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 September 30, 2004
Commission File Number: 0-24970
ALL-AMERICAN SPORTPARK, INC.
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(Exact name of small business issuer as specified in its charter)
Nevada 88-0203976
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(State of other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
6730 South Las Vegas Boulevard, Las Vegas, Nevada 89119
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(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 November 12, 2004, 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
September 30, 2004 and December 31, 2003 ........... 3
Consolidated Statements of Operations
Three Months Ended September 30, 2004 and 2003...... 4
Consolidated Statements of Operations
Nine Months Ended September 30, 2004 and 2003 ...... 5
Consolidated Statements of Cash Flows
Nine Months Ended September 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. Controls and Procedures ............................. 12
PART II: OTHER INFORMATION
Item 1. Legal Proceedings .................................. 12
Item 2. Changes in Securities .............................. 13
Item 3. Defaults Upon Senior Securities .................... 13
Item 4. Submission of Matters to a Vote of Security
Holders ............................................ 13
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
SEPTEMBER 30, 2004 AND DECEMBER 31, 2003
ASSETS
2004 2003
----------- -----------
(Unaudited)
Current assets:
Cash $ 123,325 $ 17,521
Accounts receivable 14,210 23,696
Prepaid expenses 9,834 16,278
----------- -----------
Total current assets 147,369 57,495
Leasehold improvements and equipment, net 1,046,887 808,112
Due from related entities 339,898 242,596
Other assets 3,872
----------- -----------
Total assets $ 1,534,154 $ 1,112,075
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY DEFICIENCY
Current liabilities:
Current portion of long-term debt $ 71,056 $ 66,210
Current portion of notes payable to
related entities 400,000 500,000
Interest payable to related entities 259,887 230,983
Accounts payable and accrued expenses 395,220 311,720
----------- -----------
Total current liabilities 1,126,163 1,108,913
Notes payable to related entities, net of
current portion 4,191,893 3,713,473
Interest payable to related entities 1,663,231 1,384,720
Due to related entities 629,994 602,513
Long-term debt, net of current portion 258,227 312,141
Deferred income 13,104 1,500
----------- -----------
Total liabilities 7,882,612 7,123,260
----------- -----------
Minority interest in subsidiary 387,098 435,527
----------- -----------
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 September 30, 2004,
and December 31, 2003, respectively 3,400 3,400
Additional paid-in capital 11,462,882 11,462,882
Accumulated deficit (18,201,838) (17,912,994)
----------- -----------
Total shareholders' equity deficiency (6,735,556) (6,446,712)
----------- -----------
Total liabilities and shareholders'
equity deficiency $ 1,534,154 $ 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 SEPTEMBER 30, 2004 AND 2003
(UNAUDITED)
2004 2003
----------- -----------
Revenues $ 525,339 $ 504,883
Cost of revenues 149,146 90,910
----------- -----------
Gross profit 376,193 413,973
----------- -----------
Operating expenses:
Selling, general and administrative 519,582 469,374
Depreciation and amortization 23,311 17,002
----------- -----------
Total operating expenses 542,893 486,376
----------- -----------
Operating loss (166,700) (72,403)
Other income (expense):
Interest expense, net (120,875) (115,092)
Other income 80,598 -
----------- -----------
Loss before minority
interest (206,977) (187,495)
Minority interest in loss of
subsidiary 87,211 49,665
----------- -----------
Net loss $ (119,766) $ (137,830)
=========== ===========
NET LOSS PER SHARE:
Basic and diluted net loss
per share $ (0.04) $ (0.04)
=========== ===========
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 NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(UNAUDITED)
2004 2003
----------- -----------
Revenues $ 1,754,949 $ 1,783,619
Cost of revenues 407,856 266,730
----------- -----------
Gross profit 1,347,093 1,516,889
----------- -----------
Operating expenses:
Selling, general and administrative 1,523,874 1,605,040
Depreciation and amortization 54,499 50,408
----------- -----------
Total operating expenses 1,578,373 1,655,448
----------- -----------
Operating loss (231,280) (138,559)
Other income (expense):
Interest expense, net (360,389) (354,817)
Other income 254,396 880,000
----------- -----------
Income (loss) before minority
interest (337,273) 386,624
Minority interest in (income) loss of
subsidiary 48,429 (203,092)
----------- -----------
Net income (loss) $ (288,844) $ 183,532
=========== ===========
NET INCOME (LOSS) PER SHARE:
Basic and diluted net income (loss)
per share $ (0.08) $ 0.05
=========== ===========
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 NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(UNAUDITED)
2004 2003
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (288,844) $ 183,532
Adjustment to reconcile net income
(loss) to net cash provided by
operating activities:
Minority interest (48,429) 203,092
Depreciation and amortization 54,499 50,408
Loss on sale of capital assets 1,000 -
Bad debts 18,875 -
Changes in operating assets and
liabilities:
Increase in accounts
receivable (9,389) (13,788)
Decrease in prepaid expenses
and other assets 10,316 11,198
Increase (decrease) in accounts payable
and accrued expenses 83,500 (367,757)
Increase in interest payable to
related entities 307,415 323,511
Increase (decrease) in deferred income 11,604 (75,800)
----------- -----------
Net cash provided by
operating activities 140,547 314,396
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of capital assets 114,581 -
Purchases of capital assets (408,855) (67,832)
----------- -----------
Net cash used in
investing activities (294,274) (67,832)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in due to
related entities (69,821) (172,295)
Proceeds from notes payable to
related entities 523,378 -
Principal payments on notes payable
to related entities (144,958) -
Principal payments on notes payable (49,068) (42,956)
----------- -----------
Net cash provided by (used in)
financing activities 259,531 (215,251)
----------- -----------
NET (DECREASE) INCREASE IN CASH 105,804 31,313
CASH, beginning of period 17,521 30,108
----------- -----------
CASH, end of period $ 123,325 $ 61,421
=========== ===========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest $ 30,223 $ 57,407
=========== ===========
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" or the "Company"), 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 September 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 the three-month and nine month periods ended September 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.
7
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.
5. RELATED PARTY TRANSACTIONS
The Company has transactions and relationships with (a) an entity owned by the
Company Chairman that operates two wholly-owned golf retail stores in Las
Vegas, Nevada (the "Paradise Store" and "Rainbow Store") and, (b) two other
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 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
Paradise Store, Rainbow Store and SAGS approximated $11,400 and $12,800 for
the quarters ended September 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 September
30, 2004, the Company had a working capital deficit of $978,794 and a
shareholders' equity deficiency of $6,735,556.
CGC 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.
In the first and third quarters of 2004, the CGC converted a portion of its
driving range and golf course 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
incentives exceeded the costs of the conversions. The turf conversion
projects are expected to significantly reduce the future costs of landscape
maintenance. Water usage is also expected to be significantly lower, however,
due to water rate increases, the usage reductions are not expected to generate
cost savings compared to historical cost.
AASP management believes that its operations, and existing cash balances as of
September 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.
8
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.
7. RECLASSIFCATIONS
Certain prior period amounts have been reclassified to conform with current
year presentation.
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 SEPTEMBER 30, 2004, AS COMPARED TO
THE THREE MONTHS ENDED SEPTEMBER 30, 2003
REVENUES. Revenues of the Callaway Golf Center ("CGC") for the three months
ended September 30, 2004 increased $20,456 or 4.1% to $525,339 from $504,883
reported for the same period in 2003. Golf lesson revenue was $45,154 in 2004
compared to zero golf lesson revenue in 2003 as a result of the CGC paying
golf pros directly instead of contracting with Giant Golf to provide lessons.
As a result of the termination of this relationship, rental revenue from Giant
Golf decreased by $19,280. Green fees increased by $12,608 and driving range
revenue increased by $14,069. Sponsorship income decreased by $25,000 due to
termination of a sponsorship agreement with a soft drink bottler in October
2003.
COST OF REVENUES. Costs of revenues increased by $58,236 or 64.1% to $149,146
in 2004 as compared to $90,910 in 2003. Cost of revenue as a percentage of
revenues was 28.4% in 2004 as compared to 18.0% in 2003. The increase is due
9
mainly to the following items: golf pros were paid $29,590 in 2004 compared to
zero cost in 2003 due to the fact that during 2003 this service was outsourced
to Giant Golf. This arrangement ended in March 2004. The net effect of
terminating the Giant Golf relationship was a decrease of $5,122 in gross
margin for the three months ended September 30, 2004. Wages and benefits also
increased $13,818, and operating supplies increased $13,962 as a result of
purchasing range balls which did not occur in the year ago quarter.
SELLING, GENERAL AND ADMINISTRATIVE. These expenses consist principally of
administrative payroll, rent, professional fees and other corporate costs.
These expenses increased by $50,208, or 10.6%, to $519,582 in 2004, compared
to $469,374 in 2003. Computer expenses in 2004 include a $10,699 write off of
obsolescent point of sale software. Advertising expense increased $13,196 in
2004 as a result of the increased revenues detailed above. Repairs and
maintenance expenses increased by $7,572 due to aging range equipment.
Investor relations expense increased $22,068 in 2004 due to receipt of a
$22,500 credit from the Company's investor relations firm in 2003.
OTHER INCOME AND EXPENSE. Other income and expense consists principally of
interest income and expense and non-operating income. For the three months
ended September 2004, other income improved $80,598 compared to the same
period in 2003, primarily due to the water authority paying CGC an incentive
for completion of the conversion of a portion of the golf course to drought
tolerant (xeriscape) vegetation. The amount of the payment net of disposition
of capitalized landscaping was $78,052.
NET LOSS. The net loss decreased by $18,064 to $119,766 in 2004, compared to
a net loss of $137,830 in 2003. The primary reason for the decreased net loss
in 2004 was that other income improved $80,598 due primarily to receipt of a
$78,052 turf conversion incentive payment from the water authority. In
addition, the minority interest in the net profit of the CGC decreased by
$37,546 to $$87,211 as compared to $49,665 in 2003 as a result of CGC's
increased net loss for the three months ended September 30, 2004.
RESULTS OF OPERATIONS - NINE MONTHS ENDED SEPTEMBER 30, 2004, AS COMPARED TO
THE NINE MONTHS ENDED SEPTEMBER 30, 2003.
REVENUES. Revenues of the CGC decreased $28,670 or 1.6% to $1,754,949 as
compared to $1,783,619 in 2003. This decrease is due primarily to a reduction
in league play revenue of $13,160; the termination of a sponsorship agreement
with a soft drink bottler resulting in loss of $75,000 in sponsorship revenue;
a decrease in rental income of $46,980 from Giant Golf and Saint Andrews Golf:
and the fact that $16,974 in insurance recoveries and miscellaneous income
were received in 2003. The revenue reductions were offset by increased driving
range revenue of $29,616 and golf lesson revenue of $95,757.
COST OF REVENUES. Cost of revenues increased by $141,126 or 52.9% to $407,856
compared to $266,730 in 2003. This increase is due primarily to GCG paying
golf pros $59,014 directly in 2004 to teach lessons which were taught by Giant
Golf in 2003. In addition, there was an increase in direct wages of $36,075
as a result of staff increases in 2004 required to provide a higher level of
guest service, and an increase of $47,775 in cost of range supplies due to
higher volume purchases of range balls compared to 2003 to take advantage of
favorable pricing.
SELLING, GENERAL AND ADMINISTRATIVE. These expenses consist principally of
administrative payroll, rent, professional fees and other corporate costs.
These expenses decreased by $81,166 or 5.0% to $1,523,874 in 2004 compared to
$1,605,040 in 2003. The reduction is primarily due to a $179,442 decrease in
legal fees resulting primarily from a settlement of the Company's lawsuit
10
against the general contractor in 2003 who built the CGC facility. This
reduction was offset by the following expense increases: $7,580 in repairs and
maintenance due to aging range equipment; $21,059 in computer related expenses
due primarily to a write off of obsolescent software; $21,537 in landscaping
expenses; $26,110 in advertising expenses and $18,875 in bad debt expense.
OTHER INCOME. Other income in 2004 of $254,396 resulted primarily from the
receipt of a $272,350 incentive payment from the water authority net of
disposition of related assets with a depreciated cost of $26,950 based on
CGC's conversion of 487,107 square feet of its driving range and golf course
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 who built the CGC
facility.
NET INCOME (LOSS). The Company had a net loss in 2004 of $288,844 compared to
net income of $183,532 in 2003. The drop was primarily a result of the fact
that during 2003 the Company received other income of $880,000 from the
settlement of a construction defect claim. This was partially offset by other
income in 2004 of $254,396 which resulted primarily from receipt of an
incentive payment from the water authority for CGC's conversion of a portion
of its golf course and driving range to "xeriscape." In addition, minority
interest in the earnings of the CGC decreased $251,521 in 2004 as a result of
the CGC's 2004 net loss.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2004, the Company had a working capital deficit of
$978,794, as compared to a working capital deficit of $1,051,418 at December
31, 2003. The CGC 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 provide positive cash flow.
Management believes that the CGC operations and existing cash balances as of
September 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 and third quarters of 2004, the CGC converted a portion of its
driving range and golf course 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
incentives exceeded the costs of the conversions. The turf conversion
projects are expected to significantly reduce the future costs of landscape
maintenance. Water usage is also expected to be significantly lower, however,
due to water rate increases, the usage reductions are not expected to generate
cost savings compared to historical cost.
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
11
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 can 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.
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 September 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 September
30, 2004. There have been no changes in internal control over financial
reporting that occurred during the third 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.
12
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 the case is expected to be
heard in June of 2005. 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. Unregistered Sales of Equity Securities and Use of Proceeds. None.
Item 3. Defaults Upon Senior Securities. None
Item 4. Submission of Matters to a Vote of Security Holders. None.
Item 5. Other Information. None.
Item 6. 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
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: November 15, 2004
By:/s/ Ronald Boreta
Ronald Boreta, President and
Chief Executive Officer(Principal
Executive Officer) and Treasurer
(Principal Financial Officer)
14