UNITED STATES 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 September 30, 1997
( ) Transition Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from _____to_____
Commission file number: 33-55254-46
AMERICAN SPORTS HISTORY INCORPORATED
--------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Nevada 87-0485307
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
18-I Heritage Drive, Chatham, New Jersey 07928
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(Address of principal executive offices)
(201) 635-0665
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Issuer's telephone number, including area code
Not applicable
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(Former name, former address and former fiscal year,
if changed since last report.)
Check whether the issuer (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. Yes ( X ) No ( )
As of September 30, 1997, the issuer had 2,770,826 shares of its common stock
issued and outstanding or to be issued.
Transitional Small Business Disclosure Format: Yes ( ) No ( X )
Total sequentially number pages in this document: 13
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AMERICAN SPORTS HISTORY INCORPORATED AND SUBSIDIARY
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Page
Condensed Consolidated Balance Sheets (Unaudited)-
As of September 30, 1997 and December 31, 1996.......... 3
Condensed Consolidated Statements of Operations
(Unaudited)- Three Months and Nine Months Ended
September 30, 1997 and 1996 and Cumulative from
May 1, 1995............................................. 4-5
Condensed Consolidated Statements of Cash Flows
(Unaudited)- Nine Months Ended September 30, 1997
and 1996 and Cumulative from May 1, 1995................ 6
Condensed Consolidated Statement of Stockholders'
Deficit (Unaudited)- For the period January 1,1996
through September 30, 1997.............................. 7
Notes to Condensed Consolidated Financial
Statements (Unaudited)- Three Months and Nine
Months Ended September 30,1997 and 1996 and
Cumulative from May 1, 1995............................. 8
Item 2. Management's Discussion and Analysis or Plan of Operation..... 11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.............................. 12
SIGNATURES............................................................. 13
2
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ITEM 1. FINANCIAL STATEMENTS
AMERICAN SPORTS HISTORY INCORPORATED AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
September 30, December 31,
1997 1996
---------- ----------
ASSETS
Current Assets:
Cash $13 $8
Prepaid Taxes 3,442 3,442
---------- ----------
Total Current Assets 3,455 3,450
Other Assets:
Deposit (Note 4) 30,000 30,000
Trade Name 5,000 5,000
---------- ----------
Total Other Assets 35,000 35,000
---------- ----------
TOTAL ASSETS $38,455 $38,450
========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts Payable and Accrued expenses $291,417 $298,839
Due to Officer 271,166 166,669
Loan from Stockholder (Note 3) 73,217 50,260
Notes Payable (Note 3) 23,400 23,400
Liability from Sale of Common Stock
subsequently rescinded 22,260 22,260
Income Taxes Payable resulting from
Discontinued Operations 32,000 32,000
---------- ----------
Total Current Liabilities 713,460 593,428
Stockholders' Deficit (Notes 2 and 6)
Common Stock $.01 par value; authorized
25,000,000 shares issued and outstanding-
2,770,826 shares at September 30, 1997
and 13,958,262 shares at December 31, 1996 27,708 13,958
Additional Paid-In Capital 1,260,264 1,216,514
Deficit (Deficit of $1,878,580
accumulated since May 1, 1995) (1,962,977) (1,785,450)
---------- ----------
Total Stockholder's Deficit (675,005) (554,978)
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $38,455 $38,450
========== ==========
See Notes To Condensed Consolidated Financial Statements.
3
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AMERICAN SPORTS HISTORY AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
1997 1996
---------- ----------
REVENUES
Interest $24
---------- ----------
EXPENSES
General and Administrative 58,458 81,421
Consulting fees 60,250
---------- ----------
Total Expenses 58,458 141,671
---------- ----------
---------- ----------
NET LOSS ($58,458) ($141,647)
========== ==========
---------- ----------
NET LOSS PER COMMON SHARE ($0.03) ($0.01)
========== ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 1,770,826 12,023,829
========== ==========
See Notes To Condensed Consolidated Financial Statements.
4
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AMERICAN SPORTS HISTORY INCORPORATED AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
AND CUMULATIVE FROM MAY 1, 1995
Cumulative
from May 1,
1997 1996 1995
---------- ----------- ----------
REVENUE
Interest $187 $468
---------- ----------- ----------
EXPENSES
General and administrative 175,027 386,730 1,336,217
Consulting and promotion fees 2,500 447,050 461,975
Write-off of advances for terminated
acquistion 80,856
---------- ----------- ----------
Total Expenses 177,527 833,780 1,879,048
---------- ----------- ----------
NET LOSS ($177,527) ($833,593) ($1,878,580)
========== =========== ==========
NET LOSS PER COMMON SHARE ($0.09) ($0.07)
========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 1,895,826 11,855,683
========== ===========
See Notes to Condensed Consolidated Financial Statements.
5
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AMERICAN SPORTS HISTORY INCORPORATED AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
AND CUMULATIVE FROM MAY 1, 1995
<TABLE>
<CAPTION>
Cumulative
from May 1,
1997 1996 1995
------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C>
Loss from continuing operations ($177,527) ($833,593) ($1,878,580)
Adjustments to reconcile loss from
operations to net cash provided by
(used in) operating activities:
Write-off of Prepaid Royalty 137,500
Shares of common stock issued for services 57,500 201,250 540,508
Changes in operating assets and liabilities:
Other assets (5,000) (5,000)
Increase in Due to Officer 104,497 175,000 271,166
Increase (Decrease) in Accounts
payable and accrued expenses (7,422) 121,675 241,578
------------------------------------
Net cash used in operating activities (22,952) (340,668) (692,828)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of notes 23,400 23,400
Loan from stockholder 22,957 26,853 73,217
Sale of common stock 287,500 573,964
Liability from sales of common stock rescinded (2,640) 22,260
------------------------------------
Net cash provided by financing activities 22,957 335,113 692,841
------------------------------------
NET INCREASE (DECREASE) IN CASH 5 (5,555) 13
CASH-Beginning of period 8 6,626
------------------------------------
CASH-End of period $13 $1,071 $13
====================================
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
6
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AMERICAN SPORTS HISTORY INCORPORATED AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT (UNAUDITED)
YEAR ENDED DECEMBER 31, 1996 AND NINE MONTHS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
Average Additional
Price Common Stock Paid-in Accumulated
Dates Per Share Shares Amount Capital Deficit
---------- --------- ---------- ------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, December 31, 1995 10,296,112 $10,297 $485,084 ($623,052)
Shares issued for services 1/96-12/96 $0.11 2,428,400 2,428 257,655
Shares issued for assets 1/96-6/96 $0.25 670,000 670 166,830
Sale of common stock 1/96-12/96 $0.55 563,750 563 306,945
Net loss for the year ended
December 31, 1996 (1,162,398)
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BALANCE, December 31, 1996 13,958,262 13,958 1,216,514 (1,785,450)
Net loss for the three month
ended March 31, 1996 (59,460)
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BALANCE, March 31, 1997 13,958,262 13,958 1,216,514 (1,844,910)
Effect of 1 for 10 reverse
stock split (Note 6) 5/15/97 (12,562,436)
Shares issued for services 5/30/97 $0.02 375,000 3,750 3,750
Net loss for the three months ended
June 30, 1997 (59,609)
-----------------------------------------------------
BALANCE, June 30, 1997 1,770,826 $17,708 $1,220,264 ($1,904,519)
=====================================================
Shares issued for services 7/2/97 $0.05 1,000,000 10,000 40,000
Net loss for the three months ended
September 30, 1997 (58,458)
-----------------------------------------------------
BALANCE, September 30, 1997 2,770,826 $27,708 $1,260,264 $1,962,977
=====================================================
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
7
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AMERICAN SPORTS HISTORY INCORPORATED AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
AND CUMULATIVE FROM MAY 1, 1995
1. ORGANIZATION AND BASIS OF PRESENTATION
Organization- The Company was incorporated in the State of Nevada on
August 9, 1990 as National Logistics, Inc. National Logistics, Inc.
changed its name to Fans Holdings, Inc. on June 30, 1995, and
subsequently to American Sports History Incorporated ("ASH") on
September 20, 1995. On August 21, 1995, ASH acquired 100% of the
capital stock of Infinet, Inc. ("Infinet"). As used in this document,
the "Company " refers to ASH and its subsidiary, Infinet, unless the
context indicates otherwise.
Basis of Presentation- For accounting purposes, the acquisition of
Infinet by ASH has been treated as a recapitalization of Infinet, with
Infinet as the acquirer (reverse acquisition). ASH had no assets or
operations prior to May 1995. The historical financial statements prior
to August 21, 1995 were those of Infinet. The business of Infinet has
historically been investing and consulting, but in conjuction with its
acquisition by ASH, the Company commenced the business of publishing a
variety of nostalgic sports magazines effective May 1, 1995.
Accordingly, the historical operations of Infinet were classified as
discontinued operations. Although planned principal operations have
commenced, since the Company has not generated any revenues from
operations, the Company is still considered to be in the development
stage, and therefore cumulative results of operations and cash flows
have been presented.
Net Loss per Common Share- In August 1995, the Company issued new
shares of common stock in consideration for the acquisition of Infinet,
in a transaction, which has been accounted for as a reverse
acquisition. Net loss per common share for the three and nine months
ended September 30, 1997, is calculated based on the weighted average
number of common shares outstanding.
The accompanying consolidated financial statements are unaudited but,
in the opinion of management of the Company, contain all adjustments
necessary to present fairly the financial position at September 30,
1997, the results of operations for the three and nine months ended
September 30, 1997 and 1996 and cumulative from May 1, 1995, and the
changes in cash flows for the nine months ended September 30, 1997 and
1996 and cumulative from May 1, 1995. These adjustments are of a normal
recurring nature. The consolidated balance sheet as of December 31,
1996 is derived from the Company's audited financial statements. The
accompanying consolidated financial statements include the operations
of ASH and its wholly-owned subsidiary, Infinet. All significant
inter-company accounts and transactions have been eliminated in
consolidation.
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Certain information and footnote disclosures normally included in
financial statements that have been prepared in accordance with
generally accepted accounting principles have been condensed or omitted
pursuant to the rules and regulations of the Securities and Exchange
Commission, although management of the Company believes that the
disclosures contained in these financial statements are adequate to
make the information presented therein not misleading. For further
information, refer to the consolidated financial statements and notes
thereto included in the Company's Annual Report on Form 10-KSB for the
year ended December 31, 1996, as filed with the Securities and Exchange
Commission.
The results of operations for the three and nine months ended September
30, 1997 are not necessarily indicative of the results of operations to
be expected for the full year ending December 31, 1997.
2. GOING CONCERN
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and
satisfaction of liabilities in the normal course of business. The
financial statements do not include any adjustments relating to the
recoverability of the recorded assets or the classification of the
liabilities that might be necessary should the Company be unable to
continue as a going concern.
The Company incurred a net loss of $1,162,398 for the year ended
December 31, 1996, resulting in an accumulated deficit of $1,785,450
and a stockholders' deficit of $554,978 at December 31, 1996. For the
nine months ended September 30, 1997, the Company incurred a net loss
of $177,527 resulting in a stockholders' deficit of $675,005 at
September 30, 1997.
Management of the Company has a business plan summarizing its strategy
through December 1998. Under this plan, approximately $5,000,000 will
be required through December 1998, to pay off current debt and fund the
start up of its sports magazine. The Company is currently negotiating
with several independent parties regarding certain potential contracts
that will help achieve the promotion of its magazine. The intention is
to raise capital through the sale of its equity securities and/or to
seek outside private sources of financing. There can be no assurances
that the Company will be successful in its attempts to raise sufficient
capital essential to its survival. To the extent the Company is unable
to raise the necessary operating capital, it will not be able to
implement its business plan, and it will become necessary to curtail or
cease operations. Additionally, even if the Company does raise
sufficient operating capital, there can be no assurances that the net
proceeds will be sufficient enough to enable it to develop its business
to a level where it will generate profits and cash flows from
operations.
3. TRANSACTIONS WITH RELATED PARTIES
LOAN FROM STOCKHOLDER/NOTES PAYABLE- Loan from stockholder reflects
advances made to and expenses paid on behalf of the Company by a
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stockholder related to the Chief Executive Officer of the Company.
Proceeds from issuance of notes represents direct loans made to the
Company by stockholders. The loans and notes are due on demand. The
notes bear interest at 10% per annum. Interest expense for the three
and nine month periods ended September 30, 1997 was $585 and $1,755,
respectively.
4. ACQUISITION OF OTHER ASSETS
Deposits- On January 30, 1996, the Company issued 120,000 shares of its
restricted common stock for the acquisition of a film library
consisting of 16 hours of sports footage film and license rights to use
36 hours of footage from Historical Footage film library (not related
to sports). As stipulated in the contract, the Company also agreed to
issue up to an additional 120,000 shares of common stock in the event
that the initial 120,000 shares were not sufficient to generate
$600,000 of proceeds to the seller. The Company valued the 120,000
shares of common stock issued at estimated fair value of $.25 per
share, and recorded the aggregate value of such shares of $30,000 as a
deposit for the film library during the year ended December 31, 1996.
As of September 30, 1997, no additional shares of stock were issued.
The Company is currently negotiating a revision of the original
contract terms with the owner of the film library. No conclusion has
yet been reached.
5. COMMITMENTS AND CONTINGENCIES
Legal Proceedings- On June 30, 1996 a default judgment was entered
against Infinet Inc., the wholly-owned subsidiary of American Sports
History Inc. and certain of the Company's principal stockholders by a
former affiliated party of Infinet Inc., alleging breach of contractual
commitments and other matters. Legal counsel for the Company has
advised management that this matter is in the process of being settled
for a nominal amount.
On August 2, 1996, the Company became a defendant in a case involving
one of its current stockholders. The plaintiff is seeking a refund of
approximately $200,000, the original amount invested in the Company's
common stock. Management and legal counsel for the Company believe the
allegations brought by the plaintiff have no merit. The Company is
attempting to settle the case out of court.
6. COMMON STOCK
On May 15, 1997, the Board of Directors of the Company authorized a 1
for 10 reverse stock split upon unanimous approval by its stockholders.
As of that date, the total number of common shares issued and
outstanding was reduced from 13,958,262 (no stock was issued by the
Company between December 31, 1996 and May 15, 1997) to 1,395,826, and
related par value was increased to .01 cents per common share from .001
cents per common share.
On July 2,1997, the Company issued 1,000,000 shares of its common stock
valued at $50,000, to its Chief Executive Officer in lieu of cash
payment under his employment contract with the Company.
10
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Overview:
Effective August 21, 1995, ASH acquired Infinet. For accounting
purposes, the acquisition of Infinet by ASH was treated as a recapitalization of
Infinet, with Infinet as the acquirer (reverse acquisition). The historical
financial statements prior to August 21, 1995 are those of Infinet. The business
of Infinet has historically been investing and consulting, but in conjunction
with its acquisition by ASH, the Company commenced efforts to publish a variety
of nostalgic sports magazines. Although planned principal operations have
commenced, since the Company has not yet generated any revenues from operations,
the Company is still considered to be in the development stages.
Statements of Operations:
Three Months Ended September 30, 1997 and 1996-
For the three month period ended September 30, 1997, general and
administrative expenses were $58,458 and consisted primarily of the accrual of
the Company's Chief Executive Officer's salary and related benefits.
For the three month period ended September 30,1996, general and
administrative expenses of $81,421 consisted of office expenses, legal and
accounting fees and travel and entertainment. Consulting and promotion fees of
$60,250 consisted of fees to consultants, employees and officers for services
rendered.
During the three months ended September 30, 1997 and 1996, the Company
had net losses of $58,458 and $141,647 respectively. Interest expense for the
three month period ended September 30, 1977 was $585.
Nine Months Ended September 30, 1997 and 1996-
For the nine months ended September 30, 1997, general and
administrative expenses were $175,027 and consisted primarily of the accrual of
the Chief Executive Officer's salary and related benefits.
For the nine months ended September 30, 1996, general and
administrative expenses were $386,730, and consisted of office expenses, legal
and accounting fees and travel and entertainment. Consulting and promotion fees
of $477,050 consisted of fees to consultants, employees and officers for
services rendered as well as fees for certain contractual commitments.
During the nine months ended September 30, 1997 and 1996, the Company had net
losses of $177,527 and $833,593 respectively.
Financial Condition-September 30,1997:
Liquidity and Capital Resources-
Management of the Company has a business plan summarizing its strategy
through December 1998. Under this plan, approximately $5,000,000 will be
required to pay off current debt and fund the start up of its sports magazine.
The Company is currently negotiating with several independent parties regarding
certain contracts that will help achieve the promotion of its magazine. The
11
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intention is to raise capital through the sale of its equity securities and/or
to seek outside private sources of financing. There can be no assurances that
the Company will be successful in its attempts to raise the necessary capital
essential to its survival. To the extent the Company is unable to raise the
necessary operating capital, it will not be able to implement its business plan,
and it will become necessary to curtail or cease operations. Additionally, even
if the Company does raise sufficient operating capital, there can be no
assurances that the net proceeds will be sufficient enough to enable it to
develop its business to a level where it will generate profits and cash flows
from operations.
Management of the Company believes that it will be able to sustain
limited operations during the year ending December 31, 1997, with the cash
resources generated by the continuing sale of small amounts of common stock, and
through management's ability to control discretionary expenditures. Except for
the Company's employment agreement with its Chief Executive Officer, the Company
has no other fixed expenses. The Company intends to defer the cash payment of
compensation to the officer until such time as the Company has adequate working
capital and/or cash flow. To the extent possible, the Company intends to
continue to issue shares of its common stock to its officer and consultants for
services rendered, in order to conserve working capital.
On July 2, 1997, the Company issued 1,000,000 shares of its common
stock valued at $50,000, to its Chief Executive Officer (stock in lieu of cash
payment under employment agreement).
PART II. OTHER INFORMATION
ITEM 6. EXIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit
Number Description
------ -----------
10.1 Purchase Agreement between American Sports History
Incorporated and Vernon Nobles dated February 2, 1996,
Previously filed as Exhibit 10.2 to the Company's Annual
Report on Form 10-KSB for the fiscal year ended December
31, 1995, and incorporated herein by reference thereto.
27 Financial Data Schedule (electronic filing only)
(b) Reports of Form 8-K
Three Months Ended September 30, 1997-None
12
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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.
AMERICAN SPORTS HISTORY INCORPORATED
------------------------------------
(Registrant)
Date: January 16, 1998 By: /s/ VINCENT M. NERLINO
--------------------------
Vincent M. Nerlino
President, CEO
(Duly authorized officer and
principal financial officer)
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONDENSED CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN THE COMPANY'S
QUARTERLY REPORT ON FORM 10-QSB FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 13
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,455
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 38,455
<CURRENT-LIABILITIES> 713,460
<BONDS> 0
0
0
<COMMON> 27,708
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 38,455
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,755
<INCOME-PRETAX> (177,527)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (177,527)
<EPS-PRIMARY> (.09)
<EPS-DILUTED> (.09)
</TABLE>
