SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ----- EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2000
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ----- EXCHANGE ACT OF 1934
For the transition period from _______________ to ______________
Commission File No. 000-29662
RollerBall International Inc.
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 95-4478767
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(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
9255 Doheny Road, Suite 2705 Los Angeles, CA 90069
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 275-5313
--------------
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year,
if changed since last report.
Indicate by check mark 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 _____
6,384,474 shares of Common Stock, par value $.001 per share, were outstanding at
May 16, 1999.
Page 1 of 11
<PAGE>
ROLLERBALL INTERNATIONAL INC.
FORM 10-QSB
INDEX
Page No.
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements (unaudited)
Balance Sheets -
March 31, 2000 and December 31, 1999 (Audited) 3
Statements of Operations -
Three Months ended March 31, 2000 and 1999 4
Statements of Cash Flows -
Three Months ended March 31, 2000 and 1999 5
Notes to Financial Statements 6-7
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-9
PART II - OTHER INFORMATION
Item 1 - Exhibits and reports on Form 8-K 10
Signatures 11
Page 2 of 11
<PAGE>
Part I - Financial Information
RollerBall International Inc.
Balance Sheets
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
--------------------- -------------------
(unaudited)
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 222 $ 10,029
Accounts receivable, net of allowance for doubtful
accounts of $50,000 for March 31, 2000
and December 31, 1999, respectively 265,000 272,849
Inventory 1,061,872 1,165,588
Prepaid expenses and other 140,547 177,399
------------ ------------
Total Current Assets 1,467,641 1,625,865
Property and equipment, net 237,337 265,536
Intangible assets, net of accumulated amortization
of $157,573 (2000) and $147,304 (1999) 499,893 510,162
------------ ------------
Total Assets $ 2,204,871 $ 2,401,563
============ ============
Liabilities and Stockholders' Equity
Current Liabilites:
Accounts payable and Accrued Expenses $ 1,566,232 $ 1,449,949
Due to factor 9,372 2,491
Notes payable to stockholders 57,000 57,000
Advances from stockholders 26,072 21,072
Debt 90,000 90,000
------------ -----------
Total Current Liabilities 1,748,676 1,620,512
Commitments - -
Stockholders' Equity:
Preferred stock - $.10 par value, 10,000,000 shares
authorized; no shares issued or outstanding - -
Common stock - $.001 par value, 50,000,000 shares
authorized; 6,384,474 issued and outstanding (2000),
6,384,474 (1999) 6,384 6,384
Additional paid in capital 11,222,641 11,222,641
Advances to stockholder (15,000) (15,000)
Accumulated deficit (10,757,830) (10,432,974)
------------ ------------
Total Stockholders' Equity 456,195 781,051
------------ ------------
Total Liabilities and Stockholders' Equity $ 2,204,871 $ 2,401,563
============ ============
</TABLE>
See accompanying notes
Page 3 of 11
<PAGE>
RollerBall International Inc.
Statements of Operations
<TABLE>
<CAPTION>
Three months ended March 31,
----------------------------------
2000 1999
--------------- ---------------
(unaudited)
<S> <C> <C>
Net sales $ 221,513 $ 332,822
Cost of sales 143,872 210,133
--------- ---------
Gross profit 77,641 122,689
--------- ---------
Operating expenses:
Selling and marketing 102,647 169,578
General and administrative 290,872 414,478
--------- ---------
Total operating expenses 393,519 584,056
--------- ---------
Loss from operations (315,878) (461,367)
Interest expense 8,778 15,257
--------- ---------
Loss before provision for income taxes (324,656) (476,624)
Provision for income taxes 200 200
--------- ---------
Net loss $(324,856) $ (476,824)
========= ==========
Net loss per common share
Basic ($0.05) ($0.10)
========= ==========
Diluted ($0.05) ($0.10)
========= ==========
Weighted average common shares
outstanding
Basic 6,384,474 4,820,026
========= ==========
Diluted 6,384,474 4,820,026
========= ==========
</TABLE>
See accompanying notes
Page 4 of 11
<PAGE>
RollerBall International Inc.
Statements of Cash Flows
<TABLE>
<CAPTION>
Three months ended March 31,
---------------------------------------------
2000 1999
---------------------- --------------------
<S> <C> <C>
Operating Activities
Net loss $ (324,856) $ (476,824)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 39,107 45,729
Amortization of debt issuance costs - 3,125
Change in operating assets and liabilities:
Accounts receivable 7,849 120,946
Inventory 103,716 148,938
Prepaid expenses 36,852 (69,381)
Accounts payable 13,131 109,251
Accrued expenses 103,152 48,534
---------- ----------
Net cash used in operating activities (21,049) (69,682)
---------- ----------
Investing Activities
Purchases of property and equipment - -
Increase in intangible assets (639) (7,950)
---------- ----------
Net cash used in investing activities (639) (7,950)
---------- ----------
Financing Activities
Advances from factor 9,017 209,357
Repayments to factor (2,136) (243,575)
Proceeds on loans from stockholders 5,000 2,500
---------- ----------
Net cash provided by (used in) financing activities 11,881 (31,718)
---------- ----------
Net decrease in cash (9,807) (109,350)
Cash at beginning of period 10,029 132,099
---------- ----------
Cash at end of period $ 222 $ 22,749
========== ==========
</TABLE>
See accompanying notes
Page 5 of 11
<PAGE>
ROLLERBALL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS
1. Organization
RollerBall International Inc. (the "Company") develops, manufacturers,
distributes and markets inline skates, and related accessories under the
RollerBall trademark in the United States and throughout Europe, Asia and North
America through independent sales representatives and distributors. The Company
was incorporated in Delaware on March 7, 1994. The Company's fiscal year ends on
December 31st.
On March 31, 1998, the Company's Registration Statement on Form SB-2
was deemed effective and on April 8, 1998, the offering closed and the Company
received $5.0 million in proceeds, net of underwriting discounts and commissions
and offering expenses.
2. Summary of Significant Accounting Policies
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation of the results
of operations for the periods presented have been included.
The financial data at December 31, 1999 is derived from audited
financial statements which are included in the Company's Form 10-KSB and should
be read in conjunction with the audited financial statements and notes thereto.
Interim results are not necessarily indicative of results for the full year.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Page 6 of 11
<PAGE>
3. Net Loss Per Common Share
Net Loss per Common Share is calculated in accordance with SFAS No.
128, "Earnings Per Share," which requires presentation of basic loss per share
("BLPS") and diluted loss per share ("DLPS"). The computation of BLPS is
computed by dividing loss available to common stockholders by the weighted
average number of outstanding common shares during the period. DLPS gives effect
to all diluted potential common shares outstanding during the period. The
computation of DLPS does not assume conversion, exercise or contingent exercise
of securities that would have an antidilutive effect on earnings. As of March
31, 2000 the Company had no potentially dilutive securities.
Page 7 of 11
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
SAFE HARBOR STATEMENT
Certain statements in this Form 10-QSB, including information set forth
under Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations constitute "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995 (the Act). The Company
desires to avail itself of certain "safe harbor" provisions of the Act and is
therefore including this special note to enable the Company to do so.
Forward-looking statements in this Form 10-QSB or hereafter included in other
publicly available documents filed with the Securities and Exchange Commission,
reports to the Company's stockholders and other publicly available statements
issued or released by the Company involve known and unknown risks, uncertainties
and other factors which could cause the Company's actual results, performance
(financial or operating) or achievements to differ from the future results,
performance (financial or operating) or achievements expressed or implied by
such forward-looking statements. Such future results are based upon management's
best estimates based upon current conditions and the most recent results of
operations.
THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THREE MONTHS ENDED MARCH 31, 1999
Net sales for the three months ended March 31, 2000 and 1999 were
$221,513 and $332,822, respectively, which is a decrease of $111,309 or
approximately 33.4%. This decrease for the sales in the Company is a direct
result of the inability to secure the funds on a timely basis that were
necessary to purchase new inventory for the year 2000 for sale during the three
months ended March 31, 2000 and to complete tooling for the Company's mass
market line of products. The Company's new year 2000 skate models consist
primarily of soft boot skate models as well as an innovative line of skates for
the Company's mass merchandiser/market accounts. The Company is currently
working with several funding sources to provide the needed capital for new
inventory, completion of tooling and marketing support funding.
Gross margin for the three months ended March 31, 2000 was 35.1% which
was comparable to the three months ended March 31, 1999.
Selling and marketing expenses for the three months ended March 31,
2000 and 1999 were $102,647 and $169,578, respectively, which represents a
decrease of $66,931, or 39.5%. The decrease primarily relates to the Company'
efforts in reducing the amount of corporate travel and consulting expense in an
attempt to reduce the cash requirements of the Company and therefore the overall
net loss for the Company. The Company will continue to attempt to reduce selling
and marketing expenses in the future in an attempt to reduce the cash
requirements of the Company and therefore the overall net loss for the Company.
Page 8 of 11
<PAGE>
General and administrative expenses for the three months ended March
31, 2000 and 1999 were $290,872 and $414,478, respectively, which represents a
decrease of $123,606, or 29.8%. The decrease was primarily due to the Company's
attempt to reduct overall general and administrative expenditures by reducing
officers' salaries and professional fees in an attempt to reduce the overall net
loss for the Company for the three months ended March 31, 2000 as opposed to the
same period ending March 31, 1999. The Company will continue to attempt to
reduce general and administrative expenses in the future in an attempt to reduce
the cash requirements of the Company and therefore the overall net loss for the
Company.
The Company's interest expense for the three months ended March 31,
2000 and 1999 was $8,778 and $15,257, respectively, which represents a decrease
of $6,479. This decrease was primarily attributable to the Company's decrease in
debt issuance costs.
Net loss for the three months ended March 31, 2000 and 1999 was
$324,856 and $476,824, respectively, which represents a decrease of $151,968, or
31.9%. This decrease in net loss for this period is primarily attributable to
the Company's attempt to reduce overall expenditures for the three months ended
March 31, 2000 as opposed to the same period ending March 31, 1999. The Company
will continue to reduce costs as necessary in order to reduce the overall losses
over the next several quarters as compared to the previous year's quarters.
LIQUIDITY AND CAPITAL RESOURCES
Due to the continued depressed state of the inline skate market and
lack of sales, the Company will require additional capital to continue
operations. The Company is currently in negotiations with several potential
investors to raise additional equity and or debt capital components for the
purchase of new year 2000 inventory, completion of tooling and marketing support
funding. The Company expects to have a capital funding agreement in place by the
end of the second quarter. There can be no assurances that the Company will be
successful in these efforts.
The company is also in negotiation with a major third party licensor
for a product license to introduce a line of skates on a worldwide basis under
the umbrella license of this third party licensor. The acquisition of this major
license could provide a marketing platform for increased sales, profits and
marketability of the Company's products. There can be no assurances that the
Company will be successful in these efforts.
Net cash used in operating activities for the three months ended March
31, 2000 and 1999 was $21,049 and $69,682, respectively. The decrease was
attributable to the Company's attempts to reduce expenditures for the three
months ended March 31, 1999 as compared to the same period in the prior year.
Page 9 of 11
<PAGE>
PART II - OTHER INFORMATION
Item 1. Exhibits and reports on Form 8-K
(a). Exhibits - None.
(b). Reports on Form 8-K -
Date of Report Item Reported
-------------- -------------
March 7, 2000 Item 4: Change of Registrant's Certifying
Accountant
March 27, 2000 Item 4: Change of Registrant's Certifying
Accountant
Page 10 of 11
<PAGE>
SIGNATURE
Pursuant to the requirements of 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.
ROLLERBALL INTERNATIONAL INC.
May 22, 2000 /s/ Jack Forcelledo
DATE -------------------
JACK FORCELLEDO
PRESIDENT & CHIEF EXECUTIVE OFFICER
Page 11 of 11
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 222
<SECURITIES> 0
<RECEIVABLES> 315,000
<ALLOWANCES> 50,000
<INVENTORY> 1,061,872
<CURRENT-ASSETS> 1,467,641
<PP&E> 780,893
<DEPRECIATION> 543,556
<TOTAL-ASSETS> 2,204,871
<CURRENT-LIABILITIES> 1,748,676
<BONDS> 0
0
0
<COMMON> 6,384
<OTHER-SE> 449,811
<TOTAL-LIABILITY-AND-EQUITY> 2,204,871
<SALES> 221,513
<TOTAL-REVENUES> 221,513
<CGS> 143,872
<TOTAL-COSTS> 143,872
<OTHER-EXPENSES> 393,519
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,778
<INCOME-PRETAX> (324,656)
<INCOME-TAX> 200
<INCOME-CONTINUING> (324,856)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (324,856)
<EPS-BASIC> (0.05)
<EPS-DILUTED> (0.05)
</TABLE>
