SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (Revised)
For the quarter ended October 31, 2001
Commission File Number 000-18081
SPORTSEND, INC.
(Exact name of registrant as specified in its charter)
Nevada 87-0360039
(State of Incorporation) (IRS Employer Ident. No.)
5590 Ulmerton Road
Clearwater, Florida 33760 (727) 592-0730
(Address of principal executive offices) (Registrants's telephone number)
Securities registered pursuant to Sections 12(g) of the Act:
Title of Class
---------------
(Common Stock ($0.01)
Indicate by check mark whether the registrant (1) has filed all reports required
by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports): Yes (x) No ( ) and (2) has been subject to such filing
requirements for the past 90 days Yes (x) No ( )
There were 11,821,248 shares of the Issuer's Common Stock outstanding as of
January 3, 2002.
Transitional Small Business Disclosure Format (check one): Yes ( ) No (x)
<page>
SPORTSEND, INC.
QUARTERLY REPORT ON FORM 10-QSB
OCTOBER 31, 2001
INDEX
Page
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 2. Changes in Securities 15
Item 3. Defaults Upon Senior Securities 15
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 18
SIGNATURES 17
<page>
SPORTSEND, INC.
QUARTERLY REPORT ON FORM 10-QSB
OCTOBER 31, 2001
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Sportsend, Inc.
Consolidated Balance Sheets
(unaudited)
October 31, January 31,
2001 2001
-------------- --------------
Assets
Current Assets
Cash and cash equivalents $ 11,747 $ 15,912
Accounts receivable, net 6,886 66,841
Inventories 240,419 218,750
Prepaid expenses and deposits 76,828 20,756
Other receivables 16,414 -
-------------- --------------
Total current assets 352,294 322,259
Property and equipment, net 37,485 43,385
Deposits on Corporate Shell - 130,104
-------------- --------------
Total assets $ 389,779 $ 495,748
============== ==============
Liabilities and Stockholders's Deficit
Current liabilities
Accounts payable 410,819 586,990
Accrued expenses 7,483 31,793
Customer deposits 101,601 318,392
Advances from officers/related parties 419,078 315,652
Notes payable and lines of credit 663,418 236,478
-------------- --------------
Total current liabilities 1,602,399 1,489,305
Stock Payable - 1,053,646
Stockholders' deficit:
Common stock 118,212 92,120
Additional paid in capital 850,330 -
Retained earnings (2,181,162) (2,057,203)
Stock subscription receivable - (82,120)
-------------- --------------
Total stockholders' deficit (1,212,620) (2,047,203)
-------------- --------------
Total Liabilities and Stockholders' Deficit $ 389,779 $ 495,748
============== ==============
<page>
Sportsend, Inc.
Consolidated Statement of Operations
(unaudited)
<table>
Three Months Ended Nine Months Ended
October 31, October 31,
---------------------------- ----------------------------
2001 2000 2001 2000
------------- ------------- ------------- -------------
<s> <c> <c> <c> <c>
Sales, less returns and
cancellations $ 247,794 $ 232,681 $ 1,235,701 $ 436,162
Cost of sales 135,136 136,529 701,983 266,735
------------- ------------- ------------- -------------
Gross profit 112,658 96,152 533,718 169,427
Expenses:
Operating expenses 135,173 430,347 633,871 867,528
Depreciation and amortization 2,634 2,485 7,868 6,229
------------- ------------- ------------- -------------
137,807 432,832 641,739 873,757
------------- ------------- ------------- -------------
Operating profit (loss) (25,149) (336,680) (108,021) (704,330)
Interest expense (5,665) (1,389) (15,938) (1,389)
------------- ------------- ------------- -------------
Net income(loss) $ (30,814) $ (338,069) $ (123,959) $ (705,719)
============= ============= ============= =============
Basic and diluted net loss
per share (0.00) (0.04) (0.01) (0.08)
============= ============= ============= =============
Basic and diluted weighted
Average number of common
shares outstanding 11,735,095 9,212,143 9,865,027 9,212,143
============= ============= ============= =============
</table>
<page>
Sportsend, Inc.
Consolidated Statements of Stockholder's Deficit
(unaudited)
<table>
Common Stock Additional Stock
---------------------- Paid-in Accumulated Subscription
Shares Amount Capital Deficit Receivable Total
---------- ---------- ---------- ----------- ------------ -----------
<s> <c> <c> <c> <c> <c> <c>
Balance,
January 31, 2001 9,212,043 $ 92,120 0 (2,057,203) (82,120) (2,047,203)
Recapitalization and
reorganization 1,287,957 12,880 (225,104) - 82,120 (130,104)
Issuance of stock
payable shares 350,000 3,500 206,500 - - 210,000
April 24, 2001 new
shares issued 150,000 1,500 73,500 - - 75,000
June 1, 2001 new
shares issued 821,248 8,212 795,434 - - 803,646
Net loss for period - - - (123,959) - (123,959)
---------- ---------- ---------- ----------- ------------ -----------
Balance,
October 31, 2001 11,821,248 $ 118,212 850,330 (2,181,162) - (1,212,620)
========== ========== ========== =========== ============ ===========
</table>
<page>
SportsEnd, Inc.
Consolidated Statement of Cash Flows
(unaudited)
For the Nine Months Ended
----------------------------------
October 31, 2001 October 31, 2000
---------------- ----------------
OPERATING ACTIVITIES
Net loss $ (123,959) $ (705,719)
Adjustments to reconcile net loss to net
cash used by operating activities:
Depreciation and amortization 7,869 6,229
Increase (decrease) in:
Accounts receivable 59,955 (47,341)
Inventory (21,669) (131,848)
Prepaids and other current assets (72,486) (21,133)
Accounts payable and accrued expenses (200,481) 269,466
Accrued payroll - 6,514
Customer deposits (216,791) 285,702
---------------- ----------------
Net cash used in operating activities (567,562) (338,130)
---------------- ----------------
INVESTING ACTIVITIES
Acquisition of equipment (1,969) (35,219)
Organization costs - (65,658)
---------------- ----------------
Net cash used in investing activities (1,969) (100,877)
---------------- ----------------
FINANCING ACTIVITIES
Proceeds from short/long term borrowings 434,440 175,500
Payment of short/long term borrowings (7,500) -
Proceeds from stock agreement 35,000 10,000
Advances from officers and related parties 315,117 280,179
Payment of advances from officers and
related parties (211,691) (71,153)
---------------- ----------------
Net cash provided by financing activities 565,366 394,526
---------------- ----------------
NET INCREASE (DECREASE) IN CASH (4,165) (44,481)
CASH AT BEGINNING OF PERIOD 15,912 45,822
---------------- ----------------
CASH AT END OF PERIOD $ 11,747 $ 1,341
================ ================
SUPPLEMENTAL DISCLOSURES OF NONCASH FINANCING ACTIVITIES:
For the Nine Months Ended October 31, 2001:
The Company issued 150,000 shares of common stock in lieu of payment
of $75,000 of Accounts Payable.
The Company issued 350,000 shares of comon stock for a reduction in
stock payable of $210,000.
On the date of reorganization of March 9, 2001, the $130,104 deposit
on corporate shell was charged to Additional Paid in Capital.
On June 1, 2001, the Company issued 821,248 shares of common stock for
a reduction in stock payable of $803,646.
<page>
SPORTSEND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2001
(1) BACKGROUND INFORMATION
(A) BUSINESS
Sportsend, Inc., a Nevada Corporation was originally incorporated and commenced
operations as Cache Oil Corporation in March 1980 under the laws of the State of
Utah. In July 1980, Cache Oil Corporation purchased, in a business combination,
all of the outstanding common stock of Rams Horn, Inc., a Wyoming corporation
which was subsequently dissolved. In December 1980, Cache Oil merged with a
wholly owned subsidiary of Rams Horn, Inc., Ramex Synthetic Fuels International,
Inc. a Utah corporation, at which time the name of the surviving Utah
corporation was changed to Ramex Synfuels International, Inc. (Ramex). Ramex
changed its domicile to Nevada from Utah in December 1988. Ramex was organized
for the purpose of developing and extracting of oil, gas, and other energy
sources from oil bearing shale. Between 1989 and 1992 , Ramex engaged in
activities seeking venture capital for further developments, unsuccessfully. In
1993 Ramex raised funds through a private placement to have Southwest Research
Institute engage in further research. The first phase of research was completed
in August of 1995. No further funds were obtained to complete the research and
Ramex ceased operations in 1995. On or about March 9, 2001 Ramex disposed of its
oil shale gasification business and effected a reverse stock split of its
existing outstanding common stock on a one for thirty basis. Thereafter, Ramex
issued 9,212,043 shares of reverse split common stock to the sole shareholder of
SportsSports.com, Inc. which became a wholly owned subsidiary. Effective March
13, 2001 the surviving company changed its name to Sportsend, Inc. (the
Company). The Company is engaged in the retail sale of sports collectibles and
memorabilia, clothing, sports merchandise, and sporting equipment.
(B) GOING CONCERN
The accompanying consolidated financial statements have been prepared in
conformity with generally accepted accounting principles, which contemplate
continuation of the Company as a going concern. The Company has used substantial
amounts of working capital in its operations. Further, at October 31, 2001
current liabilities exceed current assets by $1,250,105 and total liabilities
exceed total assets by $1,212,620.
In view of these matters, realization of a major portion of the assets in the
accompanying balance sheet is dependent on continued operations of the Company,
which in turn is dependent on the Company's ability to meet its financing
requirements and the success of future operations. The Company intends to
improve its operations through improved sales efforts, efficiency or cost
reductions. The Company's ability to raise the capital necessary to fund
operating losses through debt or equity cannot be assured.
<page>
SPORTSEND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2001
(1) BACKGROUND INFORMATION - CONTINUED
(C) REVERSE ACQUISITION
On or about March 9, 2001 Ramex Synfuels International, Inc. (Ramex), an
inactive "public shell", under the terms of the November 1999 plan of
reorganization effected a reverse stock split of its existing outstanding common
stock on a one for thirty basis. Thereafter Ramex issued 9,212,043 shares of
reverse split common stock to the sole shareholder of SportsSports.com,
Inc.(SportsSports) which became a wholly owned subsidiary. As a result, the
stockholder of the SportsSports now owns a majority of the shares of the
Company. This business combination is accounted for as a "reverse acquisition"
which in effect, treats SportsSports as though it were the acquirer rather than
the acquiree. As such, the historical common stock of the Company has been
retroactively restated for the stock split and exchange of shares. In connection
with the acquisition SportsSports paid a non refundable deposit of approximately
$130,000 used for satisfying liabilities and debts (estimated at approximately
$42,000) of Ramex and $10,104 for proxy costs. A Consulting Agreement provides
that the remainder of the $130,000 not used for satisfying debts be retained by
Maynard Moe, the past president of Ramex as a fee for facilitating the merger
between Ramex and SportsSports and disposal of other assets including patents.
Effective March 13, 2001 the surviving company changed its name to Sportsend,
Inc. (the Company). As a result, the stockholder of SportsSports now owns a
majority of the shares of the Company.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) ESTIMATES
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 statements and
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
The Company extends credit to its various customers based on the customer's
ability to pay. Based on management's review of accounts receivable, no
allowance for doubtful accounts is considered necessary.
(B) PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiary SportsSports. All significant intercompany
transactions have been eliminated in consolidation.
(C) CASH AND CASH EQUIVALENTS
Cash and cash equivalents includes cash deposited in financial institutions and
cash on hand.
(D) INVENTORY
Inventory is stated at the lower of cost (determined by the specific
identification method) or market and consists of sports memorabilia and
merchandise
<page>
SPORTSEND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2001
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(E) PROPERTY AND EQUIPMENT
Property and Equipment is recorded at cost. Depreciation is calculated by
the straight-line method over the estimated useful lives of the assets, ranging
generally from five to seven years. Maintenance and repairs are charged to
operations when incurred. Betterments and renewals are capitalized. When
equipment is sold or otherwise disposed of, the asset account and related
accumulated depreciation account are relieved, and any gain or loss is included
in operations. The estimated life of computer equipment is five years and the
estimated life of furniture and fixtures is five years.
(F) CUSTOMER DEPOSITS
Customers pay deposits or prepay for merchandise prior to shipment, due to
limited additions and specialty nature of the merchandise. The Company
recognizes the prepayment as a current liability.
(G) SALES
Sales and related cost of sales are recognized upon the shipment of
products. Products are shipped from the Company's office and vendor's place of
business. Customers have the right to cancel the transaction at any time prior
to shipment and return merchandise up to 30 days after shipment.
(H) TAX BASES
Deferred tax assets and liabilities are recognized for the estimated future
benefits of the net operating loss carry forwards and for the estimated
consequences attributable to temporary differences between financial statement
carrying amounts of existing assets and liabilities and their respective income
tax bases. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary
differences are expected to reverse. Valuation allowances are established when
necessary to reduce deferred tax assets to the amount expected to be realized.
As of October 31, 2001 the Company did not have any temporary differences
between the financial statements carrying amounts and their respective tax
bases.
(I) ADVERTISING COSTS
Advertising costs (except for costs associated with direct-response
adverting) are charged to operations when incurred. The costs of direct-response
advertising are capitalized and amortized over the period during which future
benefits are expected to received. Advertising expense for the period was
approximately $37,789 and $143,343 for the three months ended October 31, 2001
and 2000, respectively.
(J) EARNINGS (LOSS) PER SHARE
Basic and diluted net loss per common share is computed by dividing loss
available to common stockholders by the weighted average number of common shares
outstanding during the period. Shares reserved for issuance under stock
subscription agreements (stock payable) are considered common stock equivalents
and are included as outstanding shares.
<page>
SPORTSEND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2001
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(K) RECLASSIFICATION
Certain amounts in the October 31, 2001 consolidated financial statements have
been reclassified to conform to the January 31, 2001 presentation.
(3) EQUIPMENT
Equipment consists of the following at October 31, 2001 and January 31, 2001:
October 31, January 31,
2001 2001
----------- -----------
Office furniture and fixtures $ 26,188 $ 26,188
Computer equipment 28,437 26,468
----------- -----------
54,625 52,656
Less accumulated depreciation (17,140) (9,271)
----------- -----------
$ 37,485 $ 43,385
=========== ===========
(4) DEBT OBLIGATIONS
Notes payable consist of:
(a) $250,000 line of credit with interest payable monthly at a rate of 100
basis points above the prime rate as published by the Wall Street Journal (6% at
October 31, 2001). This agreement is collateralized by all the assets of the
company. Principle that was due and payable on September 5, 2001 was not paid
and line of credit was renewed on September 5, 2001 and is payable and due on
September 5, 2002. The outstanding balance at October 31, 2001 is $246,498.
(b) $10,000 unsecured note with interest payable quarterly at a rate of 20% per
annum. Principle was originally due and payable on July 31, 2001. The note was
not paid on July 31, 2001 and the unsecured note is payable on demand.
(c) $12,378 unsecured non interest bearing note. Principle is payable monthly
at $3,095. Final payment that was originally due and payable August 24, 2001 was
not paid and the final payment is payable on demand. Outstanding balance at
October 31, 2001 is $1,138.
(d) $58,000 unsecured note with interest accrued at the rate of 25% per annum.
Principle and interest due in 3 monthly payments of $12,000 commencing May 2001
with the balance due August 2001. None of the monthly payments have been made
and the unsecured note is payable on demand.
(e) $600,000 line of credit for the purpose of project and inventory financing
with interest accruing at the rate of 20% per annum compounded monthly. Each
loan and interest there is due no later than 12 months after the date the loan
is made. Outstanding balance at October 31, 2001 is $406,921.
(f) $50,000 unsecured non interest bearing note. Principle is payable on
demand.
(g) $309,940 unsecured non interest bearing note payable to officer. Principal
is payable on demand.
<page>
SPORTSEND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2001
(5) LEASE COMMITMENTS
The Company has a five year lease for its office space. The lease expiration
date is February 28, 2006. The originally agreed upon lease terms are under
negotiation and are subject to change. The Company expects that the terms will
change significantly by year ended January 31, 2002. Future minimum lease
payments under this lease as of October 31, 2001 are:
2001 $25,680
2002 77,040
2003 77,040
2004 77,040
2005 64,200
(6) STOCK AGREEMENTS
During 1999 and in preparation for the reverse acquisition (see Note 1c), the
Company received $45,000 in cash and $5,000 of inventory in exchange for
its agreements to issue stock. The agreements are composed of an agreement
to issue 45,000 shares of common stock at $1.00 per share in exchange for cash
received and an agreement to issue 10,000 shares of common stock at $.50 per
share in exchange for inventory. It is the intent of these agreements that the
shares will be issued after the completion of the reverse acquisition.
During the fiscal year ended January 31, 2001, the Company agreed to exchange
925,000 shares of common stock with a value of $785,000 for consulting
services rendered. The Company also issued 66,250 shares for a value of
$66,250 in exchange for employee services rendered throughout the year.
Additionally, the Company has received $105,000 in cash and $47,396 fair value
of inventory in exchange for 138,332 shares and 80,000 shares, respectively.
During the first quarter 2001, agreements were entered for 56,666 shares in
exchange for $35,000 in cash.
On March 9, 2001 the reverse acquisition was completed. On April 24 2001,
350,000 of the above mentioned shares were issued and on June 1, 2001 the
remaining shares were issued.
(7) RELATED PARTY
The Company has non-interest bearing, unsecured advances from a related party
in the amount of approximately $59,000 in exchange for inventory.
In addition, the President of the Company has advanced the Company approximately
$618,440 to fund operations, of which $199,362 has been repaid. These
advances are non-interest bearing and unsecured.
The above amounts and terms are not necessarily indicative of those amounts that
would have been agreed to by independent third parties.
<page>
SPORTSEND, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 2001
(8) INCOME TAXES
The provisions for income tax benefit (expense) for the nine months ended
October 31, 2001 and October 31, 2000, respectively, were calculated through
the use of the estimated annual income tax rates based on projected annualized
income (loss). The Company estimated an effective tax rate of 0% during the
nine months ended October 31, 2001 and 2000, respectively, based on the
Company's reported losses in year ended January 31, 2001 and for nine months
ended October 31, 2001.
The Company has incurred a taxable loss of approximately $2,200,000 and that
may be applied against future taxable income. This loss gives rise to a deferred
tax asset of $760,000. At this time, management believes that it is more likely
than not that the Company will not generate sufficient taxable income within
the appropriate period to offset this loss and, therefore, has established a
valuation allowance in the full amount of the deferred tax asset.
The loss carryforward expires on April 15, 2016. The following is a summary of
the deferred tax benefit at October 31, 2001 computed at statutory rates.
Tax benefit arising from operating loss $ 760,000
Less valuation allowance 760,000
-----------
Net deferred tax assets $ 0
===========
<page>
SPORTSEND, INC.
QUARTERLY REPORT ON FORM 10-QSB
OCTOBER 31, 2001
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company's financial statements have been prepared assuming that the
Company will continue as a going concern. The auditors' report on the Company's
January 31, 2001 financial statements states that "the Company has suffered
recurring losses from operations, has generated no revenue in the last three
years, has a working capital deficit and substantial liabilities raise
substantial doubt about the Company's ability to continue as a going concern."
Set forth below for the periods indicated, is selected unaudited information
(as stated in dollars, except percentages).
Three Months Ended Nine Months Ended
October 31, October 31,
-------------------------- --------------------------
2001 2000 2001 2000
------------ ------------ ------------ ------------
Revenue:
Sales $ 247,794 $ 232,681 $ 1,235,701 $ 436,162
Total Revenue 247,794 232,681 1,235,701 436,162
Expenses:
Cost of sales 135,136 136,529 701,983 266,735
Operating expenses 135,173 430,347 633,871 867'528
Gross profit ratio 45% 41% 43% 39%
RESULTS OF OPERATIONS
THREE MONTHS ENDED OCTOBER 31, 2001 COMPARED TO THREE MONTHS ENDED OCTOBER 31,
2000
Revenue Earned. Revenue earned increased approximately $15,000 to $247,794
for the three months ended October 31, 2001 from $232,681 for the comparable
period in 2000, an increase of approximately 6%. The increase in revenue earned
was primarily due to the continued development of business from existing
customers, expansion of product lines and increases in advertising through media
and the internet.
Cost of Sales. Cost of sales decreased approximately $1,000 or 1% from
$136,529 to $135,136 for the three months ended October 31, 2000 and 2001,
respectively. The decrease was due principally to the decrease in inventory
buildup. Cost of sales as a percentage of revenue earned, increased from 41% to
45% for the three months ended October 31, 2000 and 2001, respectively. The
increase in cost of sales ratio was primarily a result of a change in the sales
mix of the Company as discussed above and a increase in the estimate of the
accounts receivable allowance for doubtful accounts and an increase in the
inventory valuation allowance.
Operating Expenses. Operating expenses decreased $295,174 to $135,173 for
the three months ended October 31, 2001 from $430,347 for the comparable period
in the prior year. The decrease in operating expenses was primarily due to the
decrease in marketing expenses of approximately $105,000 from $143,343 for the
three months ended October 31, 2000 to $37,789 for the three months ended
October 31, 2001 and the reduction in salary and wage expense of approximately
$103,000 to $33,649 for the three months ended October 31, 2001 from $136,617
for the comparable period in the prior year.
<page>
SPORTSEND, INC.
QUARTERLY REPORT ON FORM 10-QSB
OCTOBER 31, 2001
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
NINE MONTHS ENDED OCTOBER 31, 2001 COMPARED TO SIX MONTHS ENDED OCTOBER 31, 2000
Revenue Earned. Revenue earned increased $799,539 to $1,235,701 for the
nine months ended October 31, 2001 from $ 436,162 for the comparable period in
2000, an increase of 183%. The increase in revenue earned was primarily due to
the continued development of business from existing customers, expansion of
product lines and increases in advertising through media and the internet.
Cost of Sales. Cost of sales increased approximately $435,248 or 163 %
from $266,735 to $701,983 for the nine months ended October 31, 2000 and October
31, 2001, respectively. Cost of sales as a percentage of revenue earned,
increased from 39 % to 43 % for the six months ended October 31, 2001 and 2000,
respectively. The increase in cost of sales ratio was primarily a result of a
change in the sales mix of the Company and an increase in the estimate of the
accounts receivable allowance and an increase in the inventory valuation
allowance.
Operating Expenses. Operating expenses decreased approximately $234,000 to
$633,871 for the nine months ended October 31, 2001 from $867,528 for the
comparable period in the prior year. The decrease in operating expenses was
primarily due to the decrease in marketing expenses of approximately $106,000
from $181,343 for the six months ended October 31, 2000 to $75,789 for the
comparable period in the prior year.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows. For the nine months ended October 31, 2001, operating
activities utilized approximately $567,000 of cash. The net loss adjusted for
non - cash items such as depreciation and amortization used $115,000 of cash.
The net decrease in operating assets used $34,000 in cash. The decrease in net
operating liabilities used $417,000 of cash. Financing activities provided
$565,000 of cash primarily from proceeds of notes payable and advances from
officers.
The working capital has been funded primarily by loans from Phillip
Wasserman, President of Sportsend, Inc. The funds received are from loans
that are non interest bearing and are payable on demand.
The Company's capital requirements have been and continue to be significant
and for the nine months ended October 31, 2001 its cash requirements have been
exceeding its cash flow form operations. The Company estimates that it will
need to raise additional funds within the next nine months to fund the Company's
planned business activities. The Company intends on conducting a private
offering of its common stock to finance planned business activities.
<page>
SPORTSEND, INC.
QUARTERLY REPORT ON FORM 10-QSB
OCTOBER 31, 2001
ITEM 3 - Quantitative and Qualitative Disclosures About Market Risk
Inflation
The Company believes that market advertising and evaluation of product base
will assist the Company in mitigating the effects of inflation.
Interest Rate Risk
The Company is subject to market risk from exposure to changes in interest
rates based upon its financing, investing and cash management activities. The
Company does not expect changes in interest rates to have a material adverse
effect on its income or its cash flows for fiscal year 2002. However, there can
be no assurances that interest rates will not significantly change the remainder
of 2002.
PART II
OTHER INFORMATION
ITEM 1 -LEGAL PROCEEDINGS
None
ITEM 2 - CHANGE IN SECURITIES AND USE OF PROCEEDS
On or about February 15, 2001, two stock subscription agreements were
entered into in connection with private offering being conducted by the Company
pursuant to an exemption from registration located in Section 4(2) of the
Securities Act of 1933 as amended, and Regulation D promulgated thereunder
providing for the exchange of 56,666 shares of common stock for $35,000. Stock
certificates were issued in the six months ended July 31, 2001. 812,248 shares
of common stock were issued on June 1, 2001 for a reduction in stock payable of
$803,646.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable
ITEM 5 - OTHER INFORMATION
Not Applicable
<page>
SPORTSEND, INC.
QUARTERLY REPORT ON FORM 10-QSB
OCTOBER 31, 2001
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8K
Exhibits
2: Agreement and Plan of Organization, dated November 22, 1999 and executed
H|January 7, 2000 by and among Ramex Synfuels International, Inc.(now known as
Sportsend, Inc.), SportsSports.com and the shareholders of SportsSports.com,
filed as exhibit 2 to the Company's Form 10K for the year ended January 31, 2001
and incorporated by reference.
3.1: Articles of Incorporation of Ramex Synfuels International, Inc. (now
known as Sportsend, Inc.) Dated November 22, 1988 and filed December 8, 1988,
filed as exhibit 4.1 to the company's Form 10K for the year ended January 31,
2001 and incorporated herein by reference.
3.2: Articles of Merger of Domestic and Foreign Corporations, dated November
22, 1988 and filed December 15, 1988, filed as exhibit 4.2 to the Company's Form
10K for the year ended January 31, 2001 and incorporated herein by reference.
3.3: Certificate of Amendment of Articles of Incorporation of Ramex Synfuels
International, Inc. (now known as Sportsend, Inc.) dated November 3, 1994 and
filed November 7, 1994, filed as exhibit 4.3 to the Company's Form 10K for the
year ended January 31, 2001 and incorporated herein by reference.
3.4: Certificate of Amendment of Articles of Incorporation of Ramex Synfuels
International, Inc. (now known as Sportsend, Inc.) dated March 13, 2001, filed
as exhibit 4.4 to the Company's Form 10K for the year ended January 31, 2001 and
incorporated herein by reference.
3.5: By-Laws of Ramex Synfuels International, Inc. ( now known as Sportsend,
Inc.) filed as
Exhibit 4.5 of the Company's Form 10K for the year ended January 31, 2001
and incorporated herein by reference.
All other exhibits are omitted as not applicable.
2) Reports on Form 8-K
On March 23, 2001, the Company filed an 8-K which reported on an agreement and
plan of reorganization with SportsSports.com, Inc., a Florida corporation.
On April 30, 2001, the Company filed an 8-K which reported on a change in
independent auditors.
On May 1, 2001, the company filed an 8-K/A which reported on the change in
independent auditors that was the subject of the April 30, 2001 8-K.
<page>
SPORTSEND, INC.
QUARTERLY REPORT ON FORM 10-QSB
OCTOBER 31, 2001
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
SPORTEND, INC.
Dated: January 3, 2002 /s/ Phillip Wasserman
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Phillip Wasserman, President
Dated: January 3, 2002 /s/ Linda Johnson
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Linda Johnson, Secretary