UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB AMENDMENT 2
The American Sports Machine, Inc.
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(Name of Small Business Issuer in its Charter)
Florida 65-0877744
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(State or other jurisdiction of (I.R.S. Employer Identification no.)
incorporation or organization)
222 Lakeview Avenue, Suite 160-146
West Palm Beach, FL 33401
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (561) 832-5698
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered Each class to be registered
None None
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Securities to be registered under Section 12(g) of the Act:
Common Stock, $.0001 par value per share
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(Title of class)
Copies of Communications Sent to:
Donald F. Mintmire
Mintmire & Associates
265 Sunrise Avenue, Suite 204
Palm Beach, FL 33480
Tel: (561) 832-5696 - Fax: (561) 659-5371
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PART I
Item 1. Description of Business
Business Development
The American Sports Machine, Inc. ("ASM") was organized on June 2, 1995,
under the laws of the State of Florida, having the stated purpose of engaging in
any lawful activities. ASM was formed with the contemplated purpose to build
recreational centers for small organized sports activities including basketball,
handball, racquetball, as well as video games and other computer board sports
activities. The business concept and plan was based upon information obtained by
the incorporator several years before while working for an unrelated company
with the same concept and business plan. The incorporator and sole shareholder
was unable to obtain the cooperation and assistance of workers and investors to
implement the proposed plan. The primary area of development was to be in
Florida, but was never brought to the development stage. After development of a
business plan and efforts to develop the business failed, all efforts were
abandoned in 1996. At that time ASM was unable to obtain the necessary
contracts, store locations, other facilities, and was unable to obtain the
necessary financing, therefore was unable to operate.
ASM never engaged in an active trade or business throughout the period
from June 1995 until just recently. The ASM charter was suspended (subject to
reinstatement) by the State of Florida in 1996 for inactivity and failure to pay
annual fees and costs. Its active status was reinstated on December 1, 1998,
upon payment of all past due fees and costs. On December 1, 1998, all of the
issued and outstanding shares of the common stock of ASM were acquired from
Joseph Ashley, its then sole shareholder. The shares were purchased from Mr.
Ashley on behalf of the investor group. Mr. Ashley distributed the shares
directly to each member of the investor group. The original incorporator and
shareholder agreed to exchange the 500,000 issued and outstanding shares held by
such shareholder to the new 25 member investor group in exchange for a
commitment by the new shareholder group to pay the cost of reactivating the
corporation, providing for its reinstatement, and bringing its books and records
up to date. The total of 500,000 shares was distributed 20,000 shares to each of
twenty-five (25) shareholders. In addition, ASM received gross proceeds in the
amount of $20,000 from the sale of a total of 400,000 shares of common stock,
$.0001 par value per share (the "Common Stock"), in an offering conducted
pursuant to Section 3(b) and 4(2) of the Securities Act of 1933, as amended (the
"Act"), and Rules 505 and 506 of Regulation D promulgated thereunder. This
offering was made in the State of Georgia and the State of Florida. ASM
undertook the offering of shares of Common Stock on December 1, 1998. Also on
December 1, 1998, ASM issued 500,000 shares of its Common Stock to Ms. Angela
Michelle Bartolotta, the President, Secretary and Treasurer of ASM in
consideration and in exchange for services valued at$25,000.00 in connection
with the re-organization of ASM. On March 12, 1999, Ms. Bartolotta resigned her
position due to personal conflicts and other personal reasons and tendered her
500,000 shares of stock to ASM for cancellation. Such shares were in fact
canceled. The company issued 500,00 shares of its common stock to James Donald
Brock, Jr., in consideration and in exchange for services valued at$25,000.00 to
complete the reorganization of ASM. James Donald Brock, Jr. was also elected
President, Secretary, Treasurer, and Director of ASM. (See "Recent Sales of
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Unregistered Securities")
ASM then began to consider and investigate potential business
opportunities. ASM is considered a development stage company and, due to its
status as a "shell" corporation, its principal business purpose is to locate and
consummate a merger or acquisition with a private entity. Because of ASM's
current status of having limited assets and no recent operating history, in the
event ASM does successfully acquire or merge with an operating business
opportunity, it is likely that ASM's present shareholders will experience
substantial dilution and there will be a probable change in control of ASM.
On December 1, 1998, ASM also determined it should become active in
seeking potential operating businesses and business opportunities with the
intent to acquire or merge with such businesses.
ASM is voluntarily filing its registration statement on Form 10-SB in
order to make information concerning itself more readily available to the
public. Management believes that being a reporting company under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), could provide a
prospective merger or acquisition candidate with additional information
concerning ASM. In addition, management believes that this might make ASM more
attractive to an operating business as a potential business combination
candidate. As a result of filing its registration statement, ASM is obligated to
file with the Commission certain interim and periodic reports including an
annual report containing audited financial statements. ASM intends to continue
to voluntarily file these periodic reports under the Exchange Act even if its
obligation to file such reports is suspended under applicable provisions of the
Exchange Act.
Any target acquisition or merger candidate of ASM will become subject to
the same reporting requirements as ASM upon consummation of any such business
combination. Thus, in the event that ASM successfully completes an acquisition
or merger with another operating business, the resulting combined business must
provide audited financial statements for at least the two most recent fiscal
years, or in the event that the combined operating business has been in business
less than two years, audited financial statements will be required from the
period of inception of the target acquisition or merger candidate.
ASM's principal executive offices are located at 222 Lakeview Avenue,
Suite 160-157, West Palm Beach, FL 33401 and its telephone number is (561)
832-5698.
Business of Issuer
ASM has no recent operating history and no representation is made, nor
is any intended, that ASM will be able to carry on future business activities
successfully. Further, there can be no assurance that ASM will have the ability
to acquire or merge with an operating business, business opportunity or property
that will be of material value to ASM.
Management plans to investigate, research and, if justified, potentially
acquire or merge with one or more businesses or business opportunities. ASM
currently has no commitment or
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arrangement, written or oral, to participate in any business opportunity and
management cannot predict the nature of any potential business opportunity it
may ultimately consider. Management will have broad discretion in its search for
and negotiations with any potential business or business opportunity.
Sources of Business Opportunities
ASM intends to use various sources in its search for potential business
opportunities including its officer and director, consultants, special advisors,
securities broker-dealers, venture capitalists, member of the financial
community and others who may present management with unsolicited proposals.
Because of ASM's limited capital, it may not be able to retain on a fee basis
professional firms specializing in business acquisitions and reorganizations.
Rather, ASM will most likely have to rely on outside sources, not otherwise
associated with ASM, that will accept their compensation only after ASM has
finalized a successful acquisition or merger. ASM will rely upon the expertise
and contacts of such persons, will use notices in written publications and
personal contacts to find merger and acquisition candidates, the exact number of
such contacts dependent upon the skill and industriousness of the participants
and the conditions of the marketplace. None of the participants in the process
will have any past business relationship with management. To date, ASM has not
engaged nor entered into any definitive agreements nor understandings regarding
retention of any consultant to assist ASM in its search for business
opportunities, nor is management presently in a position to actively seek or
retain any prospective consultants for these purposes.
ASM does not intend to restrict its search to any specific kind of
industry or business. ASM may investigate and ultimately acquire a venture that
is in its preliminary or development stage, is already in operation, or in
various stages of its corporate existence and development. Management cannot
predict at this time the status or nature of any venture in which ASM may
participate. A potential venture might need additional capital or merely desire
to have its shares publicly traded. The most likely scenario for a possible
business arrangement would involve the acquisition of, or merger with, an
operating business that does not need additional capital, but which merely
desires to establish a public trading market for its shares. Management believes
that ASM could provide a potential public vehicle for a private entity
interested in becoming a publicly held corporation without the time and expense
typically associated with an initial public offering.
Evaluation
Once ASM has identified a particular entity as a potential acquisition
or merger candidate, management will seek to determine whether acquisition or
merger is warranted or whether further investigation is necessary. Such
determination will generally be based on management's knowledge and experience,
(limited solely to working history - See "Item 5. Directors, Executive Officers,
etc.") or with the assistance of outside advisors and consultants evaluating the
preliminary information available to them. Management may elect to engage
outside independent consultants to perform preliminary analysis of potential
business opportunities. However, because of ASM's limited capital it may not
have the necessary funds for a complete and exhaustive investigation of any
particular opportunity. Management will not devote full time to finding a merger
candidate, will continue to engage in outside unrelated activities, and
anticipates devoting no more than an average
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of five (5) hours weekly to such undertaking.
In evaluating such potential business opportunities, ASM will consider,
to the extent relevant to the specific opportunity, several factors including
potential benefits to ASM and its shareholders; working capital, financial
requirements and availability of additional financing; history of operation, if
any; nature of present and expected competition; quality and experience of
management; need for further research, development or exploration; potential for
growth and expansion; potential for profits; and other factors deemed relevant
to the specific opportunity.
Because ASM has not located or identified any specific business
opportunity as of the date hereof, there are certain unidentified risks that
cannot be adequately expressed prior to the identification of a specific
business opportunity. There can be no assurance following consummation of any
acquisition or merger that the business venture will develop into a going
concern or, if the business is already operating, that it will continue to
operate successfully. Many of the potential business opportunities available to
ASM may involve new and untested products, processes or market strategies which
may not ultimately prove successful.
Form of Potential Acquisition or Merger
Presently ASM cannot predict the manner in which it might participate in
a prospective business opportunity. Each separate potential opportunity will be
reviewed and, upon the basis of that review, a suitable legal structure or
method of participation will be chosen. The particular manner in which ASM
participates in a specific business opportunity will depend upon the nature of
that opportunity, the respective needs and desires of ASM and management of the
opportunity, and the relative negotiating strength of the parties involved.
Actual participation in a business venture may take the form of an asset
purchase, lease, joint venture, license, partnership, stock purchase,
reorganization, merger or consolidation. ASM may act directly or indirectly
through an interest in a partnership, corporation, or other form of
organization, however, ASM does not intend to participate in opportunities
through the purchase of minority stock positions.
Because of ASM's current status and recent inactive status for the prior
two (2) years, and its concomitant lack of assets and relevant operating
history, it is likely that any potential merger or acquisition with another
operating business will require substantial dilution to ASM's existing
shareholders interests. There will probably be a change in control of ASM, with
the incoming owners of the targeted merger or acquisition candidate taking over
control of ASM. Management has not established any guidelines as to the amount
of control it will offer to prospective business opportunity candidates, since
this issue will depend to a large degree on the economic strength and
desirability of each candidate, and the corresponding relative bargaining power
of the parties. However, management will endeavor to negotiate the best possible
terms for the benefit of ASM's shareholders as the case arises. Management may
actively negotiate or otherwise consent to the purchase of any portion of their
common stock as a condition to, or in connection with, a proposed merger or
acquisition. In such an event, existing shareholders may not be afforded an
opportunity to approve or consent to any particular stock buy-out transaction.
However the terms of the sale of shares held by present management of ASM will
be extended equally to all other current shareholders.
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Management does not have any plans to borrow funds to compensate any
persons, consultants, or promoters in conjunction with its efforts to find and
acquire or merge with another business opportunity. Management does not have any
plans to borrow funds to pay compensation to any prospective business
opportunity, or shareholders, management, creditors, or other potential parties
to the acquisition or merger. In either case, it is unlikely that ASM would be
able to borrow significant funds for such purposes from any conventional lending
sources. In all probability, a public sale of ASM's securities would also be
unfeasible, and management does not contemplate any form of new public offering
at this time. In the event that ASM does need to raise capital, it would most
likely have to rely on the private sale of its securities. Such a private sale
would be limited to persons exempt under the Commissions's Regulation D or other
rule, or provision for exemption, if any applies. However, no private sales are
contemplated by ASM's management at this time. If a private sale of ASM's
securities is deemed appropriate in the future, management will endeavor to
acquire funds on the best terms available to ASM. However, there can be no
assurance that the Company will be able to obtain funding when and if needed, or
that such funding, if available, can be obtained on terms reasonable or
acceptable to them. ASM does not anticipate using Regulation S promulgated under
the Securities Act of 1933 to raise any funds any time within the next year,
subject only to its potential applicability after consummation of a merger or
acquisition.
In the event of a successful acquisition or merger, a finder's fee, in
the form of cash or securities of ASM, may be paid to persons instrumental in
facilitating the transaction. ASM has not established any criteria or limits for
the determination of a finder's fee, although most likely an appropriate
finder's fee will be negotiated between the parties, including the potential
business opportunity candidate, based upon economic considerations and
reasonable value as estimated and mutually agreed upon at that time. A finder's
fee would only be payable upon completion of the proposed acquisition or merger
in the normal case, and management does not contemplate any other arrangement at
this time. Current management has not in the past used any particular
consultants, advisors or finders. Management has not actively undertaken a
search for, nor retention of, any finder's fee arrangement with any person. It
is possible that a potential merger or acquisition candidate would have its own
finder's fee arrangement, or other similar business brokerage or investment
banking arrangement, whereupon the terms may be governed by a pre-existing
contract; in such case, ASM may be limited in its ability to affect the terms of
compensation, but most likely the terms would be disclosed and subject to
approval pursuant to submission of the proposed transaction to a vote of ASM's
shareholders. Management cannot predict any other terms of a finder's fee
arrangement at this time. If such a fee arrangement was proposed, independent
management and directors would negotiate the best terms available to ASM so as
not to compromise the fiduciary duties of the representative in the proposed
transaction, and ASM would require that the proposed arrangement would be
submitted to the shareholders for prior ratification in an appropriate manner.
Management does not contemplate that ASM would acquire or merge with a
business entity in which any officer or director of ASM has an interest. Any
such related party transaction, however remote, would be submitted for approval
by an independent quorum of the Board of Directors and the proposed transaction
would be submitted to the shareholders for prior ratification in an appropriate
manner. ASM's management has not had any contact, discussions, or other
understandings regarding any particular business opportunity at this time,
regardless of any potential conflict of interest issues. Accordingly, the
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potential conflict of interest is merely a remote theoretical possibility at
this time.
Possible Blank Check Company Status
While ASM may be deemed a "shell" company at this time, it does not
constitute a "blank check" company under pertinent securities law standards. A
"blank check" company under pertinent securities law standards is a company
whose business plan is to primarily pursue a merger or aquisition candidate
(i.e. no specific business plan), and which files a Registration Statement under
the 1933 Act and at such time priced its shares at less than $5.00 per share
while it continued to have no specific business plan. Accordingly, ASM is not
subject to securities regulations imposed upon companies deemed to be "blank
check companies." If ASM were to file a registration statement under Securities
Act of 1933 and, at such time, priced its shares at less than $5.00 per share
and continued to have no specific business plan, it would then be classified as
a blank check company.
If in the future ASM were to become a blank check company, adverse
consequences could attach to ASM. Such consequences can include, but are not
limited to, time delays of the registration process, significant expenses to be
incurred in such an offering, loss of voting control to public shareholders and
the additional steps required to comply with various federal and state laws
enacted for the protection of investors, including so-called "lock-up"
agreements pending consummation of a merger or acquisition that would take it
out of blank check company status.
Many states (excluding Florida where ASM is incorporated) have statutes,
rules and regulations limiting the sale of securities of "blank check" companies
in their respective jurisdictions. Management does not intend to undertake any
efforts to cause a market to develop in the companies securities or to undertake
any offering of ASM's securities, either debt or equity, until such time as ASM
has successfully implemented its business plan described herein. In the event
ASM undertakes the filing of a registration statement under circumstances that
classifies it as a blank check company the provisions of Rule 419 and other
applicable provisions will be complied with.
Rights of Shareholders
ASM amended its Articles of Incorporation on March 10, 1999, to
expressly provide that the Board of Directors is authorized to enter into on
behalf of the corporation and to bind the corporation without shareholder
approval, any and all acts approving the terms and conditions of a merger and/or
a share exchange, and shareholders affected thereby, shall not be entitled to
dissenters rights with respect thereto under any applicable statutory dissenters
rights provision. This provision expressly eliminates shareholder participation
in the merger and/or share exchange contemplated by ASM and expressly eliminates
any shareholders dissenters rights. ASM does not intend to provide its
shareholders with complete disclosure documentation including audited finance
statements concerning a target company and its business prior to any mergers or
acquisitions.
Competition
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Because ASM has not identified any potential acquisition or merger
candidate, it is unable to evaluate the type and extent of its likely
competition. ASM is aware that there are several other public companies with
only nominal assets that are also searching for operating businesses and other
business opportunities as potential acquisition or merger candidates. ASM will
be in direct competition with these other public companies in its search for
business opportunities and, due to ASM's limited funds, it may be difficult to
successfully compete with these other companies.
Employees
As of the date hereof, ASM does not have any employees and has no plans
for retaining employees until such time as business warrants the expense, or
until ASM successfully acquires or merges with an operating business. The
Company may find it necessary to periodically hire part-time clerical help on an
as-needed basis.
Facilities
ASM is currently using at no cost to ASM, as its principal place of
business offices of its current management, James Donald Brock, Jr., located in
Atlanta, Georgia. Although ASM has no written agreement and pays no rent for the
use of this facility, it is contemplated that at such future time as an
acquisition or merger transaction may be completed, ASM will secure commercial
office space from which it will conduct its business. Until such an acquisition
or merger, ASM lacks any basis for determining the kinds of office space or
other facilities necessary for its future business. ASM has no current plans to
secure such commercial office space. It is also possible that a merger or
acquisition candidate would have adequate existing facilities upon completion of
such a transaction, and ASM's principal offices may be transferred to such
existing facilities.
Industry Segments
No information is presented regarding industry segments. ASM is
presently a development stage company seeking a potential acquisition of or
merger with a yet to be identified business opportunity. Reference is made to
the statements of income included herein in response to part F/S of this Form
10-SB for a report of ASM's operating history for the past two fiscal years.
Item 2. Management's Discussion and Analysis or Plan of Operation
ASM is considered a development stage company with limited assets or
capital, and with no operations or income since approximately 1996. The costs
and expenses associated with the preparation and filing of this registration
statement and other operations of ASM have been paid for by a shareholder,
specifically James Donald Brock, Jr. (see Item 4, Security Ownership of Certain
Beneficial Owners and Management James Donald Brock, Jr. is the controlling
shareholder). Mr. Brock has agreed to pay future costs associated with filing
future reports under Exchange Act of 1934 if ASM is unable to do so. It is
anticipated that ASM will require only nominal capital to maintain the corporate
viability of ASM and any additional needed funds will most likely be provided by
ASM's existing shareholders or its sole officer and director in the immediate
future. Current shareholders have not agreed upon the terms and conditions of
future financing and such undertaking will be subject to future negotiations,
except for the express commitment of Mr. Brock to fund required 34 Act filings.
Repayment of any such funding will also be subject to such negotiations. The
ability of ASM to continue as a going concern long term (beyond 12-24 months)
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is contingent upon the successful completion of a business combination.
In the opinion of management, inflation has not and will not have a
material effect on the operations of ASM until such time as ASM successfully
completes an acquisition or merger. At that time, management will evaluate the
possible effects of inflation on ASM as it relates to its business and
operations following a successful acquisition or merger.
Management plans may but do not currently provide for experts to secure
a successful acquisition or merger partner so that it will be able to continue
as a going concern. In the event such efforts are unsuccessful, contingent plans
have been arranged to provide that the current Director of ASM is to fund
required future filings under the 34 Act without reimbursement, and existing
shareholders have expressed an interest in additional funding if necessary to
continue ASM as a going concern.
Plan of Operation
During the next twelve months, ASM will actively seek out and
investigate possible business opportunities with the intent to acquire or merge
with one or more business ventures. In its search for business opportunities,
management will follow the procedures outlined in Item 1 above. Because the
Company has limited funds, it may be necessary for the sole officer and director
to either advance funds to ASM or to accrue expenses until such time as a
successful business consolidation can be made. ASM will not make it a condition
that the target company must repay funds advanced by its officers and directors.
Management intends to hold expenses to a minimum and to obtain services on a
contingency basis when possible. Further, ASM's directors will defer any
compensation until such time as an acquisition or merger can be accomplished and
will strive to have the business opportunity provide their remuneration.
However, if ASM engages outside advisors or consultants in its search for
business opportunities, it may be necessary for ASM to attempt to raise
additional funds. As of the date hereof, ASM has not made any arrangements or
definitive agreements to use outside advisors or consultants or to raise any
capital. In the event ASM does need to raise capital most likely the only method
available to ASM would be the private sale of its securities. Because of the
nature of ASM as a development stage company, it is unlikely that it could make
a public sale of securities or be able to borrow any significant sum from either
a commercial or private lender. There can be no assurance that ASM will able to
obtain additional funding when and if needed, or that such funding, if
available, can be obtained on terms acceptable to ASM.
ASM does not intend to use any employees, with the possible exception of
part-time clerical assistance on an as-needed basis. Outside advisors or
consultants will be used only if they can be obtained for minimal cost or on a
deferred payment basis. Management is convinced that it will be able to operate
in this manner and to continue its search for business opportunities during the
next twelve months.
Item 3. Description of Property
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The information required by this Item 3 is not applicable to this Form
10-SB due to the fact that ASM does not own or control any material property.
There are no preliminary agreements or understandings with respect to office
facilities in the future.
Item 4. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information, as of July 15, 1999, with
respect to each person known by ASM to own beneficially more than 5% of ASM's
outstanding common stock, each director of ASM and all directors and officers of
ASM as a group.
Name of Address of Amount and Nature of Percent of Class
Beneficial Owner Beneficial Ownership
James Donald Brock, Jr. 500,000 35.7%
1933 Radar Rd Ne
Atlanta, GA 30345
All Executive Officers and Directors
as a Group (one person) 500,000 35.7%
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Item 5. Directors, Executive Officers, Promoters and Control Persons,
Compliance with Section 16(a) of the Exchange Act.
The director and executive officer of ASM and his respective age is as
follows:
Name Age Position
James Donald Brock, Jr. 31 Director, President,
Secretary and Treasurer
All directors hold office until the next annual meeting of stockholders
and until their successors have been duly elected and qualified. There are no
agreements with respect to the election of directors. ASM has not compensated
its directors for service on the Board of Directors or any committee thereof. As
of the date hereof, no director has accrued any expenses or compensation.
Officers are appointed annually by the Board of Directors and each executive
officer serves at the discretion of the Board of Directors. ASM does not have
any standing committees at this time.
No director, or officer, or promoter of ASM has, within the past five
years, filed any bankruptcy petition, been convicted in or been the subject of
any pending criminal proceedings, or is any such person the subject or any
order, judgment or decree involving the violation of any state
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or federal securities laws.
The business experience of the person listed above during the past five
years is as follows:
Mr. James Donald Brock, Jr., 31 years of age, is an Arts and Science Degree
graduate of Santa Fe Community College and Emory University, Atlanta, Georgia.
Mr. Brock was a student in the education programs from 1993 to 1997. In 1997, he
received his B.S. Degree in Mathematics from Georgia State University, Atlanta,
Georgia. From 1992 to 1997, Mr. Brock was employed at Savage Pizza, Atlanta,
Georgia. In 1997-98, Mr. Brock served as a student-teacher at North Atlanta High
School, Atlanta, Georgia. In 1998, Mr. Brock was employed and continues to be
employed as a mathematics teacher at Decatur High School, Decatur, Georgia.
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires ASM's executive officers and directors and persons who own more than
10% of a registered class of ASM's equity securities, to file with the
Securities and Exchange Commission (hereinafter referred to as the "Commission")
initial statements of beneficial ownership, reports of changes in ownership and
annual reports concerning their ownership, of Common Stock and other equity
securities of ASM on Forms 3, 4, and 5, respectively. Executive officers,
directors and greater than 10% shareholders are required by Commission
regulations to furnish ASM with copies of all Section 16(a) reports they file.
Mr Brock comprises all of ASM's executive officers, directors and greater than
10% beneficial owners of its common Stock, and has complied with Section 16(a)
filing requirements applicable to them during ASM's most recent fiscal year.
Item 6. Executive Compensation
ASM has not had a bonus, profit sharing, or deferred compensation plan
for the benefit of its employees, officers or directors. ASM has not paid any
salaries or other compensation to its officers, directors or employees for the
years ended 1997 and 1998, nor at any time during 1999. Further, ASM has not
entered into an employment agreement with any of its officers, directors or any
other persons and no such agreements are anticipated in the immediate future.
ASM's officer and director will forego any compensation until such time as an
acquisition or merger can be accomplished and the new business opportunity
provide any remuneration. As of the date hereof, no person has accrued any
compensation from ASM. No compensation will accrue in the interim period.
Item 7. Certain Relationships and Related Transactions
On December 1, 1998 the Company issued 500,000 shares of its Common
Stock to Ms. Angela M. Bartolotta, the sole officer and director of the Company
in consideration and in exchange for services valued at 25,000 in connection
with the reorganization of ASM. On March 12, 1999, Ms. Bartolotta resigned her
position due to personal conflicts and other personal reasons and tendered her
500,000 shares of stock to the company for cancellation such shares were in fact
canceled.
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On March 2, 1999, ASM issued and sold 500,000 shares of the Common Stock
to Mr. Brock, the President, Secretary and Treasurer of ASM and record and
beneficial owner of approximately 35.7% of ASM's outstanding Common Stock, in
consideration and exchange therefore for services valued at$25,000 in connection
with the reorganization of ASM. Services rendered and to be rendered by Mr.
Brock include the restructuring of ASM, obtaining requisite financial
assistance, searching for merger and acquisition candidates, and a commitment on
the part of Mr. Brock to fund, if necessary, future filings of 34 Act
requirements without reimbursemnt..
In addition Mr. Brock has paid for the cost and expenses associated with
the filing of this Form 10-SB and other operations of ASM.
At the current time, ASM has no provision to issue any additional
securities to management, promoters or their respective affiliates or
associates. At such time as the Board of Directors adopts an employee stock
option or pension plan, any issuance would be in accordance with the terms
thereof and proper approval. Although ASM has a very large amount of authorized
but unissued Common Stock and Preferred Stock which may be issued without
further shareholder approval or notice, ASM intends to reserve such stock for
the Rule 506 offerings for acquisitions.
During ASM's last two fiscal years, there have not been any other
transactions between ASM and any officer, director, nominee for election as
director, or any shareholder owning greater than five percent (5%) of ASM's
outstanding shares, nor any member of the above referenced individuals'
immediate family.
James Donald Brock, Jr., may be deemed to be a "promoter" of ASM as that
term is defined under the Rules and Regulations promulgated under the Act.
Item 8. Description of Securities
Common Stock
ASM is authorized to issue 50,000,000 shares of common stock,$0.0001 par
value, of which 1,400,000 shares are issued and outstanding as of the date
hereof. All shares of common stock have equal rights and privileges with respect
to voting, liquidation and dividend rights. Each share of Common Stock entitles
the holder thereof to (i) one non-cumulative vote for each share held of record
on all matters submitted to a vote of the stockholders; (ii) to participate
equally and to receive any and all such dividends as may be declared by the
Board of Directors out of funds legally available therefor; and (iii) to
participate pro rata in any distribution of assets available for distribution
upon liquidation of ASM. Stockholders of ASM have no pre-emptive rights to
acquire additional shares of Common Stock or any other securities. The Common
Stock is not subject to redemption and carries no subscription or conversion
rights. All outstanding shares of common stock are fully paid and
non-assessable.
Preferred Stock
Shares of Preferred Stock may be issued from time to time in one or more
series as may be determined by the Board of Directors. The voting powers and
<PAGE>
preferences, the relative rights of each such series and the qualifications,
limitations and restrictions thereof shall be established by the Board of
Directors, except that no holder of Preferred Stock shall have preemptive
rights. At the present time no terms, conditions, limitations or preferences
have been established. ASM has no shares of Preferred Stock outstanding, and the
Board of Directors has no plan to issue any shares of preferred Stock for the
foreseeable future unless the issuance thereof shall be in the best interests of
ASM.
Certain Provision of Florida Law
Section 607.0902 of the Florida Business Corporation Act prohibits the
voting of shares in a publicly-held Florida corporation that are acquired in a
"control share acquisition" unless the holders of a majority of the
corporation's voting shares (exclusive of shares held by officers of the
corporation, inside directors or the acquiring party) approve the granting of
voting rights as to the shares acquired in the control share acquisition or
unless the acquisition is approved by the corporation's board of directors,
unless the corporation's articles of incorporation or bylaws specifically state
that this section does not apply. A "control share acquisition" is defined as an
acquisition that immediately thereafter entitles the acquiring party to vote in
the election of directors within each of the following ranges of voting power;
(i) one-fifth or more, but less than one-third of such voting power; (ii)
one-third or ore, but less than a majority of such voting power; and, (iii) more
than a majority of such voting power. The Amended Articles of Incorporation of
ASM specifically state that Section 607.0902 does not apply to control-share
acquisitions of shares of ASM.
Part II
Item 1. Market For Common Equity and Other Shareholder Matters.
No shares of ASM's common stock have previously been registered with the
Securities and Exchange Commission (the "Commission") or any state securities
agency or authority. ASM intends to make application to the NASD for ASM's
shares to be quoted on the OTC Bulletin Board. The application to the NASD will
be made during the commission comment period for this Form 10-SB. ASM's
application to the NASD will consist of current corporate information, financial
statements and other documents as required by Rule 15c211 of the Securities
Exchange Act of 1934, as amended. Inclusion on the OTC Bulletin Board permits
price quotation for ASM's shares to be published by such service.
ASM is not aware of any existing trading market for its common stock.
ASM's common stock has never traded in a public market. There are no plans,
proposals, arrangements or understandings with any person(s) with regard to the
development of a trading market in any of ASM's securities.
If and when ASM's common stock is traded in the over-the-counter market,
most likely the shares will be subject to the provisions of Section 15(g) and
Rule 15g-9 of the Securities Exchange Act of 1934, as amended (the Exchange
Act"), commonly referred to as the "penny stock" rule.
<PAGE>
Section 15(g) sets forth certain requirements for transactions in penny stocks
and Rule 15g9(d)(1) incorporates the definition of penny stock as that used in
Rule 3a51-1 of the Exchange Act.
The Commission generally defines penny stock to be any equity security
that has a market price less than $5.00 per share, subject to certain
exceptions. Rule 3a51-1 provides that any equity security is considered to be a
penny stock unless that security is: registered and traded on a national
securities exchange meeting specified criteria set by the Commission; authorized
for quotation on The NASDAQ Stock Market; issued by a registered investment
company; excluded from the definition on the basis of price (at least $5.00 per
share) or the issuer's net tangible assets; or exempted from the definition by
the Commission. If ASM's shares are deemed to be a penny stock, trading in the
shares will be subject to additional sales practice requirements on
broker-dealers who sell penny stocks to persons other than established customers
and accredited investors, generally persons with assets in excess of $1,000,000
or annual income exceeding $200,000, or $300,000 together with their spouse.
For transactions covered by these rules, broker-dealers must make a
special suitability determination for the purchase of such securities and must
have received the purchaser's written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the rules require the delivery, prior to the first transaction, of a
risk disclosure document relating to the penny stock market. A broker-dealer
also must disclose the commissions payable to both the broker-dealer and the
registered representative, and current quotations for the securities. Finally,
the monthly statements must be sent disclosing recent price information for the
penny stocks held in the account and information on the limited market in penny
stocks. Consequently, these rules may restrict the ability of broker dealers to
trade and/or maintain a market in ASM's common stock and may affect the ability
of shareholders to sell their shares.
As of July 15, 1999, there were 26 holders of record of ASM's common
stock.
As of the date hereof, ASM has issued and outstanding 1,400,000 shares
of common stock. Of this total, 500,000 shares were originally issued in
transactions more than three (3) years ago. Such shares may be sold or otherwise
transferred without restriction pursuant to the terms of rule 144 ("Rule 144")
of the Securities Act of 1933, as amended (the "Act"), unless held by an
affiliate. The remaining 900,000 shares were issued subject to Rule 144 and may
not be sold and/or transferred without further registration under the Act or
pursuant to an applicable exemption..
Dividend Policy
ASM has not declared or paid cash dividends or made distributions in the
past, and ASM does not anticipate that it will pay cash dividends or make
distributions in the foreseeable future. ASM currently intends to retain and
reinvest future earnings, if any, to finance its operations.
Public Quotation of Stock
ASM has not as of this date, but intends to request a
broker-dealer in the immediate future, to act as a market maker for ASM's
securities. No broker-dealer has been contacted thus far.
<PAGE>
ASM anticipates that other market makers may be requested to participate at a
later date. ASM will not use consultants to obtain market makers. There have
been no preliminary discussions between ASM, or anyone acting on its behalf, and
any market maker regarding the future trading market for ASM. It is anticipated
that the market maker will be contacted prior to an acquisition or merger and
only by management of ASM.
Item 2. Legal Proceedings
ASM is currently not a party to any pending legal proceedings and no
such action by, or to the best of its knowledge, against ASM has been
threatened. ASM was inactive from 1996 through the date of this Form 10-SB.
Item 3. Changes in and Disagreements with Accountants
Item 3 is not applicable to this Form 10-SB.
Item 4. Recent Sales of Unregistered Securities
On December 1, 1998, all of the issued and outstanding shares of the
Common Stock of ASM were acquired from its then sole shareholder. The original
incorporator and shareholder agreed to exchange the 500,000 issued and
outstanding shares held by such shareholder to the new 25 member investor group
in exchange for a commitment by the new shareholder group to pay the cost of
reactivating the corporation, providing for its reinstatement, and bringing its
books and records up to date. The total of 500,000 shares was distributed 20,000
shares to each of twenty-five (25) shareholders. ASM received a total offering
price of $20,000 ($0.05 per share) from the sale of a total of 400,000 shares of
common stock, $.0001 par value per share (the "Common Stock"), in an a
self-underwritten offering conducted pursuant to Section 3(b) and 4(2) of the
Securities Act of 1933, as amended (the "Act"), and Rules 505 and 506 of
Regulation D promulgated thereunder. These offering were made in the State of
Georgia and the State of Florida. ASM undertook the offering of shares of Common
Stock on December 1, 1998, and did not pay any underwriting discounts or
commissions. The issuance of additional shares to Ms. Bartolotta on December 1,
1998, totaling 500,000 shares, and the transfer of shares to Mr. Brock on March
12, 1999, totaling 500,000 shares was made in reliance on Section 4(2) and
Section 506 of Regulation D. Ms. Bartolotta and Mr. Brock are accredited
investors, the books and records of ASM were made available to them, and at the
time of acquisition of such shares each was serving as the sole Officer and
Director of ASM.
Item 5. Indemnification of Directors and Officers
Article X of ASM's Amended Articles of Incorporation contains provisions
providing for the indemnification of directors and officers of ASM as follows:
(a) The corporation shall indemnify any person who was or is a party, or
is threatened to be made a party, of any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation),
<PAGE>
by reason of the fact that he is or was a director, officer, employee or agent
of the corporation, or is otherwise serving at the request of the corporation as
a director, officer, employee or agent of another corporation, partnership joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement, actually and reasonably
incurred by him in connection with such action, suit or proceeding, if he acted
in good faith and in a manner he reasonably believed to be in, or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, has no reasonable cause to believe his conduct is unlawful. The
termination of any action, suit or proceeding, by judgment, order, settlement,
conviction upon a plea of nolo contendere or its equivalent, shall not of itself
create a presumption that the person did not act in good faith in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
corporation and, with respect to any criminal action or proceeding, had
reasonable cause to believe the action was unlawful.
(b) The corporation shall indemnify any person who was or is a party, or
is threatened to be made a party, to any threatened, pending or completed action
or suit by or in the right of the corporation, to procure a judgment in its
favor by reason of the fact that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit, if he acted in good faith and in a manner he
reasonably believed to be in, or not, opposed to, the best interests of the
corporation, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation, unless, and only to the extent that, the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability, but in view of all circumstances of the case, such
person is fairly and reasonably entitled to indemnification for such expenses
which such court deems proper.
(c) To the extent that a director, officer, employee or agent of the
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections (a) and (b) of this Article,
or in defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorney's fees) actually and reasonably incurred by
him in connection therewith.
(d) Any indemnification under Section (a) or (b) of this Article (unless
ordered by a court) shall be made by the corporation only as authorized in the
specific case upon a determination that indemnification of the officer, director
and employee or agent is proper in the circumstances, because he has met the
applicable standard of conduct set forth in Section (a) or (b) of this Article.
Such determination shall be made (i) by the Board of Directors by a majority
vote of a quorum consisting of directors who were not parties to such action,
suit or proceeding, or (ii) if such quorum is not obtainable or, even if
obtainable, a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or (iii) by the affirmative vote of the holders of
a majority of the shares of stock entitled to vote and represented at a meeting
called for purpose.
(e) Expenses (including attorneys' fees) incurred in defending a civil
or criminal action, suit
<PAGE>
or proceeding may be paid by the corporation in advance of the final disposition
or such action, suit or proceeding, as authorized in Section (d) of this
Article, upon receipt of an understanding by or on behalf of the director,
officer, employee or agent to repay such amount, unless it shall ultimately be
determined that he is entitled to be indemnified by the corporation as
authorized in this Article.
(f) The Board of Directors may exercise the corporation's power to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee, or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would have the power to indemnify him against such liability under this Article.
(g) The indemnification provided by this Article shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under these Amended Articles of Incorporation, the Bylaws, agreements,
vote of the shareholders or disinterested directors, or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding such office and shall continue as to person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the heirs
and personal representative of such a person.
Transfer Agent
ASM is serving as its own transfer agent until it becomes eligible for
quotation with NASD.
PART F/S
Financial Statements and Supplementary Data
ASM's financial statements for the years ended May 31, 1999, has been
examined to the extent indicated in their reports by Dorra, Shaw, & Dugan,
independent certified accountants, and have been prepared in accordance with
generally accepted accounting principles and pursuant to Regulation S-B as
promulgated by the Securities and Exchange Commission and are included herein,
on Page F-1 hereof in response to Part F/S of this Form 10-SB.
PART F/S
Financial Statements and Supplementary Data
ASM's financial statements for the years ended May 31, 1999, has been
examined to the extent indicated in their reports by Dorra, Shaw, & Dugan,
independent certified accountants, and have been prepared in accordance with
generally accepted accounting principles and
<PAGE>
pursuant to Regulation S-B as promulgated by the Securities and Exchange
Commission and are included herein, on Page F-1 hereof in response to Part F/S
of this Form 10-SB.
THE AMERICAN SPORTS MACHINE, INC.
TABLE OF CONTENTS
Page
Independent Auditors' Report.............................. F-1
Balance Sheet............................................. F-2
Statement of Operations and Accumulated Deficit........... F-3
Statement of Changes in Stockholders' Equity.............. F-4
Statement of Cash Flows................................... F-5
Notes to Financial Statements............................. F-6
<PAGE>
Dorra Shaw & Dugan
Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
The American Sports Machine, Inc.
Palm Beach, Florida
We have audited the accompanying balance sheet of The American Sports
Machine, Inc. (a Florida corporation) and (a development stage company) as of
May 31, 1999, and the related statements of operations, accumulated deficit,
cash flows and changes in stockholders' equity for the period October 1, 1998
(date of inception) to May 31, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we 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.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The American Sports Machine,
Inc. as of May 31, 1999 and the results of its operations and its cash flows and
changes in stockholders' equity for the period from October 1, 1998 (date of
inception) to May 31, 1999 in conformity with generally accepted accounting
principles.
Audited statements of operations, cash flows and stockholders' equity for the
two years ended September 30, 1998 as required by item 310 of regulation S-B are
not provided because the company was dormant.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As shown in the financial statements,
the Company has incurred net losses since its inception. The Company's financial
position and operating results raise substantial doubt about its ability to
continue as a going concern. Management's plan regarding those matters also are
described in Note D. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ Dorra Shaw & Dugan
Certified Public Accountants
June 4, 1999
270 South County Road * Palm Beach, FL 33480 Telephone
(561) 822-9955 * Fax (561) 822-9955 * Website: dsd-cpa.com
<PAGE>
<TABLE>
<CAPTION>
THE AMERICAN SPORTS MACHINE, INC.
( A Development Stage Company)
BALANCE SHEET
May 31, 1999
- ---------------------------------------------------------------- ------------
<S> <C>
ASSETS
Current Assets:
Cash $ 20,057
- --- ------------------------------------------------------------ ------------
TOTAL CURRENT ASSETS 20,057
- ---------------------------------------------------------------- ------------
$ 20,057
- --- ------------------------------------------------------------ ------------
LIABILITIES
Current Liabilities:
Accrued expenses $ 7,978
- --- ------------------------------------------------------------ ------------
TOTAL CURRENT LIABILITIES 7,978
- ---------------------------------------------------------------- ------------
7,978
- --- ------------------------------------------------------------ ------------
STOCKHOLDERS' EQUITY
Common stock - $.0001 par value - 50,000,000 shares
authorized 1,400,000 shares issued and outstanding 140
Preferred stock - No par value - 10,000,000 shares authorized
No shares issued or outstanding -
Additional paid-in-capital 45,860
Accumulated deficit (33,921)
- --- ------------------------------------------------------------ ------------
TOTAL STOCKHOLDERS' EQUITY 12,079
- ---------------------------------------------------------------- ------------
$ 20,057
- --- ------------------------------------------------------------ ------------
</TABLE>
See Accompanying Notes to Financial Statements
F-2
<PAGE>
<TABLE>
<CAPTION>
THE AMERICAN SPORTS
MACHINE, INC.
( A Development Stage Company)
STATEMENT OF OPERATIONS AND
ACCUMULATED DEFICIT
For the period October 1, 1998 (date of inception) to May 31. 1999
- ---------------------------------------------------------------- -------------
<S> <C>
Revenues $ -
- ----------------------------------------------------- ---------- -------------
Operating expenses:
Professional fees $ 30,500
Organization costs 2,421 32,921
- ----------------------------------------------------- ---------- -------------
Loss before income taxes (32,921)
Income taxes -
- ----------------------------------------------------- ---------- -------------
Net loss (32,921)
Accumulated deficit - December 1, 1998 (1,000)
- ----------------------------------------------------- ---------- -------------
Accumulated deficit - May 31, 1999 $ (33,921)
- ----------------------------------------------------- ---------- -------------
Net loss per share $ (0.03)
- ----------------------------------------------------- ---------- -------------
Weighted average shares of common stock $ 1,174,073
- ----------------------------------------------------- ---------- -------------
</TABLE>
See Accompanying Notes to Financial Statements
F-3
<PAGE>
<TABLE>
<CAPTION>
THE AMERICAN SPORTS
MACHINE, INC.
( A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS'
EQUITY
For the period October 1, 1998 (date of inception) to May 31, 1999
- ------------------------------------------------------------------------------- ----------------
Additional
Number of Preferred Common Paid - In Accumulated
Shares Stock Stock Capital Deficit Total
------------------------------------------------ -------------------
<S> <C> <C> <C> <C> <C> <C>
Beginning balance:
June 2, 1995 - Services $ 500,000$ - $ 50 $ 950 $ $ 1,000
Issuance of Common Stock:
December 1, 1998 - Services 500,000 - 50 24,950 - 25,000
December 1, 1998 400,000 - 40 19,960 - 20,000
Accumulated deficit - - - - (33,921) (33,921)
- ------------------------------------------------------------------------------- --------------------
$ 1,400,000 $ - $ 140 $ 45,860 $ (33,921 $12,079
- ------------------------------------------------------------------------------- --------------------
</TABLE>
See Accompanying Notes to Financial Statements
F-4
<PAGE>
<TABLE>
<CAPTION>
THE AMERICAN SPORTS MACHINE, INC.
(A Development Stage Company)
Statement of Cash Flows
For the period October 1, 1998 (date of inception) to May 31, 1999
- --------------------------------------------------------------------------------
<S> <C>
Operating Activities:
Net loss $ (32,921)
Adjustments to reconcile net loss to net cash
used by operating activities:
Increase in:
Accrued expenses 7,978
Issuance of common stock for services 25,000
- --- --------- ------------------------------------------------------------------
Net cash provided by operating activities 57
- --------------------------------------------------------------------------------
Financing activities:
Issuance of Common Stock 20,000
- --- ----------------------------------------------------------------------------
Net cash provided by financing activities 20,000
- --------------------------------------------------------------------------------
Net increase in cash 20,057
- --------------------------------------------------------------------------------
Cash - May 31, 1999 $ 20,057
----------
</TABLE>
See Accompanying Notes to Financial Statements
F-5
<PAGE>
The American Sports Machine, Inc.
Notes to Financial Statements
Note A - Summary of Significant Accounting Policies:
Organization
The American Sports Machine, Inc. (a development stage company) is a Florida
Corporation organized June 2, 1995 to build recreational centers for small
organized sports activities including basketball, handball, racquetball, as well
as video games and other computer board sports activities. The Company failed in
its attempt to implement its initial business plan and during June 1996
abandoned its efforts. The Company had no operations for the period prior to
June 1996. The Company was inactive and there were no transactions from June
1996 to the date of reinstatement by the State of Florida on December 1, 1998
that affect the balances reflected in the financial statements as of December 1,
1998. In addition, audited statements of operations, cash flows and
stockholders' equity for the two years ended September 30, 1998 as required by
item 310 of regulation S-B are not provided because the company was dormant.
The Company has a new business plan, which was adopted on or about December 1,
1998, which is to engage in seeking potential operating businesses and business
opportunities with the intent to acquire or merge with such businesses. The
assets of the Company will be used for its expenses of operation to implement
this plan.
Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a September 30 year end.
Start - Up Costs
Start - up and organization costs are being expensed as incurred.
Loss Per Share
The computation of loss per share of common stock is based on the weighted
average number of shares outstanding at the date of the financial statements.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Note B - Stockholders' Equity:
On June 2, 1995, the Company issued 500,000 shares of common stock, in lieu of
cash, for the fair market value of services rendered by its initial officer -
stockholder. On or about December 1, 1998, third parties purchased the shares
from the initial officer - stockholder. On or about December 1, 1998, the
Company issued 500,000 shares of its common stock to its sole officer in
exchange for services valued at $25,000. Subsequently the same third parties
purchased at $0.05 per share, 400,000 shares of the common stock of the Company
in a private placement pursuant to Regulation D of the SEC. The $18,000 in
professional fees includes the costs and expenses (including legal fees)
associated with the preparation and filing of the
F-6
<PAGE>
Note B - Stockholders' Equity (Cont'd):
registration statement. Included in professional fees are additional legal fees
of $1,500 unrelated to the registration statement and $4,000 in auditing and
accounting fees.
At May 31, 1999, the Company had authorized 50,000,000 shares of $.0001 par
value common stock and had 1,400,000 shares of common stock issued and
outstanding. In addition, the Company authorized 10,000,000 shares of preferred
stock with the specific terms; conditions, limitations and preferences to be
determined by the Board of Directors. None of the preferred stock was issued and
outstanding as of May 31, 1999.
Note C - Income Taxes:
The Company has a net operating loss carry forward of $32,921 that may be offset
against future taxable income. If not used, the carry forward will expire in
2014.
The amount recorded as deferred tax assets, cumulative as of May 31,1999 is
$5,000, which represents the amounts of tax benefits of loss carry-forwards. The
Company has established a valuation allowance for this deferred tax asset of
$5,000, as the Company has no history of profitable operations.
Note D - Going Concern:
The Company's financial statements are prepared using generally accepted
accounting principles applied to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. The Company has incurred losses from its inception through May 31,
1999. It has not established revenues sufficient to cover operating costs and to
allow it to continue as a going concern. Management plans currently provide for
experts to secure a successful acquisition or merger partner so that it will be
able to continue as a going concern. In the event such efforts are unsuccessful,
contingent plans have been arranged to provide that the current Director of the
Company is to fund required future filings under the 34 Act, and existing
shareholders have expressed an interest in additional funding if necessary to
continue the Company as a going concern.
F-7
<PAGE>
PART III
Item 1. Index to Exhibits
The following exhibits are filed with this Registration Statement:
Exhibit No. Exhibit Name
3(i).1 Articles of Incorporation filed June 2, 1995 (filed with original
on 6/10/99)
3(i).2 Articles of Amendment filed March 10, 1999 (filed with original
on 6/10/99)
3(ii).1 By-laws (filed with original on 6/10/99)
27 Financial Data Schedule
Item 2. Description of Exhibits
See Item 1 above.
<PAGE>
Signatures
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
there unto duly authorized.
The American Sports Machine, Inc.
(Registrant)
Date: July 27, 1999 BY: /s/ James Donald Brock, Jr.
---------------------------
James Donald Brock, Jr., President
In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.
Date Signature Title
July 15, 1999 BY:/s/ JAMES DONALD BROCK JR. Director, President,
-------------------------- Secretary, Treasurer
James Donald Brock, Jr.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001081987
<NAME> The American Sports Machine, Inc.
<MULTIPLIER> 1
<CURRENCY> U.S. Currency
<S> <C>
<PERIOD-TYPE> 7-mos
<FISCAL-YEAR-END> Sep-30-1998
<PERIOD-START> Oct-1-1998
<PERIOD-END> May-31-1999
<EXCHANGE-RATE> 1
<CASH> 20,057
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 20,057
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 20,057
<CURRENT-LIABILITIES> 7,978
<BONDS> 0
0
0
<COMMON> 140
<OTHER-SE> 11,939
<TOTAL-LIABILITY-AND-EQUITY> 20,057
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 32,921
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (32,921)
<INCOME-TAX> 0
<INCOME-CONTINUING> (32,921)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (32,921)
<EPS-BASIC> (0.03)
<EPS-DILUTED> 0
</TABLE>
