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 March 31, 1996
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
March 31, 1996, 19,991,126 common shares, $.001 par value
per share were outstanding.
AGTsports, Inc. &
INDEX
Page Number
PART 1.
Item 1. Financial Information
Statement Balance Sheets March 31, 1996
and September 30, 1995 3
Statement of Operations Three Months and
Six Months Ended March 31, 1996 and 1995 4
Statement of Cash Flows Six Months Ended
March 31, 1996 and 1995 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 8
Item 6. Exhibits and Reports on Form 8-K
8
Signatures 9
AGTsports, Inc. &
Wholly Owned Subsidiaries
Part I, Item 1.
Quarterly Consolidation
March 31, September 30,
1996 1995
Assets
Current Assets
Cash and cash equivalents $ 34,991 $
16,904
Total Current Assets 34,991
16,904
Fixed Assets:
Property, Plant and Equipment 1,377,776
1,437,466
Less: Accumulated Depreciation (953,832)
(960,685)
Total Fixed Assets 423,944
476,781
Other Assets:
Other Receivables 12,027
7,193
Prepaids & Other Assets 20,524
99,141
Intangibles - Net 59,445
297,224
Investment 868,000
868,000
Total Other Assets 959,996
1,271,558
Total Assets $1,418,931
$1,765,243
Liabilities and Shareholders' Equity
Current Liabilities
Accounts Payable - Trade 240,164 180,190
Other Liabilities 130,245
322,017
Due to Affiliates 253,000
- -0-
Current portion - long term debt 505,041
348,142
Accrued Expenses 482,614
907,963
Total Current Liabilities 1,611,064
1,758,312
Long-Term Liabilities 768,688
861,204
Liability to issue common stock
to affiliate -0- 3,187,349
2,379,752 5,806,865
Shareholders' Equity
Preferred stock, $4.00 par Value: -0-
- -0-
50,000,000 shares Authorized, -0-
shares issued and outstanding as of March 31, 1996
Common Stock, $.001 par Value: 19,991
10,531
50,000,000 shares Authorized, 19,991,126 issued and
outstanding as of March 31, 1996 and 10,530,972
issued and outstanding as of September 30, 1995
Treasury Stock (16,720)
(16,720)
Unrealized Holding Gain -0- -
0-
Additional Paid-In Capital 20,234,924
15,259,846
Cumulative Translation Adjustment (15,147)
(11,191)
Deficit Accumulated During
the Development Stage (21,183,869)
(19,284,088)
Total Shareholders Equity (960,821)
(4,041,622)
Total Liabilities and
Shareholder's Equity $1,418,931
1,765,243
AGTsports, Inc.
& Wholly Owned Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
(A Development Stage Company)
Three Months Ended Six Months Ended
March 31, March 31,
1996 1995 1996
1995
Operating Revenue
Revenue 27,429 186,080 59,321
388,956
Total Operating Revenues 27,429 186,080 59,321
388,956
Expenses
Salaries and Wages 106,915 76,625 293,403
200,154
Professional Services 853,148 1,135,935 919,005
1,209,693
General & Administrative 108,577 276,869 274,086
667,938
Depreciation and
Amortization 178,741 31,740 354,430
52,952
Travel and Expenses 46,023 10.507 76,612
30,062
Total Expenses 1,293,404 1,531,676 1,917,536
2,160,799
Operating
Income(Loss)(1,265,975)(1,345,596)(1,858,215)(1,771,843)
Other Income (Expenses)
Net Gain on Sale of Investment-0- 280,568 -0-
280,568
Interest Expense (13,952) (1,356) (44,869)
(7,100)
Other Income(Expense) 439 294 2,215
1,280
Total Other Income(Expense) (13,513) 279,506 (42,654)
274,748
Net
Income(Loss)before(1,279,488)(1,066,090)(1,900,869)(1,497,
095)
Extraordinary Items and
Provision for Income Taxes
Extraordinary Items:
Debt Forgiveness 5,150 3,204 5,150
4,617
Net Income(Loss)
$(1,274,338)$(1,062,886)$(1,895,719)$(1,492,478)
Net Income (Loss) per Common (.07) (.20) (.10)
(.28)
Share before Extrodinary Items
Extraordinary Items per -0- -0- -0-
- -0-
Common Share
Net Income(Loss)per Common Share (.07) (.20) (.10)
(.28)
Weighted Average Shares 19,201,072 5,283,461 19,809,777
5,283,461
of Common Stock Outstanding
AGTsports, Inc.
& Wholly Owned Subsidiaries
CONSOLIDATED STATEMENT OF CASH FLOWS
(A Development Stage Company)
Six Months Ended
March 31,
1996 1995
Cash Flows from Operating Activities
Net Income/(Loss) $(1,895,718) $(1,492,478)
Depreciation and Amortization 354,430
52,952
(Gain) Loss on Sale of Investments -0-
(280,568)
Forgiveness of Debt (5,150)
(4,617)
Common Stock issued for Services 655,233
1,094,872
Common Stock issued for Obligations 3,766,934
10,000
(Increase) Decrease in Other Assets 73,783
2,096,771
Increase(Decrease) in Accounts Payable 59,974
(266,587)
Increase(Decrease)
in Other Liabilities (3,537,460)
(1,245,945)
Net Cash Provided (Used)by Operating (527,974)
(35,600)
Activities
Cash Flows from Investing Activities
Purchase of Assets (63,814)
(3,100)
Total Cash Used by Investing Activities (63,814)
(3,100)
Cash Flows from Financing Activities
Proceeds from Issuance of 617,875
38,700
Capital Stock
Principal payments on long-term (8,000)
- -0-
borrowings
Total Cash Provided by Financing 609,875
38,700
Activities
Net Increase (Decrease) in Cash 18,087
- -0-
Cash at Beginning of the Year 16,904
- -0-
Cash at March 31 $ 34,991
$-0-
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 March 31, 1996, sales
were $27,429 as compared to $186,080 for the fiscal
quarter ending March 31, 1995. This decrease in sales
was due to the number of events in which the
Company participated pursuant to its agreements with the
European and Australasian PGA tours. The Company incurred
a loss of $1,274,338 for the quarter ended March 31, 1996.
The loss was due to a large extent, to depreciation and
amortization expense of $178,741 and professional service
expense of $853,148 to maintain domestic and international
operations. The two foreign wholly owned subsidiaries
incurred expenses of $153,379.
The increase in salaries and wages during the fiscal
quarter ended March 31, 1996, as compared to fiscal
quarter ended March 31, 1995, is attributable to the
Company moving its staff personnel in-house instead of
relying on a temporary agency to compensate employees.
The decrease in professional services during the fiscal
quarter ended March 31, 1996 as compared to fiscal quarter
ended March 31, 1995 is a result of the Company's attempt
to reduce its reliance on outside consultants necessary to
the Company's pursuit of its global business plans,
marketing strategies and products. The Company plans to
continue to restructure its operational activities to
improve efficiencies of its global activities.
The decrease in general and administrative expenses
during the fiscal quarter ended March 31, 1996 as compared
to fiscal quarter ended March 31, 1995 is attributable to
the number of events in which the Company participated
pursuant to its agreements with the European and
Australasian PGA Tours and the implementation of
restructuring the Company's activities to reduce expenses.
Liquidity and Capital Resources
Cash and cash equivalents balance on March 31,
1996, was $34,991.
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 is currently not significant
enough to enable management to implement its business
plans.
PART II OTHER INFORMATION
An 11% Specific Collateral Debenture in the amount of
$2,175,000 issued by the Registrant in 1990 for the
acquisition of certain Fiber Optic technology and
subsequently transferred has not been paid by subsequent
holders of the Technology Rights. The Registrant was
notified February 23, 1996 of Acquisition by Display Group
LLC of Corporate Partners, Inc.'s Resolution Trust
Corporation Loan (Loan Package #349). The 11% Specific
Collateral Debenture served as collateral for the
Resolution Trust Corporation Loan. Management of the
Registrant, as of March 31, 1996, has been in discussion
with Display Group LLC and have reached no agreement on
this matter. Management cannot at this time determine the
effect of the above matter on the financial operations of
the Registrant and offers no assurances as to any
resolution or any liability of the Registrant.
The Registrant is in default on payment of debt which
was principally incurred through the repurchase of
territorial marketing rights for the Southeast Region of
the United States. Management is negotiating this matter
but no resolution has been reached and no assurances of
such resolution can be offered by management.
ITEM 1 LEGAL PROCEEDINGS
None
ITEM 2 CHANGES IN SECURITIES
The Registrant filed a Form S-8 Registration
Statement under the Securities Act of 1993 in January 1996
to register 1,600,000 shares of common stock. As of March
31, 1996, there were 690,815 shares issued pursuant to the
January S-8 Registration Statement.
ITEM 3 DEFAULT ON SENIOR SECURITIES
The Registrant is in default on payment of debt
which was principally incurred through the repurchase of
territorial marketing rights for the Southeast Region of
the United States. Management is negotiating this matter
but no resolution has been reached and no assurances of
such resolution can be offered by management
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
None
ITEM 5 OTHER INFORMATION
An 11% Specific Collateral Debenture in the amount of
$2,175,000 issued by the Registrant in 1990 for the
acquisition of certain Fiber Optic technology and
subsequently transferred has not been paid by subsequent
holders of the Technology Rights. The Registrant was
notified February 23, 1996 of Acquisition by Display Group
LLC of Corporate Partners, Inc.'s Resolution Trust
Corporation Loan (Loan Package #349). The 11% Specific
Collateral Debenture served as collateral for the
Resolution Trust Corporation Loan. Management of the
Registrant, as of March 31, 1996, has been in discussion
with Display Group LLC and have reached no agreement on
this matter. Management cannot at this time determine the
effect of the above matter on the financial operations of
the Registrant and offers no assurances as to any
resolution or any liability of the Registrant.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
Form 8-K: January 11, 1996; Australian Golf Union.
Form 8-K: January 21, 1996; Ladies Professional Golf
Association.
Form 8-K: March 1, 1996; Change of Accountant for the
September 1995 fiscal year end audit.
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: May 14, 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 May 14, 1996 By: /s/T. Alan Walls______
T. Alan Walls
President
Dated May 14, 1996 By: /s/T. Alan Walls
T. Alan Walls
Secretary
