U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(MARK ONE)
|X| Quarterly Report Pursuant to Section 13 or 15(d) of Securities Exchange Act
of 1934
For the quarterly period ended MARCH 31, 2003
|_| Transition report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the transition period from _______ to _______.
Commission File No. 000-28321
AVID SPORTSWEAR & GOLF CORP.
(Name of Small Business Issuer in Its Charter)
Nevada 88-0374969
- ------ ----------
(State or Other Jurisdiction of Incorporation (I.R.S. Employer
or Organization) Identification No.)
834 Ridge Avenue, Pittsburgh, Pennsylvania 15212
- ------------------------------------------ -----
(Address of Principal Executive Offices) (Zip Code)
(412) 321-6001
--------------
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months, and (2) has
been subject to such filing requirements for the past 90 days. Yes / / No /X/
There were 147,933,309 shares of common stock outstanding as of July 10,
2003. This number does not include outstanding options to purchase shares of
common stock of the issuer.
PART I
ITEM 1. FINANCIAL STATEMENTS
FINANCIAL INFORMATION
2
AVID SPORTSWEAR & GOLF CORP.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2003 AND DECEMBER 31, 2002
3
AVID SPORTSWEAR & GOLF CORP.
(A Development Stage Company)
Consolidated Balance Sheets
ASSETS
------
March 31, December 31,
2003 2002
----------- ------------
(Unaudited)
CURRENT ASSETS
Cash $ 840 $ 7,158
---------- -----------
Total Current Assets 840 7,158
---------- -----------
OTHER ASSETS
Trademarks 2,902 2,902
---------- -----------
Total Other Assets 2,902 2,902
---------- -----------
TOTAL ASSETS $ 3,742 $ 10,060
========== ===========
LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS' EQUITY
(DEFICIT)
CURRENT LIABILITIES
Accounts payable
$4,183,075 $ 4,163,337
Accrued liabilities 214,196 200,157
Notes payable 561,525 561,525
Capital leases - current portion 131,629 131,629
---------- -----------
Total Current Liabilities 5,090,425 5,056,648
---------- -----------
Total Liabilities 5,090,425 5,056,648
---------- -----------
Preferred stock; $0.001 par value: 10,000,000 shares
authorized; 5,000 shares issued and outstanding 20,000 20,000
---------- -----------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock; $0.001 par value; 150,000,000 shares
authorized; 147,933,309 shares issued and
outstanding 147,933 147,933
Additional paid-in capital 16,760,589 16,760,589
Accumulated deficit prior to the development stage (20,412,928) (20,412,928)
Accumulated deficit during the development stage (1,602,277) (1,562,182)
------------ ------------
Total Stockholders' Equity (Deficit) (5,106,683) (5,066,588)
------------ ------------
TOTAL LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 3,742 $ 10,060
============ ============
The accompanying notes are an integral part of these consolidated
financial statements.
4
AVID SPORTSWEAR & GOLF CORP.
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)
From
Inception
Of the
Development
Stage
For the on January 1,
Three Months Ended 2002
March 31, through
----------------------- March 31,
2003 2002 2003
---------- ----------- ---------------
$ - $ - $ -
EXPENSES
Bad debt - - 960,187
General and administrative 26,057 214,527 583,982
------------ ----------- ---------------
Total Expenses 26,057 214,527 1,544,169
------------ ----------- ---------------
LOSS FROM OPERATIONS (26,057) (214,527) (1,544,169)
------------ ----------- ---------------
OTHER INCOME (EXPENSE)
Other income - 1,327 1,949
Interest expense (14,038) (14,038) (73,765)
------------ ----------- ---------------
Total Other (Expense) Income (14,038) (12,711) (71,816)
------------ ----------- ---------------
LOSS BEFORE EXTRAORDINARY GAIN (40,095) (227,238) (1,615,985)
------------ ----------- ---------------
EXTRAORDINARY GAIN - - 33,708
------------ ----------- ---------------
NET LOSS (40,095) (227,238) (1,582,277)
------------ ----------- ---------------
ACCRETION OF BENEFICIAL CONVERSION FEATURE
ON PREFERRED STOCK - - (20,000)
------------ ----------- ---------------
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS $ (40,095) $ (227,238) $ (1,602,277)
============ =========== ================
BASIC LOSS PER SHARE $ (0.00) $ (0.00)
============ ===========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 147,933,309 147,933,309
============ ===========
The accompanying notes are an integral part of these consolidated
financial statements.
5
AVID SPORTSWEAR & GOLF CORP.
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit)
Preferred Stock Common Stock Additional
--------------------- ---------------------- Paid-in Accumulated
Shares Amount Shares Amount Capital Deficit
---------- ---------- ----------- ---------- ------------ --------------
Balance at January
1, 2002 - $ - 147,933,309 $ 147,933 $ 16,740,589 $ (20,412,928)
May 30, 2002,
preferred stock
issued for cash
at $4.00 per share 5,000 20,000 - - 20,000 -
Accretion of
beneficial
conversion
feature of
preferred stock
to retained
earnings - - - - - (20,000)
Net loss for the
year ended
December 31, 2002 - - - - - (1,542,182)
Balance, December
31, 2002 5,000 20,000 147,933,309 147,933 16,760,589 (21,975,110)
Net loss for the
three months
ended March 31,
2003 (unaudited) - - - - - (40,095)
---------- ---------- ----------- ---------- ------------ --------------
Balance, March 31,
2003 (unaudited) 5,000 20,000 147,933,309 147,933 16,760,589 (22,015,205)
========== ========== =========== ========== ============ ==============
Accumulated deficit
incurred prior to
the development
stage $ (20,412,928)
Accumulated deficit
incurred during
the development
stage (1,602,277)
--------------
Total Accumulated
Deficit $ (22,015,205)
==============
The accompanying notes are an integral part of these consolidated
financial statements.
6
AVID SPORTSWEAR & GOLF CORP.
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
From
Inception
Of the
Development
Stage
For the on January 1,
Three Months Ended 2002
March 31, through
------------------------- March 31,
2003 2002 2003
------------ ----------- ---------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (40,095) $ (227,238) $ (1,582,277)
Adjustments to reconcile net loss to
net cash used in operating activities:
Bad debt - - 960,187
Gain on settlement of debt - - (33,708)
Income on equity warrant liability - - (1,948)
Changes in operating assets and liabilities
accounts:
Increase in accounts payable and accrued
liabilities 33,777 - 119,599
Increase in other current liabilities - 12,699 5,553
----------- ----------- --------------
Net Cash Used in Operating Activities (6,318) (214,539) (532,594)
----------- ----------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES
Decrease in notes receivable - 25,000 300,000
----------- ----------- --------------
Net Cash Provided (Used) in Investing
Activities - 25,000 300,000
----------- ----------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of preferred stock - - 20,000
----------- ----------- --------------
Net Cash Provided by Financing Activities - - 20,000
----------- ----------- --------------
NET INCREASE (DECREASE) IN CASH (6,318) (189,539) (212,594)
CASH AT BEGINNING OF PERIOD 7,158 213,434 213,434
----------- ----------- --------------
CASH AT END OF PERIOD $ 840 $ 23,895 $ 840
=========== =========== ==============
CASH PAID FOR:
Interest $ - $ - $ -
Income tax $ - $ - $ -
The accompanying notes are an integral part of these consolidated
financial statements.
7
AVID SPORTSWEAR & GOLF CORP.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2003 and December 31, 2002
NOTE 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been
prepared by the Company without audit. In the opinion of management,
all adjustments (which include only normal recurring adjustments)
necessary to present fairly the consolidated financial position,
results of operations and cash flows at March 31, 2003, and 2002,
and for all periods presented have been made.
Certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted. It is suggested that these condensed consolidated financial
statements be read in conjunction with the financial statements and
notes thereto included in the Company's December 31, 2002, audited
consolidated financial statements. The results of operations for the
period ended March 31, 2003, are not necessarily indicative of the
operating results for the year ended December 31, 2003.
NOTE 2 - GOING CONCERN
The Company's consolidated financial statements are prepared using
accounting principles generally accepted in the United States of
America applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal
course of business. The Company has generated significant losses
from operations, and has negative working capital as of March 31,
2003. Additionally, the Company reentered the development stage on
January 1, 2002, as all operations were discontinued as of November
30, 2001.
On February 20, 2003, the Company approved a merger agreement with
United Companies Corporation (Note 5). As a result of the Merger
with United Companies Corporation, the Company will be changing its
business strategy going forward. United Companies has also been in
touch with several funding sources that have voiced an interest in
providing funds to the combined company. Although no funding has
been committed to date, Management believes that the required
funding will be available through conventional sources as well as
venture capital sources.
The ability of the Company to continue as a going concern is
dependant upon its ability to successfully seek out and consummate
an agreement with an existing operating company, or secure other
sources of financing such that it may commence profitable
operations. The accompanying financial statements do not include any
adjustments that might be necessary if the Company is unable to
continue as a going concern.
8
AVID SPORTSWEAR & GOLF CORP.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2003 and December 31, 2002
NOTE 3 - COMMITMENTS AND CONTINGENCIES
COMMON STOCK ISSUED WITHOUT RESTRICTIVE LEGEND
----------------------------------------------
The Company's new management believes that during the years ended
December 31, 2001 and 2000, the Company issued shares of common
stock without legends restricting the resale of such shares. The
Company's new management believes that at least 19,225,000 shares of
common stock have been resold in the public market in violation of
Section 5 of the Securities Act of 1933, as amended. The Company may
be liable for rescission and other damages with respect to these
sales.
NOTE 4 - DILUTIVE INSTRUMENTS
a. Stock Options
A Summary of the Company's outstanding stock options and weighted
average assumptions used for grants as of March 31, 2003 is
presented below:
Date of Vesting Exercise Exercise Trading Amount
Description Grant Requirements Number Price Price Exercised
--------------- -------- ------------ -------- -------- ------- ---------
1) Lone Star 08/14/00 Immediate 175,000 $0.35 $0.31 -
Capital
2) D. Aganost 08/09/00 Immediate 200,000 $0.35 $0.38 -
3) D. Blakely 08/09/00 Immediate 100,000 $0.35 $0.38 -
-------- --------
475,000 -
======== ========
Risk-Fre Grant Date
Expiration Interest Expected Expected Expected Compensation
Description Date Rate Life Volatility Dividends Expense
---------------- ---------- -------- -------- ---------- --------- -------------
1) Lone Star
Capital 08/14/10 6.00% 2 182.84% $ - $ 43,922
2) D. Aganost 08/09/10 6.79% 5 182.83% $ - 72,506
3) D. Blakely 08/09/10 6.79% 5 182.83% $ - 36,253
----------
$ 152,681
==========
b. Unqualified Stock Options
In January 2000, the Company granted options to purchase an
aggregate of 1,864,477 shares of its common stock to employees and
directors for services rendered.
9
AVID SPORTSWEAR & GOLF CORP.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2003 and December 31, 2002
NOTE 4 - DILUTIVE INSTRUMENTS (CONTINUED)
b. Unqualified Stock Options (continued)
FASB Statement 123, "Accounting for Stock-Based Compensation" ("SFAS
No. 123") requires the Company to provide pro forma information
regarding net income and net income per share as if compensation
costs for the Company's stock option plans and other stock awards
had been determined in accordance with the fair value based method
prescribed in SFAS No. 123. The Company estimates the fair value of
each stock award at the grant date by using the Black-Scholes option
pricing model with the following weighted average assumptions used
for grants, respectively; dividend yield of zero percent for all
years; expected volatility of 96 percent for all years; risk-free
interest rates of 5.87 percent and expected lives of 5 years.
c. Warrants
A summary of the Company's outstanding warrants and weighted average
assumptions used for grants as of March 31, 2003 is presented below:
Date of Vesting Exercise Exercise Trading Amount
Description Grant Requirements Number Price Price Exercised
--------------- -------- ------------ -------- -------- ------- ---------
1) May Davis 12/29/00 Immediately 1,680,000 $0.35 $0.13 -
Group
2) Persia 12/29/00 Immediately 320,000 $0.35 $0.13 -
Consulting
3) J. McKee 12/31/99 Immediately 285,714 $1.50 $0.38 -
4) D. Paetz 12/31/99 Immediately 100,000 $0.50 $0.38 -
5) Tarpon Scurry 01/08/99 Immediately 39,000 $0.01 $1.77 -
--------- -----
2,424,714 -
========= =====
Risk-Fre Grant Date
Expiration Interest Expected Expected Expected Compensation
Description Date Rate Life Volatility Dividends Expense
---------------- ---------- -------- -------- ---------- --------- -------------
1) May Davis 12/29/10 5.13% 3 173.61% $ - $ 155,865
Group
2) Persia 12/29/10 5.13% 3 173.61% $ - 29,689
Consulting
3) J. McKee 08/23/09 5.87% 5 100.63% $ - 63,074
4) D. Paetz 08/01/03 5.87% 5 100.63% $ - 28,194
5) Tarpon Scurry 01/08/04 5.69% 3 86.94% $ - 53,235
------------
$ 330,057
============
10
AVID SPORTSWEAR & GOLF CORP.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2003 and December 31, 2002
NOTE 5 - SIGNIFICANT EVENT
On February 20, 2003, the shareholders of Avid Sportswear & Golf
Corporation voted upon, and approved a merger agreement by and among
Avid Sportswear & Golf Corporation, United Companies Corporation, a
Nevada corporation ("United"), and Merger Co., Inc., a Nevada
Corporation and a wholly-owned subsidiary of United ("Merger Co.").
The merger agreement provided for the merger of Avid with and into
Merger Co. Upon consummation of the merger, Merger Co. will become
the surviving entity and will assume all of Avid's assets and
liabilities. At the time of the Merger, all shares of Avid common
stock will be automatically converted into shares of United common
stock on a fifty for one basis. In addition, all shares of Avid
convertible preferred stock will also be converted into shares of
United common stock on the same basis as if such shares of preferred
stock had been converted into shares of Avid common stock prior to
the Merger. (Each share of Avid convertible preferred stock will be
converted into 20,000 shares of Avid common stock, which will then
be converted into United common stock at the same fifty for one
ratio.)
The merger agreement also required that all options outstanding
under the Avid 2000 Stock Incentive Plan terminated effective as of
the effective date of the Merger. All holders of Avid common stock
purchase warrants will receive United common stock purchase warrants
which represent the right to purchase one share of United common
stock in exchange for fifty shares of Avid common stock at an
identical exercise price per share.
Although the merger has been approved, as of March 31, 2003, the
merger has not yet been executed. These financial statements do not
include any adjustments that may be required upon execution of the
agreement.
11
ITEM 2. MANAGEMENT'S PLAN OF OPERATION AND DISCUSSION AND ANALYSIS
INTRODUCTORY STATEMENTS
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS. THIS FILING CONTAINS
FORWARD-LOOKING STATEMENTS, INCLUDING STATEMENTS REGARDING, AMONG OTHER THINGS,
(a) OUR COMPANY'S PROJECTED SALES AND PROFITABILITY, (b) OUR COMPANY'S GROWTH
STRATEGIES, (c) OUR COMPANY'S FUTURE FINANCING PLANS AND (d) OUR COMPANY'S
ANTICIPATED NEEDS FOR WORKING CAPITAL. IN ADDITION, WHEN USED IN THIS FILING,
THE WORDS "BELIEVES," "ANTICIPATES," "INTENDS," "IN ANTICIPATION OF," "EXPECTS,"
AND SIMILAR WORDS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE
FORWARD-LOOKING STATEMENTS ARE BASED LARGELY ON OUR COMPANY'S EXPECTATIONS AND
ARE SUBJECT TO A NUMBER OF RISKS AND UNCERTAINTIES, MANY OF WHICH ARE BEYOND OUR
COMPANY'S CONTROL. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THESE
FORWARD-LOOKING STATEMENTS AS A RESULT OF CHANGES IN TRENDS IN THE ECONOMY AND
OUR COMPANY'S INDUSTRY, DEMAND FOR OUR COMPANY'S PRODUCTS, COMPETITION,
REDUCTIONS IN THE AVAILABILITY OF FINANCING AND OTHER FACTORS. IN LIGHT OF THESE
RISKS AND UNCERTAINTIES, THERE CAN BE NO ASSURANCE THAT THE FORWARD-LOOKING
STATEMENTS CONTAINED IN THIS FILING WILL IN FACT OCCUR.
OVERVIEW
Currently, Avid has no on-going operations. Avid had been seeking
potential operating businesses and business opportunities, with the intent to
acquire or merge with such businesses. On February 12, 2002, Avid filed with the
Securities and Exchange Commission a Form S-4 Proxy Statement and Registration
Statement in conjunction with United Companies Corporation, a Nevada
corporation, describing a proposed merger of Avid with and into Merger Co., a
wholly-owned subsidiary of United Companies. On January 28, 2003, the Commission
declared the Form S-4 Proxy Statement and Registration Statement effective. At a
special meeting of Avid shareholders held on February 20, 2003, the shareholders
approved (i) the Merger Agreement, dated June 18, 2002, by and among Avid,
United Companies and Merger Co. and (ii) the related Articles of Merger. When
the merger is completed, Merger Co. will be the surviving entity and will assume
all of Avid's assets and liabilities. At the time of the merger, outstanding
shares of Avid common stock will be converted automatically into shares of
United Companies common stock on a fifty (50) for one (1) basis. In management's
opinion, the excess of Avid's liabilities over its assets and the lack of
available funding made any other such acquisition or merger, other than the
merger with Merger Co., unlikely.
Previously, through Avid's wholly-owned subsidiary, it designed,
manufactured and marketed distinctive premium and moderately-priced sportswear.
Avid sold its products primarily through golf pro shops and resorts, corporate
sales accounts and better specialty stores. Until 2001, Avid's sportswear was
marketed under three distinct labels: Avid Sportswear, British Open Collection
and Dockers Golf. From its incorporation on September 19, 1997 until March 1,
1999, Avid had no operations. On March 1, 1999, Avid acquired Avid Sportswear,
Inc., which had been in the business of designing, manufacturing and marketing
golf apparel since October 6, 1988. For accounting purposes, the acquisition was
treated as a purchase of Avid Sportswear, Inc. All of Avid's business operations
had been conducted through Avid Sportswear, Inc.
On January 19, 2001, Avid received a letter from IMG that the Company was
in default of the license with The Championship Committee Merchandising Limited
for failure to pay timely its royalty payments for the second, third and fourth
quarters of 2000 of approximately $94,000. On April 30, 2001, IMG subsequently
terminated this license.
On May 9, 2001, Avid received a letter from Levi Strauss & Co. that,
effective May 9, 2001, it was terminating the Dockers Trademark License
Agreement between Avid's wholly-owned subsidiary, Avid Sportswear, Inc. and Levi
Strauss & Co. as a result of Avid Sportswear, Inc.'s second quality and closeout
or end-of-season sales being greater than 25% of Avid's total product sales
during the Year 2000. Due to the loss of this license, Avid's operating results
for the year ended December 31, 2001 are not indicative of future results. Avid
believes that the loss of this license will have a material adverse effect on
its results of operations in future periods. As a result of the loss of this
license, Avid has no ongoing operations.
On May 17, 2001, Barnum Mow, the President of Avid Sportswear, Inc.
resigned. In addition, on May 14, 2001, Stephen A. Korn, the Chief Financial
Officer of Avid Sportswear, Inc., was terminated by the Company and, on May 29,
2001, David, Roderick, the Executive Vice-President of Merchandising and Design
of Avid Sportswear, Inc. resigned.
On May 22, 2001, Avid received a letter from GE Capital Commercial
Services, Inc. that, effective May 22, 2001, it was terminating its obligation
to make any further advances to Avid pursuant to the Factoring Agreement between
Avid and GE Capital. In addition, GE Capital declared all of the advances and
12
other obligations owing by Avid to GE Capital to be immediately due and payable.
Subsequently, on July 20, 2001, Avid's wholly-owned subsidiary received notice
from GE Capital that the obligations under the Factoring Agreement had been paid
in full. Also, on July 20, 2001, Avid's wholly-owned subsidiary received notice
from the factor that the Company's then-current chairman had no further
obligations as the guarantor of the Factoring Agreement.
In June 2001, Earl Ingarfield resigned as President and Chief Executive
Officer of Avid. Mr. Ingarfield was employed as President and Chief Executive
Officer of Avid.
On June 25, 2001, Avid hired Frank Jakovac as its new President and Chief
Executive Officer. Also, on July 24, 2001, Avid hired James Handlon as its new
Chief Operating Officer and Michelle Mathis as its new Director of Corporate and
Legal Affairs. Messrs. Jakovac and Handlon and Ms. Mathis were also elected as
members of Avid's Board of Directors.
Effective December 1, 2001, the employment agreements for Messrs. Jakovac
and Handlon and Ms. Mathis were terminated by the mutual consent of Avid and
each respective individual. Mr. Jakovac continues as an officer and director of
Avid. Handlon and Ms. Mathis continue to remain as directors of Avid.
FINANCIAL PERFORMANCE
Avid has historically lost money. For the three month period ended March
31, 2003, Avid sustained losses of $40,095. For the years ended December 31,
2002 and 2001, Avid sustained losses of $1.5 million and $6.2 million,
respectively. The Company's independent auditors have noted that Avid does not
have significant cash or other material assets to cover its operating costs and
to continue as a going concern. Accordingly, Avid will experience significant
liquidity and cash flow problems if it is not able to raise additional capital
as needed and on acceptable terms.
PLAN OF OPERATIONS
Currently, Avid has no on-going operations. Avid had been seeking
potential operating businesses and business opportunities, with the intent to
acquire or merge with such businesses. On February 12, 2002, Avid filed with the
Securities and Exchange commission a Form S-4 Proxy Statement and Registration
Statement in conjunction with United Companies Corporation, a Nevada
corporation, describing a proposed merger of Avid with and into Merger Co., a
wholly-owned subsidiary of United Companies. On January 28, 2003, the Commission
declared the Form S-4 Proxy Statement and Registration effective. At a special
meeting of Avid shareholders held on February 20, 2003, the shareholders
approved (i) Merger Agreement, dated June 18, 2002, by and among Avid, United
Companies and Merger Co. and (ii) the related Articles of Merger. When the
merger is completed, Merger Co. will be the surviving entity and will assume all
of Avid's assets and liabilities. At the time of the merger, outstanding shares
of Avid common stock will be converted automatically into shares of United
Companies common stock on a fifty (50) for one (1) basis. In management's
opinion, the excess of Avid's liabilities over its assets and the lack of
available funding made any such acquisition or merger other than the merger with
Merger Co. unlikely.
ADDITIONAL FUND RAISING ACTIVITIES. As of December 31, 2002, Avid had
$7,158 cash-on-hand. Avid has historically funded its operations through a
combination of internally generated cash, funds loaned to the Company by certain
of its officers and directors and through the sale of securities. Avid will need
to raise additional funds to execute any new business strategy after the merger
with Merger Co. is successfully consummated. Avid's current liabilities exceed
its current assets as of December 31, 2002.
SUMMARY OF ANTICIPATED PRODUCT DEVELOPMENT. Since Avid has no on-going
operations, we do not anticipate any expenditures on product development.
SIGNIFICANT PLANT AND EQUIPMENT PURCHASES. In 2002, Avid did not make any
significant plant and/or equipment purchases. In 2003, Avid does not anticipate
purchasing additional equipment.
CHANGES IN NUMBER OF EMPLOYEES. Avid currently has one (1) employee. Avid
does not anticipate hiring additional personnel during the remainder of 2003.
The Company believes that its personnel will be adequate to accomplish the tasks
set forth in the plan.
13
CURRENT
DEPARTMENT EMPLOYEES
----------------------------- -----------
Administrative and Other
Support Positions 1
-----
Total Employees 1
-----
THREE-MONTH PERIODS ENDED MARCH 31, 2003
Effective November 30, 2001, Avid ceased all operations relating to the
manufacture and sale of golf apparel and related products. The following results
are not indicative of our future results.
Our results of operations for the three-month periods ended March 31, 2003
and 2002, respectively, included three months of operations of our wholly-owned
subsidiary, Avid Sportswear, Inc.
SALES, NET. We had no sales, net in the three-month periods ended March
31, 2003 and 2002, respectively. Our lack of sales was attributable to our
Company ceasing all operations relating to the manufacture and sale of golf
apparel and related products.
EXPENSES. Expenses decreased $188,470, or 87.9%, from $214,527 to $26,057
in the three-month period ended March 31, 2003, compared to the same period in
the prior year. The decrease consisted of a decrease in general and
administrative expenses of $188,470, which was primarily attributable to the
merger transaction among Avid, United Companies and Merger Co. and the filing of
the related Form S-4 Proxy Statement and Registration Statement.
INTEREST EXPENSE. Interest expense was $14,038 in the three-month period
ended March 31, 2003, which did not change compared to the same period in the
prior year.
NET LOSS. Net loss decreased $187,143, or 82.4%, from $227,238 to $40,095
in the three-month period ended March 31, 2003, compared to the same period in
the prior year. This decrease was primarily attributable to the Company having
only limited operations during the three-month period ended March 31, 2003.
LIQUIDITY AND CAPITAL RESOURCES. As of March 31, 2003, Avid had $840
cash-on-hand and its current liabilities exceeded its current assets. A
discussion of how Avid generated and used cash in the three-month period ended
March 31, 2003 follows:
OPERATING ACTIVITIES. Our operating activities used $6,318 in cash during
the three-month period ended March 31, 2003. Our operating activities consisted
mainly of a net loss of $40,095, which was partially offset by an increase in
accounts payable of $33,777.
INVESTING ACTIVITIES. We had no investing activities during the
three-month period ended March 31, 2003.
FINANCING ACTIVITIES. We had no financing activities during the
three-month period ended March 31, 2003. Avid will need to rely on external
financing to fund its operations for the foreseeable future.
On May 9, 2001, Avid received a letter from Levi Strauss & Co. that,
effective May 9, 2001, it was terminating the Dockers' Trademark License
Agreement between Avid's wholly-owned subsidiary, Avid Sportswear, Inc. and Levi
Strauss & Co. as a result of Avid Sportswear, Inc.'s second quality and closeout
or end of season sales being greater than 25% of the Company's total product
sales during the year 2000.
On January 19, 2001, Avid received a letter form IMG that Avid was in
default of the license with The Championship Committee Merchandising Limited for
failure to pay timely our royalty payments for the second, third and fourth
quarters of 2000 of approximately $94,000. IMG subsequently terminated this
license.
In December 2000, our Company raised $400,000 from the sale of 2,000,000
shares of common stock.
On November 28, 2000, Avid entered into a Line of Credit with GMF
Holdings, Inc. Pursuant to the Line of Credit, GMF Holdings, Inc. agreed to
acquire up to $10 million of the Company's debentures. The debentures were
convertible into shares of Avid's common stock at a conversion price equal to
14
80% of the closing bid price on the Over-the-Counter Bulletin Board or other
principal market on which Avid's common stock was traded for the 10 days
immediately following the notice date of conversion. The timing of each sale and
the number of debentures to be sold was at the Company's discretion, subject to
various conditions. Through December 31, 2001, Avid has raised $1.2 million from
the sale of debentures pursuant to the Line of Credit and 59.3 million shares of
Avid's common stock were issued upon conversion of the debentures. As a result
of the loss of the Dockers' license, no additional funds pursuant to the Line of
Credit are available to Avid.
In November 2000, Avid raised $300,000 in gross proceeds and $255,000 in
net proceeds from the sale of convertible debentures. See "Item 2. Changes in
Securities and Use of Proceeds."
As of August 18 2000, the outstanding balance of Avid's loan with First
State Bank, including all collateral security and guarantees associated
therewith, were assigned to Earl T. Ingarfield, Michael LaValliere and Lido
Capital Corporation in consideration of payment in full of all outstanding
indebtedness to First State Bank.
In August 2000, Avid entered into a factoring, letter of credit and
revolving inventory facility. On May 22, 2001, the factor terminated its
obligations to make any further advances to Avid under the factoring agreement
and declared all of the advances and obligations owing by Avid to the factor to
be immediately due and payable. Subsequently, on July 20, 2001, Avid's
wholly-owned subsidiary received notice from the factor that the obligations
under the factoring agreement had been paid in full. Also, on July 20, 2001,
Avid's wholly-owned subsidiary received notice from the factor that the
Company's then-current chairman had no further obligations as the guarantor of
the factoring agreement.
CONTINGENT LIABILITIES
Avid's new management believes that the Company issued shares of common
stock without legends restricting the resale of such shares. The Company's new
management believes that at least 19,225,000 shares of common stock have been
resold in the public market in violation of Section 5 of the 1933 Act.
Accordingly, additional shares may have been resold in violation of Section 5 of
the 1933 Act. Avid may be liable for rescission and other damages with respect
to these sales.
Avid's new management believes that the Company may be liable for unpaid
compensation to Mr. Earl Ingarfield pursuant to the Employment Agreement dated
February 29, 2000 between Avid and Mr. Ingarfield.
In 2000, Avid's wholly-owned subsidiary, Avid Sportswear, Inc., entered
into individual Endorsement Agreements, typically for a two-year term, with
individual PGA Tour professionals, whereby the individual was to paid an annual
fixed fee to wear Avid products at golf and golf-related events, and to be
included in advertising and other promotional events, including personal
appearances. The fixed fee for the first year was set forth in the Agreement,
whereas the second year fixed fee was to be determined by that individual's
final ranking on the official PGA Tour Money List at the end of the first year.
The individuals were also to be eligible to earn a bonus for performance on
individual PGA Tour events and at year-end, based upon the individual's final
ranking of the official PGA Tour Money List at the end of each contract year.
The fixed fee, bonus incentive, and number of days of personal appearance varied
by individual. Avid terminated all of these endorsement agreements as of
December 31, 2001 and has accrued for all minimum future guaranteed payments, of
$403,061, as of December 31, 2001.
CERTAIN BUSINESS RISKS
AVID IS SUBJECT TO VARIOUS RISKS WHICH MAY MATERIALLY HARM ITS BUSINESS,
FINANCIAL CONDITION AND RESULTS OF OPERATIONS. YOU SHOULD CAREFULLY CONSIDER THE
RISKS AND UNCERTAINTIES DESCRIBED BELOW AND THE OTHER INFORMATION IN THIS FILING
BEFORE DECIDING TO PURCHASE AVID'S COMMON STOCK. THESE ARE NOT THE ONLY RISKS
AND UNCERTAINTIES THAT THE COMPANY FACES. IF ANY OF THESE RISKS OR UNCERTAINTIES
ACTUALLY OCCUR, AVID'S BUSINESS, FINANCIAL CONDITION OR OPERATING RESULTS COULD
BE MATERIALLY HARMED. IN THAT CASE, THE TRADING PRICE OF AVID'S COMMON STOCK
COULD DECLINE AND YOU COULD LOSE ALL OR PART OF YOUR INVESTMENT.
OUR DOCKERS' TRADEMARK LICENSE HAS BEEN TERMINATED BY LEVI STRAUSS & CO.
AND WILL RESULT IN LOWER COMPANY SALES AND A HIGHER NET LOSS IN FUTURE
PERIODS
On May 9, 2001, Avid received a letter from Levi Strauss & Co. that,
effective May 9, 2001, it was terminating the Dockers' Trademark License
Agreement between Avid's wholly-owned subsidiary, Avid Sportswear, Inc., and
Levi Strauss & Co. as a result of Avid Sportswear, Inc.'s second quality and
closeout or end-of-season sales being greater than 25% of Avid's total product
15
sales during Year 2000. Avid believes that the loss of the license will have a
material adverse effect on our results of operations in future periods. The loss
of this license will result in lower Company sales and a higher net loss in
future periods.
AVID HAS HISTORICALLY LOST MONEY AND LOSSES MAY CONTINUE IN THE FUTURE
WHICH MAY NOT ALLOW AVID TO CONTINUE AS A GOING CONCERN
Avid has historically lost money. In the three-month period ended March
31, 2003, Avid sustained losses of $40,095. In the years ended December 31, 2002
and December 31, 2001, Avid sustained losses of $1.5 million and $6.2 million,
respectively. Avid currently does not have any operations. Future losses are
likely to occur. Avid's independent auditors have added an explanatory paragraph
to their audit opinions issued in connection with the 2002 and 2001 financial
statements, which states that Avid does not have significant cash or other
material assets to cover its operating costs and to allow it to continue as a
going concern. Avid's ability to obtain additional funding will determine its
ability to continue as a going concern. Avid's financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
As of March 31, 2003, its current liabilities exceeded its current assets.
Avid had a working capital deficit of $5.1 million at March 31, 2003. Avid had
an accumulated deficit of $22.0 million at March 31, 2003. Avid currently does
not have any operations. Avid currently has little or no cash-on-hand.
Accordingly, Avid will experience significant liquidity and cash flow problems
if it is not able to raise additional capital as needed and on acceptable terms.
No assurances can be given that Avid will be successful in reaching or
maintaining profitable OPERATIONS.
AVID WILL NEED TO RAISE ADDITIONAL CAPITAL TO FINANCE OPERATIONS
Avid has relied on significant external financing to fund its operations.
Such financing has historically come from a combination of borrowings and sale
of common stock from third parties and funds provided by certain officers and
directors. Avid will need to raise additional capital to execute a new business
strategy. Among other things, external financing will be required to cover its
operating costs. Avid cannot assure you that financing whether from external
sources or related parties will be available if needed or on favorable terms. In
management's opinion, Avid will be unsuccessful in raising additional capital
without changing its capital structure.
AVID DOES NOT HAVE AUTHORIZED COMMON STOCK AVAILABLE WHICH MAY NOT ALLOW
IT TO RAISE CAPITAL
Avid does not have any authorized common stock available to raise capital.
The sale of Avid's common stock to raise capital may cause dilution to its
existing shareholders. Avid's inability to obtain adequate financing will result
in the need to curtail business operations. Any of these events would be
materially harmful to Avid's business and may result in a lower stock price.
AVID'S NEW MANAGEMENT BELIEVES SHARES OF COMMON STOCK WERE ISSUED WITHOUT
RESTRICTIVE LEGENDS AND AVID MAY BE LIABLE FOR RESCISSION AND OTHER
DAMAGES WITH RESPECT TO THE ISSUANCE OF THESE SHARES
Avid's new management believes that the Company issued shares of common
stock without legends restricting the resale of such shares. Avid's new
management believes that at least 19,225,000 shares of common stock have been
resold in the public market in violation of Section 5 of the 1933 Act.
Accordingly, additional shares may have been resold in violation of Section 5 of
the 1933 Act. Avid may be liable for rescission and other damages with respect
to these sales.
AVID COMMON STOCK IS A "PENNY STOCK" AND IS CONSIDERED A VERY RISKY
INVESTMENT
Avid common stock is a "penny stock" as that term is defined in Rule
3a51-1 promulgated under the Securities Exchange Act of 1934. Penny stocks are
stock:
o With a price of less than $5.00 per share;
o That are not traded on a "recognized" national exchange;
o Whose prices are not quoted on the Nasdaq automated quotation system
(Nasdaq listed stock must still have a price of not less than $5.00
per share); or
16
o In issuers with net tangible assets less than $2.0 million (if the
issuer has been in continuous operation for at least three years) or
$5.0 million (if in continuous operation for less than three years),
or with average revenues of less than $6.0 million for the last three
years.
Broker/dealers dealing in penny stocks are required to provide potential
investors with a document disclosing the risks of penny stocks. Moreover,
broker/dealers are required to determine whether an investment in a penny stock
is a suitable investment for a prospective investor. These requirements may
reduce the potential market for Avid common stock by reducing the number of
potential investors. This may make it more difficult for investors in Avid
common stock to resell shares to third parties or to otherwise dispose of them.
This could cause Avid's stock price to decline.
AVID COMMON STOCK MAY BE AFFECTED BY LIMITED TRADING VOLUME AND MAY
FLUCTUATE SIGNIFICANTLY AND AN INVESTOR MAY LOSE A SUBSTANTIAL PART OR ALL
OF ITS INVESTMENT
Avid's common stock has experienced, and is likely to experience in the
future, significant price and volume fluctuations, which could adversely affect
the market price of its common stock. Historically, there has been a limited
public market for Avid's common stock and there can be no assurance that an
active trading market for Avid's common stock will develop. As a result, this
could adversely affect shareholders' ability to sell Avid's common stock in
short time periods, or possibly at all. Avid's common stock has experienced, and
is likely to experience in the future, significant price and volume
fluctuations, which could adversely affect the market price of its common stock.
RISKS ASSOCIATED WITH UNITED
United is subject to various risks, which may have a material adverse
effect on United's business, financial condition and results of operations. The
material risks are discussed below:
UNITED HAS NO OPERATING HISTORY OR REVENUE FROM WHICH TO EVALUATE ITS
BUSINESS WHICH MAKES AN INVESTMENT IN UNITED VERY SPECULATIVE
United has had no operating history or revenue from operations since its
inception on November 26, 2001. In addition, United has very limited assets and
financial resources. Due to United's lack of operations and revenue, the Company
expects to incur operating losses for the foreseeable future. Due to United's
lack of operations, there is limited information upon which investors can
evaluate its business. United does not have significant cash or a source of
revenue to cover its operating costs and to allow it to continue as a going
concern. External capital will be required for United to continue as a going
concern. United has no commitments or other sources of capital available to it.
UNITED'S PRESIDENT AND SOLE DIRECTOR, WHOSE INTERESTS MAY DIFFER FROM
OTHER STOCKHOLDERS, IS EXPECTED TO EXERT SIGNIFICANT INFLUENCE OVER THE
DIRECTION OF THE COMPANY
Through his stock ownership, Mr. Frank Jakovac, United's President and
sole director, will be able to exert significant influence over the direction of
United and its business opportunities. The interests of Mr. Jakovac may differ
from the interests of other stockholders.
UNITED HAS BEEN THE SUBJECT OF A GOING CONCERN OPINION FROM ITS
INDEPENDENT AUDITOR
United's independent auditors have added an explanatory paragraph to their
audit opinion issued in connection with the Company's financial statements as of
December 31, 2002, which states that United does not have an established source
of revenue or operations since inception which raises substantial doubt about
its ability to continue as a going concern. United's financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
UNITED COMMON STOCK MAY BE DEEMED A "PENNY STOCK"
United common stock may be deemed a "penny stock" as that term is defined
in Rule 3a51-1 promulgated under the Securities Exchange Act of 1934. Penny
stocks are stock:
o With a price of less than $5.00 per share;
o That are not traded on a "recognized" national exchange;
17
o Whose prices are not quoted on the Nasdaq automated quotation system
(Nasdaq listed stock must still have a price of not less than $5.00
per share); or
o In issuers with net tangible assets less than $2.0 million (if the
issuer has been in continuous operation for at least three years) or
$5.0 million (if in continuous operation for less than three years),
or with average revenues of less than $6.0 million for the last three
years.
Broker/dealers dealing in penny stocks are required to provide potential
investors with a document disclosing the risks of penny stocks. Moreover,
broker/dealers are required to determine whether an investment in a penny stock
is a suitable investment for a prospective investor. These requirements may
reduce the potential market for United common stock by reducing the number of
potential investors. This may make it more difficult for investors in United
common stock to resell shares to third parties or to otherwise dispose of them.
This could cause United's stock price to decline.
WITHOUT ADDITIONAL FINANCING, UNITED WILL NOT BE ABLE TO ACHIEVE ITS
OBJECTIVES
Without additional working capital, United will not be able to achieve the
objectives of management which include assuming an effective management team and
obtaining adequate working capital. There can be no assurance that United will
obtain additional financing.
18
ITEM 3. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Within the 90 days prior to the filing date of this report, Avid carried
out an evaluation of the effectiveness of the design and operation of its
disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. This
evaluation was done under the supervision and with the participation of the
Company's President and Chief Executive Officer. Based upon that evaluation, he
concluded that disclosure controls and procedures are effective in gathering,
analyzing and disclosing information needed to satisfy Avid's disclosure
obligations under the Securities Exchange Act of 1934.
CHANGES IN INTERNAL CONTROLS
There were no significant changes in Avid's internal controls or in other
factors that could significantly affect those controls since the most recent
evaluation of such controls.
19
PART II
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(a), (b), (c) and (d) None.
CONTINGENT LIABILITIES
The Company's new management believes that the company issued shares of
common stock without legends restricting the resale of such shares. The
company's new management believes that at least 19,225,000 shares of common
stock have been resold in the public market in violation of Section 5 of the
1933 Act. Accordingly, additional shares may have been resold in violation of
Section 5 of the 1933 Act. The company may be liable for rescission and other
damages with respect to these sales.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At a special meeting of the Avid shareholders held on February 20, 2003,
the shareholders approved (i) the merger Agreeement dated June 18, 2002, by and
among Avid, United Companies Corporation, a Nevada corporation, and Merger Co.,
a wholly owned subsidiary of United Companies and (ii) the related Articles of
Merger. When the merger is completed, Merger Co. will be the surviving entity
and will assume all of Avid's assets and liabilities. At the time of the merger,
outstanding shares of Avid common stock will be converted automatically into
shares of United Companies stock on a fifty (50) for one (1) basis.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
EXHIBIT
NO. DESCRIPTION LOCATION
--- ----------- --------
201 Stock Purchase and Sale Incorporated by reference to
Agreement dated as of December Exhibit 2.01 to the Registrant's
18, 1998 among our company, Avid Registration Statement on Form
Sportswear, Inc. and the 10-SB (the "Registration
shareholders of Avid Sportswear, Statement")
Inc.
2.02 Merger Agreement, dated June 18, Incorporated by reference to
2002 by and among United Exhibit 2.02 to Avid Sportswear &
Companies Corporation, Merger Golf Corp.'s Amendment No. 1 to
Co., Inc. and Avid Sportswear & Form S-4 filed June 24, 2002
Golf Corp.
2.03 Articles of Merger of Avid Incorporated by reference to
Sportswear & Golf Corp. with and Exhibit 2.03 to Avid Sportswear &
into Merger Co., Inc. Golf Corp.'s Amendment No. 1 to
Form S-4 filed June 24, 2002
20
EXHIBIT
NO. DESCRIPTION LOCATION
--- ----------- --------
3.01 Articles of Incorporation filed on Incorporated by reference to
September 19, 1997 with the Nevada Exhibit 3.01 to the Registration
Secretary of State Statement
3.02 Amended Articles of Incorporation Incorporated by reference to
filed on May 12, 1999 with the Exhibit 3.02 to the Registration
Nevada Secretary of State Statement
3.03 Certificate of Amendment to Incorporated by reference to
Articles of Incorporation filed Exhibit 3.03 to the Registration
on May 27, 1999 with the Nevada Statement
Secretary of State
3.04 Bylaws Incorporated by reference to
Exhibit 3.04 to the Registration
Statement
4.01 2000 Stock Incentive Plan Incorporated by reference to
Exhibit 4.01 to Amendment No. 2 to
the Registration Statement.
10.01 Agreement dated as of December 8, Incorporated by reference to
1998 between the Championship Exhibit 10.01 to the Registration
Committee Merchandising Limited Statement
and Avid Sportswear Inc.
10.02 Lease dated as of March 1, 1999 Incorporated by reference to
between F & B Industrial Exhibit 10.02 to the Registration
Investments, LLC and Avid Statement
Sportswear, Inc.
10.03 Lease dated as of April 30, 1999 Incorporated by reference to
between Links Associates, Ltd. Exhibit 10.03 to the Registration
and our company Statement
10.04 Employment Agreement dated as of Incorporated by reference to
September 11, 1999 between Barnum Exhibit 10.04 to the Registration
Mow and Avid Sportswear, Inc. Statement
10.05 Trademark License Agreement Incorporated by reference to
dated as of May 10, 1999 between Exhibit 10.05 to Amendment No. 2
Levi Strauss & Co. and Avid to the Registration Statement
Sportswear, Inc.
10.06 Employment Agreement dated as of Incorporated by reference to
January 1, 1999 between David E. Exhibit 10.06 to the Registration
Roderick and Avid Sportswear, Statement
Inc.
10.07 Promissory Note in the original Incorporated by reference to
principal amount of $180,000 Exhibit 10.07 to the Registration
dated as of June 4, 1999 from our Statement
company to First State Bank
10.08 Commercial Security Agreement Incorporated by reference to
dated as of November 17, 1999 Exhibit 10.08 to the Registration
between First State Bank and our Statement
company
10.09 Promissory Note dated as of Incorporated by reference to
November 17, 1999 in the Exhibit 10.09 to the Registration
original principal amount of Statement
$1,000,000 given by our company
to First State Bank
10.10 Business Loan Agreement dated as Incorporated by reference to
of November 17, 1999 between Exhibit 10.10 to the Registration
First State Bank and our company Statement
10.11 Convertible Revolving Demand Incorporated by reference to
Note dated as of December 1, Exhibit 10.11 to Amendment No. 2
1999 in the original principal to the Registration Statement
amount of $550,000 given by our
company to Earl Ingarfield
21
EXHIBIT
NO. DESCRIPTION LOCATION
--- ----------- --------
10.12 Convertible Revolving Demand Incorporated by reference to
Note dated as of December 1, Exhibit 10.12 to Amendment No. 2
1999 in the original principal to the Registration Statement
amount of $1,000,000 given by
our company to Lido Capital
Corporation
10.13 Convertible Revolving Demand Incorporated by reference to
Note dated as of December 1, Exhibit 10.13 to Amendment No. 2
1999 in the original principal to the Registration Statement
amount of $125,000 given by our
company to Michael E. LaValliere
10.14 Convertible Revolving Demand Incorporated by reference to
Note dated as of December 1, Exhibit 10.14 to Amendment No. 2
1999 in the original principal to the Registration Statement
amount of $500,000 given by our
company to Thomas Browning
10.15 Revolving Demand Note dated as Incorporated by reference to
of December 1, 1999 in the Exhibit 10.15 to Amendment No. 2
original principal amount of to the Registration Statement
$200,000 given by our company to
Daniel Paetz
10.16 Executive Employment Agreement Incorporated by reference to
effective as of February 1, 2000 Exhibit 10.16 to Amendment No. 2
between our company and Earl T. to the Registration Statement
Ingarfield
10.17 Consulting Agreement dated as of Incorporated by reference to
June 22, 2000 between Persia Exhibit 10.17 to the Registrant's
Consulting Group, Inc. and our Registration Statement on Form SB-2
company
10.18 Form of Factoring Agreement Incorporated by reference to
between our company and GE Exhibit 10.18 to the Registrant's
Capital Commercial Services, Inc. Form 10-QSB filed on November 17,
2001
10.19 Form of Factoring Agreement Incorporated by reference to
Guaranty/Letter of Credit Exhibit 10.19 to the Registrant's
Supplement between our company Form 10-QSB filed on November 17,
and GE Capital Commercial 2001
Services, Inc.
10.20 Form of Factoring Agreement - Incorporated by reference to
Inventory Supplement (with Exhibit 10.20 to the Registrant's
advances) between our company and Form 10-QSB filed on November 17,
GE Capital Commercial Services, 2001
Inc.
10.21 Form of Letter of Agreement Incorporated by reference to
between our company and GE Exhibit 10.21 to the Registrant's
Capital Commercial Services, Inc. Form 10-QSB filed on November 17,
2001
10.22 Form of Convertible Debenture Incorporated by reference to
Exhibit 10.22 to the Registrant's
Form 10-QSB filed on November 17,
2001
10.23 Form of Registration Rights Incorporated by reference to
Agreement between our company Exhibit 10.23 to the Registrant's
and purchasers of convertible Form 10-QSB filed on November 17,
debentures 2001
10.24 Line of Credit Agreement dated Incorporated by reference to
as of November 28, 2000 between Appendix "A" to the Registrant's
our company and GMF Holdings, Proxy Statement (the "Proxy
Inc. Statement")
10.25 Form of Debenture dated as of Incorporated by reference to
November 28, 2000 given by our Appendix "B" to the Registrant's
company Proxy Statement
22
EXHIBIT
NO. DESCRIPTION LOCATION
--- ----------- --------
10.26 Registration Rights Agreement Incorporated by reference to
dated as of November 28, 2000 Appendix "C" to the Registrant's
between our company and GMF Proxy Statement
Holdings, Inc.
10.27 Form of Warrant dated as of Incorporated by reference to
November 28, 2000 given by our Appendix "D" to the Registrant's
company Proxy Statement
10.28 Registration Rights Agreement Incorporated by reference to
dated as of November 28, 2000 Appendix "E" to the Registrant's
between our company and the May Proxy Statement
Davis Group, inc.
10.29 Placement Agent Agreement as of Incorporated by reference to
November 28, 2000 between our Appendix "F" to the Registrant's
company and the May Davis Group, Proxy Statement
Inc.
10.30 Escrow Agreement dated as of Incorporated by reference to
November 28, 2000 among our Appendix "G" to the Registrant's
company, the May Davis Group, Proxy Statement
Inc. and First Union National
Bank
10.31 Amendment to Employment Incorporated by reference to
Agreement effective January 31, Exhibit 10.31 to the Registrant's
20001 between our company and Form 10-QSB filed on November 17,
Barnum Mow 2001
10.32 Forbearance Agreement as of Incorporated by reference to
February 16, 2001 between our Exhibit 10.32 to the Registrant's
company and GE Capital Form 10-QSB filed on November 17,
Commercial Services, Inc. 2001
10.33 Employment Agreement dated as of Incorporated by reference to
June 25, 2001 between Frank Exhibit 10.33 to the Registrant's
Jakovac and our company Form 10-QSB filed on September 21,
2001
10.34 Employment Agreement dated as of Incorporated by reference to
June 25, 2001 between James Exhibit 10.34 to the Registrant's
Handlon and our company Form 10-QSB filed on September 21,
2001
10.35 Employment Agreement dated as of Incorporated by reference to
June 25, 2001 between Michelle Exhibit 10.35 to the Registrant's
Mathis and our company Form 10-QSB filed on September 21,
2001
11.01 Statement re: Computation of Not Applicable
Earnings
15.01 Letter on unaudited interim Not Applicable
financial information
16.01 Letter on Change in Certifying Not Applicable
Accountant
20.01 Letter dated May 9, 2001 from Incorporated by reference to
Levi Strauss & Co. Exhibit 20.01 to the Registrant's
Form 8-K filed May 18, 2001
21.01 Subsidiaries of our company Incorporated by reference to
Exhibit 21.01 to the Registration
Statement
23.01 Consent of Independent Not Applicable
Accountants
24.01 Power of Attorney Not Applicable
27.01 Financial Data Schedule Not Applicable
(b) Reports On Form 8-K.
23
None.
24
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date: July 17, 2003 AVID SPORTSWEAR & GOLF CORP.
By: /s/ FRANK JAKOVAC
--------------------------------------
Frank Jakovac
President, Chief Executive Officer
and Principal Accounting Officer
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Avid Sportswear & Golf Corp.
(the "Company") on Form 10-QSB for the period ended March 31, 2003 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), each
of the undersigned, in the capacities and on the dates indicated below, hereby
certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that to his knowledge:
1. The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operation of the
Company.
/s/ FRANK JAKOVAC
- -------------------------------------
Frank Jakovac
President, Chief Executive Officer
and Principal Accounting Officer
25
CERTIFICATION BY PRINCIPAL EXECUTIVE OFFICER
--------------------------------------------
I, Frank Jakovac, the President and Chief Executive Officer of Avid
Sportswear & Golf Corp., a Nevada corporation (the "Registrant"), certify that:
I have reviewed this quarterly report on Form 10-QSB for the fiscal
quarter ended March 31, 2003, of the Registrant (the "Report").
Based on my knowledge, the Report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by the Report.
Based on my knowledge, the financial statements, and other financial
information included in the Report, fairly present in all material respects the
financial condition, results of operations and cash flows of the Registrant as
of, and for, the periods presented in the Report.
The Registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the Registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which the Report is being prepared.
b) evaluated the effectiveness of the Registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
the Report (the "Evaluation Date"); and
c) presented in the Report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
The Registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the Registrant's auditors and the Registrant's
Board of Directors:
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the Registrant's ability to
record, process, summarize and report financial data and have identified for the
Registrant" auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Registrant's internal
control.
The Registrant's other certifying officers and I have indicated in the
Report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
/s/ FRANK JAKOVAC
-------------------------------------
Name: Frank Jakovac
Title: President, Chief Executive
Officer and Principal
Accounting Officer
26