UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from to
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Commission File Number: 000-50283
Golf Two, Inc.
--------------
(Exact name of small business issuer as specified in its charter)
Delaware 04-3625550
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1521 West Orangewood Avenue, Orange, California 92868
--------------------------------------------------------------------------------
(Address of principal executive offices)
(714) 633-1400
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(Issuer's Telephone Number)
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practical date. As of May 21, 2004, there were
7,418,336 shares of the issuer's $.001 par value common stock issued and
outstanding.
1
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
-----------------------------
GOLF TWO, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET - MARCH 31, 2004
(UNAUDITED)
ASSETS
Current assets -
cash and cash equivalents $ 45,708
==============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities -
accounts payable and accrued expenses $ 12,940
--------------
Note payable, related party 50,000
--------------
Stockholders' deficit:
Preferred stock, $0.001 par value, 5,000,000 shares authorized;
no shares issued or outstanding -
Common stock, $0.001 par value, 50,000,000 shares authorized;
7,418,336 issued and outstanding 7,418
Additional paid-in capital 152,907
Deficit accumulated during development stage (177,557)
--------------
Total stockholders' deficit (17,232)
--------------
$ 45,708
==============
2
GOLF TWO, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(UNAUDITED)
For the three months For the period
ended March 31, from March 15,
------------------------------------------------ 2001 (inception)
2004 2003 to March 31, 2004
---------------------- ---------------------- -----------------------
Net revenue $ - $ - $ -
General and administrative expenses 9,112 2,360 176,557
---------------------- ---------------------- -----------------------
Loss from operations (9,612) (2,360) (176,557)
Other income (expense):
Interest income - 35 300
Interest expense (500) - (1,300)
---------------------- ---------------------- -----------------------
Loss before provision for income taxes (9,612) (2,325) (177,557)
Provision for income taxes - - -
---------------------- ---------------------- -----------------------
Net loss $ (9,612) $ (2,325) $ (177,557)
====================== ====================== =======================
Net loss available to common stockholders
per common share - basic and dilutive:
Loss per common share $ (0.00) $ (0.00) $ (0.03)
====================== ====================== =======================
Weighted average common shares
outstanding - basic and dilutive 7,418,336 7,418,336 5,753,410
====================== ====================== =======================
3
GOLF TWO, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
Deficit
accumulated
Common stock Additional during Total
---------------------------------- paid-in development stockholders'
Shares Amount capital stage equity (deficit)
---------------- ---------------- --------------- ---------------- ----------------
Balance at March 15, 2001, - $ - $ - $ - $ -
date of incorporation
Issuance of Founders Shares for
services at $0.01 per share
(March 2001) 2,325,000 2,325 - - 2,325
Capital contribution for office space - - 1,500 - 1,500
Net loss - - - (14,303) (14,303)
---------------- ---------------- --------------- ---------------- ----------------
Balance at December 31, 2001 2,325,000 2,325 1,500 (14,303) (10,478)
Issuance of common stock for
services at $0.03 per share
(February 2002) 3,000,000 3,000 87,000 - 90,000
Issuance of common stock for cash
at $0.03 per share (April 2002) 2,093,336 2,093 60,707 - 62,800
Capital contribution for office space
and interest expense - - 1,400 - 1,400
Net loss - - - (123,572) (123,572)
---------------- ---------------- --------------- ---------------- ----------------
Balance at December 31, 2002 7,418,336 7,418 150,607 (137,875) 20,150
Capital contribution for office space
and interest expense - - 1,500 - 1,500
Net loss - - - (30,070) (30,070)
---------------- ---------------- --------------- ---------------- ----------------
Balance at December 31, 2003 7,418,336 7,418 152,107 (167,945) (8,420)
Capital contribution for office space
and interest expense (unaudited) - - 800 - 800
Net loss for the three months ended
March 31, 2004 (unaudited) - - - (9,612) (9,612)
---------------- ---------------- --------------- ---------------- ----------------
Balance at March 31, 2004 (unaudited) 7,418,336 $ 7,418 $ 152,907 $ (177,557) $ (17,232)
================ ================ =============== ================ ================
4
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the three months For the period
ended March 31, from March 15,
------------------------------------------------- 2001 (inception)
2004 2003 to March 31, 2004
------------------------ ------------------------ ------------------------
Cash flows provided by (used for) operating activities:
Net loss $ (9,612) $ (2,325) $ (177,557)
------------------------ ------------------------ ------------------------
Adjustments to reconcile net loss to net cash
provided by (used for) operating activities:
Non-cash issuance of common stock for services - - 92,325
Non-cash contribution to capital 800 300 5,200
Increase (decrease) in liabilities -
accounts payable 3,790 (4,410) 12,940
------------------------ ------------------------ ------------------------
Total adjustments 4,590 (4,110) 110,465
------------------------ ------------------------ ------------------------
Net cash used for operating activities (5,022) (6,435) (67,092)
------------------------ ------------------------ ------------------------
Cash flows provided by (used for) financing activities:
Proceeds from note payable-related party - - 60,000
Payments on note payable-related party - - (10,000)
Proceeds from issuance of common stock - - 62,800
------------------------ ------------------------ ------------------------
Net cash provided by financing activities - - 112,800
------------------------ ------------------------ ------------------------
Net increase (decrease) in cash (5,022) (6,435) 45,708
Cash, beginning of period 50,730 27,150 -
------------------------ ------------------------ ------------------------
Cash, end of period $ 45,708 $ 20,715 $ 45,708
======================== ======================== ========================
Supplemental disclosure of cash flow information:
Income taxes paid $ - $ - $ -
======================== ======================== ========================
Interest paid $ - $ - $ -
======================== ======================== ========================
Supplemental disclosure of non-cash financing activities:
In April 2001, the Company entered into a $10,000 non-interest bearing note with
a stockholder. The note was due upon demand and repaid in April 2002. The
Company recorded $800 of interest expense on this note at 8% per annum as a
contribution to capital for the period from March 15, 2001 (inception) to
December 31, 2002.
An officer of the Company provides office space to the Company for $100 per
month on a month-to-month basis, which was recorded as a contribution to
capital. Total office expense for the three months ended March 31, 2004 and
2003 and for the period from March 15, 2001 (inception) to March
31, 2004, amounted to $300, $300 and $4,400, respectively.
In March 15, 2001, the Company issued 2,325,000 shares of its common stock in
exchange for services to incorporate the Company, totaling $2,325. The Founder
Shares were valued at the par value of the Company's common stock, which
represented its fair market value on the date of issuance.
In February 2002, 3,000,000 shares of common stock were issued at $0.03 per
share in exchange for prior services rendered for a total of $90,000, which
represented its fair market value on the date of issuance.
On November 5, 2003, the Company was loaned $50,000 by a stockholder in exchange
for a promissory note. For the three months ended March 31, 2004 and for the
period from March 15, 2001 (inception) to March 31, 2004, the Company recorded
interest expense of $300 and $800, respectively, related to this note as a
contribution to capital.
5
GOLF TWO, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2004 AND 2003 AND THE
PERIOD FROM MARCH 15, 2001 (INCEPTION) TO MARCH 31, 2004
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
NATURE OF BUSINESS:
Golf Two, Inc. (the "Company") is currently a development stage company under
the provisions of Statement of Financial Accounting Standards ("SFAS") No. 7 and
was incorporated under the laws of the State of Delaware on March 15, 2001. The
Company plans to operate retail golf stores that will feature indoor golf
instruction and sell custom golf clubs throughout California. As of March 31,
2004, the Company has not produced revenues since inception (unaudited) and will
continue to report as a development stage company until significant revenues are
produced.
INTERIM FINANCIAL STATEMENTS:
The accompanying unaudited financial statements for the three months ended March
31, 2004 include all adjustments (consisting of only normal recurring accruals),
which, in the opinion of management, are necessary for a fair presentation of
the results of operations for the periods presented. Interim results are not
necessarily indicative of the results to be expected for a full year. The
unaudited financial statements should be read in conjunction with the audited
financial statements included in the 10-KSB, as filed with the Securities and
Exchange Commission on March 19, 2004 for the year ended December 31, 2003.
BASIS OF PRESENTATION:
The accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America, which
contemplate continuation of the Company as a going concern. However, the Company
has no established source of revenue and, without realization of additional
capital, it would be unlikely for the Company to continue as a going concern.
This matter raises substantial doubt about the Company's ability to continue as
a going concern.
Management recognizes that the Company must generate additional resources to
enable it to continue operations. Management intends to continue to raise
additional financing through debt financing and equity financing or other means
and interests that it deems necessary, with a view to moving forward and
sustaining a prolonged growth in its strategy phases. However, no assurance can
be given that the Company will be successful in raising additional capital.
Further, there can be no assurance, assuming the Company successfully raises
additional equity, that the Company will achieve profitability or positive cash
flow. If management is unable to raise additional capital and expected
significant revenues do not result in positive cash flow, the Company will not
be able to meet its obligations and may have to cease operations.
The Company's expenses will significantly increase as it begins to implement its
business plan and currently has no source of revenue. Management hopes that the
Company's initial source of revenue will be sales from its proposed website. On
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
November 5, 2003, the Company entered into a promissory note for $50,000 with
one of its shareholders, payable by November 5, 2008, at the rate of 4% per year
calculated yearly, in order to engage a web developer. However, management
estimates that its proposed website will not be operational until late 2004.
Management hopes that once operational, the website will become a source of
revenue to the Company.
Subsequently, the Company plans to locate and begin developing its first brick
and mortar retail location, which management anticipates will not occur before
2005. To begin that step, management recognizes that the Company's funding needs
will be significantly greater and it will require additional sources of funding
since the Company is not yet able to generate revenues from operations. Because
the Company does not currently have the funds it believes are needed to open its
first retail location, and because revenues that may be generated from operation
of the Company's proposed website are likely not to be sufficient, the Company
hopes to raise an additional $475,000, the amount management estimates it needs
need to open its first retail location. Management projects that such financing
will need to be raised through borrowings and equity financing. Management hopes
to begin raising this amount during 2004. If the Company fails to raise this
amount by the end of 2004, management will focus the Company's efforts on its
proposed internet operations and website.
USE OF ESTIMATES:
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements, and the reported amounts of revenues and expenses
during the reported periods.
(2) EQUITY:
PREFERRED STOCK
The Company is authorized to issue 5,000,000 shares of preferred stock, par
value at $.001 per share. As of March 31, 3004, none of the shares were issued
or outstanding (unaudited).
6
GOLF TWO, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2004 AND 2003 AND THE
PERIOD FROM MARCH 15, 2001 (INCEPTION) TO MARCH 31, 2004
(2) EQUITY, CONTINUED:
COMMON STOCK
In March 2001, the Company issued 5,650,000 shares of its common stock in
exchange for services to incorporate the Company. In February 2002, the Board of
Directors declared that the company had not received consideration for the
issuance of 3,325,000 shares of the previously issued shares and canceled those
shares leaving 2,325,000 shares totaling $2,325. The Founder Shares were valued
at the par value of the Company's common stock, which represented its fair
market value on the date of issuance. The Company has not recognized the
issuance of the cancelled shares in the financial statements.
In February 2002, 3,000,000 shares of common stock were issued at $0.03 per
share in exchange for prior services rendered for a total of $90,000, which
represented its fair market value on the date of issuance.
In April 2002, the Company performed a private placement and issued 2,093,366
shares of its common stock at $0.03 per share for an aggregate total of $62,000.
(3) RELATED PARTY TRANSACTIONS:
OFFICE SPACE
A stockholder of the Company provided office space to the Company at $100 per
month on a month-to-month basis, which was recorded as a contribution to
capital. Total office expense for the three months ended March 31, 2004 and 2003
and for the period from March 15, 2001 (inception) to March 31, 2004 amounted to
$300, $300, and $4,400, respectively (unaudited).
NOTES PAYABLE
In April 2001, the Company entered into a $10,000 non interest-bearing note with
a stockholder. The note was due upon demand and repaid in April 2002. For the
year ended December 31, 2002, the Company recorded interest expense of $200 on
this note at 8% per annum as a contribution to capital.
On November 5, 2003, the Company was loaned $50,000 by a stockholder in exchange
for a promissory note. The principal is due and payable on November 5, 2008 with
interest payable on the unpaid balance at 4% per annum. For the three months
ended March 31, 2004, the Company recorded interest expense of $500 as a
contribution to capital (unaudited).
7
ITEM 2. PLAN OF OPERATION
--------------------------
THIS FOLLOWING INFORMATION SPECIFIES CERTAIN FORWARD-LOOKING STATEMENTS OF
MANAGEMENT OF THE COMPANY. FORWARD-LOOKING STATEMENTS ARE STATEMENTS THAT
ESTIMATE THE HAPPENING OF FUTURE EVENTS AND ARE NOT BASED ON HISTORICAL FACT.
FORWARD-LOOKING STATEMENTS MAY BE IDENTIFIED BY THE USE OF FORWARD-LOOKING
TERMINOLOGY, SUCH AS "MAY", "SHALL", "COULD", "EXPECT", "ESTIMATE",
"ANTICIPATE", "PREDICT", "PROBABLE", "POSSIBLE", "SHOULD", "CONTINUE", OR
SIMILAR TERMS, VARIATIONS OF THOSE TERMS OR THE NEGATIVE OF THOSE TERMS. THE
FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATION HAVE BEEN
COMPILED BY OUR MANAGEMENT ON THE BASIS OF ASSUMPTIONS MADE BY MANAGEMENT AND
CONSIDERED BY MANAGEMENT TO BE REASONABLE. OUR FUTURE OPERATING RESULTS,
HOWEVER, ARE IMPOSSIBLE TO PREDICT AND NO REPRESENTATION, GUARANTY, OR WARRANTY
IS TO BE INFERRED FROM THOSE FORWARD-LOOKING STATEMENTS.
THE ASSUMPTIONS USED FOR PURPOSES OF THE FORWARD-LOOKING STATEMENTS SPECIFIED IN
THE FOLLOWING INFORMATION REPRESENT ESTIMATES OF FUTURE EVENTS AND ARE SUBJECT
TO UNCERTAINTY AS TO POSSIBLE CHANGES IN ECONOMIC, LEGISLATIVE, INDUSTRY, AND
OTHER CIRCUMSTANCES. AS A RESULT, THE IDENTIFICATION AND INTERPRETATION OF DATA
AND OTHER INFORMATION AND THEIR USE IN DEVELOPING AND SELECTING ASSUMPTIONS FROM
AND AMONG REASONABLE ALTERNATIVES REQUIRE THE EXERCISE OF JUDGMENT. TO THE
EXTENT THAT THE ASSUMED EVENTS DO NOT OCCUR, THE OUTCOME MAY VARY SUBSTANTIALLY
FROM ANTICIPATED OR PROJECTED RESULTS, AND, ACCORDINGLY, NO OPINION IS EXPRESSED
ON THE ACHIEVABILITY OF THOSE FORWARD-LOOKING STATEMENTS. WE CANNOT GUARANTY
THAT ANY OF THE ASSUMPTIONS RELATING TO THE FORWARD-LOOKING STATEMENTS SPECIFIED
IN THE FOLLOWING INFORMATION ARE ACCURATE, AND WE ASSUME NO OBLIGATION TO UPDATE
ANY SUCH FORWARD-LOOKING STATEMENTS.
CRITICAL ACCOUNTING POLICY AND ESTIMATES. Our Management's Discussion and
Analysis of Financial Condition and Results of Operations section discusses our
consolidated financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States of America. The
preparation of these financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. On an on-going basis, management evaluates
its estimates and judgments, including those related to revenue recognition,
accrued expenses, financing operations, and contingencies and litigation.
Management bases its estimates and judgments on historical experience and on
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying value of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different
assumptions or conditions. The most significant accounting estimates inherent in
the preparation of our financial statements include estimates as to the
appropriate carrying value of certain assets and liabilities which are not
readily apparent from other sources. These accounting policies are described at
relevant sections in this discussion and analysis and in the notes to the
consolidated financial statements included in our Quarterly Report on Form
10-QSB for the three months ended March 31, 2004.
We incorporated in Delaware on March 15, 2001. We are a development stage
company and we plan to market and sell our goods and services by means of our
proposed website, www.golftwo.com. As of November 2003 we have engaged Pacific
Coast Consulting to develop our website. We anticipate that the cost for
developing our website will be approximately $17,500, and that our website will
be completed by the third quarter of 2004. We have not taken any other steps to
implement our business plan except for engaging this website consultant and
obtaining $50,000 in funding as described herein.
8
Once we have sufficient funds, as discussed below, we hope to initiate,
establish and operate retail golf stores which will feature indoor golf
instruction and custom golf clubs. Each retail location will offer custom-fitted
golf clubs, individualized to our customers' needs and marketed under the Golf
Two brand name. Golf instruction and training will be conducted on-site by
in-store staff under the direction of a professional at each store.
We anticipate that our future retail stores will be approximately 5,000 square
feet and will include two virtual reality golf simulators, two computer swing
analysis systems and a club fitting analysis system. Private label and brand
name golf merchandise and related products will also be available for sale at
each retail store. We seek to promote the enjoyment of the game of golf by
helping golfing enthusiasts of all levels play better. Accordingly, we intend to
offer indoor golf training available and individualized, quality golf clubs and
related products to our clientele.
LIQUIDITY AND CAPITAL RESOURCES. As of March 31, 2004, we have cash and cash
equivalents of $45,708. We believe that our available cash is sufficient to pay
our day-to-day expenditures and move forward with the development of our
website. One of our shareholders loaned us $50,000 in November 2003. As of March
31, 2004, our total liabilities were $62,940, which was represented by $12,940
of accounts payable and accrued expenses, and $50,000 in a note payable to a
related party, who is a stockholder.
FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND COMPARED TO THE THREE MONTH
PERIOD ENDED MARCH 31, 2003.
-------------------------------------------------------------------------
RESULTS OF OPERATIONS.
REVENUES. We have realized no revenues from our inception on March 15, 2001 to
March 31, 2004.
OPERATING EXPENSES. For the three months ended March 31, 2004, our general and
administrative expenses amounted to $9112. We also had $500 in interest expense.
Therefore, for the three months ended March 31, 2004, we experienced a net loss
of $9,612. This is in comparison to the three months ended March 31, 2003, where
our general and administrative expenses amounted to $2,360. For the three months
ended March 31, 2003, we also had $35 in interest income, making our net loss
$2,325.
OUR PLAN OF OPERATION FOR THE NEXT TWELVE MONTHS. To effectuate our business
plan during the next twelve months, we plan to begin marketing our products and
services by means of our website and develop our brand image. We have been
focused on developing our brand name and have reserved the domain name
www.golftwo.com; our website is currently under development and is not yet
operational. Our operations to date have been focused on engaging a website
contractor, which we were able to do by borrowing funds from one of our
shareholders, and locating sources of additional funding needed to further
implement our business plan. We have not taken any other steps to implement our
business plan to date. We anticipate that our website will be operational by the
third quarter of 2004. Our next step will be to attempt to establish strategic
relationships with providers of golf products. In the next twelve months, we
hope to accomplish the steps listed below to implement our business plan:
o Complete development of our website to promote our brand name and services
and take product orders;
o Begin advertising by means of direct mail, flyers and magazine inserts to
develop brand name recognition;
o Engage golf pro / instructor staff;
o Explore possible suitable retail locations for our initial store ; and
o Explore debt financing options
As of November 2003 we have engaged Pacific Coast Consulting to develop our
proposed website, located at www.golftwo.com. We have already reserved the
domain name. We anticipate that the cost for developing our website will be
approximately $17,500, and that our website will be completed by the third
quarter of 2004. We hope to use our website to market our proposed selection of
customized golf clubs which we hope to obtain from local independent golf
retailers, such as golf pro shops located at golf courses.
During the time our web site is being developed, we plan to review the website
templates for each page of our website as they become available from our website
contractor. We also plan to begin marketing space on our website to potential
suppliers of golf equipment, which we hope to engage as "Community Members" on
our site. We propose to use mailers, telemarketing, search engines and other
media to promote our brand name among potential suppliers.
Before our website goes "live", we will allow potential suppliers or "Community
Members" to view these templates after they are uploaded to the privately
viewable version of our website as it is being constructed. During this phase,
we hope to conclude agreements with these potential suppliers for us to sell
their products on our website.
9
Also during the time our site is under construction, we also plan to locate the
specific golf shops, course pro shops and other potential suppliers whom we hope
to engage as part of our supplier base. Each potential supplier will be notified
of the terms and conditions of being one of our "Community Members" and how and
when they will be able to begin uploading their inventory to our site. We will
not go live with our site until we have engaged a minimum number of Community
Members. We believe that some of the marketing tools that we will be using to
attract "Community Members" are available at a nominal cost.
In addition to our proposed online "Community" we hope to utilize two
fulfillment companies to help us fulfill our internet orders. One of our
officers and directors personally knows the owners of two independent
fulfillment companies, and they have verbally agreed to provide us with a net
discount once a volume of orders is established. We envision that these
companies will purchase, stock and finance all orders and a complete inventory
product line that will be available to customers online. We believe that this
will give us a very large product line with minimal capital outlay. We plan to
generate revenues from the commissions of everything sold from our site.
As our website is being launched, we intend to take steps to acquire and operate
from our first retail location, which we believe will require approximately
$475,000 in funding to lease a site and prepare it for retail operations. We are
continuing to locate additional funds sufficient to finance this proposed retail
location, though we have not yet been able to do so to date. Once we have
secured financing, we plan to enter into a lease for the premises we will use
for our retail location. Once the lease has been secured, we will arrange to
begin tenant improvements, begin vendor procurement for inventory, install
fixtures and equipment, hire and train employees, and undertake other necessary
efforts to begin operations. As of November 2003, we have identified two
potential locations and have begun discussions with the owners of these
properties, though we have not yet begun discussions regarding possible lease
terms. As of November 2003, we have also begun discussions with one of our
officers and directors, who is an architect, who we believe will assist us with
quantifying the costs of the tenant improvements that we would require,
depending on which of the two proposed premises are leased. In addition, we have
spoken with a tenant improvement specialist at Bickel Underwood Architect
located in Newport Beach, California as to the scope of this type of project.
We have cash of $45,708 as of March 31, 2004. In the opinion of management,
available funds will satisfy our working capital requirements through the next
twelve months if we are to take additional steps to implement our business plan.
We believe that our expenses will significantly increase as we begin to
implement our business plan. In November 2003, we have entered into a promissory
note for $50,000 with one of our shareholders, which is payable by November 5,
2008, at the rate of 4% per year calculated yearly. These funds have allowed us
to engage a web developer, as we have no other source of revenues. We estimate
that our proposed website, our only potential source of revenue, will not be
operational until late 2004. Once we locate and begin developing our first brick
and mortar retail location, which we anticipate will not occur before 2005, our
funding needs will be significantly greater and we will require additional
sources of funding since we are not yet able to generate revenues from
operations. We do not currently have the funds we believe we need to open our
first retail location, but hope to raise an additional $475,000, the amount we
estimate we need to open our first retail location, within the next 12 to 18
months. We will need to raise this amount through borrowings and equity
financing since we have no other source of revenue. If we fail to raise this
amount by the end of 2004, we will focus our efforts on our internet operations
and website. Our forecast for the period for which our financial resources will
be adequate to support our operations involves risks and uncertainties and
actual results could fail as a result of a number of factors.
We are not currently conducting any research and development activities other
than the development of our website and do not anticipate conducting such
activities in the near future. Unless we raise funds to accommodate additional
expenditures, we do not anticipate that we will purchase any significant
equipment. In the event that we generate significant revenues and expand our
operations, then we may need to hire additional employees or independent
contractors as well as purchase or lease additional equipment. We do not
anticipate incurring expenses to hire a golf pro or instructor staff, at least
initially, in that we hope to engage such individuals on a fee-splitting or
commission basis.
10
ITEM 3. CONTROLS AND PROCEDURES
-------------------------------
(a) Evaluation of disclosure controls and procedures. We maintain controls and
procedures designed to ensure that information required to be disclosed in the
reports that we file or submit under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the Securities and Exchange Commission. Based upon
their evaluation of those controls and procedures performed within 90 days of
the filing date of this report, our chief executive officer and the principal
financial officer concluded that our disclosure controls and procedures were
adequate.
(b) Changes in internal controls. There were no significant changes in our
internal controls or in other factors that could significantly affect these
controls subsequent to the date of the evaluation of those controls by the chief
executive officer and principal financial officer.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
--------------------------
None.
ITEM 2. CHANGES IN SECURITIES.
------------------------------
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
----------------------------------------
None.
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
----------------------------------------------------------
None.
ITEM 5. OTHER INFORMATION
--------------------------
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
------------------------------------------
(a) Exhibits.
31. Rule 13a-14(a)/15d-14(a) Certifications.
32. Section 1350 Certifications.
(b) Reports on Form 8-K
None.
11
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Golf Two, Inc.,
a Delaware corporation
May 21, 2004 By: /s/ David Bennett
-----------------------------------
David Bennett
principal executive, accounting and
financial officer, president, treasurer,
and a director