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: September 30, 1995
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>
I. PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
FAMOUS SAM'S GROUP, INC., F/K/A, U.S. FLYWHEEL SYSTEMS, INC.
(a development stage company)
BALANCE SHEETS
September 30, 1995 December 31, 1994
(unaudited)
ASSETS:
Current Assets $ -0- $ 939
Other Assets $ -0-
Total Assets $ -0- $ 939
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities
Accounts payable $ 37,076 $ 16,077
Due to shareholders -0- 11,707
Accrued interest payable -0- 1,262
Total Current Liabilities:$ 37,076 $ 29,046
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) (3,752,430)
Total Liabilities and
Stockholders' Equity
(Deficit) -0- $ 939
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)
STATEMENT OF OPERATIONS
Three months ended Nine months ended
September 30, September 30,
(Unaudited) (Unaudited)
1995 1994 1995 1994
Revenues ----- ----- ----- -----
Expenses ----- 34,451 26,554 34,451
Gain from sale
of assets ----- 100,000 ----- 100,000
Provision for
Income Taxes ----- ----- ----- -----
Net Gain (Loss) ----- 65,549 (26,554) 65,549
Net Gain (Loss)
per common
share $ * * * *
Weighted
average
shares 12,010,000 12,010,000 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)
STATEMENT OF CASH FLOWS
Nine Months Ended September 30
(Unaudited)
1995 1994
Cash Flows Provided (Used) by
Operating activities:
Net Loss (Gain) $( 8,030) $(34,451)
Increase in due
from affiliate --- (45,579)
Increase in accounts
payable 8,030 1,937
Increase in interest
payable -0- ---
Net cash flows provided
(used) by
operating activities $( -0-) $(78,093)
Cash Flows Provided by Investing Activities:
Sales of assets --- $100,000
Interest earned --- ---
Net cash flows provided by
investing activities --- ---
Cash Flows Provided by Financing Activities:
Increase in amounts
due shareholders $ -0- $(4,901)
Net cash flows provided
by financing activities $ -0- $(4,901)
Increase (Decrease) in cash: $ --- $15,406
Cash at beginning of the period:$ --- $ 18
Cash at end of period: $ --- $15,424
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)
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: /s/ Robert D'Alesio
Robert D'Alesio, President
and Chief Executive Officer
By: /s/ Robert D'Alesio
Robert D'Alesio, Chief Financial
and Accounting Officer and Treasurer
* * * * * *
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<PERIOD-END> SEP-30-1995
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0
0
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