10QSB 1 aasp.txt ALL AMERICAN SPORTPARK 6-30-02 10-QSB 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, 2002 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 August 14, 2002, 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, 2002 and December 31, 2001 3 Consolidated Statements of Operations Three Months Ended June 30, 2002 and 2001 5 Consolidated Statements of Operations Six Months Ended June 30, 2002 and 2001 6 Consolidated Statements of Cash Flows Six Months Ended June 30, 2002 and 2001 7 Notes to Consolidated Financial Statements 8 Item 2. Management's Discussion and Analysis Of Financial Condition and Results of Operations 11 PART II: OTHER INFORMATION Item 1. Legal Proceedings 15 Item 2. Changes in Securities 15 Item 3. Defaults Upon Senior Securities 15 Item 4. Submission of Matters to a Vote of Security Holders 15 Item 5. Other Information 15 Item 6. Exhibits and Reports on Form 8-K 15 SIGNATURES 16 2 ALL-AMERICAN SPORTPARK, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS JUNE 30, DECEMBER 31, 2002 2001 ----------- ----------- (UNAUDITED) Current assets: Cash and cash equivalents $ 22,692 $ 27,322 Accounts receivable 100,674 90,267 Prepaid expenses and other 52,909 83,663 ----------- ----------- Total current assets 176,275 201,252 Leasehold improvements and equipment, net 836,986 881,785 Due from affiliated stores 175,918 170,574 Note receivable - related party 20,000 20,000 Due from other related entities - 30,026 Other assets 7,661 12,661 ----------- ----------- Total assets $ 1,216,840 $ 1,316,298 =========== =========== The accompanying notes are an integral part of these consolidated financial statements. 3 ALL-AMERICAN SPORTPARK, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (CONTINUED) LIABILITIES AND SHAREHOLDERS' EQUITY DEFICIENCY JUNE 30, DECEMBER 31, 2002 2001 ----------- ----------- (UNAUDITED) Current liabilities: Current portion of long-term debt $ 74,140 $ 54,827 Current portion of obligations under capital leases 4,997 16,358 Accounts payable and accrued expenses 692,976 811,464 ----------- ----------- Total current liabilities 772,113 882,649 Note payable to shareholder 5,265,370 5,129,879 Due to affiliated stores 446,531 425,699 Due to other related entities 528,239 463,890 Long-term debt, net of current portion 409,188 438,600 Deferred income 128,928 178,929 ----------- ----------- Total liabilities 7,550,369 7,519,646 ----------- ----------- Minority interest 376,386 373,724 Shareholders' equity deficiency: Series B Convertible Preferred Stock, $.001 par value, 250,000 shares issued and outstanding at December 31, 2001 - 2,500,000 Common Stock, $.001 par value, 10,000,000 shares authorized, 3,400,000 and 3,150,000 shares issued and outstanding at June 30, 2002 and December 31, 2001, respectively 3,400 3,150 Additional paid-in capital 11,462,882 8,963,132 Accumulated deficit (18,176,197) (18,043,354) ----------- ----------- Total shareholders' equity deficiency (6,709,915) (6,577,072) Total liabilities and shareholders' equity deficiency $ 1,216,840 $ 1,316,298 =========== =========== The accompanying notes are an integral part of these consolidated financial statements. 4 ALL-AMERICAN SPORTPARK, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2002 AND 2001 (UNAUDITED) 2002 2001 ----------- ----------- Revenues $ 674,660 $ 662,976 Cost of revenues 77,081 91,497 ----------- ----------- Gross profit 597,579 571,479 Operating expenses: Selling, general and administrative 485,688 523,889 Depreciation and amortization 23,167 22,595 ----------- ----------- Total operating expenses 508,855 546,484 ----------- ----------- Operating income 88,724 24,995 Interest expense, net (126,854) (127,044) ----------- ----------- Loss from continuing operations before minority interest (38,130) (102,049) Minority interest (7,605) (5,750) ----------- ----------- Loss from continuing operations (45,735) (107,799) DISCONTINUED OPERATIONS: Loss from disposal of discontinued segment - (316,263) ----------- ----------- Net loss $ (45,735) $ (424,062) =========== =========== NET LOSS PER SHARE: Basic and diluted: Loss from continuing operations $ (0.01) $ (0.03) Loss from discontinued operations - (0.10) ----------- ----------- Net loss per share $ (0.01) $ (0.13) =========== =========== The accompanying notes are an integral part of these consolidated financial statements. 5 ALL-AMERICAN SPORTPARK, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (UNAUDITED) 2002 2001 ----------- ----------- Revenues $ 1,263,482 $ 1,283,440 Cost of revenues 147,734 170,191 ----------- ----------- Gross profit 1,115,748 1,113,249 ----------- ----------- Operating expenses: Selling, general and administrative 946,253 1,026,870 Depreciation and amortization 45,377 45,170 ----------- ----------- Total operating expenses 991,630 1,072,040 ----------- ----------- Operating income 124,118 41,209 Interest expense, net (254,299) (256,438) ----------- ----------- Loss from continuing operations before minority interest (130,181) (215,229) Minority interest in income of subsidiary (2,662) (5,750) ----------- ----------- Loss from continuing operations (132,843) (220,979) DISCONTINUED OPERATIONS: Loss from disposal of discontinued segment - (260,024) ----------- ----------- Net loss $ (132,843) $ (481,003) =========== =========== NET LOSS PER SHARE: Basic and diluted: Loss from continuing operations $ (0.04) $ (0.07) Loss from discontinued operations - (0.08) ----------- ----------- Net loss per share $ (0.04) $ (0.15) =========== =========== The accompanying notes are an integral part of these consolidated financial statements. 6 ALL-AMERICAN SPORTPARK, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (UNAUDITED) 2002 2001 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (132,843) $ (481,003) Adjustment to reconcile net loss to net cash provided by (used in) operating activities of continuing operations: Minority interest 2,662 5,750 Loss from discontinued operations - 260,024 Depreciation and amortization 45,377 45,170 Gain on sale of securities (1,061) - Changes in operating assets and liabilities: Increase in accounts receivable (10,407) (13,552) (Increase) decrease in prepaid expenses and other 35,754 (23,208) Increase (decrease) in accounts payable and accrued expenses (118,488) 205,883 Increase in interest payable to shareholder and affiliated store 211,797 214,661 Increase (decrease) in deferred income (50,001) 50,010 ----------- ----------- Net cash provided by (used in) operating activities of continuing operations (17,210) 263,735 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of securities 76,306 - Leasehold improvements expenditures (578) (25,785) ----------- ----------- Net cash provided by (used in) investing activities of continuing operations 75,728 (25,785) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Increase (decrease) in due to affiliated stores and other related entities 34,618 (60,042) Principal payments on notes payable to shareholder (76,306) - Cash paid to redeem preferred stock - (5,000) Principal payments on notes payable (10,099) (24,358) Principal payments on capital leases (11,361) (11,362) ----------- ----------- Net cash used in financing activities of continuing operations (63,148) (100,762) ----------- ----------- NET CASH PROVIDED BY DISCONTINUED OPERATIONS - 11,151 ----------- ----------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (4,630) 148,339 CASH AND CASH EQUIVALENTS, beginning of period 27,322 150,556 ----------- ----------- CASH AND CASH EQUIVALENTS, end of period $ 22,692 $ 298,895 =========== =========== SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for interest $ 26,784 $ 30,975 =========== =========== NON-CASH INVESTING AND FINANCING ACTIVITIES: Land lease obligation exchanged for common stock of subsidiary $ - $ 451,740 =========== =========== The accompanying notes are an integral part of these consolidated financial statements. 7 ALL-AMERICAN SPORTPARK, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 1. CONSOLIDATED FINANCIAL STATEMENTS The accompanying unaudited consolidated financial statements include the accounts of All-American Sportpark, Inc. ("AASP"), a Nevada corporation, and its subsidiary, All-American Golf Center, Inc. ("AAGC"). For year 2001 amounts, the financial statements also include the accounts of AASP's discontinued SportPark subsidiary, SportPark Las Vegas, Inc. ("SPLV") that was dissolved as of February 14, 2002. AASP, AAGC, and SPLV are collectively referred to herein as the "Company." All significant inter-company accounts and transactions have been eliminated. The Company's continuing operations of the Callaway Golf Center ("CGC") are included in AAGC. The accompanying 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, 2002 and for all periods presented. Certain reclassifications have been made to amounts in the 2001 statements of operations and of cash flows to conform to the 2002 presentation. 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, 2001, from which the December 31, 2001 audited balance sheet was derived. The Company's continuing operations consist of the Callaway Golf Center located on 42 acres of land on the south end of the Las Vegas "Strip". 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 three tenants: the Saint Andrews Golf Shop retail store, the Giant Golf teaching academy, and the Bistro 10 restaurant and bar. 2. RESTRUCTURING AND SETTLEMENT AGREEMENT In connection with the disposal of the SportPark, on June 1, 2001, the Company completed a transaction pursuant to a Restructuring and Settlement Agreement with Urban Land of Nevada, Inc. (the "Landlord"), whereby the Company issued the Landlord a 35-percent ownership interest in AAGC. In connection therewith, the Company, AAGC and the Landlord entered into a Stockholders Agreement that provides certain restrictions and rights on the AAGC shares issued to the Landlord. As to matters other than the election of Directors, the Landlord has agreed to vote its shares of AAGC as designated by the Company. 8 3. LOSS PER SHARE AND SHAREHOLDER'S EQUITY DEFICIENCY Basic and diluted loss per share is computed by dividing the reported net loss from continuing operations and discontinued operations 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 3,270,166 and 3,150,000 for the six month periods ended June 30, 2002 and 2001, respectively, and 3,389,011 and 3,150,000 for the three-month periods ended June 30, 2002 and 2001. Prior to April 5, 2002, the Company had issued and outstanding 3,150,000 shares of common stock and 250,000 shares of Series B convertible preferred stock. Sports Entertainment Enterprises, Inc. ("SPEA"), a publicly traded company, owned 2,000,000 of the Company's common shares outstanding and all of the Series B preferred shares that combined represented an approximate 66% ownership in the Company. On April 5, 2002, SPEA elected to convert its Series B convertible preferred stock into common stock on a 1 for 1 basis. As such, commencing April 5, 2002, the Company had issued and outstanding 3,400,000 shares of common stock and no Series B preferred stock. On May 8, 2002, SPEA completed a spin-off of its AASP common stock holdings to SPEA shareholders that resulted in SPEA having no ownership interest in the Company. 4. LEASES The land underlying the CGC is leased to the Company at a base minimum monthly rent of $33,173. The lease commenced October 1, 1997 with a term of 15 years with two five-year renewal options. The lease provides for a ten percent increase in the minimum rent at the end of the fifth year of the term and every five years thereafter. 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 of AASP. 5. RELATED PARTY TRANSACTIONS The Company has transactions and relationships with (a) SPEA and subsidiaries ("Related Entities"), (b) SPEA's Chairman and his wholly owned golf retail store in Las Vegas, Nevada (the "Paradise Store") and, (c) 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 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. The Company has issued notes payable to the Company's Chairman (the "Chairman's Notes") that bear interest at ten percent per annum with balances of $5,265,370 and $5,129,879, respectively, at June 30, 2002 and December 31, 2001. Included in the foregoing balances is accrued interest payable of $1,048,501 and $836,704, respectively. The Company has issued notes payable to the Paradise Store (the "Paradise Notes") that bear interest at ten percent per annum with balances of $366,538 and $353,289, respectively, at June 30, 2002 and December 31, 2001. Included in the foregoing balances is accrued interest payable of $101,571 and $88,322, respectively. These balances due are included under the caption "Due to Affiliated Stores" in the accompanying consolidated balance sheets. 9 The Chairman's Notes and the Paradise Notes (collectively, the "Notes") are due at various dates through the year 2008; the assets of the Company secure the Notes. In February 2002, the Company repaid $76,306 in principal on the Notes. Interest payments on the Notes have been deferred since inception. The Chairman has agreed to continue deferring payment of the accrued interest until such time as the Company has adequate capital resources to service this obligation. 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. As shown in the accompanying consolidated financial statements, for the six months ended June 30, 2002, the Company had a net loss of $132,843. For the year ended December 31, 2001, the Company had a net loss from continuing operations of $603,775. As of June 30, 2002, the Company had a working capital deficit of $595,838 and a shareholders' equity deficiency of $6,709,915. Management believes that its continuing operations may not be sufficient to fund operating cash needs and debt service requirements over at least the next 12 months. As a result, management attempted to negotiate a deferral of three scheduled debt payments with its primary lender on the CGC; however, the lender was only willing to defer one $25,000 payment (the March 2002 payment). This payment is to be repaid in equal amounts in addition to the regularly scheduled $25,000 payments due June 30, September 30, and December 31, 2002; the June 30 payment was made on time as agreed with the lender. As a result, management plans on seeking other sources of funding as needed, which may include Company officers or directors or other related parties. In addition, management continually analyzes 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. The Callaway Golf Center has generated positive cash flow since it was reacquired at the end of 1998. However, this positive cash flow is used to fund corporate overhead that is in place in support of the CGC. 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. 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following information should be read in conjunction with the Company's consolidated financial statements and related footnotes included in this report. OVERVIEW The Company's continuing operations consist of the management and operation of a golf course and driving range property called the Callaway Golf Center. The Callaway Golf Center commenced operations on October 1, 1997; the Company sold its 80% interest in the Callaway Golf Center on May 5, 1998 and then reacquired 100% of the Callaway Golf Center on December 31, 1998. In May 2001, the Company issued a 35% interest in the Callaway Golf Center to the property's landlord in exchange for forgiveness of back rent due the landlord. RESULTS OF CONTINUING OPERATIONS THREE MONTHS ENDED JUNE 30, 2002 AS COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2001 REVENUES. Revenues increased 1.8% to $674,660 in 2002 compared to $662,976 in 2001. The modest increase is due to increased revenues for the golf course and driving range. COST OF REVENUES. Cost of revenues decreased 15.8% to $77,081 in 2002 compared to $91,497 in 2001. Cost of revenues as a percentage of revenues was 11.4% in 2002 and 13.8% in 2001. This decrease is due mainly to lower direct payroll costs in 2002 because of improved staff scheduling. SELLING, GENERAL AND ADMINISTRATIVE (SG&A). These expenses consist principally of administrative payroll, rent, professional fees and other corporate costs. These expenses decreased 7.3% to $485,688 in 2002 compared to $523,889 in 2001. The decrease is due mainly to a combination of the following: (1) corporate overhead decreased 24.4%, or about $18,000, due to lower administrative labor costs and lower legal fees, and (2) SG&A for the Callaway Golf Center decreased 4.5%, or about $20,000, due to lower property taxes, advertising, and contract services. LOSS FROM CONTINUING OPERATIONS. Loss from continuing operations for 2002 was $45,735 compared to $107,799 in 2001. The lower loss for 2002 is due mainly to the combination of lower operating and SG&A costs in 2002. The Company generated operating income of $88,724 in 2002, an increase of 255% over the 2001 amount of $24,995. SIX MONTHS ENDED JUNE 30, 2002 AS COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2001 REVENUES. Revenues decreased 1.6% to $1,263,482 in 2002 compared to $1,283,440 in 2001. The decrease is due mainly to an approximate 3% decrease in golf course rounds played in 2002 compared to 2001. The decrease in rounds played is attributed to less favorable weather conditions in the first quarter of 2002 compared to the first quarter of 2001. 11 COST OF REVENUES. Cost of revenues decreased 13.2% to $147,734 in 2002 compared to $170,191 in 2001. Cost of revenues as a percentage of revenues was 11.7% in 2002 compared to 13.3% in 2001. This decrease is due mainly to lower direct payroll costs in 2002 because of improved staff scheduling. SELLING, GENERAL AND ADMINISTRATIVE (SG&A). These expenses consist principally of administrative payroll, rent, professional fees and other corporate costs. These expenses decreased 7.9% to $946,253 in 2002 compared to $1,026,870 in 2001. The decrease is a combination of the following: (1) corporate overhead decreased 19.1%, or about $30,000, due to lower administrative labor costs, and (2) SG&A for the Callaway Golf Center decreased 5.9%, or about $51,000, because of lower property taxes, advertising, contract services, and utility costs. LOSS FROM CONTINUING OPERATIONS. Loss from continuing operations for 2002 was $132,843 compared to $220,979 in 2001. The lower loss for 2002 is due mainly to the combination of lower operating and SG&A costs in 2002. The Company generated operating income of $124,118 in 2002, an increase of 201% over the 2001 amount of $41,209. LIQUIDITY AND CAPITAL RESOURCES At June 30, 2002, the Company had a working capital deficit of $595,838. This deficit has decreased approximately $85,000 since December 31, 2001. This deficit has been created primarily because of the historical financial problems of the discontinued SportPark business segment. On June 1, 2001, the Company completed a transaction pursuant to a Restructuring and Settlement Agreement with Urban Land of Nevada, Inc. (the "Landlord"), which essentially rid the Company of the financial strain caused by the Sportpark. The Company ceased funding cash shortfalls at the SportPark, the Company was released from all significant continuing and contingent liability related to the Sportpark, and all back rent through April 30, 2001 for the CGC was cancelled. Management believes that its continuing operations may not be sufficient to fund operating cash needs and debt service requirements over at least the next 12 months. As a result, management attempted to negotiate a deferral of three scheduled debt payments with its primary lender on the CGC; however, the lender was only willing to defer one $25,000 payment (the March 2002 payment). This payment is to be repaid in equal amounts in addition to the regularly scheduled $25,000 payments due June 30, September 30, and December 31, 2002; the June 30 payment was made on time as agreed to with the lender. As a result, management plans to seek other sources of funding as needed, which may include Company officers or directors or other related parties. In addition, management continually analyzes all operational and administrative costs of the Company and has made and will continue to make the necessary cost reductions as appropriate. The Company's current and expected sources of working capital are its cash balances that were $22,692 at June 30, 2002 and its operating cash flow of its CGC property. Working capital needs have been helped by deferring payments of interest and notes payable balances due to the Company's Chairman and Affiliated Store. Deferrals of payments to the Company's Chairman and Affiliated Store are expected to continue until the Company has sufficient cash flow to begin making payments. The Company does not currently have the financial resources available to make these payments. 12 The Company has issued notes payable to the Company's Chairman (the "Chairman's Notes") that bear interest at ten percent per annum with balances of $5,265,370 and $5,129,879, respectively, at June 30, 2002 and December 31, 2001. Included in the foregoing balances is accrued interest payable of $1,048,501 and $836,704, respectively. The Company repaid $76,306 in principal on these notes in February 2002. The Company has issued notes payable to the Paradise Store (the "Paradise Notes") that bear interest at ten percent per annum with balances of $366,538 and $353,289, respectively, at June 30, 2002 and December 31, 2001. Included in the foregoing balances is accrued interest payable of $101,571 and $88,322, respectively. The Chairman's Notes and the Paradise Notes (collectively, the "Notes") are due at various dates through the year 2008; the assets of the Company secure the Notes. In February 2002, the Company repaid $76,306 in principal on the Notes. Interest payments on the Notes have been deferred since inception. The Chairman has agreed to continue deferring payment of the accrued interest until such time as the Company has adequate capital resources to service this obligation. The Callaway Golf Center has generated positive cash flow since it was reacquired at the end of 1998. However, this positive cash flow is used to fund corporate overhead that is in place in support of the CGC. 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. There are no planned material capital expenditures in 2002. Operating Activities. Net cash used in operating activities was $17,210 in 2002 compared to net cash provided by operating activities of $263,735 in 2001. The primary reasons for the change are (1) a larger net loss in 2001 of about $88,000 offset by (2) a decrease in accounts payable and accrued expenses of approximately $118,000 in 2002 compared to an increase in payables in 2001 of about $206,000, and (3) an increase in deferred income in 2001 of $50,000 compared to a $50,000 decrease in 2002. Investing Activities. Net cash provided by investing activities was $75,728 in 2002; net cash used in investing activities was $25,785 in 2001. The activity in 2002 results from the disposition of equity securities held by the Company amounting to $76,306 that had been transferred from SPEA offset by $578 in expenditures for equipment. The 2001 activity was related to leasehold improvements made to the golf course driving range. Financing Activities. Net cash used in financing activities was $63,148 in 2002 compared to $100,762 in 2001. The primary reasons for the difference are: (1) an increase in due to affiliated stores and other related entities in 2002 of $36,618 compared to a corresponding decrease in such accounts of $60,042 in 2001, (2) payment of $76,306 in 2002 to reduce notes payable to shareholder, and (3) approximately $14,000 less in 2002 of principal payments on notes payable due to the negotiated deferral of leasehold mortgage payments to the CGC's lender. 13 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 will generate revenues or profits, or that the market price of the Company's common stock will be increased thereby. The Company has no commitments to enter into or acquire a specific business opportunity and therefore can disclose the risks of a business or opportunity that it may enter into in only a general manner, and cannot 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. Special Cautionary Notice Regarding Forward-Looking Statements The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for 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, changes in regulations and application for licenses and approvals under applicable jurisdictional laws and regulations. 14 PART II - OTHER INFORMATION Item 1. Legal Proceedings. None. Item 2. Changes in Securities. 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 and Reports on Form 8-K. (a) Exhibits. None (b) Reports on Form 8-K. The Company filed a report on Form 8-K dated May 8, 2002 reporting information under Item 1 of that Form concerning Sports Entertainment Enterprises' ("SPEA") distribution to SPEA shareholders of all of SPEA's shares of common stock of the Company. The 2,250,000 shares of common stock distributed represented approximately 66.2% of the outstanding shares of the Company. No other reports on Form 8-K were filed during the quarter ended June 30, 2002. 15 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 14, 2002 By:/s/ Ronald Boreta Ronald Boreta, President and Chief Executive Officer Date: August 14, 2002 By:/s/ Kirk Hartle Kirk Hartle, Chief Financial Officer CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER OF ALL-AMERICAN SPORTPARK, INC. PURSUANT TO 18 U.S.C. SECTION 1350 We certify that, to the best of our knowledge, the Quarterly Report on Form 10-QSB of All-American SportPark, Inc. for the period ended June 30, 2002: (1) Complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of All-American SportPark, Inc. /s/ Ronald Boreta /s/ Kirk Hartle Ronald Boreta Kirk Hartle Chief Executive Officer Chief Financial Officer August 14, 2002 August 14, 2002 16