[X] QUARTERLY REPORT UNDER SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
[ ] TRANSITION REPORT UNDER SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the
preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files).
Yes [X] No [ ]
Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the definitions of
“large accelerated filer,” “accelerated filer” and “smaller reporting company”
in Rule 12b-2 of the Exchange Act.
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
Yes [X] No [ ]
The number of shares of
Common Stock, $0.001 par value, outstanding on November 1, 2017 was 5,658,123
shares.
PART 1 – FINANCIAL
INFORMATION
ITEM 1 FINANCIAL STATEMENTS
ALL-AMERICAN SPORTPARK, INC.
CONDENSED BALANCE SHEETS
|
|
September 30,
|
|
|
December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
(Unaudited)
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Prepaid expenses and other current assets
|
$
|
32,076
|
|
$
|
38
|
|
Total current assets
|
|
32,076
|
|
|
38
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
97
|
|
|
306
|
|
|
|
|
|
|
|
|
Total Assets
|
$
|
32,173
|
|
$
|
344
|
|
|
|
|
|
|
|
|
Liabilities and Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
$
|
30,435
|
|
$
|
45,129
|
|
Due to related party
|
|
136,841
|
|
|
61,824
|
|
Total current liabilities
|
|
167,276
|
|
|
106,953
|
|
|
|
|
|
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
Stockholder’s deficit:
|
|
|
|
|
|
|
Preferred stock, Series "B", $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively
|
|
-
|
|
|
-
|
|
Common stock, $0.001 par value, 50,000,000 shares authorized, 5,658,123 and 5,624,123 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively
|
|
5,658
|
|
|
5,624
|
|
Additional paid-in capital
|
|
28,719,129
|
|
|
28,685,503
|
|
Accumulated deficit
|
|
(28,859,890
|
)
|
|
(28,797,736
|
)
|
Total stockholders' deficit
|
|
(135,103
|
)
|
|
(106,609
|
)
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders' Deficit
|
$
|
32,173
|
|
$
|
344
|
|
The accompanying notes are an integral part of these
unaudited condensed financial statements.
1
ALL-AMERICAN SPORTPARK, INC.
CONDENSED STATEMENTS OF OPERATIONS
(
Unaudited)
|
|
For the Three Months Ending
September 30,
|
|
|
For the Nine Months Ending
September 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses
|
$
|
19,930
|
|
$
|
81,214
|
|
$
|
61,945
|
|
$
|
254,864
|
|
Depreciation and amortization
|
|
42
|
|
|
206
|
|
|
209
|
|
|
889
|
|
Total expenses
|
|
19,972
|
|
|
81,420
|
|
|
62,154
|
|
|
255,753
|
|
Net operating loss
|
|
(19,972
|
)
|
|
(81,420
|
)
|
|
(62,154
|
)
|
|
(255,753
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
-
|
|
|
(68,283
|
)
|
|
-
|
|
|
(273,132
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other expense
|
|
-
|
|
|
(68,283
|
)
|
|
-
|
|
|
(273,132
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss before provision for income tax
|
|
(19,972
|
)
|
|
(149,703
|
)
|
|
(62,154
|
)
|
|
(528,885
|
)
|
Provision for income tax expense
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from continued operations
|
|
(19,972
|
)
|
|
(149,703
|
)
|
|
(62,154
|
)
|
|
(528,885
|
)
|
Net (loss) income from discontinued operations
|
|
-
|
|
|
(63,080
|
)
|
|
-
|
|
|
71,454
|
|
Net Loss
|
$
|
(19,972
|
)
|
$
|
(212,783
|
)
|
$
|
(62,154
|
)
|
$
|
(457,431
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income attributable to non-controlling interest
|
|
-
|
|
|
(30,909
|
)
|
|
-
|
|
|
35,012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to All-American SportPark, Inc.
|
$
|
(19,972
|
)
|
$
|
(181,874
|
)
|
$
|
(62,154
|
)
|
$
|
(492,443
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted income (loss) per weighted average common share
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing Operations
|
$
|
(0.00
|
)
|
$
|
(0.03
|
)
|
$
|
(0.01
|
)
|
$
|
(0.11
|
)
|
Discontinued Operations
|
$
|
(0.00
|
)
|
$
|
(0.01
|
)
|
$
|
0.00
|
|
$
|
0.02
|
|
Total basic and diluted loss per weighted average common share
|
$
|
(0.00
|
)
|
$
|
(0.04
|
)
|
$
|
(0.01
|
)
|
$
|
(0.10
|
)
|
Weighted average number of common shares outstanding - basic and fully diluted
|
|
5,641,310
|
|
|
4,624,123
|
|
|
5,629,873
|
|
|
4,624,123
|
|
The accompanying notes are an integral part of these unaudited
condensed financial statements.
2
ALL-AMERICAN SPORTPARK, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
For the Nine Months Ended
|
|
|
|
September 30,
|
|
|
|
2017
|
|
|
2016
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from continued operations
|
$
|
(62,154
|
)
|
$
|
(528,885
|
)
|
|
|
|
|
|
|
|
Adjustment to reconcile net loss to net cash used in operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
209
|
|
|
889
|
|
Share-based compensation
|
|
1,782
|
|
|
944
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
Prepaid expenses and other current assets
|
|
(160
|
)
|
|
(181
|
)
|
Accounts payable and accrued expenses
|
|
(2,194
|
)
|
|
8,620
|
|
Deferred compensation
|
|
(12,500
|
)
|
|
45,000
|
|
Accrued interest related parties
|
|
-
|
|
|
227,111
|
|
Net cash used in operating activities
|
|
(75,017
|
)
|
|
(246,502
|
)
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
Proceeds from related parties
|
|
75,017
|
|
|
245,502
|
|
Net cash provided by financing activites
|
|
75,017
|
|
|
245,502
|
|
|
|
|
|
|
|
|
Cash flows from continued operations
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
Cash flow from discontinued operations
|
|
-
|
|
|
|
|
Cash flows operating activities
|
|
-
|
|
|
(64,679
|
)
|
Cash flows financing activities
|
|
|
|
|
64,679
|
|
Net cash provided by discontinued operations
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
Net decrease in cash
|
|
-
|
|
|
-
|
|
Cash, beginning of period
|
|
-
|
|
|
-
|
|
Cash, end of period
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
Supplemental Disclosures:
|
|
|
|
|
|
|
Cash paid for interest
|
$
|
-
|
|
$
|
-
|
|
Cash paid for taxes
|
$
|
-
|
|
$
|
-
|
|
Non cash financing and investing activities:
|
|
|
|
|
|
|
Shares issued for services
|
$
|
33,660
|
|
$
|
-
|
|
The accompanying notes are an integral part of these
unaudited condensed financial statements.
3
ALL-AMERICAN SPORTPARK, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Organizational Structure and Basis of Presentation
a. ORGANIZATION
On October 18, 2016, All-American Sportpark, LLC (“AASP” or the “Company”)
completed the closing of the Transfer
Agreement for the sale and transfer of the Company’s 51% interest in All
American Golf Center, Inc. (“AAGC”), which constituted substantially all of the
Company’s assets. As a result of the closing of the Transfer Agreement, the
Company now has no or nominal operations and no or nominal assets and is
therefore considered to be a “Shell Company” as that term is defined in Rule
12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”).
b. BASIS OF PRESENTATION
The unaudited condensed interim financial statements included herein,
presented in accordance with United States generally accepted accounting
principles and stated in US dollars, have been prepared by All-American
SportPark, Inc. (the “Company”), without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although the Company believes
that the disclosures are adequate to make the information presented not
misleading.
These statements reflect all adjustments, consisting of normal recurring
adjustments, which, in the opinion of management, are necessary for fair
presentation of the information contained therein. It is suggested that these unaudited
condensed interim financial statements be read in conjunction with the
financial statements of the Company for the year ended December 31, 2016 and
notes thereto included in the Company's Form 10-K. The Company follows the
same accounting policies in the preparation of interim reports.
Results of operations for interim periods may not be indicative of annual
results.
On June 10, 2016, the Company
entered into a Transfer Agreement for the sale and transfer of the Company’s
51% interest in All American Golf Center, Inc. (“AAGC”), which constituted
substantially all of the Company’s assets. On October 18, 2016, the
Company completed the closing of the Transfer Agreement pursuant to which the
Company transferred the 51% interest in AAGC to Ronald Boreta and John Boreta
(the “Boretas”), and also issued to the Boretas 1,000,000 shares of the
Company’s common stock, in exchange for the cancellation of promissory notes
held by the Boretas and accrued interest of $8,864,255.
In connection with the closing
of the Transfer Agreement, AAGC assumed the obligation of the Company to pay
Ronald Boreta for deferred salary of $342,500. In addition, AAGC cancelled
$4,267,802 in advances previously made by it to the Company to fund its
operations.
4
Also in connection with the
closing of the Transfer Agreement, entities controlled by the Boretas cancelled
$1,286,702 owed to them by the Company. In addition, the Company cancelled
$24,523 of amounts due from entities controlled by the Boretas.
Also, as a result of the
Transfer Agreement, on October 18, 2016, the Company derecognized the assets
and liabilities of AAGC.
The sale and transfer of the Company’s
51% interest in AAGC to the controlling shareholders of the Company is a common
control transaction and recorded at book value. Any difference between the
proceeds received by the Company and the book value of assets and liabilities
of AAGC, cancellation of promissory notes and accrued interest, assumption of
deferred salary, cancellation of amounts due to and due from entities
controlled by the Boretas is recognized as a capital transaction with no gain
or loss recorded.
The assets and liabilities transferred and debts cancelled
and assumed are summarized below:
|
|
AASP
|
|
|
AAGC
|
|
|
Total
|
|
Accounts receivable
|
$
|
-
|
|
$
|
23,080
|
|
$
|
23,080
|
|
Prepaid expenses and other current
|
|
-
|
|
|
32,992
|
|
|
32,992
|
|
Property and equipment, net
|
|
-
|
|
|
443,775
|
|
|
443,775
|
|
Cash in excess of available funds
|
|
-
|
|
|
(34,405
|
)
|
|
(34,405
|
)
|
Accounts payable and accrued expenses
|
|
|
|
|
(309,979
|
)
|
|
(309,979
|
)
|
Accounts payable and accrued expenses – related party
|
|
(342,500)
|
|
|
(214,063
|
)
|
|
(556,563
|
)
|
Deferred revenue
|
|
-
|
|
|
(171,345
|
)
|
|
(171,345
|
)
|
Notes payable – related party
|
|
(3,300,149
|
)
|
|
(1,034,077
|
)
|
|
(4,334,226
|
)
|
Due to related party
|
|
(1,262,179
|
)
|
|
(554,022
|
)
|
|
(1,816,201
|
)
|
Capital lease obligation
|
|
-
|
|
|
(41,381
|
)
|
|
(41,381
|
)
|
Accrued interest payable – related party
|
|
(5,600,502
|
)
|
|
(946,513
|
)
|
|
(6,547,015
|
)
|
Intercompany account
|
|
(4,267,802
|
)
|
|
4,267,802
|
|
|
-
|
|
Deferred rent liability
|
|
-
|
|
|
(525,778
|
)
|
|
(525,778
|
)
|
Issuance of 1,000,000 shares of common stock
|
|
|
|
|
|
|
|
|
|
of the Company
|
|
1,000
|
|
|
-
|
|
|
1,000
|
|
Non-controlling interest
|
|
-
|
|
|
(441,187
|
)
|
|
(441,187
|
)
|
Increase in additional paid-in capital
|
|
14,772,132
|
|
|
(494,899
|
)
|
|
14,277,233
|
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
As a result of the closing of
the Transfer Agreement, the Company now has no or nominal operations and no or
nominal assets and is therefore considered to be a “Shell Company” as that term
is defined in Rule 12b-2 of the Exchange Act.
c. BUSINESS
ACTIVITIES
At this time, the Company’s purpose is to seek, investigate and, if such
investigation warrants, acquire an interest in business opportunities presented
to the Company by persons or firms who or which desire to seek the perceived
advantages of a corporation whose securities are registered pursuant to the
Exchange Act. The Company will not restrict our search to any specific
business or geographical location.
5
d. RECLASSIFICATIONS
Certain reclassifications have been made in prior periods’ financial
statements to conform to classifications used in the current period.
Note 2
.
Summary of Significant Accounting Policies
a. USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, and the disclosure of contingent assets and liabilities at the date
of the financial statements, and the reported amount of revenues and expenses
during the reporting period. Significant estimates and assumptions made by
management include, but are not limited to, the determination of the provision
for income taxes, and valuation of fixed assets. The Company bases the
estimates on historical experience and on various other assumptions that are
believed to be reasonable. Actual results could differ from those estimates.
b. CASH AND CASH EQUIVALENTS
All highly liquid investments with original maturities of three months or
less are classified as cash and cash equivalents. The fair value of cash and
cash equivalents approximates the amounts shown on the financial statements.
Cash and cash equivalents consist of unrestricted cash in accounts maintained
with major financial institutions.
c. INCOME TAXES
The Company accounts for income taxes under the asset and liability method,
which requires the recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been included in the
financial statements. Under this method, deferred tax assets and liabilities
are determined based on the differences between the financial statements and
tax basis of assets and liabilities using enacted tax rates in effect for the
year in which the differences are expected to reverse. The effect of a change
in tax rates on deferred tax assets and liabilities is recognized in income in
the period that includes the enactment date. The Company records net deferred
tax assets to the extent the Company believes these assets will more likely
than not be realized. In making such determination, the Company considers all
available positive and negative evidence, including future reversals of
existing taxable temporary differences, projected future taxable income, tax
planning strategies and recent financial operations. A valuation allowance is
established against deferred tax assets that do not meet the criteria for
recognition. In the event the Company were to determine that it would be able
to realize deferred income tax assets in the future in excess of their net
recorded amount, the Company would make an adjustment to the valuation
allowance which would reduce the provision for income taxes.
The Company follows the accounting guidance which provides that a tax
benefit from an uncertain tax position may be recognized when it is more likely
than not that the position will be sustained upon examination, including
resolutions of any related appeals or litigation processes, based on the
technical merits. Income tax positions must meet a more-likely-than-not
recognition threshold at the effective date to be recognized initially and in
subsequent periods. Also included is guidance on measurement, de-recognition,
classification, interest and penalties, accounting in interim periods,
disclosure and transition.
6
d. STOCK-BASED COMPENSATION
The Company accounts for all compensation related to stock, options or
warrants in accordance with ASC topic 718 “Compensation- stock compensation”
which requires companies to recognize in the statement of operations using a
fair value based method whereby compensation cost is measured at the grant date
based on the value of the award and is recognized over the service period,
which is usually the vesting period. The Company uses the Black-Scholes pricing
model to calculate the fair value of options and warrants issued to both
employees and non-employees. Stock issued for compensation is valued using the
market price of the stock on the date of the related agreement.
e. ADVERTISING
The Company expenses advertising costs as incurred. The company incurred no
advertising expenses for the three and nine months ended September 30, 2017 and
2016, respectively.
f. REVENUES
The Company earned no revenues for the three and nine months ended September
30, 2017 and 2016, respectively.
g. COST OF REVENUES
The Company incurred no costs of revenues for the three and nine months
ended September 30, 2017 and 2016, respectively
h. GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses consisted principally of management,
accounting and other administrative employee payroll and benefits, utilities,
and other expenses (
e.g.
, office supplies, marketing/advertising, and
professional fees, etc.).
i. IMPAIRMENT OF LONG-LIVED ASSETS
Long-lived assets, including property and equipment, are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of the long-lived asset may not be recoverable. If the long-lived
asset or group of assets is considered to be impaired, an impairment charge is
recognized for the amount by which the carrying amount of the asset or group of
assets exceeds its fair value. Long-lived assets to be disposed of are reported
at the lower of the carrying amount or fair value less cost to sell.
7
j. FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company adopted the ASC-820 “Fair Value Measurement” related to fair
value measurement at inception. The standard defines fair value, establishes a
framework for measuring fair value and expands disclosure of fair value
measurements. The standard applies under other accounting pronouncements that
require or permit fair value measurements and, accordingly, does not require
any new fair value measurements. The standard clarifies that fair value is an
exit price, representing the amount that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market
participants. As such, fair value is a market-based measurement that should be
determined based on assumptions that market participants would use in pricing
an asset or liability. The recorded values of long-term debt approximate their
fair values, as interest approximates market rates. As a basis for considering
such assumptions, the standard established a three-tier fair value hierarchy,
which prioritizes the inputs used in measuring fair value as follows:
-
Level 1: Observable inputs such as quoted prices in active
markets;
-
Level 2: Inputs, other than quoted prices in active
markets, that are observable either directly or indirectly; and
-
Level 3: Unobservable inputs in which there is little or
no market data, which require the reporting entity to develop its own
assumptions.
At each of September 30, 2017 and December 31, 2016, the carrying amount of
cash, notes payable, and accounts payable and accrued liabilities approximates
fair value because of the short maturity of these instruments.
k. BASIS OF PRESENTATION
The financial statements of the Company have
been prepared in accordance with the accounting principles generally accepted
in the United States of America (“GAAP”).
l. EARNINGS (LOSS) PER SHARE
Basic earnings (loss) per share excludes any dilutive effects of options,
warrants, and convertible securities. Basic earnings per share is computed
using the weighted average number of shares of common stock and common stock
equivalent shares outstanding during the period. Common stock equivalent shares
are excluded from the computation if their effect is antidilutive. The Company
did not have any stock equivalent shares for the periods ended September 30,
2017 and December 31, 2016.
Loss per share is computed by dividing reported net loss by the weighted
average number of common shares outstanding during the period. The
weighted-average number of common shares used in the calculation of basic loss per share was 5,629,837 and 4,624,123 for the nine
months ended September 30, 2017 and 2016, respectively.
m. RECENT ACCOUNTING POLICIES
The Company believes there was no new accounting
guidance adopted but not yet effective that either has not already been
disclosed in prior reporting periods or is relevant to the readers of the
Company’s financial statements.
8
The Company continually assesses any new
accounting pronouncements to determine their applicability to the Company.
Where it is determined that a new accounting pronouncement affects the
Company’s financial reporting, the Company undertakes a study to determine the
consequence of the change to its financial statements and assures that there
are proper controls in place to ascertain that the Company’s financials
properly reflect the change.
Note 3 – Going concern
As of September 30, 2017, we had an accumulated deficit of $28,859,890.
In addition, the Company’s current liabilities exceed its current assets by $135,200
as of September 30, 2017.
The Company’s management believes that its operations may not be sufficient
to fund operating cash needs and debt service requirements over at least the
next 12 months. As described in Note 1, the Company’s Board of Directors
determined that it was in the best interests of the Company to enter into the
Transfer Agreement with the Boretas. The closing of that agreement eliminated
nearly all of the debt of the Company. However, the Company has no significant
assets and continues to depend on affiliates to provide funds to pay its
ongoing expenses. These factors raise substantial doubt about the company’s
ability to continue as a going concern within one year after the date that the
financials are issued.
The financial statements do not include any adjustments relating
to the recoverability and classification of asset carrying amounts or the
amount and classification of liabilities that might result should the Company
be unable to continue as a going concern.
Note 4 – Related party transactions
Due to related parties
Prior to October 18, 2016, the Company’s employees provided
administrative/accounting support for three golf retail stores named Saint
Andrews Golf Shop ("SAGS"), Las Vegas Golf and Tennis ("Boca
Store") and Las Vegas Golf and Tennis Superstore (“Westside 15 Store”),
owned by Ronald Boreta, the Company's President, and his brother, John Boreta,
a Director of the Company. The SAGS store is the retail tenant in the TMGE.
AAGC has advanced funds to pay certain expenses of the Company.
At September 30, 2017 and December 31, 2016, the total amounts
owed to AAGC were $136,841 and $61,824, respectively.
Note 5 – Commitments
The Company had no commitments as of September 30, 2017.
9
Note 6 – Stockholders' deficit
PREFERRED STOCK
Preferred stock, Series "B", $0.001 par value, 10,000,000 shares
authorized, no shares issued and outstanding as of September 30, 2017 and
December 31, 2016. The Company’s Board of Directors shall determine the rights,
preferences, privileges and restrictions of the preferred stock, including
dividends rights, conversion rights, voting rights, terms of redemption,
liquidation preferences, sinking fund terms and the number of shares
constituting any series or the designation of any series.
COMMON STOCK
Common stock, $0.001 par value, 50,000,000 shares authorized, 5,658,123 and 5,624,123
shares issued and outstanding as of September 30, 2017 and December 31, 2016,
respectively.
SHARE-BASED COMPENSATION
On August 15, 2017, the Company granted 34,000 shares of restricted common
stock to one employee for services. The
restricted common stock granted to the employee was valued at $33,660 and will
vest as follows: 33% of the shares on January 1, 2018, an additional 33% of the
shares on January 1, 2019, and the remaining 34% of the shares on January 1,
2020. The share-based compensation will be amortized ratably over the
three year vesting period. The Company has recorded prepaid stock-based
compensation of $31,878 as of September 30, 2017. The Company recorded
share-based compensation of $0 and $944 for three months ended September 30,
2017 and 2016, respectively. The Company recorded share-based compensation of
$1,782 and $944 for nine months ended September 30, 2017 and 2016,
respectively.
Note 7 – Subsequent Events
Management has evaluated all subsequent events through the
date of the filing and determined that there were none.
10
ITEM 2. MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Forward-Looking Statements
This document contains “forward-looking statements.” All
statements other than statements of historical fact are “forward-looking
statements” for purposes of federal and state securities laws, including, but
not limited to, any projections of earnings, revenue or other financial items;
any statements of the plans, strategies and objections of management for future
operations; any statements concerning proposed new services or developments;
any statements regarding future economic conditions or performance; any
statements or belief; and any statements of assumptions underlying any of the
foregoing.
Forward-looking statements may include the words “may,”
“could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate”
or other similar words. These forward-looking statements present our estimates
and assumptions only as of the date of this report. Accordingly, readers are
cautioned not to place undue reliance on forward-looking statements, which
speak only as of the dates on which they are made. We do not undertake to
update forward-looking statements to reflect the impact of circumstances or
events that arise after the dates they are made. You should, however, consult
further disclosures we make in future filings of our Annual Report on Form
10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Although we believe that the expectations reflected in any
of our forward-looking statements are reasonable, actual results could differ
materially from those projected or assumed in any of our forward-looking
statements. Our future financial condition and results of operations, as well
as any forward-looking statements, are subject to change and inherent risks and
uncertainties. The factors affecting these risks and uncertainties include, but
are not limited to, the risks and uncertainties detailed in this report.
11
Overview
of Current Operations
On October 18, 2016 the Company completed the closing of the Transfer
Agreement for the sale and transfer of the Company’s 51% interest in All
American Golf Center, Inc. (“AAGC”), which constituted substantially all of the
Company’s assets. As a result of the closing of the Transfer Agreement, the
Company now has no or nominal operations and no or nominal assets and is
therefore considered to be a “Shell Company” as that term is defined in Rule
12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
At this time, our purpose is to seek, investigate and, if such investigation
warrants, acquire an interest in business opportunities presented to us by
persons or firms who or which desire to seek the perceived advantages of a
corporation whose securities are registered pursuant to the Exchange Act. We
will not restrict our search to any specific business or geographical location.
This discussion of our proposed business is purposefully general and is not
meant to be restrictive of our discretion to search for and enter into
potential business opportunities.
Management anticipates that we may be able to participate in only one
potential business venture because we have nominal assets and limited financial
resources. This lack of diversification should be considered a substantial risk
to our shareholders because it will not permit us to offset potential losses
from one venture against gains from another.
We may seek a business opportunity with entities that have recently
commenced operations, or that wish to utilize the public marketplace in order
to raise additional capital in order to expand into new products or markets, to
develop a new product or service, or for other corporate purposes. We may
acquire assets and establish wholly-owned subsidiaries in various businesses or
acquire existing businesses as subsidiaries.
The Company has not entered into any definitive or binding agreements and
there are no assurances that such transactions will occur. Such a combination
would normally take the form of a merger, stock-for-stock exchange or
stock-for-assets exchange. The Company may determine to structure any business
combination to be within the definition of a tax-free reorganization under
Section 351 or Section 368 of the Internal Revenue Code of 1986, as amended.
It is anticipated that any securities issued in any such business
combination would be issued in reliance upon an exemption from registration
under applicable federal and state securities laws. In some circumstances,
however, as a negotiated element of its transaction, the Company may agree to
register all or a part of such securities immediately after the transaction is
consummated or at specified times thereafter. If such registration occurs, it
will be undertaken by the surviving entity after the Company has entered into
an agreement for a business combination or has consummated a business
combination. The issuance of additional securities and their potential sale
into any trading market in the Company's securities may depress the market
value of the Company's securities in the future.
12
Results of Operations for the three months ended September 30, 2017 and 2016
compared.
INCOME:
Revenue
There were no revenues from the continuing operations for
the three months ended September 30, 2017 and 2016.
Cost of Sales/Gross Profit Percentage
of Sales
There were no cost of sales from
the continuing operations for the three months ended September 30, 2017 and
2016.
EXPENSES:
General
and Administrative Expenses
General and administrative expenses for the three months
ended September 30, 2017 were $19,930, a decrease of $61,284 or 75.5%, from $81,214
for the three months ended September 30, 2016. Expenses were lower in 2017 due
to the elimination of payroll as a result of the closing of the Transfer Agreement.
Depreciation and amortization expenses for the three months
ended September 30, 2017 were $42 a decrease of $164, or 79.6% from $206 for
the three months ended September 30, 2016.
Interest Expenses
Interest expenses decreased from $68,283 for the three
months ended September 30, 2016 to $0 in 2017. The decrease was due to the
elimination of debt and accrued interest as a result of the closing of the
Transfer Agreement.
Net Loss from Operations
We had a net loss from operations of $19,972 for the three
months ended September 30, 2017 as compared to net loss from operations of $149,703
for the three months ended September 30, 2016, a decrease of $129,731 or 87.0%.
Discontinued operations provided a loss of $0 and $63,080 for the three months
ended September 30, 2017 and 2016, respectively.
Results of Operations for the nine months ended September 30, 2017 and 2016
compared.
INCOME:
Revenue
There were no revenues from the continuing operations for
the nine months ended September 30, 2017 and 2016.
13
Cost of Sales/Gross Profit Percentage
of Sales
There were no cost of sales from
the continuing operations for the nine months ended September 30, 2017 and
2016.
EXPENSES:
General
and Administrative Expenses
General and administrative expenses for the nine months
ended September 30, 2017 were $61,945 a decrease of $192,919 or 75.7%, from $254,864
for the nine months ended September 30, 2016. Expenses were lower in 2017 due
to the elimination of payroll as a result of the closing of the Transfer
Agreement.
Depreciation and amortization expenses for the nine months
ended September 30, 2017 were $209, a decrease of $680, or 76.5% from $889 for
the nine months ended September 30, 2016.
Interest Expenses
Interest expenses decreased from $273,132 for the nine
months ended September 30, 2016 to $0 in 2017. The decrease was due to the
elimination of debt and accrued interest as a result of the closing of the
Transfer Agreement.
Net Loss from Operations
We had a net loss from continued operations of $62,154 for the nine months ended September 30, 2017 as compared to net loss from operations of $528,885 for the nine months ended September 30, 2016, a decrease of $466,731 or 88.2%. Discontinued operations provided $0 and $71,454 of income for the nine months ended September 30, 2017 and 2016, respectively.
Liquidity and Capital Resources
The following
table summarizes our current assets, liabilities, and working capital at September
30, 2017 compared to December 31, 2016.
|
September 30,
2017
|
December 31, 2016
|
Increase /
(Decrease)
|
$
|
%
|
|
|
|
|
|
Current
Assets
|
$32,076
|
$38
|
32,038
|
84310.1%
|
Current
Liabilities
|
167,276
|
106,953
|
60,323
|
56.4%
|
Working Capital Deficit
|
$135,200
|
$106,915
|
|
|
14
Going Concern
The Company’s management believes that its operations may not be sufficient
to fund operating cash needs and debt service requirements over at least the
next 12 months. As described in Note 1 to the financial statements, the
Company’s Board of Directors determined that it was in the best interests of
the Company to enter into the Transfer Agreement with the Boretas. The closing
of that agreement eliminated nearly all of the debt of the Company. However,
the Company has no significant assets and continues to depend on affiliates to
provide funds to pay its ongoing expenses. These factors raise substantial
doubt about the Company’s ability to continue as a going concern.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that is
material to investors.
Critical Accounting Policies and Estimates
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, and the disclosure of contingent assets and liabilities at the
date of the financial statements, and the reported amount of revenues and
expenses during the reporting period. Significant estimates and assumptions
made by management include, but are not limited to, the determination of the
provision for income taxes, and valuation of fixed assets. The Company bases
the estimates on historical experience and on various other assumptions that
are believed to be reasonable. Actual results could differ from those
estimates.
Related party transactions:
In accordance with
accounting standards concerning related party transactions, there now are
established requirements for related party disclosures and the policy provides
guidance for the disclosures of transactions between related parties.
Recent Accounting Developments
The
Company believes there are no new accounting standards adopted but not yet
effective that are relevant to the readers of our financial statements.
15
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK.
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures
that are designed to ensure that information required to be disclosed in the
reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules
and forms, and that such information is accumulated and communicated to the
Company’s management, including its Chief Executive Officer and Principal
Financial Officer to allow timely decisions regarding required financial
disclosure.
As of the end of the period covered by this report, the
Company’s management carried out an evaluation, under the supervision of and
with the participation of the Chief Executive Officer and Principal Financial
Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Rules 13a-15 and 15d-15 under the
Exchange Act). Based upon that evaluation, the Company’s Chief Executive
Officer and Principal Financial Officer concluded that our disclosure controls
and procedures were not effective as of the end of the period covered by this
report, to provide reasonable assurance that information required to be
disclosed by the Company in reports that it files or submits under the Exchange
Act is recorded, processed, summarized and reported, completely and accurately,
within the time periods specified in SEC rules and forms.
Changes in Internal Control over Financial Reporting
There were no changes in internal control over financial
reporting that occurred during the quarter ended September 30, 2017 that have materially
affected, or are reasonably likely to affect, the Company’s internal control
over financial reporting.
16