SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended Commission File No.
March 31, 2001 33-19107
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LBO Capital Corp.
(Exact name of Registrant as Specified in its Charter)
Colorado 38-2780733
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(State or Other Jurisdiction (IRS Employer
of Incorporation or Organization) Identification No.)
32751 Middlebelt Road, Suite B
Farmington Hills, MI 48334 (248) 851-5651
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(Address of Principal Executive Offices (Registrant's Telephone
including Zip Code) Number including Area Code)
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
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 March 31, 2001 a total of 12,100,000 shares, $.0001 par
value common stock, were issued and outstanding.
LBO CAPITAL CORP.
Form 10-Q Filing of Quarter Ended March 31, 2001
INDEX
Page Number
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets
March 31, 2001 (Unaudited)
and December 31, 2000 3
Statements of Operations (Unaudited)
Three months ended March 31, 2001 and 2000 4
Statements of Cash Flows (Unaudited)
Three months ended March 31, 2001 and 2000 5
Notes to Financial Statements (Unaudited) 6-7
Item 2. Management's Discussion and Analysis of
Financial Statements (Unaudited) 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 8
Signature Page 9
Note: No other information is included in answer to any item under
Part II as those other Items are either not applicable, or if
applicable, the answer is negative.
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
LBO CAPITAL CORP
BALANCE SHEETS
(Unaudited)
March 31, December 31,
2001 2000
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ASSETS
Current Assets:
Cash and Equivalents $ 21 $ 0
Marketable Securities - Available
for Sale 10,547 11,506
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Total Current Assets 10,568 11,506
Other Assets
Investments 321,000 321,000
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Total Other Assets 321,000 321,000
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TOTAL ASSETS $ 331,568 $ 332,506
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts Payable $ 791 $ 2,608
Accounts Payable -
Related Entities 585 0
Notes Payable - Other 833,926 830,701
Accrued Expenses and Taxes 308,505 286,966
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Total Current Liabilities 1,143,807 1,120,276
Stockholders' Equity
Common Stock, $.0001 par value:
Authorized 100,000,000 Shares:
Issued and Outstanding
12,100,000 shares 1,210 1,210
Additional paid-In Capital 623,094 623,094
Other Comprehensive Income (Loss) (37,849) (36,890)
Accumulated Deficit (1,398,693) (1,375,183)
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Total Stockholders' Deficit (812,239) (787,770)
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TOTAL LIABILTIES & STOCKHOLDERS' DEFICIT $ 331,568 $ 332,506
The accompanying notes are an integral part
of this financial statement
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
LBO CAPITAL CORP.
STATEMENTS OF OPERATIONS
For the Three Months Ended March 31,
2001 2000
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REVENUES:
Interest Income - Other $ 0 $ 5,219
EXPENSES:
Professional services 688 811
Management fees 825 810
Interest Expense 21,539 21,910
Other Expense 458 36
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Total Expenses 23,510 23,567
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Income (Loss) before Income Taxes (23,510) (18,348)
Income Tax Expense (Benefit):
Currently Payable -0- -0-
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Net Income (Loss) $ (23,510) $ (18,348)
Net Income (loss) per Share $ (.00) $ (.00)
Weighted Average Number of
Common Shares Outstanding 12,100,000 12,100,000
The accompanying notes are an integral part
of this financial statement
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PART 1. FINANCIAL INFORMATION
Item i. Financial Statements
LBO CAPITAL CORP
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31,
2001 2000
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Cash Flows for Operating Activities:
Net Loss $ (23,510) $ (18,347)
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Changes in Assets and Liabilities:
(Decrease) Increase in:
Interest Receivable - Other 0 15,781
Accounts Payable (1,818) (1,020)
Accounts Payable - related Entities 585 30
Accrued Expenses and Taxes 21,539 21,910
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Total Adjustments 20,306 36,701
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Net Cash (Used for) Operations (3,204) 18,354
Cash (Used for) investing Activities
Note Receivable - Other 0
Purchase of Investments 0 (21,000)
Marketable Securities for Sale 0
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0 (21,000)
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Cash Flows from Financing Activities:
Proceeds on Notes Payable 3,225 2,600
Interest Income 0
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Net Cash Provided by Financing
Activities 3,225 2,600
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Net Increase (Decrease) in Cash 21 (46)
Cash and cash Equivalents:
At Beginning of Period 0 63
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At End of Period $ 21 $ 17
Supplemental Disclosures of Cash Flow
Information:
Interest Paid $ 0 $ 0
The accompanying notes are an integral part
of this financial statement
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LBO CAPITAL CORP
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1. INTERIM FINANCIAL STATEMENTS
The accompanying financial statements of LBO Capital Corp.
("the Company") have been prepared by the Company without audit by
independent accountants, except for the balance sheet at December
31, 2000. In the opinion of the Company's management, the
financial statements reflect all adjustments necessary to present
fairly the Company's financial position at March 31, 2001 and the
results of operations and cash flows for the three month periods
ended March 31, 2001 and 2000.
Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted. These unaudited financial statements should be read in
conjunction with the financial statements and notes thereto
included in the Company's Annual Report 10-K. The results for the
three-month period ended March 31, 2001 are not necessarily
indicative of future financial results.
NOTE 2. INVESTMENTS.
As previously reported, the Company had acquired 1,880,000
shares of the restricted common stock of Ajay Sports, Inc.
("Ajay") in April 1989, for $182,000. Subsequently, this was
reduced to 1,480,000 shares. As a result of recording the
Company's equity in net losses of Ajay, the carrying value of this
investment is zero. The Company also obtained 200,000 warrants of
Ajay at that time. Each warrant entitles the Company to purchase
one share of Ajay common stock at $.18.
On August 13, 1998, Ajay announced that its board of
directors had authorized the implementation of a 1-for-6 reverse
split of the company's common stock, effective with the
commencement of trading on August 14, 1998. The reverse split was
approved by the stockholders of Ajay at the company's annual
meeting on May 29, 1998.
Following the reverse split, holders of Ajay's common stock
received one new share of $.01 par value common stock for every
six shares of common stock currently held. Therefore, the number
of Ajay shares held by the Company is 246,667. The reverse split
also affected the number and exercise price of the Company's
warrants, such that the Company now holds 33,333 warrants
entitling it to purchase one share of Ajay's common stock at $1.08
per share.
On February 29, 2000, the Registrant converted its note
receivable from Pro Golf International, Inc. ("PGI"), and the
interest accrued but unpaid on such note receivable, into common
stock of PGI. The conversion was made at the rate of $60 per
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common share, the price at which PGI was raising equity capital
under a Confidential Private Placement Memorandum dated February
4, 2000. The Registrant had initially made an investment in the
subordinated debt of the Registrant on June 23, 1999, as part of
the purchase of PGI by the Registrant's investee company, Ajay
Sports, Inc. on that date, and the Registrant had held the note
from PGI until the time of this conversion into common stock. In
exchange for converting the $300,000 note and $21,000 of
interest, the Registrant received 5,350 shares of PGI's common
stock.
On November 21, 1994, the Registrant bought 2,667 shares of
Enercorp, Inc. for $8,702. During 1996, the Registrant bought
12,674 additional shares of Enercorp, Inc. for $39,694.
Enercorp, Inc. is a business development company under the
Investment Company Act of 1940, as amended.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
(a) Material Changes in Financial Condition
Working capital decreased by $24,469 in the three-month
period ended March 31, 2001 due to the net loss of $23,510 and the
decrease in unrealized gain on investments of $959 for the three
months ended March 31, 2001.
(b) Results of Operations
Registrant's operations for the three months ended March 31,
2001 resulted in a loss of $23,510. This was due mainly to
interest expense of $21,539, management fees, professional
services and other expenses of $1,971.00.
Liquidity and Capital Resources
The Registrant is currently meeting its cash needs from
borrowing from a company. There is no assurance that this will
continue in future years. The Registrant's principal asset is its
investment in marketable securities of Ajay, which it has held for
over nine years. These shares are carried at a zero value on the
Registrant's Balance Sheet as a result of recording the
Registrant's equity in net losses of Ajay. The market value of
Ajay stock on March 31, 2001 was $0.07 per share. Ajay stock is
traded over-the-counter. The approximate market value of the
Registrant's 246,667 shares was $17,267 on that date. The
Registrant also owns 15,341 shares of Enercorp, Inc. common stock.
These shares are carried at their fair market value of $0.6875 per
share at March 31, 2001, which is $37,849 below cost. These
shares could be liquidated to meet cash flow needs if necessary.
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Part II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
Non
(b) Reports on Form 8-K.
None
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LBO CAPITAL CORP.
FORM 10-Q
For the Quarter Ended March 31, 2001
Signature Page
SIGNATURES
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.
LBO CAPITAL CORP.
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(Registrant)
By /s/ Thomas W. Itin
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Thomas W. Itin, President,
Chairman of Board of Directors
Date signed: May 18, 2001
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