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.
June 30, 2001 33-19107
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
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(Address of Principal Executive Offices) (Zip Code)
(248) 851-5651
(Registrant's Telephone 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 August 15, 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 June 30, 2001
INDEX
Page Number
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets
June 30, 2001 (Unaudited) and
December 31, 2000 3
Statements of Operations (Unaudited)
Three months and Six months ended
June 30, 2001 and 2000 4
Statements of Cash Flows (Unaudited)
Six months ended June 30, 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.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
LBO CAPITAL CORP.
BALANCE SHEETS
(Unaudited)
June 30, December 31,
2001 2000
--------- ------------
ASSETS
Current Assets:
Cash and Equivalents $ 266 $ 0
Marketable Securities -
Available for sale 14,382 11,506
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Total Current Assets 14,648 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 $ 335,648 $ 332,506
============ =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts Payable $ 900 $ 2,608
Accounts Payable - Related Entities 1,185 0
Notes Payable - Other 836,526 830,701
Accrued Expenses and Taxes 334,543 286,966
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Total Current Liabilities 1,173,154 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) (34,014) (36,890)
Accumulated Deficit (1,427,796) (1,375,183)
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Total Stockholders' Deficit (837,506) (787,770)
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TOTAL LIABILTIES & STOCKHOLDERS' DEFICIT $ 335,648 $ 332,506
========== ==========
The accompanying notes are an integral part
of this financial statement
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
LBO CAPITAL CORP.
STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2001 2000 2001 2000
REVENUES:
Interest Income - Other $ 0 $ 0 $ 0$ 5,219
EXPENSES:
Professional services 601 557 2,989 1,368
Management fees 600 930 1,425 1,740
Interest Expense 26,038 22,946 47,577 44,856
Other Expense 148 51 622 87
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Total Expenses 27,387 24,484 52,613 48,051
--------- -------- -------- --------
Income (Loss) before Income Taxes (27,387) (24,484) (52,613) (42,832)
Income Tax Expense (Benefit):
Currently Payable -0- -0- -0- -0-
-------- -------- -------- -------
Net Income (Loss) $(27,387) $ (24,484) $ (52,613) $(42,832)
======== ========= ========== ========
Net Income (loss) per Share $ (.00) $ (.00) $ (.00) $ (.00)
========== =========== ========== ========
Weighted Average Number of
Common Shares
Outstanding 12,100,000 12,100,000 12,100,000 12,100,000
========== ========== ========== =========
The accompanying notes are an integral part
of this financial statement
PART 1. FINANCIAL INFORMATION
Item i. Financial Statements
LBO CAPITAL CORP.
STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months Ended June 30,
2001 2000
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Cash Flows for Operating Activities:
Net Loss $ (52,613) $ (42,832)
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 (1,709) (2,520)
Accounts Payable - related Entities 1,185 (90)
Accrued Expenses and Taxes 47,577 44,856
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Total Adjustments 47,053 58,027
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Net Cash (Used for) Operations (5,560) 15,195
Cash (Used for) Investing Activities
Note Receivable - Other 0 0
Purchase of Investments 0 (21,000)
Marketable Securities for Sale 0 0
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Net Cash (Used for Investing Activities 0 (21,000)
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Cash Flows from Financing Activities:
Proceeds on Notes Payable 5,825 5,750
Interest Income 0 0
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Net Cash Provided by Financing
Activities 5,825 5,750
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Net Increase (Decrease) in Cash 265 (55)
Cash and Cash Equivalents:
At Beginning of Period 0 63
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At End of Period $ 265 $ 8
========== ========
Supplemental Disclosures of Cash Flow
Information:
Interest Paid $ 0 $ 0
========= ========
The accompanying notes are an integral part
of this financial statement
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 June 30,
2001 and the results of operations and cash flows for the six-month periods
ended June 30, 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 six-month period ended June 30, 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 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 PGI 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
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Working capital decreased by $(49,736) in the six-month period
ended June 30, 2001 due to the net loss of $(52,613) and the
increase in unrealized gain on investments of $2,876 for the six
months ended June 30, 2001.
(b) Results of Operations
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Registrant's operations for the six months ended June 30, 2001
resulted in a loss of $(52,613). This was due mainly to
interest expense, professional services and other expenses of
$(51,188) and management fees of $(1,425).
Liquidity and Capital Resources
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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 June 30, 2001 was $0.03 per share. Ajay stock is traded over-the-counter.
The approximate market value of the Registrant's 246,667 shares was $7,400 on
that date. The Registrant also owns 15,341 shares of Enercorp, Inc. common
stock. These shares are carried at their market value of $1.00 per
share at June 30, 2001, which is $33,055 below cost. These shares could be
liquidated to meet cash flow needs if necessary.
Part II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
(b)
None
(c) Reports on Form 8-K.
None
LBO CAPITAL CORP.
FORM 10-Q
For the Quarter Ended June 30, 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.
----------------
(Registrant)
By
Thomas W. Itin, President,
Chairman of Board of Directors
Date signed: August 21, 2001