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 September 30, 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 registrant (1) filed all reports required
to be filed by Section 13 or 15 (d) of the Exchange Act
during the past 12 months (or for such shorter period that
the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90
days.
Yes ( X ) No ( )
As of November 16, 2000, the registrant had 12,942,272
shares of its common stock issued and outstanding.
Transitional Small Business Disclosure Format: Yes ( ) No (X)
<PAGE>
AMERICAN SPORTS HISTORY INCORPORATED AND SUBSIDIARIES
(A Development Stage Company)
FORM 10-QSB - SEPTEMBER 30, 2000
INDEX
PART I - FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2000 and December 31, 1999 1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the three and nine months ended September 30, 2000 and
1999 and cumulative from May 1, 1995 2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 2000 and 1999
and cumulative from May 1, 1995 3
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 4-9
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 10-11
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS 12
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K 12
SIGNATURES 13
<PAGE>
PART I - FINANCIAL INFORMATION
AMERICAN SPORTS HISTORY INCORPORATED AND SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2000 1999
(Unaudited)
ASSETS
Current
assets
Cash $ 4,658 $ 228
Prepaid expenses 26,667 6,250
Total current assets 31,325 6,478
Website development costs 224,277 -
Other assets 21,811 9,984
$ 277,413 $ 16,462
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued $ 523,038 $ 507,382
expenses
Notes payable to officers - 174,548
Notes payable and accrued interest 29,183 615,785
Due to affiliate 7,500 -
Liability from settlement of lawsuit 95,000 120,000
Total current liabilities 654,721 1,417,715
Liability from settlement of lawsuits,
non-current 25,000 25,000
Notes payable to director 295,898 274,771
Total liabilities 975,619 1,717,486
Commitments and contingencies
Stockholders' deficit
Common stock, $.001 par value;
25,000,000 shares authorized,
12,942,272 and 9,466,026 shares issued
and outstanding, respectively 12,942 9,466
Additional paid-in capital 4,831,600 2,313,479
Accumulated deficit ($5,458,351
accumulated during the
development stage) (5,542,748) (3,971,469)
Unearned compensation - (52,500)
Total stockholders' deficit (698,206) (1,701,024)
$ 277,413 $ 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)
<TABLE>
<CAPTION>
Cumulative
Three months ended Nine months ended from
September 30, September 30, May 1,1995
2000 1999 2000 1999 1995
<S> <C> <C> <C> <C> <C>
Revenue $ 216,877 $ - $ 238,632 $ - $ 238,632
Expenses
Product development 23,355 88,738 140,788 459,738 607,496
General and
administrative 528,459 268,403 1,669,123 648,030 4,830,131
Lawsuit settlements - - - - 178,500
Write-off of advances
for terminated
acquisition - - - - 80,856
551,814 357,141 1,809,911 1,107,768 5,696,983
Net Loss $ (334,937) $(357,141) $ (1,571,279) $(1,107,759) $(5,458,351)
Basic and diluted net
loss per share $ (0.03) $ (0.03) $ (0.16) $ (0.11)
Weighted average number
of common shares
outstanding 11,265,372 10,446,026 10,069,748 10,140,348
</TABLE>
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)
Nine months ended September 30, Cumulative
From May 1,
2000 1999 1995
INCREASE (DECREASE) IN CASH
Cash flows from operating
activities
Net loss $ (1,571,279) $ (1,107,759) $ (5,449,793)
Adjustments to reconcile
net loss to net cash used in
operating activities
Write-off of prepaid royalty - - 137,500
Depreciation and amortization 2,657 1,183 8,236
Write-off of deposit - - 30,000
Impairment of goodwill - - 14,437
Common stock issued for
partial settlement of lawsuit - - 6,000
Stock options issued to
non-employees for services 141,374 54,000 225,790
Common stock and options issued
to employees for services 709,350 186,500 1,786,152
Imputed interest on notes
payable to officers 8,818 - 19,270
Changes in assets and liabilities
Prepaid expenses (20,417) (10,000) (37,570)
Other assets - - (5,000)
Liability from settlement of
lawsuits (25,000) - 142,500
Accounts payable and
accrued expenses (3,599) 31,746 460,192
Loan from director - 202,831 402,541
Accrued interest 18,550 6,681 51,814
Net cash used in
operating activities (739,546) (634,818) (2,207,931)
Cash flows from investing activities
Website development costs (224,277) - (224,277)
Other assets purchased (14,484) (8,500) (24,484)
Net cash provided by
investing activities (238,761) (8,500) (248,761)
Cash flows from financing activities
Proceeds from issuance of
notes to officers 4,500 165,908 179,048
Proceeds from issuance of notes 1,052,500 558,500 1,649,400
Repayment of notes (43,195) (73,500) (109,695)
Proceeds from loan to affiliate 7,500 - 7,500
Loans from director - 3,385 120,441
Issuance of common stock - - 630,964
Common stock issuance costs paid (38,568) - (38,568)
Liability from sale of
common stock rescinded - - 22,260
Net cash provided by
financing activities 982,737 654,293 2,461,350
Net increase in cash 4,430 10,975 4,658
Cash, beginning of period 228 3,344 -
Cash, end of period $ 4,658 $ 14,319 $ 4,658
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 AND NINE MONTHS ENDED SEPTEMBER 30, 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. In the second quarter 2000, the
Company's newly formed subsidiary, American Sports Academy,
LLC ("ASA"), assumed the operations of the Bud Harrelson
Baseball and Softball Academy (Note 5). Although the Company
has incurred a significant amount of start-up costs, since
the Company has generated only minimal revenue from
operations, it is still considered to be in the development
stage.
The Company incurred a net loss of $1,571,279 for the nine
months ended September 30, 2000, resulting in an accumulated
deficit of $5,542,748. The Company's business plan is now
focused on providing a vertical integration vehicle for the
team sports market, both domestically and internationally,
utilizing available internet technologies in the delivery of
content, communication, education and instruction. Under
this plan, significant cash will be required to pay off
current debt and fund its implementation. The Company's
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
$1,057,000 in non-interest bearing promissory notes to
various parties during the first nine months of 2000, which
were converted to equity on August 14, 2000 (see Note 5).
Since September 30, 2000, the Company has used a $50,000
advance from two of its officers to fund its operations.
Additionally, on November 3, 2000, the Company obtained a
300,000 bank line of credit (Note 7); a portion of these
proceeds were used to return the officers' advance and as of
November 16, 2000 and $83,000 of the credit line remains
available. 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.
4
<PAGE>
AMERICAN SPORTS HISTORY INCORPORATED AND SUBSIDIARIES
(A Development Stage Company)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
2 Significant accounting policies
Interim financial information
The condensed consolidated balance sheet as of September 30,
2000, and the condensed consolidated statements of
operations and cash flows for the periods ended September
30, 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 and nine months ended September 30, 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.
Revenue recognition
Revenue currently consists of fees earned from participants
in the Company's sports camps. Revenue is recognized at the
time the sports instructional services are provided. Cash
received in advance of the instructional services is
reflected as customer deposits in the consolidated balance
sheet. As of September 30, 2000, all customer deposits were
earned and are reflected as revenue in the condensed
consolidated statements of operations.
5
<PAGE>
AMERICAN SPORTS HISTORY INCORPORATED AND SUBSIDIARIES
(A Development Stage Company)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
2 Significant accounting policies (continued)
Website development costs
Statement of Position 98-1, "Accounting for the Costs of
Computer Software Developed For or Obtained For Internal
Use" ("SOP 98-1") requires capitalization of certain costs
incurred in the development of the core software for the
Company's website infrastructure. Costs incurred in the
development of content for the Company's website and
maintenance are expensed as incurred. During the nine months
ended September 30, 2000, the Company capitalized
approximately $225,000 in costs associated with the
development of its website infrastructure and charged
$75,000 to operations.
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
Two of the Company's officers advanced the Company $179,048
in cash to be used for working capital purposes. These
advances were non-interest bearing and had 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. On August 14, 2000, these notes were
converted into 358,096 shares of the Company's common stock
pursuant to a Private Placement (Note 5).
Notes payable to director
Notes payable to director ($295,898 at September 30, 2000)
includes notes payable to the Company's Chairman of the
Board ($199,693) and his spouse ($96,205). These notes are
non-interest 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 $29,183 at
September 30, 2000, represent demand loans made to the
Company by various investors as well as amounts owed to
certain vendors; $5,198 of these notes are non-interest
bearing and $23,985 of these notes bear interest at rates
ranging from 7% to 10% per annum. On August 14, 2000,
$1,574,075 of notes payable were converted into 3,148,150
shares of the Company's common stock pursuant to a Private
Placement (Note 5).
6
<PAGE>
AMERICAN SPORTS HISTORY INCORPORATED AND SUBSIDIARIES
(A Development Stage Company)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
5 Stock and option transactions
Private Placement
On August 14, 2000, the Company completed a private
offering, where holders of the Company's notes payable were
allowed to exchange their notes for Company common stock at
a fixed exchange rate of $.50 per share. The Company
converted a total of $1,753,123 of notes payable ($1,574,075
of notes and $179,048 of the loans from officers) into
3,506,246 restricted shares of the Company's common stock.
Stock options
In the second quarter, the Company granted bonuses to three
officers of the Company for services performed. The bonuses
were paid with immediately vested options to acquire an
aggregate of 1,000,000 shares of the Company's common stock
at an exercise price of $.20 per share. The Company recorded
a charge to operations of $518,000 in second quarter 2000,
based upon the intrinsic value of the options at the grant
date. Also, in lieu of cash compensation, two of these
officers were granted additional options to acquire an
aggregate of 600,000 shares of the Company's common stock at
an exercise price of $.20 per share. These options vest
ratably over the 1-year service period from 4/16/00 to
4/15/01 The Company recorded a charge to operations of
$64,750 in second quarter 2000 and $77,700 in third quarter
2000, based upon the $311,000 intrinsic value of the options
at the grant date.
In the second quarter, the Company granted three members of
its Advisory Board options to acquire an aggregate of
125,000 shares of the Company's common stock at an exercise
price of $1.00 per share. These options vest in 1 year. The
Company valued the options at $89,750 (calculated using the
Black-Scholes option pricing model) and recorded a charge to
operations of $5,720 in second quarter 2000 and $21,000 in
third quarter 2000.
In September 2000, the Company granted two members of its
Advisory Board options to acquire an aggregate of 100,000
shares of the Company's common stock at an exercise price of
$1.00 per share. These options vest over six months. The
Company valued the options at $287,000 and will record a
charge to operations over the vesting period.
Next Generation Networks Technology, Inc. and Kenneth O.
Roko
Effective November 18, 1998, the Company entered into a
business and consulting services agreement with Next
Generation Networks Technology, Inc. ("NGN"). In connection
with the agreement, Kenneth O. Roko, NGN's Chief Executive
Officer, was to serve as an officer and a member of the
Company's Board of Directors and assist in the
implementation of the Company's technological strategies in
order to establish the Company as a major contributor and
presence on the Internet. As compensation to NGN and Mr.
Roko, the Company issued 200,000 shares of its common stock
to NGN, 60,000 shares of common stock to Mr. Roko and also
granted 1,200,000 stock options to NGN with an exercise
price of $.12 per share. The Company was also obligated to
pay $50,000 cash to NGN upon completion of the Company's
strategic business plan.
7
<PAGE>
AMERICAN SPORTS HISTORY INCORPORATED AND SUBSIDIARIES
(A Development Stage Company)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
5 Stock and option transactions (continued)
Next Generation Networks Technology, Inc. and Kenneth O.
Roko (continued)
On June 27, 2000, the Company entered into separation
agreements with both NGN and Mr. Roko. Key conditions of the
separation agreements are as follows: 1) the Company remains
obligated to NGN for $50,000, payable in 10 equal bi-monthly
installments of $5,000 ( there was a $45,000 balance as of
September 30, 2000), 2) of the 1,200,000 stock options
previously granted to NGN, only 400,000 options actually
vested, 3) Mr. Roko surrendered 30,000 shares of common
stock previously issued to him, and 4) the Company is
obligated to pay $25,000 in cash to Mr. Roko ( which was
paid in full as of September 30, 2000).
American Sports Academy, LLC ("ASA")
In the second quarter, the Company's newly formed
subsidiary, ASA, assumed the operations of the Buddy
Harrelson Baseball and Softball Academy ("BHBSA"). Revenue
and expenses related to the Company's operation of the
sports camps have been included in the Company's financial
results since that date. One of the Company's
officers/directors is a co-owner of the BHBSA. In connection
with such assumption, the Company has verbally agreed to
compensate the former owners of the BHBSA with a combination
of Company stock and options based upon the future
performance of ASA. Because the parties have not yet
determined the consideration to be paid to BHBSA, no
consideration has been reflected in the accompanying
financial statements.
6 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 Company is currently delinquent with its payment
due on October 14th; however, the Company is currently in
the process of negotiating new payment terms. The first cash
installment was paid in November 1998 and the common stock
was issued in June 1998.
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 and paid $25,000 in May 2000. The Company is also
obligated to pay $25,000 in November 2001.
8
<PAGE>
AMERICAN SPORTS HISTORY INCORPORATED AND SUBSIDIARIES
(A Development Stage Company)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
6 Commitments and contingencies (continued)
Legal proceedings (continued)
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. Because 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.
7 Subsequent event
On November 3, 2000, the Company obtained a $300,000 line of
credit with European American Bank. The line of credit,
which expires on June 30, 2001, provides for interest at a
fluctuating rate per annum equal to the bank's prime rate
plus 2%. The Company is also required to maintain a zero
loan balance for a period of no less than 30 consecutive
days prior to the expiration of the loan.The line of credit
is guaranteed by three of the Company's officers. A portion
of the credit line was used to return a $50,000 advance that
the Company had received from two of its officers (Note 1).
9
<PAGE>
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
In May 2000, the Company's newly formed subsidiary, American
Sports Academy, LLC ("ASA"), led by the Company's director
and former member of the Baltimore Orioles and New York
Mets, Rob Dromerhauser, assumed operations of the Bud
Harrelson Baseball and Softball Academy. ASA has an all-
star lineup of sports professionals such as Keith Hernandez
and Jody Reed in baseball, and Marty Lyons in football.
Existing camps in five sports (baseball, softball, soccer,
wrestling and lacrosse) are now offered for children ages 5-
15 with further expansion planned. The Company believes that
ASA will provide an on-going revenue stream and a solid
foundation on which to build for the future. Although the
Company has incurred significant start-up costs, because the
Company has generated only minimal revenue from operations,
the Company is still considered to be in the development
stages.
The Company is continuing to develop its new Website,
Sportsinfo.com. The Company plans to utilize Sportsinfo.com
to provide a vertical integration vehicle for the team
sports market, both domestically and internationally,
utilizing available Internet technologies in the delivery of
content, communication, education and instruction.
Results of operations
During the quarter ended September 30, 2000, the Company
began to generate revenue from the ASA sports camp
operations. Revenue for the quarter ended September 30,
2000 was $238,632.
During the quarters ended September 30, 2000 and September
30, 1999, general and administrative expenses were $528,459
and $268,403 respectively. Cumulative from May 1, 1995, the
Company has incurred $4,830,131 of general and
administrative expenses. Product development expenses were
incurred during the quarters ended September 30, 2000 and
1999 totaling $23,355 and $88,738, respectively. Cumulative
from May 1, 1995, the Company has incurred $607,496 of
product development expenses. Additionally, during the nine
months ended September 30, 2000, the Company capitalized
approximately $225,000 in costs associated with the
development of infrastructure for its new Website,
Sportsinfo.com.
During the quarters ended September 30, 2000 and 1999, the
Company incurred net losses of $334,937 and $357,141,
respectively. During the nine months ended September 30,
2000 and 1999, the Company incurred net losses of $1,571,279
and $1,107,759, respectively. The nine-month results include
non-cash charges related to stock and option compensation
approximating $851,000 and $241,000, respectively.
As of September 30, 2000 and 1999, the Company was a
development stage company that had generated only minimal
revenue from operations. The Company expects to incur
continuing
10
<PAGE>
Results of operations (continued)
general and administrative expenses, without significant
commensurate operating revenue, until such time as it is
able to commence significant 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
ASA operating revenue. 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 $1,571,279 for the nine
months ended September 30, 2000, resulting in an accumulated
deficit of $5,542,748. 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 a vertical integration vehicle for the
team sports market, both domestically and internationally,
utilizing available internet technologies in the delivery of
content, communication, education and instruction. Under
this plan, significant cash will be required to pay off
current debt and fund its implementation. The Company's
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
$1,057,000 in non-interest bearing promissory notes to
various parties during the first nine months of 2000, which
were converted to equity on August 14, 2000 (see below).
Since September 30, 2000, the Company has used a $50,000
advance from two of its officers to fund its operations.
Additionally, on November 3, 2000, the Company obtained a
300,000 bank line of credit (see below); a portion of these
proceeds were used to return the officers' advance and as of
November 16, 2000, $83,000 of the credit line remains
available.
On August 14, 2000, the Company completed a private
offering, where holders of the Company's notes payable
exchanged their notes for Company common stock at a fixed
exchange rate of $.50 per share. The Company converted a
total of $1,753,123 of notes payable ($1,574,075 of notes
and $179,048 of the loans from officers) into 3,506,246
restricted shares of the Company's common stock.
On November 3, 2000, the Company obtained a $300,000 line of
credit from European American Bank. The line of credit,
which expires on June 30, 2001, provides for interest at a
fluctuating rate per annum equal to the bank's prime rate
plus 2%. The Company is also required to maintain a zero
loan balance for a period of no less than 30 consecutive
days prior to the expiration of the loan.The line of credit
is guaranteed by three of the Company's officers. A portion
of the credit line was used to return a $50,000 advance that
the Company had received from two of its officers.
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 seven full-time employees. In
addition, there are seasonal part-time employees in the ASA
operations. 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, by seeking outside private
sources of financing and through management's ability to
control discretionary expenditures. The Company intends to
continue to offer common stock or options to officers,
employees and consultants for services rendered to conserve
working capital.
11
<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 nine-
month period ended September 30, 2000 (Exhibit Ref. No.
27).
(b)Reports on Form- 8-K: None.
12
<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: November 16, 2000 By: /s/ HERBERT J. HEFKE
Herbert J. Hefke
President and Chief
Executive Officer
13
<PAGE>
