<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
FOR QUARTER ENDING DECEMBER 31, 1995
Commission file number 33-4309-D
AGTSPORTS, INC.
(Exact name of registrant as specified in its charter)
COLORADO 84-1022287
(State of incorporation) (IRS Employer ID number)
6890 SOUTH TUCSON WAY, SUITE 202, ENGLEWOOD, COLORADO 80112
(Address of principle executive office)(Zip Code)
(303) 792-5000
(Registrant's telephone number, including area code)
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 X NO
----- -----
December 31, 1995, 18,679,313 common shares, $.001 par value per share were
outstanding.
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AGTSPORTS, INC. &
INDEX
PAGE NUMBER
PART 1.
ITEM 1. Financial Information
STATEMENT BALANCE SHEETS DECEMBER 31, 1995 3
STATEMENT OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 1995 AND 1994 4
STATEMENT OF CASH FLOWS
THREE MONTHS ENDED DECEMBER 31, 1995 AND 1994 5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS 6
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 7
ITEM 2. CHANGES IN SECURITIES 7
ITEM 3. DEFAULT ON SENIOR SECURITIES 7
ITEM 4. MATTERS TO A VOTE OF SECURITY HOLDERS 7
ITEM 5. OTHER INFORMATION 7
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 7
SIGNATURES 8
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AGTSPORTS, INC. &
WHOLLY OWNED SUBSIDIARIES
PART I, ITEM 1.
QUARTERLY CONSOLIDATION
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1995 1995
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<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 124,247 $ 16,904
Accounts Receivable -0- -0-
Inventory -0- -0-
----------- -----------
Total Current Assets 124,247 16,904
----------- -----------
Fixed Assets:
Property, Plant and Equipment 1,313,962 1,437,466
Less: Accumulated Depreciation (893,981) (960,685)
----------- -----------
Total Fixed Assets 419,981 476,781
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Other Assets:
Other Receivables 15,049 7,193
Other Assets 94,917 99,141
Investment 1,604,711 868,000
Intangibles - Net 178,335 297,224
----------- -----------
Total Other Assets 1,893,012 1,271,558
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Total Assets $ 2,437,240 $ 1,765,243
----------- -----------
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable - Trade $ 195,435 $ 180,190
Other Liabilities 454,532 322,017
Due to Affiliates 36,088 -0-
Accrued Expenses 975,375 907,963
Current portion - long term debt 454,033 348,142
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Total Current Liabilities 2,115,463 1,758,312
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Long-Term Liabilities 824,196 861,204
Liability to issue common stock to affiliate -0- 3,187,349
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824,196 4,048,553
Shareholders' Equity
Preferred stock -0- -0-
Common Stock 18,679 10,531
Treasury Stock (16,720) (16,720)
Unrealized Holding Gain -0- -0-
Additional Paid-In Capital 19,409,017 15,259,846
Cumulative Translation Adjustment (7,059) (11,191)
Accumulated Deficit (19,906,336) (19,284,088)
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Total Shareholders Equity (502,419) (4,041,622)
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Total Liabilities and Shareholder's Equity $ 2,437,240 $ 1,765,243
----------- -------------
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</TABLE>
3
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AGTSPORTS, INC.
& WHOLLY OWNED SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(A DEVELOPMENT STAGE COMPANY)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31,
-----------------------
1995 1994
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<S> <C> <C>
Operating Revenue
Revenue $ 31,892 $ 112,934
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Total Operating Revenues 31,892 112,934
Expenses
Salaries and Wages 186,489 138,529
Contract Services 34,231 588,864
General and Administrative 197,133 330,632
Depreciation and Amortization 175,690 21,213
Travel and Expenses 30,588 -0-
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Total Expenses 624,131 1,079,238
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Operating Income (Loss) (592,239) (966,304)
Other Income (Expenses)
Net Gain on Sale of Investment -0- 463,200
Interest Expense (30,917) -0-
Other Income (Expense) 1,777 2,736
--------- ---------
Total Other Income (Expense) (29,140) 465,936
--------- ---------
Net Income (Loss) before Extraordinary
Items and Provision for Income Taxes (621,379) (500,368)
Extraordinary Items:
Debt Forgiveness -0- -0-
--------- ---------
Net Income $(621,379) $(500,368)
--------- ---------
--------- ---------
Net Income per Common Share before
Extraordinary Items (.03) (.100)
Extraordinary Items per Common Share -0- (.000)
Net Income per Common Share after
Extraordinary Items (.03) (.100)
Weighted Average Shares of Common
Stock Outstanding 18,592,366 4,994,624
</TABLE>
4
<PAGE>
AGTSPORTS, INC.
& WHOLLY OWNED SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(A DEVELOPMENT STAGE COMPANY)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31,
-----------------------------
1995 1994
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<S> <C> <C>
Cash Flows from Operating Activities
Net Income/(Loss) $ (621,379) $ (500,368)
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities
Depreciation and Amortization 175,690 21,213
Gain on Sale of Investments -0- (463,200)
Common Stock issued for Services 22,069 425,866
Common Stock issued for Obligations 3,188,289 -0-
Common Stock Issued for Investment 736,711 -0-
(Increase) Decrease in Other Assets (621,454) 1,224,774
Increase (Decrease) in Accounts Payable 15,245 432,090
Increase (Decrease) in Other Liabilities (2,994,578) (1,140,165)
----------- -----------
Net Cash Provided (Used) by Operating
Activities (99,407) 210
Cash Flows from Investing Activities
Purchase of Assets -0- (1,399)
Cash Flows from Financing Activities
Proceeds from Issuance of Capital Stock 210,250 -0-
Principal payments on long-term borrowings (3,500) -0-
----------- -----------
Net Increase (Decrease) in Cash 107,343 (1,189)
Cash at Beginning of the Year 16,904 1,189
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Cash at December 31, 1995 $ 124,247 $ -0-
----------- -----------
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</TABLE>
5
<PAGE>
AGTSPORTS, INC. &
WHOLLY OWNED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. MANAGEMENT REPRESENTATION
The accompanying unaudited interim financial statements have been prepared
in accordance with the instructions to form 10-QSB and does not include all the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of Management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. The results of operations for any interim
period are not necessarily indicative of results for the year. These statements
should be read in conjunction with the financial statements and related notes
included in the Company's Annual Report to shareholders on form 10-KSB for the
year ended September 30, 1995.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
In the fiscal quarter ending December 31, 1995, sales were $31,892 as
compared to $112,934 for the fiscal quarter ending December 31, 1994. This
decrease in sales was attritributed to the Company's activity pursuant to its
agreements with the European and Australasian PGA tours. The Company
incurred a loss of $621,379 for the quarter ended December 31, 1995. The
loss was due to a large extent, to depreciation and amortization expense of
$175,690 and general and administrative expense of $197,133 to maintain
domestic and international operations. The two foreign wholly owned
subsidiaries incurred expenses of $76,825 not including the accrued
compensation of our Managing Director in Australia.
The increase in salaries and wages during the fiscal quarter ended
December 31, 1995, as compared to fiscal quarter ended December 31, 1994, is
attributable to the Company hiring additional key personnel in the United
States and Australia. The Company plans to continue to restructure its
operational activities. As a result of this restructuring, more reliance on
outside consultants is necessary in the Company's pursuit of its global
business plans, marketing strategies and products. As part of a new contract
executed after the close of the quarter ended December 31, 1995, with the
Ladies Professional Golf Association (LPGA), the LPGA is making office space
available at its new international headquarters which is currently under
construction. Anticipated completion of this facility is April 15, 1996.
The Company is making plans to move much of its operational activities to
Daytona Beach, Florida to properly manage the activities with the LPGA since
this will be a key relationship in the United States operations of the
Company. (Reference Form 8-K filed relative to the LPGA contract.)
The significant decrease in general and administrative expenses during
the fiscal quarter ended December 31, 1995, over the same period in the last
fiscal year is attributable to the implementation of restructuring activities
of the Company to reduce expenses initiated by the new management of the
Company.
6
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents balance on December 31, 1995, was $124,247.
In Management's opinion, the Company has inadequate working capital to
pursue the business opportunities that are a part of its business plan.
Management is seeking funding opportunities which will allow implementation
of its global business plans and opportunities. While management is
confident it can obtain sufficient funding to implement part or all of its
business plan, there is no guarantee that the Company will be successful in
this respect. If management is unsuccessful, the future growth of the
Company could be substantially diminished. The liquidity of the Company has
significantly improved at December 31, 1995, over the same period in the last
fiscal year.
PART II OTHER INFORMATION
Subsequent the end of the fiscal quarter ending December 31, 1995, the
Company entered into a contract with the Ladies Professional Golf Association
(LPGA). The Company is now the "Official Technology Partner of the LPGA."
The contract allows for the two entities to explore mutually agree upon
revenue sharing opportunities related to LPGA brand and co-venture
activities. (Reference Form 8-K filed relative to the LPGA contract.)
ITEM 1 LEGAL PROCEEDINGS
None
ITEM 2 CHANGES IN SECURITIES
The Company issued 7,850,000 shares of common stock to American
Consolidated Growth Corporation (AMGC) pursuant to the settlement agreement
dated September 15, 1995, to eliminate intercompany debts and the limited
partnership of the Company. The common stock issued represented
approximately 40% of the outstanding shares of the Company. Pursuant to the
settlement agreement the 7,850,000 shares were contributed to a partnership
which provides a tee-time reservation system to the Company. Both the
Company and AMGC are to receive royalty rights from the partnership. AMGC
has the right to receive 25% of the shares back from the partnership for a
twelve month period and take a reduced royalty payment from the partnership.
Reference the Form 10-KSB as of September 30, 1995 of the Company.
ITEM 3 DEFAULT ON SENIOR SECURITIES
None
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5 OTHER INFORMATION
None
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
Form 8-K: December 18, 1995 to report on new auditors.
Form 8-K: December 18, 1995 to report on final negotiations with LPGA.
Form 8-K: December 18, 1995 to report on delay of delivery of HandWedge.
7
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
AGTSPORTS, INC.
Dated: February 13, 1996 By: /s/ T. ALAN WALLS
------------------------
T. Alan Walls
PRESIDENT
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
Dated: February 13, 1996 By: /s/ T. ALAN WALLS
------------------------
T. Alan Walls
PRESIDENT
Dated February 13, 1996 By: /s/ ROBERT W. WETZEL
------------------------
Robert W. Wetzel
Secretary
8
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BALANCE
SHEET AND STATEMENT OF OPERATIONS FILED AS FOR 10-QSB AND IS QUALIFIED IN ITS
ENTIRETY BY SUCH REGISTRANT'S ANNUAL REPORT ON 10-KSB FOR YEAR END PERIOD
SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 124,247
<SECURITIES> 0
<RECEIVABLES> 237,611
<ALLOWANCES> 237,611
<INVENTORY> 0
<CURRENT-ASSETS> 124,247
<PP&E> 1,313,962
<DEPRECIATION> (893,981)
<TOTAL-ASSETS> 2,437,240
<CURRENT-LIABILITIES> 2,115,463
<BONDS> 0
0
0
<COMMON> 18,679
<OTHER-SE> (521,098)
<TOTAL-LIABILITY-AND-EQUITY> 2,437,240
<SALES> 0
<TOTAL-REVENUES> 31,892
<CGS> 0
<TOTAL-COSTS> 624,131
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 30,917
<INCOME-PRETAX> (621,379)
<INCOME-TAX> 0
<INCOME-CONTINUING> (621,379)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (621,379)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
