SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 0-24736
Famous Sam's Group, Inc., f/k/a U.S. Flywheel Systems, Inc.
(Exact name of small business issuer as specified in its charter)
Colorado
88-0361701
(State or other jurisdiction of
(I.R.S. employer
incorporation or organization)
identification
number)
4221 E. Pontatoc Canyon Dr., Tucson, Arizona
85718
(Address of principal executive offices)
(Zip Code)
Issuer's telephone number, including area code: (520) 577-6611
Indicate by check mark whether the issuer (1) has filed all reports
required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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
Indicate the number of shares outstanding of each of the issuer's
classes of common stock,
as of the latest practicable date: As of July 15, 1996, there were
approximately 33,000
shares outstanding.
<PAGE>
HALLIBURTON, HUNTER & ASSOCIATES, P.C.
Certified Public Accountants
To the Board of Directors and Shareholders
Famous Sam's Group, Inc., f/k/a U.S. Flywheel Systems, Inc.
We have audited the accompanying balance sheets of Famous Sam's
Group, Inc., f/k/a U.S.
Flywheel Systems, Inc. (a development stage company) as of December
31 1995, and the
related statements of operations, stockholders' equity, and cash
flows for the year then ended.
Our responsibility is to express an opinion on these financial
statements based on our audit.
The financial statements of Famous Sam's Group, Inc., f/k/a U.S.
Flywheel Systems, Inc. (a
development stage company), as of December 31, 1994, and 1993 were
audited by other
auditors whose report dated May 5, 1995, expressed an unqualified
opinion on these
statements.
We conducted our audits in accordance with generally accepted
auditing standards. Those
standards require that we plan and perform the audits to obtain
reasonable assurance about
whether the financial statements are free of material misstatement.
An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant
estimates made by management, as well as evaluating the overall
financial statement-presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, based on our audit and the report of the other
auditors, the financial
statements referred to above present fairly, in all material
respects, the financial position of
Famous Sam's Group, Inc., f/k/a U.S. Flywheel Systems, Inc., (a
development stage
company), as of December 31, 1995, and December 31, 1994, and the
results of its
operations and cash flows for the three years ended December 31,
1995.
/s/ Halliburton, Hunter & Associates, P.C.
Littleton, Colorado
July 22, 1996
<PAGE>
Item 1. Financial Statements
FAMOUS SAM'S GROUP, INC., F/K/A, U.S. FLYWHEEL SYSTEMS, INC.
(a development stage company)
BALANCE SHEETS
June 30, 1996 December 31,
1995
(unaudited)
ASSETS:
Current Assets $ ---- $
----
Other Assets $ ----
$ ----
Total Assets $ ---- $
----
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities
Accounts payable $ 37,076 $
37,076
Total Current Liabilities: $ 37,076 $
37,076
Stockholders' Equity
Common stock, no par value,
12,010,000 shares issued and
outstanding 3,724,323
3,724,323
Deficit accumulated during development stage (3,761,399)
(3,761,399)
Total Liabilities and Stockholders'
Equity (Deficit) $ ---
$ ----
The accompanying notes form an integral part of these statements.
FAMOUS SAM'S GROUP, INC., F/K/A, U.S. FLYWHEEL SYSTEMS, INC.
(a development stage company)
STATEMENTS OF OPERATIONS
Six months ended
June 30,
(Unaudited)
1996 1995
Revenues $ ---- $
95
Expenses ---- $11,158
Gain from sale of assets
Net Gain (Loss) ----
$(11,063)
Net Gain (Loss)
per common share *
*
Weighted average shares 12,010,000
12,010,000
* - Less than $.001 per share.
The accompanying notes form an integral part of these statements.
<PAGE>
FAMOUS SAM'S GROUP, INC., F/K/A,
U.S. FLYWHEEL SYSTEMS, INC.
(a development stage company)
STATEMENTS OF CASH FLOWS
Six Months Ended June
30
(Unaudited)
1996 1995
Cash Flows Provided (Used) by
Operating activities:
Net Loss (Gain) $ ---
$(11,063)
Increase in due from affiliate
- --- ( 0)
Increase in accounts payable ---
4,579
Increase in interest payable ---
650
Net cash flows provided (used) by
operating activities $ ---
$(5,834)
Cash Flows Provided by Financing Activities:
Increase in due shareholders ---
4,925
Net cash flows provided by
financing activities ---
4,925
Increase (Decrease) in cash: $ ---
$ (910)
Cash at beginning of the period: $ ---
$ 939
Cash at end of period: $ --- $
29
The accompanying notes form an integral part of these statements.
<PAGE>
FAMOUS SAM'S GROUP, INC., F/K/A, U.S. FLYWHEEL SYSTEMS, INC.
(a development stage company)
Notes to
Financial Statements
(Unaudited)
In the opinion of management, all adjustments (consisting of normal
recurring adjustments)
considered necessary for a fair presentation of the financial
condition of registrant have been
included, and the disclosures are adequate to make the information
presented not misleading.
Note 1. A summary of significant accounting policies is currently
on file with the U.S.
Securities and Exchange Commission in registrant's Form 10SB.
Note 2. The loss per share was computed by dividing net loss by
the weighted average
number of shares of common stock outstanding during the period.
Note 3. Registrant has not declared or paid dividends on its
common shares since inception.
Note 4. The accompanying unaudited financial statements have been
prepared in accordance
with the instructions to Form 10-Q and do not include all
information and footnotes required
by generally accepted accounting principles for complete financial
statements.
Note 5. Income taxes have not been provided for in that registrant
has not had a tax liability
from inception to the date of these notes.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of
Operations
Liquidity and Capital Resources
The Company, previous to 1994, operated solely as a research and
development facility.
Since October, 1993, the Company has merely held a minority stake
in the Partnership. The
Company has had no income since 1994 from any source whatsoever.
For the 1994 fiscal
year, the Company realized $100,000 in income from the sale of a
portion of its Partnership
interest to CII and in 1993 realized $500,000 in income from the
sale of its flywheel
technology and licenses to the Partnership. The Company, in spite
of the foregoing, has had
no liquidity from any source whatsoever since 1994, because it
transferred the proceeds from
the foregoing transfer and sale, approximately $600,000, to its
former parent, Sunbird
Technologies. As a result, the Company became delinquent in
payments to its creditors, one
of whom sued for payment and obtained a judgement. During 1996 a
change of control
occurred, and the new control group provided a capital infusion
which satisfied or otherwise
provided for the payment in full of all obligations of the Company.
It is believed by
management that the closing with Famous Sam's, which is discussed
below and is not
assured, will subsequently allow for liquidity to the Company from
its relationship with the
new subsidiary.
Results of Operations
Famous Sam's Group, Inc., formerly known as U.S. Flywheel Systems,
Inc. (the
"Company"), currently has no operations and no assets.
On April 24, 1996, the Company held a special meeting of its board
of directors (the "Board
of Directors"), with all directors being in attendance. The
purpose of the meeting was to (i)
discuss and take action on all corporate matters which had taken
place since the date of the
last meeting of the board, including the filing of all delinquent
reports by the Company with
the U.S. Securities and Exchange Commission (the "Commission"),
(ii) appoint independent
Certified Public Accountants to audit the books and records of the
Company for the year
ended December 31, 1995, (iii) discuss the financial condition of
the Company and
implement an appropriate course of action and (iv) discuss all
other matters then pending
before the Company. At the meeting, the Board of Directors adopted
a new plan of business
for the Company, that being to divest itself of all of its current
assets and liabilities and then
begin a search for a new business opportunity. In order to
implement this new plan of
business, however, the Board of Directors had to implement a number
of curative measures.
First, a trust was established effective as of March 31, 1996, and
all assets and liabilities of
the Company as of the close of business on April 23, 1996, were
transferred into this trust.
The beneficiaries of the trust were and remain all shareholders of
the Company as of the
close of business on April 23, 1996, which was the date of notice
to the shareholders and the
notification of the appropriate regulatory authorities. The
administrators of the trust were
appointed by the Company. Secondly, an attorney was engaged to
assist in the renegotiation
and satisfaction of debts, general corporate matters and the filing
of all delinquent reports
with the Commission. Thirdly, a new auditor was engaged to audit
the books and records
of the Company for 1995, prepare and file the 1994 and 1995 federal
and state income tax
forms and compile the financial information necessary for the
filing of the final quarter of
1995 and the first quarter of 1996 report by the Company with the
Commission. Finally, a
firm was engaged to disseminate information to the public, attract
firms to begin a public
market for the Common Stock and provide advice on such other
financial matters as may
have presented themselves from time to time. The foregoing
curative matters resulted in the
expenditure of approximately $20,000, of which $15,000 was paid
through the issuance of
20,000,000 pre-split shares of Common Stock, which resulted in a
change of control of the
Company. The Company is now current in this reports with the
Commission, all tax filings
have been made with the appropriate federal and state agencies, all
information concerning
the foregoing has been disseminated to the public and market makers
have undertaken to
begin making a market in the Common Stock. Finally, all assets of
the Company have been
transferred to trust for the benefit of all shareholders prior to
the change in control of the
Company and all liabilities of the Company satisfied through a
capital infusion from the new
control group.
In May, 1996, the Company entered into a letter of intent with
Famous Sam's Franchise
Corporation, an Arizona corporation ("Famous Sam's"), which was
followed by a formal
agreement (the "Reorganization Agreement"). Pursuant to the
Reorganization Agreement,
the Company agreed to acquire all of the outstanding capital stock
of Famous Sam's in
exchange for 700,000 post-split shares of Common Stock. Prior to
closing under the
Reorganization Agreement, the Company has been required to (i)
change its name, (ii)
change its domicile, (iii) reverse split its Common Stock, (iv)
bring itself current in the filing
of reports with the Commission, (v) file all the reports required
by federal and state
regulatory and taxing authorities, (vi) transfer all assets in
trust for the benefit of its
shareholders and (vii) satisfy all liabilities. On May 31, 1996,
the Company change its name
to Famous Sam's Group, Inc., and its domicile to Nevada, and
reverse split its Common
Stock on a one for one thousand (1:1,000) basis, which left
approximately 33,000 post-split
shares outstanding. Previously, on April 24, 1996, the Company
transferred all of its assets
in trust for the benefit of its shareholders as of the close of
business on April 23, 1996. All
liabilities of the Company were either satisfied or fully provided
for by the infusion of cash
in the from of a capital contribution from its current control
group. Finally, the Company
satisfied all conditions pertaining to it under the Reorganization
Agreement concurrent with
the filing of this and other reports with the Commission.
Famous Sam's, under the Reorganization Agreement, has been required
to either produce a
balance sheet as of a recent date showing that, after closing, the
Company, on a consolidated
basis with Famous Sam's, has assets of $4,000,000 or more and a net
tangible book value
of at least $2,000,000, or, in the alternative, produce a business
plan which will reasonably
allow for the foregoing within one year after closing. The latter
of these alternative
conditions had been provided for by the date of this report.
Famous Sam's was further
required under the Reorganization Agreement to provide audited and
unaudited financial
statements allowing for compliance by the Company following closing
with the rules and
regulations of the Commission. These had also been provided by the
date of this report;
thus, closing under the acquisition agreement is estimated by
management of the Company
to occur forthwith.
Famous Sam's is engaged in the business of franchising a bar and
restaurant concept known
as "Famous Sam's." The operations of this company are principally
centered in Arizona at
the present time.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Litigation
The Company was sued and a judgment obtained by its former law firm
for non-payment of
fees and expenses in a California court. Provision has now been
made to satisfy the
judgment and obtain a release. Other than the foregoing, no
material legal proceedings to
which the Company (or any officer or director of the Company, or
any affiliate or owner of
record or beneficially of more than five percent of the Common
Stock, to management's
knowledge) is a party or to which the property of the Company is
subject is pending and no
such material proceeding is known by management of the Company to
be contemplated.
Item 2. Change in Securities
This item is not applicable to the Company for the period covered
by this report.
Item 3. Defaults Upon Senior Securities
This item is not applicable to the Company for the period covered
by this report.
Item 4. Submission of Matters to a Vote of Security Holders
There were no meetings of security holders during the period
covered by this report; thus,
this item is not applicable.
Item 5. Other Information
There is no additional information which the Company is electing to
report under this item
at this time.
Item 6. Exhibits and Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the period
covered by this report.<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 this 16th day of July, 1996.
FAMOUS SAM'S GROUP, INC.
(Registrant)
By: Robert D'Alesio
Robert D'Alesio, President
and Chief Executive Officer
By: Robert D'Alesio
Robert D'Alesio, Chief Financial
and Accounting Officer and Treasurer
* * * * * *
