SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Annual Report Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the Quarter Ended Commission File No.
October 31, 1997 0-5304
CUSTOMER SPORTS, INC.
UTAH 87-0282745
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
455 Marine View Avenue, Suite 260, Del Mar, California 92014
(Address of Principal Executive Offices)
Registrant's telephone number including area code: (619) 481-2400
Former name, former address, and former fiscal
year end, if changed since last report.
Indicate by checkmark whether the registrant (1) has 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 in the past 90 days:
Yes X No
------ ------
Indicate the number of shares outstanding for each of the issuer's classes
of Common Stock as of the last practical date:
Common Stock, Par Value $.01 Per Share, 13,984,290 Shares Outstanding at
October 31, 1997. <PAGE>
CUSTOMER SPORTS, INC.
TABLE OF CONTENTS
PART I FINANCIAL STATEMENTS
ITEM 1. FINANCIAL STATEMENTS (Unaudited)
Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . .3
Statement of Operations. . . . . . . . . . . . . . . . . . . . .4
Statement of Cash Flows. . . . . . . . . . . . . . . . . . . . .5
Note to Financial Statements . . . . . . . . . . . . . . . . . .6
ITEM 2 MANAGEMENT DISCUSSION AND FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
PART II OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . .7
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . .8
<PAGE>
Customer Sports, Inc.
Balance Sheets (Unaudited)
October 31, 1997 & July 31, 1997
<TABLE>
<CAPTION>
October July
31, 1997 31, 1997
------------ ------------
<S> <C> <C>
Assets
Current Assets
- --------------
Cash $ 1,691 $ 234
Receivables 3,213 3,213
Inventory 23,218 23,218
------------ ------------
Total Current Assets 28,122 26,665
Other Assets
- ------------
Refundable Deposit 3,000 3,000
Equipment - Net 7,608 8,213
Oil & Gas Properties
(Successful Efforts Method) 807,901 832,901
Less Accumulated Depreciation (702,334) (697,450)
------------ ------------
Total Other Assets 116,175 146,664
------------ ------------
Total Assets $ 144,297 $ 173,329
============ ============
Liabilities & Stockholders' Equity
Current Liabilities
- -------------------
Accounts Payable & Accrued Expenses $ 145,052 $ 133,415
Note Payable 178,965 178,965
------------ ------------
Total Current Liabilities 324,017 312,380
Long Term Liabilities
- ---------------------
Notes Payable 219,925 214,925
------------ ------------
Stockholders' Equity
- --------------------
Capital Stock 50,000,000 Shares at
$0.01 Par Value; 13,984,290
& 13,766,790 Shares Issued
& Outstanding Respectively 139,843 137,668
Paid In Capital 6,424,519 6,404,319
Deficit in Retained Earnings (6,964,007) (6,895,963)
------------ ------------
Total Stockhodlers' Equity (399,645) (353,976)
------------ ------------
Total Liabilities &
Stockholders' Equity $ 144,297 $ 173,329
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
Customer Sports, Inc.
Statements of Operations (Unaudited)
For the Periods August 1, 1997 to October 31, 1997
and August 1, 1996 to October 31, 1996
<TABLE>
<CAPTION>
1997 1996
------------- ------------
<S> <C> <C>
Revenues
- --------
Golf Sales & Fees $ 15,492 $ 21,617
------------- ------------
Total Revenues 15,492 21,617
Cost of Sales
- -------------
Cost of Golf Sales 1,415 4,577
------------- ------------
Gross Profit 14,077 17,040
Operating Expenses
- ------------------
Consulting Fees 25,975 19,575
General & Administrative Expenses 21,619 31,921
Interest Expenses 11,637 7,275
Depreciation & Amortization 5,489 5,490
------------ ------------
Total Costs & Expenses 64,720 64,261
------------ ------------
Loss from Operations (50,643) (47,221)
- --------------------
Other Income (Expenses)
- -----------------------
Gain on Sale of Assets 2,550 -0-
Oil & Gas Revenues 8,721 9,379
Write Off Impaired Oil Wells (25,000) (25,000)
Lease Operating Expenses,
Delayed Rentals, Royalties,
& Taxes Oil Wells (3,672) (3,096)
------------ ------------
Total Other Income (Expenses) (17,401) (18,717)
------------ ------------
Net Loss $ (68,044) $ (65,938)
============ ============
Net Loss Per Share
Of Common Stock (.00) (.01)
Weighted Average Number Of
Shares Outstanding During
Period 13,875,540 10,390,996
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
Customer Sports, Inc.
Statement of Cash Flows - Unaudited
For the Periods August 1, 1997 to October 31, 1997
& August 1, 1996 to October 31, 1996
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
Cash Flows from Operating Activities
- ------------------------------------
Net (Loss) from Operations $ (68,044) $ (65,938)
Adjustments to Reconcile Net Income
(Loss) to Net Cash Provided by
Operating Activities
Non Cash Consulting Fees 16,750 -0-
Depreciation 5,489 5,490
Write Off Impaired Assets 25,000 25,000
Changes in Operating Assets & Liabilities
(Increase) Decrease in Receivable -0- -0-
Increase (Decrease) in Accounts Payable 11,637 7,275
------------ ------------
Net Cash Provided (Used) by
Operating Activities (9,168) (28,173)
Cash Flows from Investing Activities -0- -0-
- ------------------------------------ ------------ ------------
Net Cash Provided (Used) by
Investing Activities -0- -0-
------------ ------------
Cash Flows from Financing Activities
- ------------------------------------
Sale of Common Shares 6,375 10,000
Increase in Notes Payable 4,250 15,000
Payment on Notes Payable -0- -0-
------------ ------------
Net Cash Provided (Used) by
Financing Activities 10,625 25,000
------------ ------------
Increase (Decrease) in Cash 1,457 (3,173)
------------ ------------
Cash at Beginning of Period 234 3,248
------------ ------------
Cash at End of Period $ 1,691 $ 75
============ ============
Disclosures from Operating Activities
- -------------------------------------
Interest $ 11,637 $ 7,275
Taxes -0- -0-
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
Customer Sports, Inc.
Notes to Financial Statements (Unaudited)
ITEM I
NOTE #1 - Basis of Presentation
- -------------------------------
The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three month periods ending October 31,
1997 are not necessarily indicative of the results that may be expected for the
year ended July 31, 1998. For further information, refer to the financial
statements and footnotes thereto included in the Company's annual report on Form
10-K for the year ended July 31, 1997.
ITEM II
Management's Discussion and Analysis of Financial Condition and Results of
Operation
Total operating revenues for the quarter ended October 31, 1997 were
$26,763 compared to $30,996 for the quarter ended October 31, 1996.
Total operating expenses for the quarter ended October 31, 1997 were
$64,720 compared to $64,261 for the quarter ended October 31, 1996 due to
expenses related to establishment of the Company's golf business.
During the period, Registrant signed a sales agreement with Stockton
Equities, Inc., a licensed NASD broker dealer to offer for sale units of the
Registrant's new Private Placement of Securities as the agreement with LaJolla
capital had lapsed and Registrant had no interest in renewal.
Sales of golf equipment and accessories lagged estimates because of lack of
capital to promote the shop and the business. Oil and gas revenues continued
their orderly decline during the period and Registrant wrote down the value of
the oil and gas holdings by an additional $25,000.
The Company entered into modifications of its leases both at its executive
headquarters and at its retail facility. These modifications which commenced at
the end of October called for a rental reduction at the executive office to $750
monthly for less space and reduced services. Registrant's intent is to move
these offices closer to what will become the core of its operations in Orange
County, California. This will provide reduced commuting time for operational
personnel. The Registrant also entered into a rental abatement and sales
sharing agreement at its retail facility until such time as Stockton Equities
provides the agreed upon capital.
Both agreements were personally guaranteed by Mr. Edmund Irvine, Chairman
of the Registrant.
<PAGE>
PART II
OTHER INFORMATION
During the period Registrant, accepted with regret, the resignation of
S. Michael Sharp as Chief Operating Officer. He will remain as Corporate
secretary and as a member of the Board of Directors.
During the period, Mr. Richard Mangerelli, president of Cybertel
Communications was nominated for and elected to the Board of Directors to serve
until the elections at the Registrant's shareholder meeting tentatively
scheduled for early 1998.
Item 1 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . None
Item 2 Changes in the Rights of the Company's Security Holders . . . . . . None
Item 3 Defaults by the Company on its Senior Securities. . . . . . . . . . None
Item 4 Results of Votes of Security Holders. . . . . . . . . . . . . . . . None
Item 5 Other Information . . . . . . . . . . . . . . . . . . . . . . . . . None
Item 6 Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . . . None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
CUSTOMER SPORTS, INC.
(Registrant)
/S/ Edmund J. Irvine
Date: ----------------- By: -----------------------
December 22, 1997 Edmund J. Irvine, Jr.
President
/S/ S. Michael Sharp
Date: ---------------- By: -----------------------
December 22, 1997 S. Michael Sharp
Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000051853
<NAME> CUSTOMER SPORTS, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-END> OCT-30-1997
<CASH> 1,691
<SECURITIES> 0
<RECEIVABLES> 3,213
<ALLOWANCES> 0
<INVENTORY> 23,218
<CURRENT-ASSETS> 28,218
<PP&E> 822,637
<DEPRECIATION> 709,462
<TOTAL-ASSETS> 144,297
<CURRENT-LIABILITIES> 324,017
<BONDS> 0
0
0
<COMMON> 139,843
<OTHER-SE> (539,488)
<TOTAL-LIABILITY-AND-EQUITY> 144,297
<SALES> 15,492
<TOTAL-REVENUES> 15,492
<CGS> 1,415
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 70,484
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,637
<INCOME-PRETAX> (68,044)
<INCOME-TAX> 0
<INCOME-CONTINUING> (68,044)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (68,044)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
