----------
Adjustments to
reconcile net loss
to net cash used
by operating activities:
Increase in accounts payable/
accrued expenses 941
----------
Net cash used in
operating activities (6,942)
----------
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
----------
INCREASE IN CASH AND
CASH EQUIVALENTS 242
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD -
----------
CASH AND CASH EQUIVALENT -
END OF PERIOD $ 242
------------- ==========
See accompanying notes to financial statements.
<PAGE>
UNITED RACEWAYS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1998
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 December 31, 1998, 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, AAccounting
for Income Taxes@ (AStatement 109"). Under Statement 109, deferred tax
assets and liabilities are recognized for the future tax
<PAGE>
UNITED RACEWAYS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONT'D)
- --------------------------------------------------------------
D. Income Taxes - (CONT'D)
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 were no
current or deferred income tax expense or benefits due to the Company
not having any material operations for the period ending December 31,
1998.
NOTE 2 - STOCKHOLDERS' DEFICIENCY
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.
