U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
( X ) REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2000
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)
21 Maple Avenue, Bay Shore, New York 11706-8752
(Address of principal executive offices)
(631) 206-2674
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 May 10, 2000, the issuer had 9,466,026 shares of its
common stock issued and outstanding or to be issued.
Transitional Small Business Disclosure Format: Yes ( ) No (X)
<PAGE>
AMERICAN SPORTS HISTORY INCORPORATED AND SUBSIDIARIES
(A Development Stage Company)
FORM 10-QSB - MARCH 31, 2000
INDEX
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 2000 and December 31, 1999 1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended March 31, 2000 and 1999
and cumulative from May 1, 1995 2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31, 2000 and 1999
and cumulative from May 1, 1995 3
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 4 - 6
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION 7 - 8
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS 9
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K 9
SIGNATURES 10
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
AMERICAN SPORTS HISTORY INCORPORATED AND SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2000 1999
(Unaudited)
ASSETS
Current assets
Cash $ 476,280 $ 228
Prepaid expenses 2,500 6,250
Total current assets 478,780 6,478
Other assets 9,234 9,984
$ 488,014 $ 16,462
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued expenses $ 584,896 $ 507,382
Notes payable to officers 179,048 174,548
Notes payable and accrued interest 1,238,112 615,785
Liability from settlement of lawsuit 120,000 120,000
Total current liabilities 2,122,056 1,417,715
Liability from settlement of lawsuits, non-current 25,000 25,000
Notes payable to director 281,697 274,771
Total liabilities 2,428,753 1,717,486
Commitments and contingencies
Stockholders' deficit
Common stock, $.001 par value; 25,000,000 shares 9,466 9,466
authorized, 9,466,026 shares issued
and outstanding
Additional paid-in capital 2,362,450 2,313,479
Accumulated deficit ($4,220,758 accumulated (4,305,155) (3,971,469)
during the development stage)
Unearned compensation (7,500) (52,500)
Total stockholders' deficit (1,940,739) (1,701,024)
$ 488,014 $ 16,462
See notes to condensed consolidated financial statements.
1
<PAGE>
AMERICAN SPORTS HISTORY INCORPORATED AND SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Cumulative
Three months ended from
March 31, May 1,
2000 1999 1995
Revenue
Interest income $ $ 9 $ 504
Expenses
Product development 63,827 80,000 530,535
General and administrative 269,859 140,869 3,431,371
Lawsuit settlements - - 178,500
Write-off of advances for
terminated acquisition - - 80,856
333,686 220,869 4,221,262
Net loss $ (333,686) $ (220,860) $ (4,220,758)
Basic and diluted net loss per share $ (0.04) $ (0.02)
Weighted average number of common
shares outstanding 9,466,026 9,746,026
See notes to condensed consolidated financial statements.
2
<PAGE>
AMERICAN SPORTS HISTORY INCORPORATED AND SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended Cumulative
March 31, From May 1,
2000 1999 1995
INCREASE (DECREASE) IN CASH
Cash flows from operating activities
Net loss $ (333,686) $ (220,860) $(4,220,758)
Adjustments to reconcile net loss to
net cash used in operating activities
Write-off of prepaid royalty - - 137,500
Depreciation and amortization 750 283 6,329
Write-off of deposit - - 30,000
Impairment of goodwill - - 14,437
Common stock issued for partial - - 6,000
settlement of lawsuit
Stock options issued to non- 44,562 18,000 128,978
employees for services
Common stock issued for services 45,000 - 1,121,802
Imputed interest on notes 4,409 - 14,861
payable to officers
Changes in assets and liabilities
Prepaid expenses and other assets 3,750 - (4,058)
Liability from settlement of lawsuits - - 167,500
Accounts payable and 76,929 (3,500) 534,933
accrued expenses
Loan from director - 402,541 128,341
Accrued interest 12,338 2,227 45,602
Net cash used in operating activities (145,948) (75,509) (1,614,333)
Cash flows from investing activities
Purchase of equipment and domain name - (2,000) (10,000)
Cash flows from financing activities
Proceeds from issuance of notes to
officers 4,500 - 179,048
Proceeds from issuance of notes 637,500 250,000 1,234,400
Repayment of notes (20,000) - (86,500)
Loans from director - 3,385 120,441
Issuance of common stock - - 630,964
Liability from sale of
common stock rescinded - - 22,260
Net cash provided by
financing activities 622,000 253,385 2,100,613
Net increase in cash 476,052 175,876 476,280
Cash, beginning of period 228 3,344 -
Cash, end of period $ 476,280 $ 179,220 $ 476,280
See notes to condensed consolidated financial statements.
3
<PAGE>
AMERICAN SPORTS HISTORY INCORPORATED AND SUBSIDIARIES
(A Development Stage Company)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
1 Basis of presentation and management's plan
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 ("AMSH" or the "Company") on September 20,
1995. On August 21, 1995, AMSH acquired 100% of the capital
stock of Infinet, Inc. ("Infinet"). For accounting purposes,
the acquisition of Infinet by AMSH has been treated as a
recapitalization of Infinet, with Infinet as the acquirer
(reverse acquisition). AMSH had no assets or operations
prior to May 1995. Although the Company has incurred a
significant amount of start-up costs, since the Company has
not generated any revenue from operations, it is still
considered to be in the development stage.
The Company incurred a net loss of $333,686 for the three
months ended March 31, 2000, resulting in an accumulated
deficit of $4,305,155. Management of the Company is
continuing to develop a business plan summarizing its
strategy for the next several years. This plan is now
focused on providing U.S. sports and educational content
utilizing all available technologies of the Internet, media,
advanced telecommunications and storage technologies. Under
this plan, significant cash will be required through
December 2000 to pay off current debt and fund its
implementation. The intention is to raise capital through
the sale of its equity securities and/or to seek outside
private sources of financing. In connection with this, the
Company has issued approximately $637,000 in non-interest
bearing promissory notes to various parties during the first
quarter of 2000. In addition, the Company issued
approximately $415,000 in non-interest bearing promissory
notes to various parties during the period April 1, 2000
through May 10, 2000. See Note 6 for information on current
private offering. Significant additional cash will be
required.
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.
These matters raise substantial doubt about the Company's
ability to continue as a going concern. However, the
accompanying consolidated 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.
2 Significant accounting policies
Interim financial information
The condensed consolidated balance sheet as of March 31,
2000, and the condensed consolidated statements of
operations and cash flows for the three months ended March
31, 2000 and 1999 and cumulative from May 1, 1995, have been
prepared by the Company without audit. These interim
financial statements include all adjustments, consisting
only of normal recurring accruals, which management
considers necessary for a fair presentation of the financial
statements for the above periods. The results of operations
for the three months ended March 31,
4
<PAGE>
2 Significant accounting policies (continued)
Interim financial information (continued)
2000, are not necessarily indicative of results that may be
expected for any other interim periods or for the full year.
These condensed consolidated financial statements should be
read in conjunction with the consolidated financial
statements and notes thereto for the year ended December 31,
1999. The accounting policies used in preparing the
condensed consolidated financial statements are consistent
with those described in the December 31, 1999 consolidated
financial statements.
Principles of consolidation
The consolidated financial statements include the accounts
of the Company and its wholly owned subsidiaries. All
significant intercompany transactions and balances have been
eliminated in consolidation.
Stock options
Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" ("SFAS 123")
establishes a fair value-based method of accounting for
stock compensation plans. The Company has chosen to adopt
the disclosure requirements of SFAS 123 and continue to
record stock compensation for its employees in accordance
with Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees" ("APB 25"). Under APB 25,
charges are made to operations in accounting for stock
options granted to employees when the option exercise prices
are below the fair market value of the common stock at the
grant date. Options granted to non-employees are recorded
in accordance with SFAS 123.
Use of estimates
In preparing condensed consolidated financial statements in
conformity with generally accepted accounting principles,
management makes estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures
of contingent assets and liabilities at the date of the
condensed consolidated financial statements, as well as the
reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those
estimates.
Reclassifications
Certain reclassifications have been made to the condensed
consolidated financial statements shown for the prior
periods in order to conform to the current period's
classifications.
3 Transactions with related parties
Notes payable to officers
Notes payable to officers totaling $179,048 at March 31,
2000 represent advances made by two of the Company's
officers to be used for working capital purposes. These
advances are non-interest bearing and have no scheduled
repayment terms. Interest expense, at an annual rate of 10%,
has been imputed on these notes and reflected as additional
paid-in capital.
Notes payable to director
Notes payable to director ($281,697 at March 31, 2000)
includes notes payable to the Company's Chairman of the
Board ($190,109) and his spouse ($91,588). These notes are
non-interest
5
<PAGE>
bearing with a face amount aggregating
$370,441, and are payable in full on December 31, 2002.
Accordingly, interest expense, at an annual rate of 10%, has
been imputed on these notes.
4 Notes payable and accrued interest
Notes payable and accrued interest totaling $1,238,112 at March
31, 2000 represent loans made to the Company by various investors
as well as amounts owed to certain vendors which were converted
to formal notes. All of these notes are due on demand.
$1,042,698 of these notes are non-interest bearing and $195,414
of these notes bear interest at rates ranging from 7% to 10% per
annum.
5 Commitments and contingencies
Legal proceedings
On June 30, 1996, a default judgment was entered against
Infinet, the Company's wholly owned subsidiary, and certain
of the Company's principal stockholders by a former
shareholder of Fans Publishing Inc., alleging breach of
contractual commitments and other matters. Effective October
14, 1997, on behalf of himself and the Company, Mr. Nerlino
entered into a settlement agreement that required the
Company to pay $100,000 in cash and to issue 225,000 shares
of its common stock. As a result, the Company recorded a
charge to operations of $122,500 in 1997. The $100,000 is
payable, without interest, in two installments: $5,000
within 120 days of the agreement and $95,000 by October 14,
2000. The common stock was to be issued within 30 days of
the effective date of the agreement. Since the first cash
installment was paid in November 1998 and the common stock
was issued in June 1998, the Company became in default of
the agreement. Should any legal action be initiated against
the Company due to its late payment default, the Company
will vigorously defend itself.
On August 2, 1996, the Company became a defendant in a case
involving one of its current stockholders. The stockholder
was seeking a refund of approximately $200,000, the original
amount invested in the Company's common stock. On November
2, 1998, the Company entered into a settlement agreement
with the stockholder. Pursuant to the agreement, the Company
issued 50,000 shares of its common stock to the stockholder
in 1998. The Company is also obligated to pay $25,000 in May
2000 and $25,000 in November 2001.
The Company is delinquent in paying many of its outstanding
debts and has been notified by several creditors that they
have already initiated or may pursue legal remedies. The
Company believes that all amounts are appropriately accrued
in its financial statements. Since the Company does not
currently have the financial resources to satisfy these
debts, it intends to negotiate settlements with its
creditors in the near term. It is not possible to predict
the ultimate outcome of these matters.
6 Subsequent event
The Company is currently in the midst of a private offering,
pursuant to a confidential offering memorandum dated April
26, 2000, where holders of the Company's notes payable will
be allowed to exchange their notes for Company common stock
at a fixed exchange rate. At March 31, 2000, the Company
has notes payable to investors and officers aggregating
approximately $1,371,000 (excluding accrued interest).
Additionally, approximately $415,000 of promissory notes
were issued during the period from April 1, 2000 through May
10, 2000. All of these note holders have been offered the
opportunity to participate in the exchange. While the
Company anticipates completing the offering memorandum in
the first half of 2000, there can be no assurances that the
Company's offering will be successful.
6
<PAGE>
ITEM II - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Forward-looking statements
This Form 10-QSB includes, without limitation, certain
statements containing the words "believes", "anticipates",
"estimates", and words of a similar nature, constitute
"forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. This Act
provides a "safe harbor" for forward-looking statements to
encourage companies to provide prospective information about
themselves so long as they identify these statements as
forward looking and provide meaningful, cautionary
statements identifying important factors that could cause
actual results to differ from the projected results. All
statements other than statements of historical fact made in
this Form 10-QSB are forward-looking. In particular, the
statements herein regarding industry prospects and future
results of operations or financial position are forward-
looking statements. Forward-looking statements reflect
management's current expectations and are inherently
uncertain. The Company's actual results may differ
significantly from management's expectations.
Overview
Although the Company has incurred significant start-up
costs, since the Company has not yet generated any revenue
from operations, the Company is still considered to be in
the development stages.
Results of operations
During the quarter ended March 31, 2000 and March 31, 1999,
general and administrative expenses were $269,859 and
$140,869, respectively. Cumulative from May 1, 1995, the
Company has incurred $3,431,371 of general and
administrative expense. Product development expenses were
incurred during the quarter ended March 31, 2000 totaling
$63,827.
During the quarters ended March 31, 2000 and 1999, the
Company had net losses of $333,686 and $220,860,
respectively.
As of March 31, 2000 and 1999, the Company was a development
stage company that had not yet generated any revenue from
operations. The Company expects to incur continuing general
and administrative expenses, without any commensurate
operating revenue, until such time as it is able to commence
revenue-generating operations. The generation of revenue
will be dependent upon the Company raising substantial
working capital from the sales of equity securities and or
obtaining funds from loan proceeds, and operating revenues.
There can be no assurances, however, that the Company will
ultimately be successful in raising the necessary capital
and in establishing itself as a sports information and
services provider.
Liquidity and capital resources
The Company incurred a net loss of $333,686 for the three
months ended March 31, 2000, resulting in an accumulated
deficit of $4,305,155. Management of the Company is
developing a business plan summarizing its strategy for the
next several years. This plan is now focused on providing
U.S. sports and educational content utilizing all available
technologies of the Internet, media, advanced
telecommunications and storage technologies. Under this
plan, significant cash will be required through December
2000 to pay off current debt and fund its implementation.
The intention is to raise capital through the sale of its
equity securities and/or to seek outside private sources of
financing. In connection with this, the Company issued
approximately $1,032,000 (net of $20,000 in note repayments)
in non-interest bearing promissory notes to various parties
during the period January 1, 2000 through May 10, 2000.
Significant additional cash will be required.
7
<PAGE>
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. These matters raise substantial doubt about the
Company's ability to continue as a going concern.
The Company currently has six employees. In the business
plan, it is contemplated that additional employees will be
added as funding permits. Management of the Company intends
to sustain operations during the year ending December 31,
2000, with the cash resources generated by the continuing
sale of common stock, issuance of stock for services, and
through management's ability to control discretionary
expenditures. During the quarter ended March 31, 2000, the
Company did not pay any compensation to officers in cash.
The Company intends to continue to issue shares of its
common stock to officers, employees and consultants for
services rendered to conserve working capital.
The Company is currently in the midst of a private offering,
pursuant to a confidential offering memorandum dated April
26, 2000, where holders of the Company's notes payable will
be allowed to exchange their notes for Company common stock
at a fixed exchange rate. At March 31, 2000, the Company
has notes payable to investors and officers aggregating
approximately $1,371,000 (excluding accrued interest).
Additionally, approximately $415,000 of promissory notes
were issued during the period from April 1, 2000 through May
10, 2000. All of these note holders have been offered the
opportunity to participate in the exchange. While the
Company anticipates completing the offering memorandum in
the first half of 2000, there can be no assurances that the
Company's offering will be successful.
8
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See Note 4 to Condensed Consolidated Financial
Statements "Commitments and Contingencies."
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a)Exhibits: Included only with the electronic filing of
this report is the Financial Data Schedule for the three-
month period ended March 31, 2000 (Exhibit Ref. No. 27).
(b)Reports on Form 8-K: None.
9
<PAGE>
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
Date: May 10, 2000 By: /s/ HERBERT J. HEFKE
Herbert J. Hefke
President and Chief Executive Officer
May 10, 2000 By: /s/ JEFFREY HWANG
Jeffrey Hwang
Chief Financial Officer
10
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 476,280
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 478,780
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 488,014
<CURRENT-LIABILITIES> 2,122,056
<BONDS> 281,697
0
0
<COMMON> 9,466
<OTHER-SE> (1,950,205)
<TOTAL-LIABILITY-AND-EQUITY> 488,014
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 333,686
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (333,686)
<INCOME-TAX> 0
<INCOME-CONTINUING> (333,686)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (333,686)
<EPS-BASIC> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
