<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Form 10-KSB of Golf Rounds.com, Inc. for the year ended August 31, 1999 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000319016
<NAME> Golf Rounds.com, Inc.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-START> SEP-01-1998
<PERIOD-END> AUG-31-1999
<CASH> 2,036
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,044
<PP&E> 5
<DEPRECIATION> 1
<TOTAL-ASSETS> 2,181
<CURRENT-LIABILITIES> 10
<BONDS> 0
0
0
<COMMON> 21
<OTHER-SE> 2,150
<TOTAL-LIABILITY-AND-EQUITY> 2,181
<SALES> 0
<TOTAL-REVENUES> 94
<CGS> 0
<TOTAL-COSTS> 202
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (108)
<INCOME-TAX> 0
<INCOME-CONTINUING> (108)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (108)
<EPS-BASIC> (.05)
<EPS-DILUTED> (.05)
</TABLE>
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(MARK ONE)
[x] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [Fee Required] For the fiscal year ended August
31, 1999
[ ] Transition Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934 [No Fee Required] For the transition period from
__________ to __________.
Commission File Number 0-10093
-------
GOLF ROUNDS.COM, INC.
-------------------------------------------------------------
(Exact name of small business issuer in its charter)
Delaware 22-3664872
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
376 Main Street, P. O. Box 74, Bedminster, New Jersey 07921
---------------------------------------------------------------------
(Address of principal executive offices)
Issuer's telephone number: (908) 901-9250
--------------
Securities registered under Section 12(b) of the Exchange Act:
NONE
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.01 par value
----------------------------------
(Title of class)
Check whether 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
----- -----
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.
YES X NO
----- ------
Issuer's revenues for the fiscal year ended August 31, 1999 were approximately
$94,000.
As of November 26, 1999, there were 2,099,496 shares of the registrant's common
stock, $.01 par value, issued and outstanding.
The aggregate market value of the voting stock held by nonaffiliates of the
registrant as of November 26, 1999, was approximately $1,600,000.
Transitional Small Business Disclosure Format Yes No X
----- ------
DOCUMENTS INCORPORATED BY REFERENCE:
NONE
<PAGE>
PART I
Item 1. DESCRIPTION OF BUSINESS
- ------ -----------------------
General
- -------
Until the fourth quarter of fiscal 1992, the Company was engaged in the
wholesale distribution of aluminum alloys, steel and other specialty metals. The
Company liquidated the assets of its former business and in May 1999, acquired
the assets of PKG Design, Inc., the developer of two Internet websites:
golfrounds.com and skiingusa.com. The Company is in the publishing business of
Internet websites through this acquisition. The Company has an exclusive
arrangement with Lycos, Inc. ("Lycos"), a major Internet guide, to provide golf
content through its golfrounds.com website. Currently the Company's primary
revenue source is the sale of advertising through Lycos. To date the Company has
not generated significant revenues from its websites.
The Company's business is characterized by rapid technological change, new
product development and evolving industry standards. Inherent in the Company's
business are various risks and uncertainties, including its limited operating
history, unproven business model and the limited history of commerce on the
Internet.
The Company's success may depend in part upon the emergence of the Internet
as a communications medium, prospective product development efforts and
acceptance of the Company's brand name and products in the marketplace.
The Company was incorporated in 1968 under the laws of the State of
Florida. Its executive offices were located in Miami, Florida until September
1992 when such offices were relocated to Bedminster, New Jersey. During June
1999 stockholders approved an amendment to reincorporate in the state of
Delaware.
Asset Value Holdings, Inc. ("AVH")
- ----------------------------------
AVH, a Delaware corporation, is wholly-owned by Asset Value Fund Limited
Partnership, a New Jersey limited partnership ("Asset Value"), which is engaged
in investing in securities. The sole general partner of Asset Value is Asset
Value Management, Inc., a Delaware corporation, which is a wholly-owned
subsidiary of Kent Financial Services, Inc., a Delaware corporation ("Kent").
Kent's principal business is the operation of its wholly-owned subsidiary, T. R.
Winston & Company, Inc. ("Winston"), a securities broker-dealer registered with
the National Association of Securities Dealer, Inc. and Asset Value. Until
December 1994, the Company was a majority-owned subsidiary of AVH. Through a
series of upstream transactions, AVH distributed approximately 88% of its
ownership interest in the Company to Kent, which, in turn, distributed such
shares to its stockholders (the "Distribution"). At October 31, 1999, AVH and
certain affiliates own approximately 44% of the Company's outstanding common
stock.
<PAGE>
Employees
- ---------
On August 31, 1999, the Company had one employee, the Company's president.
(See Note 8 of Notes to Financial Statements). Certain administrative functions
for the Company are performed by Kent personnel.
Item 2. DESCRIPTION OF PROPERTY
- ------ -----------------------
None.
Item 3. LEGAL PROCEEDINGS
- ------ -----------------
None.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------ ---------------------------------------------------
None.
<PAGE>
PART II
Item 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
- ------ --------------------------------------------------------
The common stock of the Company is traded on the OTC Bulletin Board, and
quotations are available through the National Quotation Bureau.
The table below lists the high and low bid prices for the common stock as
reported in the National Quotation Bureau for the Company's last two fiscal
years. Bid prices represent prices between broker-dealers and do not include
retail mark-ups and mark-downs or any commission to broker-dealers. In addition,
these prices do not necessarily reflect actual transactions.
Fiscal Year Ended
August 31, 1999
---------------------
Quarter High Bid Low Bid
------- -------- -------
First $1.02 $1.00
Second 1.44 .88
Third 2.69 .90
Fourth 3.13 1.50
Fiscal Year Ended
August 31, 1998
---------------------
Quarter High Bid Low Bid
------- -------- -------
First $1.03 $ .80
Second 1.06 1.03
Third 1.06 1.00
Fourth 1.05 1.00
As of September 30,1999, there were approximately 4,600 shareholders of
record.
The Company has not paid any cash dividends on the common stock since its
organization. The Board of Directors has no present plans for the payment of
dividends.
<PAGE>
Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
- ------ ---------------------------------------------------------
This Form 10-KSB contains forward-looking statements which may involve
known and unknown risks, uncertainties and other factors that may cause the
Company's actual results and performance in future periods to be materially
different from any performance suggested by these statements.
Overview
- --------
Until the fourth quarter of fiscal 1992, the Company was engaged in the
wholesale distribution of aluminum alloys, steel and other specialty metals. The
Company liquidated the assets of its former business and in May 1999, acquired
the assets of PKG Design, Inc., the developer of two Internet websites:
golfrounds.com and skiingusa.com. The Company is in the publishing business of
Internet websites through this acquisition. The Company has an exclusive
arrangement with Lycos, Inc. ("Lycos"), a major Internet guide, to provide golf
content through its golfrounds.com website. Currently, the Company's primary
revenue source is the sale of advertising through Lycos. To date the Company has
not generated significant revenues from its websites.
The Company's business is characterized by rapid technological change, new
product development and evolving industry standards. Inherent in the Company's
business are various risks and uncertainties, including its limited operating
history, unproven business model and the limited history of commerce on the
Internet.
The Company's success may depend in part upon the emergence of the Internet
as a communications medium, prospective product development efforts and
acceptance of the Company's brand name and products in the marketplace.
Results of Operations
- ---------------------
Available cash is being invested in interest-bearing deposits and in U.S.
Treasury securities. Cash and cash equivalents at August 31, 1999 were
approximately $2,036,000 and the Company has no funded debt. Included in cash
and cash equivalents were $1,959,000 of U.S. Treasury bills which have
maturities through November 12,1999 and yields ranging between 4.59% and 4.93%.
For the years ended August 31, 1999 and 1998, interest income of $88,000 and
$104,000 was earned on U.S. Treasury securities. The decrease in interest income
was due to lower interest rates. Other income of $6,000 in the year ended August
31, 1999 consisted of $1,000 from Internet advertising income and $5,000 from
the payment of a previously reserved accounts receivable.
General, administrative and other expense was $137,000 and $75,000 for the
fiscal years ended August 31, 1999 and 1998, respectively. Included in general
and administrative expense is a management fee of $50,000 that was charged to
the Company by Kent in each of the fiscal years ended August 31, 1999 and 1998.
This fee was for corporate governance, financial management, and accounting
services and was based on Kent's estimated costs. Management believes the cost
allocation is reasonable. General, administrative and other expense also
includes insurance expense of $21,000, legal expense of $17,000, salaries of
$31,000, and other expenses of $18,000 for the fiscal year ended August 31,
1999, compared to insurance expense of $1,000,advertising expense of $6,000,
consulting fees of $6,000, and other expenses of $12,000 for the fiscal year
ended August 31, 1998. The Company also incurred amortization expense of $65,000
for the year ended August 31, 1999, which was in connection with the acquisition
of PKG Design, Inc. (For more information see Note 3 of Notes to Financial
Statements.)
<PAGE>
Liquidity and Capital Resources
- -------------------------------
As of August 31, 1999, the Company had cash and cash equivalents and
working capital of approximately $2,036,000 and $2,034,000, respectively. During
the fiscal year ended August 31, 1999 the Company repurchased 20,000 shares of
its common stock for an aggregate cost of $21,000. All shares acquired were
purchased at market prices and have been returned to the status of authorized
and unissued shares. In addition, during the fiscal year ended August 31, 1999
the Company issued 150,000 shares of common stock in connection with the asset
purchase of PKG Design, Inc. Capitalized costs related to the asset purchase
amounted to $45,000.
The Company believes its cash and cash equivalents are sufficient for its
current business activities.
Year 2000 Matters
- -----------------
The Year 2000 Issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Any of the Company's
computer programs that have time-sensitive software may recognize a date using
"00" as the year. Miscalculations could cause disruptions of operations,
including, among other things, a temporary inability to process transactions or
engage in similar normal business activities.
The company uses computer hardware, software, and a third party Internet
service provider in its business. We have contacted our principal vendors of
hardware and software. All vendors contacted have notified us that the hardware
and software we use is year 2000 compliant.
Management has determined that the Year 2000 Issue will not pose
significant operational problems for its internal computer systems. The Company
uses "off the shelf" accounting software to maintain its accounting system. All
of these software applications are already Year 2000 compliant. The cost of
being Year 2000 compliant was nominal. All costs associated with this conversion
have been expensed as incurred.
<PAGE>
Item 7. FINANCIAL STATEMENTS:
- ------ --------------------
Independent Auditors' Report
Balance Sheet at August 31, 1999
Statements of Operations
for the years ended August 31, 1999 and 1998
Statements of Stockholders' Equity for the
years ended August 31, 1999 and 1998
Statements of Cash Flows for the years ended
August 31, 1999 and 1998
Notes to Financial Statements
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
Golf Rounds.com, Inc.
We have audited the accompanying balance sheet of Golf Rounds.com, Inc., as of
August 31, 1999 and the related statements of operations, stockholders' equity
and cash flows for the years ended August 31, 1999 and 1998. 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 audits.
We conducted our audits 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 audits provide 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 Golf Rounds.com, Inc., as of
August 31, 1999 and the results of its operations and cash flows for the years
ended August 31, 1999 and 1998 in conformity with generally accepted accounting
principles.
/s/ Bederson & Company LLP
Bederson & Company LLP
West Orange, New Jersey
November 3, 1999
<PAGE>
GOLF ROUNDS.COM, INC.
BALANCE SHEET
($000 Omitted)
August 31,
1999
----------
ASSETS
- ------
Current assets:
Cash and cash equivalents $ 2,036
Prepaid expenses 8
-------
Total current assets 2,044
Intangible assets, net of accumulated
amortization of $65 132
Equipment, net of accumulated
depreciation of $1 5
-------
Total assets $ 2,181
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Accrued liabilities $ 10
-------
Total current liabilities 10
-------
Stockholders' equity:
Common stock, $.01 par value, 12,000,000
shares authorized, 2,099,497
outstanding 21
Additional capital in excess of par value 3,200
Accumulated deficit ( 1,050)
-------
Total stockholders' equity 2,171
-------
Total liabilities and stockholders'
equity $ 2,181
=======
See accompanying notes to financial statements.
<PAGE>
GOLF ROUNDS.COM, INC.
STATEMENTS OF OPERATIONS
($000 Omitted, except per share data)
Year Ended August 31,
-----------------------
1999 1998
------ -------
Revenues:
Interest $ 88 $ 104
Other 6 -
------ ------
Total revenue 94 104
------ ------
Expenses:
General, administrative and other 137 75
Amortization 65 -
------ ------
Total expenses 202 75
------ ------
Net income (loss) ($ 108) $ 29
====== ======
Basic and diluted net income
(loss) per share ($ .05) $ .02
====== ======
Weighted average number of
shares outstanding (in 000's) 2,000 1,963
====== ======
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
GOLF ROUNDS.COM, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
(000 Omitted)
Accumulated
Common Stock Capital in Total
------------------------------ Excess of Accumulated Stockholders'
Shares Par Value Par Value Deficit Equity
---------- ------------ ------------ ----------- -------------
<S> <C> <C> <C> <C> <C>
Balance at
August 31,
1997 1,951 $ 20 $3,054 ($ 971) $2,103
Repurchase and
cancellation of
common stock ( 1) - ( 1) - ( 1)
Issuance of
common stock upon
exercise of stock
options 20 - 17 - 17
Net income - - - 29 29
Balance at
August 31, ------ ------ ------ ------ ------
1998 1,970 20 3,070 ( 942) 2,148
------ ------ ------ ------ ------
Repurchase and
cancellation of
common stock ( 20) - ( 21) - ( 21)
Issuance of
common stock 150 1 151 - 152
Net loss - - - ( 108) ( 108)
Balance at
August 31, ------ ------ ------ ------ ------
1999 2,100 $ 21 $3,200 ($1,050) $2,171
------ ------ ------ ------ ------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
GOLF ROUNDS.COM, INC.
STATEMENTS OF CASH FLOWS
($000 Omitted)
For the year ended August 31,
------------------------------
1999 1998
-------- --------
Cash flows from operating activities:
Net income (loss) ($ 108) $ 29
Adjustments:
Increase in prepaid expenses ( 8) -
Increase (decrease) in
accrued liabilities 7 ( 5)
Amortization of intangible assets 65 -
------- ------
Net cash provided by (used in)
operating activities ( 44) 24
------- ------
Cash flows from investing activities -
Purchase of equipment ( 5) -
------- ------
Net cash used in investing activities ( 5) -
------- ------
Cash flows from financing activities:
Issuance of common stock upon exercise
of stock options - 17
Capitalized costs in connection
with the asset purchase of PKG Design ( 45) -
Repurchase of common stock ( 21) ( 1)
------- ------
Net cash provided by (used in)
financing activities ( 66) 16
------- ------
Net increase (decrease) in cash and cash
equivalents ( 115) 40
Cash and cash equivalents at beginning
of period 2,151 2,111
------- ------
Cash and cash equivalents at end of period $ 2,036 $2,151
======= ======
Non-cash investing and financing activities:
In May, 1999 the Company issued 150,000 shares of common stock in
connection with the asset purchase of PKG Design, Inc.
See accompanying notes to financial statements.
<PAGE>
GOLF ROUNDS.COM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED AUGUST 31, 1999 AND 1998
NOTE 1 - CORPORATE OPERATIONS
- -----------------------------
Until the fourth quarter of fiscal 1992, Golf Rounds.com, Inc. (the
Company) was engaged in the wholesale distribution of aluminum alloys, steel and
other specialty metals. The Company liquidated the assets of its former
business, and in May, 1999, the Company acquired the assets of PKG Design, Inc.,
the developer of two Internet websites: golfrounds.com and skiingusa.com.(the
"Acquisition").
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------
Cash Equivalents
- ----------------
The Company considers all U.S. Treasury securities purchased with an
original maturity of three months or less to be cash equivalents.
Equipment
- ---------
The Company records equipment at cost. Depreciation is computed using the
straight-line method over the related estimated useful life of the asset, which
is a two-year period.
The Company evaluates the carrying value of its long-lived assets whenever
there is a significant change in the use of an asset and adjusts the carrying
value, if necessary, to reflect the amount recoverable through future
operations.
Intangible Assets
- -----------------
A value for intangible assets had been established in connection with the
acquisition of PKG Design, Inc.(described in Note 3). Intangible assets are
being amortized using the straight-line method over one year.
Income Taxes
- ------------
Statement of Financial Accounting Standards No. 109 "Accounting For Income
Taxes" ("SFAS 109") requires use of the asset and liability method of accounting
for income taxes. Under the asset and liability method, deferred income taxes
are recognized for the tax consequences of "temporary differences" by applying
enacted statutory tax rates applicable to future years to differences between
the financial statement carrying amounts and the tax basis of existing assets
and liabilities.
Net Income Per Common Share
- ---------------------------
Net income per share is based on the weighted average number of shares
outstanding. Excluded from the income per share calculation are contingently
issuable shares which, if included, would have an antidilutive effect.
Basis of Presentation
- ---------------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent liabilities and assets at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates. Prior years'
financial statements have been reclassified to conform to the current year's
presentation.
<PAGE>
NOTE 3 - ACQUISITIONS
- ---------------------
In connection with the Acquisition, the Company issued to the seller of PKG
Design, Inc. 100,000 newly issued shares of common stock of the Company and
reserved another 280,000 shares, of which 100,000 will be issued if revenues for
the first year after the acquisition exceed $200,000 and the balance if revenues
for the period exceed $350,000. Additionally, 50,000 newly issued shares of
common stock were issued to the finder of the Acquisition for services rendered.
The cost associated with the issuance of the shares to the seller and to the
finder comprise the cost of the Acquisition.
The Acquisition is being accounted for by the purchase method. The total
purchase price for this transaction of approximately $197,000 has been allocated
to intangible assets, representing the value assigned to the websites acquired
in the Acquisition. The intangibles are being amortized on a straight-line basis
over a one-year period. The Company will not receive a tax benefit for the
amortization. Had the Acquisition been effective on September 1, 1997, the net
loss for the year ended August 31, 1998 would have been approximately $258,000
or $.12 per share. For the year ended August 31, 1999, the net loss would have
been approximately $175,000 or $.08 per share. These proforma net losses
resulted principally from recording the expense of the employment agreement,
amortization of intangible assets, salary, and other miscellaneous expenses,
from September 1, 1997. This proforma financial information is not intended to
reflect results of operations which would have actually resulted had these
transactions been effected on the dates indicated. Moreover, this proforma
financial data is not intended to be indicative of results of operations which
may be attained in the future.
NOTE 4 - INCOME TAXES
- ---------------------
At August 31, 1999, the Company had net operating loss carryforwards
("NOLs") of approximately $227,000 for Federal income tax reporting purposes,
and $177,000 for state income tax reporting purposes.
The federal NOLs expire beginning in the year 2011 and the state NOLs
expire beginning in the year 2003.
The tax effects of significant items composing the Company's net deferred
tax asset as of August 31, 1999 are as follows (in $000's):
Deferred tax asset:
Federal NOLs $ 46
State NOLs 12
AMT credit carryforward 6
----
64
Valuation allowance ( 64)
====
Net deferred tax asset $ -
====
Due to the uncertainty of realizing these deferred tax assets, a valuation
allowance of an equal amount is maintained, resulting in a net deferred tax
asset of zero.
<PAGE>
NOTE 5 - CAPITAL STOCK
- ----------------------
From time to time since October 1996, the Company's Board of Directors has
authorized the repurchase of the Company's common stock in the open market or in
privately negotiated transactions. During the fiscal year ended August 31, 1999
and 1998, the Company repurchased 20,520 and 533 shares, for an aggregate cost
of approximately $21,000 and $600, respectively. All shares acquired through
August 31, 1999 have been canceled and returned to the status of authorized but
unissued. On June 12, 1999, the stockholders authorized an increase in the
authorized number of shares from 6,000,000 to 12,000,000.
NOTE 6 - STOCK OPTION PLANS
- ---------------------------
In August 1983, the Company adopted an incentive stock option plan covering
100,000 shares exercisable for a period of ten years from the date of grant.
There were no options granted, or canceled under the incentive stock option plan
in the fiscal years ended August 31, 1999 and 1998. One hundred thousand shares
were available for grant at August 31, 1999. During the fiscal year ended August
31, 1998 the Company issued 20,000 shares of common stock due to the exercise of
stock options by a then current director of the Company for total proceeds of
$17,000.
NOTE 7 - RELATED PARTY TRANSACTIONS
- -----------------------------------
The Company retains the firm of Rosenman & Colin LLP ("R&C") for certain
legal services. The wife of the Chairman of the Board is of counsel to R&C. R&C
has billed the Company $31,000 for the fiscal year ended August 31, 1999. These
billings were for services related to the acquisition of PKG Design, Inc. There
were no billings to the Company from R&C for the fiscal year ended August 31,
1998.
The Company paid a management fee to Kent Financial Services, Inc. ("Kent")
of $50,000 in 1999 and 1998 for management services performed for the Company by
Kent personnel. These services included corporate governance, financial
management, and accounting services. Kent is the indirect parent of Asset Value
Holdings, Inc., which was the beneficial owner of 19% of the Company's common
stock at August 31, 1999. The management fees were based on Kent's estimated
costs, and management believes the cost allocation is reasonable.
NOTE 8 - COMPENSATION AGREEMENTS
- --------------------------------
In connection with the Acquisition, the Company entered into an employment
agreement with Thomas K. Van Herwarde, the Company's President, for an initial
term of one-year at an annual salary of $90,000 commencing May 17, 1999 (the
"Agreement"). Mr. Van Herwarde was the sole stockholder of PKG Design, Inc. On
the expiration of the one-year period, and on each yearly anniversary
thereafter, unless otherwise terminated by either party, the Agreement will
automatically renew for an additional one-year period.
<PAGE>
PART III
Item 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
---------------------------------------------------------------
FINANCIAL DISCLOSURE
--------------------
None
----
Item 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
-------------------------------------------------------------
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
-------------------------------------------------
The following table provides information with respect to current Directors
and executive officers of the Company:
Position and Office Director
Name Age Presently Held with Company Since
- --------------------- --- --------------------------- --------
Paul O. Koether 63 Chairman and Director 1992
Thomas K. Van Herwarde 41 President and Director 1999
John W. Galuchie, Jr. 46 Vice President, Treasurer 1992
and Director
Paul O. Koether is principally engaged in the following businesses: (i) as
Chairman and director since July 1987 and President since October 1990 of Kent
Financial Services, Inc. ("Kent") and the general partner since 1990 of Shamrock
Associates, an investment partnership which is the principal stockholder of Kent
and (ii) various positions with affiliates of Kent, including Chairman since
1990 and a registered representative since 1989 of T. R. Winston & Company, Inc.
("Winston"), a securities broker-dealer, and since July 1992 as Chairman and
director of the Company and from July 1992 to May 1999, President of the
Company. Mr. Koether also has been Chairman since April 1988, President from
April 1989 to February 1997 and a director since March 1988 of Pure World, Inc.
("Pure World"), and for more than five years, the Chairman and President of Sun
Equities Corporation ("Sun"), a private, closely-held corporation which is Pure
World's principal stockholder. Until August 1994, when it sold its majority
ownership to an unaffiliated party, Pure World operated as a real estate asset
manager through its wholly-owned subsidiary, NorthCorp Realty Advisors, Inc.
("NorthCorp"). Prior to its sale, Mr. Koether also served as Chairman and a
director of NorthCorp. Since December 1994, Mr. Koether has been a director of
Pure World Botanicals, Inc. ("PWBI"), a wholly-owned subsidiary of Pure World,
and since January 1995, its Chairman. PWBI is a manufacturer of natural
products. In September 1998 Mr. Koether was elected a director and Chairman of
Cortech, Inc.("Cortech") a biopharmaceutical company.
Thomas K. Van Herwarde. Since May 1999, Mr. Van Herwarde has been President
of the Company. From 1995 through May 1999, he was President of PKG Design,
Inc., a developer of two internet websites. In 1994, Mr. Van Herwarde was self-
employed as a consultant to e-marketing, e-commerce and online retail companies.
John W. Galuchie, Jr., a certified public accountant, is principally
engaged in the following businesses: (i) the Company as Vice President,
Treasurer and a director since July 1992; (ii) Pure World, as Executive Vice
President since April 1988, director from January 1990 until October 1994 and
for more than five years as Vice President and director of Sun; (iii) Kent, in
various executive positions since 1986 and a director from June 1989 until
August
<PAGE>
1993; (iv) Winston, as President since January 1990 and director since
September 1989. Mr. Galuchie served as a director of Crown NorthCorp, Inc., the
successor corporation to NorthCorp from June 1992 to August 1996. In September
1998, Mr. Galuchie was elected a director and President of Cortech. Mr. Galuchie
served as a director of HealthRite, Inc., a nutritional product company, from
December 1998 to June 1999. Since September 1999, Mr. Galuchie has been a
director of Gish Biomedical, Inc., a medical device manufacturer.
Item 10. EXECUTIVE COMPENSATION
- ------- ----------------------
There is shown below information concerning the annual compensation for
services in all capacities to the Company for the fiscal years ended August 31,
1999, 1998 and 1997 for those persons who were, at August 31, 1999 the chief
executive officer, or who was among the four most highly compensated executive
officers of the Company, whose annual compensation exceeds $100,000 (the "Named
Officers").
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Annual Compensation (1) (2) Compensation Other
Name and Principal -------------------------------- ------------ -----
Officer Year Salary Bonus Other (3) Options (#)
<S> <C> <C> <C> <C> <C> <C>
Paul O. Koether 1999 $ - $ - $ - - -
Chairman 1998 $ - $ - $ - - -
1997 $ - $ - $ - - -
</TABLE>
Employment Arrangements
- -----------------------
In May 1999, the Company entered into an employment agreement with Thomas
K. Van Herwarde, the Company's President, for an initial term of one-year at an
annual salary of $90,000 (the "Agreement"). Mr. Van Herwarde was the sole
stockholder of PKG Design, Inc. On the expiration of the one-year period, and on
each yearly anniversary thereafter, unless otherwise terminated by either party,
the Agreement will automatically renew for an additional one-year period.
<PAGE>
Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- ------- --------------------------------------------------------------
The following table sets forth the beneficial ownership of the Common Stock
of the Company as of November 26, 1999, by each person who was known by the
Company to beneficially own more than 5% of the common stock, by each director
who owns shares of common stock and by all directors and officers as a group:
Number of Shares Approximate
Name and Address of Common Stock Percent
of Beneficial Owner Beneficially Owned(1) of Class
- ------------------- --------------------- -----------
Shamrock Associates
211 Pennbrook Road
Far Hills, NJ 07931 817,470(2) 38.94%
Paul O. Koether
211 Pennbrook Road
Far Hills, NJ 07931 909,690(3) 43.33%
John W. Galuchie, Jr.
376 Main Street
Bedminster, NJ 07921 419,166(4) 19.97%
Asset Value Holdings, Inc.
376 Main Street
Bedminster, NJ 07921 400,000 19.05%
Thomas K. Van Herwarde
376 Main Street
Bedminster, NJ 07921 100,000 4.76%
All directors and officers
as a group (3 persons) 1,014,690(5) 48.33%
- ------------------------------
* Represents less than one percent
(1) The beneficial owner has both sole voting and sole investment powers
with respect to these shares except as set forth in this footnote or in
other footnotes below.
(2) Includes 400,000 shares of common stock held by AVH. Shamrock
Associates, as the ultimate parent of AVH, disclaims beneficial
ownership of these shares.
(3) Includes 417,470 shares beneficially owned by Shamrock Associates.
As the general partner of Shamrock, Mr. Koether may be deemed to own
these shares beneficially. Includes 400,000 shares held by AVH. Mr.
Koether may be deemed to be the beneficial owner of the shares
owned by AVH. Includes 14,166 shares owned by Sun Equities Corporation,
a private corporation of which Mr. Koether is Chairman and a principal
stockholder. Includes 1,666 shares held by Mr. Koether's Keogh Plan.
Includes 20,000 shares owned by Mr. Koether's wife and 15,000 shares
<PAGE>
held in discretionary accounts for his brokerage customers. Mr. Koether
is also a limited partner of Shamrock and may be deemed to own
beneficially that percentage of the shares owned by Shamrock
represented by his partnership percentage. Mr. Koether disclaims
beneficial ownership of such shares.
(4) Reflects 400,000 shares of common stock held by AVH. Mr. Galuchie may
be deemed to be the beneficial owner of the shares owned by AVH. Mr.
Galuchie disclaims beneficial ownership of the shares. Includes 14,166
shares owned by Sun, a private corporation of which Mr. Galuchie is a
director and officer. Mr. Galuchie disclaims beneficial ownership of
such shares.
(5) Reflects 1,014,690 shares of common stock held by Shamrock and AVH, and
beneficially owned by Messrs. Koether and Galuchie (see Notes 2, 3 and
4).
<PAGE>
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- ------- ----------------------------------------------
No information is required to be reported under this item.
Item 13. EXHIBITS AND REPORTS ON FORM 8-K
- ------- --------------------------------
(a) Exhibits
--------
(1) Agreement and Plan of Merger, incorporated herein by
reference to the Company's Quarterly Report on Form
10-QSB for the quarter ended May 31, 1999, Commission
File 0-10093.
(3) (i) .1 Articles of Incorporation, incorporated herein by
reference to the Company's Quarterly Report on Form
10-QSB for the quarter ended May 31, 1999, Commission
File 0-10093.
(3) (ii) .1 By-laws, incorporated herein by reference to the
Company's Quarterly Report on Form 10-QSB for the
quarter ended May 31, 1999, Commission File 0-10093.
(10) Employment agreement with Thomas K. Van Herwarde
dated May 17, 1999, incorporated herein by reference to
the Company's Quarterly Report on Form 10-QSB for the
quarter ended May 31, 1999, Commission File 0-10093.
(27) Financial Data Schedule
(b) Reports on form 8-K
--------------------
None
<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, thereunto duly
authorized.
GOLF ROUNDS.COM, INC.
Dated: November 26, 1999 By:/s/ Paul O. Koether
---------------------------
Paul O. Koether
Chairman of the Board
(Principal Executive Officer)
Dated: November 26, 1999 /s/ John W. Galuchie, Jr.
---------------------------
John W. Galuchie, Jr.
Vice President, Treasurer
and Director
(Principal Accounting
and Financial Officer)
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.
Dated: November 26, 1999 /s/ Paul O. Koether
---------------------------
Paul O. Koether
Chairman of the Board,
and Director
(Principal Executive Officer)
Dated: November 26, 1999 /s/ Thomas K. Van Herwarde
---------------------------
Thomas K. Van Herwarde
President and Director
Dated: November 26, 1999 /s/ John W. Galuchie, Jr.
---------------------------
John W. Galuchie, Jr.
Vice President, Treasurer
and Director
(Principal Accounting
and Financial Officer)
