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Securities and Exchange Commission
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF EARLIEST REPORTED EVENT - OCTOBER 13, 1999
MOTORSPORTS USA, INC.
(Exact name of Registrant as specified in its charter)
Delaware 0-13895 34-1444240
(State or other jurisdiction of (Commission File (IRS Employer
incorporation or organization) Number) Identification Number
106 East South Main Street
Waxhaw, North Carolina 28173
(Address of Registrant's principal executive offices)
(416) 729-4321
(Registrant's telephone number, including area code)
(416) 588-2777
(Registrant's facsimile number, including area code)
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INTRODUCTORY NOTE
Unless otherwise indicated all information in this Current Report on
Form 8-K (the "Report") has been adjusted to reflect a 1 for 10 reverse stock
split effective October 24, 1999 and a business combination transaction that
closed on October 13, 1999 and became effective on October 27, 1999. References
to Fraser Realty Group, Inc. "FRG", or "Fraser" refer to the Company before the
business combination and "MUSA", "Motorsports", "we", "us", and "our" refer to
Motorsports USA, Inc. after the combination.
Our quarterly and annual operating results will be affected by a wide
variety of factors that could materially and adversely affect our actual
results. These factors include, but are not limited to:
(1) Changes in general economics and market conditions;
(2) Changes in the nature of our business;
(3) General declines in the market for venture capital and emerging
company investments; and
(4) Changes in regulatory requirements.
As a result of these factors and others, our future operating results
may fluctuate on a quarterly or annual basis. Such fluctuations could materially
and adversely affect our business, financial condition, operating results, and
stock price.
This report and other documents that we file with the Securities and
Exchange commission (the "SEC") contain forward-looking statements about our
business. These forward-looking statements are subject to many risks and
uncertainties. Therefore, actual results may differ significantly form the
forward-looking statements. Except as specified in SEC regulations, we have no
duty to release information that updates the forward-looking statements
contained in this Report. An investment in our stock involves various risks,
including those mentioned above and described elsewhere in this Report.
Additional risks will be disclosed form time to time in our future SEC filings.
ITEM 1. CHANGE IN CONTROL OF REGISTRANT
GENERAL. Motorsports USA, Inc. is a Delaware corporation formerly known
as Fraser Realty Group, Inc. Fraser was the successor to Fraser Mortgage
Investments (the "Trust"), an unincorporated association in the form of a
business trust organized in Ohio under a Declaration of Trust dated May 7, 1969.
In 1969 through an initial public offering ("IPO"), McDonald & Company raised
18,000,000 in equity through a public offering. Fraser Realty Group, Inc. was
formed as a Delaware, for profit, corporation on July 9, 1984, and at a special
meeting of the shareholders held on August 28, 1984, the shareholders approved a
plan of reorganization. The purpose of the proposed reorganization was to
convert the Trust to a business organization taxable as an ordinary
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corporation, instead of a real estate investment trust, under the Federal
income tax laws. An organizational meeting of the Board of Directors of FRG
was held on July 11, 1984 and in connection with the proposed reorganization
the Directors unanimously passed a resolution approving the Registration
Statement on Form S-14 of the company prepared by the law firm of Squire
Sanders & Dempsey. Such Registration Statement was filed with the Securities
and Exchange Commission and subsequently became effective.
In connection with an application to list its Common Stock on the
NASDDQ system, FRG also registered its Common Stock pursuant to Section, 12(g)
of the Securities Exchange Act of 1934 (the "Exchange Act").
FRG invested in real estate and mortgage loans. FRG was organized as a
real estate investment trust, primarily for the purpose of making passive
investments in real estate and passing through the income realized from such
investments to its shareholders. From its inception, FRG financed its real
estate investment operations principally through the sale of common stock, and
short-term debt financing, including both bank borrowings and the issuance of
commercial paper. FRG saw its real estate investments evolve from principally
short-term construction loans to a mix of variable and fixed-rate mortgage loans
of which a significant portion consisted of mortgage positions on improved and
unimproved land held by investors for development purposes. Accordingly, FRG's
investments in mortgage loans represented long-term assets with realization
dates dependent upon the equity holders' ability to complete development
projects or obtain refinancing from other sources. At the same time, bank notes
payable and commercial paper outstanding were all short-term borrowings
renewable at the option of the noteholders. FRG relied on these short-term
borrowings, the intermittent repayment of loans and the refinancing or sale of
portfolio investments in order to meet its then current obligations. During
fiscal 1989, cash provided from these sources was wholly inadequate to provide
working capital to fund operations.
Management was unable to secure additional financing or find other
means of obtaining needed cash in fiscal 1990 to permit FRG to meet past and
current obligations. Accordingly, management determined that there was no reason
to continue operating and, thus, incurring further losses. FRG has been inactive
since 1990 and has not conducted any business since that time.
On May 4, 1997 Roger A. Kimmel, Jr. was appointed to fill the position
of Director on the Board of Directors of Fraser Realty Group, Inc. The Company
had not engaged in any business activity since 1990. Mr. Kimmel, through action
in writing by the Fraser Realty Group, Inc. Board of Directors on May 4, 1997
was solely and unconditionally authorized to act on behalf of FRG and in
connection therewith he was also authorized to pursue the Board's mission to
seek a suitable business combination opportunity. Accordingly, Mr. Kimmel
immediately initiated a due diligence investigation into the former business,
affairs, market, stockholders and other relevant matters concerning the Company
and launched a movement to rehabilitate the Company.
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On August 4, 1998, acting in his capacity as Chairman of the Board and
President, and with first receiving the consent, approval and authorization of
FRG's Board of Directors, Roger A. Kimmel, Jr. filed with the State of Delaware,
Secretary of State, Division of Corporations, a Certificate of Correction which
was filed to correct a certain error in the Company's original Certificate Of
Incorporation of Fraser Realty Group, Inc. filed in the office of the Delaware
Secretary of State on July 9, 1984. The effect of said Certificate to be
corrected was as follows, to-wit: No par value stock was mistakenly authorized.
Accordingly, Article fourth: Section 1. Of the Certificate was corrected to read
as follows:
"The total number of shares of all classes of stock which the
corporation shall have authority to issue is twenty-five million one hundred
thousand (25,100,000), of which twenty-five million (25,000,000) shares shall be
Common Stock with a par value of $0.0001 per share, and one hundred thousand
(100,000) shares shall be convertible Serial Preferred Stock with a par value of
$0.0001 per share.
Also, in 1998 Mr. Kimmel perfected the necessary filings to bring the
company current with the Securities and Exchange Commission and to reinstate the
corporate Charter. FRG and its president Roger A. Kimmel, Jr. began actively
seeking a business combination opportunity for FRG in the fall of 1998. After
investigating a number of potential opportunities for FRG, Roger A. Kimmel, Jr.,
along with the other two directors, negotiated a business combination
transaction (the "Transaction") with Motorsports USA, Inc. a Delaware
corporation ("MUSA"), pursuant to the terms of a written Plan And Agreement Of
Merger dated October 13, 1999, which became effective on October 27, 1999 when
certificates from the corporate secretaries of the two parties, certifying the
approval of the merger were filed with the State of Delaware.
THE TRANSACTION. Fraser acquired Motorsports in a business combination
that was structured as a reverse merger or takeover. Before the Transaction,
Fraser had no material assets, liabilities or business operations. No
relationship existed between Motorsports and Fraser before the Transaction. No
funds of Fraser were spent to acquire Motorsports. As consideration for
Motorsports, Motorsports' shareholders became shareholders of the surviving
corporation, i.e. Fraser Realty Group, Inc. The number of shares issued by
Fraser in the Transaction was determined by arms-length negotiation between the
parties.
The above referenced Merger Agreement provided that : (1) the surviving
corporation's name shall be changed from Fraser Realty Group, Inc. to
Motorsports USA, Inc.; and (2) that the permanent office of the corporation
shall become 106 East South Main Street, Waxhall, North Carolina 28173; and (3)
that the amount of authorized common stock shall be increased from twenty-five
million to fifty million shares; and(4) that the Common Stock which had already
been issued shall be subject to a one for ten reverse split, such that the
1,038,948 shares shall be reduced approximately to 103,894 shares, subject to
this qualification. If any shareholder holds less than 10 shares of
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common stock, then said shareholder will be issued one share of stock,
thereby making all 693 shareholders of Fraser, shareholders as well with
Motorsports USA, Inc.
In connection with the Transaction, FRG agreed to acquire all of
Motorsports' rights, privileges, powers, and franchises, both public and
private, and all of the property, real, personal, and mixed in exchange for
12,650,000 Restricted shares of Common Stock. The Transaction closed on October
13, 1999 and became effective on October 27, 1999. Taking into account the
exercise of the convertible Serial Preferred Stock, there are approximately
23,103,894 shares of Common Stock issued and outstanding on the date of this
Report.
PRINCIPAL STOCKHOLDERS. The following table sets forth the number of
shares of Common Stock owned, as of the date of this Report, by (i) each
executive officer and director, (ii) all executive officers and directors as a
group, and (iii) each other person who owns of record or owns beneficially, more
than five percent (5%) of our outstanding common stock.
<TABLE>
<CAPTION>
Name and Address of
Beneficial Owner Shares owned of Class Percent (%)
- ------------------------ ---------------------- -------------
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None -0- -0-
Executive Officers and Directors as a Group (4 persons)
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NEW MANAGEMENT TEAM.
GRANT GEE, CHAIRMAN/CEO
Grant Gee is the founder and CEO of Motorsports USA, Inc. He was
educated in England where he received his MBA from London University and
Mechanical Engineering Diplomas from Manchester Polytechnic. Grant was president
of Vestronix Inc., a public company that specialized in building software
development tool kits for programmers. Grant has management and marketing
experience in the following industries - aerospace, computers, shipbuilding,
transportation and construction where he gained extensive and varied experience
in developing new products for identified marketing opportunities.
ROBERT ANTHONY PEARLMAN, DIRECTOR OF MARKETING
Robert A. Pearlman is the Managing General Partner of Aegis Management
Group LLC, a management consulting and communications company. With over twenty
years of experience, Robert has launched new products, managed existing
businesses, and established strategic partnerships in consumer healthcare,
pharmaceutical, financial services, technologies, and packaged goods industries.
Some of his clients include: Bristol-Meyers Squibb, Citicorp, and
Colgate-Palmolive.
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DAVID STERNTHAL, SPECIAL EVENTS DIRECTOR
David is currently producer, director and head writer for In Visible
Media, a multi-media production company. David's work as an independent film
maker and multi-image artist has won him national acclaim and numerous
international honors including an AMI silver medal in the documentary category.
David's expertise in producing and directing videos and other multi-media
presentations has landed him prominent clients such as Ford Motor Company,
Proctor and Gamble, Esso Chemicals Canada Ltd., and educational centers in
Tampa, Miami, Charlotte, and Boston.
STEVEN BROWN, DIRECTOR OF OPERATIONS
Steven Brown has been Operations Manager in both the packaging and the
bulk material handling industries for 16 years. As Operations Manager he was
responsible for several refineries across Canada. The position required skills
in design, machining, welding, service and installation on both land and
offshore marine applications for clients such as Esso Petro-Chemical, Dow
Chemical and Redpath Sugars.
INTRODUCTION TO OUR BUSINESS
Motorsports USA, Inc. ("MUSA") or (the "Company") is introducing and
promoting the new sport of 1/5 scale remote controlled stock car racing. This
exciting motor sport is based on a fast, reliable miniature racecar designed and
built for MUSA in the United States.
In 1947, stock car racing was a sport that had grown from its rural
roots, to a sport poised on the edge of overwhelming public popularity. Although
auto racetracks throughout the country were drawing more drivers to race in
front of increasingly larger crowds, racing rules varied from track to track. As
the result of a meeting to organize and establish parameters for the Daytona
Beach racing event, in late 1947, the National Association of Stock Car Auto
Racing ("NASCAR") was established. The first NASCAR-sanctioned race was then
held on Daytona's beach course in February 1948. The National Association of
Stock Car Auto Racing has gone on to become the foremost sanctioning body for
auto racing in the U.S.
Largely due to the efforts of NASCAR, auto racing has become the
largest spectator-sporting event in the world. There are approximately 19 motor
speedways and super-speedways located throughout the United States with an
average seating capacity per track in excess of 100,000. Numerous tracks feature
condominiums and executive suites to enhance the experience of spectator
viewing. As a result of the continued increasing popularity of stock car racing,
many of these tracks have recently completed or
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continue to undergo substantial capacity additions, while numerous tracks are
scheduled for construction.
By 1989, 10 years after the first live television broadcast, every race
on the NASCAR Winston Cup Series schedule was televised, nearly all of them
live. In 1994, all NASCAR Winston Cup Series events were broadcast live on
television by ABC, CBS, ESPN, TNN, or TBS. All NASCAR Busch Series events were
also televised; all but two were live broadcasts.
In 1994, the NASCAR Winston Cup Series drew 4,896,000 fans for 31
events, up nearly 1 million from the year before and an average of 157,935 per
event. The NASCAR Busch Series Grand National Division drew 1,302,400 for an
average of 46,514 for 28 events. In addition to the more than 6 million people
who attended NASCAR Busch Series events in 1994, more than 200 million watched
at home.
In 1998, NASCAR broadcast coverage was exploding, with more than 200
hours of prime-time coverage scheduled on some of the nations premier television
networks.
Although stock car racing may be considered a mature market, its
popularity continues to grow. The sport continues to generate increasing
revenues from many areas including sponsorships, ticket sales, merchandising,
and television broadcasts. The sport has recently implemented programs to make
auto racing a more family-oriented event and to reach out to younger racing
enthusiasts, which programs have already expanded the demographic base. As
described below, MUSA expects to capitalize on the industry's initiatives in
family entertainment through the promotion of remote controlled 1/5 scale racing
cars.
These racecars have been designed and built to closely resemble full
sized `Winston cup' stock cars. The cars are approximately three feet long with
the chassis constructed of 4160 Chrome-Moly steel tubes. They are powered by a
23cc two-stroke gas engine and are controlled by radio. The bodies are molded in
Lexan to provide authentic appearance and durability. The cars use disk brakes
and have all the chassis adjustments of full sized racecars. These small
racecars make it possible for hundreds of thousands of NASCAR fans to
participate in stock car racing at a fraction of the cost of full sized racing
and in complete safety.
MUSA has a two-fold strategy to promote this exciting new motor sport.
First is the creation of scale stock car racing clubs across the United States.
These clubs will be established in small to medium sized towns, and become the
`grass roots' of this new motor sport. The second is the deployment of large
indoor racing centers called Rolling Thunder Domes, designed as location based
family entertainment facilities.
The race clubs will race on temporary tracks set up in parking lots.
MUSA has designed a trailer that houses all the necessary equipment to support
racing. This includes an inventory of club racecars for members to race, the
computerized timing system, track
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markers, safety barrier, public address system etc. The roof of the trailer
is specially reinforced to allow members to stand on the roof while driving
to give them a better vantage point.
The timing system uses small transponders that are fixed to the
racecars and a sensor wire that crosses the track to time each car as it passes.
This timing signal is passed to the computer, which records lap times, average
speeds etc. for each car. At the end of a race, club members receive a print out
of their individual times in order to track performance. The timing system
supports different forms of racing from timed events, i.e. the number of laps
completed in a given time, as well as qualifying runs etc.
MUSA expects that `Big Box Stores' such as K Mart and Home Depot
will make parking lots available for racing. These companies have made major
investments in NASCAR racing by way of sponsorships. Supporting local clubs
further leverages their sponsorship investment and we expect these companies
to make a financial contribution to the local club, linking their marketing
investment directly to their customer in the local communities.
In order to establish and promote new clubs, MUSA is positioning full
time organizers in the field. These local organizers will establish and then
manage a number of clubs in their region. They will recruit suitable club
officials who will handle the daily running of club activities, and assist these
officials in membership building drives.
As multiple clubs are established in a given region our organizers will
promote inter club-racing events leading to local and regional racing, which in
turn will lead to a national series of championship races. The organizers will
also facilitate racecar sales to those members who should wish to own their own
car. MUSA will make a cash contribution to the club for each car sold to their
members, providing the club with another revenue source for club building
activities.
To strengthen the clubs' links to the local community MUSA has designed
a number of promotional outreach programs that individual clubs can use to
create ties with charitable and other local social organizations. Also MUSA's
local organizer will help the club to expand its social activities to provide
the member's families with many non-racing events. The clubs will be encouraged
to promote the sport at the local level by expanding their membership through
demonstration events. These events, sponsored by local businesses, will provide
the clubs with revenue for further expansion, as well as attract new members.
MUSA intends to establish hundreds of clubs throughout the United
States. These clubs will be the grass roots of this exciting new motor sport.
The Company has designed the rolling Thunder Dome (the "Dome"), which
will house MUSA's stock car racing interactive entertainment experience. The
Domes will be the `Super Speedways' of 1/5 scale racing. The basic Dome features
a 70,000-sq. ft. air
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supported structure, which is climate controlled and constructed of heavy
duty 2ply PVC. The Dome's unique design and construction allow the structure
to be erected virtually anywhere, and operated in all climates. The primary
Dome measures approximately 240 feet wide by 270 feet long by 60 feet high. A
secondary Dome, which is part of the basic package, measures approximately 78
feet in diameter by 40 feet high. A tunnel, measuring approximately 30 feet
wide, joins the two domes. Utilizing a modular structure, the Dome operates
consistent with the specific location requirements.
For an added price, MUSA plans to offer an additional package, which is
attached to the basic Dome, called "KID'S TOWN USA". Kid's Town USA is a Dome
package with entertainment components catering to families with younger
children. MUSA also intends to offer additional modular Dome concepts that could
be used for a variety of themed interactive entertainment centers.
The turnkey cost for the complete Dome attraction package (excluding
Kid's Town USA and other modular Domes) is approximately $5.2 million. The cost
includes Type I and Type III cars (hereinafter defined) and local staff
training, but excludes the Kid's Town USA package and additional Domes. The
price assumes a suitable pad for the structure, which, due to the Domes unique,
no load bearing structure, could be an asphalt or concrete parking lot. The
lead-time from order date to operational date (including staff training) is
approximately four to six months. MUSA intends to sell the Domes on a
non-recourse basis to third party operators/investors.
Based on MUSA's research, there does not appear to be any similar
type of entertainment attraction in the world. As a result, the Company
believes that each of its events will present a unique opportunity. The
interactive entertainment offered by MUSA inside the Domes shall consist of
numerous auto racing related events, which include, but are not limited to,
the following:
(1) A MULTI-MEDIA EXTRAVAGANZA ENTITLED "ALL-AMERICAN HORSEPOWER". Set
up in the main Dome, All-American Horsepower traces the evolution of the use of
American "stock cars" with their modified engines, from the initial days when
they were used to outrun the law while carrying their moonshine cargo to the
modern form of U.S. auto racing.
The main Dome is equipped with a very large video screen (approximately
52 feet wide by 42 feet high) that appears to float in the air. Utilizing a
highly sophisticated computerized lighting and environmental sound system, the
event will commence with a darkly lit Dome; centering attention on the video
screen as it transports the spectators to a serene 1920's era Kentucky Mountain
View. Highlighted by traditional banjo music and other environmental factors,
the images then depict the use of the normal looking, modified autos as they
attempt to out-race the law while transporting moonshine on a typical route,
e.g. Wilkesboro, NC to Atlanta, GA. Next, under a bright spotlight, two scaled
down vintage cars appear on the racetrack, one a rumrunner, the other a police
car that gives chase to the moonshine-carrying auto. They race each other, the
rumrunner
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wins and both cars finally disappear into the race pit. The event is expected
to last approximately 90 minutes and includes other special one of a kind
scaled down vehicles ("Type III cars") and other stimuli, which should
emulate the experience of being in the actual environment. Certain of the
Type III cars will be on static display for viewers to inspect.
MUSA will use the multi-media extravaganza to encourage spectators to
race the 1/5 scale model cars described in (II) below. Additional entertainment
modules, within the All-American Horsepower theme, will also be presented to the
spectators throughout the course of their Dome visit. In addition to being
highly entertaining, these modules permit MUSA downtime for refueling and auto
maintenance.
To further persuade the spectators to race, during All-American
Horsepower, MUSA will have several trained drivers race the model cars at high
speeds to demonstrate the cars' capabilities.
(II) REALISTIC REMOTE CONTROLLED RACING OF 1/5 SCALE MODEL STOCK CARS.
In addition to All-American Horsepower, as alluded to above, the main Dome will
house two separate race tracks, with grandstands for spectator viewing, which
can be quickly reconfigured to form one large race track. The tracks, which will
be approximately 1/5 scale, will be constructed with a Tartan surface with every
effort being taken to ensure the racing environment simulates that of an actual
racetrack.
Individuals who purchase a driving ticket will undergo a brief initial
instruction period on specially designed racing simulators. Upon his or her
successful completion of the training program, each individual will be furnished
with a racing license. The racing license resembles a bank passbook and includes
the driver's name, address and other relevant demographic information.
The licensed individuals will then be permitted to race a gasoline
powered, remote controlled stock car, which a 1/5 scale model of the cars
currently use on the stock car racing circuit (a "Type I car"). The Type I, II
(hereinafter defined) and III cars are constructed with a chassis made of
chrome-moly steel tubes and suspension components made in the same way as real
racecars. The cars' are powered by working two-stroke gasoline engines. The
cars' bodies are molded in heavy gauge Lexan and their tires are matched to the
Tartan track in order to provide the proper amount of traction.
In full racing trim, the cars can reach speeds of approximately 50
to 60 miles per hour. However, MUSA will limit the speeds of the cars
operated by the general public to approximately 15 to 20 miles per hour. MUSA
has the unique technological capability to control the cars' performance
through the use of a computerized control system that works through the radio
transmitters of the cars' remote control units. The cars have been
extensively tested and are considered to be extremely durable. With normal
maintenance and tire replacement, the cars' manufacturer forecasts many
thousands of operation hours at racing speed. Because MUSA will restrict the
RPM of the Type I cars, the Company
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anticipates a life expectancy of approximately three to five years. The price
of the Type I cars is included in the turnkey cost of the Dome.
When configured as two tracks, the facility will accommodate 16 drivers
in two groups of eight. Each race is expected to last approximately six laps or
approximately seven minutes. Due to it's unique computer control system MUSA has
the ability to throttle down a car to ensure the timely stoppage of a race.
In addition to the demographic information mentioned above, the racing
licenses will include each driver's lap times, average lap speed and other
relevant information. Such information will be updated with each race and later
used to classify the drivers in order to invite them to future events,
commensurate with their skill level.
(III) SALE OF 1/5 SCALE MODEL STOCK CARS TO PRIVATE INDIVIDUALS. As it
is anticipated the Dome will be operated by its owner/operator as a permanent
structure in each market, MUSA will encourage individuals to purchase their own
1/5 scale model stock cars ("Type II cars"). The retail price of these cars is
expected to be approximately $3,500. Type II owners will be able to use the
Dome's facilities during weekday evenings and will be invited to special "owner
only" races and related events. Regional and national competitions will be
organized as the Dome network expands offering car owners the chance to race for
prestige and prizes. Type II owners will also be permitted to rent the dome
facilities for their private events.
(IV) CORPORATE EVENT PACKAGE. In order to help cover the operators'
fixed costs, MUSA is in the process of designing a number of corporate packages
for the use of the dome facility as a venue for product launches, seminars,
employee outings and motivational sessions, customer hospitality occasions, etc.
Each event will include a racing related theme.
(V) MERCHANDISING OF STOCK CAR RACING AND MUSA ITEMS. Under one of the
secondary Domes, MUSA will include a merchandising area where it is anticipated
that the owner/operator will sell numerous racing themed merchandise items as
well as food and beverages. MUSA anticipates that it will retain a carried
interest in certain of the merchandising activities that occur in the Domes.
(VI) KID'S TOWN USA. Designed with streets and neighborhood
buildings constructed out of child-safe molded plastic, Kid's Town USA is
essentially a large-scale reproduction of a small town. Targeted to families
with children ages four to nine, Kid's Town USA will offer a variety of
racing oriented entertainment. For a fee, the children will board a small bus
to safely escort them under a highly supervised environment by trained
professionals. Prior to boarding the bus, each parent must enroll the child
in the Kid's Town USA program and input other pertinent information into a
computer. Thereafter, the child will be required to wear a radio tracking
device that communicates with the computer and the parents, indicating where
the child is at all times. Access to Kid's Town USA will be tightly
restricted and a child cannot leave the Dome while
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wearing a transmitter without setting off an alarm. In addition, Kid's Town
USA will be monitored by video cameras that will transmit images to a bank of
television monitors located in the Domes.
(VII) OTHER RACING ORIENTED ACTIVITIES. If an owner/operator desires,
he may purchase an additional Dome, which will include various racing related
arcade games, simulators and other forms of racing related entertainment.
MUSA will actively pursue the sale of the Domes and their related
packages to various interested third parties throughout North America. At a cost
of approximately $5.2 million for the basic package, each Rolling Thunder Dome
will be a separate entity, and will be sold on a non-recourse basis to third
parties. MUSA anticipates receiving staged payments for each Dome, once final
payment is received, MUSA's involvement in each Rolling Thunder Dome will
include, but not be limited to, the receipt of revenues from the exclusive right
to sell the Type II racing cars to private individuals and maintenance of the
Type I racing cars.
Although there are approximately 19 stock car motor speedways and
super-speedways located in the U.S., based on MUSA's research, there are
approximately 50 potential Rolling Thunder Dome sites located in North America.
The Company has also identified approximately 50 Dome sites in Europe and the
Middle East with an additional 10 dome sites in the Far East.
INCREASING POPULARITY OF STOCK CAR RACING
MUSA's entertainment extravaganza is a "one of a kind" event that has
not been previously introduced to both the auto racing consumer and the general
public. Given that auto racing is the largest single spectator sport in the
world and that it's popularity continues to increase, management perceives this
to be an extraordinarily opportune time to bring this product to market.
INCREASING EMPHASIS ON FAMILY ORIENTED ENTERTAINMENT
While auto racing is strictly a spectator sport, MUSA's entertainment
extravaganza is an interactive racing experience, designed for the entire family
to enjoy. With tickets to major racing events becoming increasingly expensive,
the rolling Thunder dome provides a family with an entire day's entertainment at
a fraction of the cost of attending an actual race, MUSA also expects to attract
families with younger children and to introduce them to auto racing and the
Rolling Thunder Dome experience.
EXCLUSIVE RIGHTS TO SELL AND REPAIR 1/5 SCALE MODEL STOCK CARS
MUSA has entered into an exclusive global agreement with a manufacturer
to market and sell the chrome-moly steel tube chassis 1/5 scale model cars,
built in the USA, to private individuals. Based on the Company's research, no
other entity has made 1/5 scale gasoline two-stroke engine powered, racing stock
cars available to the general public. In addition, the Company will retain the
right to service the Type I and III cars, sold with the Rolling Thunder Dome
packages.
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COMPUTER CONTROLLED RADIO TRANSMITTER
MUSA believes that it has developed exclusive technology that permits
it to remotely control the performance of Types I and II cars in terms of speed,
braking, steering etc.
SPONSORSHIP REVENUES
Stock car drivers, race teams and sponsors offer an extremely lucrative
opportunity for additional revenue for MUSA. The Company anticipates the ability
to access sponsorship funding through various promotional campaigns, tie-in's,
spokesperson agreements and individual marketing efforts.
CORPORATE PACKAGE PLANS
MUSA is currently formulating various packages it expects to offer
corporations that have expressed a desire to host events at the Rolling Thunder
Domes located throughout North America. In addition, MUSA anticipates that many
additional companies will express an interest to host "racing theme" events in
the Dome facilities.
INTERNATIONAL MARKETING
MUSA anticipates the ability to market and sell its rolling Thunder
Domes to operators/investors/corporations in European, Middle and Far Eastern
countries.
DOME SALES ON A NON-RECOURSE BASIS
As a result of the Company's exclusive agreement with T.H. Holdings,
Inc., MUSA will market and sell the Rolling Thunder Domes on a non-recourse
basis at an approximate selling price of $5.2 million.
MAILING LIST
Due to MUSA's intention to issue racing licenses to all individuals who
race at the Dome, or at the Racing Clubs, the Company will retain extensive
demographic data on all such participants. This information will prove extremely
valuable to the successful marketing of future Dome events as well as
merchandising MUSA related items.
ITEM 2 FINANCIAL STATEMENTS
<PAGE>
Fraser Realty Group, Inc.
Balance Sheet
UNAUDITED
October 24, 1999
(1 for 10 Reverse Split)
<TABLE>
<CAPTION>
PRE-SPLIT POST-SPLIT
-------------------------------------------
<S> <C> <C>
ASSETS
Cash & Cash Equivalents $ 5 $ 5
-------------------------------------------
TOTAL ASSETS $ 5 $ 5
-------------------------------------------
LIABILITIES AND STOCKHOLDERS EQUITY
Liabilities $ 0 $ 0
-------------------------------------------
TOTAL LIABILITIES $ 0 $ 0
-------------------------------------------
Stockholders' Equity
Serial Preferred Stock, convertible $.0001 par
value; 100,000 shares authorized; 100,000 $ 10 $ 10
shares issued and outstanding on
10/23/99 and 10/24/99,respectively
Common Stock, $.0001 par value; 25,000,000
Authorized; 1,038,948 shares issued and $ 104 $ 10
outstanding at 10/23/99; 103,894 shares issued
and outstanding at 10/24/99
Additional Paid-in-Capital $ 17,063,578 $ 17,063,672
Retained Earnings (Deficit) $ (17,063,687) $ (17,063,687)
-------------------------------------------
TOTAL STOCKHOLDERS' EQUITY $ 5 $ 5
-------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5 $ 5
-------------------------------------------
</TABLE>
<PAGE>
Fraser Realty Group, Inc.
Income Statement
UNAUDITED
October 24, 1999
(1 for 10 Reverse Split)
<TABLE>
<CAPTION>
PRE-SPLIT POST-SPLIT
-----------------------------------------
<S> <C> <C>
INCOME
Gross Sales $ 0 $ 0
-----------------------------------------
TOTAL INCOME $ 0 $ 0
-----------------------------------------
EXPENSES
Legal and Accounting $ 0 $ 0
-----------------------------------------
TOTAL EXPENSES $ 0 $ 0
-----------------------------------------
NET INCOME (LOSS) $ 0 $ 0
-----------------------------------------
</TABLE>
<PAGE>
Fraser Realty Group, Inc.
Balance Sheet
UNAUDITED
October 27, 1999
(Pre-Merger After Conversion)
ASSETS
<TABLE>
<S> <C>
Cash & Cash Equivalents $ 5
-----------------------
TOTAL ASSETS $ 5
-----------------------
LIABILITIES AND STOCKHOLDERS EQUITY
Liabilities $ 0
-----------------------
TOTAL LIABILITIES $ 0
-----------------------
Stockholders' Equity
Serial Preferred Stock, convertible $.0001 par
value; 100,000 shares authorized; 100,000 shares $ 0
issued 0 shares outstanding; 100,000 shares
Converted to 23,000,000 shares of common
Common Stock, $.0001 par value; 25,000,000
Authorized; 23,103,894 shares issued and $ 2,310
outstanding at 10/27/99.
Additional Paid-in-Capital $ 17,061,382
Retained Earnings (Deficit) $ (17,063,687)
-----------------------
TOTAL STOCKHOLDERS' EQUITY $ 5
-----------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5
-----------------------
</TABLE>
<PAGE>
Fraser Realty Group, Inc.
Income Statement
UNAUDITED
October 27, 1999
(Pre-Merger)
<TABLE>
<S> <C>
INCOME
Gross Sales $ 0
------------------
TOTAL INCOME 0
------------------
EXPENSES
Legal & Accounting $ 0
------------------
TOTAL EXPENSES $ 0
------------------
NET INCOME (LOSS) $ 0
------------------
</TABLE>
<PAGE>
MotorSports USA, Inc.
Balance Sheet
UNAUDITED
October 27, 1999
(Pre-Merger)
ASSETS
<TABLE>
<S> <C>
Racecars $ 97,000
Tools 30,000
Misc. Parts 10,000
-----------------
TOTAL ASSETS $ 137,000
-----------------
LIABILITIES AND STOCKHOLDERS EQUITY
Liabilities $ 0
-----------------
TOTAL LIABILITIES $ 0
-----------------
Stockholders' Equity
Common Stock, no par value; 10,000,000
Authorized; 6,900,000 shares issued and $ 6,900
outstanding at 10/27/99.
Additional Paid-in-Capital $ 130,100
Retained Earnings (Deficit) $
-----------------
TOTAL STOCKHOLDERS' EQUITY $ 137,000
-----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 137,000
-----------------
</TABLE>
<PAGE>
MotorSports USA, Inc.
Income Statement
UNAUDITED
October 27, 1999
(Pre-Merger)
<TABLE>
<S> <C>
INCOME
Gross Sales $ 0
------------------
TOTAL INCOME 0
------------------
EXPENSES
Legal & Accounting $ 0
------------------
TOTAL EXPENSES $ 0
------------------
NET INCOME (LOSS) $ 0
------------------
</TABLE>
<PAGE>
MotorSports USA, Inc.
Balance Sheet
UNAUDITED
October 27, 1999
(Post-Merger Consolidation)
ASSETS
<TABLE>
<S> <C>
Cash & Cash Equivalents $ 5
Racecars 97,000
Tools 30,000
Misc. Parts 10,000
------------------
TOTAL ASSETS $ 137,005
------------------
LIABILITIES AND STOCKHOLDERS EQUITY
Liabilities $ 0
------------------
TOTAL LIABILITIES $ 0
------------------
Stockholders' Equity
Serial Preferred Stock, convertible $.0001 par
value; 100,000 shares authorized; 100,000 shares $ 0
issued 0 shares outstanding; 100,000 shares
converted
Common Stock, $.0001 par value; 50,000,000
Authorized; 23,103,894 shares issued and $ 2,310
outstanding at 10/27/99.
Additional Paid-in-Capital $ 17,198,382
Retained Earnings (Deficit) $ (17,063,687)
--------------------
TOTAL STOCKHOLDERS' EQUITY $ 137,005
--------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 137,005
--------------------
</TABLE>
<PAGE>
MotorSports USA, Inc.
Income Statement
October 27, 1999
(Post-Merger)
<TABLE>
<S> <C>
INCOME
Gross Sales $ 0
-----------------
TOTAL INCOME 0
-----------------
EXPENSES
Legal & Accounting $ 0
-----------------
TOTAL EXPENSES $ 0
-----------------
NET INCOME (LOSS) $ 0
-----------------
</TABLE>
<PAGE>
SIGNATURE
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.
MOTORSPORTS USA, INC.,
(formerly Fraser Realty
Group, Inc.)
/s/
Grant Gee, Chief Executive Officer
Dated: February 11, 2000
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM NOVEMBER 30,
1999 BALANCE SHEET AND INCOME STATEMENT - BOTH UNAUDITED - AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> SEP-01-1999
<PERIOD-END> NOV-30-1999
<CASH> 5
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 137,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 137,005
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 2,310
<OTHER-SE> 134,695
<TOTAL-LIABILITY-AND-EQUITY> 137,005
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
