UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q/A
FORM 10-Q
Amendment No. 1
(Mark One)
| ☒QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended MayAugust 31, 20202021
| ☐TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT |
For the transition period fromto
Commission File Number 001-15913
UNITED STATES BASKETBALL LEAGUE, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware | 06-1120072 | |
(State or other jurisdiction of | | (I.R.S. Employer |
incorporation or organization) | | Identification No.) |
183 Plains Road, Suite 2 Milford, Connecticut 064618270 Woodland Center, Tampa, FL 33614
(Address of Principal Executive Offices)
(813) 769-3500
(Registrant’s Telephone Number, Including Area Code)
___________________________________________
(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which |
Common Stock | USBL | OTC Pink |
Indicate by check mark whether the registrant (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 ¨☐ No x
☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ¨☐ No x
☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | Accelerated filer | |
Non-accelerated filer | | Smaller reporting company |
Emerging Growth Company | | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x.Yes ☐ 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 June 15,October 7, 2021, there were 3,552,5027,146,202 shares of Common Stock, $0.01 par value per share, outstanding.outstanding.
Explanatory Note: This Amendment No. 1 of the Form 10-Q/A for the quarter ended August 31, 2021, is being filed solely to add additional detail to Note 1 for the sale of common and preferred stock that resulted in the change of control.
UNITED STATES BASKETBALL LEAGUE, INC.
Form 10-Q10-Q/A
For the Quarterly Period Ended MayAugust 31, 20202021
INDEX
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3 | ||||
Management’s Discussion and Analysis of Financial Condition and Results of Operations | 10 | |||
12 | ||||
12 | ||||
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13 | ||||
13 | ||||
13 | ||||
13 | ||||
13 | ||||
13 | ||||
13 | ||||
14 | ||||
15 | ||||
2
PART I
FINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS.
Balance Sheets as of | 4 | |
| | |
5 | ||
| | |
4 | ||
| | |
5 | ||
| | |
6 |
3
UNITED STATES BASKETBALL LEAGUE, INC.
BALANCE SHEETS
| May 31, 2020 | February 29, 2020 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 207 | $ | 301 | ||||
| Total Assets | $ | 207 | $ | 301 | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 252,184 | $ | 245,887 | ||||
| Credit card obligations | 5,127 | 5,127 | ||||||
| Due to related parties | 2,158,631 | 2,158,631 | ||||||
| Total Current Liabilities | 2,415,942 | 2,409,645 | ||||||
| Total Liabilities | 2,415,942 | 2,409,645 | ||||||
| Stockholders' Deficit: | ||||||||
| Preferred stock, $0.01 par value, 2,000,000 shares authorized; 1,105,679 shares issued and outstanding | 11,057 | 11,057 | ||||||
| Common stock, $0.01 par value, 30,000,000 shares authorized; 3,552,502 shares issued | 35,525 | 35,525 | ||||||
| Additional paid-in capital | 2,679,855 | 2,679,855 | ||||||
| Accumulated deficit | (5,099,718 | ) | (5,093,327 | ) | ||||
| Treasury stock, at cost; 39,975 shares of common stock | (42,454 | ) | (42,454 | ) | ||||
| Total Stockholders' Deficit | (2,415,735 | ) | (2,409,344 | ) | ||||
| Total Liabilities and Stockholders' Deficit | $ | 207 | $ | 301 | ||||
| | | | | | |
| | August 31, | | February 28, | ||
| | 2021 | | 2021 | ||
|
| (unaudited) |
| |
| |
ASSETS | | | | | | |
Current Assets: |
| |
|
| |
|
Cash | | $ | 216,530 | | $ | 75 |
Prepaid | | | 5,250 | | | — |
Prepaid stock for services | | | 125,978 | | | — |
Total Assets | | $ | 347,758 | | $ | 75 |
| | | | | | |
| | | | | | |
LIABILITIES AND STOCKHOLDERS' DEFICIT | |
| | |
| |
| | | | | | |
Current Liabilities: | |
| | |
| |
Accounts payable and accrued expenses | | $ | 2,100 | | $ | 271,158 |
Credit card obligations | |
| — | |
| 5,127 |
Due to related parties | |
| — | |
| 2,159,631 |
Total Current Liabilities | |
| 2,100 | |
| 2,435,916 |
| | | | | | |
Total Liabilities | |
| 2,100 | |
| 2,435,916 |
| | | | | | |
Stockholders' Equity (Deficit): | |
| | |
| |
Preferred stock, $0.01 par value, 10,000,000 shares authorized; 1,105,679 shares issued and outstanding | |
| 11,057 | |
| 11,057 |
Common stock, $0.01 par value, 100,000,000 shares authorized; 7,146,202 and 3,552,502 shares issued, respectively | | | 71,462 | | | 35,525 |
Additional paid-in capital | |
| 5,649,888 | |
| 2,679,855 |
Accumulated deficit | |
| (5,344,295) | |
| (5,119,824) |
Treasury stock, at cost; 39,975 shares of common stock | |
| (42,454) | |
| (42,454) |
Total Stockholders' Equity (Deficit) | |
| 345,658 | |
| (2,435,841) |
Total Liabilities and Stockholders' Deficit | | $ | 347,758 | | $ | 75 |
The accompanying notes are an integral part of these unaudited financial statements.
4
UNITED STATES BASKETBALL LEAGUE, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
| For the Three Months Ended May 31, | ||||||||
| 2020 | 2019 | |||||||
| Operating Expenses: | ||||||||
| Professional fees | $ | 2,000 | $ | 3,402 | ||||
| General and administrative | 4,391 | 761 | ||||||
| Rent | - | 3,000 | ||||||
| Total operating expenses | 6,391 | 7,163 | ||||||
| Loss from Operations | (6,391 | ) | (7,163 | ) | ||||
| Net loss | $ | (6,391 | ) | $ | (7,163 | ) | ||
| Loss per Common Share: | ||||||||
| Basic & Diluted | $ | (0.00 | ) | $ | (0.00 | ) | ||
| Weighted Average Number of Common Shares Outstanding: | ||||||||
| Basic & Diluted | 3,552,502 | 3,552,502 | ||||||
| | | | | | | | | | | | |
| | For the Three Months Ended | | For the Six Months Ended | ||||||||
| | August 31, | | August 31, | ||||||||
|
| 2021 |
| 2020 |
| 2021 |
| 2020 | ||||
Operating Expenses: | | | | | | | | | | | | |
Professional fees | | $ | 247 | | $ | 2,000 | | $ | 12,272 | | $ | 4,000 |
General and administrative | |
| 80,096 | |
| 2,143 | |
| 105,466 | |
| 6,534 |
Director compensation | |
| — | |
| — | |
| 48,000 | |
| — |
Total operating expenses | |
| 80,343 | |
| 4,143 | |
| 165,738 | |
| 10,534 |
| | | | | | | | | | | | |
Loss from Operations | |
| (80,343) | |
| (4,143) | |
| (165,738) | |
| (10,534) |
| | | | | | | | | | | | |
Other Income (Expense): | | | | | | | | | | | | |
Gain on forgiveness of debt | | | — | | | — | | | 66,747 | | | — |
Other income | | | 2,000 | | | — | | | 2,000 | | | — |
Loss on conversion of debt – related party | | | (127,480) | | | — | | | (127,480) | | | — |
Total other expense | | | (125,480) | | | — | | | (58,733) | | | — |
| | | | | | | | | | | | |
Net loss | | $ | (205,823) | | $ | (4,143) | | $ | (224,471) | | $ | (10,534) |
| | | | | | | | | | | | |
Loss per Common Share: | |
| | |
|
| |
|
| |
|
|
Basic & Diluted | | $ | (0.04) | | $ | (0.00) | | $ | (0.05) | | $ | (0.00) |
| | | | | | | | | | | | |
Weighted Average Number of Common Shares Outstanding: | |
| | |
|
| |
|
| |
|
|
Basic & Diluted | |
| 5,211,993 | |
| 3,552,502 | |
| 4,386,782 | |
| 3,552,502 |
The accompanying notes are an integral part of these unaudited financial statements.
5
UNITED STATES BASKETBALL LEAGUE, INC.
STATEMENT OF STOCKHOLDERS’ DEFICITEQUITY (DEFICIT)
FOR THE THREE AND SIX MONTHS ENDED MAYAUGUST 31, 20192020 and 2020
2021
(Unaudited)
| Common Stock | Preferred Stock | Additional | Accumulated | Treasury Stock | ||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Paid-in Capital | Deficit | Shares | Amount | Total | ||||||||||||||||||||||||||||
| Balance, February 28, 2019 | 3,552,502 | $ | 35,525 | 1,105,679 | $ | 11,057 | $ | 2,679,855 | $ | (5,051,920 | ) | 39,975 | $ | (42,454 | ) | $ | (2,367,937 | ) | ||||||||||||||||||
| Net Loss | — | — | — | — | — | (7,163 | ) | — | — | (7,163 | ) | |||||||||||||||||||||||||
| Balance, May 31, 2019 | 3,552,502 | $ | 35,525 | 1,105,679 | $ | 11,057 | $ | 2,679,855 | $ | (5,059,083 | ) | 39,975 | $ | (42,454 | ) | $ | (2,375,100 | ) | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Common Stock | | Preferred Stock | | Additional | | Accumulated | | Treasury Stock | | | | |||||||||||
| | Shares | | Amount | | Shares | | Amount | | Paid-in Capital | | Deficit | | Shares | | Amount | | Total | ||||||
Balance, February 29, 2020 |
| 3,552,502 |
| $ | 35,525 |
| 1,105,679 |
| $ | 11,057 |
| $ | 2,679,855 |
| $ | (5,093,327) |
| 39,975 |
| $ | (42,454) |
| $ | (2,409,344) |
Net Loss |
| — | |
| — |
| — | |
| — | |
| — | |
| (6,391) |
| — | |
| — | |
| (6,391) |
Balance, May 31, 2020 |
| 3,552,502 | |
| 35,525 | | 1,105,679 | |
| 11,057 | | $ | 2,679,855 | |
| (5,099,718) |
| 39,975 | | | (42,454) | |
| (2,415,735) |
Net Loss |
| — | |
| — |
| — | |
| — | |
| — | |
| (4,143) |
| — | |
| — | |
| (4,143) |
Balance, August 31, 2020 |
| 3,552,502 | | $ | 35,525 |
| 1,105,679 | | $ | 11,057 | | $ | 2,679,855 | | $ | (5,103,861) |
| 39,975 | | $ | (42,454) | | $ | (2,419,878) |
| Common Stock | Preferred Stock | Additional | Accumulated | Treasury Stock | ||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Paid-in Capital | Deficit | Shares | Amount | Total | ||||||||||||||||||||||||||||
| Balance, February 29, 2020 | 3,552,502 | $ | 35,525 | 1,105,679 | $ | 11,057 | $ | 2,679,855 | $ | (5,093,327 | ) | 39,975 | $ | (42,454 | ) | $ | (2,409,344 | ) | ||||||||||||||||||
| Net Loss | — | — | — | — | — | (6,391 | ) | — | — | (6,391 | ) | |||||||||||||||||||||||||
| Balance, May 31, 2020 | 3,552,502 | $ | 35,525 | 1,105,679 | $ | 11,057 | $ | 2,679,855 | $ | (5,099,718 | ) | 39,975 | $ | (42,454 | ) | $ | (2,415,735 | ) | ||||||||||||||||||
4
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Common Stock | | Preferred Stock | | Common Stock | | Additional | | Accumulated | | Treasury Stock | | | | ||||||||||||
|
| Shares |
| Amount |
| Shares |
| Amount |
| To be Issued |
| Paid-in Capital |
| Deficit |
| Shares |
| Amount |
| Total | |||||||
Balance, February 28, 2021 |
| 3,552,502 | | $ | 35,525 |
| 1,105,679 | | $ | 11,057 | | $ | — | | $ | 2,679,855 | | $ | (5,119,824) |
| 39,975 | | $ | (42,454) | | $ | (2,435,841) |
Common stock issued for services |
| — | |
| — |
| — | |
| — | |
| 111,250 | |
| — | |
| — |
| — | |
| — | |
| 111,250 |
Common stock issued for director services |
| — | |
| — |
| — | |
| — | |
| 48,000 | |
| — | |
| — |
| — | |
| — | |
| 48,000 |
Common stock sold for cash |
| — | |
| — |
| — | |
| — | |
| 240,000 | |
| — | |
| — |
| — | |
| — | |
| 240,000 |
Forgiveness of related party debt |
| — | |
| — |
| — | |
| — | |
| — | |
| 2,343,370 | |
| — |
| — | |
| — | |
| 2,343,370 |
Net Loss |
| — | |
| — |
| — | |
| — | |
| — | |
| — | |
| (18,648) |
| — | |
| — | |
| (18,648) |
Balance, May 31, 2021 |
| 3,552,502 | | $ | 35,525 |
| 1,105,679 | | $ | 11,057 | | $ | 399,250 | | $ | 5,023,225 | | $ | (5,138,472) |
| 39,975 | | $ | (42,454) | | $ | 288,131 |
Common stock issued for services | | 875,000 | | | 8,750 | | — | | | — | | | (159,250) | | | 254,500 | | | — | | — | | | — | | | 104,000 |
Common stock sold for cash | | 2,400,000 | | | 24,000 | | — | | | — | | | (240,000) | | | 216,000 | | | — | | — | | | — | | | — |
Common stock issued for loans payable – related party | | 318,700 | | | 3,187 | | — | | | — | | | — | | | 156,163 | | | — | | — | | | — | | | 159,350 |
Net Loss | | — | | | — | | — | | | — | | | — | | | — | | | (205,823) | | — | | | — | | | (205,823) |
Balance, August 31, 2021 | | 7,146,202 | | $ | 71,462 | | 1,105,679 | | $ | 11,057 | | $ | — | | $ | 5,649,888 | | $ | (5,344,295) | | 39,975 | | $ | (42,454) | | $ | 345,658 |
The accompanying notes are an integral part of these unaudited financial statements.
5
UNITED STATES BASKETBALL LEAGUE, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Three Months Ended May 31, | ||||||||
| 2020 | 2019 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | (6,391 | ) | $ | (7,163 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts payable and accrued expenses | 6,297 | 902 | ||||||
| Net cash used in operating activities | (94 | ) | (6,267 | ) | ||||
| Cash Flows from Investing Activities | — | — | ||||||
| Cash Flows from Financing Activities: | ||||||||
| Increase in due to related parties | — | 6,000 | ||||||
| Net cash provided by financing activities | — | 6,000 | ||||||
| Net decrease in cash | (94 | ) | (261 | ) | ||||
| Cash, beginning of period | 301 | 295 | ||||||
| Cash, end of period | $ | 207 | $ | 34 | ||||
| Supplemental disclosures of cash flow information: | ||||||||
| Interest paid | $ | — | $ | — | ||||
| Income tax paid | $ | — | $ | — | ||||
| | | | | | |
| | For the Six Months Ended | ||||
| | August 31, | ||||
|
| 2021 |
| 2020 | ||
Cash Flows from Operating Activities: |
| |
|
| |
|
| | | | | | |
Net loss | | $ | (224,471) | | $ | (10,534) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | |
Gain on forgiveness of debt | | | (66,747) | | | — |
Loss on conversion of debt – related party | | | 127,480 | | | — |
Common stock granted for director fees | | | 48,000 | | | — |
Common stock granted for services | | | 77,978 | | | — |
Changes in operating assets and liabilities: | |
| | |
| |
Prepaids | | | 6,044 | | | — |
Accounts payable and accrued expenses | |
| (50,349) | |
| 10,297 |
Net cash used in operating activities | |
| (82,065) | |
| (237) |
| | | | | | |
Cash Flows from Investing Activities | |
| 0 | |
| 0 |
| | | | | | |
Cash Flows from Financing Activities: | |
| | |
| |
Increase in due to related parties | |
| 58,520 | |
| — |
Loans payable | | | 3,581 | | | — |
Repayment of loan payable | | | (3,581) | | | — |
Cash proceeds from sale of common stock | | | 240,000 | | | — |
Net cash provided by financing activities | |
| 298,520 | |
| — |
| | | | | | |
Net change in cash | |
| 216,455 | |
| (237) |
Cash, beginning of period | |
| 75 | |
| 301 |
Cash, end of period | | $ | 216,530 | | $ | 64 |
| | | | | | |
Supplemental disclosures of cash flow information: | |
| | |
| |
Interest paid | | $ | 0 | | $ | 0 |
Income tax paid | | $ | 0 | | $ | 0 |
| | | | | | |
Supplemental disclosure of non-cash financing activity: | | | | | | |
Related party loans converted to common stock | | $ | 31,870 | | $ | — |
The accompanying notes are an integral part of these unaudited financial statements.
5
UNITED STATES BASKETBALL LEAGUE, INC.
NOTES TO FINANCIAL STATEMENTS
MAYAUGUST 31, 20202021
(Unaudited)
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
United States Basketball League, Inc. (“USBL”) is a holding company currently evaluating and assessing new business opportunities. The Company was incorporated in Delaware on May 29, 1984 as a wholly owned subsidiary of Meisenheimer Capital, Inc. (“MCI”) for the purpose of developing and managing a professional basketball league, the United States Basketball League (the “League”). Since the inception of the League, USBL has primarily engaged in selling franchises and managing the League. From 1985 and up to the present time, USBL has sold a total of approximately forty active franchises (teams), a vast majority of which were terminated for non-payment of their respective franchise obligations. Seasons from 2008 through 2018, inclusive, have been cancelled. At
On April 7, 2021, through a series of Stock Purchase Agreements (the “Purchase Agreements”), the present time, USBL does not have any definitive plans asmajority owners of the Company, Richard C. Meisenheimer, Daniel T. Meisenheimer, III, James Meisenheimer, Meisenheimer Capital, Inc. and Spectrum Associates, Inc. (the “Sellers”) sold 2,704,007 common shares which it held, to a new investor group. The Sellers also sold 1,105,644 of USBL’s preferred stock at a per share price of $.057 per share to EROP Enterprises, LLC. In addition, the schedulingnew investor group invested an additional $240,000 and received 2,400,000 shares of restricted common stock. As a result of the sale of common and preferred stock by the Sellers, the Company experienced a change in control.
World Equity Markets acted in the capacity of a new season. USBL is currently inbroker/dealer for the processPurchase Agreements and was issued 125,000 shares of exploring certain strategic alternatives, includingcommon stock for its services, and Verde Capital was issued 150,000 shares for Consulting Services. Effective April 7, 2021, the possible saleBoard of Directors accepted the resignation of Daniel T. Meisenheimer, III as Chairman of the League.Board of Directors and President of the Company. Effective April 7, 2021, Saeb Jannoun was appointed to fill the vacancy following the resignation of Daniel T. Meisenheimer, III as Chairman of the Board of Directors and President of the Company. Mr. Michael Pruitt also joined the Board.
On October 30, 2014, USBL dissolved its wholly-owned subsidiary, Meisenheimer Capital Real Estate Holdings, Inc. (“MCREH”). MCREH owned a commercial building in Milford, Connecticut until June 19, 2014.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company'sCompany’s latest Annual Report on Form 10-K filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of operations for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year, as reported in the Form 10-K for the fiscal year ended February 29, 2020,28, 2021, have been omitted.
Use of Estimates
The preparation of the unaudited financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of liabilities, and the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting periods. Management makes these estimates using the best information available at the time; however, actual results could differ materially from those estimates.
6
Reclassifications
Certain reclassifications have been made to the prior period financial information to conform to the presentation used in the financial statements for the three months ended May 31, 2020.
Recently issued accounting pronouncements
In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivative and Hedging (Topic 815, and Leases (Topic 841). This new guidance will be effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual reporting periods. The adoption of ASU 2019-10 does not have a material effect on its financial statements.
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
NOTE 3 – GOING CONCERN
The accompanying unaudited financial statementsstat have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has an accumulated deficit of $5,099,718, liabilities of $2,415,942$5,344,295, and no source of revenue. Due to these conditions, it raises substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that may result should the Company be unable to continue as a going concern.
NOTE 4 – ACCOUNTS–ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consisted of:
| May 31, 2020 | February 29, 2020 | |||||||||||||
| | | | | | | ||||||||
|
| August 31, 2021 |
| February 28, 2021 | ||||||||||
| | (unaudited) | | | | |||||||||
| Legal and accounting services’ vendors | $ | 78,164 | $ | 76,163 | | $ | 2,100 | | $ | 101,424 | ||||
| Transfer agent and EDGAR agent | 12,956 | 8,660 | |
| — | |
| 8,660 | ||||||
| Rent due Genvest, LLC (an entity controlled by the two officers of USBL) | 144,000 | 144,000 | ||||||||||||
Rent due Genvest, LLC (an entity controlled by the | |
| — | |
| 144,000 | ||||||||
| Accrued interest on MCREH note payable to president of USBL | 13,562 | 13,562 | |
| — | |
| 13,562 | ||||||
| Security deposit due CADCOM (an entity controlled by the two officers of USBL) | 2,725 | 2,725 | ||||||||||||
Security deposit due CADCOM (an entity controlled by | |
| — | |
| 2,725 | ||||||||
| Other | 777 | 777 | |
| — | |
| 777 | ||||||
| Total | $ | 252,184 | $ | 245,887 | | $ | 2,100 | | $ | 271,158 | ||||
7
NOTE 5 – DUE TO PRIOR RELATED PARTIES
Due to related parties consist of:
| May 31, 2020 | February 29, 2020 | |||||||
| USBL loans payable to Spectrum Associates, Inc. (“Spectrum”), a corporation controlled by the two officers of USBL, interest at 6%, due on demand | $ | 1,324,689 | $ | 1,324,689 | ||||
| USBL loans payable to the two officers of USBL, interest at 6%, due on demand | 569,317 | 569,317 | ||||||
| USBL loans payable to Daniel T. Meisenheimer, Jr. Trust, a trust controlled by the two officers of USBL, non-interest bearing, due on demand | 48,850 | 48,850 | ||||||
| MCREH note payable to president of USBL, interest at 7%, due on demand | 48,000 | 48,000 | ||||||
| MCREH loan payable to Spectrum, non-interest bearing, due on demand | 4,500 | 4,500 | ||||||
| MCREH loan payable to president of USBL, non-interest bearing, due on demand | 4,000 | 4,000 | ||||||
| MCREH loan payable to Meisenheimer Capital, Inc., non-interest bearing, due on demand | 159,275 | 159,275 | ||||||
| Total | $ | 2,158,631 | $ | 2,158,631 | ||||
| | | | | | |
|
| August 31, 2021 |
| February 28, 2021 | ||
| | (unaudited) | | | | |
USBL loans payable to Spectrum Associates, Inc. (“Spectrum”), | | $ | — | | $ | 1,324,689 |
USBL loans payable to the 2 officers of USBL, | |
| — | |
| 569,317 |
USBL loans payable to Daniel T. Meisenheimer, Jr. Trust, a trust | |
| — | |
| 48,850 |
MCREH note payable to president of USBL, interest at 7%, due | |
| — | |
| 48,000 |
MCREH loan payable to Spectrum, non-interest | |
| — | |
| 4,500 |
MCREH loan payable to president of USBL, non-interest | |
| — | |
| 5,000 |
MCREH loan payable to Meisenheimer Capital, Inc., | |
| — | |
| 159,275 |
Total | | $ | — | | $ | 2,159,631 |
On April 7, 2021, as part of the purchase and sale agreement, the principals of MCI consisting of Daniel Meisenheimer III, Richard Meisenheimer and their affiliated entities have agreed to cancel previously issued and outstanding loans made to the Company.
Spectrum Associates agreed to cancel indebtedness in the amount of $1,318,789 and the principals (D. Meisenheimer III and R. Meisenheimer) and their other affiliates agreed to cancel indebtedness in the amount of $815,590.
As a result of the debt cancellation the Company recognized a gain on the forgiveness of debt of $66,747 and credited $2,335,493 to additional paid in capital.
NOTE 6 – RELATED PARTY TRANSACTIONS
ForDuring the threesix months ended MayAugust 31, 20202021, Saeb Jannoun, CEO advanced the Company $3,000 for general operating expense. The advance was non-interest bearing and 2019, USBL included indue on demand. On July 26, 2021, Mr. Jannoun converted the $3,000 into 30,000 shares of common stock. The shares were valued at $0.50, the closing stock price on the date of conversion, for a loss on conversion of debt of $12,000.
During the six months ended August 31, 2021, EROP Enterprises LLC (“EROP”), a significant shareholder, advanced the Company $28,870 for general operating expenses rent incurredexpense. The advance was non-interest bearing and due on demand. On July 26, 2021, EROP converted the $28,870 into 288,700 shares of common stock. The shares were valued at $0.50, the closing stock price on the date of conversion, for a loss on conversion of debt of $115,480.
On April 7, 2021, the Company issued 200,000 restricted shares of common stock each to Genvest, LLC (an entity controlled by2 of its directors for services. The shares were valued at $0.12, the two officersclosing stock price on the date of USBL) totaling $0 and $3,000, respectively.grant, for total non-cash expense of $48,000.
During the six months ended August 31, 2021, EROP purchased 1,475,000 shares of common stock for $147,500. In addition, the Company granted 200,000 shares of common stock to EROP for services per the terms of a consulting agreement. The shares were valued at $0.52, the closing stock price on the date of grant, for total non-cash expense of $104,000. The expense is being amortized over the one-year term of the service agreement with Verde Capital, LLC. As of August 31, 2021, the Company recognized $21,667 of the expense.
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NOTE 7 – LOAN PAYABLE
During the six months ended August 31, 2021, an individual, advanced the Company $3,581 for general operating expenses. The advance was non-interest bearing and due on demand. The advance was repaid in July 2021.
NOTE 8 – PREFERRED STOCK
On May 18, 2021, the Company increased its authorized shares of Preferred Stock from 2,000,000 to 10,000,000 shares.
Each share of preferred stock has five5 votes, is entitled to a 2% cumulative annual dividend, and is convertible at any time into one1 share of common stock. There are 1,105,679 Series A Preferred outstanding, 1,105,644 of which are held by EROP. As of MayAugust 31, 2020,2021, the Company has not declared any dividends on its preferred stock.
NOTE 89 – SUBSEQUENT EVENTS
COMMON STOCK TRANSACTIONS
On April 7,29, 2021, through a series of Stock Purchase Agreements (the “Purchase Agreements”), the majority owners of the Company Richard C. Meisenheimer, Daniel T. Meisenheimer, III, James Meisenheimer, Meisenheimer Capital, Inc. and Spectrum Associates, Inc. (the “Sellers”) sold a total of 2,807,181 existing commonissued 125,000 shares of USBL’s common stock at a per share price of $.065, issued 2,400,000 shares of USBL’s common stock at a per share price of $.10 and sold 1,105,644 of USBL’s existing preferred stock at a per share price of $.053 for a total purchase price of $481,066. There were two purchasers of over 5% of the issued and outstanding shares of USBL’s capital stock following these sales, Equity Markets Advisory which owns 8.29% of the issued and outstanding shares of USBL’s common stock and EROP Enterprises LLC which owns 29.24% of the issued and outstanding shares of USBL’s common stock and 100% of the issued and outstanding shares of preferred stock.
As a result of the sale of common and preferred stock by the Sellers, the Company experienced a change in control.
to World Equity Markets who acted in the capacity of a broker/dealer for the Purchase Agreements and was(Note 1). The shares were valued at $0.71, the closing stock price on the date of grant, for total non-cash expense of $88,750. The expense is being amortized over the six-month term of the service agreement with World Equity Markets. As of August 31, 2021, the Company recognized $59,167 of the expense.
On April 6, 2021, the Company issued 125,000150,000 shares of common stock to Verde Capital, LLC for consulting services. The shares were valued at $0.15, the closing stock price on the date of grant, for total non-cash expense of $22,500. The expense is being amortized over the one-year term of the service agreement with Verde Capital, LLC. As of August 31, 2021, the Company recognized $8,438 of the expense.
During the six months ended August 31, 2021, the Company sold 925,000 shares of common stock for its services.total cash proceeds of $92,500.
Effective April 7,On May 18, 2021, the BoardCompany increased its authorized shares of Directors accepted the resignationCommon Stock to 100,000,000 shares.
Refer to Note 6 for common stock issued to related parties.
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ITEM 2. Management’s Discussion and AnalysisMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS of Operation.OF OPERATION.
Forward-looking Statements
There are “forward-looking statements” contained in this quarterly report. All statements that express expectations, estimates, forecasts or projections are forward-looking statements. In addition, other written or oral statements which constitute forward-looking statements may be made by us or on our behalf. Words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “project,” “forecast,” “may,” “should,” and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in or suggested by such forward-looking statements. We undertake no obligation to update or revise any of the forward-looking statements after the date of this quarterly report to conform forward-looking statements to actual results. Important factors on which such statements are based are assumptions concerning uncertainties, including but not limited to, uncertainties associated with the following:
| ● | Inadequate capital and barriers to raising the additional capital or to obtaining the financing needed to implement our business plans; |
| ● | Our failure to earn revenues or profits; |
| ● | Inadequate capital to continue business; |
| ● | Volatility or decline of our stock price; |
| ● | Potential fluctuation in quarterly results; |
| ● | Rapid and significant changes in markets; |
| ● | Litigation with or legal claims and allegations by outside parties; and |
| ● | Insufficient revenues to cover operating costs. |
The following discussion should be read in conjunction with the financial statements and the notes thereto which are included in this quarterly report. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ substantially from those anticipated in any forward-looking statements included in this discussion as a result of various factors.
OVERVIEW
The Company anticipates continued relianceUnited States Basketball League, Inc. (OTC: USBL) is an emerging diversified investment vehicle focused on financial assistance from affiliates. Givenparticipating in and acquiring interests that are leading edge in their respective market niches, and that have expectations of enhancing shareholder values. Based in Tampa, Florida, the current lackManagement, Advisors, and the Board of capital, the Company has not been able to develop anyare currently engaged in evaluating and assessing new programs to revitalize the League, nor has it been able to hire sales and promotional personnel or schedule a season. As a result, the Company is currently dependent on the efforts of its officers for all marketing efforts. Their efforts have not resulted in any franchises.business opportunities.
Results of Operations
The three months ended MayAugust 31, 2020 compared2021compared to the three months ended MayAugust 31, 2019
2020
Revenue
The Company recognized no revenue for the three months ended MayAugust 31, 20202021 and 2019.
2020.
Operating ExpensesProfessional Fees
For the three months ended MayAugust 31, 2020,2021, the company incurred $6,391$247 of operating expenseprofessional fees compared to $7,163$2,000 for the three months ended MayAugust 31, 2019. Expenses2020, a decrease of $1,753. Professional fees generally consist mostly of professional, Edgaraudit, legal, accounting and transfer agent fees. For the three months ended May 31, 2020, we had $2,000fees expense.
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General and $4,391 of other general and administrative expense (“G&A”), compared to $3,403 of professional fees, $3,000 of rent expense and $761 of other G&A expense for the three months ended May 31, 2019.
Liquidity and Capital Resources
Administrative Expense
For the three months ended MayAugust 31, 2021, the company incurred $80,096 of general and administrative expense compared to $2,143 for the three months ended August 31, 2020 an increase of $77,953. The increase in the current period is primarily the result of stock compensation of $70,730.
Director Compensation
For the three months ended August 31, 2021, the company incurred $48,000 of director compensation expense compared to $0 for the three months ended August 31, 2020. During the current period we issued common stock to two of our directors for total non-cash stock compensation of $48,000.
Other Income/Expense
During the three months ended August 31, 2021, the Company recognized a related party loss on conversion of debt of $127,480 (Note 6) and $2,000 of other income. There was no other income or expense in the prior period.
Net Loss
For the three months ended August 31, 2021, we had a note loss of $205,823 compared to $4,143 for the three months ended August 31, 2020. Our increase in net loss is largely attributed to non-cash stock compensation expense.
The six months ended August 31, 2021compared to the six months ended August 31, 2020
Revenue
The Company recognized no revenue for the six months ended August 31, 2021 and 2020.
Professional Fees
For the six months ended August 31, 2021, the company incurred $12,272 of professional fees compared to $4,000 for the six months ended August 31, 2020, an increase of $8,272. Professional fees generally consist of audit, legal, accounting and transfer agent fees expense.
General and Administrative Expense
For the six months ended August 31, 2021, the company incurred $105,466 of general and administrative expense compared to $6,534 for the six months ended August 31, 2020 an increase of $98,932. The increase in the current period is primarily the result of stock compensation of $89,272.
Director Compensation
For the six months ended August 31, 2021, the company incurred $48,000 of director compensation expense compared to $0 for the six months ended August 31, 2020. During the current period we issued common stock to two of our directors for total non-cash stock compensation of $48,000.
Other Income/Expense
During the six months ended August 31, 2021, we recognized a gain of forgiveness of debt of $66,747 (Note 5), related party loss on conversion of debt of $127,480 (Note 6) and $2,000 of other income. There was no other income or expense in the prior period.
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Net Loss
For the six months ended August 31, 2021, we had a note loss of $224,471 compared to $10,534 for the six months ended August 31, 2020. Our increase in net loss is largely attributed to non-cash stock compensation expense.
Liquidity and Capital Resources
Operating Activities
For the six months ended August 31, 2021, the company used $94$82,065 in operating activities compared to $6,267$237 for the threesix months ended MayAugust 31, 2019.2020.
Financing Activities
The Company expects it will continue to have to rely on affiliates for loansDuring the six months ended August 31, 2021, we received $240,000 from the sale of common stock. We received a cash advances from our CEO of $3,000, $28,870 from another related party and $39,994 from members of the prior management. We also received $3,581 from another party to assist it in meeting its current obligations. With respect to long term needs, the Company recognizes that in order for the USBL and the League to be successful, USBL has to develop a meaningful sales and promotional program. This will require an investment of additional capital. Given the Company’s current financial condition, the Company’s ability to raise additional capital other than from affiliates is questionable.with general operating expenses.
Off Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Critical Accounting Policies
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Note 2 to the Financial Statements describes the significant accounting policies and methods used in the preparation of the Financial Statements. Estimates are used for, but not limited to, contingencies and taxes. Actual results could differ materially from those estimates. The following critical accounting policies are impacted significantly by judgments, assumptions, and estimates used in the preparation of the Financial Statements.
Recent Accounting Pronouncements
We have reviewed other recently issued accounting pronouncements and plan to adopt those that are applicable to us. We do not expect the adoption of any other pronouncements to have an impact on our results of operations or financial position.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and, as such, are not required to provide the information under this Item.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Each of our principal executive and principal financial officer has evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a - 15(e)13a-15(e) and 15d - 15(e)15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this quarterly report. Based on their evaluation, each such person concluded that our disclosure controls and procedures were not effective as of MayAugust 31, 2020.2021.
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In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute assurance of achieving the desired objectives. Also, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs.
Changes in Internal Control over Financial Reporting.
Our management has evaluated whether any change in our internal control over financial reporting occurred during the last fiscal quarter. Based on that evaluation, management concluded that there has been no change in our internal control over financial reporting during the relevant period that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
None
None
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and, as such, are not required to provide the information under this Item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
None
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable
None
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Exhibit No. | Description | |
31.1 | ||
32.1 | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
101.INS | Inline XBRL Instance Document | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL | Inline XBRL Taxonomy Calculation Linkbase Document | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | Inline XBRL Taxonomy Label Linkbase Document | |
101.PRE | Inline XBRL Taxonomy Presentation Linkbase Document | |
104 | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in exhibit 101). |
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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.
| | |
| UNITED STATES BASKETBALL LEAGUE, INC. | |
| | |
| /s/ Saeb Jannoun | |
| Saeb Jannoun | |
| Chairman and President | |
| October 20, 2021 | |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
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