<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended June 30, 2000
OR
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________ to __________
Commission File Number 1-12532
RENAISSANCE GOLF PRODUCTS, INC.
(Exact name of small business issuer as specified in its charter)
DELAWARE 86-0664849
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
11585 SOUTH STATE STREET, DRAPER, UTAH 84020
(Address of Principal Executive Offices)
(801) 501-0200
(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
--- ---
As of June 30, 2000, the registrant had 11,221,439 shares outstanding of
its Common Stock, $.001 par value.
Transitional Small Business Disclosure Format (check one): Yes No X
--- ---
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RENAISSANCE GOLF PRODUCTS, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements: 3
Balance Sheets as of June 30, 2000 and 4
December 31, 1999
Statement of Operations for the Six Months 5
ended June 30, 2000 and June 30, 1999
Statements of Operations for the Three Months ended 6
June 30, 2000 and June 30, 1999
Statements of Cash Flows for the Six Months ended 7
June 30, 2000 and June 30, 1999
Notes to Financial Statements for the Three Months and Six Months ended 8
June 30, 2000
Item 2. Management's Discussion and 10
Analysis of Financial Condition and Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURE
</TABLE>
2
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Item 1. Financial Statements.
The Financial Statements of the Company required to be filed with this Form
10-QSB Quarterly Reports were prepared by management and commence on the
following page, together with related Notes. In the opinion of management, these
Financial Statements fairly present the financial condition of the Company, but
should be read in conjunction with the Financial Statements of the Company for
the year ended December 31, 1999 filed with the Securities and Exchange
Commission.
3
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PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RENAISSANCE GOLF PRODUCTS, INC.
BALANCE SHEETS
AS OF JUNE 30, 2000 AND DECEMBER 31, 1999
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
------------ ------------
<S> <C> <C>
(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 58,705 $ 47,798
Accounts receivable, net 70,557 233,172
Inventories, net 1,605,950 1,628,248
Deposits made on inventory 143,277 155,234
Prepaid expenses 11,801 12,047
------------ ------------
Total current assets 1,890,290 2,076,499
PROPERTY AND EQUIPMENT, net 432,689 446,069
OTHER ASSETS 18,000 --
------------ ------------
Total assets 2,340,979 2,522,568
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Revolving line of credit, net of discount 2,000,000 5,000,000
Accounts payable 556,856 295,716
Accrued liabilities 151,843 486,161
Accrued royalties 194,355 568,355
Current portion of notes payable 660,357 532,650
------------ ------------
Total current liabilities 3,563,411 6,882,882
------------ ------------
Notes Payable, less current portion -- --
------------ ------------
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, $.01 par value, 150,000 shares
authorized; 64,250 and 75,000 issued and
outstanding as of 6-30-00 and 12-31-99, respectively 643 750
Common stock, $.001 par value, 40,000,000 shares
authorized; 11,219,939 and 9,429,475 issued and
outstanding as of 6-30-00 and 12-31-99, respectively 11,221 9,429
Additional paid-in capital 24,266,628 20,092,443
Accumulated deficit (25,500,924) (24,462,936)
------------ ------------
Total stockholders' equity (deficit) (1,222,432) (4,360,314)
------------ ------------
Total liabilities and stockholders' equity (deficit) $ 2,340,979 $ 2,522,568
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements
4
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RENAISSANCE GOLF PRODUCTS, INC.
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND JUNE 30, 1999
<TABLE>
<CAPTION>
2000 1999
(unaudited) (unaudited)
----------- -----------
<S> <C> <C>
NET SALES $ 1,701,036 $ 2,376,573
COST OF SALES 1,046,643 1,815,692
----------- -----------
Gross profit 654,393 560,881
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 1,443,086 1,328,712
----------- -----------
Operating loss (788,693) (767,831)
OTHER INCOME (EXPENSE):
Interest Income 1,415 3,039
Interest Expense (235,529) (404,236)
Other 453 11,830
----------- -----------
Net other expense (233,661) (389,367)
----------- -----------
LOSS BEFORE INCOME TAX EXPENSE (1,022,354) (1,157,198)
PROVISION FOR INCOME TAXES (634) (4,720)
----------- -----------
LOSS BEFORE EXTRAORDINARY ITEM (1,022,988) (1,161,918)
EXTRAORDINARY ITEMS -- --
----------- -----------
NET LOSS ($1,022,988) ($1,161,918)
=========== ===========
EARNINGS PER SHARE-BASIC:
Loss before extraordinary item ($ 0.11) ($ 0.14)
=========== ===========
Extraordinary gain-forgiveness of debt 0.00 0.00
----------- -----------
Net loss per common and common
equivalent share ($ 0.11) ($ 0.14)
=========== ===========
WEIGHTED AVERAGE OUTSTANDING COMMON
AND COMMON EQUIVALENT SHARES-BASIC 9,723,354 8,059,788
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements
5
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RENAISSANCE GOLF PRODUCTS, INC.
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2000 AND JUNE 30, 1999
<TABLE>
<CAPTION>
2000 1999
(unaudited) (unaudited)
------------ -----------
<S> <C> <C>
NET SALES $ 1,292,757 $ 1,392,100
COST OF SALES 715,563 1,064,785
------------ -----------
Gross profit 577,194 327,315
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 850,527 693,066
------------ -----------
Operating loss (273,333) (365,751)
OTHER INCOME (EXPENSE):
Interest Income 884 1,290
Interest Expense (120,140) (241,447)
Other 311 35,061
------------ -----------
Net other expense (118,945) (205,096)
------------ -----------
LOSS BEFORE INCOME TAX EXPENSE (392,278) (570,847)
PROVISION FOR INCOME TAXES (36) (4,720)
------------ -----------
LOSS BEFORE EXTRAORDINARY ITEM (392,314) (575,567)
EXTRAORDINARY ITEMS 0 --
------------ -----------
NET LOSS ($ 392,314) ($ 575,567)
============ ===========
EARNINGS PER SHARE-BASIC:
Loss before extraordinary item ($ 0.04) ($ 0.07)
Extraordinary gain-forgiveness of debt 0.00 0.00
------------ -----------
Net loss per common and common
equivalent share ($ 0.04) ($ 0.07)
============ ===========
WEIGHTED AVERAGE OUTSTANDING COMMON
AND COMMON EQUIVALENT SHARES-BASIC 10,018,732 8,595,038
============ ===========
</TABLE>
The accompanying notes are an integral part of the financial statements
6
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RENAISSANCE GOLF PRODUCTS, INC.
STATEMENTS OF CASH FLOWS
AS OF JUNE 30, 2000 AND JUNE 30, 1999
<TABLE>
<CAPTION>
2000 1999
(unaudited) (unaudited)
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ($1,022,988) ($1,161,918)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 56,752 65,709
Change in Inventory for Adjustments/Reserve for Inventory Obsolescence 22,298 (75,000)
Adjustment for 1999 Expense (15,000) --
Net change in operating assets and liabilities:
(Increase) Decrease in accounts receivable 50,509 (202,653)
(Increase) Decrease in inventories 112,106 300,799
(Increase) Decrease in prepaid expenses 12,203 247,035
(Increase) Decrease in other assets (18,000) 0
(Decrease) Increase in accounts payable & accrued expenses (447,178) (148,503)
Less payment with equity -- 9,486
----------- -----------
Net cash used in operating activities (1,249,298) (965,045)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property & equipment (131,076) (22,483)
Leasehold Abandonment 87,704 --
----------- -----------
Net cash used in investing activities (43,372) (22,483)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on notes payable, net of disount -- 8,569
Proceeds from issuance of preferred stock -- 1,000,000
Notes payable converted to equity (3,450,000) 0
Conversion of debt to equity 3,156,487
Conversion of div & int payable to preferred series B shares 571,498
Conversion of div & int payable to common stock 447,991
Conversion of preffered series A shares to series B shares (107)
Funds borrowed for payment of accrued royalty 450,000
Financing of computer equipment 76,450
Financing of telephone system 51,258
----------- -----------
Net cash provided by financing activities 1,303,577 1,008,569
----------- -----------
NET INCREASE (DECREASE) IN CASH 10,907 21,041
CASH and cash equivalents, beginning of period 47,798 63,184
----------- -----------
CASH and cash equivalents, end of period $ 58,705 $ 84,225
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements
7
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RENAISSANCE GOLF PRODUCTS, INC.
Notes To Financial Statements For The Three Months and Six
Months Ended June 30, 2000
1. BASIS OF PRESENTATION
The Company has prepared its financial statements for the three months and
six months ended June 30, 2000 and 1999 without audit by the Company's
independent auditors. In the opinion of management, the unaudited financial
statements reflect all normally recurring adjustments necessary to fairly
present the Company's financial position and results of operations for the
periods indicated.
The accompanying interim financial statements should be read in conjunction
with the financial statements and related notes included in the Company's 10-KSB
for the period ended December 31, 1999, which has been filed with the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in the Company's annual financial statements have been omitted from the
quarterly financial statements based upon Securities and Exchange Commission
rules and regulations.
Net loss per common and common equivalent share was computed based on the
net loss divided by the weighted average number of common and common equivalent
shares outstanding, unless antidilutive, during the year presented.
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards 128, Earnings per Share ("SFAS 128"), which is effective
for financial statements issued for periods ending after December 15, 1997. The
effect on the Company of adopting SFAS 128 has not yet been determined.
2. FINANCING
Subsequent to the end of the second quarter, in July 2000, the Company
renegotiated its relationship with AKA, its largest stockholder. Under this new
agreement, AKA (i) converted $3,000,000 due under a note payable into 37,500
shares of Series B Preferred Stock (which will be convertible into 18,750,000
shares of Common Stock upon the Company increasing the authorized number of
shares of Common Stock), (ii) converted 50,000 shares of Series A Preferred
stock into 12,500 shares of Series B Preferred Stock (convertible into 6,250,000
shares of Common Stock), (iii) accepted 1,791,964 shares of Common Stock and
300,000 warrants to purchase shares of Common Stock for $0.25 for payment of all
past due interest dividend, and late payment fees, and (iv) reduced the interest
rate on the remaining $2,000,000 due on the note to 5%. The effective date for
this AKA transaction is June 1, 2000.
Alvin W. Emery, a creditor owed $512,685 in principal and interest pursuant
to a promissory note, agreed to convert the entire balance due into 6,409 shares
of Series B Preferred stock (which will be convertible into 3,204,281 shares of
Common Stock upon the Company increasing the authorized number of shares of
Common Stock), to be effective June 1, 2000.
John B. Hewlett, Chief Executive Officer and Chairman of the Board, who
advanced the Company $125,000 during the first quarter of 2000, agreed to
convert $127,352, including principal and interest, into 1,592 shares of Series
B Preferred Stock (convertible into 795,950 shares of Common Stock), and to
convert 25,000 shares of Series A Preferred Stock into 6,250 shares of Series B
Preferred Stock (which will be convertible into 3,125,000 shares of Common Stock
upon the Company increasing the authorized number of shares of Common Stock), to
be effective June 1, 2000.
In July 2000, the Company began offering Series "C" Preferred Stock for
$100.00 per share. This offering is limited to "Accredited Investors" and no
more than 35 non-accredited investors pursuant to Rules 505 and 506 of the
1933 Act. Up to 25,000 shares are being offered, with a minimum investment
per investor of $5,000 or 50 shares. The Preferred Stock is not registered,
and we do not intend to register the Shares. Each Preferred share shall be
convertible at the election of the stockholder into 500 shares of restricted
Common Stock. If the Company sells all 25,000 shares, such shares will be
convertible into an aggregate of 12,500,00 shares of Common Stock. No
fractual shares shall be
8
<PAGE>
issued upon conversion, and no conversion can be made of less than four
shares at any one time. The Company's Common Stock currently trades on the
OTC:BB under the symbol "RGPI." The shares will not have the right to any
specific dividend, but no dividend may be paid on the Common Stock unless a
dividend is simultaneously paid on the Preferred Stock.
The Company presently has (i) the equivalent of approximately 43,688,038
shares of Common Stock outstanding (including 18,750 shares of Series B
Preferred Stock which are convertible into 9,375,000 shares of Common Stock, and
45,500 shares of Series B Preferred Stock, which will be convertible into
22,750,231 shares of Common Stock upon the Company increasing the authorized
number of shares of Common Stock), (ii) the equivalent of approximately
11,058,919 stock options and warrants to purchase shares of the Company's Common
stock at prices ranging between $0.25 and $5.00, and (iii) the intent of issue
25,000 shares of Series C Convertible Preferred Stock (convertible into 500
Common Stock shares for each one share of Preferred Series C Stock or 12,500,000
shares of Common Stock in the aggregate) through the Company's present offering.
In the event of any liquidation or winding up, holders of shares in the
Company will be entitled to receive, in the following order of preference,
Series B Preferred, Series C Preferred, and Common Stock, any amount
available, for distribution up to an amount equal to the issue price per
share, plus any declared but unpaid dividends.
AKA, as a creditor, currently holds a first right to all inventory and
proceeds from the sale of inventory in the event of liquidation. AKA also holds
a right to terminate its loan agreement with the Company and liquidate the
inventory if at any point, in AKA's sole discretion, it determines that the
Company's business is not viable. In the event of the liquidation of the
inventory by AKA, the Company would likely liquidate the entire business.
3. LICENSE
Part of the Company's competitive advantage comes from its license from
Fila Sport, S.p.A. ("License Agreement") to use the Fila brand name on the
Company's golf equipment. During the last eight years, our License Agreement has
essentially remained unchanged and has not reflected the changes taking place in
the retail industry due generally to the emergence of the new business economy
and specifically to the general public embracing the Internet. Because of the
disparity between the License Agreement and the new means and methods of
distribution and sale of goods, the Company was unable to effectively attempt to
implement many of its innovative sales plans and strategies. Through the
continuous efforts of the Company's Chief Executive Officer, John B. Hewlett,
over the past four years, Fila Sport has agreed to renegotiate the License
Agreement to permit more freedom to move into the new economy. Along with newly
approved means and methods of distribution and sales of the Company's golf
products bearing the Fila name, Fila Sport has also agreed to renegotiate the
minimum royalties it charges the Company.
Although the Company has already negotiated the general terms of the new
License Agreement, which are included in a letter of intent with Fila Sport, the
Company has not completed a final document. Under the current License Agreement,
the Company had accumulated past due royalties of $450,000 that needed to be
paid before Fila Sport would agree to complete the new License Agreement. During
the second quarter, an affiliate of Mr. Hewlett, advanced $450,000 to pay the
outstanding royalty balance to Fila Sport permitting the drafting of the new
License Agreement to begin. The Company anticipates completing the new License
Agreement within the next few months.
4. SUBSEQUENT EVENTS
During August 2000, an affiliate of Mr. Hewlett, advanced $75.000 to pay an
outstanding royalty balance to Fila S.p.A. accrued for the period ended June 30,
2000 and due July 31, 2000. The payment has been made to Fila S.p.A.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2000
Net sales for the three months ended June 30, 2000, were $1,293,000
compared to $1,392,000 for the comparable period in 1999, a decrease of $99,000
or 7%. The decreased sales volume was attributable to the change in marketing
strategy of phasing out discounted sales in preference to selling directly to
corporate customers. The Company also moved to a new location during the second
quarter which interrupted sales and shipments.
Cost of sales decreased from $1,065,000 for the three months ended June 30,
1999, to $716,000 for the comparable period in 2000, a decrease of $349,000 or
33%. The gross profit margin increased from 23% for the three months ended June
30, 1999 to 45% for the comparable period in 2000. This increase in gross
margins resulted from discontinuance of volume selling to large mass markets.
Selling, general, and administrative costs were $851,000 for the three
months ended June 30, 2000 compared to $693,000 for the comparable period in
1999, an increase of $158,000 or 23%. In conjunction with a relocation to a new
facility, the Company opened an outlet store to sell merchandise directly to the
public resulting in additional expenses.
The Company's interest expense decreased from $241,000 for the three months
ended June 30, 1999 to $120,000 for the comparable period in 2000 as a result of
interest on the AKA loans interest rate being reduced from 12% to 8% per annum
during November 1999, and subsequently being renegotiated to 5% during June of
2000 on the $2,000,000 remaining subject to the promissory note. Additional
interest on $3,000,000 was eliminated as of June 1, 2000 as a result of AKA
converting that portion of the promissory note into equity.
The Company experienced a net loss before extraordinary items and net loss
per share before extraordinary items of $392,000 and $0.04, respectively, for
the three months ended June 30, 2000 compared to a net loss before extraordinary
items and net loss per share before extraordinary item of $576,000 and $0.07,
respectively, for the comparable period in 1999.
The Company's inventory decreased from $1,628,000 at December 31, 1999 to
$1,606,000 at June 30, 2000.
SIX MONTHS ENDED JUNE 30, 2000
Net assets at June 30, 2000 were $2,341,000 compared to $2,523,000 at
December 31, 1999. This decrease in net assets resulted primarily from a
reduction in accounts receivable of approximately $163,000. Cash received from
the collection of accounts receivable were used to fund operations. Cash at June
30, 2000 was $59,000 compared to $48,000 at December 31, 2000.
Total current liabilities decreased from $6,883,000 at December 31, 1999 to
$3,563,000. This decrease in net liabilities resulted primarily from the
conversion of $3,000,000 due on a note payable to AKA into Series B Preferred
Stock of the Company. Additionally accrued liabilities and notes payable were
reduced through the conversion of sums due into equity of the Company, and
accrued royalties were reduced through payment of sums due. The reduction in
notes payable for debt conversion into equity was offset with new debt assumed
to make the royalty payments due to Fila Sport S.p.A.
The total stockholders' deficit was reduced by approximately $3,157,000
from December 31, 2000 to June 30, 2000 as the result of conversion of debt into
equity by large creditors.
Net sales for the six months ended June 30, 2000, were $1,701,000 compared
to $2,376,000 for the comparable period in 1999, a decrease of $676,000. The
decreased sales volume was attributable to the change in marketing strategy of
phasing out discounted sales in preference to selling directly to corporate
customers.
Cost of sales decreased from $1,816,000 for the six months ended June 30,
1999, to $1,047,000 for the comparable period in 2000, a decrease of $769,000.
The gross profit margin increased from 24% for the six months
10
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ended June 30, 1999 to 38% for the comparable period in 2000. This increase in
gross margins resulted from discontinuance of volume selling to large mass
markets.
Selling, general, and administrative costs were $1,443,000 for the six
months ended June 30, 2000 compared to $1,329,000 for the comparable period in
1999, an increase of $114,000.
The Company experienced a net loss before extraordinary items and net loss
per share before extraordinary items of $1,023,000 and $0.11, respectively, for
the six months ended June 30, 2000 compared to a net loss before extraordinary
items and net loss per share before extraordinary items of $1,162,000 and $0.14,
respectively, for the comparable period in 1999.
During the first quarter of 2000, an affiliate of John B. Hewlett loaned
the Company $60,000 on a promissory note bearing interest at 8% annum and due
December 31, 2001. During the second quarter, an affiliate of John B. Hewlett
loaned the Company $515,000.
Based upon the operating history, the Company's auditors during the past
several years have expressed concern about the Company's ability to continue
operations. The Company believes these concerns are primarily founded upon
the Company's lack of working capital resulting from the Company operating at
a loss that has caused the Company to rely upon outside capital to fund
ongoing operations. During 1998 and 1999, the Company has taken action to cut
operating expenses by reducing its work force and bringing certain
independent contractor functions in house. The Company is also pursuing a new
marketing plan. The Company believes these changes will help move existing
inventory and supply cash flow, but it is unlikely that these changes alone
will provide sufficient capital to fund ongoing operations.
Historically the Company has funded itself through operations, the sale of
stock, and borrowing. Most recently the Company has raised equity through a
private offering of its stock and through negotiating loan agreements as are
outlined throughout this report. The Company plans to continue to use these
methods to fund operations. Potential investors are being approached to lend to
or invest in the Company. The Company can provide no assurance that it will be
able to raise sufficient capital to fund operations through the end of the year.
The golf business is seasonal because of the winter condition throughout
much of the world, especially the Northern United States. This seasonality
causes the Company's sales to vary by quarter; accordingly, operating results
can vary substantially from quarter to quarter and one quarter's results may not
be representative of the Company's annual results.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See the previous report in the 10-KSB filed for the year ended 1999.
ITEM 2. CHANGES IN SECURITIES
As of June 1, 2000, the Board approved the creation of two classes of
securities, Series B and Series C Preferred Stock. The Company is authorized to
issue 100,000 shares of Series B Preferred Stock, as well as 50,000 shares
Series C Preferred Stock. Shares of Series B and C Preferred Stock are
convertible at any time into shares of Common Stock at the rate of 500 shares of
Common Stock for one share of Preferred Stock. Each of Series B and Series C
Preferred Stock possess voting rights on an "as converted basis," meaning each
share of issued and outstanding Preferred Stock carries the right to vote 500
shares of Common Stock. The Series B Preferred Stock has demand and "piggy-back"
registration rights, and the Series C Preferred Stock has "piggy-back"
registration rights.
As of June 1, 2000, three creditors converted promissory notes due from the
Company into shares of Series B Preferred Stock at the equivalent of $0.16 per
Common Stock Share. These debtors included, AKA which converted $3,000,000
(37,500 shares of Series B Preferred Stock), Alvin W. Emery who converted
$512,685 (6,409 shares of Series B Preferred Stock), and John B. Hewlett who
converted $127,352 (1,592 shares of Series B
11
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Preferred Stock). The shares received by AKA, Mr. Emery, and Mr. Hewlett will be
convertible into shares of Common Stock only upon approval of the stockholders
to increase the number of Common Stock shares available for issuance.
The Company previously issued Series A Preferred Stock to AKA and John B.
Hewlett. All Series A Preferred Stock was converted into shares of Series B
Preferred Stock as of June 1, 2000: AKA received 12,500 shares of Series B
Preferred Stock, and Mr. Hewlett received 6,250 shares of Series B Preferred
Stock.
The Company intends to hold a stockholder vote to increase the number of
authorized shares of Common Stock to 100,000,000 from 40,000,000. This
increase in the number of shares will provide the Company with sufficient
shares to provide all of the Series B Preferred stockholders with conversion
rights. At the same time the Company intends to increase the authorized
number of Preferred shares to permit the split the Preferred shares into a
number of shares equivalent to the Common Stock shares issuable upon
conversion of the Preferred shares into Common Stock Shares. Based upon the
current voting rights held by AKA and Mr. Hewlett, stockholder approval of
the increase in the authorized shares of Common and Preferred Stock will be
received.
Issuances of each Series of Preferred Stock have had or will have a
dilutive effect on the current Common Stock Stockholders.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
The Company renegotiated its loan agreement with AKA to avoid being found
in default thereunder.
The Company's royalty payment to Fila Sport S.p.A was past due during the
second quarter. Through an advance to the Company by an affiliate of John B.
Hewlett, the Company avoided being found in default under the license agreement
with Fila Sport.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its regular Annual Meeting of Stockholders on June 8, 2000
in Draper, Utah. At this meeting the stockholders elected the individuals listed
below as directors and also ratified the Board of Director's choice of Jones,
Jensen & Company as independent auditor for the fiscal year ending December 31,
2000. As of the Record Date, there were 9,429,475 Shares outstanding with an
additional 1,500,000 Share equivalents held by Preferred Stockholders that were
entitled to be voted. Each outstanding Share or equivalent was entitled to one
vote on each matter properly brought before the Meeting other than the election
of Directors which was by cumulative voting. A total of 6,715,685 shares were
represented at the meeting of the 10,929,475 total shares entitled to vote. The
stockholders elected all of the nominated directors.
Proposal 1: Election of Directors
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
John B. Hewlett 6,705,300 7,598 2,787
Dennis L. Crockett 6,705,300 7,598 2,787
Ralph W. Rasmussen 6,705,300 7,598 2,787
Bruce H. Haglund 6,705,300 7,598 2,787
Wade M. Mitchell 6,705,300 7,598 2,787
</TABLE>
Proposal 2: Ratification of the appointment by the Board of Directors of
Jones, Jensen & Company as the independent auditor of the Company for the fiscal
year ending December 31, 2000
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C>
6,701,187 2,687 11,811
</TABLE>
12
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ITEM 5. OTHER INFORMATION
The Company has moved and it currently occupies approximately 29,230 square
feet of office, manufacturing, and warehouse space located at 11585 South State
Street, Draper, Utah 84020. The lease provides for rent of approximately
$288,000 per year and expires in June, 2003.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
The Company filed an 8-K dated July 26, 2000 and which reported a change in
control. This change resulted from the conversion of a portion of AKA's debt
into equity, as described above.
SIGNATURES
Pursuant to the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
RENAISSANCE GOLF PRODUCTS, INC.
Date: August 15, 2000 By: /s/ John B. Hewlett
-----------------------------------
John B. Hewlett
Chairman of the Board
Date: August 15, 2000 By: /s/ Michael Hammond
-----------------------------------
Michael Hammond
Controller
Chief Financial Officer
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