UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended: November 30, 2000
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[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ________.
Commission file number 0-10093
Golf Rounds.com, Inc.
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(Exact name of small business issuer as specified in its charter)
Delaware 59-1224913
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
111 Village Parkway, Building 2, Marietta, Georgia 30067
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(Address of principal executive offices) (Zip Code)
770-951-0984
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(Issuer's telephone number)
N/A
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days.
Yes X No
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State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date: As of January 16, 2001, the
issuer had 3,447,377 shares of common stock, par value $.01 per share,
outstanding.
Transitional Small Business Disclosure Format (check one):
Yes No X
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PART I - FINANCIAL INFORMATION
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Item 1. - Financial Statements
GOLF ROUNDS.COM, INC.
BALANCE SHEET
(Unaudited)
November 30,
2000
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ASSETS
Current assets:
Cash and cash equivalents $ 3,225,847
Prepaid expenses and other 18,828
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Total current assets 3,244,675
Equipment, net of accumulated depreciation of $909 1,688
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Total assets $ 3,246,363
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 51,167
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Stockholders' equity:
Common stock, $.01 par value, 12,000,000
shares authorized, 3,447,377
shares issued and outstanding 34,473
Additional capital in excess of par value 4,773,866
Accumulated deficit (1,613,143)
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Total stockholders' equity 3,195,196
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Total liabilities and stockholders' equity $ 3,246,363
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See accompanying notes to financial statements.
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GOLF ROUNDS.COM, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
For the three months
ended November 30,
2000 1999
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Revenues:
Interest $ 48,960 $ 21,985
Other 77 1,200
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Total revenues 49,037 23,185
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Expenses:
General, administrative and other 108,830 76,659
Amortization and depreciation 390 50,189
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Total expenses 109,220 126,848
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Net (loss) $ (60,183) $ (103,663)
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Basic and diluted net (loss) per share $ (.02) $ (.05)
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Weighted average number of shares outstanding 3,447,377 2,099,000
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See accompanying notes to financial statements.
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GOLF ROUNDS.COM, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
For the three months
ended November 30,
2000 1999
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Cash flows from operating activities:
Net (loss) $ (60,183) $ (103,663)
Adjustments to reconcile net loss to net
cash used in operating activities:
Amortization and depreciation 390 50,189
Loss on sale of assets 5,054 0
Increase or decrease in:
Prepaid expenses and other 10,760 (1,179)
Accounts payable and accrued liabilities 16,152 0
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Net cash used by
operating activities (27,827) (54,653)
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Cash flows from investing activities:
Purchase of equipment 0 (1,446)
Proceeds from sale of assets 3,000 0
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Net cash provided by (used in) 3,000 (1,446)
investing activities ----------- -----------
Net (decrease) in cash and cash (24,827) (56,099)
equivalents
Cash and cash equivalents at beginning
of period 3,250,674 2,037,257
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Cash and cash equivalents at end of period $ 3,225,847 $ 1,981,158
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See accompanying notes to financial statements.
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GOLF ROUNDS.COM, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The accompanying unaudited financial statements of Golf Rounds.com,
Inc. (the "Company") as of November 30, 2000 and for the three month periods
ended November 30, 2000 and 1999 reflect all material adjustments which, in the
opinion of management, are necessary for a fair presentation of results for the
interim periods. Certain information and footnote disclosures required under
generally accepted accounting principles have been condensed or omitted pursuant
to the rules and regulations of the Securities and Exchange Commission, although
the Company believes that the disclosures are adequate to make the information
presented not misleading. These financial statements should be read in
conjunction with the year-end financial statements and notes thereto included in
the Company's Annual Report on Form 10-KSB for the year ended August 31, 2000,
as filed with the Securities and Exchange Commission on December 14, 2000.
The results of operations for the three month periods ended November
30, 2000 and 1999 are not necessarily indicative of the results to be expected
for the entire fiscal year or for any other period. Prior year's financial
statements have been reclassified to conform to the current year's presentation.
2. Loss Per Share
Net loss per common share is based on the weighted average number of
shares outstanding. Excluded from the net loss per share calculations for the
three months ended November 30, 2000 are contingently issuable shares that, if
included, would have an antidilutive effect.
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Item 2. - Management's Discussion and Analysis of Financial Condition and
Results of Operations
This Form 10-QSB contains forward-looking statements that 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 future periods or performance suggested by these statements.
Overview
Golf Rounds.com, Inc. was incorporated in 1968. Until the fourth
quarter of fiscal 1992, we were engaged in the wholesale distribution of
aluminum alloys, steel and other specialty metals under the name American Metals
Service, Inc. In the fourth quarter of fiscal 1992, we liquidated our assets and
did not conduct any business operations until May 1999. At that time, we
acquired the assets of PKG Design, Inc., the developer of our two websites,
golfrounds.com and skiingusa.com. The golfrounds.com website provides news and
stories on professional and amateur golf, local tee time services, local golf
course reviews and information on tournaments and activities. Skiingusa.com is a
similar website devoted to skiing. In connection with the acquisition of these
websites, we changed our name to Golf Rounds.com, Inc.
On February 3, 2000, Paul O. Koether, John W. Galuchie, Jr. and
Thomas K. Van Herwarde resigned as directors of our board of directors and
Robert H. Donehew, Larry Grossman and John F. McCarthy, III took office as our
new directors. The change in composition of the board occurred in connection
with the sale on January 24, 2000 by Messrs. Koether, Galuchie and Van Herwarde
and certain other sellers of an aggregate of 500,000 shares of our common stock
to seven purchasers, some of whom are affiliated with the brokerage firm of M.
H. Meyerson & Co., Inc. ("MHM").
On March 16, 2000, we sold 1,333,005 shares of our common stock at a
purchase price of $1.375 per share, representing aggregate net proceeds of
approximately $1,567,000, to 29 accredited investors in a private placement
offering. MHM acted as the placement agent for the offering.
On October 31, 2000, Thomas Van Herwarde resigned as our president. We
have not designated a successor at this time. We have closed our Kinnelon, N.J.
office and sold the furniture and equipment. We have sublet this space for
about one half of the lease cost until the lease expires on March 31, 2001, and
we will not renew the lease.
Current Business Plan
Although we are seeking to maintain and, possibly, to expand our
websites, our primary business objective is to locate a target business that we
believe will have significant growth potential and effect a business combination
with that target. We intend to use our available cash (currently approximately
$3 million), capital stock, debt or a combination of these to effect the
business combination. A business combination may involve the acquisition of, or
merger with, a financially stable, mature company that desires to establish a
public trading market for its securities while avoiding what it may deem to be
adverse consequences of undertaking a public offering itself, such as time
delays, significant expense, loss of voting control and other burdens (including
significant professional fees) related to compliance with various federal and
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state securities laws. In the alternative, a business combination may involve a
company that may be financially unstable or in its early stages of development
or growth.
Results of Operations
We have had no significant revenues (other than interest income) since
1999 and will not achieve any significant revenues (other than interest income)
until, at the earliest, the completion of a business combination. For the three
months ended November 30, 2000 interest income was $48,960 compared to $21,985
for the comparable period of the prior fiscal year. The increase in interest
income was due to additional capital resulting from the private placement of
common stock in March 2000 and higher rates of return on U.S. Treasury
Securities and money market funds owned by the Company.
General, administrative and other expenses were $108,830 for the three
months ended November 30, 2000 compared to $76,659 for the three months ended
November 30,1999. The increase in general, administrative and other expenses was
due primarily to increases in salary expenses, rent expenses and web consulting
expenses to develop the golfrounds.com and skiingusa.com Internet sites,
director's and officer's liability insurance expenses, loss on sale of fixed
assets due to the closing of the Kinnelon office and increased legal fees.
General, administrative and other expenses for the three month period ended
November 30, 2000 consisted primarily of salary expenses of $30,000, web
consulting expenses of $21,389, director's and officer's liability insurance
expenses of $8,625, legal expenses of $19,457, rent expenses of $8,377, and the
loss on the sale of fixed assets of $5,054. Amortization expenses of $49,304 was
incurred in the first quarter of the prior year in connection with the
acquisition of PKG Design, Inc.; however, there was no such expense in the three
months ended November 30, 2000 as these assets had been fully amortized by the
end of fiscal 2000. Until March 31, 2000, a management fee of $12,500 per
quarter was paid to a company, with which we are affiliated, for accounting,
financial and administrative management. The fee was based on the former
affiliate's estimated costs. Since the change of control, most of these services
are being performed by our Treasurer. Our Chairman and Treasurer are each paid
$2,500 per month for such services.
We had previously self-insured various amounts of our employees'
medical claims, however, as of March 31, 2000, we will not self-insure our
employees' and their families' medical claims. As of April 1, 2000, we purchased
medical insurance that eliminates the Company's liability for future medical
claims of our employees' and their families'.
On November 28, 2000, the Company became aware of a potential claim of
approximately $145,000, which is reasonably possible of being asserted under the
Company's previous medical insurance plan. Management of the Company has been
advised that at least a portion of the potential claim may have been for
treatment that may have been considered experimental under the plan documents on
which the Company's "stop loss" (excess) insurance was based. The plan of
treatment was nevertheless approved by the entity engaged as administrator of
the plan. No demand for reimbursement by the Company of this claim has been made
as of January 18, 2001. Although the outcome of any potential claim cannot be
predicted with certainty, if a claim is made, management of the Company and the
Company's legal counsel believe that it is reasonably possible that the Company
will recover at least a portion of the potential claim from the administrator
and/or others; however, the amount of the potential loss, if any, and recovery
cannot be estimated. In the event a claim is asserted, management of the Company
intends to vigorously pursue its remedies.
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Liquidity and Capital Resources
On March 16, 2000, we sold an aggregate of 1,333,005 shares of common
stock in a private placement that resulted in $1,566,672 of additional net
capital.
At November 30, 2000, cash and cash equivalents were $3,225,847.
Working capital was $3,193,508. U.S. Treasury Securities of approximately
$1,486,366 mature at various dates through February 1, 2001 and bear interest
rates ranging from 6.175% to 6.2787%. Money market funds of $1,687,224 bear an
interest rate of 5.82%
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PART II - OTHER INFORMATION
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Item 6. - Exhibits and Reports on Form 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
None.
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SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant
caused this amendment to be signed on its behalf by the undersigned, thereunto
duly authorized.
GOLF ROUNDS.COM, INC.
/s/ Robert H. Donehew
Dated: January 19, 2001 By: ___________________________
Robert H. Donehew
Vice President and Treasurer
(Principal Financial and
Accounting Officer)
