SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For Quarter Ending March 31, 1997
Commission File Number 0-16447
AGTsports, Inc.
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(Exact name of registrant as specified in its charter)
Colorado 84-1022287
----------------------- -------------------------
(State of incorporation) (I.R.S. Employer ID Number)
5082 East Hampden Avenue, #234, Denver, CO 80222
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(Address of principal executive offices) (zip code)
(303) 220-8686
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(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 Securities Exchange Act of 1934 during the
preceding 12 months (or for such a 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 [ ]
As of March 31, 1997; 29,518,172 common shares, $0.10 par value per share, were
outstanding.
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AGTsports, Inc.
INDEX
Part I FINANCIAL INFORMATION
Item 1. Consolidated Balance Sheets 3
March 31, 1997 and September 30, 1996
Consolidated Statements of Operations 4
Three Months Ended March 31, 1997 and 1996
Consolidated Statements of Cash Flows 5
Three Months Ended March 31, 1997 and 1996
Item 2. Management's Discussion and Analysis 6, 7
Part II OTHER INFORMATION
Item 1. Legal Proceedings 8
Item 2. Changes in Securities 8
Item 3. Default on Senior Securities 8
Item 4. Submission of Matters to a Vote of Security Holders 8
Item 5. Other Information 8
Item 6. Exhibits and Reports on Form 8-K 8
Part III SIGNATURES 9
Exhibit 27 10
2
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PART 1, ITEM 1.
<TABLE>
<CAPTION>
AGTsports, Inc.
(and Wholly Owned Subsidiaries)
CONSOLIDATED BALANCE SHEET
ASSETS
March 31, 1997 September 30,1996
-------------- -----------------
(unaudited)
Assets:
Current assets
<S> <C> <C>
Cash $ 9,609 $ 65,806
Accounts Receivable 27,446 -0-
Inventory 3,169 -0-
----------- -----------
Total current assets $ 40,224 $ 65,806
-----------
Fixed Assets, net $ 83,543 $ 17,204
- ----------------- ----------- -----------
Other Assets:
- -------------
Prepaid Expenses $ 7,477 $ -0-
Patents 119,559 $ -0-
Other assets 4,100 4,100
Investment in Joint Venture 119,350 119,350
Total Other Assets $ 250,486 $ 123,450
Total Assets $ 374,253 $ 206,460
----------- -----------
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 281,026 $ 268,977
Accrued expenses 563,125 718,352
Long term debt - current portion 331,346 1,373,846
----------- -----------
Total current liabilities $ 1,175,497 $ 2,361,175
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Stockholders' Equity (Deficit):
Preferred Stock, $4.00 par value; 50,000,000
Authorized; No shares issued and outstanding
As of December 31, 1996 $ -0- $ -0-
Common Stock, $.001 par value;
50,000,000 shares authorized
29,518,172 shares issued and outstanding
as of March 31, 1997, and 23,930,596
issued and outstanding as of September 30, 1996 29,518 23,931
Treasury Stock (16,720) (16,720)
Additional paid-in capital $ 22,653,473 $ 20,915,460
Cumulative translation adjustment (16,823) (16,823)
Accumulated deficit (23,450,692) (23,060,563)
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(801,244) (2,154,715)
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Total liabilities and shareholders' deficit $ 374,253 $ 206,460
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3
</TABLE>
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<TABLE>
<CAPTION>
AGTsports, Inc.
(and Wholly Owned Subsidiaries)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
March 31 March 31
------------------ -----------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Operating Revenues $ 18,039 $ 27,429 $ 18,039 $ 59,321
- ------------------
Expenses:
- ---------
Salaries and Wages 51,874 106,915 61,557 293,403
Professional Services 16,401 853,148 44,935 919,005
General and administrative expenses 25,103 108,577 49,451 274,086
Depreciation and amortization 734 178,741 3,833 354,430
Research and Development 14,284 -0- 35,536 -0-
Travel and Entertainment 16,162 46,023 26,976 76,612
------------ ------------ ------------ ------------
Total Expenses 124,558 1,293,404 222,288 1,917,536
Operating Income (Loss) (106,519) (1,265,975) (204,249) (1,858,215)
Other Income (Expenses)
Interest (12,831) (13,952) 44,746 (44,869)
Other -0- 439 -0- 2,215
------------ ------------ ------------ ------------
Total Other Income (Expenses) (12,831) (13,513) 44,746 (42,654)
Net Income (Loss) Before Extraordinary
Items And Provision for Income Taxes (119,350) (1,279,488) (248,995) (1,900,869)
Extraordinary Items -0- 5,150 -0- 5,150
------------ ------------ ------------ ------------
Net Income (Loss) (119,350) (1,274,338) (248,995) (1,895,719)
Income (loss) per common share
Before Extraordinary Items -0- (.07) (.01) (.10)
Extraordinary Items Per Common Share -0- -0- -0- -0-
Net Income (loss) per Common Share -0- (.07) (.01) (.10)
Weighted Average Shares
of Common Stock Outstanding 29,518,172 19,201,072 29,518,172 19,809,777
4
</TABLE>
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<TABLE>
<CAPTION>
AGTsports, Inc.
(and Wholly Owned Subsidiaries)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
December 31,
------------------
1997 1996
---- ----
Cash Flows From Operating Activities
<S> <C> <C>
Net loss $ (248,995) $(1,895,718)
Adjustments to reconcile net loss to net cash used in operations
to net cash provided by (used in) operating activities:
Depreciation and amortization 3,833 354,430
Common Stock issued for Services -0- 655,233
Common Stock issued for Obligations 1,200,000 3,766,934
Common Stock issued for Investment -0- -0-
Forgiveness of Debt -0- (5,150)
(Increase) Decrease in Other Assets 128,561 73,783
Increase (Decrease) in Accounts Payable (12,192) 59,974
Increase (Decrease) in Other Liabilities (1,200,000) (3,537,460)
----------- -----------
Net Cash Provided (Used) in operating activities (128,793) (527,974)
Cash Flows From Investing Activities -0- (63,814)
Cash Flows From Financing Activities:
Principal payments on long-term debt (108,659) (8,000)
Proceeds from issuance of Capital Stock 230,575 617,875
-----------
Net cash provided by (used in) financing activities 121,916 609,875
Net increase (decrease) in cash (6,877) 18,087
Cash at Beginning of the Year 16,486 16,904
----------- -----------
Cash at December 31, 1996 $ 9,609 34,991
----------- -----------
5
</TABLE>
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AGTsports, Inc.
(and 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/A for
the year ended September 30, 1996.
ITEM 2: Management's Discussion and Analysis
In the fiscal quarter ending March 31, 1997, the Company was primarily
engaged in the restructuring of operations; the financial development of its
planned U.S. reservation tee times business; and "closing and absorbing" two
acquisitions. AGT is positioning itself to become a national provider of golf
course software management systems. The Company also provides products and
consulting services to the golf industry. AGT is the "Official Technology
Partner" of the Ladies Professional Golf Association (LPGA) and is in the final
stages of developing a state of the art wireless scoring system which, when
completed, will become The LPGA Official Scoring System.
For the three month period ended March 31, 1997, the Company had limited
revenues and a net loss of ($119,350). The loss was attributed to costs
associated with restructuring the Company; absorbing two acquisitions and
non-recurring costs associated with acquisitions and growth. In the opinion of
management, the Company has improved significantly as compared to the same
period last year when it reported a net loss of ($1,274,338). During the quarter
ended March 31, 1997, the Company continued to strengthen it's new management
team, divested itself of non-producing assets, and entered into negotiations
with third parties to reduce short term debt and to acquire additional golf
technology companies. The Company believes the addition of the related
technologies and business relationships will have a material favorable impact on
AGT operating cash flow and profitability on a going-forward basis.
During the quarter ended March 31, 1997, the Company successfully completed
it's previously announced acquisitions of Tee Times of America, Inc., (TTA) and
essentially all of the assets of J.M. Golf (JMG). The terms of the proposed
transactions include the transfer of the TTA and JMG technology and accounts to
AGT in return for cash, shares of restricted common stock of AGT and the
assumption of certain debt. Tee Times Of America, with headquarters in Dallas,
Texas, develops and markets golf course management software used to record tee
time reservations for the golf industry. The Company has its tee time
reservation system installed at numerous courses throughout the United States;
including such notables as Arnold Palmer's Presidio San Francisco, Hyatt's Bear
Creek and booked all tee times for the National Golf Course Superintendents
Association of America's 1977 National Tournament. The acquisition is consistent
with previously announced plans by AGTsports to pursue acquisitions and mergers
in the golf software management business.
6
<PAGE>
J.M. Golf, with headquarters in Littleton, Colorado, is the developer of
the Micro Caddie electronic yardage book. The Micro Caddie device is a high
resolution LCD display, mounted on golf carts to help golfers determine their
distance to the hole, as well as their distance to key hazards. The device also
offers tips to golfers on how to play each shot as well as provides assistance
in monitoring Pace-of-Play.
These acquisitions are part of the Company's long-term business plan to
consolidate the computerized tee times reservation business in the United
States. The Company is actively engaged in acquisition negotiations with other
companies including developers of golf course management software, as well as
other golf related businesses. It is the Company's plan to form a separate
subsidiary/division in the golf software industry as AGTsports expands it's
sports related activities.
In addition, the Company "closed" on an agreement with a major creditor to
convert $1,200,000 of debt, related accrued interest, and certain other rights,
to restricted shares of the Company's common stock. The debt to equity
conversion have had a material favorable impact on the Company's Liability and
Equity accounts.
Another major accomplishment for the Company during the current quarter was
the successful "Dismissal" of a lawsuit reported in the Company's Form 10Q dated
June 30, 1996. The litigation represented the only "material" litigation against
the Company.
Management believes these transactions represent an important opportunity
for the Company to improve asset value and to increase shareholder value. During
the period, the Company has been able to successfully continueoperations, to
improve its position in the marketplace, to acquire outside consulting expertise
and to strengthen its marketing strategies. All of these efforts have been made
for the purpose of increasing shareholders' equity and profitability on a going
forward basis. In the fiscal quarter ending March 31, 1997, such efforts
included the resolution of numerous outstanding business matters related to the
former business of the Company, the reduction or elimination of significant
portions of short term debt and the adoption of new measures designed to
increase working capital and revenues.
Liquidity and Capital Resources
Cash and cash equivalent's balance on March 31, 1996 was $ 37,055.
Provided new sources of working capital can be secured, in the opinion of
management, the Company will be able to successfully meet all of its current
obligations. However, no assurances can be given the Company will be successful
in these endeavors.
7
<PAGE>
PART II.
ITEM 1. Legal Proceedings
During the quarter ended March 31, 1997, the Company was not a party to,
nor aware of, any legal proceedings involving the Company that, in the opinion
of Management, were material to the future of the Company.
ITEM 2. Changes in Securities
During the Quarter ended March 31, 1997, the Company issued 5,512,576
shares of it's restricted common stock for debt reduction, acquisitions, and
general working capital.
ITEM 3. Default on Senior Securities.
As of December 31, 1996, the Company is in arrears on $1,225,000 in notes
payable and related interest and has subsequently settled the arrearages through
conversion into the Company's restricted common stock.
ITEM 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of the Security Holders during this
reporting period.
ITEM 5. Other Information.
As of December 31, 1996, the Company had no other reportable events which
were not previously disclosed in the below referenced exhibits and reports.
ITEM 6. Exhibits and Reports on Form 8-K
None.
8
<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: May 19, 1997 By: /s/ B. Mack DeVine
--------------------------------
B. Mack DeVine
Chief Executive Officer
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 19, 1997 By: /s/ Gary W. Crews
-------------------------------
Gary W. Crews
President
Dated: May 19, 1997 By: /s/ Cory J. Coppage
--------------------------------
Cory J.Coppage
Secretary
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted from balance sheet and
statement of operations accounts filed as for 10-QSB and is qualified in its
entirety by suh registrant's annual report on 10-KSB for the year end period
September 30, 1996.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> MAR-31-1997
<CASH> 9,609
<SECURITIES> 0
<RECEIVABLES> 27,446
<ALLOWANCES> 0
<INVENTORY> 3,169
<CURRENT-ASSETS> 40,224
<PP&E> 83,543
<DEPRECIATION> 3,833
<TOTAL-ASSETS> 374,253
<CURRENT-LIABILITIES> 1,175,497
<BONDS> 0
0
0
<COMMON> 29,518
<OTHER-SE> (801,244)
<TOTAL-LIABILITY-AND-EQUITY> 374,253
<SALES> 18,039
<TOTAL-REVENUES> 18,039
<CGS> 0
<TOTAL-COSTS> 124,558
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,831
<INCOME-PRETAX> (133,182)
<INCOME-TAX> 0
<INCOME-CONTINUING> (133,182)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (133,182)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
