UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
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(Mark one)
XX QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
- ---------- EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
- ---------- OF 1934
For the transition period from ____________ to ___________
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Commission File Number: 0-28267
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Thoroughbred Racing Associates, Inc.
(Exact name of small business issuer as specified in its charter)
Delaware 75-2534769
- ---------------------------- ----------------------
(State of incorporation) (IRS Employer ID Number)
16910 Dallas Parkway, Suite 100, Dallas, TX 75248
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(Address of principal executive offices)
(972) 248-1922
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(Issuer's telephone number)
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Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
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State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: May 4, 2000: 2,500,000
Transitional Small Business Disclosure Format (check one): YES NO X
--- ---
<PAGE>
Thoroughbred Racing Associates, Inc.
Form 10-QSB for the Quarter ended March 31, 2000
Table of Contents
Page
Part I - Financial Information
Item 1 Financial Statements 3
Item 2 Management's Discussion and Analysis or Plan of Operation 9
Part II - Other Information
Item 1 Legal Proceedings 10
Item 2 Changes in Securities 10
Item 3 Defaults Upon Senior Securities 10
Item 4 Submission of Matters to a Vote of Security Holders 10
Item 5 Other Information 10
Item 6 Exhibits and Reports on Form 8-K 10
Signatures 11
2
<PAGE>
S. W. HATFIELD, CPA
certified public accountants
Member: American Institute of Certified Public Accountants
SEC Practice Section
Information Technology Section
Texas Society of Certified Public Accountants
Part 1 - Item 1 - Financial Statements
Accountant's Review Report
--------------------------
Board of Directors and Shareholder
Thoroughbred Racing Associates, Inc.
We have reviewed the accompanying balance sheets of Thoroughbred Racing
Associates, Inc. (a Delaware corporation) as of March 31, 2000 and 1999 and the
accompanying statement of operations and comprehensive income and statement of
cash flows for the three months ended March 31, 2000 and 1999. These financial
statements are prepared in accordance with the instructions for Form 10-QSB, as
issued by the U. S. Securities and Exchange Commission, and are the sole
responsibility of the company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression on an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying consolidated financial statements for them to be in
conformity with generally accepted accounting principles.
S. W. HATFIELD, CPA
Dallas, Texas
May 4, 2000
Use our past to assist your future sm
P. O. Box 820395 9002 Green Oaks Circle, 2nd Floor
Dallas, Texas 75382-0395 Dallas, Texas 75243-7212
214-342-9635 (voice) (fax) 214-342-9601
800-244-0639 [email protected]
3
<PAGE>
<TABLE>
<CAPTION>
Thoroughbred Racing Associates, Inc.
(a wholly-owned subsidiary of Halter Capital Corporation)
Balance Sheets
March 31, 2000 and 1999
(Unaudited)
ASSETS
------
1999 1998
--------- ---------
<S> <C> <C>
Current assets
Cash on hand and in bank $ -- $ 4,149
--------- ---------
Total current assets -- 4,149
--------- ---------
Livestock and equipment
Livestock -- 50,000
Accumulated depreciation -- (25,000)
--------- ---------
Net livestock and equipment -- 25,000
--------- ---------
Total Assets $ -- $ 29,149
========= =========
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
Current liabilities
Accounts payable and accrued liabilities $ -- $ 15,167
Advances from
Parent and affiliates -- 616,728
Officer -- 88,112
--------- ---------
Total current liabilities -- 720,007
--------- ---------
Commitments and contingencies
Stockholder's equity (deficit)
Common stock - $0.001 par value
50,000,000 shares authorized
2,500,000 shares issued and outstanding 2,500 2,500
Additional paid-in capital 471,987 7,500
Accumulated deficit (474,487) (700,858)
--------- ---------
Total stockholder's equity (deficit) -- (690,858)
--------- ---------
Total Liabilities and Stockholder's Equity $ -- $ 29,149
========= =========
</TABLE>
See Accountant's Review Report.
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
Thoroughbred Racing Associates, Inc.
(a wholly-owned subsidiary of Halter Capital Corporation)
Statements of Operations and Comprehensive Income
Three months ended March 31, 2000 and 1999
(Unaudited)
Three months Three months
ended ended
March 31, March 31,
2000 1999
----------- -----------
<S> <C> <C>
Revenues
Racing purses and commissions $ 2,782 $ 7,274
----------- -----------
Expenses
Training, veterinary and other horse expenses 13,563 12,929
General and administrative expenses 2,670 20
Depreciation 1,699 4,167
----------- -----------
Total expenses 17,932 17,116
----------- -----------
Loss from operations (15,200) (9,842)
Other income (expenses) -- --
----------- -----------
Income (Loss) before income taxes (15,200) (9,842)
Provision for income taxes -- --
----------- -----------
Net Income (Loss) (15,200) (9,842)
Other comprehensive income -- --
----------- -----------
Comprehensive Income (Loss) $ (15,200) $ (9,842)
=========== ===========
Income (Loss) per weighted-average share of
common stock outstanding, computed on
Net Income (Loss) - basic and fully diluted nil nil
=========== ===========
Weighted-average number of common shares outstanding 2,500,000 2,500,000
=========== ===========
</TABLE>
See Accountant's Review Report.
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
Thoroughbred Racing Associates, Inc.
(a wholly-owned subsidiary of Halter Capital Corporation)
Statements of Cash Flows
Three months ended March 31, 2000 and 1999
(Unaudited)
Three months Three months
ended ended
March 31, March 31,
2000 1999
--------- ---------
Cash flows from operating activities
Net income (loss) for the year $ (15,200) $ (9,842)
Adjustments to reconcile net loss to
net cash used by operating activities
Depreciation 1,699 4,167
Increase (Decrease) in:
Accounts payable and accrued expenses (520) 1,625
--------- ---------
Net cash used in operating activities (12,981) (4,050)
--------- ---------
Cash flows from investing activities
Purchase of livestock and equipment (42,438) --
--------- ---------
Net cash used in investing activities (42,438) --
--------- ---------
Cash flows from financing activities
Increase (Decrease) in cash overdraft -- (9,979)
Cash advanced by (repaid to) parent company - net (193,874) 15,710
Cash advanced by (repaid to) officer (29,749) --
--------- ---------
Net cash provided by financing activities (223,623) 5,731
--------- ---------
Increase (Decrease) in cash (279,042) 1,681
Cash at beginning of year 279,042 2,468
--------- ---------
Cash at end of year $ -- $ 4,149
========= =========
Supplemental disclosures of
interest and income taxes paid
Interest paid during the period $ -- $ --
========= =========
Income taxes paid during the period $ -- $ --
========= =========
See Accountant's Review Report.
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
Thoroughbred Racing Associates, Inc.
(a wholly-owned subsidiary of Halter Capital Corporation)
Notes to Financial Statements
Note A - Organization and Description of Business
Thoroughbred Racing Associates, Inc. (Company) was incorporated on April 13,
1994 under the laws of the State of Delaware. The Company trains and races
thoroughbred horses principally for its own account and, in prior years, for
other unrelated third parties.
On November 9, 1999, the Company amended its Certificate of Incorporation to
allow for the issuance of up to 50,000,000 shares of $0.001 par value common
stock from its initial authorization to issue up to 1,000 shares of $0.00001 par
value common stock. Additionally, concurrent with the increase to the authorized
number of shares of common stock, the Company effected a 2,500 for 1 forward
split of its issued and outstanding common stock. As a result of these events,
the Company has 2,500,000 shares of $0.001 par value common stock issued and
outstanding. The accompanying financial statements have been restated to present
the effects of these events as of the first day of the first period presented.
During interim periods, the Company follows the accounting policies set forth in
its Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act
of 1934 on Form 10-SB filed with the U. S. Securities and Exchange Commission on
October 30, 1999. The information presented herein may not include all
disclosures required by generally accepted accounting principles and the users
of financial information provided for interim periods should refer to the annual
financial information and footnotes contained in its Annual Report Pursuant to
Section 13 or 15(d) of The Securities Exchange Act of 1934 on Form 10-SB when
reviewing the interim financial results presented herein.
In the opinion of management, the accompanying interim financial statements,
prepared in accordance with the instructions for Form 10-QSB, are unaudited and
contain all material adjustments, consisting only of normal recurring
adjustments necessary to present fairly the financial condition, results of
operations and cash flows of the Company for the respective interim periods
presented. The current period results of operations are not necessarily
indicative of results which ultimately will be reported for the full fiscal year
ending December 31, 2000.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
The Company is principally dependent upon its parent company for working capital
support. The parent company intends to continue providing the necessary working
capital support for foreseeable future periods.
Note B - Summary of Significant Accounting Policies
1. Cash and cash equivalents
-------------------------
For purposes of reporting cash flows, the Company considers all cash on
hand, in banks and on deposit with brokerage houses, certificates of
deposit and other highly liquid debt instruments with a maturity of three
months or less at the date of purchase to be cash and cash equivalents.
7
<PAGE>
Thoroughbred Racing Associates, Inc.
(a wholly-owned subsidiary of Halter Capital Corporation)
Notes to Financial Statements - Continued
Note B - Summary of Significant Accounting Policies - Continued
1. Cash and cash equivalents - continued
-------------------------
Cash overdraft positions may occur from time to time due to the timing of
making bank deposits and releasing checks, in accordance with the Company's
cash management policies.
2. Livestock
---------
Livestock is recorded at historical cost. Depreciation is provided in
amounts sufficient to relate the asset cost to operations over the
estimated useful life of three years using straight-line and accelerated
methods.
Gains and/or losses from the disposition of livestock are recognized as
incurred and are included in operations.
3. Income taxes
------------
The Company provides deferred income taxes, where material, based on the
asset and liability method under the provisions of Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes". At March 31,
2000 and 1999, respectively, the deferred tax asset and deferred tax
liability accounts, consisting solely of temporary differences in
accumulated depreciation, were not material to the financial statements and
no valuation allowance was provided against deferred tax assets.
The Company files its income tax returns as a component of its parent
company's consolidated tax return. Accordingly, all net operating losses
are offset against the tax liabilities of the Company's parent. No net
operating loss carryforwards exist as of March 31, 2000 and 1999,
respectively.
Note C - Related Party Transactions
Halter Capital Corporation, the Company's parent, has advanced the Company
approximately $674,000 and $640,728 as of March 31, 2000 and 1999, respectively,
in funds used primarily for working capital purposes. The advances are
non-interest bearing and are repayable upon demand.
A Company officer has advanced the Company approximately $88,000 as of March 31,
2000 and 1999, respectively, which was used principally for livestock purchases.
The advances are non-interest bearing and are repayable upon demand.
8
<PAGE>
Part I - Item 2
Management's Discussion and Analysis of Financial Condition and Results of
Operations
(1) Caution Regarding Forward-Looking Information
This quarterly report contains certain forward-looking statements and
information relating to the Company that are based on the beliefs of the Company
or management as well as assumptions made by and information currently available
to the Company or management. When used in this document, the words
"anticipate," "believe," "estimate," "expect" and "intend" and similar
expressions, as they relate to the Company or its management, are intended to
identify forward-looking statements. Such statements reflect the current view of
the Company regarding future events and are subject to certain risks,
uncertainties and assumptions, including the risks and uncertainties noted.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those described herein as anticipated, believed, estimated, expected or
intended. In each instance, forward-looking information should be considered in
light of the accompanying meaningful cautionary statements herein.
(2) Results of Operations
For the period ended March 31, 2000, the Company raced a single horse, Book a
Double, principally at a race track in Tampa, Florida. For the comparable period
ended March 31, 1999, the Company raced a single horse, ScatterBuy, principally
at the Hialeah Park race track near Miami, Florida. Total race purses for the
first quarter 2000 and 1999 were approximately $2,732 and $7,274, respectively.
Additionally, the Company claimed a second horse for it's stable in March 2000,
Sheer Bliss. The funding for this purchase was advanced by the Company's Chief
Executive Officer.
Direct horse expenses for the first quarter of 2000 and 1999 were approximately
$13,563 and $12,929, respectively. These costs remain relatively constant
between periods, depending on the number of horses in the Company's stable.
General and administrative expenses vary on the activity level within the
Company during each quarter. Total general and administrative expenses for the
first quarter of 2000 and 1999 were approximately $2,732 and $20, respectively.
For the quarters ended March 31, 2000 and 1999, respectively, the Company
incurred a net loss of $(15,200) and $(9,842), respectively. Based on 2,500,000
weighted-average shares issued and outstanding, the net loss per share was nil
for both periods presented in the accompanying financial statements.
Effective March 31, 2000, ownership of Book a Double and Sheer Bliss was
transferred to the Company's Chief Executive Officer in partial repayment of
funds advanced by the officer which were principally used in the current and
prior periods for the acquisition of livestock. Additionally, in April 2000 to
be effective on March 31, 2000, the Company transferred all remaining assets to
its parent company in partial repayment of working capital advances. Further,
the Company's parent assumed responsibility for all then outstanding
liabilities. The remaining unpaid advances from the parent company were then
forgiven by the Company's parent and reclassified as an additional paid-in
capital contribution.
(3) Liquidity and Capital Resources
As of March 31, 2000 and 1999, the Company had cash on hand of approximately
$-0- and $4,149. During each respective quarter, liquidity to support operations
in excess of revenues earned from horse racing activities was provided by
advances from it's parent company.
With the transfer of all operating assets, effective March 31, 2000, the Company
is fully dependent on it's parent company, officers or directors for all working
capital necessary to support the operations and corporate entity.
9
<PAGE>
The Company has identified no further significant capital requirements for the
current annual period. Liquidity requirements mandated by future business
expansions or acquisitions, if any are specifically identified or undertaken,
are not readily determinable at this time as no substantive plans have been
formulated by management.
(4) Year 2000 Considerations
The Year 2000 (Y2K) date change was believed to affect virtually all computers
and organizations. The Company undertook a comprehensive review of its
information systems, including personal computers, software and peripheral
devices, and its general communications systems. The Company has no direct
electronic links with any customer or supplier. The Company has not experienced
any detrimental effects related to any Y2K issues or date changes through the
date of this filing. However, there can be no assurance that all of the
Company's systems, and the systems of its suppliers, shippers, customers or
other external business partners will continue to function appropriately.
Part II - Other Information
Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities
None
Item 3 - Defaults on Senior Securities
None
Item 4 - Submission of Matters to a Vote of Security Holders
The Company has held no regularly scheduled, called or special meetings of
shareholders during the reporting period.
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
None
10
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
THOROUGHBRED RACING ASSOCIATES, INC.
May 4 , 2000 /s/ Kevin B. Halter
------- ----------------------------
Kevin B. Halter
President and Director
11
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<LEGEND>
</LEGEND>
<CIK> 0001099330
<NAME> Thoroughbred Racing Associates, Inc.
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<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 0
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0
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<COMMON> 2500
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