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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
FOR QUARTER ENDING JUNE 30, 2001
Commission File Number 0-16447
AGTSPORTS, INC.
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(Exact name of registrant as specified in its charter)
Colorado 84-1022287
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(State of incorporation ) (I.R.S. Employer ID Number)
7255 E. Quincy Avenue, Suite 550, Denver, CO 80237
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(Address of principal executive offices) (zip code)
(303) 437-9434
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of Securities Exchange Act of 1934 during the
preceding 12 months (or for such a shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
As of June 30, 2001, 49,848,919 common shares, $.001 par value per share, were
outstanding.
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AGTsports, Inc.
INDEX
Part I FINANCIAL INFORMATION
Item 1. Independent Accountants' Report F-1
Balance Sheets F-2
June 30, 2001 and September 30, 2000
Statements of Operations F-3
Nine Months Ended June 30, 2001 and 2000
Statements of Cash Flows F-4
Nine Months Ended June 30, 2001 and 2000
Notes to Financial Statements F-5
Item 2. Management's Discussion and Analysis F-5 - F-6
Part II OTHER INFORMATION
Item 1. Legal Proceedings F-6
Item 2. Changes in Securities F-6
Item 3. Default on Senior Securities F-6
Item 4. Submission of Matters to a Vote of Security Holders F-6
Item 5. Other Information F-6
Item 6. Exhibits and Reports on Form 8-K F-7
Part III SIGNATURES F-7
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors
AGTsports, Inc.
We have reviewed the accompanying balance sheet of AGTsports, Inc. (a
development stage company) as of June 30, 2001, and the related statements of
income, retained earnings, and cash flows for the nine months then ended, in
accordance with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountants. All
information included in these financial statements is the representation of the
management of AGTsports, Inc.
A review consists principally of inquiries of Company personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
The accompanying unaudited interim financial statements have been prepared in
accordance with the instructions to Form 10-QSB and do not include all the
information and footnotes required by generally accepted accounting principles
for complete financial statements. These statements should be read in
conjunction with the financial statements and related notes included in the
Company's Annual Report to shareholders to Form 10-KSB/A for the year ended
September 30, 2000.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.
As discussed in Note 2, certain conditions indicate that the Company may be
unable to continue as a going concern. The accompanying financial statements do
not include any adjustments to the financial statements that might be necessary
should the Company be unable to continue as a going concern.
BRIMMER, BUREK & KEELAN LLP
Certified Public Accountants
August 14, 2001
F-1
AGTSPORTS, INC.
TAMPA, FLORIDA
BALANCE SHEETS
ASSETS
June 30, 2001 September 30, 2000
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Current:
Cash $ 2,258 $ 16,547
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Total current assets 2,258 16,547
Property and Equipment 3,464 1,000
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Total assets $ 5,722 $ 17,547
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LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 12,711 $ 12,455
Accrued expenses - related party 122,224 64,804
Notes payable - current 12,570 2,455
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Total current liabilities 147,505 79,714
Notes payable (less current portion) -- --
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Total liabilities 147,505 79,714
Shareholders' deficit:
Convertible Preferred stock, $.001 par value;
1,500,000 shares authorized; 1,494,395
shares issued and outstanding (Note 2) 1,494 1,494
Common stock, $.001 par value; 50,000,000
shares authorized; 49,848,919 shares issued
and outstanding 49,845 49,845
Additional paid-in capital 24,085,691 24,085,691
Deficit accumulated during
the development stage (24,278,813) (24,199,197)
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Total shareholders' deficit (141,783) (62,167)
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Total liabilities and shareholders' deficit $ 5,722 $ 17,547
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Please read accompanying notes.
F-2
AGTSPORTS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
January 6, 1986
Three Monthes Ended June 30, Nine Monthes Ended June 30, (Inception) Through
2001 2000 2001 2000 June 30, 2001
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Revenue:
Territory sales $ -- $ -- $ -- $ -- $ 1,612,009
Other revenue -- -- -- -- 2,294,425
------------ ------------ ------------ ------------ ------------
-- -- -- -- 3,906,434
Expenses:
Cost of purchased goods for resale -- -- -- -- 162,378
Salaries and director compensation -- -- -- -- 3,420,101
Professional services 16,420 16,382 52,220 36,182 4,119,551
General and administrative 7,680 3,230 26,314 19,390 3,490,800
Depreciation and amortization 216 60 647 140 2,487,183
Advertising -- -- -- -- 306,112
Contract services -- -- -- -- 4,985,397
Cost of unsuccessful offering -- -- -- -- 56,860
Travel and entertainment 69 -- 124 -- 919,061
Territory reacquisition -- -- -- -- 1,465,075
Total expenses 24,385 19,672 79,305 55,712 21,412,518
------------ ------------ ------------ ------------ ------------
Preoperative loss (24,385) (19,672) (79,305) (55,712) (17,506,084)
Other income (expenses):
Interest income -- 5,895 -- (13,563) 1,081
Rent income -- -- -- -- 14,992
Interest expense (103) (31,150) (311) (31,150) (710,583)
Loss on equity securities -- -- -- -- (8,652,613)
(Loss) gain on disposal of assets -- -- -- -- 2,814,846
Provision for loan loss -- -- -- -- (528,342)
Equity in loss of joint venture -- -- -- -- (748,650)
Loss on purchase of subsidiaries -- -- -- -- (442,419)
Settlement of claims -- -- -- -- (71,398)
Other income -- -- -- 1,650 84,565
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Total other income (expenses), net (103) (25,255) (311) (43,063) (8,238,521)
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Net loss before extraordinary items and
provision for income taxes (24,488) (44,927) (79,616) (98,775) (25,744,605)
Provision for income taxes -- -- -- -- (1,873,815)
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Loss before extraordinary items (24,488) (44,927) (79,616) (98,775) (23,870,790)
Extraordinary items:
Income tax benefit realized -- -- -- -- 1,812,911
Debt forgiveness net of income taxes) -- 58,860 -- 58,860 1,163,709
Debt forgiveness - AGTsports Australia
Pty Ltd. -- -- -- -- 339,155
------------ ------------ ------------ ------------ ------------
Net income (loss) $ (24,488) $ 13,933 $ (79,616) $ (39,915) $(20,555,015)
Basic earnings per share
Loss per common share before extraordinary
items $ -- $ (0.001) $ (0.002) $ (0.003)
Extraordinary items per common share -- 0.001 -- 0.002
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Net income (loss) per common share $ -- $ -- $ (0.002) $ (0.001)
Weighted-average shares of common stock
outstanding 49,848,919 41,996,114 49,848,919 35,742,479
See accompanying notes to consolidated financial statements.
F-3
AGTSPORTS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(Unaudited)
January 6, 1986
(inception)
Nine Months Ended June 30, Through
2001 2000 June 30, 2001
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Cash Flows From Operating Activities
Net Cash Provided (Used) in
operating activities $ (21,085) $ (41,612) $(5,000,617)
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Cash Flows From Investing Activities
Purchase of assets (3,111) (1,200) (364,085)
Other investing activities -- -- 628,932
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Net Cash Provided (Used) in investing activities (3,111) (1,200) 264,847
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Cash Flows From Financing Activities:
Proceeds from issuance of notes payable 10,250 43,000 740,784
Proceeds from issuance of Capital Stock -- -- 3,038,189
Other financing activities (343) (207) 959,055
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Net Cash Provided (Used) in financing activities 9,907 42,793 4,738,028
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Net increase (decrease) in cash (14,289) (19) 2,258
Cash at beginning of the year 16,547 22 --
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Cash at end of period $ 2,258 $ 3 $ 2,258
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Preferred stock converted to common stock $ -- $ 1,000,000 $ 999,000
Loan assumed by shareholder $ -- $ -- $ 70,000
Dividends accrued $ -- $ 9,000 $ 45,000
Accrued dividends converted to note payable $ -- $ 87,000 $ 87,000
Stock issued in connection with acquisitions $ -- $ -- $ 1,336,803
Notes payable converted to stock $ -- $ 474,006 $ 1,643,681
Other payables converted to stock $ -- $ 62,987 $ 3,661,846
Please read accompanying notes.
F-4
AGTsports, Inc.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001 AND 2000
NOTE 1 - MANAGEMENT REPRESENTATION
The accompanying unaudited interim financial statements have been prepared in
accordance with the instructions to Form 10-QSB and does not include all the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of Management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. The results of operations for any interim
period are not necessarily indicative of results for the year. These statements
should be read in conjunction with the financial statements and related notes
included in the Company's Annual Report to shareholders on Form 10-KSB/A for the
year ended September 30, 2000.
NOTE 2 - BASIS OF PRESENTATION
The accompanying consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. As shown in the financial
statements, the Company has incurred net losses of $24,488 and $79,616 for the
nine months ended June 30, 2001 and 2000, respectively. At June 30, 2001 and
September 30, 2000, the Company has a net working capital deficit of $ 141,783
and $62,167, respectively, and a shareholders' deficit of $141,783 and $62,167,
respectively all of which raise substantial doubt about the Company's ability to
continue as a going concern. Management has developed plans intended to remedy
these conditions. These plans include seeking other sources of financing such as
the completion of a possible business combination and the sale of common stock.
No assurances can be given as to the success of these plans. The financial
statements do not include any adjustments that might result should the Company
be unable to continue as a going concern.
ITEM 2: Management'Management's Discussion and Analysis of Financial Condition
and Results of Operations
As of June 30, 2001, the Company had no current business operations. The Company
has experienced operating expenses of $24,385 for the nine month period ending
June 30, 2001 and $79,305 for the same period in 2000. The revenues for the
period were none in 2001 or 2000. For the nine months ended June 30, 2001 the
Company reported a net loss of ($24,488). Losses can be expected to continue
until a profitable business is achieved. While the Company is seeking capital
sources for investment, there is no assurance that sources can be found.
F-5
Liquidity and Capital Resources
The Company had $2,258 in cash at the end of the period. The Company will be
forced to either borrow money or make private placements of stock in order to
fund any limited operations. No assurance exists as to the ability to achieve
loans or make private placements of stock.
PART II.
ITEM 1. Legal Proceedings
During the quarter ended June 30, 2001, the Company was not a party to, nor
aware of, any legal proceedings involving the Company that, in the opinion of
Management, were material to the future of the Company.
ITEM 2. Changes in Securities
None.
ITEM 3. Default on Senior Securities.
None.
ITEM 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of the Security Holders during this
reporting period.
ITEM 5. Other Information.
As of June 30, 2001, the Company had no other reportable events which were not
previously disclosed in the below referenced exhibits and reports.
The Company's Articles of Incorporation as amended entitle it to transact any
lawful business or businesses for which corporations may be incorporated
pursuant to the Colorado Corporation Code. The Company can be defined as a
"shell" company, whose sole purpose at this time is to locate and consummate a
merger or acquisition with a private entity. Any business combination or
transaction will likely result in a significant issuance of shares and
substantial dilution to present stockholders of the Company. The Company's plan
is to seek, investigate and, if such investigation warrants, acquire an interest
in business opportunities presented by persons or firms seeking the perceived
advantages of a corporation which reports under Section 13 and 15 of the
Securities Exchange Act of 1934 (the "Exchange Act"). Such perceived benefits
may include facilitating or improving the terms on which additional equity
financing may be sought, providing liquidity for incentive stock options or
similar benefits to key employees, providing liquidity (subject to restrictions
of applicable statutes) for all shareholders and other factors. The Company
anticipates that the selection process of such potential business opportunities
will be complex and extremely risky, and no assurance can be provided the
Company will be successful in these endeavors.
F-6
ITEM 6. Exhibits and Reports on Form 8-K
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
AGTsports, Inc.
Dated: June 30, 2001 By: /s/ Cory J. Coppage
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President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
Dated: June 30, 2001 By: /s/ Cory J. Coppage
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President
F-7