UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission File Number 0-21337
GOLF VENTURES, INC.
(Exact name of registrant as specified in its charter)
UTAH 87-0403864
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
102 WEST 500 SOUTH, SUITE 400, SALT LAKE CITY, UTAH, 84101
(Address of principal executive offices, including zip code)
(801)363-8961
(Registrant's telephone number, including area code)
Indicated by check mark whether the registrant has: (1) 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) been subject to
such filing requirements for the past 90 days. Yes [x] No [ ]
Number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
Class Outstanding as of August 19, 1997
Common Stock, par value $.OO1 2,625,066
<PAGE>
TABLE OF CONTENTS
Heading Page
PART I. FINANCIAL STATEMENTS
Item 1. Balance Sheets - June 30,1997 and 4-5
March 31, 1997
Statements of Operations and Accumulated Deficit -
Three months ended June 30, 1997 and 1996 6
Statements of Stockholders Equity-March 31, 1996 through
June 30, 1997 7-8
Statements of Cash Flows - Three months ended
June 30, 1997 and 1996 9
Notes to Financial Statements 10-15
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 16-17
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 17
Item 2. Changes in Securities 17
Item 3. Upon Senior Securities 17
Item 4. Submission of Matters to a Vote of Securities Holders 17
Item 5. Other Information 17
Item 6. Exhibits and Reports on Form 8-K 18
SIGNATURES 18
2
<PAGE>
PART I
Item 1. Financial Statements
The following, unaudited Financial Statements for the three month
periods ended June 30, 1997, included all adjustment which management believes
are necessary for the financial statements to be presented in conformity with
generally accepted accounting principals.
(THIS SPACE INTENTIONALLY LEFT BLANK)
3
<PAGE>
<TABLE>
<CAPTION>
GOLF VENTURES, INC.
Balance Sheets
ASSETS
June 30 March 31,
1997 1997
CURRENT ASSETS (Unaudited)
<S> <C> <C>
Cash $ 14,732 $ 28,563
Real estate inventory 949,554 932,439
Current portion of contract receivable 472 472
--------------- ----------------
Total Current Assets 964,758 961,474
--------------- ----------------
PROPERTY AND EQUIPMENT
Model home 134,788 133,954
Furniture and fixtures 13,106 13,106
Computer equipment 2,350 2,350
--------------- ----------------
Total depreciable assets 150,244 149,410
Less: accumulated depreciation (3,414) (2,393)
--------------- ----------------
Net Property and Equipment 146,830 147,017
--------------- ----------------
OTHER ASSETS
Land held for development (Note 2) 11,714,678 11,475,016
Long-term portion of contract receivable 55,993 55,993
--------------- ----------------
Total Other Assets 11,770,671 11,531,009
--------------- ----------------
TOTAL ASSETS $ 12,882,259 $ 12,639,500
=============== ================
</TABLE>
The accompanying notes are an integral part of these
financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
GOLF VENTURES, INC.
Balance Sheets
LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, March 31,
1997 1997
CURRENT LIABILITIES (Unaudited)
<S> <C> <C>
Accounts payable $ 1,097,899 $ 953,072
Accrued expenses and other liabilities 821,444 659,735
Current portion of long-term debt (Note 3) 903,924 923,320
--------------- ----------------
Total Current Liabilities 2,823,267 2,536,127
--------------- ----------------
LONG-TERM DEBT (Note 3) 6,565,156 6,356,331
--------------- ----------------
Total Liabilities 9,388,423 8,892,458
--------------- ----------------
STOCKHOLDERS' EQUITY
Preferred stock (10,000,000 shares authorized at par value of $.001) 27,084
and 24,304 class "A"; 287,064 and 287,064 class "B" shares issued and
outstanding (Note 4) 314 311
Common stock (25,000,000 shares authorized
at par value of $.001) 1,851,723 and 1,852,828
shares issued; 1,838,764 and 1,839,837 shares
outstanding, respectively (Note 5) 1,852 1,853
Additional paid-in capital 8,264,826 8,264,828
Accumulated deficit (4,773,156) (4,519,950)
--------------- ----------------
Total Stockholders' Equity 3,493,836 3,747,042
--------------- ----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 12,882,259 $ 12,639,500
=============== ================
</TABLE>
The accompanying notes are an integral part of these
financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
GOLF VENTURES, INC.
Statements of Operations
(Unaudited)
For the Three Months Ended
June 30,
1997 1996
INCOME
<S> <C> <C>
Real estate sales $ 11,000 $ 133,000
Cost of real estate sales 11,000 76,582
---------------- ---------------
Gross Profit on Real Estate Sales - 56,418
---------------- ---------------
EXPENSES
Depreciation 1,021 -
General and administrative expenses 253,287 156,519
---------------- ---------------
Total Expenses 254,308 156,519
---------------- ---------------
LOSS FROM OPERATIONS (254,308) (100,101)
---------------- ---------------
OTHER INCOME (EXPENSES)
Other revenue 4,630 2,881
Interest income 777 1,993
Interest expense (4,305) -
---------------- ---------------
Total Other Income (Expenses) 1,102 4,874
---------------- ---------------
NET LOSS BEFORE INCOME TAXES (253,206) (95,227)
INCOME TAXES - -
---------------- ---------------
NET LOSS $ (253,206) $ (95,227)
================ ===============
NET LOSS PER COMMON SHARE $ (0.14) $ (0.06)
================ ===============
</TABLE>
The accompanying notes are an integral part of these
financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
GOLF VENTURES, INC.
Statements of Stockholders' Equity (Continued)
Additional
Preferred Stock Common Stock Paid-in Accumulated
Shares Amount Shares Amount Capital Deficit
<S> <C> <C> <C> <C> <C> <C>
Balance forward
March 31, 1996 284,427 $ 284 1,628,828 $ 1,629 $ 7,173,573 $ (3,834,033)
Common stock issued
for cash at $5.00
per share - - 200,000 200 999,800 -
Offering costs for sale of
common stock for cash - - - - (120,576) -
Common stock issued for
payment of interest - - 20,000 20 34,502 -
Common stock issued
for services rendered - - 4,000 4 11,996 -
Repurchase shares of
class "A" preferred stock (2,500) (3) - - (12)497 -
Class "A" preferred stock
issued for payment of
interest 1,804 2 - - 9,018 -
Class "B" preferred stock
issued for payment of
interest 27,637 28 - - 138,157 -
Contributions of capital
by parent company - - - - 356,054 -
Distributions to parent
company - - - - (325,199) -
Loss for the year ended
March 31, 1997 - - - - - (685,917)
------- --------- --------- ------ ---------- -----------
Balance, March 31, 1997 311,368 $ 311 1,852,828 $1,853 $8,264,828 $(4,519,950)
------- --------- --------- ------ ---------- -----------
</TABLE>
The accompanying notes are an integral part of these
financial statements.
7
<PAGE>
<TABLE>
<CAPTION>
GOLF VENTURES, INC.
Statements of Stockholders' Equity
(Unaudited)
Additional
Preferred Stock Common Stock Paid-in Accumulated
Shares Amount Shares Amount Capital Deficit
<S> <C> <C> <C> <C> <C> <C>
Balance,
March 31, 1997 311,368 $ 311 1,852,828 $ 1,853 $ 8,264,828 $ (4,519,950)
Class "A" preferred stock
issued for common stock 2,780 3 (1,105) (1) (2) -
Loss for the three months
ended June 30, 1997 - - - - - (253,206)
------- --------- --------- ----------- -------------- --------------
Balance,
June 30, 1997 314,148 $ 314 1,851,723 $ 1,852 $ 8,264,826 $ (4,773,156)
------- --------- --------- ----------- -------------- --------------
</TABLE>
The accompanying notes are an integral part of these
financial statements.
8
<PAGE>
<TABLE>
<CAPTION>
GOLF VENTURES, INC.
Consolidated Statements of Cash Flows
For the Months Ended
June 30,
1997 1996
OPERATING ACTIVITIES (Unaudited) (Unaudited)
<S> <C> <C>
Net income (loss) $ (253,206) $ (95,227)
Adjustments to reconcile net cash flows
from operations
Depreciation 1,021 -
Changes in assets and liabilities:
(Increase) decrease accounts receivable - (18,625)
(Increase) decrease inventory (17,115) 61,354
(Increase) decrease in accounts payable and
accrued expenses 306,536 (119,833)
----------------- -----------------
Net Cash Provided (Used) by
Operating Activities 37,236 (172,331)
------------------ -----------------
INVESTING ACTIVITIES
Purchase of property and equipment (834) -
Land held for development (239,662) (413,839)
------------------ ------------------
Net Cash (Used) in Investing Activities (240,496) (413,839)
------------------ ------------------
FINANCING ACTIVITIES
Stock offering costs - (100,000)
Common stock issued for cash - 1,000,000
Long-term borrowings 208,825 2,000,000
Distribution to parent company - (174,946)
Principal payments on long-term debt (19,396) (211,943)
------------------ ------------------
Net Cash Provided by Financing Activities 189,429 2,513,111
------------------ ------------------
INCREASE (DECREASE) IN CASH (13,831) 1,926,941
CASH AT BEGINNING OF PERIOD 28,563 784,380
------------------- ------------------
CASH AT END OF PERIOD $ 14,732 $ 2,711,321
=================== ==================
SUPPLEMENTAL CASH FLOW DISCLOSURES
Cash Paid For:
Interest $ - $ -
Income taxes $ - $ -
</TABLE>
The accompanying notes are an integral part of these
financial statements.
9
<PAGE>
GOLF VENTURES, INC.
Notes to Financial Statements
June 30, 1997 and 1996
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Golf Ventures, Inc. (the Company) was incorporated in the State
of Utah on March 2, 1983 under the name of Gold-Water, Inc. for
the purpose of acquiring and developing mining properties. The
Company's name was subsequently changed to Sierra Tech, Inc. on
September 27, 1989. The Company discontinued its mining
operations in 1992. On December 28, 1992,
at a meeting of the shareholders, the name of the Company was
changed to Gold Ventures, Inc. Also, the Company's common stock
was reverse stock split on the basis of one share for every ten
shares of the Company's outstanding common stock. On February 1,
1996, the Company reverse split its common stock again on a one
share for every five shares basis. The financial statements
reflect the reverse stock splits on an retroactive basis.
The Company has acquired real estate in St. George, Utah and is
engaged in the business of real estate development, primarily
golf courses, with surrounding residential real estate.
The following is a summary of the more significant of its
accounting policies:
a. Significant Shareholder and Distributions
The Company is a subsidiary of American Resources and Development
Company (ARDCO), formerly Leasing Technology Incorporated. ARDCO
has common directors and management with the Company. The Company
made distributions to ARDCO of $325,199 for the year ended March
31, 1997 and received contributions of capital totaling $356,054
from ARDCO during the year ended March 31, 1997. These
contributions and distributions have been treated as adjustments
of additional paid-in capital in the accompanying financial
statements.
b. Income Taxes
The Company has adopted SFAS 109, Accounting for Income Taxes. No
provision has been made for federal income taxes due to net
operating loss carryforwards, sufficient to offset any current
tax liabilities. No deferred tax asset is being recognized
currently based on the Company's past operating performance. The
net operating losses are expected to expire as summarized below.
Year ended
to expire Amount
2007 $ 16,000
2008 114,000
2009 97,000
2010 3,623,000
2011 686,000
2012 253,000
----------------
Total $ 4,789,000
================
The Company has elected a March 31 fiscal year end for book and
tax purposes.
c. Net Loss Per Share of Common Stock
The computation of net loss per share of common stock is based on
the weighted average number of shares outstanding during each
period. There common stock equivalents are anti-dilutive and
accordingly not used in the net loss per common share
computation.
10
<PAGE>
GOLF VENTURES, INC.
Notes to Financial Statements
June 30, 1997 and 1996
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
d. Profit Recognition and Capitalization of Costs Related to Real
Estate
Income on real estate is recognized in accordance with the
provisions of FASB-66. Revenue and profits from the sale of land
and other real estate have been recognized using the full accrual
method for all periods presented. As such, each sale has been
determined to have been consummated, with the buyers initial and
continuing investment determined to show adequate demonstration
of commitment to pay. In addition, all outstanding remaining
receivables related to these transactions are not subject to
future subordination and the Company no longer has a substantial
continuing involvement with the property with the buyer
substantially assuming the usual risks and rewards of ownership
of the property.
Costs associated with real estate are accounted for in accordance
with the provisions of FASB-67. Accordingly, acquisition,
development and construction costs, including property taxes and
interest on associated debt and selling costs, are capitalized.
Such costs are specifically allocated to the related opponents
or, if relating to multiple components, allocated on an pro rata
basis as appropriate. Estimates are reviewed periodically and
revised as needed. The respective real estate projects are also
periodically reviewed to determine the that carrying amount does
not exceed the net realizable value. To date, no allowance has
had to be provided for estimated impairments of value based on
evaluation of the projects.
e. Concentrations of Risk
The Company maintains its cash in bank deposit accounts at high
credit quality financial institutions. The balances, at times,
may exceed federally insured limits.
The Company builds and develops real property in Southern Utah.
In the normal course of business the Company extends secured
credit to its customers.
f. Cash and Cash Equivalents
The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash
equivalents.
The changes in operating assets and liabilities are shown net of
non cash transactions.
g. Inventory
The Company carries in inventory the cost of the developed lots,
condominiums and homes it has available for sale. The inventory
is recorded at the lower of cost or market.
h. Accounts Receivable
The Company's notes receivable are from the sale of lots and
condos in its Cotton Manor and Cotton Acres projects. The Company
has recorded an allowance for doubtful accounts of $5,000. The
Company holds a trust deed on the properties sold and the Company
expects that its sales backlog would allow it to immediately
resell any property which it foreclosed upon.
11
<PAGE>
GOLF VENTURES, INC.
Notes to Financial Statements
June 30, 1997 and 1996
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
I. Property and Equipment
Property and equipment are stated at cost less accumulated
depreciation. Depreciation on equipment is provided using the
straight-line method over an expected useful lives of the assets
(usually three years).
j. Construction Loans Payable
An officer and director of the Company has arranged for short
term loans to finance the construction of homes held in inventory
for resale. The loans are secured by the homes and accrue
interest at variable rates. During the year ended March 31,
1997, this obligation was converted into long-term debt.
k. Estimates
Management uses estimates and assumptions in preparing financial
statements. Those estimates and assumptions affect the reported
amounts of assets and liabilities, the disclosure of commitments
and contingencies, and the reported revenues and expenses.
NOTE 2 - LAND HELD FOR DEVELOPMENT
On December 28, 1992 the Company purchased the Red Hawk real
estate development and the Cotton Manor/Cotton Acres real estate
development. The land was purchased for 3,273,728 shares of
common stock and the assumption of debt. The Red Hawk land is
undeveloped and in order for the Company to realize its
investment it will need to obtain adequate financing. The land
was acquired from a company which ended up with control of the
Company as a result of the transaction, therefore the land was
recorded at predecessor cost.
For the year ended March 31, 1997, the Company capitalized
$1,093,468 in construction period interest costs. The cost of the
land is less than the estimated net realizable value of the land.
12
<PAGE>
GOLF VENTURES, INC.
Notes to Financial Statements
June 30, 1997 and 1996
NOTE 3 - LONG-TERM DEBT
<TABLE>
<CAPTION>
Long-term debt of the Company is as follows: June 30, March 31,
1997 1997
(Unaudited)
<S> <C> <C>
Promissory note secured by land. Interest accrued at 10% per annum,
payable in shares of the Company's common stock. $120,000
principal plus a percentage of the proceeds of lot sales payable
annually beginning on February 1, 1991 through February 1, 1997 at
which time the balance will be due as a balloon payment. $2,000
from each Red Hawk lot sale also applies to the note. $ 646,502 $ 646,502
Promissory note secured by land. Annual payments through
August 15, 2016 at $30,524 per year including interest at 10%
per annum. 201,890 201,890
Trust deed note, secured by land and 50,000 shares of the Company's
common stock. Interest accrued at 15% per annum. Principle and
interest were due May 31, 1995. However, the note holder has not
demanded full payment and is accepting partial payments. 80,575 80,575
Trust deed note payable, secured by land. Interest accrued at 8%
per annum. Payable $100,000 per year plus the accrued interest
for that year. 355,890 355,890
Promissory note secured by land, bearing interest at 10.5%.
Interest payable monthly with principal and any accrued
interest payable in full on June 10, 1999. 3,649,630 3,440,805
Purchase contract and note secured by land, bearing interest at
10%. Monthly installments of $25,000 due through May 15, 1998
with remaining principal and accrued interest due in full. 2,227,681 2,246,823
Mortgage note payable secured by real estate bearing interest at
11.5%. Due in monthly installments of $911. 90,839 90,915
--------------- ----------------
Balance forward $ 7,253,007 $ 7,063,400
--------------- ----------------
13
<PAGE>
GOLF VENTURES, INC.
Notes to Financial Statements
June 30, 1997 and 1996
NOTE 3 - LONG-TERM DEBT (Continued)
<CAPTION>
<S> <C> <C>
Balance forward $ 7,253,007 $ 7,063,400
Mortgage note payable secured by real estate bearing
interest at 8.125%. Due in monthly installments of $919 116,622 116,800
Mortgage note payable secured by real estate bearing
interest at 8.125%. Due in monthly installments of $879. 99,451 99,451
--------------- ----------------
Subtotal 7,469,080 7,279,651
Less Current Portion (903,924) (923,320)
--------------- ----------------
Long-Term Portion $ 6,565,156 $ 6,356,331
=============== ================
Maturities on long-term debt are as follows:
1998 $ 903,924 $ 923,320
1999 2,491,622 2,282,797
2000 3,557,065 3,557,065
2001 73,718 73,718
2002 19,559 19,559
Thereafter 423,192 423,192
--------------- ----------------
$ 7,469,080 $ 7,279,651
=============== ================
</TABLE>
NOTE 4 - PREFERRED STOCK
The Company has issued 27,084 shares of its class "A" cumulative
convertible preferred stock through a private placement at $5 per
share. The preferred stock pays a cumulative dividend at the rate
of 10% per annum and is convertible into common stock per terms of
the offering. The preferred stock also has certain preferences in
liquidation. During the year ended March 31, 1996, 2,500 shares of
class "A" preferred stock were repurchased from the holder for
$12,500. Also, 1,804 of the class "A" preferred shares were issued
during the year end March 31, 1997 as payment of interest on
long-term debt. During the three months ended June 30, 1997, 1,105
shares of common stock were converted to 2,780 shares of preferred
stock.
The Company has also issued 287,064 shares of class "B" preferred
stock. The class "B" preferred stock has a preference upon
liquidation of $5.00 per share, plus all accrued and unpaid
dividends, whether or not earned or declared. The preference is
secondary to the liquidation preference of the class "A" stock. The
class "B" preferred stock is convertible at anytime before March
31, 1998 at the rate of 1 share of common stock to be valued at
40% of the low bid price for free trading shares at my time during
the eighteen months preceding the conversion. The Company may
redeem the class "B" preferred stock on or before March 31, 1998 at
$5.00 per share plus dividends accrued at 10% per annum. Of the
total shares of class "B" preferred stock outstanding, 193,733
shares were issued during the year ended March 31, 1996 at a price
of $5.00 per share, 160,057 of which were issued to a shareholder
of the Company (see Note 7). During the year ended March 31, 1997,
the Company issued 27, 637 shares of class "B" preferred stock as
payment for interest on long-term debt.
14
<PAGE>
GOLF VENTURES, INC.
Notes to Financial Statements
June 30, 1997 and 1996
NOTE 5 - COMMON STOCK
The Company completed a placement of its common stock during the
year ended March 31, 1997, realizing proceeds of $1,000,000 for
which the Company issued 200,000 shares. Offering costs associated
with this transaction totaled $120,576 which has reduced additional
paid-in capital as reflected in the accompanying financial
statements.
An additional 20,000 shares of common stock were issued during the
year ended March 31, 1997 as payments for $34,522 of accrued
interest or long-term debt. 4,000 shares of common stock were also
issued during the year ended March 31, 1997 as payment for $12,000
of services rendered to the Company.
The Company has issued 12,991 shares which have been offered to
creditors in settlement of accrued expenses. However, the creditors
have not yet accepted the shares. These shares are considered
issued but not outstanding for financial statement purposes.
NOTE 6 - SUBSEQUENT EVENTS
From time to time since December 1, 1992, there have been
intercompany transactions between American Resources and
Development Company ("ARDCO") and the Company. These transactions
have included the exchange of funds, services rendered by employees
and the exchange of other assets. At the time of these
transactions, no formal determination was made by the Companies
whether these transactions constituted debt or equity transactions.
On July 8, 1997, the Company issued to ARDCO 823,343 shares of its
common stock with respect to the intercompany transactions
between the two entities and in addition issued a total of 250,000
shares of its common stock to its officers, directors and an
officer and director of ARDCO for services rendered. The Board
of Directors of GVI is currently reviewing the foregoing
transactions and will determine shortly whether or not the
resolution of the issues on July 8, 1997 was appropriate under all
of the circumstances.
NOTE 7 - GOING CONCERN
The Company's financial statements have been prepared using
generally accepted accounting principles applicable to a going
concern which contemplates the realization of assets and
liquidation of liabilities in the normal course of business. The
Company has incurred significant losses since inception, has a
substantial working capital deficit and has debt significantly in
excess of stockholders' equity. During the year ended March 31,
1997, the Company was able to raise working capital through the
private placement of its common stock. However, cash flow
projections show that the Company's reserves are not adequate to
cover its needs for the near future. Management of the Company
plans to raise additional capital through a private placement or
additional debt financing and the Company anticipates generating
additional revenue from increased sales.
15
<PAGE>
Item 2. Management's Discussion & Analysis of Financial Condition and Results of
Operations
RESULTS OF OPERATIONS
For the Quarter Ended June 30, 1997, Compared to the Quarter Ended June 30,
1996.
Total revenue for the quarter ended June 30, 1997 decreased $122,000,
or 92 %, to $11,000, compared with $133,000 for the quarter ended June 30, 1996.
During the current period 1 lot was sold from the Cotton Manor Phase 4, a
townhome PUD. The lot was sold to Bruce Frodsham, Vice President of the Company
for $11,000, the approximate cost of the lot to the Company. During the
comparable prior year period, 5 lots were sold from Cotton Acres at an average
price of $26,600. The sales volume for a given period is largely dependent upon
the number of completed lots and condominiums available for sale in inventory.
During the past year there has been very little capital available for
development and therefore there has been little inventory available for sale.
Cost of sales decreased by $65,582, or 86%, to $11,000 for the quarter
ended March 31, 1997 from $76,582 for same quarter in 1996. The change is
directly related to the number of units sold during each period. Correspondingly
gross profit decreased to 0 during the current period as the only lot sold was
sold at cost. Gross profit in the prior period was $56,418.
General and administrative expenses increased $96,727, 62%, to $253,246
for the quarter ended June 30, 1997 from $156,519 the quarter ended June 30,
1996. The increase was principally attributable to the costs incurred in
developing an internet website and promotional literature, and related printed
material.
The Company experienced a net loss of $253,165 in the current period
compared with a net loss of $95,227 in the prior period.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1997, the Company had total assets of $12,882,259, total
liabilities of $9,388,423 and total stockholders equity of $3,493,836 compared
with total assets of $12,639,500, total liabilities of $8,892,458 and total
stockholders equity of $3,747,042 at March 31, 1997. The increase in total
assets of $242,759, 2% is due primarily to $201,968 of capitalized development
related interest. Total liabilities at June 30, 1997 increased $495,965, 6%,
from March 31, 1997. The increase is due primarily to an increase in long term
debt of $208,825, 3%, attributable to additional borrowings from Miltex
Industries of 202,000, and an increase in current liabilities of $287,140, 11%,
explained below.
As of June 30, 1997, the Company had total current assets of $964,758
and total current liabilities of $2,823,267 which results in a current ratio of
0.34:1, compared to a current ratio of 0.38:1 as of March 31, 1997. The current
ratio decrease was due primarily to an increase in current liabilities. Current
liabilities at June 30, 1997 increased $287,140, 11%, over March 31, 1997 due to
an increase in accounts payable of $144,827, 15%, and an increase in ad expenses
of $161,709, 25%. Both increases are related to the decrease in cash flowing
into the Company from decreases in the sale of real estate and borrowings during
the period, limiting the Company's ability to pay its obligations. The decrease
in cash of $13,831, 48%, and the increase in real estate inventories of
$171,115, 2%, result in a net change to current assets of $3,284, 0%.
16
<PAGE>
The Company has historically satisfied its cash needs through the sale
of real estate in Cotton Manor and Cotton Acres and private placements of
securities and secured borrowings. During the quarter ended June 30, 1997, the
Company sold one lot in the Cotton Manor PUD development. This figure is
substantially lower than prior periods, but lot sales should increase as the
development of 19 lots in Phase 10 of Cotton Acres are completed and sales are
initiated in late August 1997. Management of the Company can give no assurance
that cash flow from the sale of lots will be sufficient to fund the Company's
operations.
Completion of Phase I in Red Hawk and the subsequent sale of lots in
Phase I will depend largely on the ability of the Company, to raise additional
funds, preferably long term financing, on acceptable terms and conditions. The
Company is pursuing development loans in the $10,000,000 to $14,000,000 range
and looking for a potential merger, and, or acquisitions. GVI will also continue
to develop and sell lots and townhomes in the Cotton Manor/Acres development as
financing becomes available. Theses sales will not be sufficient to financially
support the Company's overhead and the Red Hawk project. The Company's ongoing
overhead and land obligations are approximately $75,000 per month. Additionally,
GVI has approximately $900,000 of long-term debt due during 1998. If the Company
does not receive sufficient financing for the Red Hawk project, the Company
intends to meet its obligations through private or public offerings of common
and/or preferred stock for cash and additional borrowings. No assurance can be
given that the Company will succeed in obtaining sufficient financing for Red
Hawk or, if unsuccessful that it will raise sufficient cash to meet its
obligations through the sale of securities or additional borrowings.
PART II
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of the Company's securities holders
during the quarter ended June 30, 1997.
Item 5. Other Information
None
17
<PAGE>
Item 6. Exhibits and Reports on Form S-K
(a) This Item is not applicable to the Company.
(b) No Report on Form 8-K was filed by the Company during the three
month period ended June 30, 1997.
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.
GOLF VENTURES, INC.
BY: /s/ Duane H. Marchant
------------------------------
DUANE H. MARCHANT, President
Dated: August 19, 1997
18
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