U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
[ ] Transition report under section 13 or 15(d)
of the Exchange Act.
COMMISSION FILE NUMBER 0-27153
SQUARE SHOOTER INTERNATIONAL LIMITED
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(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-4695878
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
918 ENGLAND DRIVE, KNOXVILLE, TN 37920
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(877) 340-0837
--------------
(ISSUER'S TELEPHONE NUMBER)
1130 FIRETHORN WAY, KNOXVILLE, TN 37923 (423) 531-5620
(Former address and phone number if changed since last report)
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
--- ---
As of March 31, 2000, there were 16,544,236 shares of Common Stock, $0.001
par value, of the issuer outstanding.
Transitional Small Business Disclosure Format (check one)
YES NO X
--- ---
<PAGE>
SQUARE SHOOTER INTERNATIONAL, LIMITED
(A DEVELOPMENT STAGE COMPANY)
10-QSB Quarterly Report
INDEX
PART I. FINANCIAL INFORMATION Page Numbers
Item 1. Financial Statements
BALANCE SHEETS AT MARCH 31, 2000 (UNAUDITED) AND
SEPTEMBER 30, 1999 2
STATEMENTS OF OPERATIONS FOR THE THREE MONTHS AND SIX
MONTHS ENDED MARCH 31, 2000 AND MARCH 31, 1999 AND
FROM JUNE 1, 1998 (INCEPTION) TO MARCH 31, 2000
(UNAUDITED) 3
STATEMENTS OF CASH FLOW FOR THE SIX MONTHS ENDED
MARCH 31, 2000 AND MARCH 31, 1999 AND FROM
JUNE 1, 1998 (INCEPTION) TO MARCH 31, 2000
(UNAUDITED) 4
NOTES TO FINANCIAL STATEMENTS 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 6
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
Item 6. Exhibits and Reports filed on Form 8-K 7
Signatures 8
1
<PAGE>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
SQUARE SHOOTER INTERNATIONAL, LIMITED
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
March 31, 2000 September 30,
(Unaudited) 1999
-------------- -------------
ASSETS
CURRENT ASSETS
Cash $ 74,179 $ 9,646
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Total Current Assets 74,179 9,646
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PROPERTY & EQUIPMENT - NET 98,655 64,270
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TOTAL ASSETS $ 172,834 $ 73,916
------------
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES
Accounts payable $ 39,635 $ 85,672
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Total Current Liabilities 39,635 85,672
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TOTAL LIABILITIES 39,635 85,672
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STOCKHOLDERS' EQUITY (DEFICIENCY)
Common stock, $0.001 par value,
100,000,000 shares authorized,
16,544,236 and 14,500,000 shares
issued and outstanding 16,545 14,500
Additional paid-in capital 2,133,841 205,590
Accumulated deficit during
development stage (2,017,187) (231,846)
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Total Stockholders' Equity
(Deficiency) 133,199 (11,756)
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIENCY) $ 172,834 $ 73,916
-------------------
============= =============
See accompanying notes to financial statements.
2
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<TABLE>
<CAPTION>
SQUARE SHOOTER INTERNATIONAL, LIMITED
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(UNAUDITED)
For the
For the Three Months Ended For the Six Months Ended Period From
------------------------------ -------------------------------- June 1, 1998
March 31, March 31, March 31, March 31, (Inception) to
2000 1999 2000 1999 March 31, 2000
-------------- ------------- -------------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
SALES $ - $ 357,029 $ - $ 357,029 $ 357,029
COST OF GOODS SOLD - 294,660 - 294,660 294,660
-------------- -------------- -------------- -------------- ---------------
GROSS PROFIT - 62,369 - 62,369 62,369
-------------- -------------- -------------- -------------- ---------------
OPERATING EXPENSES
Advertising 28,904 - 28,904 - 28,904
Contract services 125,904 - 1,676,094 - 1,745,892
Royalty expense 7,000 43,000 7,000 43,000 50,000
Travel expense 31,417 2,085 37,910 2,085 70,197
Research and development - 26,554 - 26,554 100,835
Selling, general and
administrative 19,771 2,256 35,783 2,256 84,293
-------------- -------------- -------------- -------------- ---------------
Total Operating Expenses 212,996 73,895 1,785,691 73,895 2,080,121
-------------- -------------- -------------- -------------- ---------------
LOSS FROM OPERATIONS (212,996) (11,526) (1,785,691) (11,526) (2,017,752)
-------------- -------------- -------------- -------------- ---------------
OTHER INCOME - - 350 - 565
-------------- -------------- -------------- -------------- ---------------
LOSS BEFORE PROVISION FOR
INCOME TAX (212,996) (11,526) (1,785,341) (11,526) (2,017,187)
-------------- -------------- -------------- -------------- ---------------
PROVISION FOR INCOME TAXES - - - - -
-------------- -------------- -------------- -------------- ---------------
NET LOSS $ (212,996) $ (11,526) $ (1,785,341) $ (11,526) $ (2,017,187)
-------- ============== ============== ============== ============== ===============
Net loss per share $ (0.01) $ (0.01) $ (0.11) $ (0.01) $ (0.14)
============== ============== ============== ============== ===============
Weighted average number of
shares outstanding -
basic and diluted 16,397,879 14,500,000 15,981,245 14,500,000 14,904,005
============== ============== ============== ============== ===============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
SQUARE SHOOTER INTERNATIONAL, LIMITED
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the period
For the six months ended from June 1,
--------------------------- 1998
March 31, March 31, (inception) to
2000 1999 March 31, 2000
------------ ------------ ---------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(1,785,341) $ (11,526) $ (2,017,187)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Stock issued to consultants 1,500,000 - 1,500,000
Changes in assets and liabilities:
Accounts receivable - (357,029) -
Accounts payable (46,037) 368,555 39,635
------------ ------------ ---------------
Net Cash Used In Operating
Activities (331,378) - (477,552)
------------ ------------ ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and
equipment (34,385) - (98,655)
------------ ------------ ---------------
Net cash used in investing
activities (34,385) - (98,655)
------------ ------------ ---------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from private placement,
net of offering cost 430,296 - 650,386
------------ ------------ ---------------
Net cash provided by financing
activities 430,296 - 650,386
------------ ------------ ---------------
INCREASE IN CASH AND CASH EQUIVALENTS 64,533 - 74,179
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD 9,646 - -
------------ ------------ ---------------
CASH AND CASH EQUIVALENTS -
---------------------------
END OF PERIOD $ 74,179 $ - $ 74,179
------------- ============ ============ ===============
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
SQUARE SHOOTER INTERNATIONAL, LIMITED
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2000
NOTE 1 BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles and the rules and regulations of the Securities and
Exchange Commission for interim financial information. Accordingly,
they do not include all the information and footnotes necessary for
a comprehensive presentation of financial position and results of
operations.
It is management's opinion, however, that all adjustments
(consisting of normal recurring adjustments) have been made which
are necessary for a fair financial statements presentation. The
results for the interim period are not necessarily indicative of the
results to be expected for the year.
For further information, refer to the financial statements and
footnotes included in the Company's Form 8-K/A filed on November 8,
1999.
NOTE 2 STOCKHOLDERS' EQUITY
(A) Issuance of Common Stock for Cash
During the three months ended March 31, 2000, the Company issued
228,830 shares of common stock for proceeds of $286,038.
5
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The following discussion relates to the results of our operations for the
period, and our financial condition:
General
-------
Square Shooter's business is the development, manufacture and marketing
through wholesale and retail outlets, of a line of water and organic-based
fertilizer delivery systems for the lawn and garden markets. The Company has
been a development-stage company with its activities consisting primarily of
continued research and development, test marketing of products and raising of
funds.
RESULTS OF OPERATIONS
---------------------
The following discussion and analysis below should be read in conjunction
with the financial statements, including the notes thereto, appearing elsewhere
in this report.
For the period since inception (June 1, 1998) through March 31, 2000,
during the Company's development stage, the Company has a $74,179 cash balance,
and has generated a net loss of ($2,017,187).
THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO MARCH 31, 1999
------------------------------------------------------------
The Company had no revenues during the current period, compared to sales of
$357,029 for the comparable period a year ago, from the sale of its products to
a major home improvement retail chain in a test marketing program. During this
period, cost of goods sold was $294,660, for a gross profit of $62,369 for the
three months ended March 31, 1999. During the current period, the Company had
total operating expenses of $212,996, including $125,904 for Contract services,
$28,904 for advertising and $19,771 for selling, general and administrative
expenses ("SG&A"), compared to total operating expenses of $73,895 for the prior
fiscal period ended March 31, 1999, including $43,000 for royalty expense,
$26,554 for research and development and $2,256 for SG&A for the three month
period ending March 31, 1999.
SIX MONTHS ENDED MARCH 31, 2000 COMPARED TO MARCH 31, 1999
----------------------------------------------------------
In this current period, the Company completed a test marketing program for
its lawn sprinkling products at a major home improvement retail chain. The
Company was also successful in qualifying for purchase of its lawn sprinkling
products at the largest retail chain in the United States. No revenues were
recognized during this period from such activity, compared to $357,029 in sales
recorded in the six month period a year ago. The Company had total operating
expenses of $1,785,691, comprised primarily of $1,676,094 for contract services,
including consulting expense from the issuance of the Company's common stock
valued at $1,500,000. Other operating expenses for the period were $28,904 for
advertising, $7,000 for royalty expense, $37,910 for travel expense and $35,783
for SG&A. Total operating expenses for the comparable period a year ago totaled
$73,895, including $43,000 for royalty expense, $26,554 for research and
development and $2,256 for SG&A.
6
<PAGE>
FINANCIAL CONDITION AND LIQUIDITY
---------------------------------
The Company has an ongoing need to finance its activities. To date, the
Company has funded these cash requirements by offering and selling its Common
Stock through private placements of its securities. For the current three month
period, the Company received $286,038 in cash proceeds from the sale of its
common stock, for a total of $430,296 for the six months ended March 31, 2000.
The Company intends to seek financing in the current year from continued sales
of its securities through private placements, issuance of debt securities, bank
borrowings and may offer its securities in a public offering.
PART II OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
Recent Sales of Unregistered Securities
During the three months ended March 31, 2000, the Company made the
following issuances and sales of securities in reliance upon the exemption
provided by Section 4(2) of the Securities Act of 1933.
The Company sold 228,830 shares of common stock to accredited investors for
cash proceeds of $286,038.
Item 6. Exhibits and Reports filed on Form 8-K
(a) Exhibits
Exhibit No. Description
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27 Financial Data Schedule
(b) Reports on Form 8-K
None.
7
<PAGE>
SIGNATURES
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In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
SQUARE SHOOTER INTERNATIONAL LIMITED
------------------------------------
Registrant
June 15, 2000 By: /s/ Edgar O. Harman
------------ --------------------------------
Edgar O. Harman
Chief Financial Officer
(Principal Financial Officer)
8
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
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27 Financial Data Schedule
9
