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 JUNE 30, 2000
Commission File Number 0-16447
AGTSPORTS, INC.
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(Exact name of registrant as specified in its charter)
COLORADO 84-1022287
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(State of incorporation) (I.R.S. Employer ID Number)
7255 E. Quincy Avenue, Suite 550, Denver, CO 80237
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(Address of principal executive offices) (zip code)
(303) 437-9434
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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 June 30, 2000, 49,848,919 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
June 30, 2000 and September 30, 1999
Statements of Operations F-4
Nine Months Ended June 30, 2000 and 1999
Statements of Cash Flows F-5
Nine Months Ended June 30, 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 June 30, 2000, and the related statements of
income, retained earnings, and cash flows for the nine 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 do 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 2, 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.
BRIMMER, BUREK & KEELAN LLP
Certified Public Accountants
August 20, 2000
F-2
<PAGE>
AGTsports, Inc.
(A Development Stage Company)
BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, 2000 *SEP 30, 1999
------------ ------------
(unaudited)
<S> <C> <C>
ASSETS
Assets:
Current assets
Cash $ 3 $ 22
------------ ------------
Total current assets 3 22
Property and equipment (net) 1,060 --
Other assets -- 1,000
------------ ------------
Total Assets $ 1,063 $ 1,022
============ ============
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 93,454 $ 227,807
Accrued expenses 72,819 112,440
Note payable - current 137,279 481,492
------------ ------------
Total current liabilities 303,552 821,739
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
49,848,919 shares issued and outstanding
as of June 30, 2000, and 27,554,726
issued and outstanding as of September 30, 1999 49,845 27,555
Treasury Stock (17,459) (17,459)
Additional paid-in capital 23,937,746 22,392,893
Accumulated deficit (24,272,621) (24,223,706)
------------ ------------
Total shareholder's deficit (302,489) (820,717)
------------ ------------
Total liabilities and shareholders' deficit $ 1,063 $ 1,022
============ ============
</TABLE>
*Derived from Company's year-end audited balance sheet.
Please read accountants' report.
F-3
<PAGE>
AGTsports, Inc.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED JAN 6, 1986
JUNE 30 JUNE 31 (INCEPTION)
------------------------------ ------------------------------ THROUGH
2000 1999 2000 1999 JUNE 30, 2000
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
OPERATING REVENUES $ -- $ -- $ -- $ -- $ 3,904,784
------------------
EXPENSES:
---------
Salaries and Wages -- -- -- -- 3,419,101
Professional Services 16,382 7,500 36,182 27,109 4,022,266
General and administrative expenses 3,230 296 19,390 3,763 3,439,522
Depreciation and amortization 60 -- 140 -- 2,486,743
Contract services -- -- -- -- 4,985,397
Other operating expenses -- -- -- -- 2,906,581
------------ ------------ ------------ ------------ ------------
Total Expenses 19,672 7,796 55,712 30,872 21,259,610
------------ ------------ ------------ ------------ ------------
Operating Income (Loss) (19,672) (7,796) (55,712) (30,872) (17,354,826)
------------ ------------ ------------ ------------ ------------
Other Income (Expenses)
Interest 5,895 (8,923) (13,563) (36,333) (700,071)
Other income -- -- 1,650 -- 2,917,134
Settlement expense (31,150) -- (31,150) -- (31,150)
Loss on equity securities -- -- -- -- (8,652,613)
Other expense -- -- -- -- (1,719,411)
------------ ------------ ------------ ------------ ------------
Total Other Income (Expenses) (25,255) (8,923) (43,063) (36,333) (8,186,111)
------------ ------------ ------------ ------------ ------------
Net Income (Loss) Before Extraordinary
Items And Provision for Income Taxes, (44,927) (16,719) (98,775) (67,205) (25,540,937)
Extraordinary Items 58,860 -- 58,860 -- 3,154,319
Provision for Income Taxes -- -- -- -- (1,793,033)
------------ ------------ ------------ ------------ ------------
Net Income (Loss) $ 13,933 $ (16,719) $ (39,915) $ (67,205) $ 24,179,651
============ ============ ============ ============ ============
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 41,996,114 27,554,726 35,742,479 27,554,726
</TABLE>
Please read accountants' report.
F-4
<PAGE>
AGTsports, Inc.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
JAN 6, 1986
NINE MONTHS ENDED (INCEPTION)
JUNE 30 THROUGH
2000 1999 JUNE 30, 2000
----------- ----------- -----------
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net cash provided (used) by operating activities $ (41,612) $ (38,744) $(4,948,139)
----------- ----------- -----------
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 43,000 44,000 682,000
Other financing activities (207) 44 3,998,184
----------- ----------- -----------
Net cash provided (used) by financing activities 31,000 44,044 4,680,184
----------- ----------- -----------
Net increase (decrease) in cash (19) 5,300 3
Cash at beginning of period 22 685 --
----------- ----------- -----------
Cash at end of period $ 3 $ 5,985 $ 3
=========== =========== ===========
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
=========== =========== ===========
Notes payable converted to stock $ 474,006 $ -- $ 474,006
=========== =========== ===========
Other payables converted to stock $ 62,987 $ -- $ 62,987
=========== =========== ===========
</TABLE>
Please read accountants' report.
F-5
<PAGE>
AGTsports, Inc.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 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 $39,915 and $67,205 for the
nine months ended June 30, 2000 and 1999, respectively. At June 30, 2000 and
1999, the Company has a net working capital deficit of $302,489 and $775,570,
respectively, and a shareholders' deficit of $302,489 and $775,570, 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 3 - CHANGES IN SECURITIES - Continued
During the Quarter ended June 30, 2000, the Company issued 12,515,193 shares of
its restricted common stock to settle outstanding liabilities with a book value
of approximately $537,000. The Company as issued 925,000 shares of stock with a
market value of $31,150 to settle claims filed by various shareholders
ITEM 2: Management'Management's Discussion and Analysis of Financial Condition
and Results of Operations
As of June 30, 2000, the Company had no current business operations. The Company
has experienced operating expenses of $55,712 for the nine-month period ending
June 30, 2000 and $30,872 for the same period in 1999. The revenues for the
period were none in 2000 or 1999. The Company recorded net income for the period
ending June 30, 2000 because debt with a net book value of $65,000 was settled
for approximately $6,100. For the nine months ended June 30, 1999 the Company
reported a net loss of ($67,205). Losses can be expected to continue until a
profitable business is achieved. While the Company is seeking capital sources
for investment, there is no assurance that sources can be found.
Liquidity and Capital Resources
The Company had nominal cash capital at the end of the period. 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.
PART II.
ITEM 1. Legal Proceedings
During the quarter ended June 30, 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.
ITEM 2. Changes in Securities
During the Quarter ended June 30, 2000, the Company completed debt to equity
agreements with creditors eliminating debt obligations of approximately $474,000
plus accrued interest of $60,000 through the issuance of 12,440,193 shares of
the Company's restricted common stock, as reported on Form D filed by the
Company with the Securities and Exchange Commission.
ITEM 3. Default on Senior Securities.
None.
F-7
<PAGE>
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 June 30, 2000, the Company had no other reportable events which were not
previously disclosed in the below referenced exhibits and reports.
The Company's Articles of Incorporation as amended entitle it to transact any
lawful business or businesses for which corporations may be incorporated
pursuant to the Colorado Corporation Code. The Company can be defined as a
"shell" company, whose sole purpose at this time is to locate and consummate a
merger or acquisition with a private entity. Any business combination or
transaction will likely result in a significant issuance of shares and
substantial dilution to present stockholders of the Company. The Company's plan
is to seek, investigate and, if such investigation warrants, acquire an interest
in business opportunities presented by persons or firms seeking the perceived
advantages of a corporation which reports under Section 13 and 15 of the
Securities Exchange Act of 1934 (the "Exchange Act"). Such perceived benefits
may include facilitating or improving the terms on which additional equity
financing may be sought, providing liquidity for incentive stock options or
similar benefits to key employees, providing liquidity (subject to restrictions
of applicable statutes) for all shareholders and other factors. The Company
anticipates that the selection process of such potential business opportunities
will be complex and extremely risky, and no assurance can be provided the
Company will be successful in these endeavors.
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: June 30, 2000 By: /s/ CORY J. COPPAGE
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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: June 30, 2000 By: /s/ CORY J. COPPAGE
---------------------
President
F-8
