U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(MARK ONE)
|X| Quarterly Report Pursuant to Section 13 or 15(d) of Securities Exchange
Act of 1934
For the quarterly period ended JUNE 30, 2000
|_| Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from _______ to _______.
Commission File No. 000-28321
AVID SPORTSWEAR & GOLF CORP.
----------------------------
(Name of Small Business Issuer in Its Charter)
NEVADA 88-0374969
------ ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
22 SOUTH LINKS AVENUE, STE. 204,
SARASOTA, FLORIDA 34236
--------------------------------- -----
(Address of Principal Executive Offices (Zip Code)
(941) 330-8051
--------------
(Issuer's Telephone Number, Including Area Code)
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, and (2) has
been subject to such filing requirements for the past 90 days. Yes |X| No |_|
There were 44,114,405 shares of Common Stock outstanding as of August 15,
2000. This number does not include outstanding options to purchase Common Stock
of the issuer.
<PAGE>
PART I
FINANCIAL INFORMATION
---------------------
ITEM 1. FINANCIAL STATEMENTS.
2
<PAGE>
AVID SPORTSWEAR & GOLF CORP.
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000 AND DECEMBER 31, 1999
<PAGE>
<TABLE>
<CAPTION>
AVID SPORTSWEAR & GOLF CORP.
Consolidated Balance Sheets
ASSETS
------
June 30, December 31,
2000 1999
------------ ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash $ 525,175 $ 237,407
Accounts receivable, net 1,745,677 315,804
Inventory 997,345 1,885,390
Prepaid expenses 24,520 20,000
-------------- -------------
Total Current Assets 3,292,717 2,458,601
-------------- -------------
EQUIPMENT
Machinery and equipment 413,535 378,531
Furniture and fixtures 457,671 253,644
Show booths 643,799 298,479
Leasehold improvements 29,398 29,398
Less: accumulated depreciation (580,389) (502,938)
-------------- -------------
Total Equipment 964,014 457,114
-------------- -------------
OTHER ASSETS
Note receivable - related 417,003 --
Goodwill, net 2,218,137 2,346,103
Deposits 20,114 15,114
Trademarks 2,902 2,902
-------------- -------------
Total Other Assets 2,658,156 2,364,119
-------------- --------------
TOTAL ASSETS $6,914,887 $5,279,834
============== ==============
</TABLE>
F-2
<PAGE>
<TABLE>
<CAPTION>
AVID SPORTSWEAR & GOLF CORP.
Consolidated Balance Sheets (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
June 30, December 31,
2000 1999
-------------- -------------
(Unaudited)
CURRENT LIABILITIES
<S> <C> <C>
Accounts payable $ 1,872,982 $ 1,504,858
Accrued expenses 822,079 200,865
Notes payable - related parties 561,525 300,000
Notes payable 1,100,000 1,735,524
Subscribed stock 8,925 12,500
-------------- -------------
Total Current Liabilities 4,365,511 3,753,747
-------------- -------------
Total Liabilities 4,365,511 3,753,747
-------------- -------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock; 10,000,000 shares authorized
of $0.001 par value, zero issued and outstanding -- --
Common stock; 50,000,000 shares authorized of
$0.001 par value, 44,114,406 and 26,374,022
shares issued and outstanding 44,114 26,374
Additional paid-in capital 13,455,697 7,092,848
Common stock subscription receivable (1,245,000) (30,000)
Accumulated deficit (9,705,435) (5,563,135)
-------------- -------------
Total Stockholders' Equity 2,549,376 1,526,087
-------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,914,887 $ 5,279,834
============= =============
</TABLE>
F-3
<PAGE>
<TABLE>
<CAPTION>
AVID SPORTSWEAR & GOLF CORP.
Consolidated Statements of Operations
(Unaudited)
For the Six Months Ended For the Three Months Ended
June 30, June 30,
--------------------------------- --------------------------
2000 1999 2000 1999
------------ ------------ ----------- ----------
<S> <C> <C> <C> <C>
SALES, NET $ 3,667,924 $ 1,183,042 $ 2,638,616 $ 785,999
COST OF GOODS SOLD 3,370,557 805,833 2,596,264 681,494
------------ -------------- ----------- ---------
Gross Margin (Deficit) 297,367 377,209 (42,352) 104,505
------------ -------------- ----------- ---------
OPERATING EXPENSES
Selling expenses 1,286,761 252,207 675,277 139,495
Depreciation and amortization
expense 205,417 84,827 109,821 51,657
General and administrative expenses 2,652,306 2,055,484 828,467 428,292
------------ -------------- ----------- ---------
Total Operating Expenses 4,144,484 2,392,518 1,613,565 619,444
------------ -------------- ----------- ---------
Loss from Operations (3,847,117) (2,015,309) (1,571,213) (514,939)
------------ -------------- ----------- ---------
OTHER INCOME (EXPENSE)
Interest income 188 -- -- --
Interest expense (300,790) (52,397) (49,820) (24,024)
Gain on sale of asset 5,419 -- -- --
------------ -------------- ------------ ---------
Total Other Income (Expense) (295,183) (52,397) (49,820) (24,024)
------------ -------------- ------------ ---------
INCOME TAX BENEFIT -- -- -- --
------------ -------------- ------------ ---------
NET LOSS $(4,142,300) $ (2,067,706) $(1,621,033) $(538,963)
============ ============== ============ ==========
BASIC LOSS PER SHARE $ (0.13) $ (0.30) $ (0.09) $ (0.08)
============ ============== ============ ==========
</TABLE>
F-4
<PAGE>
<TABLE>
<CAPTION>
AVID SPORTSWEAR & GOLF CORP.
Consolidated Statements of Stockholders' Equity
Common Stock Additional
------------------- Paid-in Subscription Accumulated
Shares Amount Capital Receivable Deficit
--------------------- -------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1998 14,612,000 $14,612 $ 893,193 $ (60,000) $ (527,157)
January 5, 1999, common stock
issued for cash, services
and debt, valued at $0.75
per share 590,000 590 441,910 -- --
January 5, 1999, common stock
issued for cash and debt,
valued at $0.75 per share 866,670 867 649,133 -- --
January 8, 1999, common stock
issued for cash at $0.75 per
share 210,668 211 157,789 -- --
January 8, 1999, warrants
issued below market value -- -- 53,235 -- --
January 11, 1999, common stock
issued for cash and
services, valued at $0.75
per share 560,000 560 419,440 -- --
January 11, 1999, common stock
issued for media services
valued at $0.75 per share 800,000 800 599,200 -- --
January 20, 1999, common stock
issued for cash and services
valued at $0.75 per share 160,000 160 119,840 -- --
January 27, 1999, common stock
issued to purchase Avid
Sportswear valued at $0.75
per share 1,100,000 1,100 823,900 -- --
February 4, 1999, common
stock issued for cash at
$0.75 per share 372,002 372 278,630 -- --
---------- -------- ---------- ---------- ----------
Balance Forward 19,271,340 $ 19,272 $4,436,270 $ (60,000) $(527,157)
---------- -------- ---------- ---------- ----------
</TABLE>
F-5
<PAGE>
<TABLE>
<CAPTION>
AVID SPORTSWEAR & GOLF CORP.
Consolidated Statements of Stockholders' Equity (Continued)
Common Stock Additional
------------------- Paid-in Subscriptions Accumulated
Shares Amount Capital Receivable Deficit
-------- -------- ------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Balance Forward 19,271,340 $ 19,272 $4,436,270 $ (60,000) $ (527,157)
March 11, 1999, common
stock issued for cash and
services valued at $0.75
per share 1,220,000 1,220 913,780 -- --
March 11, 1999, common
stock issued for cash at
$0.75 per share 83,334 83 62,417 -- --
March 11, 1999, common
stock issued for cash at
$0.75 per share 18,334 18 13,732 -- --
May 28, 1999, common stock
issued for cash at $0.75
per share 101,100 101 75,724 -- --
September 20, 1999, common
stock issued for cash and
services valued at $0.75
per share 50,000 50 37,450 -- --
December 28, 1999, common
stock issued for conversion
of debt to equity at
$0.22 per share 5,344,200 5,344 1,170,380 -- --
Conversion of debt below
market value -- -- 293,381 -- --
December 31, 1999, common
stock issued for cash at
$0.35 per share 285,714 286 99,714 -- --
Stock offering costs -- -- (10,000) -- --
Receipt of stock subscription -- -- -- 30,000 --
Net loss for the year
ended December 31,1999 -- -- -- -- (5,035,978)
---------- --------- ----------- --------- ------------
Balance, December 31, 1999 26,374,022 $ 26,374 $7,092,848 $(30,000) $(5,563,135)
========== ========= ========== ========= ============
</TABLE>
F-6
<PAGE>
<TABLE>
<CAPTION>
AVID SPORTSWEAR & GOLF CORP.
Consolidated Statements of Stockholders' Equity (Continued)
Common Stock Additional
-------------------- Paid-in Subscription Accumulated
Shares Amount Capital Receivable Deficit
-------------------- ------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1999 26,374,022 $ 26,374 $ 7,092,848 $ (30,000) $(5,563,135)
January 17, 2000, common
stock issued for services
at $0.30 per share
(unaudited) 1,200,000 1,200 358,800 (180,000) --
January 17, 2000, options
granted below market value
(unaudited) -- -- 75,000 -- --
January 25, 2000, common
stock issued for conversion
of debt to equity at $0.375
per share (unaudited) 1,241,874 1,242 464,461 -- --
February 1, 2000, common
stock issued for conversion
of debt to equity at $0.437
per share (unaudited) 695,583 696 303,274 -- --
March 6, 2000, canceled 100,000
shares common stock, issued in
February 1998, at $0.15 per share
and canceled subscription
receivable in the amount of
$15,000 (unaudited) (100,000) (100) (14,900) 15,000 --
Common stock issued for
conversion of subscribed
stock at $0.35 per share
(unaudited) 5,103,357 5,103 1,781,072 -- --
Common stock issued for cash
at $0.35 per share
(unaudited) 7,955,218 7,955 2,740,763 1,050,000 --
Common stock issued for
conversion of debt at $0.35
per share (unaudited) 1,294,352 1,294 451,729 -- --
Common stock issued for
consulting contract at
$0.58 per share (unaudited) 350,000 350 202,650 -- --
Net loss for the six months
ended June 30, 2000
(unaudited) -- -- -- -- (4,142,300)
---------- --------- ----------- ----------- ------------
Balance, June 30, 2000 (unaudited) 44,114,406 $ 44,114 $13,455,697 $(1,245,000) $(9,705,435)
========== ========= =========== ========== ============
</TABLE>
F-7
<PAGE>
<TABLE>
<CAPTION>
AVID SPORTSWEAR & GOLF CORP.
Consolidated Statements of Cash Flows
(Unaudited)
For the Six Months For the Three Months
Ended Ended
June 30, June 30,
---------------------------- -----------------------------
2000 1999 2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES ------------ ------------ -------------- ---------
<S> <C> <C> <C> <C>
Net (loss) $(4,142,300) $(2,067,706) $(1,621,033) $(538,963)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization 205,417 95,366 109,821 55,170
Common stock issued for services, 611,935 1,075,000 284,322 --
discounts
Changes in operating assets and liabilities:
(Increase) in accounts receivable (1,429,873) (161,207) (1,220,750) (111,648)
Increase for prepaid insurance (9,520) (47,231) (14,520) (50,400)
(Increase) decrease in inventory 888,045 (276,059) 490,751 (195,759)
Increase (decrease) in accounts payable 368,124 323,535 692,480 99,774
Increase (decrease) in accrued expenses 621,214 (35,422) 377,701 (31,140)
----------- ----------- ---------- ---------
Net Cash Used in Operating Activities (2,886,958) (1,093,724) (901,228) (772,966)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (584,351) (196,691) (127,172) (190,844)
----------- ----------- ---------- ---------
Net Cash Used in Investing Activities (584,351) (196,691) (127,172) (190,844)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash purchased with Avid Sportswear, Inc. -- 40,282 -- --
Payment to Avid shareholders -- (725,000) -- --
Proceeds from notes payable -- 973,450 -- --
Payments on notes payable (549,521) (1,852,561) (514,105) --
Proceeds from related party notes payable 1,244,283 350,542 122,048 350,542
Payment on convertible note payable -- (26,750) -- (26,750)
Issuance of common stock for cash 1,698,718 2,056,034 1,698,718 591,326
Receipt of related party receivable -- 304,455 -- (47,845)
Increase in related party receivable (417,003) -- (41,003) --
Proceeds from subscribed stock 1,782,600 15,000 8,925 15,000
----------- ----------- --------- ----------
Net Cash Provided by Financing Activities 3,759,077 1,135,452 898,583 882,273
NET INCREASE (DECREASE) IN CASH 287,768 (154,963) (129,817) (81,537)
CASH AND CASH EQUIVALENTS AT 237,407 154,237 654,992 80,811
BEGINNING OF PERIOD ---------- ------------ ---------- ----------
CASH AND CASH EQUIVALENTS AT END OF
PERIOD $ 525,175 $ (726) $ 525,175 $ (726)
=========== ============ ============ ==========
</TABLE>
F-8
<PAGE>
<TABLE>
<CAPTION>
AVID SPORTSWEAR & GOLF CORP.
Consolidated Statements of Cash Flows (Continued)
(Unaudited)
For the Six Months For the Three Months
Ended Ended
June 30, June 30,
------------------- ----------------------
2000 1999 2000 1999
-------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
CASH PAID FOR:
Interest $ 63,415 $ 36,592 $ 38,964 $ 36,592
Income tax $ -- $ -- $ -- $ --
SCHEDULE OF NON-CASH FINANCING ACTIVITIES
Issuance of common stock for subsidiary $ -- $ 275,000 $ -- $275,000
Issuance of common stock for debt $ 1,222,696 $ -- $ 453,023 $ --
Issuance of common stock for services, discounts $ 611,935 $1,075,000 $ 284,322 $ --
</TABLE>
F-9
<PAGE>
AVID SPORTSWEAR & GOLF CORP.
Notes to the Consolidated Financial Statements
June 30, 2000 and December 31, 1999
NOTE 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared
by the Company without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary
to present fairly the consolidated financial position, results of
operations and cash flows at June 30, 2000 and 1999 and for all periods
presented have been made.
Certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. It is
suggested that these condensed consolidated financial statements be
read in conjunction with the financial statements and notes thereto
included in the Company's December 31, 1999 audited consolidated
financial statements. The results of operations for the period ended
June 30, 2000 and 1999 are not necessarily indicative of the operating
results for the full years.
NOTE 2 - GOING CONCERN
The Company's consolidated financial statements are prepared using
generally accepted accounting principles applicable to a going concern,
which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. However, the Company has
generated significant losses form operations for the years ended
December 31, 1998 and 1999, and for the six months ended June 30, 2000
and has current liabilities in excess of current assets at June 30,
2000. For the year ended December 31, 2000, the Company anticipates a
significant increase in sales volume from the 1999 level, requiring
cash in excess of the cash generated from operations. Management has
secured necessary cash to date from additional cash investments by
existing shareholders and from the proceeds of a private placement of
additional shares of Company stock; additional required cash is
anticipated from borrowing from a senior lender.
NOTE 3 - RELATED PARTY RECEIVABLE
Subsequent to June 30, 2000, a related party has accrued expenses and
made payments on the note payable of approximately $528,000 which will
be offset against the receivable.
F-10
<PAGE>
ITEM 2. MANAGEMENT'S PLAN OF OPERATION AND DISCUSSION AND ANALYSIS.
-----------------------------------------------------------
INTRODUCTORY STATEMENTS
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS. THIS FILING CONTAINS
FORWARD-LOOKING STATEMENTS, INCLUDING STATEMENTS REGARDING, AMONG OTHER THINGS,
(A) OUR COMPANY'S PROJECTED SALES AND PROFITABILITY, (B) OUR COMPANY'S GROWTH
STRATEGIES, (C) ANTICIPATED TRENDS IN OUR COMPANY'S INDUSTRY, (D) OUR COMPANY'S
FUTURE FINANCING PLANS, (E) OUR COMPANY'S ANTICIPATED NEEDS FOR WORKING CAPITAL
AND (F) BENEFITS RELATED TO THE ACQUISITION OF AVID SPORTSWEAR, INC., A
CALIFORNIA CORPORATION. IN ADDITION, WHEN USED IN THIS FILING, THE WORDS
"BELIEVES," "ANTICIPATES," "INTENDS," "IN ANTICIPATION OF," "EXPECTS," AND
SIMILAR WORDS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE
FORWARD-LOOKING STATEMENTS ARE BASED LARGELY ON OUR COMPANY'S EXPECTATIONS AND
ARE SUBJECT TO A NUMBER OF RISKS AND UNCERTAINTIES, MANY OF WHICH ARE BEYOND OUR
COMPANY'S CONTROL. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THESE
FORWARD-LOOKING STATEMENTS AS A RESULT OF CHANGES IN TRENDS IN THE ECONOMY AND
OUR COMPANY'S INDUSTRY, DEMAND FOR OUR COMPANY'S PRODUCTS, UNEXPECTED CHANGES IN
FASHION TRENDS, PRIOR SEASON INVENTORIES, COMPETITION, REDUCTIONS IN THE
AVAILABILITY OF FINANCING AND AVAILABILITY OF RAW MATERIALS, THE SEASONAL NATURE
OF OUR COMPANY'S BUSINESS, THE EXTREMELY COMPETITIVE NATURE OF THE GOLF APPAREL
AND SPORTSWEAR INDUSTRIES AND OTHER FACTORS. IN LIGHT OF THESE RISKS AND
UNCERTAINTIES, THERE CAN BE NO ASSURANCE THAT THE FORWARD-LOOKING STATEMENTS
CONTAINED IN THIS FILING WILL IN FACT OCCUR.
OVERVIEW
Through our wholly-owned subsidiary, we design, manufacture and market
distinctive premium and moderately-priced sportswear. We sell our products
primarily through golf pro shops and resorts, corporate sales accounts and
better specialty stores. Our sportswear is marketed under three distinct labels:
Avid Sportswear, British Open Collection and Dockers Golf. From our
incorporation on September 19, 1997 until March 1, 1999, we had no operations.
On March 1, 1999, we acquired Avid Sportswear, Inc., which has been in the
business of designing, manufacturing and marketing golf apparel since October 6,
1988. For accounting purposes, the acquisition was treated as a purchase of Avid
Sportswear, Inc. All of our business operations are conducted through Avid
Sportswear, Inc.
PLAN OF OPERATIONS
ADDITIONAL FUND RAISING ACTIVITIES. As of June 30, 2000, we had $525,175
cash-on-hand. We have historically funded our operations through a combination
of internally generated cash, funds loaned to our company by certain of our
officers and directors and through the sale of securities. We registered
14,988,640 shares of common stock issued pursuant to our company's private
offerings and the Securities and Exchange Commission declared such registration
statement effective on July 28, 2000. The sale of these shares is permitted in
most states pursuant to registration or exemptions from registration. With
respect to the remaining states, we are in the process of attempting to register
such shares with the applicable state securities authorities. No assurance can
be given that such registration in those states will be accomplished. These
shares of common stock may be offered and sold from time to time by selling
shareholders of our company, and none of the proceeds generated from such sales
will be available to our company. See "Certain Business Risk Factors - Sales of
common stock by private placement investors may cause our stock price to
decline." We may need to raise additional funds to meet expected demand for our
products in 2000 and beyond. Expenses are anticipated to increase in preparation
for the upcoming season due to, among other things, the addition of the Dockers
Golf and British Open Collection labels. If we underestimate demand or incur
unforeseen expenses in our product design or other areas, such funds may be
required earlier.
SUMMARY OF ANTICIPATED PRODUCT DEVELOPMENT. We spent approximately
$350,000 on product development in 1999 and expect to spend approximately
$500,000 on product development in 2000 in preparation for future seasons and in
designing products for the Dockers Golf and British Open Collection labels.
Because these product development efforts are in their infancy, we expect these
efforts to continue into the foreseeable future. Initially, these efforts are
expected to focus on golf-related apparel and may eventually include other types
of apparel. Even after our product lines mature, we expect product development
to remain a significant expense due to changing fashions and other factors. We
expect a national roll-out of our Dockers Golf and British Open Collection
labels in the Fall of 2000.
3
<PAGE>
SIGNIFICANT PLANT AND EQUIPMENT PURCHASES. In 2000, we expect to purchase
computer hardware and software, telephone and embroidery equipment. We estimate
that the cost of this equipment to be approximately $1,000,000.
CHANGES IN NUMBER OF EMPLOYEES. We currently have 62 employees. As shown
in the following chart, we anticipate hiring additional personnel during 2000 in
connection with our expected growth plans. We believe that these personnel will
be adequate to accomplish the tasks set forth in the plan.
PROJECTED
CURRENT EMPLOYEES
DEPARTMENT EMPLOYEES 2000
---------- --------- ----
Marketing and Sales 7 7
Embroidery and Sewing 25 32
Warehousing and Delivery 9 10
Design and Production Control 3 5
Administrative and Other
Support Positions 18 21
-------- --------
Total Employees 62 75
-------- --------
Independent Contractors - Sales 33 34
MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
The following table sets forth, for the periods presented, the percentage
of net sales represented by certain items in our company's Consolidated
Statement of Operations for the six months ended June 30, 2000 and 1999 and the
three months ended June 30, 2000 and 1999:
<TABLE>
<CAPTION>
PERCENTAGE OF SALES
-------------------
SIX MONTHS SIX MONTHS THREE MONTHS ENDED THREE MONTHS ENDED
JUNE 30, 2000 JUNE 30, 1999 JUNE 30, 2000 JUNE 30, 1999
------------- ------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C>
Sales, net 100.0% 100.0% 100.0% 100.0%
Cost of goods sold (91.9%) (68.1%) (98.4%) (86.7%)
Gross margin 8.1% 31.9% 1.6% 13.3%
Operating expenses (113.0%) (202.2%) (61.2%) (78.8%)
(Loss) from operations (104.9%) (170.4%) (59.6%) (65.5%)
Interest expense (8.2%) (4.4%) (1.9%) (3.1%)
Net loss (112.9%) (174.8%) (61.4%) (68.6%)
</TABLE>
4
<PAGE>
THREE-MONTH PERIODS ENDED JUNE 30,2000 AND 1999
Our results of operations for the three-month period ended June 30, 1999,
included three months of operations of our wholly-owned subsidiary, Avid
Sportswear, Inc. We acquired Avid Sportswear, Inc. on March 1, 1999. Our results
of operations in the three-month period ended June 30, 2000, also included three
months of operations of our wholly-owned subsidiary.
SALES, NET. Sales, net increased $1.9 million, or 235.7%, from $0.8
million to $2.6 million in the three months ended June 30, 2000 compared to the
same period in the prior year. This increase was primarily attributable to the
operations of our wholly-owned subsidiary, Avid Sportswear, Inc.
COST OF GOODS SOLD. Cost of goods sold increased $1.9 million, or 281.0%,
from $0.7 million to $2.6 million in the three months ended June 30, 2000
compared to the same period in the prior year, and cost of goods sold as a
percentage of sales, net, increased from 86.7% in the three months ended June
30, 1999 to 98.4% in the three months ended June 30, 2000. This increase was
primarily attributable to increased sales, net and the higher cost of materials
incurred in connection with the introduction of the Dockers Golf and British
Open Collection product lines, as well as the need to ship goods to the company
by air rather than ocean, the need to give concessions to customers caused by
late shipping, and the liquidation of inventory from prior seasons.
GROSS PROFIT. Gross profit decreased $62,153 in the three months ended
June 30, 2000 compared to the same period in the prior year. Gross profit as a
percentage of sales, net decreased from 13.3% to 1.6% in the three months ended
June 30, 1999 and 2000, respectively. This decrease was primarily attributable
to the increase in cost of goods sold in the current period compared to the same
period in the prior year.
SELLING EXPENSES. Selling expenses increased $0.5 million, or 384.1%, from
$0.1 million to $0.7 million in the three months ended June 30, 2000 compared to
the same period in the prior year. This increase was primarily attributable to
the start-up costs incurred in connection with the introduction of the Dockers
Golf and British Open Collection product lines.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased $0.4 million, or 93.4%, from $0.4 million to $0.8 million in the three
months ended June 30, 2000 compared to the same period in the prior year. This
increase was primarily attributable to the operations of our wholly-owned
subsidiary, Avid Sportswear, Inc.
INTEREST EXPENSE. Interest expense increased $0.03 million, or 107.4%, in
the three-month period ended June 30, 2000, compared to the same period in the
prior year. This increase consisted primarily of interest paid in connection
with bank loans.
NET LOSS. Net loss increased $1.0 million, or 200.8%, from $0.5 million to
$1.6 million in the three months ended June 30, 2000 compared to the same period
in the prior year. This increase was primarily attributable to the increase in
cost of goods sold, general and administrative expenses and interest expense in
the three-month period ended June 30, 2000.
5
<PAGE>
SIX-MONTH PERIODS ENDED JUNE 30, 2000 AND 1999
Our results of operations for the six-month period ended June 30, 1999,
included four months of operations of our wholly-owned subsidiary, Avid
Sportswear, Inc. Our results of operations in the six-month period ended June
30, 2000, included six months of operations of our wholly-owned subsidiary.
SALES, NET. Sales, net increased $2.5 million, or 210.0%, from $1.2
million to $3.7 million in the six months ended June 30, 2000 compared to the
same period in the prior year. This increase is primarily attributable to the
introduction of the Dockers Golf and British Open Collection product lines. This
increase was also partially attributable to the operations of our wholly-owned
subsidiary, Avid Sportswear, Inc. The six-month period ended June 30, 2000,
included six months of operating results compared to four months of operating
results in the same period in the prior year.
COST OF GOODS SOLD. Cost of goods sold increased $2.6 million, or 318.3%,
from $0.8 million to $3.4 million in the six months ended June 30, 2000 compared
to the same period in the prior year. Cost of goods sold as a percentage of
sales, net, increased from 68.1% in the six months ended June 30, 1999 to 91.9%
in the six months ended June 30, 2000. This increase was primarily attributable
to increased sales, net and the higher cost of materials incurred in connection
with the introduction of the Dockers Golf and British Open Collection product
lines, as well as the need to ship goods to the company by air rather than
ocean, the need to give concessions to customers caused by late shipping, and
the liquidation of inventory from prior seasons.
GROSS PROFIT. Gross profit decreased $79,842 in the six months ended June
30, 2000 compared to the same period in the prior year. Gross profit as a
percentage of sales, net decreased from 31.9% to 8.1% in the six months ended
June 30, 1999 and 2000, respectively. This decrease was primarily attributable
to the increase in cost of goods sold in the current period compared to the same
period in the prior year.
SELLING EXPENSES. Selling expenses increased $1.0 million, or 410.2%, from
$0.3 million to $1.3 million in the six months ended June 30, 2000 compared to
the same period in the prior year. This increase was primarily attributable to
the start-up costs incurred in connection with the introduction of the Dockers
Golf and British Open Collection product lines.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased $0.6 million, or 29.0%, from $2.1 million to $2.7 million in the six
months ended June 30, 2000 compared to the same period in the prior year. This
increase was partially attributable to the operations of our wholly-owned
subsidiary, Avid Sportswear, Inc.
INTEREST EXPENSE. Interest expense increased $0.2 million, or 474.1%, in
the six-month period ended June 30, 2000, compared to the same period in the
prior year. This increase consisted primarily of $0.16 million of interest
expense to reflect a discount given in connection with the conversion of debt to
equity. In total, during the six-month period ended June 30, 2000, $1.2 million
of debt was converted into 3.2 million shares of common stock at an average
price of $0.33 per share.
NET LOSS. Net loss increased $2.1 million, or 100.3%, from $2.1 million to
$4.1 million in the six months ended June 30, 2000 compared to the same period
in the prior year. This increase was primarily attributable to the increase in
cost of goods sold, general and administrative expenses and interest expense in
the six-month period ended June 30, 2000.
LIQUIDITY AND CAPITAL RESOURCES. As of June 30, 2000, we had $525,175 in
cash-on-hand, consisting mainly of the net proceeds from the sale of common
stock. A discussion of how we generated and used cash in the six-month period
follows:
6
<PAGE>
OPERATING ACTIVITIES. Our operating activities used $2.9 million in cash
during the six-month period ended June 30, 2000, consisting mainly of a net loss
of $4.1 million and an increase in accounts receivable of $1.4 million. These
items were partially offset by common stock issued for services valued at $0.4
million, depreciation and amortization expenses of $0.2 million, a decrease in
inventory of $0.9 million, an increase in accounts payable of $0.4 million, and
an increase in accrued expenses of $0.6 million.
INVESTING ACTIVITIES. Our investing activities used $0.6 million in cash
during the six-month period ended June 30, 2000, consisting mainly of the
purchase of embroidery equipment, an exhibit booth for trade shows and computer
equipment.
FINANCING ACTIVITIES. Financing activities provided net cash of $3.8
million, generated mainly by the proceeds from related party notes payable of
$1.2 million, the issuance of common stock for cash of $1.7 million and proceeds
from subscribed stock of $1.8 million, offset by payments on notes payable of
$0.5 million and an increase in related party receivables of $0.4 million.
As of June 30, 2000, Earl Ingerfield, or entities controlled by Mr.
Ingerfield, owed our company approximately $417,000. As of the date hereof, the
related party has accrued expenses and made payments on the note payable of
approximately $528,000, which results in a payable of our company $111,000.
Due to the anticipated demand for our Dockers Golf and British Open
Collection product lines, we will need to rely on external financing to fund our
operations for the foreseeable future. Expenses are anticipated to increase in
preparation of the upcoming season due to, among other things, the addition of
the Dockers Golf and British Open Collection labels. Our need for funding will
increase likewise. If we underestimate demand or incur unforeseen expenses in
our product design or other areas, such funds may be required earlier.
Effective as of August 17, 2000, we entered into a factoring, letter of
credit and revolving inventory facility. Under the terms of this arrangement, we
will assign all invoices for collection on a non-recourse basis. We may borrow
up to 75% of certain accounts receivable with a factoring commission rate of
0.75%. In addition, we may borrow up to 40% of certain inventory, subject to a
borrowing limit of $2,500,000. In addition, a letter of credit was established
in the amount of $3,500,000, subject to a reserve of 60% of available borrowing
under the revolving facility. The term of the facility is one year and will
automatically renew unless either party gives 60 days notice of its intent not
to renew.
DEFAULT UNDER LICENSE
On August 10, 2000 we received a letter from Dockers Golf that our company
is in default of the license with Dockers Golf for failure to pay timely our
royalty payments for May and June 2000 of approximately $106,000. We anticipate
that such default will be cured within the next 45 days.
GOING CONCERN OPINION
Our independent auditors have added an explanatory paragraph to their
audit opinions issued in connection with the 1999 and 1998 financial statements
which states that our company does not have significant cash or other material
assets to cover its operating costs and to allow it to continue as a going
concern. Our ability to obtain additional funding will determine our ability to
continue as a going concern. Our financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
CERTAIN BUSINESS RISK FACTORS
We are subject to various risks, which may have a material adverse effect
on our company's business, financial condition and results of operations.
Certain risks are discussed below:
WE HAVE HISTORICALLY LOST MONEY AND LOSSES MAY CONTINUE IN THE FUTURE
We have historically lost money. In the six months ended June 30, 2000, we
sustained a loss of $4.1 million. In the years ended December 31, 1999 and
December 31, 1998, we sustained losses of $5.0 million and $0.5 million,
respectively. The losses for 1998 exclude the operating results of our
wholly-owned subsidiary because it was not acquired until March 1, 1999.
Assuming the purchase of our wholly-owned subsidiary had occurred on January 1,
1998 instead of on March 1, 1999, we would have sustained losses of $1.5 million
in 1998. Future losses are likely to occur. For the years ended December 31,
1999 and 1998, our independent auditors have noted that our company does not
have significant cash or other material assets to cover its operating costs and
to allow it to continue as a going concern. Our ability to obtain additional
funding will determine our ability to continue as a going concern. Accordingly,
we may experience significant liquidity and cash flow problems if we are not
able to raise additional capital as needed and on acceptable terms. No
assurances can be given that we will be successful in reaching or maintaining
profitable operations.
WE MAY NEED TO RAISE ADDITIONAL CAPITAL TO FINANCE OPERATIONS; DEFAULT
UNDER DOCKERS GOLF LICENSE
We have relied on significant external financing to fund our operations.
Such financing has historically come from a combination of borrowings and sale
of common stock from third parties and funds provided by certain officers and
directors. We may need to raise additional capital to fund our anticipated
operating expenses and future expansion. Among other things, external financing
may be required to cover our operating costs and to fulfill our obligations
under the licenses for the "Dockers Golf" and "British Open Collection" brands.
These licenses require the payment of minimum guaranteed royalties, whether we
sell licensed products or not. We cannot assure you that financing whether from
external sources or related parties will be available if needed or on favorable
terms. The sale of our common stock to raise capital may cause dilution to our
existing shareholders. Our inability to obtain adequate financing will result in
the need to curtail business operations, and may also jeopardize our ability to
7
<PAGE>
satisfy the guaranteed minimum royalty obligations referred to above. Any of
these events would be materially harmful to our business and may result in a
lower stock price. On August 10, 2000 we received a letter from Dockers Golf
that our company is in default of the license with Dockers Golf for failure to
pay timely our royalty payments for May and June 2000 of approximately $106,000.
We anticipate that such default will be cured within the next 45 days. The
failure to cure such default would have a material adverse effect on our
business.
WE HAVE BEEN THE SUBJECT OF A GOING CONCERN OPINION FROM OUR INDEPENDENT
AUDITOR
Our independent auditors have added an explanatory paragraph to their
audit opinions issued in connection with the 1999 and 1998 financial statements
which states that our company does not have significant cash or other material
assets to cover its operating costs and to allow it to continue as a going
concern. Our ability to obtain additional funding will determine our ability to
continue as a going concern. Our financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
WE HAVE BEEN AND CONTINUE TO BE SUBJECT TO A WORKING CAPITAL DEFICIT AND
ACCUMULATED DEFICIT
We had a working capital deficit of $1.3 million and $93,000 at December
31, 1999 and 1998, respectively. At June 30, 2000, we had a working capital
deficit of $1.1 million. We had an accumulated deficit of $5.6 million and
$760,099 at December 31, 1999 and 1998, respectively. At June 30, 2000, we had
an accumulated deficit of $9.7 million.
SALE OF COMMON STOCK BY PRIVATE PLACEMENT INVESTORS MAY CAUSE OUR STOCK
PRICE TO DECLINE
We have filed a Form SB-2 Registration Statement on behalf of selling
shareholders with the Securities and Exchange Commission. This Registration
Statement was declared effective July 28, 2000 by the Securities and Exchange
Commission. The sale of these shares is permitted in most states pursuant to
registration or exemptions from registration. With respect to the remaining
states, we are in the process of attempting to register such shares with the
applicable state securities authorities. No assurrance can be given that such
registration in those states will be accomplished. These selling shareholders
hold 14,988,640 shares of common stock, representing 32.6% of our company's
outstanding capital stock. Such sales without corresponding demand may cause our
stock price to decline.
WE HAVE BEEN IN BUSINESS FOR A SHORT PERIOD OF TIME
Because we have been in business for a short period of time, there is
limited information upon which investors can evaluate our business. We were
formed on September 19, 1997 but did not begin significant operations until the
purchase of our wholly-owned subsidiary on March 1, 1999. You should consider
the likelihood of our future success to be highly speculative in view of our
limited operating history, as well as the complications frequently encountered
by other companies in the early stages of development, particularly companies in
the highly competitive sports apparel industry.
OUR PLANNED PURSUIT OF ACQUISITIONS INVOLVES RISKS THAT MAY ADVERSELY
AFFECT OUR OPERATING RESULTS AND FINANCIAL CONDITION
As part of our growth strategy, we plan to pursue acquisitions. Candidates
for acquisition include businesses that are anticipated to allow us to:
o Achieve economies of scale in terms of purchasing, distribution and
profitability;
o Enhance our name recognition and reputation;
o Obtain rights to well-recognized brand names;
8
<PAGE>
o Fill a perceived market niche; or
o Acquire products offering new price points.
If we are not correct when we assess the value, strengths, weaknesses,
liabilities and potential profitability of acquisition candidates or we are not
successful in integrating the operations of the acquired businesses, our results
of operations or financial position could be adversely effected and we could
lose money. We also may not be successful in finding desirable acquisition
candidates or completing acquisitions with candidates that we identify. Future
acquisitions that we finance through issuing equity securities could be dilutive
to existing shareholders. In addition, future acquisitions may require
additional capital and the consent of our lenders. There can be no assurances
that our lenders will consent to any capital raising or acquisitions.
WE MAY BE UNABLE TO MANAGE GROWTH
Successful implementation of our business strategy requires us to manage
our growth. Growth could place an increasing strain on our management and
financial resources. To manage growth effectively, we will need to:
o Implement changes in certain aspects of our business;
o Enhance our information systems and operations to respond to increased
demand;
o Attract and retain qualified personnel; and
o Develop, train and manage an increasing number of management-level and
other employees.
If we fail to manage our growth effectively, our business, financial
condition or operating results could be materially harmed, and our stock price
may decline.
WE RELY ON FOREIGN SUPPLIERS AND BUY MANY PRODUCTS USING LETTERS OF CREDIT
We obtain all of our garments from independent foreign and domestic
suppliers. We do not have formal agreements with these suppliers. Our reliance
on foreign suppliers may be effected by economic, political, governmental and
labor conditions in such foreign countries. This may delay or cut-off our
ability to source materials needed in production or may increase the price of
such materials. Such events would harm our business. In addition, several of our
suppliers have required us to obtain a letter of credit prior to purchasing any
garments. We may have to utilize a significant portion of our available working
capital to secure these letters of credit.
IMPORT RESTRICTIONS MAY HARM US
Our imported materials are subject to certain quota restrictions and U.S.
customs duties, which are a material part of our cost of goods. A decrease in
quota restrictions or an increase in customs duties could harm our business by
making needed materials scarce or by increasing the cost of such materials.
OUR COMMON STOCK MAY FLUCTUATE SIGNIFICANTLY
Our common stock has experienced, and is likely to experience in the
future, significant price and volume fluctuations, which could adversely affect
the market price of our common stock without regard to our operating
performance. In addition, we believe that factors such as quarterly fluctuations
in our financial results, announcements by other designers and marketers of
sportswear, and changes in the overall economy or the condition of the financial
markets could cause the price of our common stock to fluctuate substantially.
OUR COMMON STOCK MAY BE DEEMED TO BE "PENNY STOCK"
Our common stock may be deemed to be "penny stock" as that term is defined
in Rule 3a51-1 promulgated under the Securities Exchange Act of 1934. Penny
stocks are stock:
o With a price of less than $5.00 per share;
o That are not traded on a "recognized" national exchange;
9
<PAGE>
o Whose prices are not quoted on the Nasdaq automated quotation system
(Nasdaq listed stock must still have a price of not less than $5.00 per
share); or
o In issuers with net tangible assets less than $2.0 million (if the
issuer has been in continuous operation for at least three years) or
$5.0 million (if in continuous operation for less than three years), or
with average revenues of less than $6.0 million for the last three
years.
Broker/dealers dealing in penny stocks are required to provide potential
investors with a document disclosing the risks of penny stocks. Moreover,
broker/dealers are required to determine whether an investment in a penny stock
is a suitable investment for a prospective investor. These requirements may
reduce the potential market for our common stock by reducing the number of
potential investors. This may make it more difficult for investors in our common
stock to resell shares to third parties or to otherwise dispose of them. This
could cause our stock price to decline.
OUR STOCK PRICE COULD DECLINE DUE TO SEASONAL FLUCTUATIONS IN THE DEMAND
FOR OUR PRODUCTS AND GENERAL ECONOMIC CONDITIONS
Our business has been, and will continue to be, highly seasonal, and our
quarterly operating results will fluctuate due to the seasonality of our sales
of sportswear, among other things. Our sales tend to be highest during our first
and second calendar quarters (i.e., January through June), and lowest during our
third and fourth calendar quarters (i.e., July through December). Other factors
contributing to the variability of our operating results include:
o Seasonal fluctuation in consumer demand; o The timing and amount of
orders from key customers; and
o The timing and magnitude of sales of seasonal remainder merchandise and
availability of products.
In addition, any downturn, whether real or perceived, in general economic
conditions or prospects could change consumer spending habits and decrease
demand for our products.
As a result of these and other factors, our operating results may fall
below market analysts' expectations in some future quarters, and our stock price
may decline.
OUR COMMON STOCK MAY BE AFFECTED BY LIMITED TRADING VOLUME AND MAY
FLUCTUATE SIGNIFICANTLY
Historically, there has been a limited public market for our common stock
and there can be no assurance that an active trading market for our common stock
will develop. As a result, this could adversely affect our shareholders' ability
to sell our common stock in short time periods, or possibly at all. Our common
stock has experienced, and is likely to experience in the future, significant
price and volume fluctuations which could adversely affect the market price of
our common stock without regard to our operating performance.
OUR OFFICERS AND DIRECTORS EXERCISE CONTROL OF THE COMPANY
Our executive officers and directors beneficially own approximately 52.9%
of our outstanding common stock. As a result, these shareholders acting together
would be able to exert significant influence over most matters requiring
shareholder approval, including the election of directors. They would also be
able to delay or deter a change in control, which may result in shareholders not
receiving a premium on their stock.
WE COULD FAIL TO ATTRACT OR RETAIN KEY PERSONNEL
Our success largely depends on the efforts and abilities of key executives
and consultants, including Earl T. Ingarfield, our Chairman and Chief Executive
Officer, Jerry L. Busiere, our Secretary, Treasurer and a Director, and Barnum
Mow, Chief Executive Officer and President of our wholly-owned subsidiary and a
Director of our company. The loss of the services of any of these people could
materially harm our business because of the cost and time necessary to replace
and train such personnel. Such a loss would also divert management attention
away from operational issues. We do not have an employment agreement with Mr.
Busiere. We have entered into three year employment agreements with Mr.
10
<PAGE>
Ingarfield and Mr. Mow, respectively. We do not maintain key-man life insurance
policies on any of these people.
WE COULD FAIL TO ANTICIPATE CHANGES IN FASHION TRENDS
Fashion trends can change rapidly, and our business is particularly
sensitive to such changes because we typically design and arrange for the
manufacture of our apparel substantially in advance of sales of our products to
consumers. We cannot assure you that we will accurately anticipate shifts in
fashion trends, or in the popularity of golf, and adjust our merchandise mix to
appeal to changing consumer tastes in apparel in a timely manner. If we misjudge
the market for our products or are unsuccessful in responding to changes in
fashion trends or in market demand, we could experience insufficient or excess
inventory levels, missed market opportunities or higher markdowns, any of which
could substantially harm our business and our brand image.
WE FACE SUBSTANTIAL COMPETITION IN OUR BUSINESS
The sportswear and outerwear segments of the apparel industry are highly
competitive. Competition is based primarily on brand recognition, product
differentiation and quality, style and production flexibility. Our future growth
and financial success depend on our ability to further penetrate and expand our
distribution channels, including golf, corporate, international and retail
sales. We encounter substantial competition in the golf distribution channel
from Polo/Ralph Lauren, Cutter & Buck, Ashworth, Antiqua and Izod. Many of our
competitors are significantly larger and more diversified than we are and have
substantially greater resources available for developing and marketing their
products. Many of our competitors' brands also have greater name recognition
than our brands. In addition, our competitors may be able to enter the emerging
e-commerce marketplace more quickly or more efficiently than us. We cannot
assure you that we will successfully compete in this industry.
OUR FLEXIBILITY TO USE ANY CASH FROM OUR OPERATIONS OR EXTERNAL FINANCING
MAY BE LIMITED DUE TO MINIMUM ROYALTY PAYMENTS
We are required to pay minimum royalty payments under the licenses for the
"Dockers Golf" and "British Open Collection," whether we sell licensed products
or not. Our ability to use available cash as we see fit may be restricted due to
our obligation to pay these minimum royalty payments. This could place a strain
on our ability to pay other bills or to spend such cash in the most productive
manner. As a result, we may not be able to purchase equipment, to take advantage
of corporate opportunities or to maximize our operating results.
11
<PAGE>
PART II
OTHER INFORMATION.
-----------------
ITEM 1. LEGAL PROCEEDINGS.
-----------------
We are not aware of any legal proceedings involving our company.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
-----------------------------------------
(a), (b) and (d) None.
(c) SALES OF UNREGISTERED SECURITIES. Between February 22, 2000 and
June 22, 2000, our company sold subscriptions to purchase 14,352,927 shares of
our common stock at a price of $0.35 per share for cash of $5.0 million. All of
these shares were purchased by unrelated persons.
In June 2000, our company issued 350,000 shares of common stock to
Persia Consulting Group, Inc. in exchange for consulting services provided under
a Consulting Agreement dated June 22, 2000. These consulting services were
valued at $203,000. In addition, in June 2000, Mr. LaValliere elected to tender
a $60,523 receivable owed to him by the company under the terms of the private
placement offering in exchange for 172,923 shares to of our common stock.
In June 2000, our company issued a total of 1,294,352 shares of common
stock for the conversion of debt to equity at a price of $0.35 per share,
including 172,923 shares to Mr. LaValliere and 1,121,429 shares to unrelated
persons. Mr. LaValliere and unrelated persons converted indebtedness of $60,523
and $392,500 respectively.
With respect to the sale of unregistered securities referenced above,
all transactions were exempt from registration pursuant to Section 4(2) of the
Securities Act of 1933 (the "1933 ACT"), and Regulation D promulgated under the
1933 Act. In each instance, the purchaser had access to sufficient information
regarding our company so as to make an informed investment decision. More
specifically, each purchaser signed a written subscription agreement with
respect to their financial status and investment sophistication in which they
represented and warranted, among other things, that they had:
o the ability to bear the economic risks of an investment in the
shares of common stock of our company;
o a certain net worth sufficient to meet the suitability standards of
our company; and
o been provided with all material information requested by the
purchaser or his or her representatives, and been provided an
opportunity to ask questions of and receive answers from our company
concerning our company and the terms of the offering.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
-------------------------------
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
----------------------------------------------------
None.
ITEM 5. OTHER INFORMATION.
-----------------
Not applicable.
12
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
--------------------------------
(A) EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION LOCATION
--- ----------- --------
<S> <C> <C>
2.01 Stock Purchase and Sale Agreement dated as of Incorporated by reference to Exhibit 2.01 to the
December 18, 1998 among our company, Avid Registrant's Registration Statement on Form 10-SB
Sportswera, Inc. and the shareholders of Avid (the "Registration Statement")
Sportswear, Inc.
3.01 Articles of Incorporation filed on September Incorporated by reference to Exhibit 3.01 to the
19, 1997 with the Nevada Secretary of State Registration Statement
3.02 Amended Articles of Incorporation filed on Incorporated by reference to Exhibit 3.02 to the
May 12, with the Nevada Secretary of Registration Statement
State
3.03 Certificate of Amendment to Articles of Incorporated by reference to Exhibit 3.03 to the
Incorporation filed on May 27, 1999 with the Registration Statement
Nevada Secretary of State
3.04 Bylaws Incorporated by reference to Exhibit 3.04 to the
Registration Statement
4.01 2000 Stock Incentive Plan Incorporated by reference to Exhibit 4.01 to
Amendment No. 2 to the Registration Statement
10.01 Agreement dated as of December 8, 1998 Incorporated by reference to Exhibit 10.01 to the
between the Championship Committee Registration Statement
Merchandising Limited and Avid Sportswear
Inc.
10.02 Lease dated as of March 1, 1999 between F & Incorporated by reference to Exhibit 10.02 to the
B Industrial Investments, LLC and Avid Registration Statement
Sportswear, Inc.
10.03 Lease dated as of April 30, 1999 between Incorporated by reference to Exhibit 10.03 to the
Links Associates, Ltd. and our company Registration Statement
10.04 Employment Agreement dated as of September Incorporated by reference to Exhibit 10.04 to the
11, 1999 between Barnum Mow and Avid Registration Statement
Sportswear, Inc.
10.05 Trademark License Agreement dated as of Incorporated by reference to Exhibit 10.05 to
May 10, 1999 between Levi Strauss & Co. and Amendment No. 2 to the Registration Statement
Co. and Avid Sportswear, Inc.
10.06 Employment Agreement dated January 1, Incorpoated by reference to Exhibit 10.06 to the
1999 between David E. Roderick and Avid Registration Statement
Sportswear, Inc.
10.07 Promissory Note in the original principal Incorporated by reference to Exhibit 10.07 to the
amount of $180,000 dated as of June 4, 1999 Registration Statement
from our company to First State Bank
10.08 Commercial Security Agreement dated as of Incorporated by reference to Exhibit 10.08 to the
November 17, 1999 between First State Bank Registration Statement
and our company
13
<PAGE>
EXHIBIT
NO. DESCRIPTION LOCATION
--- ----------- --------
<S> <C> <C>
10.09 Promissory Note dated as of November 17, Incorporated by reference to Exhibit 10.09 to the
in the original principal amount of Registration Statement
$1,000,000 given by our company
to First State Bank
10.10 Business Loan Agreement dated as Incorporated by reference to Exhibit 10.10 to the
November 17, 1999 between First State Registration Statement
Bank and our company
10.11 Convertible Revolving Demand Note dated Incorporated by reference to Exhibit 10.11
of December 1, 1999 in the original principal to Amendment No. 2 to the Registration Statement
amount of $550,000 given by our company to
Earl Ingarfield
10.12 Convertible Revolving Demand Note dated as Incorporated by reference to to Exhibit 10.11 to
of December 1, 1999 in the original principal Amendment No. 2 to the Registration Statement
amount of $1,000,000 given by our company
Lido Capital Corporation
10.13 Convertible Revolving Demand Note dated as Incorporated by reference to Exhibit 10.13 to
of December 1, 1999 in the original principal Amendment No. 2 to the Registration Statement
amount of $125,000 given by our company to
Michael E. LaValliere
10.14 Convertible Revolving Demand Note dated as Incorporated by reference to Exhibit 10.14 to
of December 1, 1999 in the original principal Amendment No. 2 to the Registration Statement
amount of $500,000 given by our company to
Thomas Browning
10.15 Revolving Demand Note dated as of December Incorporated by reference to Exhibit 10.15 to
1, 1999 in the original principal amount of Amendment No. 2 to the Registration Statement
$200,000 given by our company to Daniel
Paetz
10.16 Executive Employment Agreement effective as Incorporated by reference to Exhibit 10.16 to
of February 1, 2000 between our company and Amendment No. 2 to the Registration Statement
Earl T. Ingarfield
10.17 Consulting Agreement dated as of June 22, Incorporated by reference to Exhibit 10.17 to the
2000 between Persia Consulting Group, Inc. Registrant's Registration Statement on Form SB-2
and our company
11.01 Statement re: Computation of Earnings Not Applicable
15.01 Letter on unaudited interim financial Not Applicable
information
16.01 Letter on Change in Certifying Accountant Not Applicable
21.01 Subsidiaries of our company Incorporated by reference to Exhibit 21.01 to the
Registration Statement
23.01 Consent of Independent Accountants Not Applicable
24.01 Power of Attorney Not Applicable
27.01 Financial Data Schedule Provided herewith
</TABLE>
14
<PAGE>
(B) REPORTS ON FORM 8-K.
None.
15
<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.
Date: August 14, 2000 AVID SPORTSWEAR & GOLF CORP.
By: /s/ Jerry Busiere
-----------------------
Jerry Busiere, Secretary
16
