U.S. Securities and Exchange Commission
Washington D.C. 2054 9
Form 10-QSB
[x] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the Quarter Ended June 30, 1999
OR
[ ] Transition Report Pursuant to Section 13 or 15 (d) or the
Securities Exchange Act of 1934.
Commission File Number 33-65573
Sportsman's Wholesale Company
(name of small business issuer as specified in its charter)
Nevada 84-1408762
(State of other jurisdiction (I.R.S. employer
incorporation or organization) identification No.)
55 West 200 North, Provo, UT 84601
(Address of principal executive offices)
Registrant's telephone no., including area code: 801 377-0874
Former name, former address, and former fiscal year, if changed
since last report.
Securities registered pursuant to Section 12(b) or the Exchange Act: None
Securities registered pursuant to Section 12(g) or the Exchange Act: None
Check whether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15 (d) or the Exchange Act during the preceding 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 X
Common Stock outstanding at August 16, 1999 - 1,603,500 of $0.0001 par
value Common Stock.
<PAGE>
PART 1 FINANCIAL INFORMATION
Item 1 Financial Statements
The Financial Statements of the Registrant required to be filed with
this 10-QSB Quarterly Report were prepared by management together with Related
Notes. In the opinion of management, the Financial Statements fairly present
the financial condition of the Registrant.
SPORTSMAN'S WHOLESALE COMPANY
(Development Stage Company)
CONDENSED BALANCE SHEETS
[Unaudited]
<TABLE>
June 30, 1999 Dec. 31, 1998
_____________ ______________
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 2,341 $ 1,624
Inventory 5,183 625
Accounts Recievable 1,800 0
Vehicle, net depreciation (303) 1,197 1,304
______________ ______________
Total Current Assets $ 10,521 $ 3,553
OTHER ASSETS: 0 0
______________ ______________
TOTAL ASSETS: $ 10,521 $ 3,553
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
June 30, 1999 Dec. 31, 1998
_______________ ______________
CURRENT LIABILITIES:
Accounts Payable $ 16,375 $ 12,854
Accrued Expenses 3,706 4,315
Related Notes Payable 41,500 27,500
______________ ______________
Total Current Liabilities $ 61,581 $ 44,669
STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock, $.0001 par value
50,000,000, 1,503,500 issued
and outstanding. 150 150
Additional paid in capital 3,975 3,975
Accumulated deficit (55,185) (45,241)
______________ ______________
Total Stockholders' Equity $ (51,060) $ (41,116)
TOTAL LIABILITIES & EQUITY $ 10,521 $ 3,553
The accompanying notes are an integral part of these financial statements.
NOTE: The balance sheet at December 31, 1999 was taken from the
audited financial statements at that date and condensed.
<PAGE>
SPORTSMAN'S WHOLESALE COMPANY
[Development Stage Company]
CONDENSED STATEMENTS OF OPERATIONS
[Unaudited]
</TABLE>
<TABLE>
For the Three For the Three From Inception,
Months Ended Months Ended Feb. 5, 1997
June 30, 1999 June 30, 1998 June 30,1999
_____________ _____________ _____________
<S> <C> <C> <C>
REVENUE:
Clays consulting fees $ 1,800 $ 0 $ 1,800
Inventory Sale 0 0 306
Cost of Goods Sold 0 0 (275)
_____________ _____________ _____________
Total Revenue $ 1,800 $ 0 $ 1,831
EXPENSES:
General and
Administrative Expenses $ 1,123 $ 6,702 $ 55,138
Interest Expense 1,038 0 1,278
_____________ ______________ ____________
Income (Loss) from operation $ (361) (6,072) $(55,185)
Other Income: 0 0 0
Total Other Income 0 0 0
_____________ ______________ ____________
NET LOSS $ (361) $ (6,702) $ (55,185)
Net Loss Per Share 0.00 0.00 0.00
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
SPORTSMAN'S WHOLESALE COMPANY
(Development Stage Company)
CONDENSED STATEMENTS OF OPERATIONS
[Unaudited]
<TABLE>
For the Six For the Six From Inception,
Months Ended Months Ended Feb. 5, 1998
June 30, 1999 June 30, 1998 June 30,1999
_____________ _____________ _____________
<S> <C> <C> <C>
REVENUE:
Clays consulting fees $ 1,800 $ 0 $ 1,800
Inventory Sale 306 0 306
Cost of Goods Sold (275) 0 (275)
_____________ _____________ _____________
Total Revenue $ 1,831 $ 0 $ 1,831
EXPENSES:
General and
Administrative Expenses $ 9,680 $ 9,175 $ 55,138
Interest Expense 2,095 345 1,278
_____________ _____________ ____________
Income (Loss) from operation $ (9,944) $ (9,520) $ (55,185)
Other Income: 0 0 0
Total Other Income 0 0 0
_____________ _____________ _____________
NET LOSS $ (9,994) $ (9,520) $ (55,185)
Net Loss Per Share 0.00 0.01 0.00
</TABLE>
The accompanying notes are an integral part of these financial statements.
[PAGE]
SPORTSMAN'S WHOLESALE COMPANY
(Development Stage Company)
Consolidated Statement of Stockholders' Deficit
February 5, 1998 (Date of Inception) to June 30, 1999
Additional
Preferred Stock Common Stock Paid-in Accumulated
Shares Amount Shares Amount Capital Deficit
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Balance at
February 5, 1998 - $ - - $ - $ - $ -
Issuance of
common stock for
cash - - 503,500 50 3,075 -
Issuance of
common stock in
exchange for
subsidiary - _ 1,000,000 100 900 -
Net loss for period - - - - - (55,185)
ended June 30, 1999
______________________________________________________
Balance at
June 30, 1999 - $ - 1,503,500 $150 $ 3,975 $(55,185)
</TABLE>
<PAGE>
SPORTSMAN'S WHOLESALE COMPANY
(Development Stage Company)
NOTES TO UNAUDITED CONDENSED &CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Condensed Financial Statements - The accompanying financial statements have
been prepared by the Company without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position and results of operations at June 30,
1999 and for all the periods presented have been made.
Organization - Sportsman's Wholesale Company (Sportsman's) was incorporated
under the laws of the state of Nevada in March of 1996. Cap's Sporting Goods
Wholesale, Inc. (Caps) was incorporated under the laws of the state of Utah
in February 1998.
From March 1996 until February 5, 1998 (date of inception) Sportsman's was an
inactive company. On February 5, 1998, Sportsman's became a development stage
enterprise as defined in Statement of Financial Accounting Standards No. 7,
"Auditing and Reporting by Development Stage Enterprises."
On April 30, 1998, Sportsman's and Caps entered into an agreement and plan of
share exchange, whereby the sole shareholder of Caps would exchange all of
the issued and outstanding common stock held in Caps, for common stock of
Sportsman's. At the time of the exchange both Sportsman's and Caps were
owned by the same individual. The exchange resulting in 1,000,000 shares of
Caps common stock being exchanged for 1,000.000 shares of Sportsman's common
stock.
The consolidated financial statements consists of Sportsman's and its wholly
owned subsidiary Caps (the Company), from February 5, 1998 (date of
inception) to December 31, 1998, as any transactions from February 5, 1998 to
April 30, 1998 for the companies were immaterial. All significant
intercompany balances and transactions have been eliminated.
Concentration of Credit Risk - The Company maintains its cash in bank deposit
accounts which, at times, may exceed federally insured limits. The Company
has not experienced any losses in such accounts and believes it is not exposed
to any significant credit risk on cash and cash equivalents.
Cash and Cash Equivalents - For purposes of the statement of cash flows, cash
includes all cash and investments with original maturities to the Company of
three months of less.
Inventory - Inventory consists of finished goods and is recorded at the lower
of cost or market, cost being determined on a first-in-first-out (FIF0)
method.
Vehicle - The Company's vehicle is recorded at cost less accumulated
depreciation. Depreciation is provided using the straight-line method over
<PAGE>
the estimated useful life. Expenditures for maintenance and repairs are
expensed when incurred and betterments are capitalized.
Income Taxes - Deferred income taxes are provided in amounts sufficient to
give effect to temporary differences between financial and tax reporting.
Earnings Per Share - The computation of basic earnings per common share is
based on the weighted average number of shares. The computation of diluted
earning per common share of is based on the weighted average number of shares
outstanding using the per share during the period plus the common stock
equivalents which would arise from the exercise of stock options and warrants
outstanding using the per share during the period. Common stock equivalents
are not included in the diluted earnings per share calculation when their
effect is antidilutive.
Use of Estimates in Financial Statements - The preparation of financial
statements in conformity requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the
financial statements. Actual results could differ from those estimates.
Income Taxes - The benefit for income taxes is different from amounts which
would be provided by applying the statutory federal income taxes for the
following reasons:
<TABLE>
<S> <C>
Federal income tax benefit
a statutory rate $ 7,000
Change in valuation allowance (7,000)
___________
$ __
Deferred tax assets (liabilities) consist of the following:
Net operating loss carry forwards $ 7,000
Valuation allowance $ (7,000)
___________
$ __
At December 31, 1998, the Company has a net operating loss carry forward
available to offset future taxable income of approximately $45,000, which will
begin to expire in 2018. The utilization of the net operating loss
carryforward is dependent upon the tax laws in carry forwards can be utilized.
The Tax Reform Act of 1986 significantly limits the annual amount that can be
utilized for this carryforward as a result of the change in ownership
Supplemental Cash Flow Disclosure - There were no amounts paid for interest or
income taxes for the period of February 5, 1998 (date of inception) to June
30, 1999.
NOTE 2 - GOING CONCERN
The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As of June 30, 1998, the
Company had an accumulated stockholders' deficit of $51,060 and incurred a
loss of $55,185 for the perod February 5, 1998 (date of inception) to June
30, 1998. These conditions raise substantial doubt about the ability of the
Company to continue as a going concern. The consolidated financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
<PAGE>
NOTE 3 - RELATED PARTY TRANSACTIONS
The related party notes payable consist of notes payable to an entity owned by
the spouse of an officer/shareholder. The notes are unsecured, due on demand
and bear interest of 12%. At June 30, 1999, the Company had accrued interest
payable and recognized interest expense of $3,373 related to these notes.
NOTE 4 - COMMON STOCK
On January 15, 1998 the company issued 500,000 shares in consideration for
$500.00 at a par value of $.001 to Fred L. Hall, the sole officer and director
of the company.
On February 19, 1998 Cap's Sporting Goods issued 1,000,000 shares of common
stock in consideration of $1,000.00 at a par value of $.001 to Mr. Hall, the
Company's sole officer and director.
On March 16, 1998 the company amended it's articles of incorporation to change
the par value of it's common stock from .001 to .0001.
In April 1998, Sportsman's acquired Cap's bringing the total outstanding
shares of common stock of Sportsman's Wholesale Company to 1,500,000.
During late June of 1998, 3,500 additional restricted common shares of
Sportsman's in consideration of $2,625, to three other investors
in a private offering.
On July 15, 1999 the Company closed its public stock offering and issued
100,000 shares of stock in consideration of $150,000 at a par value of .0001.
NOTE 5 - SUBSEQUENT EVENTS
Pursuant to Section 8(a) of the Securities Act of 1933, the company's SB2
registration statement for a $150,000 public stock offering was approved on
July 9, 1999 and was subsequently closed on July 15, 1999.
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Plan of Operation
Sportsman's was incorporated under the state of Nevada on March 13,1996 for
the purpose of becoming a wholesaler of sporting goods, primarily associated
with the shooting sports. Because of lack of funding, Sportsman's has not
been able to commence any significant operations. In April 1998, Sportsman's
acquired all of the outstanding stock of Cap's Sporting Goods Wholesale, Inc.
Sportsman's has concluded to begin its wholesale sporting goods business
through its new operating subsidiary, Cap's.
In December, 1998, the Company agreed with a local Utah shooting club to
acquire the club's shooting facilities for approximately $20,000 cash,
contingent on the completion of its public offering. Subsequently, the
shooting sports facilities were purchased on August 4, 1999 for $17,425. This
acquisition gives Sportsman's its first outlet for shooting sports products.
During the first quarter of 1999, Sportsman's organized and sponsored three
National Sporting Clays Association shooting tournaments at a local shooting
club with the intent of developing awareness among local shooters of
Sportsman's and its intent to enter the wholesale sporting goods business.
Three more such shooting tournaments were promoted and sponsored by Sportsman's
in the second quarter of 1999. Six more tournaments are scheduled
during the remainder of 1999, and Sportsman's intends to sponsor and advertise
at all of these tournaments.
During the second quarter of 1999, Sportsman's was able to acquire the
inventory of Great Basin Fly Shop for $4,326, which was taken from existing
cash working capital. This is the first inventory acquisition by Sportsman's
and will be used for resale.
Sportsman's has found two local gun clubs who are willing to purchase clay
targets from Sportsman's at prices that Sportsman's has negotiated with a
manufacturer in the Pacific Northwest.
Liquidity
The Company completed a public offering on July 15, 1999 which generated
$150,000 in cash proceeds for the operation of the Company. Management feels
that the Company will be able to operate sufficiently during its development
stage using these funds.
RESULTS OF OPERATIONS
SIX-MONTHS PERIODS ENDED JUNE 30, 1999 AND JUNE 30, 1998
For the six month period ended June 30, 1999, and 1998 the Company incurred
$11,775 and $9,520, respectively, in general and administrative exlpenses that
were mostly related to the Comapn's SB2 offering. The Company also generated
$1,831 in net revenues for the 1999 six month period as a result of increased
operations for the Company.
PART II OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
None
ITEM 2 CHANGE IN SECURITIES
None
ITEM 3 DEFAULTS ON SENIOR SECURITIES
None
ITEM 4 SUBMISSION ON MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5 OTHER INFORMATION
None
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
SPORTSMAN'S WHOLESALE COMPANY
Date: 8/16/99 By:/s/Fred L. Hall, CEO/President
-----------------------------------
Fred L. Hall
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> 12-31-1999
<PERIOD-END> 06-30-1999
<CASH> 2,341
<SECURITIES> 0
<RECEIVABLES> 1,800
<ALLOWANCES> 0
<INVENTORY> 5,183
<CURRENT-ASSETS> 9,324
<PP&E> 1,500
<DEPRECIATION> (303)
<TOTAL-ASSETS> 10,521
<CURRENT-LIABILITIES> 61,581
<BONDS> 0
0
0
<COMMON> 150
<OTHER-SE> (51,210)
<TOTAL-LIABILITY-AND-EQUITY> 10,521
<SALES> 2,106
<TOTAL-REVENUES> 2,106
<CGS> 275
<TOTAL-COSTS> 275
<OTHER-EXPENSES> 11,775
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (2,095)
<INCOME-PRETAX> (9,944)
<INCOME-TAX> (9,944)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,994)
<EPS-BASIC> .00
<EPS-DILUTED> .00
</TABLE>
