<PAGE>
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, 1999
_______ TRANSITION REPORT UNDER SECTION 13 or 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to ______________
Commission file number 0-22042
MILLENNIUM SPORTS MANAGEMENT, INC.
(Exact name of small business issuer as specified in its charter)
New Jersey 22-3127024
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Ross' Corner
U.S. Highway 206 and County Route 565
Augusta, New Jersey 07822
(Address of Principal Executive Offices) (Zip Code)
(973) 383-7644
(Issuer's telephone number)
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 _____
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Check whether the registrant filed all documents and reports required to be
filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes_____ No _____
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date 729,809 shares of common stock
outstanding as of August 10, 1999.
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (check one):
Yes _____ No X
-----
<PAGE>
MILLENNIUM SPORTS MANAGEMENT, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
----------------------- ------------------------
(Unaudited) (Note 1)
----------------------- ------------------------
<S> <C> <C>
ASSETS
PROPERTY AND EQUIPMENT, AT COST,
LESS ACCUMULATED DEPRECIATION $ 879,170 $ 900,000
CASH 59,739 221,975
INVENTORIES 54,401 71,335
INVESTMENT IN LIMITED PARTNERSHIP, AT EQUITY 371,978 466,759
OTHER ASSETS 94,487 118,048
------------ ------------
$ 1,459,775 $ 1,778,117
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Amounts due insiders, pursuant to
Chapter 11 proceedings $ 82,115 $ 88,513
Accounts payable and accrued expenses 324,270 262,293
Accrued interest - 63,542
Accrued compensation - officers and directors 168,600 170,775
------------ ------------
Total Liabilities 574,985 585,123
------------ ------------
STOCKHOLDERS' EQUITY:
Preferred stock, no par value; 500,000 shares
authorized, none issued - -
Common stock, no par value, stated value $0.01
per share; 2,000,000 shares authorized
729,809 and 719,809 shares issued in 1999
and 1998, respectively 72,980 71,980
Additional paid-in capital 19,422,050 19,416,652
Accumulated deficit (18,610,240) (18,295,638)
------------ ------------
Total Stockholders' Equity 884,790 1,192,994
------------ ------------
$ 1,459,775 $ 1,778,117
============ ============
</TABLE>
See notes to financial statements.
2
<PAGE>
MILLENNIUM SPORTS MANAGEMENT, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Six months ended June 30, Three months ended June 30,
---------------------------- ----------------------------
1999 1998 1999 1998
----------- ------------ ---------- ----------
<S> <C> <C> <C> <C>
REVENUES:
Stadium and facility rentals and
admissions $ 180,813 $ 114,361 $ 144,591 $ 87,216
Retail sales 42,200 48,841 30,595 33,770
Concession sales 32,275 36,813 32,275 36,813
Other 22,118 7,486 22,118 7,477
--------- ----------- --------- ----------
Totals 277,406 207,501 229,579 165,276
--------- ----------- --------- ----------
COSTS OF SALES AND SERVICES:
Costs of stadium operations 113,467 103,290 79,187 71,220
Costs of retail and concession sales 46,132 38,054 37,878 25,683
Selling, general and administrative 412,039 368,458 212,532 188,527
Stock compensation to officers and
directors - 734,375 - 734,375
Depreciation 20,830 182,550 10,415 91,275
--------- ----------- --------- ----------
592,468 1,426,727 340,012 1,111,080
--------- ----------- --------- ----------
LOSS BEFORE INTEREST EXPENSE (315,062) (1,219,226) (110,433) (945,804)
INTEREST EXPENSE (INCOME), NET (460) (3,968) - (4,518)
--------- ----------- --------- ----------
NET LOSS $(314,602) $(1,215,258) $(110,433) $ (941,286)
========= =========== ========= ==========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 722,337 605,491 724,809 699,138
========= =========== ========= ==========
BASIC AND DILUTED LOSS PER
COMMON SHARE $ (0.44) $ (2.01) $ (0.15) $ (1.35)
========= =========== ========= ==========
</TABLE>
See notes to financial statements.
3
<PAGE>
MILLENNIUM SPORTS MANAGEMENT, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
SIX MONTHS ENDED JUNE 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Common Stock Additional
-----------------------
Number Paid-in Accumulated
of Shares Amount Capital Deficit Total
------------- -------- ------------ -------------- -----------
<S> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1998 719,809 $71,980 $19,416,652 $(18,295,638) $1,192,994
Issuance of common stock upon conversion of
debt 10,000 1,000 5,398 6,398
NET LOSS - - - (314,602) (314,602)
------------- -------- ------------ -------------- ----------
BALANCES, JUNE 30, 1999 729,809 $72,980 $19,422,050 $(18,610,240) $ 884,790
============= ======== ============ ============== ==========
</TABLE>
See notes to financial statements.
4
<PAGE>
MILLENNIUM SPORTS MANAGEMENT, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six months ended June 30,
--------------------------------------
1999 1998
---------------- ----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (314,602) $ (1,215,258)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation and amortization 20,830 182,550
Stock compensation awarded to officers and directors - 734,375
Changes in operating assets and liabilities:
Inventory 16,934 22,284
Other assets 23,561 17,711
Accounts payable and accrued expenses (3,740) (132,609)
--------------- ---------------
Net cash flows from operating activities (257,017) (390,947)
--------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and improvements - (16,763)
Investment in limited partnership - (134,000)
Distribution from limited partnership 94,781 98,994
--------------- ---------------
Net cash flows from investing activities 94,781 (51,769)
--------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES -
Repayments of creditors' notes payable and amount due insider - (3,500)
Proceeds from issuance of common stock upon exercise
of warrants, net of costs - 578,344
Proceeds from issuance of common stock, net of costs - 188,807
Proceeds from issuance of warrants - 92,014
--------------- ---------------
Net cash flows from by financing activities - 855,665
--------------- ---------------
NET CHANGE IN CASH (162,236) 412,949
CASH, BEGINNING OF PERIOD 221,975 115,295
--------------- ---------------
CASH, END OF PERIOD $ 59,739 $ 528,244
=============== ===============
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid - $ 145,755
=============== ===============
Income taxes paid $ - $ -
=============== ===============
Issuance of common stock upon conversion of
outstanding debt $ 6,398 $ 248,844
=============== ===============
</TABLE>
See notes to financial statements.
5
<PAGE>
Note 1 - Basis of Presentation:
The balance sheet at the end of the preceding fiscal year has been
derived from the audited balance sheet contained in Millennium Sports
Management, Inc.'s (the "Company's") Annual Report on Form 10-KSB for
the year ended December 31, 1998 (the "10-KSB") and is presented for
comparative purposes. All other financial statements are unaudited.
In the opinion of management, all adjustments, which include only
normal recurring adjustments necessary to present fairly the financial
position, results of operations and cash flows for all periods
presented, have been made. The results of operations for interim
periods are not necessarily indicative of the operating results for the
full year.
Footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been
omitted in accordance with the published rules and regulations of the
Securities and Exchange Commission. These financial statements should
be read in conjunction with the financial statements and notes thereto
included in the 10-KSB.
Annual Review for Impairment of Long-lived Assets - In accordance with
generally accepted accounting principles, management reviews its
property and equipment to determine its recoverability through future
profitable operations due to the Company operating at a loss since it
emerged from Chapter 11 of the Bankruptcy Code in 1995. In years prior
to 1998 management believed that profitability could be achieved
through, among other things, leases with additional teams and leagues,
lease of the stadium name, reduction in administrative costs, leasing
the museum and store facilities for other uses, development of the
property into a year-round facility, and leasing a portion of the
parking facilities and water treatment equipment to adjacent land
owners upon construction of a strip mall.
One of management's attempts to reduce costs is an appeal of its real
estate tax assessment. In connection with tax appeal litigation in the
New Jersey Tax Court, which commenced in April 1999 and the testimony
phase was completed in May 1999, the Company engaged an appraiser to
present its belief that the assessment is excessive. The appraiser
estimated, in a report dated January 20, 1999, that (1) the cost to
replace the building and the value of the land as of October 1, 1996
(the valuation date being used by the appraiser) was $9,661,000, (2)
because of the continuing losses of the Company, fair market value
could not be determined by capitalization of the Company's earnings and
(3) comparable sales could not be identified by the appraiser. In the
circumstances, the appraiser estimated fair value at $900,000 by
capitalizing estimated "stabilized net operating income" of property
similar to the Company's stadium and land. The appeal resulted in a
valuation judgement of approximately $3.5 million, which would result
in an estimated reduction in real estate taxes of approximately
$22,000, annually. The reduction is retroactive to January 1, 1997.
Management has not determined if a further appeal will be filed.
In view of the continuing doubt about the Company's ability to achieve
substantial improvements in operating results necessary to fully
recover their cost, management
6
<PAGE>
decided that a write-down of the stadium and land to $900,000 would be
appropriate as of December 31, 1998; accordingly, a write-down of
$11,544,942 was made in the fourth quarter of 1998.
Reclassification - Certain amounts previously reported have been
reclassified to conform to current year presentation.
Note 2 - Organization, Proceedings Under Chapter 11 And Subsequent Operations:
Organization and development - The Company operates a regional sports
entertainment and recreation center in Sussex County, New Jersey, known
as the Skylands Park Sports and Recreation Center (the "Complex"). The
Complex includes a professional baseball stadium ("Skylands Park") used
for sports and other entertainment events, and other adjacent
recreational and commercial facilities (the "Related Facilities") that
include, among other things, a sports apparel and collectibles store, a
wholesale and retail sporting goods outlet, batting cages and a video
parlor.
The Company did not have sufficient financing to pay its contractors
and other vendors and, as a result, filed a voluntary petition for
reorganization under Chapter 11 of the United States Bankruptcy Code in
the United States Bankruptcy Court (the "Court") for the District of
New Jersey on June 1, 1994 (the "Petition Date"). The Company operated
as a debtor-in-possession subject to the jurisdiction of the Court from
the Petition Date through April 13, 1995, the date its plan of
reorganization (the "Plan") was confirmed.
During the periods presented herein and since inception, the Company
generated only limited amounts of revenues from the events held at
Skylands Park and the operation of the Related Facilities and, as a
result, the Company has incurred significant net losses. Revenues from
the rental of Skylands Park to its primary tenant have not and will not
be significant. The Company generates additional revenues from the
rental of skyboxes and advertising signs in the Skylands Park, parking
fees and other revenues from other baseball games, the rental of
Skylands Park for other sports and entertainment events, the operation
of the retail, recreation and other related facilities in the Complex,
and the Company's ownership in Minor League Heroes, L.P. ("Heroes"),
which is the limited partnership that owns and operates the Company's
primary tenant. Accordingly, the Company's ability to generate
significant additional revenues will be dependent upon, among other
things, its ability to generate future attendance at events and the
success of its other commercial operations.
Management believes that the Company is in need of additional liquid
resources to enable the Company to sustain operations, and there can be
no assurance that the Company will be able to obtain such additional
liquid resources. In August 1999, the Company received $500,000 in
cash proceeds from an equity issuance and convertible loan (see Note
4).
7
<PAGE>
Confirmation of Plan of Reorganization - The Company's Plan was
confirmed by its creditors and the Court on April 13, 1995 (the
"Confirmation Date"). Since the Confirmation Date, the Company has paid
unsecured pre-petition liabilities pursuant to the terms of a secured
promissory note (the "Creditors' Note"). The Creditors' Note bore
interest on the unpaid principal balance at the prime rate plus 3%.
The final payment under the Creditors' Note was paid on March 4, 1999.
The Creditors' Note was secured by substantially all of the assets of
the Company.
Claims of "insiders" (generally, former directors and executive
officers of the Company and certain of their affiliates) of
approximately $339,000 as of the Confirmation Date (including accrued
salaries and loans and advances made to the Company) may be paid from
time to time after payment in full of the Creditors' Note, as the cash
flow of the Company may permit; however, each insider has the option to
elect to be paid in shares of common stock of the Company valued at the
then current market price of such common stock as reported on "NASDAQ."
Through June 30, 1999, approximately $257,000 has been paid on the
claims of insiders, principally through the issuance of common stock.
Equity interests, including interests of stockholders and warrant
holders, were not altered or impaired under the terms of the Plan.
However, the terms of the Plan prohibit the Company from paying
dividends until all payments required under the Plan have been made.
Pursuant to SOP 90-7, the Company was not required to adopt "fresh-
start" reporting (and, as a result, revalue all of its assets and
liabilities) since the holders of the Company's existing voting stock
immediately prior to confirmation held the same relative voting
interests after confirmation. In addition, since the Company will be
paying all of its pre-petition liabilities at their original principal
amounts, the Company did not recognize any material gain or loss as a
result of the confirmation of the Plan.
Note 3 - Stockholders' Equity:
Reverse Stock Split - Effective at the close of business on January 4,
1999, the Company effectuated a one-for-ten reverse stock split, which
has been retroactively reflected in the accompanying financial
statements.
Note 4 - Subsequent Events:
In August 1999, the Company issued, in a private placement, 500,000
shares of the Company's common stock to Robert J. Hartung for $250,000.
In addition, Mr. Hartung has loaned to the Company $250,000 payable in
August 2001 with 10% interest per annum; the loan is collateralized by
the real estate and improvements of the Company, and is convertible as
to principal in whole (but not in part) at any time into shares of
common stock of the Company at $.50 per share. Upon conversion of the
principal of this note, all accrued interest (other than interest on
any prepaid principal) will be forgiven.
8
<PAGE>
Simultaneous with these transactions, Barry M. Levine and Robert H.
Stoffel, Jr. resigned as directors and officers of the Company, and Mr.
Hartung was elected to the board of directors and assumed the
responsibilities of President, Chief Operating Officer and Chief
Financial Officer.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
information set forth in the unaudited financial statements and notes thereto
included elsewhere herein and the audited financial statements and the notes
thereto included in the 10-KSB.
Overview
Skylands Park is a 4,300-seat professional baseball stadium which, among other
things, has been and will be leased for sports and other entertainment events.
The Complex follows a courtyard village design theme, and includes, among other
things, a sports apparel and collectibles store, a wholesale and retail sporting
goods outlet, batting cages, and a video parlor.
The New Jersey Cardinals ("the Team"), which is a member of the Class "A" level
New York-Penn League, plays its regularly-scheduled home games and playoff home
games at Skylands Park. The Company has a minority ownership interest in Minor
League Heroes, L.P. ("Heroes"), which is the limited partnership that owns the
Team.
In February 1999, the Company entered into a lease agreement, which commenced in
May 1999 and expired in June 1999, with Newark Bears, Inc. (the "Bears") a
professional baseball team, which is a member of the independent Atlantic
League. Pursuant to the agreement, the Bears played 22 of its 1999 regular
season home games at Skylands Park during the months of May and June 1999. The
Bears paid rent of approximately $63,000. The Company retained the net proceeds
of all alcohol beverage concessions at Bears games.
The Company currently operates, in the Complex, the Skylands Sporting Goods
store, which sells, year-round both at retail and at wholesale, a broad range of
sporting goods relating to baseball and other sports, and Team paraphernalia.
The Company also operates, in the Complex, a year-round recreational facility
known as the "Barn", which contains batting cages, a sports video parlor, mini-
gym and children's party room, and a space subleased to a director of the
Company, where sports collectibles are sold by such director for his own
account.
The Company anticipates receiving approximately $42,000 per year in rent from
the Team, which management does not believe will constitute a significant
portion of the Company's revenues. The Company expects to generate additional
revenues from, among other things, the rental of skyboxes and advertising signs
in Skylands Park, the rental of Skylands Park for other sports and entertainment
events, the operation of the related facilities in the Complex, and the
Company's direct and indirect ownership interest in the limited partnership that
owns the Team. As of August 11, 1999, the Company had received 1999 season
commitments for three skyboxes for an aggregate rental of approximately $24,000
(of which the Team is entitled to retain approximately $10,000). In addition,
the Company is entitled to 20% of all revenues from advertising sign rental
commitments at Skylands Park. The Company's 20% share of such revenues in 1998
was approximately $75,000.
Although the Company does not expect to receive significant rental income from
the Team, the Company did receive in March 1999 and expects to continue to
derive income from cash distributions through its minority ownership interest in
Heroes. Accordingly, the revenues generated by the Team through paid admissions
and its ancillary operations will indirectly benefit the Company. A portion of
the Company's cash flow in each year of operations has been received
10
<PAGE>
in the form of a distribution from Heroes in respect of the Company's share of
the net income of Heroes.
Plan of Reorganization
In April 1995, the Company paid $1,600,000 in respect of its pre-petition
unsecured liabilities (including payment in full of de minimis claims, and
subject to the Company's reservation of rights to contest a limited number of
unsecured claims), leaving a balance due in respect of such claims of
approximately $2,608,000, which was payable pursuant to the terms of the
Creditors' Note. The Company has fully paid the principal and accrued interest
on the Creditors' Note, primarily out of net equity proceeds from the sale of
common stock by the Company.
Claims held by insiders (consisting primarily of former directors and executive
officers of the Company and certain of their affiliates) in respect of pre-
petition obligations (including but not limited to pre-petition loans made to
the Company), originally in the aggregate amount of approximately $339,000, may
be paid from time to time after payment in full of the Creditors' Note, as the
cash flow of the Company may permit; or, at the option of each insider, may be
paid at any time or from time to time in shares of common stock of the Company
valued at the then-current market price of such common stock as reported on
NASDAQ. During the six months ended June 30, 1999, approximately $6,000 was
repaid upon conversion of such insider claims into 10,000 shares of common
stock, leaving an unpaid balance of approximately $82,000 at June 30, 1999.
Equity interests, including interests of stockholders and warrantholders, are
not altered or impaired under the terms of the Plan. However, pursuant to the
Plan, the Company is not permitted to pay any dividends on its common stock
until all required payments under the Plan have been made.
The foregoing information regarding the Plan is merely a summary of certain
material provisions thereof, and is qualified in its entirety by the specific
provisions of the Plan, a copy of which was previously filed as an exhibit to
the Company's Annual Report on Form 10-KSB for the year ended December 31, 1994.
11
<PAGE>
Liquidity and Capital Resources
The Company's primary sources of liquidity since its inception have been the
sale of shares of common stock to and short-term borrowings from certain
shareholders, which were used during the period from inception through March
1993; the net proceeds of approximately $739,000 from a private placement of
common stock and warrants, which were used during the period from March 1993
through September 1993; the net proceeds of approximately $5,815,000 from an
initial public offering of common stock and Class A Warrants, which were used
during the last quarter of 1993 and the first quarter of 1994; short-term
borrowings from certain officers, former shareholders and other related and
unrelated parties during March, April and May 1994, which were used during the
first and the beginning of the second quarter of 1994; proceeds from the
exercise of Class A Warrants and Class B Warrants, which were received during
the fourth quarter of 1994, and in 1995; net proceeds of $1,500,000 from a
private placement of common stock in August 1995 (all of which net proceeds were
utilized for partial prepayment of the Creditors' Note); and net proceeds of
$2,965,228 from the issuance of and exercise of Class A Warrants and Class D
Warrants and underwriter's warrants in 1997 and 1998. As of December 31, 1998,
all unexercised Class A Warrants expired, and the Company had ceased any further
offering of Class D Warrants.
As of June 30, 1999, the Company had cash totaling approximately $60,000.
Management believes that the Company is in need of additional liquid resources
to enable the Company to sustain operations.
In August 1999, the Company issued, in a private placement, 500,000 shares of
the Company's common stock to Robert J. Hartung for $250,000. In addition, Mr.
Hartung has loaned to the Company $250,000 payable in August 2001 with 10%
interest per annum; the loan is collateralized by the real estate and
improvements of the Company, and is convertible as to principal in whole (but
not in part) at any time into shares of common stock of the Company at $.50 per
share. Upon conversion of the principal of this note, all accrued interest
(other than interest on any principal) will be forgiven.
Comparative Quarterly Results
The Company's stadium and facility rentals and admissions during the three and
six months ended June 30, 1999 was approximately $145,000 and approximately
$181,000, respectively, as compared to approximately $87,000 and approximately
$114,000 for the three and six months ended June 30, 1998. The increases are
principally attributable to the lease with the Bears. Retail and concession
revenue decreased by approximately $9,000 for the three and six months ended
June 30, 1999, to approximately $63,000 and $74,000, respectively. The decrease
is principally attributable to an advance received from the Company's
concessionaire in 1998 and reduced merchandise selection in 1999.
Cost of stadium operations increased by approximately 10% to approximately
$79,000 and approximately $113,000 for the three and six months ended June 30,
1999, respectively, as compared to approximately $71,000 and approximately
$103,000 for the same periods in 1998. The increase reflects required
maintenance to the Stadium in connection with the Bears games. Cost of retail
and concession sales as a percentage of retail and concession sales increased to
approximately 60% for the three and six months ended June 30, 1999,
respectively, as compared to 38% and 45% in the comparable prior year periods.
The increase is due to the absence of a $12,000 advance received from the
Company's concessionaire in 1998.
12
<PAGE>
Selling, general and administrative expenses increased by approximately $24,000
and approximately $44,000 to approximately $213,000 and approximately $412,000
for the three and six months ended June 30, 1999, respectively, as compared to
approximately $189,000 and approximately $369,000 for the same periods in 1998.
The increase is due principally to an increase in insurance costs, stock
transfer fees relating to the January 1999 reverse split, and certain
professional fees.
Depreciation and amortization expense decreased to approximately $10,000 and
approximately $20,000 for the three and six months ended June 30, 1999,
respectively, from approximately $91,000 and approximately $183,000 for the same
periods in 1998. The decrease is attributable to the write-down of the
Company's fixed assets by approximately $11,545,000 in the fourth quarter of
1998. The write-down reduced the depreciable basis of the underlying fixed
assets.
Net loss in the three and six months ended June 30, 1999 was approximately
$110,000 and approximately $315,000, respectively, as compared to approximately
$941,000 and approximately $1,215,000 in the three and six months ended June 30,
1998, respectively. The decrease is primarily attributable a non-recurring
charge for stock based compensation recognized in the second quarter 1998 of
approximately $734,000, and to the decrease in depreciation and amortization in
the 1999 periods.
Market For Company's Common Stock
In March 1999, the Company's common stock was delisted from the NASDAQ SmallCap
Market, and is now quoted on the OTC Bulletin Board.
Seasonality
The Company's cash flow from operations is significantly greater in each spring,
summer and fall than in the winter months, when Skylands Park is not rented for
outdoor events, and the Company relies upon income generated by its other
businesses. In the event that the Company is unable to generate sufficient cash
flow from operations during the seasons of full operations, or the Company is
unable to develop or acquire additional business which will generate cash flow
in the off season, the Company may be required to utilize other cash reserves
(if any) or seek additional financing to meet operating expenses, and there can
be no assurance that there will be any other cash reserves or that additional
financing will be available or, if available, on reasonable terms.
13
<PAGE>
Year 2000 Compliance
The Company is not itself dependent to any significant extent on computer or
other embedded information systems, nor, to the Company's knowledge, are any of
its customers dependent on computer or other embedded information systems in
such customers' dealings with the Company. Thus, the Company will not be
required to incur any material costs or expenses in order to adapt, modify or
upgrade its systems to be Year 2000 compliant. The Company discussed with its
key vendors the status of their Year 2000 readiness in the first quarter of
1999, and the Company received assurances from substantially all of such vendors
that their computer-based systems will continue, without material interruption
or malfunction, to process data entries made on and after January, 1, 2000 and
with respect to dates on and after January 1, 2000. The costs of this
investigation were not material.
14
<PAGE>
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
None
Item 6 - Exhibits and Reports on Form 8-K.
(a) Exhibit 27 - Financial Data Schedule
(b) The Company did not file any reports on Form 8-K during the three
months ended June 30, 1999.
15
<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.
MILLENNIUM SPORTS MANAGEMENT, INC.
- ----------------------------------
(Registrant)
Signature Title Date
President August 12, 1999
Chief Operating Officer
/s/ Robert J. Hartung. Chief Accounting Officer
- --------------------------
Robert J. Hartung.
16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-QSB
FOR 6/30/99 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 59,739
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 54,401
<CURRENT-ASSETS> 114,140
<PP&E> 900,000
<DEPRECIATION> 20,830
<TOTAL-ASSETS> 1,459,775
<CURRENT-LIABILITIES> 574,985
<BONDS> 0
0
0
<COMMON> 72,980
<OTHER-SE> 811,810
<TOTAL-LIABILITY-AND-EQUITY> 1,459,775
<SALES> 74,475
<TOTAL-REVENUES> 277,406
<CGS> 46,132
<TOTAL-COSTS> 180,429
<OTHER-EXPENSES> 412,039
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (460)
<INCOME-PRETAX> (314,602)
<INCOME-TAX> 0
<INCOME-CONTINUING> (314,602)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (314,602)
<EPS-BASIC> (0.44)
<EPS-DILUTED> (0.44)
</TABLE>
