<PAGE>2
U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: December 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE EXCHANGE ACT
For the transition period from: to:
Commission file number: 0-22965
Freedom Golf Corporation
formerly Auric Enterprises, Inc.
(Exact name of Small Business Issuer in its charter)
NEVADA 91-1950699
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
7334 South
Alton Way, Building 14, Suite A
City, State and Zip Code - Englewood, CO 80111
(Address of principal executive offices) (Zip Code)
Registrant's Telephone number, including area code: (303) 221-0331
Check mark whether the Issuer (1) has filed all reports required by
Section 13 or 15(d) of 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 the filing requirements for
at least the past 90
days. YES: X NO:
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
THE PREVIOUS FIVE YEARS
Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13, or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by the court.
YES: X NO:
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common stock, as of the last practicable date: 11,477,206
Transitional Small Business Disclosure Format. YES: NO: X
<PAGE>3
PART I FINANCIAL INFORMATION
Balance Sheet
December 31, 1999 4
Statements of Operations
Nine months
Ended December 31, 1999 and 1998 5
Statements of Cash Flows
Nine Months Ended
December 31, 1999 and 1998 6
Notes to Financial Statements 7
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7-8
PART II
Other Information 9
Signatures 10
Financial Data Schedule 11
<PAGE>4
FREEDOM GOLF CORPORATION
Balance Sheet
December 31, 1999
ASSETS
<TABLE>
<CAPTION>
CURRENT ASSETS
<S> <C>
Cash $ 43,773
Accounts receivable - trade, net of
allowance for doubtful of accounts of $2,281 3,757
Inventory 108,703
Prepaid expenses 10,506
Total current assets 166,739
Property and equipment, at cost net of
accumulated depreciation of $5,196 6,744
Deposit 2,000
Patents, net of accumulated amortization of $9,445 90,555
Total assets $ 266,038
LIABILITIES AND STOCKHOLDERS'EQLIITY
CURRENT LLABILITEES
Notes payable - bank $19,832
Notes payable - other 223,907
Accounts payable - trade 22,831
Advances from officers 17,653
Accrued salaries 250,500
Accrued expenses 45,597
Total current liabilities 580,320
STOCKHOLDERS'EQUITY
Common stocks $.001 value, 50,000,000 shares
authorized 11,477,206 issued and outstanding 11,477
Paid in capital 1,337,235
Unearned services (201,389)
Accumulated deficit (1,461,605)
Total stockholders' equity (314,282)
Total liabilities and stockholders' equity $ 266,038
</TABLE>
<PAGE>5
FREEDOM GOLF CORPORATION
Statement of Operations
<TABLE>
<CAPTION>
Three Month Period Ended
December 31, 1999 December 31, 1998
<S> <C> <C>
Sales - net $9,799 23,951
Cost of sales (5,537) (5,662)
Gross profit 4,262 18,299
Selling, general and administrative
Expenses 87,912 75,324
Loss from operations (83,550) (57,035)
Other income and (expense)
Interest expense (2,597) (4,865)
Interest income 49 16
Net (loss) $ (86,098) $ (61,884)
Basic and fully diluted
(loss) per share: (.01) $(-01)
Weighted average shares outstanding 11,428,614 6,574,934
<PAGE>6
FREEDOM GOLF CORPORATION
Statement of Cash Flows
</TABLE>
<TABLE>
<CAPTION>
Three Month Period Ended
December 31,1999 December 31, 1998
<S> <C> <C>
Net loss $ (86,098) $ (61,884)
Adjustments to reconcile net loss, to
net cash provided by operating activities
Depreciation and amortization 2,094 3,151
Changes in assets and liabilities:
Increase in accounts receivable (3,011) (15)
Increase (decrease) in inventory (60,518) 2,377
Decrease in prepaid expenses and deposits 20,530 -
(Decrease) in accounts payable (21,140) (3,876)
Increase in accrued salaries 18,000 27,000
Increase (decrease) in accrued expenses 39,507 (3,407)
Total adjustments (4,538) 25,230
Net cash provided by (used. in)
operating activities (90,636) (36,654)
Cash flow from financing activities:
Common stock sold for cash 52,100 46,000
Proceeds from notes payable 87,870 1,000
Payment on notes payable (5,807) (2,171)
Net cash provided by financing activities 134,163 44,829
Increase (decrease in cash) 43,527 8,175
Cash and cash equivalents,
beginning of period 246 -
Cash and cash equivalents,
end of period $ 43,773 $8,175
</TABLE>
<PAGE>6
FREEDOM GOLF CORPORATION
Notes to Financial Statements
December 31, 1999
(Unaudited)
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for, interim
financial information and with the instructions incorporated in
Regulation 10-SB of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting of normal recurring adjustments and accrual) considered
necessary for a presentation have been included.
The results of operations for the periods presented are not necessarily
indicative of the results to be expected for the full year. The
accompanying financial statements should be read in conjunction with the
Company's annual financial statements for the period.
Basic loss per share was computed using the weighted average number of
common shares outstanding.
The Company was incorporated as Auric Enterprises (Auric) in Nevada in
October 1998. On December 10, 1999, the stockholders' of the Company
approved a merger with Freedom Golf Corporation (Freedom) a Colorado
corporation, Under the terms of the agreement, each common share of
Freedom will receive a share of Auric common stock. This transaction
was accounted for as a reverse acquisition, whereby the financial
statements of Freedom will continue carryforward. In conjunction with
the transaction, Auric changed its name to Freedom. Freedom is a golf
club manufacturer specializing in custom built woods and irons.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Statements used in this discussion that relate to future plans, events,
financial results or performance are forward looking statements as
defined under the Private Securities Litigation Reform Act of 1995.
Such statements are subject to certain risks and uncertainties which
could cause actual results to differ materially from those anticipated.
Readers are cautioned not to place under reliance on these forward-
looking statements which speak only as of the date hereof. The Company
undertakes no obligation to republish revised forward-looking statements
to reflect events or circumstances after the date hereof or to reflect
the occurrence of unanticipated events. Readers also are urged to
carefully review and consider the various disclosures made by the
Company which describe certain factors which affect the Company's
business, including the disclosures made under the caption "Management's
Discussion and Analysis of Financial Condition and Results of Operations
- - Certain Factors Affecting Freedom Golf Corporation" below, well as
the, Company's other periodic reports on Forms 10-K and 10Q and Current
Reports on Form 8-K filed with the Securities and Exchange Commission.
Readers also should be aware that while the Company communicates with
securities analysts, the Company has a policy against issuing or
confirming financial forecasts or projections issued by others.
Accordingly, to the extent that reports issued by securities analysts
contain any projections, forecasts or opinions, such reports are not the
responsibility of the Company, and stockholders should not assume that
the Company agrees with any statement or report, issued by any analyst.
CERTAIN FACTORS AFFECTING FREEDOM GOLF CORPORATION
RESTRUCTURING
In the first quarter of 2000 the Company went through a merger agreement
with Auric Enterprise, Inc. Since Auric Enterprises was a publicly
traded company, Freedom was the surviving company. Immediately upon the
closing of the merger Auric Enterprises, Inc. agreed to a name change to
Freedom Golf Corporation and a symbol change to FGLC.
SALES; GROSS MARGIN; SEAONALITY
During the three-month period ending December 31, 1999, the Company's
Gross Profit was about 22% of what it had been during the same period in
1998. The Company believes that this decrease was due to several
reasons. One, the negotiating for the merger was ongoing, the Company's
President/CEO who has handling all negotiations for the Company, was
also the lone salesman for the Company. The Company was also having
problems getting their contracted Marketing Company to upgrade the
webpage and come up with new and unique print material for
dissemination. The hiring of Key personnel in the Sales and Operations
Department of the Company will hopefully take place in the second
<PAGE>8
quarter of fiscal year 2000, but if it does not happen, the lack of
qualified personnel to assist in building the Company could do further
damage to the revenue stream of the Company.
NEW PRODUCT INTRODUCTION
The Company believes that the introduction of new, innovative golf
equipment is imperative to is future success, Even though the Company
faces certain risks with such bold moves, Management deems it necessary
to introduce new and unique products such as the Freedom 345 Fairway
Wood. The 345 Fairway Wood is a combination 3, 4 and 5 fairway wood
combined into one club.
Company understands that new designs and changes from the traditional
line of golf clubs may be met with consumer rejection. It is also
possible that cloning of the 345 Fairway Wood may occur and possibly
have an adverse effect on the Company's revenues. The Company plans its
manufacturing capacity based upon the forecasted demand for its
products. Actual demand for such duct may exceed to be less than
forecasted demand. If the Company is unable to produce sufficient
quantities of this new product in time to fulfill actual demand,
especially during the Company's hopefully busy second and third
quarters, it could limit the Company's sales and. adversely affects its
financial performance.
Trends and Uncertainties. Demand for the Company's products will be
dependent on, among other things, market acceptance for the Company's
concept its operations and general economic conditions that are cyclical
in nature. Inasmuch as a major portion of the Company's activities will
be the receipt of revenues from the sales of its products, the Company's
business operations, may be adversely affected by the Company's
inability to obtain the necessary financing, competitors and prolonged
recessionary periods.
Capital and Source of Liquidity. The Company requires substantial
capital in order to meet its obligations and in order to continue and
expand its current and strategic business plan. Initial working capital
has been obtained by private sale of common stock. The company has
received $170,000 from the exercise of warrants through the date of this
report, These funds will be used for inventory, repay debt and provide
working capital. The Company needs to have adequate capital to market
its products.
Results of Operations. Net sales declined from $23,951 in 1998 to $9,799
in 1999. This decrease is due to a lack of funds for advertising and
promotion of the Company's products. It is the Company's intent to
development advertising for both the television and print media. It is
expected that all funds become available that advertising expenditures
will significantly increase.
Selling and general administrative expenses increased by $12,488 as
compared to 1998. The increase is due to higher legal and accounting
fees incurred in connection with the acquisition of Freedom.
<PAGE>9
Part II
OTHER INFORM4ATION
ITEM 1, LEGAL PROCEEDINGS.
Not applicable.
ITEM 2. CHANGES IN SECURITIES-
Not applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4.SUBMISSION OF.MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable
ITEM 5 OTHER INFORMATION.
Not applicable.
ITEM 6- EXHIBITS AND REPORTS ON FORM 8-K.
<PAGE>10
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Freedom Golf Corporation
(Registrant)
Date. March 15, 2000
By: /s/Gaylen P. Johnson
Gaylen P. Johnson
<TABLE> <S> <C>
<ARTICLE> 5
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-END> DEC-31-1999
<CASH> 43,773
<SECURITIES> 0
<RECEIVABLES> 3,757
<ALLOWANCES> 2,281
<INVENTORY> 108,703
<CURRENT-ASSETS> 166,739
<PP&E> 6,744
<DEPRECIATION> 5,196
<TOTAL-ASSETS> 266,038
<CURRENT-LIABILITIES> 580,320
<BONDS> 0
<COMMON> 11,477
0
0
<OTHER-SE> (640,041)
<TOTAL-LIABILITY-AND-EQUITY> 266,038
<SALES> 9,799
<TOTAL-REVENUES> 9,799
<CGS> 5,537
<TOTAL-COSTS> 5,537
<OTHER-EXPENSES> (87,912)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,597
<INCOME-PRETAX> (86,098)
<INCOME-TAX> 0
<INCOME-CONTINUING> (86,098)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (86,098)
<EPS-BASIC> (.01)
<EPS-DILUTED> (.01)
</TABLE>
