<PAGE>
1
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended: October 31, 1996
[ ] Transition Report Under Section 13 or 15(d) of the Exchange Act
Commission File Number: 33-14576-D
ARENA GROUP, INC.
(Exact name of small business Registrant as specified in its charter)
Nevada 87-0453842
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5 Clancy Lane South
Rancho Mirage, California 92270
(Address of principal executive offices)
(760) 346-5961
(Registrant's telephone number)
Weststar Group, Inc.
2200 Sunrise Boulevard
Rancho Cordova, California 95670
(Former name and address of Registrant)
June 30th
(Former fiscal year end - representing a change from the last report filed)
The Registrant last filed a Report under Section 13 or 15(d) of the Exchange Act
on Form 10-Q for the quarterly period ended March 31, 1993. Subsequently the
Registrant's two wholly owned subsidiaries were placed under the control of a
Court appointed receiver. The business activities of the Registrant's
subsidiaries comprises the only business in which the Registrant was engaged.
This Report represents the first Report filed by the Registrant since the Court
discharged and released the Receiver and closed the proceedings with respect to
the Registrant's subsidiaries on July 31, 1996. The Registrant has elected a new
fiscal year which would have resulted in a transitional period of one month or
less. However, inasmuch as the Registrant is considered a "new entity" for
accounting purposes, commencing on July 31, 1996, the Registrant is filing a
Quarterly Report rather than a Transition Report.
Check whether the Registrant: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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.
[Item - 1] Yes [ ] No [ X ]; [Item - 2] Yes [ X ] No [ ]
APPLICABLE ONLY TO CORPORATIONS
State the number of shares outstanding of each of the Registrant's classes of
common equity as of the latest practical date:
994,225 shares of its $0.001 par value common stock as of September 10, 1997.
Transitional Small Business Disclosure Format (check one) Yes [ ] No [ X ]
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2
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
The following unaudited financial statements as of October 31, 1996 and for the
three month period ending and from the commencement of a development stage
company through October 31, 1996 are included as part of the Registrant's Form
10-QSB Report for the first quarter of its fiscal year ended July 31, 1997.
These financial statements have been prepared by the Registrant pursuant to the
rules and regulations of the Securities and Exchange Commission and therefore,
certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted.
In the opinion of management, all adjustments which are necessary in order to
make the financial statements not misleading have been made and the Registrant's
financial position, results of operations, cash flows and stockholder's equity
are presented fairly for the given periods. These financial statements should be
read in conjunction with their accompanying footnotes and with the Registrant's
audited financial statements and footnotes contained in the Registrant's Form
10-KSB Report for the fiscal year ended July 31, 1997.
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3
ARENA GROUP, INC.
(a development stage company)
Balance Sheet
[unaudited]
October 31, 1996
ASSETS
Current Assets
Cash in Bank........................................ $ -
------------
TOTAL ASSETS................................................. $ -
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable.................................... $ 250
------------
Stockholders' Equity:
Common Stock, $.001 par value, 50,000,000
shares authorized, 779,940 shares
issued and outstanding...................... 780
Capital in excess of par value...................... (1,030)
Deficit accumulated during the development
stage....................................... -
------------
TOTAL STOCKHOLDERS' EQUITY................................... (250)
------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY................... $ -
============
The accompanying notes are an integral part of these financial statements.
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4
ARENA GROUP, INC.
(a development stage company)
Statement of Operations
[unaudited]
From the
commencement of
a development
For the Three stage company
Months Ended through
October 31, 1996 October 31, 1996
---------------- --------------------
Revenue........................... $ - $ -
------- -------
Expenses:
Office expenses............... - -
Public company costs.......... - -
Filing and Registration....... - -
------- -------
Total Expenses.................... - -
------- -------
NET OPERATING LOSS................ $ - $ -
======= =======
LOSS PER SHARE.................... $ - $ -
======= =======
SHARES USED TO COMPUTE LOSS
PER SHARE..................... 994,225 994,225
======= =======
The accompanying notes are an integral part of these financial statements.
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5
<TABLE>
<CAPTION>
ARENA GROUP, INC.
(a development stage company)
Statement of Stockholders' Equity
[unaudited]
Deficit
Capital Accumulated
Common Stock in Excess During the Total
----------------------------- of Development Stockholders'
Shares Amount Par Value Stage Equity
-------------- ------------ --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
At commencement of the
Development Stage,
July 31, 1996...... 779,940 $ 780 $ (1,030) $ - $ (250)
------- -------- -------- --------- -------
Net Loss for the
period ended
October 31, 1996... - - - - -
------- -------- --------- --------- -------
BALANCE
October 31, 1996... 779,940 $ 780 $ (1,030) $ - $ 250)
======= ======== ======== ========= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
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6
ARENA GROUP, INC.
(a development stage company)
Statements of Cash Flow
[unaudited]
From the
commencement of
a development
For the Three stage company
Months Ended through
October 31, 1996 October 31, 1996
---------------------- ---------------------
Cash Flows from Operating
Activities:
Net loss from operations.... $ - $ -
---------- ----------
NET CASH USED IN OPERATING
ACTIVITIES...................... - -
---------- ----------
Cash Flows from Financing
Activities:
Proceeds from sale of
common stock............. - -
---------- ----------
NET CASH PROVIDED BY FINANCING
ACTIVITIES.................. - -
---------- ----------
Net increase in cash............ - -
Cash at beginning of period..... - -
---------- ----------
CASH AT END OF PERIOD........... $ - $ -
========== ==========
The accompanying notes are an integral part of these financial statements.
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7
ARENA GROUP, INC.
(a development stage company)
Notes to Unaudited Financial Statements
NOTE 1 - ACCOUNTING POLICIES AND OTHER DISCLOSURES
The condensed financial statements included in this Form 10-QSB Report have been
prepared by the Registrant, without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission. These financial statements have been
prepared for the purpose of providing information with respect to the interim
three month period ending October 31, 1996, at a time when the Registrant was
without a board of directors and without any officers.
From the date of the Registrant's commencement as a development stage company on
July 31, 1996 through July 22, 1997, the Registrant did not conduct any business
operations. Commencing during the fourth quarter of the fiscal year ending July
31, 1997, the Registrant conducted such business activities as needed in
preparation for the July 22, 1997 election of a board of directors. The amounts
stated in these financial statements are not purposeful for analyzing the
Registrant's normal business operations and should not be considered indicative
of the results to be expected for the entire year, nor for the future
corresponding quarter of the fiscal year ended July 31, 1998.
The accounting policies followed by the Registrant and other pertinent financial
statement disclosures are contained in the footnotes accompanying the
Registrant's audited financial statements for its fiscal year ended July 31,
1997. Those financial statements are contained in the Registrant's Form 10-KSB
Report which was filed with the Securities and Exchange Commission at or about
the same time as this Form 10-QSB Report.
NOTE 2 - COMMON STOCK ISSUED AND OUTSTANDING
On July 22, 1997, by a Written Consent Resolution representing a vote of 61% of
the Registrant's shareholders, the Registrant changed its name to Arena Group,
Inc. At the same time a reverse split in the Registrant's common stock was
approved whereby one (1) share of common stock reflecting the Registrant's new
name, Arena Group, Inc., will be issued for seven (7) shares of Registrant's
common stock held under its previous name. The herein presented financial
statements reflect, in all respects, the Registrant's common stock as adjusted
for the 1 for 7 reverse split.
The Registrant issued 214,285 shares of its post split common stock during July
of 1997. These shares were issued for a total cash consideration of $15,000. Of
the total 214,285 shares, 174,285 shares were issued to one of the Registrant's
directors and 40,000 shares were issued to an individual who, after such
issuance, holds 8.3% of the Registrant's total issued and outstanding common
stock.
The results of operations as presented on a per common share basis is reflected
in the accompanying Statement of Operations by using the total number of post
split common shares outstanding as of the Registrant's fiscal year ended July
31, 1997. Inasmuch as the Registrant is a development stage company and did not
conduct any business operations during the period presented, using the number of
common shares outstanding as of the Registrant's year end provides a more
comparable and conservative approach to the per share computation for the
present and in future periods.
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8
PART I - FINANCIAL INFORMATION
ITEM 2. PLAN OF OPERATIONS
The Registrant's two wholly owned subsidiaries were placed under the control of
a Court appointed receiver during 1994. The business activities of the
Registrant's subsidiaries comprises the only business in which the Registrant
was engaged. This Report represents the first Report filed by the Registrant
since the Court discharged and released the Receiver and closed the proceedings
with respect to the Registrant's subsidiaries on July 31, 1996.
As a result, for approximately three years, the Registrant has been inactive and
has not generated any revenue from any sources. Furthermore, the Registrant has
been without management, including a functioning board of directors, for
approximately the same period of time. These facts have resulted in a dormancy
with respect to any business operations or other activities of the Registrant.
Not until the election of a board of directors in July, 1997, and the
Registrant's limited sale of unregistered securities, has the Registrant been
under any type of management and have funds been available to conduct any
business activities. These facts should be given due consideration when reading
statements made regarding the Registrant's expectations as to its future
operations and other activities disclosed in this Form 10-QSB Report. Such
statements constitute forward looking information within the meaning of the
Private Securities Litigation Reform Act of 1995. Although the Registrant
believes that its expectations are based on reasonable assumptions within the
bounds of its knowledge and experience, there can be no assurance that actual
results will not differ materially from the expectations expressed herein.
The Registrant did not have any business operations during the period covered by
this Report. Additionally, the Registrant only engaged in certain organizational
and minimal capitalization activities from the period covered by this Report
through the date of filing this Report with the Securities and Exchange
Commission. The Registrant's intent is to seek a new business venture. In
attempting to locate a viable business venture, which the Registrant has not
attempted to define in any detail, (hereinafter referred to as a "Target
Company") the Registrant may encounter factors which could cause expectations to
differ from those expressed herein. Such factors would include, but not be
limited to, the following: 1) changes in federal and/or state securities laws;
2) changes in federal and/or state income tax laws relating to tax free
reorganizations; 3) economic conditions and their associated impact on equity
security markets; 4) management of the Registrant having the ability to locate a
Target Company; and 5) Registrant's ability to have sufficient capital available
for an undeterminable future period of time in order to seek and find a Target
Company.
As previously stated, the Registrant was essentially dormant through the period
of time that its subsidiaries were being operated by a Court appointed Receiver.
During the period covered by this Report, no substantial changes occurred from
those that existed on July 31, 1996, when the Court discharged and released the
Receiver and closed the proceedings with respect to the Registrant's
subsidiaries. The Registrant was not a party to the Receivership nor was the
Registrant named as a defendant in any of the Receivership proceedings.
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9
The Registrant remained essentially inactive until the fourth quarter of its
fiscal year ended July 31, 1997. At that time, the Registrant's shareholders,
among other items, elected a board of directors, approved a change in the
Registrant's name and agreed to reverse split the Registrant's common stock.
Reference is made to the Registrant's Form 10-KSB Report for the fiscal year
ended July 31, 1997, which contains the Registrant's plan of operations for the
twelve month period ending with its fiscal year of July 31, 1998, in
significantly greater detail. The board of directors elected in July of 1997
have set goals which they believe are attainable and which should not exceed the
cash available to the Registrant from its recently completed limited sale of its
securities.
Liquidity and Capital Resources
As of the end of August 1997, the Registrant had cash assets of approximately
$13,500 and no accrued liabilities. The Registrant anticipates that further
costs will be incurred for legal, accounting and other related matters in
conjunction with bringing its Reporting requirements with the Securities and
Exchange Commission current. Additional financial obligations may be incurred in
attempting to locate a Target Company and to create an interest in the
Registrant which will result in a publicly traded market for the Registrant's
common stock being established. These endeavors will result in management making
time commitments and incurring out-of-pocket costs, which the Registrant has
agreed to reimburse. Additionally, the Registrant shall pay to one of its
directors a monthly fee of $250 for incidental costs incurred relative to the
Registrant's shareholder and business activities. As a result, if sufficient
cash is not available for these and other expenditures, the Registrant may issue
shares of its equity securities or enter into a debt arrangement with management
to satisfy those obligations.
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10
PART - II OTHER INFORMATION
Item 1 - Legal Proceedings
The Registrant was not a party to any legal proceedings; however, the
Receivership of the Registrant's subsidiaries was closed on July 31, 1996.
Further information regarding those proceedings is incorporated by reference to
the Registrant's Form 10-KSB Report for the year ended July 31, 1997.
Item 2 - Changes in Securities
Information relative to Item 701 of Regulation S-B is incorporated by reference
to the Registrant's Form 10-KSB Report for the year ended July 31, 1997.
Item 3 through Item 5 - Not applicable for the period covered by this Report.
Item 6 (a) - Index to Exhibits:
Location Exhibit Description of Exhibit
(E) 2 Order of the Court to dissolve subsidiary corporations
(B) 3(i).1 Initial Articles of Incorporation
(C) 3(i).2 Amended Articles of Incorporation dated January 5, 1990
(E) 3(i).3 Amended Articles of Incorporation dated August 5, 1997
(B) 3(ii).1 Initial By-Laws
(D) 3(ii).2 By-Laws dated July 2, 1991
(E) 22.1 Form of the Written Shareholder Consent
(E) 22.2 Notice of Shareholder Action
(E) 22.3 Information Statement
(E) 22.4 Transmittal Form
(A) 27 Financial Data Schedule
Legend to location of Exhibits
(A) The Financial Data Schedule is only included in the EDGAR submission.
(B) Incorporated by reference to a Registration Statement filed on Form S-18;
File Number 33-23314 in the Denver Regional Office of the SEC.
(C) Incorporated by reference to a Form 10-Q Report for the quarter ended
December 31, 1989.
(D) Incorporated by reference to a Form 10-K Report for the year ended June 30,
1991.
(E) Incorporated by reference to a Form 10-KSB Report for the year ended July
31, 1997.
Item 6 (b) - No Reports on Form 8-K were filed by the Registrant for the period
covered by this report.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Arena Group, Inc.
/s/ Lloyd T. Rochford Dated: September 15, 1997
- ---------------------
Lloyd T. Rochford,
Chief Executive Officer
/s/ Denny W. Nestripke Dated: September 15, 1997
- ----------------------
Denny W. Nestripke,
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-START> AUG-01-1996
<PERIOD-END> OCT-31-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 250
<BONDS> 0
0
0
<COMMON> 780
<OTHER-SE> (1,030)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0.000
<EPS-DILUTED> 0.000
</TABLE>
