10-Q 1 eightq.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10QSB (MARK ONE) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED September 30, 2001. OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____ TO _____. COMMISSION FILE NUMBER: 000 26211 --------- EIGHT BALL CORPORATION, d/b/a/ Westchester Sports Grill ------------------------------------------------------ (Exact name of registrant as specified in its charter) Nevada 95 4666270 -------------------------------- -------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5630 West Manchester Boulevard Los Angeles, California 90045 ---------------------------------------- -------------------- (Address of principal executive offices) (Zip Code) (310) 670 2366 ---------------------------------------------------- (Registrants telephone number, including area code) N/A ---------------------------------------------------- (Former name or former address, if changed since last report) Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No 1 Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date. Class: Outstanding at september 30, 2001: Common Stock, $.001 par value 150,000 shares Transitional Small Business Disclosure Format (check one): YES [ ] NO [X] PART I FINANCIAL INFORMATION Item 1. Financial Statements. EIGHT BALL CORPORATION Financial Statements September 30, 2001 December 31, 2000 December 31, 1999 CONTENTS Page(s) ------ Independent Accountants Report 1 Financial Statements Balance Sheets 2 Statements of Operations 3 5 Statements of Stockholders Equity 6 Statements of Cash Flows 7 9 Notes to Financial Statements 10 12 2 INDEPENDENT AUDITOR S REPORT Board of Directors Eight Ball Corporation Las Vegas, Nevada I have audited the accompanying balance sheets of Eight Ball Corporation as of September 30, 2001 and as of December 31, 2000 and as of December 31, 1999 and the related statements of operations, stockholders equity and cash flows for the nine months and the years then ended. These financial statements are the responsibility on the Companys management. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principals used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Eight Ball Corporation at September 30, 2001 and at December 31, 2000 and at December 31, 1999 and the results of their operations and their cash flows for the nine month period and years then ended in conformity with generally accepted accounting principals. /s/ KURT D. SALIGER, C.P.A. --------------------------- KURT D. SALIGER, C.P.A. CERTIFIED PUBLIC ACCOUNTANT November 12, 2001 Las Vegas, Nevada 3 EIGHT BALL CORPORATION BALANCE SHEETS

See Accompanying Notes to Financial Statements. 4 EIGHT BALL CORPORATION STATEMENT OF OPERATIONS

See Accompanying Notes to Financial Statements. 5 EIGHT BALL CORPORATION STATEMENT OF OPERATIONS

See Accompanying Notes to Financial Statements. 6 EIGHT BALL CORPORATION STATEMENT OF OPERATIONS

See Accompanying Notes to Financial Statements 7 EIGHT BALL CORPORATION STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY For The Six Months Ended September 30, 2001

See Accompanying Notes to Financial Statements. 8 EIGHT BALL CORPORATION STATEMENTS OF CASH FLOWS

See Accompanying Notes to Financial Statements 9 EIGHT BALL CORPORATION STATEMENTS OF CASH FLOWS

See Accompanying Notes to Financial Statements 10 EIGHT BALL CORPORATION STATEMENTS OF CASH FLOWS

See Accompanying Notes to Financial Statements 11 EIGHT BALL CORPORATION NOTES TO FINANCIAL STATEMENTS NOTE 1 HISTORY AND ORGANIZATION OF THE COMPANY The Company was organized October 9, 1997 under the laws of the State of Nevada, under the name Eight Ball Corporation. The Company operates in the pool hall and restaurant industries. NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Method ----------------- The Company records income and expenses on the accrual method of accounting. Estimates --------- The preparation of financial statements in conformity with generally accepted accounting principals requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Cash and Equivalents -------------------- For the statements of cash flows, all highly liquid assets with a maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of December 31, 1999 and December 31, 2000 and September 30, 2001. Inventory --------- Inventories are stated at the lower cost (which approximates first in, first out cost) or market. Property and Equipment ---------------------- Property and equipment is stated at cost. Depreciation is recorded using the straight line method over the estimated useful life of the asset of three to seven years. Income taxes ------------ Income taxes are provided for using the liability method of accounting in accordance with Statement of Financial Accounting Standards No. 109 (SFAS #109) "Accounting for Income Taxes." A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. 12 EIGHT BALL CORPORATION NOTES TO FINANCIAL STATEMENTS (continued) NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Loss Per Share Net loss per share is provided in accordance with Statement of Financial Accounting Standards No. 128 (SFAS #128) "Earnings Per Share."Basic loss per share is computed by dividing losses available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per share reflects per share amounts that would have resulted if dilutive common stock equivalents had been converted to common stock. As of September 30, 2001 and December 31, 2000 and 1999, the Company had no dilutive common stock equivalents such as stock options. NOTE 3 INVENTORY Inventories consist of the following:

NOTE 4 PROPERTY AND EQUIPMENT The Company s property and equipment consisted of the following:

13 EIGHT BALL CORPORATION NOTES TO FINANCIAL STATEMENTS (continued) NOTE 5 STOCKHOLDERS EQUITY The authorized common stock of Eight Ball Corporation consists of 50,000 shares with a par vale of $0.0001 per share. On October 9, 1997, the Company issued 50,000 shares of its common stock for $50,000 cash On September 15, 1998, the Company completed a public offering that was offered without registration under the Securities Act of 1933, as amended, in reliance upon exemption from registration from registration afforded by sections 4(2) and 2(b) of the Securities Act and Regulation D promulgated thereunder. The company sold 100,000 shares at a price of $0.25 per share for a total amount raised of $25,000. NOTE 6 COMMITMENTS AND CONTINGENCIES Operating Leases The Company leases retail space for its restaurant and pool hall. The facility lease is for a period of two years and five months. The lease provides a renewal option of two five year additional terms. Total rent expense was $15,000 for the year ended December 31, 1998. Total rent expense was $82,092 for the year ended December 31, 2000. Total rent expense was $49,780 for the nine months ended September 30, 2001. Estimated future minimum lease payments as of September 30, 2001 are as follows:

14 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations. GENERAL OVERVIEW The Registrant, Eight Ball Corporation, is a Nevada corporation formed on October 9, 1997. It is currently doing business as Westchester Sports Grill. Westchester Sports Grill is located at 5630 West Manchester Boulevard, Los Angeles, California, 90045. Since its opening in July of 1998, Westchester Sports Grill has served the residential, university, commercial, and tourist communities in its surrounding areas. Westchester Sports Grill provides dining, including alcoholic beverages, and entertainment services to its customers. Westchester Sports Grill s niche is in providing: o live bands performing Hispanic dance music, with dancing areas o sports oriented entertainment including video games, billiard tables, and television monitors showing sports events and news o restaurant dining that provides a hint of Mexican flavor to an American cuisine RESULTS OF OPERATIONS STATEMENT ON FORWARD LOOKING INFORMATION Certain information included herein contains statements that may be considered forward looking, such as statements relating to anticipated performance and financing sources. Any forward looking statement made by the Company necessarily is based upon a number of estimates and assumptions that, while considered reasonable by the Company, is inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of the Company, and are subject to change. Actual results of the Company s operations may vary materially from any forward looking statement made by or on behalf of the Company. Forward looking statements should not be regarded as a representation by the Company or any other person that the forward looking statements will be achieved. Undue reliance should not be placed on any forward looking statements. Some of the contingencies and uncertainties to which any forward looking statement contained herein is subject include, but are not limited to, those relating to dependence on existing management, Internet regulation, leverage and debt service, domestic or global economic conditions and changes in federal or state tax laws or the administration of such laws. 15 COMPARISON OF THREE AND NINE MONTHS ENDED September 30, 2001 AND 2000. REVENUES. Revenues increased for the nine months ended September 30, 2001 by approximately $49,800 or 20 % over the same periods of the prior year. This increase during the 2001 period was due primarily to an increase in the average number of the Companys restaurant and bar patrons, as well as increased customer awareness of the Company. COSTS OF REVENUES. Costs of revenues decreased for the three and nine months ended September 30, 2001 by approximately $41,000 or 302 % over the same periods of the prior year. The increases during the 2001 periods were directly related to the increases in sales during the 2001 periods. Gross profits decreased for the three and nine months ended September 30, 2001 from approximately $149,426 to $98,563. 16 LIQUIDITY AND CAPITAL RESOURCES The ability of the Company to satisfy its obligations depends in part upon its ability to reach a profitable level of operations and, if needed, to procure short and longterm financing to continue development of its restaurant and entertainment operations through Westchester Sports Grill. There is no assurance that, if needed, short and longterm financing could be obtained to fulfill the Company s capital needs. If needed, the Company s management may offer shortterm loans in order to provide liquidity for Westchester Sports Grill. In addition, if needed, the Company may attempt to sell additional common stock to meet its current and future capital needs. The Company currently does not have plans to obtain a line of credit from a financial institution, as it is currently able to continue operations of Westchester Sports Grill without additional financing. However, if the Company cannot maintain its operations through revenues obtained by Westchester Sports Grill, and could not obtain either short or long term funding or funding through the sale of its common stock, the Company would be unlikely to continue its operations. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in the restaurant and entertainment businesses. Such risks include, but are not limited to, a large amount of competing businesses. To address these risks we must, among other things, continue to expand our niche in providing live Hispanic music entertainment and high quality Mexican American cuisine. Currently, the Company has no material commitments for capital expenditures. There can be no assurance that we will be successful in addressing such risks, and the failure to do so can have a material adverse effect on our financial condition and results of operations. ASSETS AND LIABILITIES. As of the nine months ended September 30, 2001, the Company had assets of approximately $33,540 compared to $32,950 as of December 31, 2000. The increase of assets in 2001 was due primarily to an increase in raw materials in inventory. The Companys current liabilities increased to $73,060 for the nine months ended September 30, 2001 compared to $65,790 as of the end of December 31, 2000. This increase was due mainly to an increase in accounts payable and accrued liabilities during the 2001 period. 17 PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8K. (a) Exhibits. Exhibit Number Description --------------------------------------------------------------------- 3.1 Articles of Incorporation of Eight Ball Corporation (Incorporated by reference from Exhibit 3.1 of Form 10QSB filed March 12, 2001). 3.2 Bylaws of Eight Ball Corporation (Incorporated by reference from Exhibit 3.2 of Form 10QSB filed March 12, 2001). 10.1 Lease (Incorporated by reference from Exhibit 10.1 of Form 10KSB filed April 18, 2001). (b) Reports on Form 8K. The Company filed a Form 8K on January 16, 2001 regarding the delayed filing of its quarterly report on Form 10QSB for the period ending September 30, 2000, due to a change in legal services used by the Company. 18 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 hereunto duly authorized. EIGHT BALL CORPORATION, d/b/a Westchester Sports Grill ------------------------------ (Registrant) Date: November 15, 2001 ---------------- /s/ ALFONSO HERNANDEZ, JR. ---------------------- ALFONSO HERNANDEZ, JR. PRESIDENT EIGHT BALL CORPORATION, d/b/a Westchester Sports Grill 19

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