Securities Exchange Commission
Washington, D.C. 20549
Form 10-Q
[X] Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission File No.:
Eight Ball Corporation, d/b/a Westchester Sports Grill
(Exact name of registrant as it appears in its charter)
Nevada
(State or jurisdiction of Incorporation or organization)
95-4666270
(IRS Employer Identification No.)
5630 West Manchester Blvd. Los Angeles, CA 90045
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code: (702) 768-0555
Securities registered pursuant to Section 12 (b) of the Act: None
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 92) has been subject to such filing
requirements for the past 90 days. Yes _______ No ________
At the end of the quarter ending March 31, 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
Balance Sheet
Statement of Operations
Statement of Stockholders' Equity
Statement of Cash Flows
Notes to Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of operation.
Results of Operations
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS
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.
EIGHT BALL CORPORATION
FINANCIAL STATEMENTS
March 31, 2000
EIGHT BALL CORPORATION
CONTENTS
PAGE
----
INDEPENDENT AUDITOR'S REPORT 1
FINANCIAL STATEMENTS
BALANCE SHEET 2
STATEMENT OF OPERATIONS 3
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY 4
STATEMENT OF CASH FLOWS 5
NOTES TO FINANCIAL STATEMENTS 6-7
KDS
KURT D. SALIGER, CPA
CERTIFIED PUBLIC ACCOUNTANT
INDEPENDENT AUDITOR'S REPORT
BOARD OF DIRECTORS
EIGHT BALL CORPORATION
LAS VEGAS, NEVEDA
I HAVE AUDITED THE ACCOMPANYING BALANCE SHEET OF EIGHT BALL CORPORATION,
AS OF March 31, 2000 AND THE RELATED STATEMENTS OF OPERATIONS,
STOCKHOLDERS' EQUITY AND CASH FLOWS FOR THE YEAR THEN ENDED. THESE
FINANCIAL STATEMENTS ARE THE RESPONSIBILITY OF THE COMPANY'S MANAGEMENT.
MY RESPONSIBILITY IS TO EXPRESS AN OPINION ON THESE FINANCIAL STATMENTS 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 statments 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 March 31, 2000 and the results of their operations their cash flows for
the year then ended in conformity with generally accepted accounting principles.
Kurt D. Saliger, CPA
May 2, 2000
5000 W. Oakey, Suite A-4
Las Vegas, NV 89146
EIGHT BALL CORPORATION
BALANCE SHEET
March 31, 2000
<TABLE>
<CAPTION>
<S> <C>
ASSETS
CURRENT ASSETS
CASH $145
INVENTORY $12,442
ACCOUNTS RECEIVABLE $0
------
TOTAL CURRENT ASSETS $12,587
PROPERTY AND EQUIPMENT, NET $21,219
OTHER ASSETS $0
-------
TOTAL ASSETS $33,806
=======
LIABILITES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
ACCOUNTS PAYABLE $39,523
ACCURED LIABILITIES $20,278
CURRENT PORTION, LONG TERM DEBT $0
-------
TOTAL CURRENT LIABILITIES $59,801
LONG-TERM DEBT $0
STOCKHOLDERS'EQUITY
COMMON STOCK, $.001 PAR VALUE
AUTHORIZED 50,000,000 SHARES; ISSUED
AND OUTSTANDING 150,000 SHARES
DECEMBER 31, 1999 $150
ADDITIONAL PAID IN CAPITAL $74,850
RETAINED EARNINGS (DEFICIT) ($100,995)
----------
Total Stockholders' Equity ($25,995)
TOTAL LIABLITIES AND
STOCKHOLDERS' EQUITY $(33,806)
==========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
EIGHT BALL CORPORATION
STATEMENT OF OPERATIONS
FROM JANUARY 1, 2000 TO March 31, 2000
<TABLE>
<CAPTION>
<S> <C>
REVENUES $70,022
COSTS OF REVENUES ($28,444)
---------
GROSS PROFIT $41,578
OPERATION EXPENSES
SELLING, GENERAL AND
ADMINISTRATIVE $40,828
DEPRECIATION $786
TOTAL OPERATION EXPENSES $41,614
---------
INCOME (LOSS) FROM OPERATIONS ($36)
Other Income (expenses)
Gain on sale of assets $0
Interest expense $0
--------
INCOME (LOSS) BEFORE INCOME TAXES ($36)
INCOME TAXES $0
---------
NET PROFIT (LOSS) ($36)
=========
NET PROFIT (LOSS)
PER SHARE ($0.0002)
AVERAGE NUMBER OF
SHARES OF COMMON
STOCK OUTSTANDING 150,000
=========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
EIGHT BALL CORPORATION
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
MARCH 31, 2000
<TABLE>
<CAPTION>
COMMON STOCK
- ------------
<S> <C> <C> <C> <C>
NUMBER ADDITIONAL RETAINED
OF AMOUNT PAID IN EARNINGS
SHARES CAPITAL (DEFICIT)
------ ------ ---------- ---------
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 DEC. 31, 1997 50,000 $50 $49,950 ($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 MARCH 31, 2000 ($36)
------- ---- -------- ---------
BALANCE MARCH
31, 2000 150,000 $150 $74,850 ($100,995)
======= ==== ======= ==========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
EIGHT BALL CORPORATION
STATEMENTS OF CASH FLOWS
FROM JANUARY 1, 2000 TO MARCH 31, 2000
<TABLE>
<CAPTION>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME (LOSS) ($36)
Adjustments to reconcile net income (loss)
to cash provided by operating activities:
Depreciation $786
Decrease in accounts receivable $0
Increase in inventory ($2,740)
Increase in accounts payable ($11,350)
Increase in accrued liabilities $13,240
----------
Net cash provided by operating activities ($100)
----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment $0
----------
Net cash (used in) investing activities $0
----------
CASH FLOWS FROM FINANCING ACTIVITIES
Issue common stock $0
----------
Net increase (decrease) in cash ($100)
Cash, January 1, 2000 $245
----------
Cash, March 31, 2000 $145
==========
</TABLE>
See accompanying notes to financial statements.
EIGHT BALL CORPORATION
NOTES TO FINANCIAL STATEMENTS
March 31, 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 preperation of financial statments 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 a
maturity of three months or less are considered to be cash equivalents.
There were no cash equivalents as of March 31, 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 differenced between financial and tax reporting. Deferred
tax expense (benefit) results from the net change during the year of deferred
tax assets and liabilities.
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 March
31, 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 thereunder. 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
$14,592 for the period ended March 31, 2000.
Estimated future minium lease payments as of March 31, 2000 are as
follows:
Year ending December 31, 2000 $0
Year ending December 31, 2001 $0
Year ending December 31, 2003 $0
Year ending December 31, 2004 $0
--------
$0
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.
Director Jose F. Garcia resigned effective January 1, 2000.
Item 6. Exhibits and Reports on Form 8-K.
None.
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, d/b/a Westchester Sports Grill.
Dated: May , 2000 By: /s/ Alfonso Hernandez
Alfonso Hernandez, President
