SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
(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, 1999 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 No. 0-18303
- -----------------------------------------------------------------
GOLF ENTERTAINMENT, INC.
_________________________________________________________________
(Exact name of registrant as specified in
its charter)
Delaware
No. 11-2990598
- -------------------------------------- -----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2500 Northwinds Parkway
Three Northwinds Center - Suite 175
Alpharetta, GA
30004
- -------------------------------------------- ------------------
(Address of principal executive offices) (Zip Code)
(770) 667-9890
- --------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports 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 [ ]
Applicable only to issuers involved in bankruptcy proceedings
during the preceding five years:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by sections 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes [ ] No [ ]
Applicable only to corporate issuers:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date.
October 31, 1999: 2,641,711 common shares.
GOLF ENTERTAINMENT, INC. AND
SUBSIDIARIES
INDEX TO FORM 10-Q
PAGE
------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - September 30, 1999 and
and December 31, 1998 (Unaudited) 3
Consolidated Statements of Operations - for the three
and nine months ended September 30, 1999
and 1998 (Unaudited)
5
Consolidated Statements of Cash Flows - for the nine months
ended September 30, 1999 and 1998 (Unaudited) 6
Notes to Consolidated Financial Statements (Unaudited) 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 16
16
Item 2. Submission of Matters to a Vote of
Security Holders 16
16
Item 5. Other Information 16
16
Item 6. Exhibits and Reports on Form 8-K 16
(a) Exhibits
(b) Reports on Form 8-K
PART I - FINANCIAL INFORMATION
- ------------------------------
ITEM 1. FINANCIAL STATEMENTS
GOLF ENTERTAINMENT, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(UNAUDITED)
September 30, December 31,
1999 1998
- ----------- ------------
ASSETS:
Cash $
215,122 $ 379,043
Receivables - net of allowance
for doubtful accounts of $304,367
at September 30, 1999 and December
31, 1998, respectively 618,777
2,577,260
Notes receivable - employees
- 143,376
Notes and accounts receivable - other 249,833 -
Inventory, net of reserve for
obsolescence of $940,868 and
$1,086,608 at September 30, 1999
and December 31, 1998, respectively
1,510,333 1,862,981
Net assets to be disposed of 609,000 (275,308)
Furniture and equipment - net of
accumulated depreciation of
$526,402 and $425,465
890,779 552,706
Other assets
120,579 610,335
- ---------- ----------
TOTAL ASSETS $
4,214,423 $ 5,484,163
========== ==========
The accompanying notes are an integral part of these consolidated
financial statements.
(continued)
GOLF ENTERTAINMENT, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(UNAUDITED)
September 30, December 31,
1999 1998
- ----------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable $
1,123,325 $ 2,227,120
Accrued liabilities
49,963 476,629
Notes payable and lines of credit 876,727
271,754
Other liabilities
72,875 56,278
- ---------- ----------
TOTAL LIABILITIES
2,122,890 3,031,781
- ---------- ----------
STOCKHOLDERS' EQUITY:
Series A convertible preferred
stock, $.01 par value; 1,000,000
shares authorized, 380,000 shares
issued; 228,516 and 229,016 shares
outstanding at September 30, 1999 and
December 31, 1998, respectively 2,285
2,290
Common stock, $.01 par value;
25,000,000 shares authorized,
2,641,711 and 1,410,393 shares
issued and outstanding at September 30,
1999 and December 31, 1998,
respectively
26,417 14,104
Additional paid-in capital
10,711,006 10,354,985
Accumulated deficit
(8,648,175) (7,918,997)
- ---------- ----------
TOTAL STOCKHOLDERS' EQUITY
2,091,533 2,452,382
- ---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $
4,214,423 $ 5,484,163
========== ==========
The accompanying notes are an integral part of these consolidated
financial statements.
GOLF ENTERTAINMENT, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(UNAUDITED)
Three Months Ended
Nine Months Ended
----------------------
- ----------------------
Sep. 30, Sep. 30,
Sep. 30, Sep. 30,
1999 1998
1999 1998
---------- ----------
- ---------- ----------
Revenues:
Golf operations $ 297,807 $ - $
432,483 $ -
Other 14,671 2,115
13,116 3,168
--------- ---------
---------- ---------
Total revenues 312,478 2,115 436,599 3,168
--------- ---------
---------- ---------
Costs and expenses:
Golf operations 46,584 - 68,653
-
Selling, general and
administrative expense 273,497 - 377,260 -
--------- --------- ---------- --------
Total expenses 320,081 - 445,913 -
--------- --------- ---------- --------
Net income (loss) before
corporate expense, de-
preciation and interest (7,603) 2,115 (9,314) 3,168
Corporate expense 185,300 460,137 628,331 1,351,789
Depreciation expense 6,500 - 26,000 -
Interest expense 3,060 -
3,230 1,303
--------- -------- -------- --------
Net loss from continuing
operations (202,466) (458,022) (666,875)(1,349,924)
Discontinued operations:
Income (loss) from
discontinued opera-
tions 133,567 403,446 (144,009) (573,068)
Gain on disposal 81,707 81,707 81,707 81,707
--------- ---------
---------- ---------
Net income (loss) $ 14,810 $ 27,131 $(
729,178)$(1,841,285)
========= =========
========= =========
Earnings(loss) per common
share $ 0.01 $ 0.02
$ (0.37) $ (1.56)
========= =========
========= =========
Earnings(loss) per common
share assuming dilution $ 0.01 $ 0.02
$ (0.37) $ (1.56)
========= =========
========= =========
The accompanying notes are integral part of these consolidated financial
statements.
GOLF ENTERTAINMENT, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(UNAUDITED)
Nine Months Ended
- --------------------------
Sep. 30, Sep. 30,
1999 1998
- ------------ -----------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) $
( 729,178) $(1,841,285)
Adjustments to reconcile net
income (loss) to cash provided
by operating activities:
Depreciation and amortization
100,937 114,980
Write down of inventory, residual
values and other - 250,350
Stock compensation expense 37,500 -
Change in assets and liabilities
due to operating activities:
(Increase) decrease in
accounts receivable 1,985,483 ( 765,970)
(Increase) decrease in
inventory
396,809 (305,448)
Increase (decrease) in
accounts payable
(674,374) 293,428
Increase (decrease) in
accrued liabilities (426,666) 318,192
All other operating activities (4,248) (289,092)
- ----------- ----------
Total adjustments
1,388,441 (383,560)
- ----------- ----------
Net cash provided by operating
activities
659,263 (2,224,825)
- ----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Change in net assets to be
disposed of (884,308) 2,905,993
Purchases of furniture and equipment (30,048) (292,882)
Increase in notes receivable (21,783) (83,820)
- ----------- ----------
Net cash provided by (used in)
investing activities ( 936,139) 2,529,291
- ----------- ----------
The accompanying notes are an integral part of these consolidated
financial statements.
(Continued)
GOLF ENTERTAINMENT, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(UNAUDITED)
Nine Months Ended
- --------------------------
Sep. 30, Sep. 30,
1999 1998
- ------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on notes payable
( 117,875) (54,325)
Proceeds from sale of stock
230,830 -
Purchase of treasury stock - (66,455)
- ----------- ----------
Net cash provided by (used in)
financing activities 112,955
(120,780)
- ----------- ----------
Net increase (decrease) in cash
(163 921) 183,666
Cash at beginning of period
379,043 195,977
- ----------- ----------
Cash at end of period $
215,122 $ 379,643
=========== ==========
Supplemental Disclosure of Cash Flow
Information:
Cash paid during the period for:
Interest $
1,114,645 $ 1,631,552
=========== ==========
Income taxes $
- $ 35,279
=========== ==========
The accompanying notes are an integral part of these consolidated
financial statements.
GOLF ENTERTAINMENT, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Basis of Presentation
The accompanying unaudited consolidated financial statements
are condensed and do not include all information required by
generally accepted accounting principles to be included in a full
set of financial statements. The unaudited condensed consolidated
financial statements include the accounts of Golf Entertainment,
Inc. and its wholly owned subsidiaries, collectively referred to as
the "Company".
All material intercompany accounts and transactions have been
eliminated. Certain reclassifications have been made to prior
years' amounts to conform with current period presentation. The
information furnished reflects all adjustments which are, in the
opinion of the Company, necessary to present fairly the results of
its operations for the three and nine months ended September 30,
1999 and 1998 and its cash flows for the nine months ended
September 30, 1999. It is suggested that this report be read in
conjunction with the Company's audited financial statements
included in the Annual Report on Form 10-K for the fiscal year
ended December 31, 1998. The operating results for the three and
nine months ended September 30, 1999 and cash flows for the nine
months ended September 30, 1999 are not necessarily indicative of
the results that will be achieved for the full fiscal year or for
future periods.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial reporting period. Actual
results could differ from those estimates.
Note 2. Sale and Abandonment
On September 24, 1999, the Company and Somerset Capital Group,
Ltd. (the "Buyer") entered into a Purchase and Sale Agreement (the
"Purchase Agreement") for the sale to Buyer of substantially all of
the Company's leases of business equipment (the "Lease Portfolio"),
the business equipment which is subject to those leases and certain
other business equipment (collectively, the "Purchased Assets").
The purchase price is $3,559,500, consisting of cash in the amount
of $524,500, a promissory note in the amount of $400,000, and the
assumption of the outstanding indebtedness owed to Excel Bank, N.A.
("Excel") and Finova Capital Corporation ("Finova") up to a maximum
of $2,635,000. Additionally, the Buyer will assume all nonrecourse
and recourse debt which encumbers the leases and equipment
(approximately $12,500,000). At September 30, 1999, the estimated
net assets to be disposed of related to the proposed sale, after
deducting estimated expenses of $315,500, was $609,000. The sale
of the Purchased Assets requires the affirmative vote of the
holders of a majority of the issued and outstanding shares of the
Company's common stock and preferred stock.
At September 30, 1999, the Company had guaranteed $1,261,447
of debt owed by its LEC Leasing, Inc. subsidiary ("LEC") to Excel
pursuant to a letter agreement whereby Excel agreed to make
available to the Company a $2,500,000 line of credit to be used to
fund LEC's equity investment in certain equipment leases discounted
by Excel (i.e., the difference between the cost of the leased
equipment and the discounted present value of the minimum lease
payments assigned to Excel). At September 30, 1999, LEC was in
payment default of approximately $58,000, including accrued
interest, under this agreement. As of November 12, 1999, such
payment default had not been cured.
At September 30, 1999, the Company had guaranteed $1,223,279
of debt owed by LEC and $150,135 of debt owed by its Atlantic
Digital International, Inc. subsidiary ("ADI") to Finova pursuant
to those entities $3 million joint credit facility. At September
30, 1999, the Company was in default of the minimum net worth
covenant and LEC and ADI were in payment default under the credit
facility of approximately $38,000, including accrued interest. As
of November 12, 1999, such defaults had not been cured.
Upon consummation of the sale of the Purchased Assets, the
Company will be released from its guarantees to Excel and Finova,
with the exception of approximately $500,000 of recourse debt
encumbering certain leases not being purchased by the Buyer.
Also on September 24, 1999, the Company engaged the Buyer as
the managing agent of the Purchased Assets, effective as of October
1, 1999.
Note 3. Earnings Per Share
Basic and diluted earnings (loss) per share are computed in
accordance with SFAS No. 128 "Earnings Per Share". The following
EPS amounts reflect EPS as computed under SFAS No. 128 (all share
data has been adjusted to reflect the one-for-four reverse stock
split which became effective on September 15, 1998):
Three Months Ended
- ------------------------
Sep. 30, Sep. 30,
1999 1998
- --------- ---------
Shares outstanding at
beginning of period
2,641,492 1,176,017
Effect of conversion of preferred
stock to common stock
169 -
- --------- ---------
Weighted average common
shares outstanding
2,641,661 1,176,017
========= =========
Net earnings available to
common shareholders $
14,810 $ 27,131
========= =========
Earnings per common share $
0.01 $ 0.02
========= =========
Weighted average common
shares outstanding
2,641,661 1,176,017
Effect of common shares
issuable upon exercise of
dilutive stock options
69,385 7,280
- --------- ---------
Weighted average common shares
outstanding assuming dilution
2,711,046 1,183,297
========= =========
Earnings per common share
assuming dilution $
0.01 $ 0.02
========== =========
Nine Months Ended
- ------------------------
Sep. 30, Sep. 30,
1999 1998
- --------- ---------
Shares outstanding at
beginning of period
1,410,393 1,197,267
Effect of issuance of common
stock for services
73,590 -
Sale of common stock
432,511 -
Acquisition of SCS 71,538 -
Effect of conversion of preferred
stock to common stock 57 -
Purchase of treasury stock
(17,941)
- --------- ---------
Weighted average common
shares outstanding
1,988,090 1,179,326
========= =========
Net earnings (loss) available to
common shareholders $(
729,178) $(1,841,285)
========= =========
Earnings (loss) per common share $
(0.37) $ (1.56)
========= =========
Weighted average common
shares outstanding
1,988,090 1,179,326
Effect of common shares
issuable upon exercise of
dilutive stock options
- -
- --------- ---------
Weighted average common shares
outstanding assuming dilution
1,988,090 1,179,326
========= =========
Earnings (loss) per common share
assuming dilution $
(0.37) $ (1.56)
========== =========
Note 4. Notes Payable
In October of 1997, PMCPI and Merrill Lynch Business Financial
Services, Inc. ("Merrill Lynch") replaced PMCPI's prior line of
credit (the "Merrill Line of Credit") with a term note in the
amount of $443,848 (the "Merrill Note"). Subsequently, the Company
negotiated a term out of the remaining obligation, effective June
16, 1998, whereby the then outstanding principal and accrued
interest balance of approximately $420,000 would be amortized to
zero as of March 1, 1998. On February 9, 1999, the Company and
Merrill Lynch entered into a letter agreement whereby the Merrill
Note was amended to provide for lesser monthly principal payments
such that the then outstanding principal balance of approximately
$215,000 would be amortized to zero as of June 1, 1999. As of
September 30, 1999, the amount outstanding on the Merrill Note was
$186,464. The Merrill Note is guaranteed by the Company and is
secured by the inventory and accounts receivable of PMCPI. At
September 30, 1999, PMCPI was in payment default of the Merrill
Note. As of November 12, 1999, such payment default had not been
cured.
In March of 1999, LEC Leasing, Inc. and Pinacor, Inc. entered
into an agreement whereby $175,000 of accounts payable obligations
were converted into a non-interest bearing term note payable in
monthly installments of $20,000. At September 30, 1999, LEC
Leasing, Inc. was in payment default under the note agreement. On
October 12, 1999, the court entered a judgement against LEC
Leasing, Inc. and certain of the Company's other subsidiaries in
the amount of $228,777 plus interest on behalf of Pinacor, Inc.
The parties have held preliminary discussions to resolve this
issue, but no agreement has yet been reached. As of November 12,
1999, such payment default had not been cured and the court
judgement had not been satisfied.
In March of 1999, LEC Leasing, Inc. and IBM Corporation
("IBM") entered into an agreement whereby $347,884 of accounts
payable obligations were converted into an 8% term note payable in
monthly installments of $20,000. At September 30, 1999, LEC
Leasing, Inc. was in payment default under the note agreement. On
November 12, 1999, the Company and IBM reached a verbal agreement,
subject to appropriate documentation, to substantially reduce the
obligation and amend the repayment terms. As of such date,
however, the related documentation had not been executed and,
consequently, such payment default had not been cured.
Notes payable and lines of credit consist of the following at
September 30, 1999 and December 31, 1998:
September 30, December 31,
1999 1998
------------ -----------
Term note with Merrill Lynch, due
June 1, 1999, with floating
interest rate, currently at 9.25
percent 186,464 216,464
Term note due Pinacor, Inc., non-
interest bearing, payable in monthly
installments of $20,000, due October
1, 1999 155,000 -
Term note due IBM Corporation, paya-
ble in monthly installments of $20,000
with interest at 8%, due August, 2000 307,884 -
Other 227,379 55,290
- --------- ---------
$ 876,727 $ 271,754
========= =========
See Note 2 for a description of the Company's indebtedness to
Excel Bank, N.A. and Finova Capital Corporation, substantially all
of which will be eliminated as a result of the sale of the
Company's lease portfolio.
NOTE 4. Supplemental Disclosures of Noncash Investing
and Financing Activities
During the nine months ended June 30, 1999, the Company issued
50,000 shares of common stock in exchange for services valued at
$37,500; converted $522,884 in accounts payable obligations into
term notes; issued 135,000 shares of restricted common stock to
satisfy accounts payable obligations of $100,000; and assumed
$454,073 in liabilities in exchange for $454,073 in assets to be
used in connection with the operations of the Traditions Golf Club.
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Overview
On September 24, 1999, the Company and Somerset Capital Group,
Ltd. (the "Buyer") entered into a Purchase and Sale Agreement (the
"Purchase Agreement") for the sale to Buyer of substantially all of
the Company's leases of business equipment (the "Lease Portfolio"),
the business equipment which is subject to those leases and certain
other business equipment (collectively, the "Purchased Assets").
The purchase price is $3,559,500, consisting of cash in the amount
of $524,500, a promissory note in the amount of $400,000, and the
assumption of the outstanding indebtedness owed to Excel Bank, N.A.
("Excel") and Finova Capital Corporation ("Finova") ("Excel" and
"Finova" are sometimes collectively referred to as the "Lenders")
up to a maximum of $2,635,000. Additionally, the Buyer will assume
all nonrecourse and recourse debt which encumbers the leases and
equipment (approximately $12,500,000). At September 30, 1999, the
estimated net assets to be disposed of related to the proposed
sale, after deducting estimated expenses of $315,500, was $609,000.
The sale of the Purchased Assets requires the affirmative vote of
the holders of a majority of the issued and outstanding shares of
the Company's common stock and preferred stock.
In addition, on September 24, 1999, the Company engaged the
Buyer as the managing agent of the Purchased Assets effective as of
October 1, 1999. Under the Management Agreement, the Buyer will
collect payments on the leases and remit those payments to the
Company's Lenders, and be paid a management fee equal to 20% of the
revenue generated from the lease portfolio during the term of
Management Agreement for these services, plus an additional 3% of
the amount so paid. Notwithstanding the foregoing, the Buyer has
further agreed that, if the proposed sale is consummated, the Buyer
will not be entitled to any compensation under the Management
Agreement.
If the proposed sale is completed, the Company will cease its
equipment leasing business and other technology related businesses
and continue to pursue its new golf entertainment business
strategy.
Estimated Use of Proceeds
The net proceeds of to the Company from the proposed sale,
after paying legal, accounting and other expenses associated
therewith, are expected to be approximately $200,000 in cash and
the $400,000 promissory note. The actual or net proceeds derived
from the sale may be more or less than this amount. The net
proceeds will be used for general corporate purposes, including
funding a certificate of deposit to Excel as collateral for certain
recourse debt encumbering leases not been purchased by the Buyer.
If the Proposed Sale Is Not Approved
If the Proposed Sale is not approved, the actions of the
Company are expected to be limited by, among other things, the
actions of the Lenders or the Company's other creditors. While the
directors of the Company have not determined what actions the
Company would take if the Proposed Sale is not approved,
alternatives for the Company would include continuing its efforts
to sell its Lease Portfolio, subcontracting the management of the
Lease Portfolio to a third party, or ceasing business activities
and liquidating the Leases in the Lease Portfolio and disposing of
the equipment associated with the Lease Portfolio. There is no
assurance that the Company will be able to consummate a disposition
transaction with another buyer or that the Company will be able to
consummate an agreement with a third party to manage the Lease
Portfolio. In the interim, however, the Company will be delayed
in fully implementing its golf entertainment line of business.
Equipment Leasing and Resale Business Subject to the Proposed Sale.
The Company is proceeding with its announced intention to
become involved in the business of owning and operating golf
entertainment facilities. Mr. Ronald G. Farrell introduced in late
1998 a plan to re-orient the Company from its existing equipment
leasing business to one that owns and operates golf courses. On
February 17, 1999, the stockholders of the Company approved the
issuance of convertible debentures to an investment company managed
by Mr. Farrell, as well as the change of the Company's name to Golf
Entertainment, Inc. from LEC Technologies, Inc.
The Company's existing, and traditional, line of business has
been leasing business equipment. The equipment generally has been
midrange computer systems, telecommunications systems, system
peripherals (terminals, printers, communications controllers, etc.)
and point-of-sale systems. The Company has provided customers with
technical, financial and product alternatives, of various hardware
platforms or manufacturers, and has assisted customers with
equipment upgrades or selling used equipment.
The Company's business has been diversified by customer,
customer type, equipment type, equipment manufacturer, and
geographic location of its customers and subsidiaries. The
Company's customers have included "Fortune 1000" corporations or
companies of similar size as well as smaller corporations. A
significant portion of the Company's business has been with long-
term, repeat customers. Three customers of the Company, Tiffany &
Co., Bed, Bath & Beyond and The Hertz Corporation, respectively,
accounted for approximately 17.2%, 7.6%, and 2.3% of consolidated
revenues for the year ended December 31, 1998, 15.0%, 9.2% and 3.7%
of consolidated revenues for the year ended December 31, 1997 and
25.0%, 12.8% and 7.4% of consolidated revenues for the year ended
December 31, 1996.
Unfortunately, the Company's business has not been profitable.
For example, the Company lost $3,202,265 in the year ended December
31, 1998, recorded net income of $329,000 in the year ended
December 31, 1997, and had a loss of $1,398,316 in the year ended
December 31, 1996. The losses have generally been caused by the
Company's inability to obtain sufficient capital needed to make the
required equity investment in a sufficient number of leases to
achieve profitability, and acquisitions that have not contributed
to the Company's profitability. The Company could not foresee
being able to prevent future losses in the lease business.
Prior History of the Company
The Company was founded in 1980 under the name TJ Computer
Services, Inc. ("TJCS"). In 1989, all of the outstanding common
stock of TJCS was acquired by Harrison Development, Inc., an
inactive public corporation organized in Colorado, which then
changed its name to TJ Systems Corporation. In October 1991, the
Company reincorporated in the State of Delaware and in June 1995
changed its name to Leasing Edge Corporation. In March 1997, the
Company's stockholders approved a change in the Company's name to
LEC Technologies, Inc. to more accurately reflect the evolving
nature of the Company's business. In February 1999, the Company's
stockholders approved a change in the Company's name to Golf
Entertainment, Inc. to reflect the re-orientation of the Company.
Golf Entertainment Business.
The Company is proceeding with its announced intention to
become involved in the golf entertainment business by purchasing or
leasing existing golf facilities, and then enhancing value by
adding amenities and improving management and operating systems.
Golf Entertainment plans to develop new golf recreational
facilities, and may acquire other golf related businesses.
Facilities will be centered around a driving range and will provide
a variety of golf practice areas for pitching, putting, chipping
and sand play, and will be user-friendly for all levels of golfer
and will appeal to the entire family. The driving range may permit
night play and limited year round use. Each facility will offer
instructional programs for men, women and juniors, and will be
staffed with professional instructors. Most facilities will
include a clubhouse that will house a full line pro shop and a
snack bar, a miniature golf course(s) and batting cages. Where
feasible, the facilities will include par-3 or executive-length
(shorter than a regulation-length) golf courses. Golf
Entertainments revenues will be derived from selling balls to be
used on the driving range, charging for rounds of miniature golf,
charging for the use of the batting cages, selling golf equipment,
golf apparel and related accessories through the pro shop, fees for
instructional programs and from food and beverage sales. Golf
Entertainment will seek to realize economies of scale at its
facilities through centralized management information systems,
accounting, cash management and purchasing programs. Golf
Entertainment intends to purchase products from a number of
suppliers, including Karsts Manufacturing Company (Ping), Tommy
Armor Golf, Cobra Golf Company, Inc., Masan Golf Company, Callahan
Golf Company, Titlest and Foot Joy.
Golf Entertainment also may seek long-term management
contracts to operate golf courses and golf related facilities.
Reasons For the Proposed Sale
The Directors determined that, in light of the significant
losses from the Companys equipment leasing business and the
sizeable indebtedness of the Company form that business, that it
was in the best interest of the Company that its equipment leasing
business be sold and the Company should develop a golf
entertainment business. As of June 30, 1999, the Company had an
accumulated deficit of $8,662,985. In particular, in the fiscal
year ended December 31, 1998 the Company lost $3,202,000, or $2.63
per share, on revenue of $30,623,000, and in the six months ended
June 30, 1999, the Company lost $744,000, or $0.45 per share, on
revenue of $5,371,000.
The Directors believe that the Company will be unable to end
the losses from the equipment leasing business.
The Directors agreed to the Proposed Sale to repay
indebtedness incurred in connection with the Company's equipment
leasing business and to generate capital for the development of the
golf entertainment business. The Proposed Sale will generate
approximately $200,000 in cash (after deducting estimated expenses
of $315,000), plus $400,000 in payments from the Buyer over the
next three (3) years. These funds will be used to pay ongoing
expenses of the Company, including funding a certificate of deposit
to Excel Bank, N.A. as collateral for certain recourse debt not
being assumed by the Buyer. Furthermore, the Buyer is assuming
approximately $12,500,000 of debt associated with the Companys
business equipment leases and approximately $2,600,000 of senior
secured debt.
The Directors agreed to the Proposed Sale, and the attendant
termination of the Company's guarantees, to reduce the Company's
liabilities. As of June 30, 1999, the Company had guaranteed
$1,366,725 of debt owed by its subsidiaries to Excel Bank, N.A. and
$1,448,414 of debt owed by its subsidiaries to Finova Capital
Corporation. That debt and the Companys guarantee will be
eliminated, or at a minimum, substantially reduced by the Proposed
Sale. As of September 30, 1999, the balance owed on that debt was
approximately $2,600,000. The Proposed Sale will reduce the
Companys liabilities by approximately $15,100,000.
The Board of Directors agreed to the sale to Somerset Capital
Group, Ltd. after contacting several prospective buyers, including
a prospective buyer that was owned and operated by Michael Daniels,
a former chief executive officer and director of the Company. The
offer made by the Buyer is higher than any other firm offer
received. The Board decided to accept the Buyers offer because
none of those other prospective buyers was able to demonstrate to
the Board sufficient resources or commitment to completing a
transaction to make a solid, binding, closable offer for the stock
or assets of the Company on terms more beneficial to the Company
than those contained in the Agreements.
The Board of Directors believes that approval and consummation
of the Proposed Sale will enhance shareholder value by reducing
liabilities, raising capital for the Company's new business
activities and terminating the Companys equipment leasing business
that has proved unprofitable since inception.
The Company's Board also considered the following potentially
negative factors in its deliberations concerning the Proposed Sale:
The Board of Directors considered as a negative factor the
fact that the Buyer is not paying the entire purchase price in cash
at closing. Instead, the Buyer is executing a $400,000 promissory
note for a portion of the purchase price. To satisfy the Board of
Directors concern, the Board of Directors has relied on the
Buyers audited financial statements dated December 31, 1998 and
various credit references, including those of Excel Bank, N.A.
The board of directors did not quantify or assign any relative
weight to the various factors considered. Ultimately, the Board of
Directors felt that the risk of these negative factors was
diminished by the specific language of the Agreements, and that
the negative factors were substantially outweighed by the
advantages of the Proposed Sale.
Payoff of the Company' Lenders
The Company expects that the proceeds from the Proposed Sale
will be sufficient to payoff all, or substantially all, of the
amount owed to Excel Bank, N.A., and Finova Capital Corporation
(the "Lenders"), and that the Company will be released from its
guarantees to those institutions. However, the Lenders have not
provided the Company with final payoff amounts. If the proceeds
from the Proposed Sale are insufficient to payoff the indebtedness
to the Lenders (and other funds are not available to payoff the
remaining amount due), the Lenders would retain first position
liens on the equipment and the Lease Portfolio, in which case,
unless the Lenders waive or release their liens, the Company would
not be able to meet all conditions precedent for the Proposed Sale.
Without a waiver of such conditions precedent by the Buyer, the
Proposed Sale would not be consummated. If the Lenders are not
paid in full, the Lenders might also waive or release their liens
(allowing consummation of the Proposed Sale), but not release the
Company from the unpaid indebtedness and guarantees for that
amount.
Currently, the Company is in default of its obligations to the
Lenders. Neither Lender has agreed with the Company to forebear
enforcement of their rights or remedies under their respective loan
agreements pending the Proposed Sale. It is anticipated that, if
the Proposed Sale is not concluded, the Lenders will foreclose on
the equipment and the Lease Portfolio, with no assurance that the
proceeds from any liquidation sale would be sufficient to payoff
the Lenders.
The Company is refocusing its business to the golf
entertainment business. Some of the relevant considerations
associated with that business, and the Company's position in that
business include the following:
Remaining Liabilities
The Company believes that the Proposed Sale will result in the
payoff or assumption of all, or substantially all of the Companys
debt to Excel Bank, N.A. and Finova Capital Corporation, the
Companys principal lenders. However, the Buyer has agreed to
payoff or assume a maximum of $2,635,000 in liabilities to the
Companys principal lenders. If such liabilities exceed that
amount, the Company will have to pay such liabilities from other
sources to consummate the Proposed Sale. Also, because the
transaction is structured as an asset sale, and not a sale of
stock, the Company remains liable to other creditors of the
Company, and the Companys subsidiaries remain liable for their
existing obligations. Also, the Company and its subsidiaries have
other remaining creditors who will not be paid in full from the
sale of the lease portfolio, and such creditors could seek payment
from the Company or its subsidiaries. At least one such creditor
has obtained a judgment against certain of the Companys
subsidiaries that has not been paid.
Additional Capital Requirements
To develop the Companys golf entertainment business it will
need substantially more cash than it will receive from the Proposed
Sale. The Company will have to obtain those funds from public or
private sources of equity investment or debt issuances, or
combinations thereof. Failure to raise additional capital will
adversely affect the Companys fiscal strength. If the Company
cannot raise additional funds, it will be limited in its ability
to acquire or develop golf facilities, will have greater dependence
on the performance of a lesser number of golf facilities and will
have less capital to enable it to withstand economic downturns.
Business Strategy; Possible Lack of Suitable Locations
The Companys ability to generate revenue, net income and
operating cash flow depends upon its success in acquiring or
leasing and developing golf recreational facilities at suitable
locations upon satisfactory terms. This in turn depends on a
number of factors, including the availability and cost of suitable
locations, the availability of adequate financing for the Company,
the hiring, training and retention of skilled management and other
personnel, the ability to obtain the necessary governmental permits
and approvals and third party consents, the competitive environment
and other factors, some of which are beyond the Companys control.
There can be no assurance that suitable golf facility acquisition
or lease opportunities will be available or that the Company will
be able to consummate acquisition or leasing transactions on
satisfactory terms.
The development of golf recreational facilities is subject to
all the delays and uncertainties associated with development and
construction projects generally, such as the performance by
construction contractors, costs of materials, labor and energy,
inflation, adverse weather, adverse subsurface conditions and other
factors that could cause construction and expansion and renovation
costs to exceed estimates. If necessary, the Company will hire a
construction manager to oversee construction activities at
facilities acquired by the Company and on acquired sites. The
acquisition and development of golf recreational facilities may
become more expensive in the future to the extent that competition
for sites increases. The future success and growth of this business
will depend on, among other things, the ability to acquire suitable
operating properties and development sites and to obtain required
financing for future acquisitions and development of golf
facilities. There can be no assurance that the Company will be
able to acquire suitable sites or facilities or to obtain financing
on favorable terms.
Competition
The golf industry is highly competitive and includes
competition from other golf facilities, traditional golf ranges and
golf courses, as well as other recreational pursuits. Many
potential competitors have considerably greater financial and other
resources, experience and customer recognition than the Company
will have. The golf entertainment business will also experience
competition in its day-to-day operations from existing and newly
constructed golf and recreational facilities. Such competition may
adversely impact the cash flow from its golf facilities.
Dependence on Discretionary Consumer Spending
The amount spent by consumers on discretionary items, such as
family, leisure and entertainment activities, like those to be
offered by golf recreational facilities acquired, developed and
operated by the Company, have historically been dependent upon
levels of discretionary income, which may be adversely affected by
general economic conditions. A decrease in consumer spending on
golf will have an adverse effect on the Companys financial
condition and results of operations.
Dependence on Key Employees; Recruitment of Additional Personnel
The continuing services of Mr. Farrell are considered
essential to the successful operation of the Companys golf
entertainment business. Currently, the Company has an employment
contract with Mr. Farrell through December, 2003. If Mr. Farrell
should die or withdraw, or be removed from his position with the
Company, there can be no assurance that a capable successor could
be found. Accordingly, the Company will seek to hire a person with
experience and knowledge in the golf entertainment business who
will be responsible for the operation of the business. As golf
centers are acquired and developed, those facilities will need to
be staffed. There can be no assurances that the Company will be
able to attract or retain persons to serve in such capacities.
Nine Months Ended September 30, 1999 Compared to the Nine Months
Ended September 30, 1998
Revenues
Total revenues for the nine months ended September 30, 1999
were $436,599, comprised of $423,483 of revenues from the Company's
Traditions Golf Club and $13,116 of interest income. The Traditions
Golf Club operations were acquired in May 1999.
Costs and Expenses
Total costs and expenses for the nine months ended September
30, 1999 were $445,913, comprised of $68,653 related to cost of
sales related to revenues from golf operations and $377,260 of
selling, general and administrative expenses related to the
operations of the Traditions Golf Club.
Corporate expense decreased 53.5% from $1,351,789 for the nine
months ended September 30, 1998 to $628,331 for the nine months
ended September 30, 1999, a decrease of $723,458. The decrease in
corporate expense is attributable to a decrease in staffing levels
between periods and a concentrated effort by the Company's new
management to reduce general expenses.
Discontinued Operations
Loss from discontinued operations decreased 74.9% from
$573,068 for the nine months ended September 30, 1998 to $144,009
for the nine months ended September 30, 1999, a decrease of
$429,459. The decrease in the loss from discontinued operations
between periods is due primarily to the write down of inventory and
residual values related to the Company's leasing operations
recorded in the 1998 period.
Revenues associated with discontinued operations decreased
68.2% from $25,098,966 for the nine months ended September 30, 1998
to $7,979,541 for the nine months ended September 30, 1999, a
decrease of $17,119,425.
The consolidated financial statements do not reflect a
provision for income taxes due to the utilization of net operating
loss carryforwards and changes in the related valuation allowance.
At September 30, 1999, the Company had unexpired net operating loss
carryforwards of approximately $6,000,000 which can be utilized to
offset future taxable income, if any.
Net Earnings
As a result of the foregoing, the Company recorded a net loss
of $729,178 for the nine months ended September 30, 1998 as
compared to a net loss of $1,841,285 for the nine months ended
September 30, 1998.
Three Months Ended September 30, 1999 Compared to Three Months
Ended September 30, 1998
Revenues
Total revenues for the three months ended September 30, 1999
were $312,478, comprised of $297,807 of revenues from the Company's
Traditions Golf Club and $14,671 of interest income. The Traditions
Golf Club operations were acquired in May 1999.
Costs and Expenses
Total costs and expenses for the three months ended September
30, 1999 were $320,081, comprised of $46,584 related to cost of
sales related to revenues from golf operations and $273,497 of
selling, general and administrative expenses related to the
operations of the Traditions Golf Club.
Corporate expense decreased 59.7% from $460,137 for the three
months ended September 30, 1998 to $185,300 for the three months
ended September 30, 1999, a decrease of $274,837. The decrease in
corporate expense is attributable to a decrease in staffing levels
between periods and a concentrated effort by the Company's new
management to reduce general expenses.
Discontinued Operations
Income from discontinued operations decreased 66.9% from
$403,446 for the three months ended September 30, 1998 to $133,567
for the three months ended September 30, 1999, a decrease of
$269,879. The decrease in income from discontinued operations
between periods is due primarily to a decrease in the Company's
lease and technology related business activity between periods as
a result of the Company's pending sale of its lease portfolio and
the discontinuance of its technology services businesses.
Revenues associated with discontinued operations decreased
73.7% from $10,385,893 for the three months ended September 30,
1998 to $2,734,278 for the three months ended September 30, 1999,
a decrease of $7,651,615.
Net Earnings
As a result of the foregoing, the Company recorded net income
of $14,810 for the quarter ended September 30, 1999 as compared to
net income of $27,131 for the quarter ended September 30, 1998.
Liquidity and Capital Resources
In October of 1997, PMCPI and Merrill Lynch Business Financial
Services, Inc. ("Merrill Lynch") replaced PMCPI's prior line of
credit (the "Merrill Line of Credit") with a term note in the
amount of $443,848 (the "Merrill Note"). Subsequently, the Company
negotiated a term out of the remaining obligation, effective June
16, 1998, whereby the then outstanding principal and accrued
interest balance of approximately $420,000 would be amortized to
zero as of March 1, 1998. On February 9, 1999, the Company and
Merrill Lynch entered into a letter agreement whereby the Merrill
Note was amended to provide for lesser monthly principal payments
such that the then outstanding principal balance of approximately
$215,000 would be amortized to zero as of June 1, 1999. As of
September 30, 1999, the amount outstanding on the Merrill Note was
$186,464. The Merrill Note is guaranteed by the Company and is
secured by the inventory and accounts receivable of PMCPI. At
September 30, 1999, PMCPI was in payment default of the Merrill
Note. As of November 12, 1999, such payment default had not been
cured.
In March of 1999, LEC Leasing, Inc. and Pinacor, Inc. entered
into an agreement whereby $175,000 of accounts payable obligations
were converted into a non-interest bearing term note payable in
monthly installments of $20,000. At September 30, 1999, LEC
Leasing, Inc. was in payment default under the note agreement. On
October 12, 1999, the court entered a judgement against LEC
Leasing, Inc. and certain of the Company's other subsidiaries in
the amount of $228,777 plus interest on behalf of Pinacor, Inc.
The parties have held preliminary discussions to resolve this
issue, but no agreement has yet been reached. As of November 12,
1999, such payment default had not been cured and the court
judgement had not been satisfied.
In March of 1999, LEC Leasing, Inc. and IBM Corporation
entered into an agreement whereby $347,884 of accounts payable
obligations were converted into an 8% term note payable in monthly
installments of $20,000. At September 30, 1999, LEC Leasing, Inc.
was in payment default under the note agreement. On November 12,
1999, the Company and IBM reached a verbal agreement, subject to
appropriate documentation, to substantially reduce the obligation
and amend the repayment terms. As of such date, however, the
related documentation had not been executed and, consequently, such
payment default had not been cured.
Based on the Company's anticipated proceeds from the sale of
its lease portfolio and the elimination of the related indebtedness
combined with the anticipated purchase by LEC Acquisition LLC of
the Company's 6% Convertible Debentures and the subsequent
conversion thereof into shares of the Company's restricted common
stock, management believes that it will have adequate capital
resources to continue its operations at the present level for at
least the next twelve months. Notwithstanding the foregoing, if
the proposed sale of the Company's lease portfolio is not
consummated, it is unlikely that LEC Acquisition LLC will continue
to invest in the Company, and, consequently, the Company will cease
to be a going concern.
The Company believes that inflation has not been a significant
factor in its business.
The Company is aware of the issues associated with the
programming code in existing computer systems as the millennium
approaches. Independent of such issues, management of the Company
has initiated an information systems project to standardize all of
the Company's hardware and software systems. The systems selected
by management are Year 2000 compliant. The implementation of such
systems is anticipated to be completed in 1998. Management does
not believe that such implementation will have a significant effect
on the Company's earnings.
Recently Issued Accounting Standards
Management does not believe that any recently issued but not
yet adopted accounting standards will have a material effect on the
Company's results of operations or on the reported amounts of its
assets and liabilities upon adoption.
Future Plans
The Company is continuing its efforts to divest itself of its
technology services businesses and is focusing primarily on
acquiring and consolidating the ownership of existing golf ranges
and golf centers. The Company believes that the fragmented
ownership of golf ranges and centers, currently characteristic of
the industry in the United States, coupled with the extensive
business experience of the Company's CEO, Ronald G. Farrell, in
negotiating and financing acquisition opportunities, offer it an
opportunity for growth. The Company intends to enhance these
existing golf facilities by adding amenities and improving
management and operating systems. The Company also will develop
new golf recreational facilities, and may acquire other golf
related businesses. The Company intends that its facilities will
be centered around a driving range and will provide a variety of
golf practice areas for pitching, putting, chipping and sand play.
The Company intends that its facilities will be user-friendly for
all levels of golfer and will appeal to the entire family. Each
driving range will, generally, permit night play and limited year
round use. Each facility will offer instructional programs for
men, women and juniors, and will be staffed with professional
instructors. Most facilities will include a clubhouse that will
house a full-line pro-shop, a snack bar, a miniature golf course(s)
and batting cages. Where feasible, the Company intends that the
facilities will include par-3 or executive-length (shorter than
regulation-length) golf courses. The Company's revenues will be
derived from selling balls to be used on the driving range,
charging for rounds of miniature golf, charging for the use of the
batting cages, selling golf equipment, golf apparel and related
accessories through the pro-shop, fees for instructional programs
and from food and beverage sales. The Company will seek to realize
economies of scale at its facilities through centralized management
information systems, accounting, cash management and purchasing
programs. The Company may also seek long-term management contracts
to operate golf courses and golf related facilities.
Safe Harbor Statement under the
Private Securities Litigation Reform Act
of 1995
Certain statements herein and in the future filings by the Company
with the Securities and Exchange Commission and in the Company's
written and oral statements made by or with the approval of an
authorized executive officer constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934, and
the Company intends that such forward-looking statements be subject
to the safe-harbors created thereby. The words and phrases
"looking ahead", "we are confident", "should be", "will be",
"predicted", "believe", "expect" and "anticipate" and similar
expressions identify forward-looking statements. These and other
similar forward-looking statements reflect the Company's current
views with respect to future events and financial performance, but
are subject to many uncertainties and factors relating to the
Company's operations and business environment which may cause the
actual results of the Company to be materially different from any
future results expressed or implied by such forward-looking
statements. Examples of such uncertainties include, but are not
limited to, changes in customer demand and requirements, the mix of
leases written, the availability and timing of external capital,
the timing and method of the Company's realization of its recorded
residual values, new product announcements, continued growth of the
semiconductor industry, trend of movement to client/server
environment, interest rate fluctuations, changes in federal income
tax laws and regulations, competition, unanticipated expenses and
delays in the integration of newly-acquired businesses, industry
specific factors and worldwide economic and business conditions.
With respect to economic conditions, a recession can cause
customers to put off new investments and increase the Company's bad
debt experience. The mix of leases written in a quarter is a
direct result of a combination of factors, including, but not
limited to, changes in customers demands and/or requirements, new
product announcements, price changes, changes in delivery dates,
changes in maintenance policies and the pricing policies of
equipment manufacturers, and price competition from other lessors.
The Company undertakes no obligation to publicly update or revise
any forward-looking statements whether as a result of new
information, future events or otherwise.
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings.
On July 1, 1999, the former chief executive officer of the
Company and another former employee of the Company filed a
Complaint for Arbitration before the American Arbitration
Association. The Complaint claims the Plaintiffs were improperly
terminated by the Company, and that they are entitled to an
unspecified amount of actual and punitive damages. On or about
July 22, 1999, the Company answered, denying the allegations and
submitting counterclaims against the former chief executive officer
for failure to repay monies owed and breaches of other duties to
the Company. On the same day, the Company answered the other
former employee's Complaint, and denied the allegations of that
other former employee. The matters are proceeding before the
American Arbitration Association. No date for a hearing has been
set.
On October 12, 1999, the court entered a judgement against
certain of the Company's subsidiaries in the amount of $228,777
plus interest on behalf of Pinacor, Inc. The parties have held
preliminary discussions to resolve this issue, but no agreement has
yet been reached.
On September 28, 1999, former counsel to the Company filed
suit for $19,341.83 plus interest. The Company believes that it
has settled this suit.
The Company is party to various other litigation, which, in
the aggregate, the Company does not believe to be material.
ITEM 3. Defaults Upon Senior Securities.
As of November 12, 1999, the Company was in payment default
under the Excel Equity Line Agreement in the amount of
approximately $264,628 including accrued interest.
As of November 12, 1999, the Company was not in compliance
with the minimum consolidated net worth covenants under the Finova
Credit Facility and was in payment default in the amount of
approximately $114,000 including accrued interest.
As discussed in Note 2 of Notes to Consolidated Financial
Statements, if the Company's shareholders approve the sale of the
Company's lease portfolio, the Company will be released from its
guarantees to Excel and Finova, with the exception of approximately
$500,000 of recourse debt encumbering certain leases not being
purchased by the Buyer.
For a description of the status of the Company's other debt
agreements, see Note 4 of Notes to Consolidated Financial
Statements.
ITEM 4. Submission of Matters to a Vote of Security Holders.
None.
ITEM 5. Other Information.
On May 22, 1999 the Company, through a wholly-owned
subsidiary, entered into a multi-year lease agreement for the
Company's first golf course and recreation facility. In connection
therewith, the Company assumed approximately $450,000 in
liabilities in exchange for $450,000 in assets to be used in
connection with the operation of the facility. Located in Oklahoma
City, Oklahoma and named Traditions, the recreational complex
includes a 4,500 yard, 18-hole, par 60 executive course; a 20-acre,
80 tee practice range with multiple target greens; a 9-hole pitch
and putt course; and an 18-hole practice putting course. The total
complex is less than one year old and encompasses approximately 120
acres. Private and group lessons, which are videotaped for each
student, are given in a separate facility.
On June 30, 1999, LEC Acquisition LLC exercised a warrant to
purchase $150,000 face amount of 6% Convertible Debentures and
immediately exercised its option to convert such debentures into
500,000 shares of the Company's restricted common stock. As of
August 17, 1999, LEC Acquisition LLC was the registered owner of
751,099 shares of the Company's common stock. In addition thereto,
Mr. Ronald Farrell, CEO and Chairman of the Company and the
managing director of LEC Acquisition LLC has informed the Company
that he holds proxies and voting control over an additional 367,250
shares of the Company's common stock.
On August 17, 1999, the Company was notified by NASDAQ that it
had failed to maintain a minimum bid price greater than or equal to
$1.00 over the prior 30 consecutive trading days as required under
Marketplace Rule 4310(c)(4). The Company was given 90 days, or
until November 17, 1999, to regain compliance with such rule. The
Company anticipates filing a formal request for hearing on November
15, 1999 and requesting a hearing date be scheduled for the second
week in January 2000.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27.1 Financial Data Schedule.
(b) Reports on Form 8-K
None.
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.
GOLF
ENTERTAINMENT, INC.
(Registrant)
Date: November 12, 1999 /s/ Ronald
G. Farrell
Ronald G.
Farrell, Chief
Executive
Officer
(Principal
Executive Officer)
Date: November 12, 1999 /s/ William
J. Vargas
William J.
Vargas, V.P.- Finance
(Principal
Financial and
Accounting
Officer)