UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act o f 1934
May 15, 2001
Date of Report
(Date of earliest event reported)
TEAM SPORTS ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-23100 22-2649848
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1111 South Main, Suite 127, Grapevine, TX 76051
(Address of principal executive offices)
(817) 410-5708
Registrant's telephone number
1
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
ACQUISITION OF MAXX MOTORSPORTS, INC.
On May 15, 2001, the Team Sports Entertainment, Inc. ("Team" or the "Company")
(formerly Logisoft Corp.) completed acquisition of Maxx Motorsports, Inc.
("MAXX"), including retirement of debt and transaction costs, for 11,050,000
shares of its common stock. A special committee of the independent Directors of
Team reviewed and approved the acquisition. There were no material previous
relationships between the Company and the sellers of MAXX. MAXX is a successor
to Maxx Motorsports, LLC.
MAXX through its wholly owned subsidiary, Team Racing Auto Circuit, LLC ("TRAC")
will own, operate, and sanction an automotive racing league designed to provide
content for television and tracks while expanding the existing base of race car
fans. TRAC will initially consist of multi-car teams, strategically positioned
in major North American television markets located near major motorsports
venues. Each team will represent the city or state where it is located. The
initial TRAC racing season, planned to start in 2003, will consist of a regular
season race schedule, a playoff race schedule, and a Championship Race. TRAC
will incorporate the use of aerodynamically identical cars (Aerostock(TM)),
fuel-injection engines and other innovative competition standards to increase
parity among the teams without diminishing the entertainment value. TRAC intends
to attract multiple manufacturers who currently are involved in motorsports
worldwide, but may not be currently involved in the major stock car racing
series in America.
TRAC will be structured as a single-entity league to allow for centralized
management, economies of scale in purchasing, strict operational standards and
cost controls at the team level. Revenue sharing systems will be enacted to
ensure parity and fair allocation of revenue among teams.
Initial TRAC funds will be derived through the sales of rights to
city/state-based teams. Team owners will own and operate local race teams and
will also have the opportunity to own shares in TRAC's parent company. TRAC will
seek strategic alliances with companies in the areas of television,
sports/entertainment marketing and public relations. Once racing begins, TRAC
will generate revenue through event ticket sales, league corporate sponsorships,
television and other multimedia contracts, merchandise sales, licensing/royalty
fees, team fees/dues, and sales of additional expansion teams.
TRAC's long-term business plan includes expanding its team base not only in
North America, but also internationally.
2
DISPOSITION OF LOGISOFT COMPUTER PRODUCTS CORP. AND ESTOREFRONTS.NET CORP
-------------------------------------------------------------------------
On May 15, 2001 and pursuant to the agreement to acquire MAXX, the Company
completed the sale of its interest in its wholly owned subsidiaries, Logisoft
Computer Products Corp. and eStorefronts.net Corp (collectively referred to as
the "Former Subsidiaries"). The Former Subsidiaries were purchased by a group of
Team shareholders led by Robert Lamy, the founder of the Former Subsidiaries, in
return for 12,000,000 shares of Team common stock. The Company has retired the
Team shares received from the Lamy group. A special committee of the independent
Directors of Team reviewed and approved the transaction.
EQUITY FUNDING
In addition to completing the acquisition of Maxx, and as a part of the
definitive stock purchase agreement, Team has received $7,244,250 in equity
funding. In return for the $7,244,250 in cash received by Team, the Company
issued 28,977,000 shares of its common stock and issued warrants to the
investors entitling them to purchase a total of 14,488,500 shares at a purchase
price of $1.00 per share.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
The audited financial statements of Maxx Motorsports, LLC, at
December 31, 2000 and for the years ended December 31, 2000 and
1999, and for the period from inception, November 12, 1999 through
December 31, 2000, together with the audit report of Guest &
Company, P.C. dated July 18, 2001 is attached hereto as Exhibit
99.1.
(b) PRO FORMA FINANCIAL INFORMATION
On May 15, 2001, Team acquired 100% of Maxx, including retirement
of debt and transaction costs, in exchange for a total of
11,050,000 shares of its common stock. The transaction is being
accounted for utilizing the purchase method of accounting.
The pro forma exhibits include a pro forma combining consolidated
balance sheet as of March 31, 2001 that reflects the effects of
the acquisition as if it had occurred on that date. In addition, a
combining pro forma consolidated statement of operations for the
year ended December 31, 2000 and the three months ended March 31,
2001 reflect the acquisition on a pro forma basis as if the
transaction had occurred at the beginning of the periods.
3
(c) EXHIBITS
99.1 Audited financial statements of Maxx Motorsports, LLC, at
December 31,2000 and for the years ended December 31, 2000 and
1999, and for the period from inception, November 12, 1999 through
December 31, 2000.
99.2 Pro forma combined balance sheet as of March 31, 2001.
99.3 Pro forma combined statement of operations for the year ended
December 31, 2000.
99.4 Pro forma combined statement of operations for the three months
ended March 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 hereunto duly authorized.
TEAM SPORTS ENTERTAINMENT, INC.
By/s/ Terry Washburn
--------------
Terry Washburn
Chief Executive Officer
Date: July 27, 2001
4
EXHIBITS
Exhibit Page
Number Description Number
99.1 Audited financial statements of Maxx Motorsports, LLC. 6
at December 31, 2000 and for the years ended December 31, 2000
and 1999, and for the period from inception, November 12, 1999
through December 31, 2000.
99.2 Pro forma combined balance sheet as of March 31, 2001. 17
99.3 Pro forma combined statement of operations for the year ended 18
December 31, 2000.
99.4 Pro forma combined statement of operations for the three months 19
ended March 31, 2001.
5
MAXX MOTORSPORTS, LLC
(A Development Stage Company)
Financial Statements
December 31, 2000
(With Independent Auditor's Report Thereon)
6
GUEST & COMPANY, P.C.
7170 S. Braden Ave., Suite 100
Tulsa, OK 74136-6333
Phone: 918-481-5355 Fax: 918-481-5771
Independent Auditor's Report
Board of Directors
Maxx Motorsports, LLC:
We have audited the accompanying balance sheet of Maxx Motorsports, LLC (a
development stage company) as of December 31, 2000 and the related statements of
operations, members' capital deficiency and cash flows for the years ended
December 31, 2000 and 1999, and for the period from November 12, 1999
(inception) through December 31, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Maxx Motorsports, LLC at
December 31, 2000 and the results of their operations and their cash flows for
the years ended December 31, 2000 and 1999, and for the period from November 12,
1999 (inception) through December 31, 2000 in conformity with accounting
principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. However, as discussed in Note 3, the Company
has been in the development stage since its inception on November 12, 1999. As
shown in the financial statements, the Company incurred a net loss of $292,796
for the year ended December 31, 2000 and has incurred substantial net losses
since inception. At December 31, 2000, current liabilities exceed current assets
by $319,194 and total liabilities exceed total assets by $314,076. These
factors, and others discussed in Note 3, raise substantial doubt about the
Company's ability to continue as a going concern. The financial statements do
not include any adjustments relating to the recoverability and classification of
recorded assets, or the amounts and classification of liabilities that might be
necessary in the event the Company cannot continue in existence.
/s/ Guest & Company, P.C.
July 18, 2001
Tulsa, Oklahoma
7
MAXX MOTORSPORTS, LLC
(A Development Stage Company)
Balance Sheet
December 31, 2000
Assets
Current assets:
Cash $ 2,752
Employee advance 1,800
---------
Total current assets 4,552
---------
Property and equipment:
Computer equipment 4,180
Less accumulated depreciation 780
---------
Net property and equipment 3,400
Other assets - trademark 1,718
---------
Total assets $ 9,670
=========
Liabilities and Members' Capital Deficiency
Current liabilities:
Accounts payable $ 3,213
Accrued expenses 3,538
Advances from members (note 2) 316,995
-------
Total current liabilities 323,746
-------
Members' capital deficiency:
Membership units, 111,111 units authorized;
issued and outstanding -
Deficit accumulated during the development stage (314,076)
-------
Total members' capital deficiency (314,076)
-------
Commitments and contingencies (notes 3 and 4)
Total liabilities and members' capital deficiency $ 9,670
=========
See accompanying notes to financial statements.
8
MAXX MOTORSPORTS, LLC
(A Development Stage Company)
Statements of Operations
Years Ended December 31, 2000 and 1999, and
From Inception (November 12, 1999) through December 31, 2000
From Inception
Year Ended Year Ended (November 12, 1999)
December 31, December 31, through
2000 1999 December 31, 2000
------------------- ------------------- -----------------
Operating expenses:
Salaries and wages $ 216,250 13,492 229,742
Payroll taxes and benefits 34,608 2,080 36,688
Outside services 10,091 338 10,429
Office expenses 9,462 157 9,619
Meals and entertainment 5,238 - 5,238
Printing 5,117 - 5,117
Consulting 4,478 - 4,478
Communications 3,965 - 3,965
Travel 2,358 - 2,358
Professional services 1,229 5,213 6,442
--------- --------- ---------
Total operating expenses 292,796 21,280 314,076
------- -------- -------
Net loss $ (292,796) (21,280) (314,076)
======= ======== =======
See accompanying notes to financial statements.
9
MAXX MOTORSPORTS, LLC
(A Development Stage Company)
Statements of Members' Capital Deficiency
Years Ended December 31, 2000 and 1999, and
From Inception (November 12, 1999) to December 31, 2000
Deficit
Accumulated Total
during the Members'
Membership Development Capital
Units Stage Deficiency
-------------- --------- --------
Balances at November 12, 1999 - $ - $ -
Membership units issued 1,000,000 - -
Net loss - (21,280) (21,280)
--------- -------- --------
Balances at December 31, 1999 1,000,000 (21,280) (21,280)
Membership units issued 111,111 - -
Net loss - (292,796) (292,796)
--------- ------- -------
Balances at December 31, 2000 1,111,111 $(314,076) $(314,076)
========= ======= =======
See accompanying notes to financial statements.
10
MAXX MOTORSPORTS, LLC
(A Development Stage Company)
Statements of Cash Flows
Years Ended December 31, 2000 and 1999, and
From Inception (November 12, 1999) to December 31, 2000
From Inception
Year Ended Year Ended (November 12, 1999)
December 31, December 31, through
2000 1999 December 31, 2000
------------------- ------------------- -----------------
Increase in Cash
Cash flows from operating activities - cash
paid to suppliers and employees $(292,278) (16,067) (308,345)
------- -------- -------
Cash flows from investing activities:
Purchase of equipment (1,680) (2,500) (4,180)
Purchase of trademarks (1,718) - (1,718)
--------- ------------- ---------
Net cash used by investing activities (3,398) (2,500) (5,898)
--------- --------- ---------
Cash flows from financing activities:
Advances from members 297,995 20,000 317,995
Repayments of advances from members (1,000) - (1,000)
--------- ------------- ---------
Net cash provided by financing
activities 296,995 20,000 316,995
------- -------- -------
Net increase in cash 1,319 1,433 2,752
Cash, beginning of period 1,433 - -
--------- ------------- -------------
Cash, end of period $ 2,752 1,433 2,752
========= ========= =========
See accompanying notes to financial statements.
11
MAXX MOTORSPORTS, LLC
(A Development Stage Company)
Statements of Cash Flows, Continued
Years Ended December 31, 2000 and 1999, and
From Inception (November 12, 1999) to December 31, 2000
From Inception
Year Ended Year Ended (November 12, 1999)
December 31, December 31, through
2000 1999 December 31, 2000
------------------- ------------------- -----------------
Reconciliation of Change in Net Loss
to Net Cash Used by Operating
Activities
Net loss $(292,796) (21,280) (314,076)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation and amortization 780 - 780
Increase in receivables (1,800) - (1,800)
Increase (decrease) in accounts payable (2,000) 5,213 3,213
Increase in accrued expenses 3,538 - 3,538
----------- ----------- ----------
Net cash used by operating
activities $ (292,278) (16,067) (308,345)
========== ========= =======
See accompanying notes to financial statements.
12
MAXX MOTORSPORTS, LLC
(A Development Stage Company)
Notes to Financial Statements
(1) Summary of Significant Accounting Policies
(a) Description of Business
Maxx Motorsports, LLC (the Company), a development stage company,
was formed on November 12, 1999 under the laws of the State of
South Carolina as UnionSports, LLC, a limited liability company to
be in existence for fifty years. On March 23, 2000, UnionSports
LLC amended its Articles of Organization to change its name to
Maxx Motorsports, LLC.
The purpose of the Company is to create, develop, manage and
operate an auto racing league. The league is to consist of
multi-car teams, strategically positioned in major North American
television markets located near major motorsport venues.
(b) Management Estimates
The process of preparing financial statements in conformity with
generally accepted accounting principles requires the use of
estimates and assumptions regarding certain types of assets,
liabilities, revenues and expenses. Such estimates primarily
relate to unsettled transactions and events as of the date of the
financial statements. Accordingly, upon settlement, actual results
could differ from those estimated amounts.
(c) Cash and Cash Equivalents
The Company considers all cash on hand, cash in banks and liquid
investments with original maturities of three months or less to be
cash and cash equivalents.
(d) Property and Equipment
Depreciation of property and equipment is provided using the
straight-line method over the estimated useful lives of the
related assets. Expenditures for repairs and maintenance are
expensed as incurred, whereas major renewals and betterments that
extend the useful lives of property and equipment are capitalized.
(e) Income Taxes
The Company is a limited liability company treated as a
partnership for income tax reporting purposes, as such, it is not
subject to income tax. Accordingly, no provision for income taxes
is provided in the financial statements. The income tax liability
of the individual members is not accrued on the books of the
Company.
13
MAXX MOTORSPORTS, LLC
(A Development Stage Company)
Notes to Financial Statements, Continued
(2) Advances from Members
During 1999 and 2000, two members of the Company made net cash advances
totaling $316,995 at various dates during the years.
(3) Uncertainties
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. The Company has been in the
development stage since inception (November 12, 1999) and has not
established sources of revenues sufficient to fund the development of
business and pay operating expenses, resulting in a net loss of $292,796
for the year ended December 31, 2000 and a net loss of $314,076 from
inception (November 12, 1999) through December 31, 2000. At December 31,
2000, current liabilities exceed current assets by $319,194 and total
liabilities exceed total assets by $314,076. Management intends to obtain
the necessary development and operating capital through stock sales and
the establishment, ownership, operation and sanctioning of a stock car
racing league designed to provide highly desirable content for television
and tracks, while expanding the existing base of stock car fans. Revenues
for the racing league will be derived through the sales of
city/state-based teams. Team owners will own and operate local race teams
and will also have the opportunity to own shares in the parent company.
The racing league also plans to generate revenues on an annual basis
through event ticket sales, corporate sponsorships, television and other
multimedia contracts, merchandise sales, licensing/royalty fees, team
dues and sales of expansion teams. The racing league's initial start-up
phase is to be funded through private placement stock sales.
The ability of the Company to continue as a going concern during the next
year depends on the Company's success in executing these plans. The
financial statements do not include any adjustments that might be
necessary if the Company is unable to continue as a going concern.
14
MAXX MOTORSPORTS, LLC
(A Development Stage Company)
Notes to Financial Statements, Continued
(4) Subsequent Events
On February 15, 2001, the members of Maxx Motorsports, LLC filed Articles
of Incorporation to form Maxx Enterprises, Inc. under the laws of the
State of South Carolina, with 100,000 shares of no par, common stock
authorized and the members of Maxx Motorsports, LLC terminated the
Articles of Organization of the limited liability company. On March 15,
2001, Maxx Enterprises, Inc. amended its Articles of Incorporation to
change the name of the corporation to Maxx Motorsports, Inc. With this
termination, the tangible and intangible assets and liabilities of Maxx
Motorsports, LLC were transferred by the members to Maxx Motorsports,
Inc. in exchange for shares of Maxx Motorsports, Inc. common stock.
On April 1, 2001, Maxx Motorsports, Inc. entered into subscription
agreements with the founding shareholders and other employees and
individuals for shares of common stock. In these agreements, the number
of common stock shares for the founding shareholders were reduced to
reflect the number of common stock shares issued to the other employees
and individuals. The shares issued to the founding shareholders in these
agreements were issued in exchange for their respective ownership
interest of the limited liability company transferred to Maxx
Motorsports, Inc. The shares issued to other employees and individuals in
these agreements were issued in exchange for their respective services
performed for Maxx Motorsports, Inc. in 2001.
On May 15, 2001, the shareholders of Maxx Motorsports, Inc. entered into
an agreement with Logisoft Corp. (Logisoft), a public company. In this
agreement, Logisoft issued 7,750,000 shares of its $.0001 par value,
common stock to the shareholders of Maxx Motorsports, Inc. in exchange
for their 10,000 shares of common stock, which represented 100% of the
issued and outstanding common stock of Maxx Motorsports, Inc. These
Logisoft shares are "restricted securities" and may be sold only in
compliance with Rule 144 of Regulation D of the Securities Act of 1933,
as amended.
As part of this agreement with Logisoft, Team Racing Auto Circuit, LLC
(TRAC), was formed by Maxx Motorsports, Inc. under the laws of the State
of Delaware. TRAC will incorporate the use of Aerostock, fuel-injection
engines and other innovative competition standards to increase parity
among the teams without diminishing the entertainment value.
15
MAXX MOTORSPORTS, LLC
(A Development Stage Company)
Notes to Financial Statements, Continued
(4) Subsequent Events, Continued
As part of the agreement with Logisoft, Logisoft settled debts of Maxx
Motorsports, Inc. The debts were owed to a group of creditors, some of
which were existing shareholders of Maxx Motorsports, Inc. Logisoft
issued 3,300,000 shares of Logisoft's $.0001 par value, common stock in
exchange for $450,000 in Maxx Motorsports, Inc. liabilities and other
obligations to third parties that were instrumental to the transaction.
These Logisoft shares are "restricted securities."
In May 2001, Logisoft changed its name to Team Sports Entertainment, Inc.
16
EXHIBIT 99.2
TEAM SPORTS ENTERTAINMENT, INC.
PRO FORMA COMBINED BALANCE SHEET AS OF MARCH 31, 2001
(Unaudited)
Historical Pro Forma
March 31, March 31,
2001 No. Debit Credit 2001
---- --- ----- ------ ----
ASSETS
Current assets:
Cash $ 365,903 2 7,244,250 $ 7,488,194
3 121,959
Other current assets 393,719 393,719
Current assets of discontinued operations 898,383 1 898,383 -
-------------------- ------------- ------------- ---------------------
1,658,005 7,244,250 1,020,342 7,881,913
Non-current assets of discontinued
operations 2,528,336 1 2,528,336 -
Other non-current assets 6,920 3 53,017 59,937
Goodwill, net 3 2,831,442 2,831,442
-------------------- ------------- ------------- ---------------------
$ 4,193,261 10,128,709 3,548,678 $10,773,292
==================== ============= ============= =====================
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 25,000 $ 25,000
-------------------- ------------- ------------- ---------------------
Stockholders' equity:
Common stock 3,101 1 1,200 5,904
2 2,898
3 1,105
Additional paid in capital 8,825,418 1 3,425,519 15,402,646
2 7,241,352
3 2,761,395
Note receivable from warrant exercise (350,000) (350,000)
Accumulated deficit (4,310,258) (4,310,258)
-------------------- ------------- ------------- ---------------------
4,168,261 3,426,719 10,006,750 10,748,292
-------------------- ------------- ------------- ---------------------
$ 4,193,261 3,426,719 10,006,750 $10,773,292
==================== ============= ============= =====================
(1) Sale of Former Subsidiaries for 12,000,000 shares of the Company's common
stock, which was retired.
(2) Sale of 28,977,000 shares of the Company's common stock for cash.
(3) Acquisition of Maxx Motorsports, Inc. and subsidiary, including retirement of debt
and transaction costs for 11,050,000 shares of the common stock of the Company.
17
EXHIBIT 99.3
TEAM SPORTS ENTERTAINMENT, INC.
PRO FORMA COMBINED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2000
(Unaudited)
Team Sports Maxx
Historical Historical No. Adjust Pro Forma
----------- ---------- -- ------ ---------
Revenues $ 173,621 $ - $173,621
Cost of sales 77,919 77,919
------------------ --------------- ---------------
95,702 - 95,702
Selling, general and administrative 295,370 292,796 1 168,556 756,722
------------------ --------------- ------------------- ---------------
Loss from operations (199,668) (292,796) (168,556) (661,020)
------------------ --------------- ------------------- ---------------
Other income 21,411 - - 21,411
------------------ --------------- ------------------- ---------------
Net loss before income taxes (178,257) (292,796) (168,556) (639609)
Income taxes 12,459 12,459
------------------ --------------- ------------------- ---------------
Net loss from continuing operations $(190,716) $ (292,796) $(168,556) $ (652,068)
================== =============== =================== ===============
Net loss per common share, basic and diluted
Continuing operations (0.01) (0.01)
=================== ===============
Weighted average shares outstanding,
basic and diluted 26,873,284 28,027,000 54,900,284
=================== =================== ===============
(1) Amortization of goodwill over fifteen years.
18
EXHIBIT 99.4
TEAM SPORTS ENTERTAINMENT, INC.
PRO FORMA COMBINED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2001
(Unaudited)
Team Sports Maxx
Historical Historical No. Adjust Pro Forma
---------- ---------- -- ------ ---------
Revenues $ 20,365 $ - $ 20,365
Cost of sales 6,440 6,440
------------------- -------------- -----------------
13,925 - 13,925
Selling, general and administrative 107,713 33,509 1 42,139 183,361
------------------- -------------- ------------------ -----------------
Loss from operations (93,788) (33,509) (42,139) (169,436)
------------------- -------------- ------------------ -----------------
Other income 78,889 - - 78,889
------------------- -------------- ------------------ -----------------
Net loss before income taxes (14,899) (33,509) (42,139) (90,547)
Income taxes - - -
------------------- -------------- ------------------ -----------------
Net loss from continuing operations $ (14,899) $ (33,509) (42,139) $ (90,547)
=================== ============== ================== =================
Net loss per common share, basic and diluted
Continuing operations (0.00) (0.00)
=================== =================
Weighted average shares outstanding,
basic and diluted 30,967,942 28,027,000 58,994,942
=================== ================= =================
(1) Amortization of goodwill over fifteen years.
Operations of Maxx were substantially inactive during the three months ended
March 31, 2001, pending completion of funding. Accordingly, this pro forma is
not indicative of expected future performance, which will involve substantially
more cost during the development stage.
19