SECURITIES AND EXCHANGE COMMISSION
Washington, DC
20549
FORM 10-QSB
[X] Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act
of 1934
Commission File No.: 000-26211
EIGHT BALL CORPORATION
d/b/a Westchester Sports Grill
(Exact name of registrant as it appears in its charter)
NEVADA 95-4666270
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5630 West Manchester Boulevard
Los Angeles, California 90045
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code: 310-670-2366
Securities registered pursuant to Section 12 (b) of the Act: None
Securities registered pursuant to Section 12 (b) of the Act:
Class A Common Stock $0.001 Par Value
Indicate by check mark whether the registrant (1) has filed all reports to be
filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the preceding 12 months ( or 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 No
At the end of the quarter ending 6/30/2000 there were 150,000 issued and
outstanding shares of the registrants common stock.
There is no active market for the registrant's securities.
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
See attached exhibit
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION.
This statement includes projections of future results and "forward-looking
statements" as that term is defined in Section 27A of the Securities Act of
1933 as amended (the "Securities Act"), and Section 21E of the Securities
Exchange Act of 1934 as amended (the "Exchange Act"). All statements that are
included in this Registration Statement, other than statements of historical
fact, are forward-looking statements. Although Management believes that the
expectations reflected in these forward-looking statements are reasonable, it
can give no assurance that such expectations will prove to have been correct.
Important factors that could cause actual results to differ materially from the
expectations are disclosed in this Statement, including, without limitation, in
conjunction with those forward-looking statements contained in this Statement.
Westchester sports grill was opened to the public in July of 1998. Originally,
management had a vision for light food fare for lunch. By local demand,
however, the food itinerary was changed presently to a Mexican Food buffet for
lunch. Sandwiches and finger foods are provided for dinner. Most orders are
still under $8.Westchester Sports Grill serves the residential, university,
commercial and tourist communities in the surrounding area. The restaurants
immediate neighborhood is an industrial, heavy-traffic area. Across one street
is a police training center. Half a mile away is the Great Forum indoor arena
with a maximum seating capacity of approximately 15,000. One mile away is the
Los Angeles International Airport. Westchester anticipates its patronage to
be non-seasonal. Westchester Sports Gill is open from 11 a.m. to 2 a.m.
Monday through Friday, and 9 a.m. to 2 a.m. Saturday and Sunday. Westchester
believes these hours are optimum for attracting its targeted patrons.
Westchester Sports Grill serves alcoholic drinks and food in an atmosphere
featuring billiard tables, displays of sports memorabilia, and TV monitors
which mainly show sporting events. At least two licensed uniformed security
guards patrol inside and outside the property, including any associated parking
areas. Security personnel are on duty continuously from later than 9 p.m.
until one-half hour after closing of the facility for patron service on all
days the facility is open for business.
Management has downsized the pool table area to make room for bands to play.
Management has found one band that can currently satisfy the range of
customers. However, management believes in the end it will need to find
several bands for entertainment.
The Westchester's target markets include well - paid workers and managers,
college and police training center students, tourists, and singles who desire
quality food and alcoholic beverages served in a casual sports - oriented
atmosphere. Current trends within the food industry according to the National
Restaurant Association that the Company's menu and facility are designed to
capitalize on are:
Value and convenience continue to drive industry growth. Food away from home
is no longer considered a luxury but a component of today's convenience-driven
lifestyle. Ambiance give restaurants a competitive edge. The 1990's have seen
restaurant customers demanding more entertainment for their dollar which
Westchester intends to deliver with the sports atmosphere of its Westchester
Sports Grill. Menu development is important to the management of Westchester
Sports Grill. Westchester re-evaluates its menu on a regular basis, and all
promotional menu items are to be tracked according to popularity and operating
margin. Westchester prices and portions its entire menu to reflect a minimum
cost of goods sold. Westchester also attempts to monitor competing restaurants
and bars in order to remain competitive. Westchester believes its most
important competitive advantage over Burger King, Pollo Loco, and Denny's is
its flexibility with respect to its menu. Originally, management had a vision
for light food fare for lunch. By local demand, however, the food itinerary
was changed presently to a Mexican Food buffet for lunch. Sandwiches and
finger foods are provided for dinner. Most orders are still under $8.
Westchester still attempts to offer food fare somewhat different from the food
which its three nearby aforementioned competitors offer. Westchester also
attempts to design its food to take advantage of the current trends within the
restaurant industry, and will stress freshness as a key component to its menu
Westchester operates under the theory that its customers will get their food
prepared their way, within reason, when ordering. Prices of the menu items and
beverages will be set first and foremost by the grills overhead, the
competition's range of prices. The Company's goal is to maintain a balance of
providing high quality food purchased at a lower cost in order to maximize
profit margins. Westchester will continue to promote its live entertainment,
quality food, satisfactory service, and casual sports ambiance in order to
draw in the local repeat patronage as well as tourists and to establish the
Westchester Sports Grill in the community as a casual restaurant and bar, with
alcoholic beverages and quality food served in a sports-oriented atmosphere.
Westchester's advertising strategy includes: Selecting local business and
mass media publications with high specific market penetration. Using discount
coupons and advertising in the dining section of the local newspapers.
Scheduling adequate frequency of ads to impact market with menu items and
promotions. Where possible, position advertising in or near entertainment/food
related editorials.Promoting its live entertainment which Westchester provides
within the limitations of the conditional use permit that the City of Los
Angeles granted April 18, 1998 to its planned Westchester Sports Grill.
Taking advantage of special high-interest local holiday issues of local
newspapers when possible.
Maximizing advertisement life with monthly and weekly publications.
Establishing relationships with individuals who are in a position to recommend
Westchester or direct business to the Company. Investigating the establishment
of an Internet Web Site with links to local and possibly appropriate non-local
Web sites. According to the National Restaurant Association, a very successful
trend in 1996 that has continued to attract customers in 1997 is a valuable
added promotional media plan. Westchester plans to specifically target
customers directly through local publications and direct mailings, using the
following approaches Position Westchester as an interesting sports grill and
bar with live entertainment, dancing, quality food, and alcoholic beverages.
Favorably compare Westchester's expertise, advantages, services and products
with other restaurants and bars. To be effective and to present a professional
image to prospective patrons, Westchester expects its advertisements and
marketing representatives to include reliance on a history of professional
conduct, meticulous attention to detail, and a documented record of
satisfaction by past patrons. Develop a sustained public relations effort in
conjunction with ongoing contact with key editors and top-level reporters in
local mass media. Invite the more influential reporters and editors from
pertinent industry publications and/or mass media for visits to the Company's
planned Westchester Sports Grill. During a visit, each of the guests would
receive a complete briefing on the Westchester Sports Grill, an opportunity to
interview the Company's President and staff, and samples of the food and
beverages.
If logistics or timing is a problem with the interviews, then Westchester could
possible arrange interviews at local trade shows and fairs. Participate in
appropriate local trade shows and fairs. To reduce costs, Westchester may
participate in other companies ' booths as joint ventures. Produce a
comprehensive Company sales presentation incorporating computer slides,
photograph albums, video tapes, audio cassettes, binder , a letter of
introduction, and brochures. Combinations of this material to be used as the
primary public relations tool for all target media editorial contact.
Westchester expects such a presentation will also be effective for inclusion in
press kits and sales packages. Track, wherever possible, the incremental
revenue generated from it advertising, promotion and publicity efforts.
Westchester anticipates a portion of sales will be generated directly from its
promotions, and another portion of indirect increase in sales through various
channels. Form strategic alliances with other companies in the restaurant and
bar industries and other related industries. These relationships may allow
Westchester to offer inducements and discounts to special patron categories and
to generate leads for future customers. Develop a regular and consistent menu
and activity update program for the major target media, keeping key editors
abreast of the Company's menus and activities. Establish contact with
editorial staff for the purpose of being included in restaurant and bar "round
-ups" in the mass media, where competing restaurant and bar services are
compared. Westchester expects such exposure to build credibility and market
acceptance.
Management
Management understands the importance of a strong management team which
believes in day-to-day hands-on operational management covering all shifts.
Westchester also believes in an experienced supporting advisory management team
making up the Company's Board of Directors.
In addition to the management of day-to-day operations, Westchester's Officers
plan to:
Oversee menu development, purchasing, portioning, pricing and inventory control
including approval of all financial obligations of the company. Plan, develop,
and establish customer service policies and objectives as well as plan and
establish all employee-related policies. Hire and fire all employees of the
Company Manage working capital including receivables, inventory, cash and
marketable securities. Perform financial forecasting including capital
budgeting, cash flow analysis, pro forma financial statements, and external
financing requirements. Prepare financial analysis of operations for guidance
of management, including the preparation of reports which outline company's
financial position in areas of income, expenses, and earnings, based on past,
present and future operations. Prepare budgets and financial forecasts and
arrange for audits of company's accounts. The duties of some types of the
Company's officers and employees are summarized as follows:
PRESIDENT: Manages menu planning, advertising, public relations, sales and
promotion, merchandising, and training. Identifies and researches new markets.
Identifies and set strategy for reaching new markets. Evaluates competition.
VICE PRESIDENT OF FINANCE: Manages working capital including receivables,
cash and market securities. Performs financial forecasting including capital
budget, cash budget , pro forma financial statements, external financing
requirements, and financial condition requirements.
Directs financial affairs to the organization. Prepares financial analysis of
operations for guidance to management. Prepares reports which outline company's
financial position in areas of income, expenses, and earnings, based on past,
present and future operations. Directs preparation of budgets and financial
forecasts. Arranges audits of company's accounts. If necessary, sets up and
operates Company's computerized information system.
DIRECTOR OF MARKETING AND ENTERTAINMENT: Prepares and implements marketing
plans and budgets. Formulates and purses publicity strategies. Generates and
maintains lists of contacts. Tracks and identifies successful sales tactics.
Assists with interviewing and hiring personnel. Designs and places
advertisements and discount coupons. Arranges visits and interviews with mass
media representatives and reporters. Selects, interviews, auditions, hires,
and schedules live entertainment.
DIRECTOR OF FOOD AND BEVERAGES: Purchases food and beverages. Plans and
prints menus and beverage selections. Interview, hires and trains waitstaff,
chefs, cashiers, bartenders, and dishwashers. Monitors and assures quality of
food and beverages. Sets and maintains sanitary standards. Ensures compliance
with local health district regulations. Provides assistance where and when
needed during peak periods and/or during temporary personnel shortages.
From time to time, Westchester may combine, rearrange, or assign new duties and
responsibilities among its employees and officers.Westchester plans to keep
the Westchester Sports Grill open a minimum of 360 days out of the year and
use a minimum of two full shifts of personnel. Westchester believes peak
business at its Westchester Sports Grill business will occur form Friday
through Sunday, all day; lunch during the week and at night to the local
residents, factory and office employees, police training center and university
students and staff, and tourists. Westchester plans to add additional staff as
the business cycle dictates.
Westchester believes continued success will be heavily dependent on the
quality of its service and food. It must, therefore, assure that its
employees provide a consistently high level of service from the beginning.
Westchester plans to hire only experienced qualified people and ensure that its
staff are adequately trained. Westchester believes that its customers will
emphasize service and support as one of their major concerns. Westchester
believes that they will be impressed with the fast, full service that it plans
to provide. Westchester particularly believes that they will be delighted with
being able to modify menu selections to a reasonable degree, when ordering.
The purpose for this service is to assure customer satisfaction and loyalty
and to create satisfied word of mouth advertising.
Westchester plans to demand that its wait staff provide the very best in
quality services to the customer making certain that they are happy and
satisfied with their dining and bar experiences. Westchester plans to ensure
that its personnel are thoroughly trained and undergo regular performance
evaluations.
Westchester anticipates that none of Westchester employees will be subject to
collective bargaining agreements. None of the Company's employees are on
strike, or have been in the past three years. Westchester is not aware of any
existing or threatened strikes or workers' disputes. Sales commissions, bonuses,
and corporate stock may be offered to employees as supplemental benefits or
incentive arrangements. At this time, Westchester currently offers no such
benefits, and no plans to offer such benefits exist. Should Westchester need
additional financing, Westchester may either rely on officers or shareholders
providing additional financing or on additional equity financing via the
issuance of additional shares.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities
None
Item 3. Default Upon Senior Securities
None
Item 4. Submission of matters To a Vote of Security Holders
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 10-Q
(a) The following documents are filed as part of this report:
Financial Statements as of June 30, 2000 as prepared by Kurt D. Saliger, C.P.A
Exhibits:
<TABLE>
<S> <C>
3.1 Articles of Incorporation
Incorporated by reference
The Company's Form 10-SB/A
filed on May 16th, 2000.
3.2 By-Law
Incorporated by reference
The Company's Form 10-SB/A
filed on May 16th 2000.
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.
Eight Ball Corporation
Dated: August 14th, 2000
By: /S/
Alfonso Hernandez, Jr., President
EIGHT BALL CORPORATION
FINANCIAL STATEMENTS
JUNE 30, 2000
EIGHT BALL CORPORATION
CONTENTS
</TABLE>
<TABLE>
<S> <C>
Independent Auditor's Report. . . . . . . . . . . . . . 1
Financial Statements
Balance Sheet. . . . . . . . . . . . . . . . . . . . . .2
Statement of Operations. . . . . . . . . . . . . . . . 3
Statement of Changes in Stockholders Equity. . . . . . .4
Statement of Cash Flows. . . . . . . . . . . . . . . . 5
Notes to Financial Statements. . . . . . . . . . . . . .6-7
</TABLE>
Member American Institute Member Nevada Society
of Certified Public Accountants of Certified Public Accountants
KURT D.SALIGER, C.P.A.
Certified Public Accountant
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Eight Ball Corporation
Las Vegas, Nevada
I have audited the accompanying balance sheet of Eight Ball Corporation as of
June 30, 2000 and the related statements of operations, stockholders' equity
and cash flows for the six-month period then ended. These financial statements
are the responsibility of the Company's management. My responsibility is to
express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are 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.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Eight Ball Corporation at
June 30, 2000 and the results of their operations and their cash flows for the
six month period then ended in conformity with generally accepted accounting
principles.
/s/
Kurt D. Saliger C.P.A.
August 07, 2000
5000 W. Oakey Suite A-4 Las Vegas, Nevada 89146
Phone: (702) 367-1988 Fax: (702) 870-8388
<TABLE>
EIGHT BALL CORPORATION
BALANCE SHEET
JUNE 30, 2000
<CAPTION>
<S> <C>
ASSETS
CURRENT ASSETS
Cash $710
Inventory $12,442
Accounts Receivable $0
--------
TOTAL CURRENT ASSETS $13,152
PROPERTY AND EQUIPMENT, NET $20,433
OTHER ASSETS $0
---------
TOTAL ASSETS $33,585
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $58,187
Accrued Liabilities $20,278
Current Portion, Long Term Debt $0
--------
TOTAL CURRENT LIABILITIES $78,465
LONG TERM DEBT $0
STOCKHOLDERS' EQUITY
Common Stock, $.001 par value
authorized 50,000,000 shares;
issued and outstanding 150,000
shares at June 30, 2000 $150
Additional Paid-In Capital $74,850
Retained Earnings (Deficit) ($119,880)
----------
TOTAL STOCKHOLDERS' EQUITY ($44,880)
----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $33,585
==========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<TABLE>
EIGHT BALL CORPORATION
STATEMENT OF OPERATIONS
From January 1, 2000 to June 30, 2000
<CAPTION>
<S> <C>
REVENUES $132,542
COSTS OF REVENUES ($53,841)
---------
GROSS PROFIT $78,701
OPERATING EXPENSES
Selling, general and
administrative $96,050
Depreciation $1,572
----------
TOTAL OPERATING EXPENSES $97,622
----------
INCOME (LOSS) FROM OPERATIONS ($18,921)
OTHER INCOME (EXPENSES)
Gain on sale of assets $0
Interest expense $0
----------
INCOME (LOSS) BEFORE
INCOME TAXES ($18,921)
Income Taxes $0
----------
NET PROFIT (LOSS) ($18,921)
==========
NET PROFIT (LOSS)
PER SHARE ($0.1261)
==========
AVERAGE NUMBER OF SHARES
OF COMMON STOCK
OUTSTANDING 150,000
==========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<TABLE>
EIGHT BALL CORPORATION
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
JUNE 30, 2000
<CAPTION>
Common Stock
------------
Number Additional Retained
of Paid in Earnings
Shares Amount Capital (Deficit)
------- ------- ----------- ---------
<S> <C> <C> <C> <C>
Balance January 1, 1997 0 $0 $0 $0
October 9, 1997
issued for cash 50,000 $50 $49,950
Net (Loss) for the period
October 9, 1997 (inception)
to
December 31, 1997 ($1,227)
-------- ------- ---------- --------
Balance December 31, 1997 50,000 $50 $49,9550 ($1,227)
September 15, 1998
Public Offering Regulation D
issued for cash 100,000 $100 $24,900
Net (Loss) January 1, 1998
to December 31, 1998 ($61,600)
--------- -------- ----------- ---------
Balance December 31, 1998 150,000 $150 $74,850 ($62,827)
Net (Loss) January 1, 1999
to
December 31, 1999 ($38,132)
Net (Loss) January 1, 2000
to
June 30, 2000 ($18,921)
--------- --------- ----------- ---------
Balance June 30, 2000 150,000 $150 $74,850 ($119,880)
========= ========= ============ ==========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
EIGHT BALL CORPORATION
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized October 9, 1997 under the laws of the State of Nevada,
under the name Eight Ball Corporation. The Company operates in the pool hall
and restaurant industries.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual method of accounting.
Estimates
The preparation of 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, disclosure of
contingent assets and liabilities, and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.
Cash and equivalents
For the statements of cash flows, all highly liquid investments with maturity
of three months or less are considered to be cash equivalents. There were no
cash equivalents as of June 30, 2000.
Inventory
Inventories are stated at the lower of cost (which approximates first-in, first
-out cost) or market.
Property and equipment
Property and equipment is stated at cost. Depreciation is recorded using the
straight - line method over the estimated useful life of the asset of three to
seven years.
Income taxes
Income taxes are provided for using the liability method of accounting in
accordance with Statement of Financial Accounting Standards No. 109 (SFAS #109)
"Accounting for Income Taxes." A deferred tax asset or liability is recorded
for all temporary differences between financial and tax reporting. Deferred tax
expense (benefit) results from the net change during the year of deferred tax
assets and liabilities.
EIGHT BALL CORPORATION
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Loss Per Share
Net loss per share is provided in accordance with Statement of Financial
Accounting Standards No. 128 (SFAS #128) "Earnings Per Share." Basic loss per
share is computed by dividing losses available to common stockholders by the
weighted average number of common shares outstanding during the period. Diluted
loss per share reflects per share amounts that would result if dilutive common
stock equivalents had been converted to common stock. As of June 30, 2000, the
Company had no dilutive common stock equivalents such as stock options.
NOTE 3 - STOCKHOLDERS' EQUITY
The authorized common stock of Eight Ball Corporation consists of 50,000,000
shares with a par value of $0.001 per share.
On October 9, 1997, the Company issued 50,000 shares of its common stock for
$50,000 cash.
On September 15, 1998, the Company completed a public offering that was offered
without registration under the Securities Act of 1933, as amended, in reliance
upon the exemption from registration afforded by sections 4 (2) and 2 (b) of
the Securities Act and Regulation D promulgated there under. The Company sold
100,000 shares at a price of $0.04 per share for a total amount raised of
$25,000.
NOTE 4 - COMMITMENTS AND CONTINGENCIES
Operating leases
The Company leases retail space for its restaurant and pool hall. The facility
lease is for a period of two years and five months. The lease provides a
renewal option of two five-year additional terms. Total rent expense was
$37,992 for the period ended June 30, 2000.
Estimated future minimum lease payments as of June 30, 2000 are as follows:
<TABLE>
<S> <C>
Year ending December 31, 2000 $0
Year ending December 31, 2001 $0
Year ending December 31, 2002 $0
Year ending December 31, 2003 $0
Year ending December 31, 2004 $0
-----
$0
</TABLE>
