SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-KSB
ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the year ended December 31, 1999.
Commission File Number 000-26211
EIGHT BALL CORPORATION, DBA
WESTCHESTER SPORTS GRILL
(Exact name of registrant as specified in its charter)
Nevada 95-4666270
(State of organization) (I.R.S. Employer Identification No.)
5630 West Manchester Blvd. Los Angeles, CA 90045
(Address of principal executive offices)
Registrant's telephone number, including area code: (702) 768-0555.
Registrant' Attorney: Shawn F. Hackman, Esq.
3360 W. Sahara, Suite 200
Las Vegas, NV 89102
Tele: 702-732-2253
Fax: 702-940-4006
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.001 par value per share
Check whether the issuer (1) filed all reports required to be file by
Section 13 or 15(d) of the Exchange Act during the past 12 months and
(2) has been subject to such filing requirements for the past 90 days.
YES ()
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B not contained in this form, and no
disclosure will be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in
PART III of this Form 10-KSB or any amendments to this Form 10-KSB. []
Issuer's Revenue during the year ended December 31, 1999: $0
DOCUMENTS INCORPORATED BY REFERENCE:
The Company's form 10-SB12G filed on 5/28/1999, and the exhibits
thereto, are incorporated by reference. A list of those exhibits is
provided in ITEM 13 below.
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
Background
Eight Ball Corporation, dba Westchester Sports Grill (the "Company") is
a Neveda corporation formed on October 9, 1997. Its principal place of
business is located at 5630 West Manchester Blvd., Los Angeles, CA
90045. The Company intends it Westchester Grill to serve drinks and
food in an atmosphere featuring pool tables, displays of sports
memorabilia, and TV monitors which would mainly show sporting events.
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
of 1933, as amended (the "Securities Act") and Regulation D promulgated
thereunder. The Company sold 100,000 shares at a price of $0.25 per
share for a total amount raised of $25,000.
Business of Issuer
The Company's mission is to finish developing and then operate its
Westchester Sports Grill. The Company intends its Westchester Sports
Grill to serve drinks and food in an atmosphere featuring pool tables,
displays of sports memorabilia, and TV monitors which would mainly show
sporting events.
ITEM 2. DESCRIPTION OF PROPERTY
The company currently has a five year lease for 4,100 square feet of
space at 5630 West Manchester Avenue, Los Angeles, CA 90045 for
$ 4,864.00 per month.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal proceedings
and, to the best of its knowledge, no such action by or against the
Company has been threatened.
ITEM 4. SUBMISSION OF MATTERS TO SHAREHOLDERS' VOTE
None
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Company's common stock is not quoted on the over-the-counter market
in the United States under the symbol . Management has not undertaken
any discussions, preliminary or otherwise, with any prospective market
maker concerning the participation of such market maker in the after-
market for the Company's securities and management does not intend to
initiate any such discussions until such time as the Company has
consummated a merger or acquisition. There is no assurance that a
trading market will ever develop or, if such a market does develop,
that it will continue.
Market Price
The Registrant's Common Stock is not quoted at the present time.
Effective August 11, 1993, the Securities and Exchange Commission
adopted Rule 15g-9, which established the definition of a "penny
stock," for purposes relevant to the Company, as any equity security
that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless exempt,
the rules require: (i) that a broker or dealer approve a person's
account for transactions in penny stocks; and (ii) the broker or dealer
receive from the investor a written agreement to the transaction,
setting forth the identity and quantity of the penny stock to be
purchased. In order to approve a person's account for transactions in
penny stocks, the broker or dealer must (i) obtain financial
information and investment experience and objectives of the person; and
(ii) make a reasonable determination that the transactions in penny
stocks are suitable for that person and that person has sufficient
knowledge and experience in financial matters to be capable of
evaluating the risks of transactions in penny stocks. The broker or
dealer must also deliver, prior to any transaction in a penny stock, a
disclosure schedule prepared by the Commission relating to the penny
stock market, which, in highlight form, (i) sets forth the basis on
which the broker or dealer made the suitability determination; and (ii)
that the broker or dealer received a signed, written agreement from the
investor prior to the transaction. Disclosure also has to be made about
the risks of investing in penny stocks in both public offerings and in
secondary trading, and about commissions payable to both the broker-
dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in
cases of fraud in penny stock transactions. Finally, monthly statements
have to be sent disclosing recent price information for the penny stock
held in the account and information on the limited market in penny
stocks.
The National Association of Securities Dealers, Inc. (the "NASD"),
which administers NASDAQ, has recently made changes in the criteria for
initial listing on the NASDAQ Small Cap market and for continued
listing. For initial listing, a company must have net tangible assets
of $4 million, market capitalization of $50 million or net income of
$750,000 in the most recently completed fiscal year or in two of the
last three fiscal years. For initial listing, the common stock must
also have a minimum bid price of $4 per share. In order to continue to
be included on NASDAQ, a company must maintain $2,000,000 in net
tangible assets and a $1,000,000 market value of its publicly-traded
securities. In addition, continued inclusion requires two market-makers
and a minimum bid price of $1.00 per share.
Management intends to strongly consider undertaking a transaction with
any merger or acquisition candidate which will allow the Company's
securities to be traded without the aforesaid limitations. However,
there can be no assurances that, upon a successful merger or
acquisition, the Company will qualify its securities for listing on
NASDAQ or some other national exchange, or be able to maintain the
maintenance criteria necessary to insure continued listing. The failure
of the Company to qualify its securities or to meet the relevant
maintenance criteria after such qualification in the future may result
in the discontinuance of the inclusion of the Company's securities on a
national exchange. In such events, trading, if any, in the Company's
securities may then continue in the non-NASDAQ over-the-counter market.
As a result, a shareholder may find it more difficult to dispose of, or
to obtain accurate quotations as to the market value of, the Company's
securities.
Holders
There are 29 holders of the Company's Common Stock. 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. The
Company sold 100,000 shares at a price of $0.25 per shares for a total
amount raised of $25,000, pursuant to 504 of Regulation D.. All of the
issued and outstanding shares of the Company's Common Stock were issued
in accordance with the exemption from registration afforded by Section
4(2) of the Securities Act of 1933.
Dividends
The Registrant has not paid any dividends to date, and has no plans to
do so in the immediate future.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS
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.
The Company intends for its Westchester Sports Grill to serve 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. The Company anticipates its
patronage to be non-seasonal.
The Company plans to have its Westchester Sports Gill open from
11 a.m. to 2 a.m. Monday through Friday, and 8 a.m. to 2 a.m. Saturday
and Sunday. The Company believes these hours are optimum for
attracting its targeted patrons. No persons under 18 years of age
shall be allowed within the establishment between the hours of 10 a.m.
and 5 p.m., Monday through Friday, unless accompanied by an adult. The
Company intends its Westchester Sports Grill to serve alcoholic drinks
and food in an atmosphere featuring billiard tables, displays of sports
memorabilia, and TV monitors which would mainly show sporting events.
At least two licensed uniformed security guards shall patrol
inside and outside the property, including any associated parking
areas. Security personnel shall be 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.
The bar and grill in the Westchester Sports Gill total 4,100
square feet in area. However, the Company will not know the specific
maximum allowed seating capacity until construction is completed and
the premises have been inspected by the local fire department. The
property's conditional use permit, which was granted April 17, 1998 by
the City of Los Angeles, limits total capacity to 125 patrons.
The Company'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.
Off -premises dining continues to grow and can be exploited
by providing alcoholic beverages and an American food menu
and advertising that menu and alcoholic beverages locally
on a consistent basis through direct mailings.
The U.S. Census Bureau predicts that in influence of
children will continue to grow in the years ahead in
response to the baby-boomers' baby production. Four
million children a year in this country, and that trend is
expected to continue through the year 2000.
Ambiance give restaurants a competitive edge. The 1990's
have seen restaurant customers demanding more entertainment
for their dollar which the Company intends to deliver with
the sports atmosphere of its Westchester Sports Grill.
Menu development is important to the management of the
Westchester Sports Grill. The Company intends to re-evaluate its menu
on a regular basis, and all promotional menu items are to be tracked
according to popularity and operating margin. The Company intends to
price and portion its entire menu to reflect a minimum cost of goods
sold.
The Company also intends to monitor competing restaurants and
bars in order to remain competitive. The Company believes its most
important competitive advantage over Burger King, Pollo Loco, and
Denny's is its flexibility with respect to its menu.
The Company's Management, from its many years of experience in
the restaurant business, has learned that food has to touch all of the
senses. The Company plans to offer classic American fare somewhat
different from the food which its three nearby aforementioned
competitors offer. The Company also plans 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
The Company intends that its customers will get their food
prepared their way, within reason, when ordering.
The Company has not yet planned a specific menu, but an average
ticket price of $25.00 per table. The Company may adjust portion sizes
and prices and make other changes to its menu based on its experience
with customers after the Westchester Grill commences operations.
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 plans to regularly review the competitions menu offerings
to maintain a competitive stance in the marketplace and to offer a
choice of quality food and beverages values to its customers. The
Company's goal is to maintain a maximum cost of goods sold in order to
maintain an achievable high net profit margin.
The Company will hold a grand opening, to which it will invite
senior officials.(and their spouses) of local companies, government
agencies, schools, and other organizations within several miles of the
grill to eat, drink, dance to live music, and socialize.
The Company will 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. The Company'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 the Company plans to
provide 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 the Company 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. The Company plans to
specifically target customers directly through local publications and
direct mailings, using the following approaches
Position the Company as an interesting sports grill and bar
with live entertainment, dancing, quality food, and
alcoholic beverages.
Favorably compare the Company's expertise, advantages,
services and products with other restaurants and bars. To
be effective and to present a professional image to
prospective patrons, the Company 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 the Company could
possible arrange interviews at local trade shows and fairs.
Participate in appropriate local trade shows and fairs. To
reduce costs, the company 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. The Company 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. The
Company 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 the Company of 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. The Company expects such exposure to build
credibility and market acceptance.
Management
The Company's founders possess many years of restaurant and retail
experience between them. They understand the importance of a strong
management team which believes in day-to-day hands-on operational
management covering all shifts. The Company 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, the Company'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, the Company may combine, rearrange, or assign new
duties and responsibilities among its employees and officers.
The Company 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. The company 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. The Company plans to add additional staff as the
business cycle dictates.
The Company 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. The Company plans to hire only experienced qualified people
and ensure that its staff are adequately trained.
The Company believes that its customers will emphasize service and
support as one of their major concerns. The Company believes that they
will be impressed with the fast, full service that it plans to provide.
The Company 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.
The Company plans to demand that its waitstaff provide the very best in
quality services to the customer making certain that they are happy and
satisfied with their dining and bar experiences. The Company plans to
ensure that its personnel are thoroughly trained and undergo regular
performance evaluations.
The Company anticipates that none of the Company 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. The
Company 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, the Company currently offers no such benefits, and no plant to
offer such benefits exist.
ITEM 7. FINANCIAL STATEMENTS.
EIGHT BALL CORPORATION
FINANCIAL STATEMENTS
DECEMBER 31, 1999
DECEMBER 31, 1998
<TABLE>
EIGHT BALL CORPORATION
CONTENTS
<CAPTION>
PAGE
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<S> <C>
INDEPENDENT AUDITOR'S REPORT 1
FINANCIAL STATEMENTS
Balance Sheet 2
Statement of Operations 3
Statement of Changes in Stockholder's Equity
Statement of Cash Flows 5
Notes to Financial Statements 6-7
</TABLE>
KDS
KURT D. SALIGER, CPA
CERTIFIED PUBLIC ACCOUNTANT
MEMBER AMERICAN INSTITUTE OF
CERTIFIED PUBLIC ACCOUNTANTS
MEMBER NEVADA SOCIETY OF
CERTIFIED PUBLIC ACCOUNTANTS
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 December 31, 1999 and 1998, and the related statements of operations, changes
in stockholders' equity and cash flows for the years ended 1998 and 1999. 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 in accordance with standards established by the American Institute of
Certified Public Accountants.
I conducted my audit i 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 as of
December 31, 1998 and 1999, and the results of their operations and their cash
flows for the years ended 1998 and 1999 in conformity with generally accepted
accounting principles.
/s/ ______________
Kurt D. Saliger CPA
April 19, 2000
5000 W. Oakey, Suite A-4
Las Vegas, Nevada 89146
Phone: (702) 367-1988
Fax: (702) 870-8388
<TABLE>
EIGHT BALL CORPORATION
BALANCE SHEETS
<CAPTION>
December 31, 1998 December 31, 1999
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $641 $245
Inventory $6,660 $9,702
Accounts Receivable $0 $0
----------- -----------
TOTAL CURRENT ASSETS $7,301 $9,947
PROPERTY AND EQUIPMENT, NET $28,293 $22,005
OTHER ASSETS $0 $0
----------- -----------
TOTAL ASSETS $35,594 $31,952
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES
Accounts Payable $6,534 $28,173
Accrued Liabilities $16,887 $29,738
Current Portion, Long Term Debt $0 $0
---------- -----------
TOTAL CURRENT LIABILITIES $23,421 $57,911
LONG-TERM DEBT $0 $0
STOCKHOLDERS' EQUITY
Common Stock, $0.001 par value
authorized 50,000,000 shares; issued
and outstanding 150,000 and
150,000 shares, respectively $150 $150
Additional Paid In Capital $74,850 $74,850
Retained Earnings (Deficit) ($62,827) ($100,959)
----------- ------------
TOTAL STOCKHOLDERS' EQUITY $12,173 ($25,959)
----------- ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $35,594 $31,952
=========== ============
</TABLE>
See accompanying notes to financial statements.
<TABLE>
EIGHT BALL CORPORATION
STATEMENT OF OPERATIONS
<CAPTION>
For the year For the year
ended Dec. 31, ended Dec. 31,
1998 1999
<S> <C> <C>
REVENUES $83,264 $163,511
COSTS OF REVENUES ($51,981) ($76,190)
------------- ------------
GROSS PROFIT $31,283 $87,321
OPERATING EXPENSES
Selling, general and
administrative $89,739 $119,165
Depreciation $3,144 $6,288
------------- ------------
TOTAL OPERATING EXPENSES $92,883 $125,453
------------- ------------
INCOME (LOSS) FROM OPERATIONS ($61,600) ($38,132)
OTHER INCOME (EXPENSES)
Gain on sale of assets $0 $0
Interest expense $0 $0
INCOME (LOSS) BEFORE INCOME TAXES ($61,600) ($38,132)
Income Taxes $0 $0
------------- ------------
NET PROFIT (LOSS) ($61,600) ($38,132)
============= ============
NET PROFIT (LOSS)
PER SHARE ($0.4106) ($0.2542)
============= ============
AVERAGE NUMBER OF
SHARES OF COMMON
STOCK OUTSTANDING 150,000 150,000
============= ============
</TABLE>
See accompanying notes to financial statements.
<TABLE>
EIGHT BALL CORPORATION
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For The Year Ended December 31, 1998
And For The Year Ended December 31, 1999
<CAPTION>
Common Stock
------------
<S> <C> <C> <C> <C>
Number Additional Retained
of Paid In Earnings
Shares Amount 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)
------- ------- ---------- ---------
Balance December
31, 1999 150,000 $150 $74,850 ($100,959)
======= ======= ========== ==========
</TABLE>
See accompanying notes to financial statements.
<TABLE>
EIGHT BALL CORPORATION
STATEMENTS OF CASH FLOWS
<CAPTION>
For the For the
year ended year ended
December 31, December 31,
1998 1999
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) ($61,600) ($38,132)
Adjustments to reconcile net income (loss)
to cash provided by operating activities:
Depreciation $3,143 $6,288
Decrease in accounts receivable $45,000 $0
Increase in inventory ($6,660) ($3,042)
Increase in accounts payable $6,534 $21,639
Increase in accrued liabilities $16,887 $12,851
--------- ---------
Net cash provided by operating activities $3,304 ($396)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Property and Equipment ($31,436) $0
--------- ---------
Net cash (used in) investing activities ($31,436) $0
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Issue common stock $25,000 $0
--------- ---------
Net increase (decrease) in cash ($3,132) ($396)
Cash, Beginnig of Period $3,773 $641
--------- ---------
Cash, Ending of Period $641 $245
========= =========
</TABLE>
See accompanying notes to financial statements.
EIGHT BALL CORPORATION
NOTES TO FINANCIAL STATEMENTS
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 operated 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 a maturity
of three months or less are considered to be cash equivalents. There were no
cash equivalents as of December 31, 1998 and December 31, 1999.
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
straigh-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 Taxe." A deferred tax asset or liability is recorded
for all temporary differences between financial and tax reporting. Deferred
tax expense (benefit) results from the change during the year of deferred tax
assets and liabilities.
EIGHT BALL CORPORATION
NOTES TO FINANCIAL STATEMENTS (continued)
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 resulted if
dilutive common stock equivalents had been converted to common stock. As of
December 31, 1998 and December 31, 1999, 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 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 $15,000 for
the ended December 31, 1998. Total rent expense was $35,184 for the year ended
December 31, 1999.
Estimated future minimum lease payments as of December 31, 1998 as follows:
<TABLE>
<CAPTION>
<S> <C>
Year ending December 31, 1999 $52,152
Year ending December 31, 2000 $17,384
Year ending December 31, 2001 $0
Year ending December 31, 2002 $0
Year ending December 31, 2003 $0
--------
$69,536
</TABLE>
