FORM 10-QSB/A
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
{ } Quarterly report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934 for the fiscal quarter ended
______________ or
{X } Transition report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934 for the transition period from
December 31, 1995 to March 31, 1996
Commission file number 0-11345
FANATICS ONLY, INC.
(Exact Name of Registrant as Specified in its Charter)
Colorado 84-1320541
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
7730 East Belleview, Suite 305, Englewood, CO 80111
(Address of principal executive offices) (Zip Code)
Former address 7340 East Caley Avenue, Suite 215, Englewood, CO 80110
(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark 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 for
the past 90 days.
YES_____ NO X
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at June 30, 1996
Common stock, no par value 8,926,876 Shares*
* Does not reflect pending retirement of 2,323,500 shares of
Common Stock held by four shareholders.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Report on Unaudited Financial Statements
Balance Sheets as of December 31, 1995 and March 31, 1996
Statement of Operations for Three Months Ended March
31, 1996 and from Inception (October 10, 1995) to March 31,
1996
Statement of Cash Flows for Three Months Ended March
31, 1996 and from Inception (October 10, 1995) to March 31,
1996
REPORT ON UNAUDITED FINANCIAL STATEMENTS
To the Board of Directors
Fanatics Only, Inc.
Denver, Colorado
The accompanying balance sheet of Fanatics Only, LLC as of March 31,
1996, and the related statements of operations and cash flows for the
three month period ended and the period from October 10, 1995
(inception) to March 31, 1996 were not audited by me and,
accordingly, I do not express an opinion on them.
/s/ Nicollette D. Rounds
Nicollette D. Rounds
July 9, 1996
Balance Sheets
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
(Unaudited)
Assets
<S> <C> <C>
Current assets
Cash $ 20,111 $407,892
Restricted cash 309,160 672,505
Accounts receivable 222,825 120,375
Inventory 336,000 -
Deferred participating kit costs 120,375 -
Prepaid expenses and other 6,077 52,725
Total current assets 1,014,548 1,253,497
Property and equipment, net 22,954 14,531
Other asset
Licensing rights, net 216,258 220,803
Goodwill, net 266,185 271,474
Organizational costs 11,459 12,084
Deferred offering costs - 74,785
Total other asset 493,902 579,146
Total assets $ 1,531,404 $1,847,174
Liabilities and Stockholders' Deficit
Current liabilities
Accounts payable and accrued expenses $ 394,741 $ 71,703
Revenue participation contracts 3,075,000 3,075,000
Deferred revenue 220,890 -
Due to stockholder 8,303 8,303
Total current liabilities 3,698,934 3,155,006
Stockholders' deficit
Preferred stock; no par value; 5,000,000
shares authorized, no shares issued - -
Common stock subscribed 2,974,185 -
Common stock; no par value; 50,000,000
shares authorized; 8,071,400 shares
issued and outstanding 551,884 551,884
Deficit accumulated during the
development stage (5,693,599) (1,859,716)
Total stockholders' deficit (2,167,530) (1,307,832)
Total liabilities and stockholders'
deficit $ 1,531,404 $ 1,847,174
</TABLE>
Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
October 10,
For the Three 1995
Months Ended (Inception) to
March 31, March 31,
1996 1996
<S> <C> <C>
Costs and expenses
Costs of participation kits $ 1,019,602 $ 1,019,602
General and administrative 950,365 1,820,212
Advertising and promotional expenses 1,863,916 2,853,785
Net loss $ (3,833,883) $(5,693,599)
Net loss per common share $ (.47) $ (.70)
Weighted average shares outstanding 8,071,400 8,071,400
</TABLE>
Statement of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
October 10,
For the Three 1995
Months Ended (Inception) to
March 31, March 31,
1996 1996
<S> <C> <C>
Cash flows from operating activities
Net loss $ (3,833,883) $(5,693,599)
Adjustments to reconcile net loss to net
cash used by operating activities -
Depreciation and amortization 11,976 20,253
Aborted offering costs 54,785 -
Changes in assets and liabilities -
Accounts receivable (222,825) (222,825)
Inventory (336,000) (336,000)
Prepaid expenses and other 46,648 (6,077)
Deferred participation kit costs - (120,375)
Accounts payable and accrued
expenses 323,038 394,741
Deferred revenue 220,890 220,890
Due to stockholder - 8,303
98,512 (41,090)
Net cash used by operating
activities (3,735,371) (5,734,689)
Cash flows from investing activities
Purchase of property and equipment (9,940) (25,776)
Organizational costs - (12,500)
Acquisition of licensing rights and
goodwill - (498,833)
Net cash used by investing
activities (9,940) (537,109)
Cash flows from financing activities
Revenue participation contracts - 3,075,000
Payment of offering costs - (20,000)
Proceeds from common stock and
subscription 2,994,185 3,546,069
Net cash provided by financing
activities 2,994,185 6,601,069
Net (decrease) increase in cash (751,126) 329,271
Cash - beginning of period 1,080,397 -
Cash - end of period $ 329,271 $ 329,271
</TABLE>
ITEM 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Financial Resources - December 31, 1995 Compared to
March 31, 1996
At December 31, 1995, the registrant had current assets (mostly cash
and restricted cash) of $1,253,497. Subsequent to such date and
before March 31, 1996, the registrant took in $2,974,185 net proceeds
from a private placement of shares and warrants. By March 31, 1996,
substantial amounts of such cash had been expended on advertising and
other marketing costs for the Company's Baseball 1996 Fantasy Game.
At March 31, 1996, the Company's current assets were $1,014,548 but
current liabilities were $3,698,934. Subsequent to March 31, 1996,
the registrant has relied on proceeds from three short-terms working
loans totaling $350,000. Additional financing from equity sales or
additional short-term loans will be necessary for the Company to
liquidate its accounts payable and short-term debt and fund ongoing
operations, including funding for general and administrative expense
and Football 1996. Absent such additional capital infusions, the
Company will not be able to sustain operations.
Realization of $220,890 deferred revenue representing sales receipts
from the Baseball 1996 Fantasy Game selling effort will occur
throughout the Baseball 1996 playing season, and, in any event, the
Company will apply such deferred revenues against estimated costs of
prizes for such game.
Results of Operations-Inception (October 10, 1995) to March 31, 1996
Compared to the Three Months Ended March 31, 1996
Costs and expenses from inception (the date when the startup Fanatics
Only LLC business was acquired by the registrant) to March 31, 1996
totaled $5,693,599, of which $3,833,883 was incurred in the three
months ended March 31, 1996. All such expenses were either general
and administrative costs, or Fantasy Game inventory and advertising
and promotional expense incurred for the Baseball 1996 Fantasy Game
selling effort.
No revenues have been recognized by the registrant for the period
from inception to March 31, 1996 as the $220,890 of deferred revenues
from selling the Baseball 1996 Fantasy Game will be recognized over
the Baseball 1996 playing season which started April 1, 1996. As
noted above, prize expense for such game are expected to offset such
revenues. The registrant had expended over $2,500,000 for
advertising and promotional expense for the Baseball 1996 Fantasy
Game, expecting sales of 10,000 or more units. Only approximately
4,000 have been sold.
Subsequent to March 31, 1996, the registrant has significantly
reduced general and administrative expense and refined its business
plan to emphasize (for Football 1996 and future Fantasy Game) direct
selling methods instead of national media campaigns funded by the
registrant, and also the sale of sponsorship contracts to major
corporations wherein such sponsors would fund advertising expenses.
PART II OTHER INFORMATION
Item 1. Legal Proceedings. Not applicable.
Item 2. Changes in Securities. Not applicable.
Item 3. Defaults on Senior Securities. Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders. Not
applicable.
Item 5. Other information. Not applicable.
Item 6. Exhibits and Reports on Form 8-K:
a) Exhibits. Not applicable.
b) Reports on Form 8-K.
1) Form 8-K/A, dated March 22, 1996
regarding the December 18, 1995 acquisition of
all the assets of Fanatics Only, LLC
a. Financial statements of
business acquired as of November 30, 1995
b. Pro forma financial
information as of November 30, 1995
2) Form 8-K, dated March 22, 1996
regarding the change in year end from October 31,
1995 to December 31, 1995
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.
Fanatics Only, Inc.
(Registrant)
/s/ Jeff Gehl, President and Chief Financial Officer
Jeff Gehl, President and Chief
Financial Officer
Date: June 30, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 20,111
<SECURITIES> 0
<RECEIVABLES> 222,825
<ALLOWANCES> 0
<INVENTORY> 336,000
<CURRENT-ASSETS> 1,014,548
<PP&E> 22,954
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,531,404
<CURRENT-LIABILITIES> 3,698,934
<BONDS> 0
0
0
<COMMON> 3,526,069
<OTHER-SE> (5,693,599)
<TOTAL-LIABILITY-AND-EQUITY> 1,531,404
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 3,833,883
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,833,883)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,833,883)
<EPS-PRIMARY> (.47)
<EPS-DILUTED> (.47)
</TABLE>
