U.S. 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 the quarterly period ended June 30, 2004
Commission File Number: 0-24970
ALL-AMERICAN SPORTPARK, INC.
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Nevada 88-0203976
------------------------------- ---------------------------------
(State of other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
6730 South Las Vegas Boulevard, Las Vegas, Nevada 89119
-----------------------------------------------------------
(Address of principal executive offices including zip code)
(702) 798-7777
---------------------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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___
As of May 12, 2003, 3,400,000 shares of common stock were outstanding.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
ALL-AMERICAN SPORTPARK, INC.
FORM 10-QSB
INDEX
Page Number
PART I: FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets
June 30, 2004 and December 31, 2003 ................ 3
Consolidated Statements of Operations
Three Months Ended June 30, 2004 and 2003............ 4
Consolidated Statements of Operations
Six Months Ended June 30, 2004 and 2003 ............. 5
Consolidated Statements of Cash Flows
Six Months Ended June 30, 2004 and 2003 ............ 6
Notes to Consolidated Financial Statements ......... 7
Item 2. Management's Discussion and Analysis or
Plan of Operation .................................. 9
Item 3. Control and Procedures ............................. 12
PART II: OTHER INFORMATION
Item 1. Legal Proceedings .................................. 12
Item 2. Changes in Securities .............................. 12
Item 3. Defaults Upon Senior Securities .................... 12
Item 4. Submission of Matters to a Vote of Security
Holders ............................................ 12
Item 5. Other Information .................................. 13
Item 6. Exhibits and Reports on Form 8-K ................... 13
SIGNATURES .................................................. 14
2
ALL-AMERICAN SPORTPARK, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2004 AND DECEMBER 31, 2003
ASSETS
2004 2003
----------- -----------
(Unaudited)
Current assets:
Cash $ 16,037 $ 17,521
Accounts receivable 48,515 23,696
Prepaid expenses and other 7,603 16,278
----------- -----------
Total current assets 72,155 57,495
Leasehold improvements and equipment, net 1,009,767 808,112
Due from affiliated stores 137,669 132,375
Due from other related entities 151,352 110,221
Other assets 3,488 3,872
----------- -----------
Total assets $ 1,374,431 $ 1,112,075
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY DEFICIENCY
Current liabilities:
Current portion of long-term debt $ 85,760 $ 66,210
Current portion of notes payable to
affiliates 470,000 500,000
Interest payable to affiliates 249,887 230,983
Accounts payable and accrued expenses 319,353 311,720
----------- -----------
Total current liabilities 1,125,000 1,108,913
Notes payable to affiliate, net of
current portion 3,713,473 3,713,473
Interest payable to affiliate 1,570,394 1,384,720
Due to affiliated stores 416,111 187,966
Due to other related entities 414,321 414,547
Long-term debt, net of current portion 276,619 312,141
Deferred income 1,500
----------- -----------
Total liabilities 7,515,918 7,123,260
----------- -----------
Minority interest in subsidiary 474,304 435,527
----------- -----------
Shareholders' equity deficiency:
Series B Convertible Preferred Stock,
$.001 par value, no shares issued
and outstanding - -
Common Stock, $.001 par value, 10,000,000
shares authorized, 3,400,000 shares
issued and outstanding at June 30, 2004,
and December 31, 2003, respectively 3,400 3,400
Additional paid-in capital 11,462,882 11,462,882
Accumulated deficit (18,082,073) (17,912,994)
----------- -----------
Total shareholders' equity deficiency (6,615,791) (6,446,712)
----------- -----------
Total liabilities and shareholders'
equity deficiency $ 1,374,431 $ 1,112,075
=========== ===========
The accompanying notes are an integral part of these consolidated financial
statements.
3
ALL-AMERICAN SPORTPARK, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2004 AND 2003
(UNAUDITED)
2004 2003
----------- -----------
Revenues $ 665,135 $ 663,811
Cost of revenues 168,064 82,307
----------- -----------
Gross profit 497,071 581,504
----------- -----------
Operating expenses:
Selling, general and administrative 555,636 512,168
Depreciation and amortization 13,648 16,972
----------- -----------
Total operating expenses 569,284 529,140
----------- -----------
Operating income (loss) (72,213) 52,364
Other income (expense):
Interest expense, net (116,063) (117,446)
Other income 5,064 -
----------- -----------
Income (loss) before minority
interest (183,212) (65,082)
Minority interest in (income) loss of
subsidiary (54,213) (3,783)
----------- -----------
Net income (loss) $ (237,425) $ (68,865)
=========== ===========
NET LOSS PER SHARE:
Basic and diluted net loss
per share $ (0.07) $ (0.02)
=========== ===========
The accompanying notes are an integral part of these consolidated financial
statements.
4
ALL-AMERICAN SPORTPARK, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003
(UNAUDITED)
2004 2003
----------- -----------
Revenues $ 1,229,610 $ 1,278,736
Cost of revenues 258,710 167,681
----------- -----------
Gross profit 970,900 1,111,055
----------- -----------
Operating expenses:
Selling, general and administrative 1,004,292 1,143,805
Depreciation and amortization 31,188 33,406
----------- -----------
Total operating expenses 1,035,480 1,177,211
----------- -----------
Operating income (loss) (64,580) (66,156)
Other income (expense):
Interest expense, net (239,515) (239,725)
Other income 173,798 880,000
----------- -----------
Income (loss) before minority
interest (130,297) 574,119
Minority interest in (income) loss of
subsidiary (38,782) (252,757)
----------- ----------
Net income (loss) $ (169,079) $ 321,362
=========== ==========
NET INCOME (LOSS) PER SHARE:
Basic and diluted net income (loss)
per share $ (0.05) $ 0.09
=========== ===========
The accompanying notes are an integral part of these consolidated financial
statements.
5
ALL-AMERICAN SPORTPARK, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003
(UNAUDITED)
2004 2003
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (169,079) $ 321,362
Adjustment to reconcile net income
(loss) to net cash provided by
operating activities:
Minority interest 38,777 252,757
Depreciation and amortization 31,188 33,406
Loss on sale of capital assets 1,000 -
Changes in operating assets and
liabilities:
Increase in accounts receivable (24,816) (9,247)
Decrease (increase)in prepaid expenses
and other 9,059 (8,623)
Increase (decrease) in accounts payable
and accrued expenses 7,633 (319,405)
Increase in interest payable to
affiliated stores and other
related entities 204,579 215,674
Increase (decrease) in deferred income (1,500) (50,680)
----------- -----------
Net cash provided by
operating activities 96,841 435,244
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of capital assets 114,581 -
Purchases of capital assets (348,425) (12,863)
----------- -----------
Net cash used in
investing activities (233,844) (12,863)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in due to affiliated
stores and other related entities 181,483 (110,217)
Proceeds from notes payable to
affiliated stores 114,958 -
Principal payments on notes payable
to affiliated stores (144,958) -
Principal payments on notes payable (15,974) (16,053)
----------- -----------
Net cash provided by (used in)
financing activities 135,519 (126,270)
----------- -----------
NET (DECREASE) INCREASE IN CASH (1,484) 296,111
CASH, beginning of period 17,521 30,108
----------- -----------
CASH, end of period $ 16,037 $ 326,219
=========== ===========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest $ 23,395 $ 47,907
=========== ===========
The accompanying notes are an integral part of these consolidated financial
statements.
6
ALL-AMERICAN SPORTPARK, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements of All-American SportPark,
Inc. ("AASP"), include the accounts of AASP and its 65% owned subsidiary,
All-American Golf Center, Inc. ("AAGC"), collectively the "Company. All
significant intercompany accounts and transactions have been eliminated. The
operations of the Callaway Golf Center ("CGC") are included in AASP.
The accompanying interim unaudited consolidated financial statements have been
prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission relating to interim financial statements.
Accordingly, certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. In the opinion of management, all
necessary adjustments have been made to present fairly, in all material
respects, the financial position, results of operations and cash flows of the
Company at June 30, 2004 and for all periods presented.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that may require revision in future periods.
These consolidated financial statements should be read in conjunction with the
Company's Annual Report on Form 10-KSB for the year ended December 31, 2003,
from which the December 31, 2003, audited balance sheet information was
derived.
The Company's operations consist of the Callaway Golf Center located on 42
acres of land on the south end of the Las Vegas "Strip."
2. INCOME (LOSS) PER SHARE AND SHAREHOLDER'S EQUITY DEFICIENCY
Basic and diluted income (loss) per share is computed by dividing the reported
net income or loss by the weighted average number of common shares outstanding
during the period. The weighted-average number of common and common equivalent
shares used in the calculation of basic and diluted loss per share were
3,400,000 for both of the three-month periods ended June 30, 2004 and 2003.
3. LEASES
The land underlying the Callaway Golf Center is leased by AAGC. The lease
expires in 2012 and has two five-year renewal options. Also, the lease has a
provision for contingent rent to be paid by AAGC upon reaching certain levels
of gross revenues. The lease has a corporate guarantee by AASP.
4. LONG-TERM DEBT
The Company has outstanding a promissory note payable (the "Note") to Active
Media Services ("Active") in the original amount of $1 million due in
quarterly installments of $25,000 through September 2008, without interest.
This note has been discounted to reflect its present value.
Because of cash flow constraints, the Company negotiated an agreement with
Active to restructure its payments due under the Note. Certain amounts due
under the Note in 2002, were deferred into 2003. As noted above, the normal
quarterly payments are $25,000. In 2003, the amount due for each quarterly
payment was $36,667. In 2004, the quarterly installments returned to the
$25,000 payment. The required June 30, 2004, was made on July 20, 2004.
7
5. RELATED PARTY TRANSACTIONS
The Company has transactions and relationships with (a) The Company Chairman's
two wholly-owned golf retail stores in Las Vegas, Nevada (the "Paradise Store"
and "Rainbow Store") and, (b) two golf retail stores, both named Saint Andrews
Golf Shop ("SAGS"), owned by the Company's President and his brother. One of
the SAGS stores is the retail tenant in the Callaway Golf Center. The
Paradise Store, Rainbow Store, and SAGS are referred to herein as the
"Affiliated Stores." The types of activities that are shared by these entities
are advertising, payroll and employee benefits, warehouse rent, equipment
leases, and miscellaneous office expenses. Costs are allocated to each entity
based on relative benefits received. Amounts allocated to the Affiliated
Stores by the Company approximated $25,000 and $26,000 for the quarters ended
June 30, 2004 and 2003, respectively.
6. GOING CONCERN MATTERS
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. Historically,
with some exceptions, the Company has incurred net losses. As of June 30,
2004, the Company had a working capital deficit of $1,052,845 and a
shareholders' equity deficiency of $6,615,791.
The Callaway Golf Center has generated positive cash flow since 1998.
However, this positive cash flow, which has diminished substantially in the
current period, has been used to fund corporate overhead that is in place in
support of the CGC and public company operations, and there is no assurance
that it will continue.
AASP management believes that its operations, and existing cash balances as of
June 30, 2004, may not be sufficient to fund operating cash needs and debt
service requirements over the next 12 months. In March 2003, the Company
reached a settlement with the general contractor and other entities
responsible for building the CGC wherein the Company received $880,000. Of
this amount, approximately $200,000 was used to pay outstanding legal and
expert fees related to the lawsuit. Part of these settlement proceeds were
used to fund continuing operations. Management continues to seek other
sources of funding, which may include Company officers or directors or other
related parties. In addition, management continues to analyze all operational
and administrative costs of the Company and has made and will continue to make
the necessary cost reductions as appropriate.
Among its alternative courses of action, management of the Company may seek
out and pursue a business combination transaction with an existing private
business enterprise that might have a desire to take advantage of the
Company's status as a public corporation. There is no assurance that the
Company will acquire a favorable business opportunity through a business
combination. In addition, even if the Company becomes involved in such a
business opportunity, there is no assurance that it would generate revenues or
profits, or that the market price of the Company's common stock would be
increased thereby.
Management continues to seek out financing to help fund working capital needs
of the Company. In this regard, management believes that additional
borrowings against the CGC could be arranged although there can be no
assurance that the Company would be successful in securing such financing or
with terms acceptable to the Company.
The consolidated financial statements do not include any adjustments relating
to the recoverability of assets and the classification of liabilities that
might be necessary should the Company be unable to continue as a going
concern.
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following information should be read in conjunction with the Company's
consolidated financial statements and related notes included in this report.
OVERVIEW
The Company's operations consist of the management and operation of a golf
course and driving range property called the Callaway Golf Center. The
Callaway Golf Center includes the Divine Nine par 3 golf course fully lighted
for night golf, a 110-tee two-tiered driving range which has been ranked the
Number 2 golf practice facility in the United States since it opened in
October 1997, a 20,000 square foot clubhouse which includes the Callaway Golf
fitting center and two tenants: the Saint Andrews Golf Shop retail store and
the Bistro 10 restaurant and bar. As discussed below it is currently seeking
other business opportunities.
RESULTS OF OPERATIONS - THREE MONTHS ENDED JUNE 30, 2004, AS COMPARED TO THE
THREE MONTHS ENDED JUNE 30, 2003
REVENUES. Revenues of the Callaway Golf Center ("CGC") were basically
unchanged at $665,135 in 2004, compared to $663,811 in 2003, however, certain
components of income varied significantly from 2003. Golf lesson revenue was
$51,103 compared to no golf lesson revenue in 2003 as a result of CGC paying
golf pros directly instead of contracting with Giant Golf to provide lessons.
Accordingly, rent revenue from Giant Golf decreased $19,820. Other income
decreased $25,000 due to the termination of a sponsorship agreement with a
soft drink bottler and its associated sponsorship income.
COST OF REVENUES. Cost of revenues increased $85,757, or 104%, to $168,064 in
2004, compared to $82,307 in 2003. Cost of revenues as a percentage of
revenues was 25.3% in 2004, compared to 12.4% in 2003. This increase in cost
of revenues is due mainly to $29,423 paid to golf pros to teach lessons
compared to 2003 when lessons were contracted out to Giant Golf, the purchase
of range balls for $34,775 and general increase in direct payroll costs of
$13,923.
SELLING, GENERAL AND ADMINISTRATIVE. These expenses consist principally of
administrative payroll, rent, professional fees and other corporate costs.
These expenses increased $43,468 or 8.4%, to $555,636 in 2004, compared to
$512,168 in 2003. The increase is primarily due to water rate increases of
$23,000, landscaping cost of $21,000, bad debt expense of $18,800, advertising
of $8,400, property insurance of $3,500, electricity of $3,000, and real
estate tax of $3,000, net of reductions in legal expense of $29,000 and
administrative salaries and wages of $8,000. The reduction in legal fees is
due almost exclusively to legal fees and costs associated with the Company's
lawsuit as plaintiff against the general contractor that built the CGC that
were incurred in 2003.
NET INCOME (LOSS). Net loss was ($237,425) in 2004, compared to ($68,865) in
2003. The primary differences for the increased net loss in 2004, as compared
to 2003, are as follows: gross margin decreased $84,443 primarily due to
replacement of range balls of $34,775, loss of soft drink bottler sponsorship
of $25,000, and direct payroll cost of $13,923. SG&A expenses increased
$43,468 primarily due to a water rate increase of $23,000, landscape expenses
$21,000, bad debt expense of $18,800, $8,400 in advertising, property
insurance of $3,500, electricity of $3,000, real estate tax of $3,000 offset
by reductions in legal expense of $29,000 and administrative salaries and
wages of $8000. Minority interest of $54,213 increased $50,430.
9
RESULTS OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 2004, AS COMPARED TO THE SIX
MONTHS ENDED JUNE 30, 2003
REVENUES. Revenues of the Callaway Golf Center ("CGC") decreased 3.8% to
$1,229,610 compared to $1,278,736 in 2003. This decrease is mainly due to the
termination of a sponsorship agreement with a soft drink bottler and its
associated sponsorship income. The decrease was also partially due to
unseasonable cold and rainy weather experienced in the first quarter of 2004
compared to much more favorable weather conditions in the same months of 2003
resulting in a reduction in golf course rounds played and driving range
buckets sold. The decrease is also partially due to a reduction in the base
rent of one of CGC's primary tenants, the St. Andrews Golf Shop. Golf lesson
revenue was $51,103 compared to zero golf lesson revenue in 2003 as a result
of CGC paying golf pros direct instead of contracting with Giant Golf to
provide lessons. This revenue was completely offset by loss of rent collected
from Giant Golf and loss of soft drink bottler sponsorship income.
COST OF REVENUES. Cost of revenues increased $91,029, or 54.3%, to $258,710
in 2004, compared to $167,681 in 2003. Cost of revenues as a percentage of
revenues was 21.0% in 2004 compared to 13.1% in 2003. This increase in cost
of revenues is due mainly to $29,423 paid to golf pros to teach lessons
compared to 2003 when lessons were contracted out to Giant Golf, the purchase
of range balls for $34,775 and general increase in direct payroll costs of
$13,923.
SELLING, GENERAL AND ADMINISTRATIVE. These expenses consist principally of
administrative payroll, rent, professional fees and other corporate costs.
These expenses decreased $139,513 or 12.2% to $1,004,292 in 2004 compared to
$1,143,805 in 2003. The reduction is primarily due to an approximate $205,000
decrease in legal fees and costs from settling the Company's lawsuit against
the general contractor that built the CGC facility offset by the following
SG&A expense increases: $23,000 in water rate increases, $21,000 in
landscaping cost, $18,800 in bad debt expense, $8,400 in advertising, $3,500
in property insurance, $3,000 in electricity, $3,000 in real estate taxes.
OTHER INCOME. Other income of $173,798 results primarily from the receipt of
a $187,533 incentive payment from the Southern Nevada Water Authority based on
CGC's conversion of 325,067 square feet of it's driving range to "xeriscape"
landscaping with the expectation of a significant reduction in water usage.
The $880,000 of other income in 2003 resulted from the Company's settlement of
its lawsuit against the general contractor that built the CGC facility.
NET INCOME (LOSS). Net loss was $169,079 compared to net income of $321,362
in 2003. The primary differences in 2004 compared to 2003, are as follows: (1)
Gross profit: $34,775 replacement of range balls, $60,000 loss of soft drink
bottler sponsorship, $13,923 in increased direct payroll costs. SG&A:
$205,000 reduction in legal expenses and related costs due to CGC's settlement
of it lawsuit against the contractor that built the facility and an $8,000
reduction in administrative salaries and wages offset by the following expense
increases: water rates $23,000, landscape expenses $21,000, bad debt expense
$18,800, advertising $8,400, property insurance $3,500, electricity $3,000,
real estate tax $3,000. Other income was $880,000 in 2003 resulting from CGC's
settlement in 2003 against the general contractor of the CGC facility compared
to the $173,798 reported in 2004 in incentive payments from the Southern
Nevada Water Authority. Minority interest decreased $213,975 as a result of
CGC's reduced 2004 net income which is the basis for calculation of the 35%
minority interest.
10
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2004, the Company had a working capital deficit of $1,052,845
and a shareholders' equity deficiency of $6,615,791.
The Callaway Golf Center has generated positive cash flow since 1998.
However, this positive cash flow has been used to fund corporate overhead that
is in place in support of the CGC and public company operations. There is no
assurance that it will continue to do so.
AASP management believes that its operations, and existing cash balances as of
June 30, 2004, may not be sufficient to fund operating cash needs and debt
service requirements over the next 12 months. In its report on the Company's
annual financial statements for 2003, the Company's auditors expressed
substantial doubt about the Company's ability to continue as a going concern.
In the first quarter of 2004, CGC converted a portion of its driving range to
a water saving desert landscape known as "xeriscape." The costs of this
conversion were funded by an incentive from the Southern Nevada Water
Authority; additionally, the amount of the incentive exceeded the costs of the
conversion. Future turf conversions are planned for the third quarter of
2004, for which incentives will be applied for. The turf conversion projects
are expected to significantly reduce ongoing utility expenses as well as
reduce the future costs of landscape maintenance. Additional turf conversion
of the golf course is expected to be completed in the third quarter of 2004.
Management has also undertaken a restructuring of the administrative staff of
AASP, which is expected to result in additional payroll cost reductions in
future periods. Management continues to seek other sources of funding, which
may include Company officers or directors or other related parties. In
addition, management continues to analyze all operational and administrative
costs of the Company and has made and will continue to make the necessary cost
reductions as appropriate.
Among its alternative courses of action, management of the Company may seek
out and pursue a business combination transaction with an existing private
business enterprise that might have a desire to take advantage of the
Company's status as a public corporation. At this time, management does not
intend to target any particular industry but, rather, intends to judge any
opportunity on its individual merits. Any such transaction would likely have
a dilutive effect on the interests of the Company's stockholders that would,
in turn, reduce each shareholders proportionate ownership and voting power in
the Company. There is no assurance that the Company will acquire a favorable
business opportunity through a business combination. In addition, even if the
Company becomes involved in such a business opportunity, there is no assurance
that it would generate revenues or profits, or that the market price of the
Company's common stock would be increased thereby.
The Company has no commitments to enter into or acquire a specific business
opportunity and, therefore, is able to disclose the risks of a business or
opportunity that it may enter into only in a general manner, and unable to
disclose the risks of any specific business or opportunity that it may enter
into. An investor can expect a potential business opportunity to be quite
risky. Any business opportunity acquired may be currently unprofitable or
present other negative factors.
Working capital needs have been helped by deferring payments of interest and
notes payable balances due to an Affiliate. Management believes that
additional deferrals or such payments could be negotiated, if necessary.
Management continues to seek out financing to help fund working capital needs
of the Company. In this regard, management believes that additional
borrowings against the CGC could be arranged although there can be no
assurance that the Company would be successful in securing such financing or
with terms acceptable to the Company.
11
The Company has raised considerable capital in the past for development
projects. Expansion programs in other locations are not expected to take
place until the Company achieves an appropriate level of profitability and
positive cash flow. If and when expansion does occur, such expansion is
expected to be funded primarily by third parties.
SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
Certain information included in this quarterly report contains statements that
are forward-looking such as statements relating to plans for future expansion
and other business development activities, as well as other capital spending
and financing sources. Such forward-looking information involves important
risks and uncertainties that could significantly affect anticipated results in
the future and, accordingly, such results may differ from those expressed in
any forward-looking statements made by or on behalf of the Company. These
risks and uncertainties include, but are not limited to, those relating to
dependence on existing management, leverage and debt service (including
sensitivity to fluctuations in interest rates), domestic or global economic
conditions, changes in federal or state tax laws or the administration of such
laws, and changes in regulations and application for licenses and approvals
under applicable jurisdictional laws and regulations.
ITEM 3. CONTROLS AND PROCEDURES
As of June 30, 2004, under the supervision and with the participation of the
Company's Chief Executive Officer and Principal Financial Officer, management
has evaluated the effectiveness of the design and operations of the Company's
disclosure controls and procedures. Based on that evaluation, the Chief
Executive Officer and Principal Financial Officer concluded that the Company's
disclosure controls and procedures were effective as of June 30, 2004. There
have been no changes in internal control over financial reporting that
occurred during the fourth quarter of the fiscal year covered by this report
that have materially affected, or are reasonably likely to affect, the
Company's internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
On September 12, 2000, the Company filed a complaint against Bentar
Development, Inc. and Contractors Bonding & Insurance Company in the District
Court of Clark County, Nevada, seeking damages for breach of contract, unjust
enrichment, and license bond claim. Bentar Development, Inc. was the general
contractor on the construction of the Callaway Golf Center. The Company
settled the case in March 2003 with Bentar and all other involved parties,
except for one subcontractor named Western Technologies. The settlement with
Bentar resulted in the Company receiving $880,000 in cash. Subsequent to the
settlement, the Company continued its suit against Western Technologies and
was awarded a judgment against Western Technologies of $660,000 in March
2003.Western Technologies has appealed the judgment and they are in the
process of obtaining the court records needed to draft their appeal. Their
opening brief is due April 12, 2004. Western Technologies was required to and
did file a bond in the amount of the judgment to date, which is approximately
$1,180,000 (including the judgment, interest, and attorneys fees).
Item 2. Changes in Securities. None.
Item 3. Defaults Upon Senior Securities. None
Item 4. Submission of Matters to a Vote of Security Holders. None.
12
Item 5. Other Information. None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
31 Certification of Chief Filed herewith electronically
Executive Officer and Principal
Financial Officer Pursuant
to Section 302 of the
Sarbanes-Oxley Act of 2002
32 Certification of Chief Filed herewith electronically
Executive Officer and Principal
Financial Officer Pursuant
to Section 18 U.S.C. Section 1350
(b) Reports on Form 8-K. None.
13
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.
ALL-AMERICAN SPORTPARK, INC.
Date: August 19, 2004 By:/s/ Ronald Boreta
Ronald Boreta, President and
Chief Executive Officer(Principal
Executive Officer) and Treasurer
(Principal Financial Officer)
14