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, 2000
Commission File Number 0-16447
AGTsports, Inc.
(Exact name of registrant as specified in its charter)
Colorado 84-1022287
(State of incorporation) (I.R.S. Employer ID Number)
7255 E. Quincy Avenue, Suite 550, Denver, CO 80237
(Address of principal executive offices) (zip code)
(303) 437-9434
(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, 2000, 36,408,726 common shares, $.001 par value per share, were
outstanding.
<PAGE>
AGTsports, Inc.
INDEX
Part I FINANCIAL INFORMATION
Item 1. Independent Accountants' Report F-1 - F-2
Balance Sheets F-3
March 31, 2000 and September 30, 1999
Statements of Operations F-4
Six Months Ended March 31, 2000 and 1999
Statements of Cash Flows F-5
Six Months Ended March 31, 2000 and 1999
Notes to Financial Statements F-6 - F-7
Item 2. Management's Discussion and Analysis F-7
Part II OTHER INFORMATION
Item 1. Legal Proceedings F-7
Item 2. Changes in Securities F-8
Item 3. Default on Senior Securities F-8
Item 4. Submission of Matters to a Vote of Security Holders F-8
Item 5. Other Information F-8
Item 6. Exhibits and Reports on Form 8-K F-8
Part III SIGNATURES F-8
Exhibit 27 F-9
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors
AGTsports, Inc.
We have reviewed the accompanying balance sheet of AGTsports, Inc. (a
development stage company) as of March 31, 2000, and the related statements of
income, retained earnings, and cash flows for the six months then ended, in
accordance with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountants. All
information included in these financial statements is the representation of the
management of AGTsports, Inc.
A review consists principally of inquiries of Company personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
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. These statements should be read in
conjunction with the financial statements and related notes included in the
Company's Annual Report to shareholders to Form 10-KSB/A for the year ended
September 30, 1999.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.
As discussed in Note 1, certain conditions indicate that the Company may be
unable to continue as a going concern. The accompanying financial statements do
not include any adjustments to the financial statements that might be necessary
should the Company be unable to continue as a going concern.
F-1
<PAGE>
The accompanying 1999 financial statements of AGTsports, Inc. were compiled by
us in accordance with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountants. A compilation
is limited to presenting in the form of financial statements information that is
the representation of management. We have not audited or reviewed the 1999
financial statements and, accordingly, do not express an opinion or any other
form of assurance on them.
/s/ BRIMMER, BUREK & KEELAN LLP
-------------------------------
BRIMMER, BUREK & KEELAN LLP
Certified Public Accountants
May 12, 2000
F-2
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<TABLE>
<CAPTION>
AGTsports, Inc.
(A Development Stage Company)
BALANCE SHEETS
ASSETS
Mar 31, 2000 *Sep 30, 1999
------------ -------------
(unaudited)
<S> <C> <C>
Assets:
Current assets
Cash $ 864 $ 22
------------ ------------
Total current assets 864 22
Property and equipment (net) 1,120 --
Other assets -- 1,000
------------ ------------
Total Assets $ 1,984 $ 1,022
============ ============
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 152,838 $ 227,807
Accrued expenses 133,220 112,440
Note payable - current 600,492 481,492
------------ ------------
Total current liabilities 886,550 821,739
Stockholders' Equity (Deficit):
Preferred Stock, $1.00 par value; 5,000,000
Authorized; 1,000,000 shares issued and outstanding
as of September 30, 1999 -- 1,000,000
Common Stock, $.001 par value; 50,000,000 shares authorized
36,408,726 shares issued and outstanding
as of March 31, 2000, and 27,554,726
issued and outstanding as of September 30, 1999 36,405 27,555
Treasury Stock (17,459) (17,459)
Additional paid-in capital 23,383,043 22,392,893
Accumulated deficit (24,286,555) (24,223,706)
------------ ------------
Total shareholder's deficit (884,566) (820,717)
------------ ------------
Total liabilities and shareholders' deficit $ 1,984 $ 1,022
============ ============
*Derived from Company's year-end audited balance sheet.
Please read accountants' report.
F-3
</TABLE>
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<TABLE>
<CAPTION>
AGTsports, Inc.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended Jan 6, 1986
Mar 31 Mar 31 (Inception)
--------------------- -------------------- Through
2000 1999 2000 1999 Mar 31, 2000
---- ---- ---- ---- ------------
<S> <C> <C> <C> <C> <C>
Operating Revenues $ -- $ -- $ -- $ -- $ 3,904,784
- ------------------
Expenses:
- ---------
Salaries and Wages -- -- -- -- 3,419,101
Professional Services 13,533 10,685 19,800 19,609 4,005,884
General and administrative expenses 7,033 2,017 16,160 3,467 3,436,292
Depreciation and amortization 60 -- 80 -- 2,486,683
Contract services -- -- -- -- 4,985,397
Other operating expenses -- -- -- -- 2,906,581
------------ ------------ ------------ ------------ ------------
Total Expenses 20,626 12,702 36,040 23,076 21,239,938
------------ ------------ ------------ ------------ ------------
Operating Income (Loss) (20,626) (12,702) (36,040) (23,076) (17,335,154)
------------ ------------ ------------ ------------ ------------
Other Income (Expenses)
Interest (15,613) (11,459) (19,458) (27,410) (705,966)
Other income 1,650 -- 1,650 -- 2,917,134
Loss on equity securities -- -- -- -- (8,652,613)
Other expense -- -- -- -- (1,719,411)
------------ ------------ ------------ ------------ ------------
Total Other Income (Expenses) (13,963) (11,459) (17,808) (27,410) (8,160,856)
------------ ------------ ------------ ------------ ------------
Net Income (Loss) Before Extraordinary
Items And Provision for Income Taxes (34,589) (24,161) (53,848) (50,486) (25,496,010)
Extraordinary Items -- -- -- -- 3,095,459
Provision for Income Taxes -- -- -- -- (1,793,033)
------------ ------------ ------------ ------------ ------------
Net Income (Loss) $ (34,589) $ (24,161) $ (53,848) $ (50,486) $ 24,193,584
============ ============ ============ ============ ============
Income (loss) per common share -- -- -- --
Before Extraordinary Items -- -- -- --
Extraordinary Items Per Common Share -- -- -- --
------------ ------------ ------------ ------------
Net Income (loss) per Common Share -- -- -- --
Weighted Average Shares
of Common Stock Outstanding 36,379,726 27,554,726 32,632,748 27,554,726
Please read accountants' report
F-4
</TABLE>
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<TABLE>
<CAPTION>
AGTsports, Inc.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
Jan 6, 1986
Six Months Ended (Inception)
March 31 Through
2000 1999 Mar 31, 2000
---- ---- ------------
Cash Flows From Operating Activities:
<S> <C> <C> <C>
Net cash provided (used) by operating activities $ (28,958) $ (38,744) $(4,935,485)
----------- ----------- -----------
Cash Flows From Investing Activities:
Purchase of assets (1,200) -- (360,974)
Other investing activities -- -- 628,932
----------- ----------- -----------
Net cash provided (used) by investing activities (1,200) -- 267,958
----------- ----------- -----------
Cash Flows From Financing Activities:
Proceeds from issuance of long-term debt 31,000 44,000 670,000
Other financing activities -- 44 3,998,391
----------- ----------- -----------
Net cash provided (used) by financing activities 31,000 44,044 4,668,391
----------- ----------- -----------
Net increase (decrease) in cash 842 5,300 864
Cash at beginning of period 22 685 --
----------- ----------- -----------
Cash at end of period $ 864 $ 5,985 $ 864
=========== =========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Preferred stock converted to common stock $ 1,000,000 $ -- $ 1,000,000
=========== =========== ===========
Loan assumed by shareholder $ -- $ 70,000 $ 70,000
=========== =========== ===========
Dividends accrued $ 9,000 $ 18,000 $ 54,000
=========== =========== ===========
Accrued dividends converted to note payable $ 87,000 $ -- $ 87,000
=========== =========== ===========
Please read accountants' report.
F-5
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<PAGE>
AGTsports, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 2000
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, 1999.
NOTE 2 - BASIS OF PRESENTATION
The accompanying consolidated financial statements have been prepared on a
going concern basis which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. As shown in the
financial statements, the Company has incurred net losses of $94,352 and
$336,535 for the years ended September 30, 1999 and 1998, respectively. At
September 30, 1999 and 1998, the Company has a net working capital deficit of
$820,717 and $631,365, respectively, and a shareholders' deficit of $820,717 and
$690,365, respectively all of which raise substantial doubt about the Company's
ability to continue as a going concern. Management has developed plans intended
to remedy these conditions. These plans include seeking other sources of
financing such as the completion of a possible business combination and the sale
of common stock. No assurances can be given as to the success of these plans. In
addition, management has been advised by legal counsel that the Company may have
violated certain securities laws as discussed below which might result in
additional liability not currently determinable due to possible recission of
certain common stock sales. The financial statements do not include any
adjustments that might result should the Company be unable to continue as a
going concern.
NOTE 3 - CHANGES IN SECURITIES
During the Quarter ended December 31, 1999, the Company issued 7,580,000
shares of its restricted common stock in accordance with the terms of agreements
reached with a creditor and preferred shareholder of the Company. 1,000,000
shares of the Company's issued and outstanding preferred stock were canceled in
exchange for 2,000,000 restricted common shares of the Company. The common
shares were issued as follows: 1,000,000 shares were issued on December 17,
1999, and 1,000,000 shares were issued February 2, 2000.
Pursuant to the terms of the Company's 1997 joint venture agreement with
Global Links Trading, Ltd., the Company issued 6,850,000 restricted common
shares on December 17, 1999 to GLT's assignee and the agreement was thereby
terminated.
F-6
<PAGE>
NOTE 4 - DEFAULT ON SENIOR SECURITIES
As of December 31, 1999, the Company is in arrears on notes payable and
related interest and has subsequently entered into negotiations to settle the
arrearages through conversion into the Company's restricted common stock.
Accrued preferred stock dividends of approximately $83,000 were waived by the
Holder in exchange for 2,695,203 restricted common shares of the Company. At
March 31, 2000, the shares have not been issued pending the completion and
filing of various securities disclosure documents and registration statements by
the Company.
ITEM 2: Management's Discussion and Analysis
From 1993 to 1998, the Company was engaged in the development of golf
technology and sports-related products and services. The Company was unable to
bring its products to market and the business failed in 1998. During fiscal
1999, and through the period ending March 31, 2000, no significant business
activity was conducted by the Company and no income was realized. As of the date
of filing of this report, the Company has no business operations, material
revenues or identifiable assets and it continues to experience working capital
shortages that have limited its ability to pursue new business strategies.
In October 1998, the Company appointed a consultant to negotiate the
settlement of outstanding liabilities with a view toward reorganizing the
Company and securing a new business opportunity. While the Company is seeking
capital sources for investment, there is no assurance that sources can be found.
The Company will be forced to either borrow money or make private placements of
stock in order to fund any limited operations. No assurance exists as to the
ability to achieve loans or make private placements of stock. Operating expenses
for the six month period ending March 31, 2000 were $36,040 and $23,076 for the
same period in 1999. The revenues for the period were $-0- in 2000 and 1999. The
Company recorded a loss for the period ending March 31, 2000 of ($53,848) and
($50,486) in 1999. Losses can be expected to continue until a profitable
business is developed.
Liquidity and Capital Resources
Cash and cash equivalent's balance on March 31, 2000 was $864. (In the
fiscal quarter ending March 31, 2000, the Company was primarily engaged in the
restructuring of operations.) For the six month period ended March 31, 2000, the
Company had limited revenues and a net loss of ($53,848). The Company has
abandoned its former sports technology business plan in favor of pursuing a
potential merger or business combination with other entities as yet
unidentified. In the opinion of management, the Company has not improved
significantly as compared to the same period last year when it reported a net
loss of ($50,486).
PART II.
ITEM 1. Legal Proceedings
During the quarter ended March 31, 2000, 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.
F-7
<PAGE>
ITEM 2. Changes in Securities
During the Quarter ended December 31, 1999, the Company issued 7,580,000
shares of its restricted common stock in accordance with the terms of agreements
reached with a creditor and preferred shareholder of the Company. 1,000,000
shares of the Company's issued and outstanding preferred stock were canceled in
exchange for 2,000,000 restricted common shares of the Company. The common
shares were issued as follows: 1,000,000 shares were issued on December 17,
1999, and 1,000,000 shares were issued February 2, 2000.
Pursuant to the terms of the Company's 1997 joint venture agreement with
Global Links Trading, Ltd., the Company issued 6,850,000 restricted common
shares on December 17, 1999 to GLT's assignee and the agreement was thereby
terminated.
ITEM 3. Default on Senior Securities.
As of March 31, 2000, the Company is in arrears on notes payable and
related interest and has subsequently entered into negotiations to settle 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 March 31, 2000, 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.
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: March 31, 2000 By: /s/ Cory J. Coppage
- --------------------- -----------------------
Cory J. Coppage, 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: March 31, 2000 By: /s/ Cory J. Coppage
- --------------------- -----------------------
Cory J. Coppage, President
F-8
<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 such registrant's annual report on 10-KSB for the year end period
September 30, 1999.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-START> OCT-01-1999
<PERIOD-END> MAR-31-2000
<CASH> 864
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,200
<DEPRECIATION> 80
<TOTAL-ASSETS> 1,120
<CURRENT-LIABILITIES> 886,550
<BONDS> 0
0
0
<COMMON> 36,408,726
<OTHER-SE> (17,459)
<TOTAL-LIABILITY-AND-EQUITY> 1,985
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 36,040
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19,459
<INCOME-PRETAX> (53,848)
<INCOME-TAX> 0
<INCOME-CONTINUING> (53,848)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (53,848)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
