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 June 30,1997
( X ) 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
----------------------------------------------
(Address of principal executive offices)
(201) 635-0665
----------------------------------------------
Issuer's telephone number, including area code
Not applicable
-------------------------------------------------
(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 June 30, 1997, the issuer had 1,770,826 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: 14
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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 June 30, 1997 and December 31, 1996 ................. 3
Condensed Consolidated Statements of Operations
(Unaudited)- Three Months and Six Months Ended June
30, 1997 and 1996 and Cumulative from May 1, 1995 ......... 4-5
Condensed Consolidated Statements of Cash Flows
(Unaudited)- Six Months Ended June 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 June 30, 1997 ..................................... 7
Notes to Condensed Consolidated Financial
Statements (Unaudited)- Three Months and Six Months
Ended June 30,1997 and 1996 and Cumulative from May
1, 1995 ................................................... 8
Item 2. Management's Discussion and Analysis or Plan of Operation ...... 12
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K ............................... 13
SIGNATURES .............................................................. 14
2
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ITEM 1. FINANCIAL STATEMENTS
AMERICAN SPORTS HISTORY INCORPORATED AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
June 30, December 31,
1997 1996
ASSETS ----------- -----------
Current Assets:
Cash $8 $8
Prepaid Taxes 3,442 3,442
----------- -----------
Total Current Assets 3,450 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 $38,450 $38,450
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts Payable and Accrued expenses $297,361 $298,839
Due to Officer 267,697 166,669
Loan from Stockholder (Note 3) 62,279 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 704,997 593,428
Stockholders' Deficit (Notes 2 and 6)
Common Stock $.01 par value; authorized
25,000,000 shares issued and
outstanding- 1,770,826 shares at June 30, 1997
and 13,958,262 shares at December 31, 1996 17,708 13,958
Additional Paid-In Capital 1,220,264 1,216,514
Deficit (Deficit of $1,820,122 accumulated
since May 1, 1995) (1,904,519) (1,785,450)
----------- -----------
Total Stockholder's Deficit (666,547) (554,978)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $38,450 $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 JUNE 30, 1997 AND 1996
1997 1996
---------- ----------
REVENUES
Interest $69
---------- ----------
EXPENSES
General and Administrative 57,109 104,477
Consulting fees 2,500 33,300
---------- ----------
Total Expenses 59,609 137,777
------------------------
---------- ----------
NET LOSS ($59,609) ($137,708)
========== ==========
---------- ----------
NET LOSS PER COMMON SHARE ($0.04) ($0.01)
========== ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 1,520,826 11,890,000
========== ==========
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)
SIX MONTHS ENDED JUNE 30, 1997 AND 1996
AND CUMULATIVE FROM MAY 1, 1995
Cumulative
from May 1,
1997 1996 1995
---------- ---------- -----------
REVENUE
Interest $163 $468
---------- ---------- ----------
EXPENSES
General and administrative 116,569 306,309 1,277,759
Consulting and promotion fees 2,500 385,800 461,975
Write-off of advances for
terminated acquistion 80,856
---------- ---------- -----------
Total Expenses 119,069 692,109 1,820,590
---------- ---------- -----------
---------- ---------- -----------
NET LOSS ($119,069) ($691,946) ($1,820,122)
========== ========== ===========
NET LOSS PER COMMON SHARE ($0.08) ($0.06)
========== ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 1,458,326 11,890,000
========== ==========
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 SIX MONTHS ENDED JUNE 30, 1997 AND 1996
AND CUMULATIVE FROM MAY 1, 1995
Cumulative
from May 1,
1997 1996 1995
---------- ---------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Loss from continuing operations ($119,069) ($691,946) ($1,820,122)
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 7,500 170,000 490,508
Changes in operating assets and liabilities:
Other assets (5,000)
Increase in Due to Officer 101,028 106,000 267,697
Increase (Decrease) in Accounts
payable and accrued expenses (1,478) 109,300 247,522
---------- ---------- -----------
Net cash used in operating activities (12,019) (306,646) (681,895)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of notes 23,400
Loan from stockholder 12,019 26,853 62,279
Sale of common stock 277,500 573,964
Liability from sales of
common stock rescinded (2,640) 22,260
---------- ---------- -----------
Net cash provided by financing activities 12,019 301,713 681,903
---------- ---------- -----------
NET INCREASE (DECREASE) IN CASH 0 (4,933) 8
CASH-Beginning of period 8 6,626
---------- ---------- -----------
CASH-End of period $8 $1,693 $8
========== ========== ===========
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 SIX MONTHS ENDED JUNE 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)
------------------------------------------------------------------------
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)
------------------------------------------------------------------------
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)
========================================================================
</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 SIX MONTHS ENDED JUNE 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 six months
ended June 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 June 30, 1997,
the results of operations for the three and six months ended June 30,
1997 and 1996 and cumulative from May 1, 1995, and the changes in cash
flows for the six months ended June 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 intercompany accounts
and transactions have been eliminated in consolidation.
8
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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 six months ended June 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
six months ended June 30, 1997, the Company incurred a net loss of
$119,069 resulting in a stockholders' deficit of $666,547 at June 30,
1997.
Management of the Company has currently prepared 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.
9
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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
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 six month periods ended June 30, 1997 was $585 and $1,170,
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 commom 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 June 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.
10
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On May 30, 1997, the Company issued 375,000 shares of its common stock,
comprised of 250,000 shares issued to its Chief Executive Officer
(stock in lieu of cash under employment agreement) and 125,000 shares
for services rendered by an outside consultant. The shares were valued
at $7,500.
11
<PAGE>
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 June 30, 1997 and 1996-
For the three month period ended June 30, 1997, general and
administrative expenses were $57,109 and consisted primarily of the accrual of
the Company's Chief Executive Officer's salary and related benefits.
For the three month period ended June 30,1996, general and
administrative expenses of $104,477 consisted of office expenses, legal and
accounting fees and travel and entertainment. Consulting fees of $33,300
consisted of fees to consultants, employees and officers for services rendered.
During the three months ended June 30, 1997 and 1996, the Company had
net losses of $59,609 and $137,708 respectively. Interest expense for the three
month period ended June 30, 1977 was $585.
Six Months Ended June 30, 1997 and 1996-
For the six months ended June 30, 1997, general and administrative
expenses were $116,569 and consisted primarily of the accrual of the Chief
Executive Officer's salary and related benefits.
For the six months ended June 30, 1996, general and administrative
expenses were $306,309, and consisted of office expenses, legal and accounting
fees and travel and entertainment. Consulting and promotion fees of $385,300
consisted of fees to consultants, employees and officers for services rendered
as well as fees for certain contractual commitments.
During the six months ended June 30, 1997 and 1996, the Company had net losses
of $119,069 and $691,946 respectively.
Financial Condition-June 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
12
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certain 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 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.
During the six months ended June 30, 1997, the Company issued 375,000
shares of its common stock for services rendered, to the Company's Chief
Executive Officer (stock in lieu of cash payment under employment agreement) and
an outside consultant. The stock was valued at $7500.
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 June 30, 1997-None
13
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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)
14
<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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 8
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,450
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 38,450
<CURRENT-LIABILITIES> 704,997
<BONDS> 0
0
0
<COMMON> 17,708
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 38,450
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,170
<INCOME-PRETAX> (119,069)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (119,069)
<EPS-PRIMARY> (.08)
<EPS-DILUTED> (.08)
</TABLE>
