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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.
--------------------- --------------------
April 30, 2000 0-5304
CUSTOMER SPORTS, INC.
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(Exact name of registrant as specified in its charter)
UTAH 87-0282745
-------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1023 Reliance Way Del Mar, California 92014
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(Address of Principal Executive Offices)
Registrant's telephone number including area code: (619) 481-2400
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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
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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, 39,807,703 Shares Outstanding
at April 30, 2000.
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CUSTOMER SPORTS, INC.
TABLE OF CONTENTS
PART I FINANCIAL STATEMENTS
ITEM 1. FINANCIAL STATEMENTS (Unaudited)
Accountant's Review Letter. . . . . . . . . . . . . . . . . . . . . .3
Balance Sheets. . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Statement of Operations . . . . . . . . . . . . . . . . . . . . . . .6
Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . .7
Note to Financial Statements. . . . . . . . . . . . . . . . . . . . .8
ITEM 2 MANAGEMENT DISCUSSION AND FINANCIAL
CONDITION AND RESULTS OF OPERATIONS. . . . . . . . . . . . . .9
PART II OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . 10
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . 11
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/Letterhead/
Schvaneveldt & Company
Certified Public Accountant
275 East South Temple, #300
Salt Lake City, Utah 84111
(801) 521-2392
Darrell T. Schvaneveldt, C.P.A.
Board of Directors
Customer Sports, Inc.
(A Development Stage Company)
I have reviewed the accompanying balance sheets, of Customer Sports, Inc.,
as of April 30, 2000, and for the three months period and the nine months
period then ended. These financial statements are the responsibility of
the Company's management.
I conducted my review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, I do not express such an
opinion.
Based on my review, I am not aware of any material modifications that
should be made to the accompanying financial statements for them to be in
conformity with generally accepted accounting principles.
/S/ Schvaneveldt & Company
Salt Lake City, Utah 84111
July 6, 2000
3
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Customer Sports, Inc.
Balance Sheets
April 30, 2000 Unaudited and July 31, 1999
<TABLE>
<CAPTION>
2000 1999
----------- -----------
<S> <C> <C>
Assets
Current Assets
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Cash $ 8,283 $ -0-
Inventory 97,848 -0-
----------- -----------
Total Current Assets 106,131 -0-
Property & Equipment
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Office Equipment - Net 3,428 729
Store Fixtures 14,813 -0-
Warehouse Fixtures 11,805 -0-
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Total Property & Equipment 30,046 729
Other Assets
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Refundable Deposit 19,459 -0-
Oil & Gas Properties
(Successful Efforts Method) 732,901 732,901
Less Accumulated Depreciation ( 732,901) ( 724,961)
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Total Other Assets 19,459 7,940
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Total Assets $ 155,636 $ 8,669
=========== ===========
</TABLE>
See accountant's review letter and accompanying notes
4
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Customer Sports, Inc.
Balance Sheets -Continued-
April 30, 2000 Unaudited and July 31, 1999
<TABLE>
<CAPTION>
2000 1999
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<S> <C> <C>
Liabilities & Stockholders' Equity
Current Liabilities
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Cash in Bank Overdraft $ -0- $ 10,060
Accounts Payable & Accrued Expenses 93,375 126,590
Notes Payable 1,046,888 380,564
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Total Current Liabilities 1,140,263 517,214
Stockholders' Equity
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Capital Stock, 50,000,000 Shares at $0.01
Par Value; 39,807,703 & 32,407,703
Shares Issued & Outstanding Restated 398,077 324,077
Paid In Capital 6,802,314 6,758,403
Deficit in Retained Earnings (8,185,018) ( 7,591,025)
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Total Stockholders' Equity ( 984,627) ( 508,545)
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Total Liabilities &
Stockholders' Equity $ 155,636 $ 8,669
=========== ===========
</TABLE>
See accountant's review letter and accompanying notes
5
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Customer Sports, Inc.
Statements of Operations (Unaudited)
For the Three Months Period Ended April 30, 2000 & 1999
& the Nine Months Ended April 30, 2000 & 1999
<TABLE>
<CAPTION>
For the Three For the Nine
Months Ended Months Ended
April April April April
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues
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Golf Sales & Fees $ 5,996 $ 53,281 $ 95,608 $ 152,681
----------- ----------- ----------- -----------
Total Revenues 5,996 53,281 95,608 152,681
Cost of Expenses
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Cost of Golf Sales 4,593 7,218 16,333 11,000
----------- ----------- ----------- -----------
Gross Profit 1,403 46,063 79,275 141,681
Operating Expenses
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General & Administrative
Expenses 229,162 52,487 678,227 193,587
Depreciation & Amortization 3,698 796 15,336 5,707
----------- ----------- ----------- -----------
Total Cost & Expenses 232,860 53,283 693,563 199,294
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Profit or (Loss) from Operations ( 231,457) ( 7,220) ( 614,288) ( 57,613)
----------- ----------- ----------- -----------
Other Income (Expenses)
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Oil & Gas Revenues -0- 329 -0- 8,070
Rental Income 6,319 10,000 20,295 10,000
Lease Operating Expenses
Delayed Rentals, Royalties,
& Taxes - Oil Well -0- ( 975) -0- 309
----------- ----------- ----------- -----------
Total Other Income (Loss) 6,319 9,354 20,295 18,379
----------- ----------- ----------- -----------
Net Income Loss ($ 225,138) $ 2,134 ($ 593,993) ($ 39,234)
=========== =========== =========== ===========
Net Loss Per Share of
Common Stock ($ 0.01) ($ 0.00) ($ 0.02) ($ 0.00)
Weighted Average Number
Of Shares Outstanding
During Period 39,807,703 19,866,253 39,708,703 19,866,253
</TABLE>
See accountant's review letter and accompanying notes
6
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Customer Sports, Inc.
Statement of Cash Flows Unaudited
For the Nine Months Periods Ended
April 30, 2000 and 1999
<TABLE>
<CAPTION>
Nine Months Period Ended
April 30,
2000 1999
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<S> <C> <C>
Cash Flows from Operating Expenses
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Net (Loss) from Operations ($ 593,993) ($ 39,234)
Adjustments to Reconcile Net Loss to
Net Cash Provided by Operating Activities
Rounding -0- 1
Depreciation 15,336 5,707
Non Cash Stock Issued for Services 112,017 -0-
Changes in Operating Assets & Liabilities
(Increase) Decrease in Inventory ( 97,848) 7,218
Increase (Decrease) in Accounts Payable ( 33,215) 15,589
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Net Cash Provided (Used) by
Operating Expenses ( 597,703) ( 10,719)
Cash Flows from Investing Activities
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Increase in Deposits ( 19,459) -0-
Purchase of Equipment ( 44,653) -0-
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Net Cash Provided (Used) by
Investing Activities ( 64,112) -0-
Cash Flows from Financing Activities
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Increase in Notes Payable 666,324 -0-
Sale of Common Shares 13,834 -0-
(Decrease) Increase in Notes Payable ( 10,060) 6,000
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Net Cash Provided (Used) by
Financing Activities 670,098 6,000
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Increase (Decrease) in Cash 8,283 ( 4,719)
Cash at Beginning of Period -0- 20,927
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Cash at End of Period $ 8,283 $ 16,208
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Disclosures from Operating Activities
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Interest $ 15,520 $ 30,283
Taxes -0- -0-
</TABLE>
See accountant's letter and accompanying notes
7
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Customer Sports, Inc.
Notes to Financial Statements
NOTE #1 - Organization
----------------------
The Company was organized under the laws of the State of Utah and commenced
business activities on September 25, 1969. Substantially all of the
Company's assets were acquired in 1982 and 1983 in exchange for 5,533,164
shares of the Company's common stock.
NOTE #2 - Summary of Significant Accounting Policies
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A. The Company uses the accrual method of accounting.
B. Revenues and directly related expenses are recognized in the period
when the goods are sold to the customer.
C. The Company considers all short term, highly liquid investments, that
are readily convertible, within ninety days, to known amounts as cash.
The Company currently has no cash equivalents.
D. Basic Earnings Per Shares are computed by dividing income available to
common stockholders by the weighted average number of common shares
outstanding during the period. Diluted Earnings Per Share shall be
computed by including contingently issuable shares with the weighted
average shares outstanding during the period. When inclusion of the
contingently issuable shares would have an antidilutive effect upon
earnings per share no diluted earnings per share shall be presented.
E. Inventories: Inventories are stated at the lower of cost, determined
by the FIFO method or market.
F. Depletion: The Company's policy is to provide depletion based on the
units of production method. During the past ten years, depletion has
been claimed on the ratio of prior years units of production to
estimated revenues.
G. Depreciation: The cost of property and equipment is depreciated over
the estimated useful lives of the related assets. The cost of
leasehold improvements is amortized over the lesser of the length of
the lease of the related assets of the estimated lives of the assets.
Depreciation and amortization is computed on the straight line method.
H. Estimates: The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could
differ from those estimates.
8
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Customer Sports, Inc.
ITEM 1.
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Summarized Financial Information
--------------------------------
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 10Q 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 or normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three and nine months periods ending April 30, 2000 are not
necessarily indicative of the results that may be expected for the year
ended July 31, 2000. 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, 1999.
ITEM 2.
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Management's Discussion and Analysis of Financial Condition and Results of
Operation
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Operating revenue for the quarter ended April 30, 2000 were $5,996 compared
to $63,610 for the quarter ended April 30, 1999. Total expenses for the
quarter ending April 30, 2000 were $232,860 compared to $54,258 for the
same period ended April 30, 1999.
Total revenues for the nine month period ended April 30, 2000 were $95,608
compared to $171,060 for the same period ended April 30, 1999. Total
expenses for the nine months period ending April 30, 2000 were $693,563
compared to $199,294 for the same period ended April 30, 1999.
During the quarter ended April 30, 2000, Registrant modified its retail
presentation from occasional tent shows to permanent locations and executed
a lease for a shop for a period of one year in San Marcos, California.
Registrant intends this site to be the model for expansion. Management is
of the opinion that a stable profitable retail presence is required to
attempt a second launch of event marketing in distant cities.
Registrant intends to expand its retail presence in both San Diego, and
Orange, Counties with additional capital. Each start-up requires
approximately $75,000 of which 80% is inventory. Break-even on each
location is approximately $20,000 monthly. The first location was a pro-
forma break-even in its first month of operation without benefit of
advertising.
Registrant terminated, for the present, the on-going search for ranges in
its Community Golf Centers to focus on its Bigtop operation and the
potential Internet business - Membergolf.
Registrant also postponed its shareholders meeting until early summer
pending resolution of its listing status on the NASDAQ Bulletin Board and
the certification.
During the period, the Registrant wrote down the remaining valuation of its
remaining wells.
During the period, based upon votes of the Board, Registrant issued
7,400,000 shares of common stock.
9
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PART II
OTHER INFORMATION
Item 1. Legal Proceedings
Registrant is the subject of a suit for wages initiated
by a former employee of Community Golf Centers.
Registrant believes the suit to be without merit.
Item 2. Changes in the Rights of the Registrant's
Security Holders . . . . . . . . . . . . . . . . . . . . . . None
Item 3. Defaults by the Company on its Senior Securities
In 1999, Registrant issued 1,027,500 shares of common
stock to one class of convertible debt holders and
780,000 shares to another holder of other debt as payment
in kind.
Item 4. Results of Votes of Security Holders . . . . . . . . . . . . None
Item 5. Other Information. . . . . . . . . . . . . . . . . . . . . . None
10
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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)
Date: July 6, 2000 By: /S/ Edmund J. Irvine
---------------------------------
Edmund J. Irvine, Jr.
President
11
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