$454,000 related to our sponsorship and advertising package with
The Mirage and $295,000 related to our contract with Pocket Kings, Ltd.
Sponsorship and advertising revenue in the three and six months ended June 30,
2007 primarily represented the fair value of our sponsorship and advertising
package with The Mirage, which we recorded at $405,000, $188,000 for our
sponsorship package with Mitchum (through Van Wagner, a sales agent), and
$134,000 in additional barter revenue recorded in trade for vendor credits.
Licensing
revenue.
During the
first half of 2008, we recorded revenue related to our licensing contract with
the Custom Group. There was no licensing revenue recorded during 2007.
Player
entry fees revenue.
Player entry fees revenue is comprised of the tournament entry fees paid by the
amateur players in our live events, which were $10,000 per player for our 2007
and 2008 events. We record player entry fees revenue on a net basis, in that we
do not record gifted or sponsored buy-ins to player entry fees revenue with an
offset to expense. Revenue from player entry fees increased in the three and
six months ended June 30, 2008 compared to the three and six months ended June
30, 2007. In 2008, we had 80 playing positions, with 54 players paying the full
entry fee and 23 sponsored players. In 2007, the year in which we held our
inaugural event, we had 60 players, with 26 players paying the full entry fee
and 28 sponsored players.
Cost
of revenue
. Cost
of revenue primarily consists of barter transactions, player payout (tournament
prizes), media production costs and other event costs. Cost of revenue
decreased slightly in the three and six months ended June 30, 2008 compared to
the three and six months ended June 30, 2007. Our inaugural event was held in
2007, which resulted in costs being higher for the tournament.
Sales
and marketing
.
Sales and marketing expense consists primarily of consulting, public relations,
sales materials and advertising. Sales and marketing increased in the three and
six months ended June 30, 2008 compared to the three and six months ended June
30, 2007 resulting primarily from the inclusion in the three and six months
ended June 30, 2008 of $150,000 and $300,000, respectively, of fair value of
shares of our common stock issued to a consulting group which provided public
relations and promotional services. This was offset by higher sales and
marketing expenses in 2007 related to promotional activities related to the
inaugural event.
General
and administrative
.
General and administrative expense consists primarily of salaries and other
personnel-related expenses to support our tournament operations, non-cash
stock-based compensation for general and administrative personnel, professional
fees, such as accounting and legal, corporate insurance and facilities costs.
The significant increase in general and administrative expenses in the three
and six months ended June 30, 2008 compared to the three and six months ended
June 30, 2007 resulted primarily from an overall increase in 2008 as compared
to 2007 in consulting fees and salaries paid to administrative personnel in
support of tournament operations.
Interest
Expense
.
In 2007,
we borrowed a total of $985,000 pursuant to a promissory note with the chairman
of our board of directors. The note bore interest at a rate of 12% per annum
and matured on November 9, 2007. An origination fee of $10,000 was recorded as
debt discount and amortized over the life of the debt, and 197,000 shares of
common stock were also issued as an origination fee and recorded at their fair
value of $1.00 per share as determined by our board of directors after taking
into account recent stock sales and amortized to interest expense during 2007.
In
January 2008, the note was replaced by a second promissory note in the principal
amount of $961,000, bearing interest at a rate of 12% per annum. This new note
was due on January 1, 2009. During the three and six months ended June 30,
2008, we recorded interest expense of approximately $29,000 and $58,000 related
to this note.
In
addition, in the second quarter of 2008, we borrowed an aggregate of $1,135,000
pursuant to convertible promissory notes, bearing interest at 6% per annum,
with a discount of $1.1 million that was recorded and is being amortized to
interest expense during 2008. We recognized interest expense related to the
amortization of the discount of $285,000 during the three and six months ended
June 30, 2008.
Off-Balance Sheet Arrangements
As
of June 30, 2008, we did not have any off-balance sheet arrangements, as
defined in Item 303(a)(4)(ii) of SEC Regulation S-K.
I
TEM 4T. CONTROLS AND PROCEDURES.
(a)
Disclosure Controls and Procedures. As described above in the Explanatory
Note to this Amendment No. 1 to our Quarterly Report on Form 10-Q/A for the
quarter ended June 30, 2008 and Note 9 to our unaudited consolidated financial
statements,
17
our management determined it
was necessary to restate our unaudited interim financial statements as of and
for the three and six months ended June 30, 2008 and 2007.
As
stated in our Quarterly Report on Form 10-Q for the period ended June 30, 2008
as originally filed, our management evaluated, under the supervision and with
the participation of our then Chief Executive Officer/Chief Financial Officer
(CEO/CFO), the effectiveness of our disclosure controls and procedures as of
June 30, 2008. Based on that initial evaluation, our then CEO/CFO concluded
that, as of June 30, 2008, our disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934), were
effective.
Subsequent
to that evaluation and in connection with the restatement and filing of this
Amendment No. 1 to our Quarterly Report on Form 10-Q/A for the quarter ended
June 30, 2008, our management, under the supervision and with the participation
of our current CEO/CFO, reevaluated the effectiveness of our disclosure
controls and procedures and concluded that our disclosure controls and
procedures were not effective as of June 30, 2008 in light of the need for the
restatements reported herein. Under Item 9A(T) of our Annual Report on Form
10-K for the year ended December 31, 2008 (the Annual Report), we described
the remediation efforts we are undertaking in order to correct the deficiencies
in our disclosure controls.
(b)
Internal Control over Financial Reporting. There were no changes in our
internal controls over financial reporting or in other factors during the
fiscal quarter ended June 30, 2008 that materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting. As
previously reported in Item 9A(T) of the Annual Report, we still had numerous
material weaknesses in our internal control over financial reporting as of
December 31, 2008. In the Annual Report we described the remediation efforts we
have begun to undertake in order to correct such material weaknesses.
P
ART II OTHER INFORMATION
I
TEM 2. UNREGISTERED SALES OF EQUITY
SECURITIES AND USE OF PROCEEDS
The
following sets forth certain information for all securities we sold during the
quarter ended June 30, 2008 without registration under the Securities Act of
1933, as amended (the Securities Act), other than those sales previously
reported in a Current Report on Form 8-K:
In
May and June 2008, we issued convertible promissory notes to six investors in
an aggregate principal amount of $1,135,000. These notes were convertible into
shares of common stock at a conversion price of $1.00 per share. The
convertible notes provide that the conversion price of the notes will be
reduced in the event of subsequent financings at an effective price per share
less than the conversion price of the convertible notes, subject to certain
exceptions. The convertible promissory notes were issued together with warrants
to purchase an aggregate of 1,135,000 shares of common stock at an exercise
price of $1.05 per share. Copies of the form of Convertible Promissory Note and
form of Warrant issued to the investors are filed as Exhibits 10.5 and 10.6,
respectively, to our Annual Report on Form 10-K for the year ended December 31,
2008. This offering was exempt from registration provided by Rule 506
promulgated under the Securities Act, and each of the investors was an
accredited investor as defined in Rule 501promulgated under the Securities
Act.
In
May 2008, we issued 150,000 shares of our common stock to a financial
consultant in payment of services rendered. This transaction was exempt from
registration provided by Section 4(2) of the Securities Act.
I
TEM 6. EXHIBITS
The
exhibits required by this item are listed on the Exhibit Index attached hereto.
18
S
IGNATURES
In
accordance with the requirements of the Exchange Act, the registrant has caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
|
|
|
Dated: August 5, 2009
|
WORLD SERIES OF GOLF, INC.
|
|
|
|
|
By:
|
/s/ Joseph F. Martinez
|
|
|
|
|
|
Joseph F. Martinez
|
|
|
Chief Executive Officer,
Chief Financial Officer,
|
|
|
and Principal Accounting
Officer
|
19
EXHIBIT INDEX
|
|
|
|
Exhibit No.
|
|
Description
of Exhibit
|
|
|
|
|
|
|
|
|
|
31.1
|
|
Certification of our Chief
Executive Officer and Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
|
|
|
32.1
|
|
Certification of our Chief
Executive Officer and Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|
20
Vaycaychella (PK) (USOTC:VAYK)
Historical Stock Chart
From Jun 2024 to Jul 2024
Vaycaychella (PK) (USOTC:VAYK)
Historical Stock Chart
From Jul 2023 to Jul 2024