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EX-99.1 - RISK FACTORS - GOLF ROUNDS COM INCteee_ex991.htm
EX-32.1 - CERTIFICATION - GOLF ROUNDS COM INCteee_ex321.htm
EX-31.1 - CERTIFICATION - GOLF ROUNDS COM INCteee_ex311.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
 
For the fiscal year ended: August 31, 2013
   
o
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 0-10093

Golf Rounds.com, Inc.
(Exact name of registrant as specified in its charter)

Delaware
 
59-1224913
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)

111 Village Parkway, Building #2, Marietta, Georgia 30067
(Address of principal executive offices) (Zip Code)

770-951-0984
(Registrant’s telephone number)

N/A
(Former name, former address and former fiscal year,
if changed since last report)

Check 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. Yes x  No o

State the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: As of November 15, 2013, the issuer had 5,848,185 shares of common stock, par value $.01 per share, outstanding.

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recent completed second fiscal quarter. As of February 28, 2013, the aggregate market value was $339,234.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o
Accelerated filer o
Non-accelerated filer o
Smaller reporting company x
    (Do not check if a smaller reporting company)  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes x  No o
 


 
 

 
 
TABLE OF CONTENTS
 
PART I      
         
Item 1.
Description of Business
    3  
Item 2.
Description of Properties
    6  
Item 3.
Legal Proceedings
    6  
Item 4. Mine Safety Disclosures     6  
           
PART II        
           
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    7  
Item 6.
Selected Financial Data
    8  
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
    8  
Item 8.
Financial Statements and Supplementary Data
    11  
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    12  
Item 9A(T).
Controls and Procedures
    12  
Item 9B.
Other Information
    12  
           
PART III        
           
Item 10.
Directors, Executive Officers and Corporate Governance
    13  
Item 11.
Executive Compensation
    14  
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    15  
Item 13.
Certain Relationships and Related Transactions, and Director Independence
    17  
Item 14.
Principal Accountant Fees and Services
    17  
           
PART IV        
           
Item 15.
Exhibits, Financial Statement Schedules
    18  
           
SIGNATURES     19  
EX-31.1: Certification        
EX-32.1: Certification        
EX-99.1: Risk Factors        

 
2

 

PART I

ITEM 1. DESCRIPTION OF BUSINESS
 
INTRODUCTION
 
Golf Rounds.com, Inc. (the “Company”) was incorporated in 1968 as a Delaware corporation, which is also authorized to conduct business in New Jersey and Georgia. Until the fourth quarter of fiscal 1992, the Company was engaged in the wholesale distribution of aluminum alloys, steel and other specialty metals under the name American Metals Service, Inc. In the fourth quarter of fiscal 1992, the Company liquidated its assets and did not conduct any business operations until May 1999. In May 1999, the Company acquired the assets of PKG Design, Inc., the developer of two (2) sports-related Internet websites: golfrounds.com and skiingusa.com. In connection with the acquisition of these websites, the Company changed its name to Golf Rounds.com, Inc.

In August 2001, the Company determined to cease operations of its golfrounds.com and skiingusa.com websites since continued maintenance of these websites was not a productive use of the Company’s resources.

On September 19, 2003, the Company and its wholly owned subsidiary, DPE Acquisition Corp. (formed on September 2, 2003), entered into an agreement and plan of reorganization and merger with Direct Petroleum Exploration, Inc. ("DPE"), which was not consummated. The Company continues to maintain the subsidiary for use in any other potential future acquisition. This subsidiary is currently inactive and has no operations.

On July 26, 2013, the Company executed a reorganization agreement with PH Squared LLC (“PharmHouse”). Under the terms of the agreement, the Company would have engaged in a business combination with PharmHouse, with Pharmhouse becoming a wholly owned subsidiary of the Company, and the equity owners of PharmHouse being issued approximately 90% of the common stock of the Company, on an after issued basis. On October 11, 2013, the Company delivered a letter to PharmHouse notifying PharmHouse that the agreement had expired on its stated termination date of August 30, 2013 and that the agreement would not be extended. Upon expiration of the agreement with PharmHouse, the Company determined to actively pursue alternative business combination opportunities in the near term. 

OUR BUSINESS PLAN
 
Generally
 
Our current business plan is to serve as a vehicle for the acquisition of or merger or consolidation with another company (a “target business”). We intend to use our available working capital, capital stock, debt or a combination of these to effect a business combination with a target business which we believe has significant growth potential. The business combination may be with a financially stable, mature company or a company that is in its early stages of development or growth, which could include companies seeking to obtain capital and to improve their financial stability.
 
We will not restrict our search to any particular industry. Rather, we may investigate businesses of essentially any kind or nature and participate in any type of business that may, in our management’s opinion, meet our business objectives as described in this report. We emphasize that the description in this report of our business objectives is extremely general and is not meant to restrict the discretion of our management to search for and enter into potential business opportunities. We have not chosen the particular business in which we will engage and have not conducted any market studies with respect to any business or industry for you to evaluate the possible merits or risks of the target business or the particular industry in which we may ultimately operate. To the extent we enter into a business combination with a financially unstable company or an entity in its early stage of development or growth, including entities without established records of sales or earnings, we will become subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, to the extent that we effect a business combination with an entity in an industry characterized by a high level of risk, we will become subject to the currently unascertainable risks of that industry. An extremely high level of risk frequently characterizes certain industries that experience rapid growth. In addition, although we will endeavor to evaluate the risks inherent in a particular industry or target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
 
 
3

 
 
Sources of target businesses
 
We anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including securities broker-dealers, investment bankers, venture capitalists, bankers and other members of the financial community, who may present solicited or unsolicited proposals. Our officers and directors and their affiliates may also bring to our attention target business candidates. While we do not presently anticipate engaging the services of professional firms that specialize in business acquisitions on any formal basis, we may engage such firms in the future, in which event, we may pay a finder’s fee or other compensation for such introductions if they result in consummated transactions. These fees are customarily between 1% and 5% of the size of the overall transaction, based upon a sliding scale of the amount involved.
 
Selection of a target business and structuring of a business combination
 
Our management will have significant flexibility in identifying and selecting a prospective target business. In evaluating a prospective target business, our management will consider, among other factors, the following:
 
·  
the financial condition and results of operation of the target;
 
·  
the growth potential of the target and that of the industry in which the target operates;
 
·  
the experience and skill of the target’s management and availability of additional personnel;
 
·  
the capital requirements of the target;
 
·  
the competitive position of the target;
 
·  
the stage of development that the target’s products, processes or services are at;
 
·  
the degree of current or potential market acceptance of the target’s products, processes or services;
 
·  
proprietary features and the degree of intellectual property or other protection of the target’s products, processes or services;
 
·  
the regulatory environment of the industry in which the target operates;
 
·  
the prospective equity interest in, and opportunity for control of, the target; and
 
·  
the costs associated with effecting the business combination.
 
These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular business combination will be based, to the extent relevant, on the above factors as well as other considerations deemed relevant by our management in connection with effecting a business combination consistent with our business objective. In connection with our evaluation of a prospective target business, we anticipate that we will conduct an extensive due diligence review that will encompass, among other things, meetings with incumbent management and inspection of facilities, as well as a review of financial or other information that will be made available to us.
 
We will endeavor to structure a business combination so as to achieve the most favorable tax treatment to us, the target business and both companies’ stockholders. We cannot assure you, however, that the Internal Revenue Service or appropriate state tax authority will agree with our tax treatment of the business combination.
 
 
4

 
 
Until we are presented with a specific opportunity for a business combination, we are unable to ascertain with any degree of certainty the time and costs required to select and evaluate a target business and to structure and complete the business combination. We do not have any full-time employee who will be devoting 100% of his or her time to our affairs. Any costs incurred in connection with the identification and evaluation of a prospective target business with which a business combination is not ultimately completed will result in a loss to us and reduce the amount of capital otherwise available to complete a business combination.
 
Limited ability to evaluate the target business’ management
 
Although we intend to carefully scrutinize the management of a prospective target business before effecting a business combination, we cannot assure you that our assessment of the target’s management will prove to be correct, especially in light of the possible inexperience of our officers and directors in evaluating certain types of businesses. In addition, we cannot assure you that the target’s future management will have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of our officers and directors, if any, in the target business cannot presently be stated with any certainty. While it is possible that one or more of our officers and directors will remain associated in some capacity with us following a business combination, it is unlikely that any of them will devote their full efforts to our affairs after a business combination. Moreover, we cannot assure you that our officers and directors will have significant experience or knowledge relating to the operations of the particular target business.
 
We may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you, however, that we will be able to recruit additional managers who have the requisite skills, knowledge or experience necessary to enhance the incumbent management.
 
Investment Company Act
 
We may participate in a business or opportunity by purchasing, trading or selling the securities of a business. We do not intend to engage primarily in these activities and we are not registered as an “investment company” under the Investment Company Act of 1940. We do not believe that registration under the act is required based upon our proposed activities. We intend to conduct our activities so as to avoid being classified as an “investment company” and avoid application of the costly and restrictive registration and other provisions of the Investment Company Act and its regulations.
 
The Investment Company Act may, however, also be deemed to be applicable to a company that does not intend to be characterized as an “investment company” but that, nevertheless, engages in activities that may be deemed to be within the definitional scope of certain provisions of the Investment Company Act. While we do not believe that our anticipated principal activities will subject us to regulation under the Investment Company Act, we cannot assure you that we will not be deemed to be an “investment company,” especially during the period prior to a business combination. In the event we are deemed to be an “investment company,” we may become subject to certain restrictions relating to our activities and regulatory burdens, including:
 
·  
restrictions on the nature of our investments; and
 
·  
the issuance of securities,
 
·  
registration as an investment company;
 
·  
adoption of a specific form of corporate structure; and
 
·  
compliance with certain burdensome reporting, recordkeeping, voting, proxy and disclosure requirements and other rules and regulations.
 
In the event we are characterized as an “investment company,” we would be required to comply with these additional regulatory burdens, which would require additional expense.
 
 
5

 
 
COMPETITION
 
We expect to encounter intense competition from other entities having a business objective similar to ours. Many of these entities, including financial consulting companies and venture capital firms, have longer operating histories and have extensive experience in identifying and effecting business combinations, directly or through affiliates. Many of these competitors possess significantly greater financial, technical and other resources than we do. We cannot assure you that we will be able to effectively compete with these entities. In the event we are unable to compete effectively with these entities, we may be forced to evaluate less attractive prospects for a business combination. If we are forced to evaluate these less attractive prospects, we cannot assure you that our stated business objectives will be met.
 
If we effect a business combination, we will become subject to competition from competitors of the acquired business. In particular, industries that experience rapid growth frequently attract larger numbers of competitors, including competitors with greater financial, marketing, technical and other resources than we have. We cannot ascertain the level of competition we will face if we effect a business combination and we cannot assure you that we will be able to compete successfully with these competitors.
 
EMPLOYEES
 
Currently, our only employee is our officer, who devotes as much time to our business as our board of directors determines to be necessary. R.D. Garwood, Inc. provides us with the use of an administrative assistant, who performs secretarial and bookkeeping services. (See also Item 2, Description of Properties.)
 
ITEM 2. DESCRIPTION OF PROPERTIES
 
Our principal executive offices are located at 111 Village Parkway, Building #2, Marietta, Georgia and our telephone number is (770) 951-0984. Our office space, fixtures, furniture and equipment, as well as our administrative assistant, is provided to us by R.D. Garwood, Inc. at a cost of $900 per month on a month-to-month basis. Effective June 1, 2013, due to the financial status of the Company, R.D. Garwood, Inc. began providing the aforementioned services at no charge to the Company. Robert H. Donehew, our president, treasurer and director, is also chief financial officer of R.D. Garwood, Inc. We believe that our present business property is adequate and suitable to meet our needs until we consummate a business combination.
 
ITEM 3. LEGAL PROCEEDINGS
 
None.
 
ITEM 4. MINE SAFETY DISCLOSURES
 
Conditions to the proposed business combination with PharmHouse included amending the Company’s certificate of incorporation to: (i) change the name of the Company, (ii) effectuate a 1 for 14.62 reverse stock split of the Company’s common stock and (iii) increase the Company’s authorized capitalization from 12,000,000 shares of common stock to 500,000,000 shares of common stock and 20,000,000 shares of preferred stock. A limited number of stockholders of the Company, including directors and former directors and affiliated persons, executed a written consent on July 24, 2013 approving such amendments. These amendments were not effected, however, as the proposed transaction with PharmHouse expired and was abandoned by the parties.
 
 
6

 
 
PART II
 
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
 
MARKET INFORMATION
 
Our common stock is traded on the OTC Bulletin Board under the symbol “TEEE”. Below is a table indicating the range of high and low bid information for the common stock as reported by the OTC Bulletin Board for the periods listed. Bid prices represent prices between broker-dealers and do not include retail mark-ups and mark-downs or any commission to broker-dealers. In addition, these prices do not necessarily reflect actual transactions.
 
   
HIGH
   
LOW
 
PERIOD
 
($)
   
($)
 
Fiscal 2014
           
First Quarter*
    0.20       0.04  
                 
Fiscal 2013
               
First Quarter
    0.09       0.03  
Second Quarter
    0.10       0.03  
Third Quarter
    0.10       0.05  
Fourth Quarter
    0.15       0.05  
                 
Fiscal 2012
               
First Quarter
    0.08       0.03  
Second Quarter
    0.11       0.03  
Third Quarter
    0.10       0.06  
Fourth Quarter
    0.12       0.02  
_____________
               
*      Through November 8, 2013                
 
HOLDERS
 
As of November 15, 2013, we believe there were approximately 2,000 beneficial holders of our common stock.
 
DIVIDEND POLICY
 
We had not paid any dividends until October 21, 2010, at which time the Company declared a special cash dividend of $0.50 per share payable to stockholders of record as of September 30, 2010. We do not anticipate declaring any additional dividends prior to the consummation of a business combination. The payment of dividends after a business combination will be contingent upon our revenues and earnings, if any, our capital requirements and our general financial condition. The payment of any dividends after a business combination will be within the discretion of our board of directors. We presently intend to retain all earnings, if any, for use in our business operations and, accordingly, we do not anticipate declaring any dividends in the foreseeable future.
 
RECENT SALES OF UNREGISTERED SECURITIES AND USE OF PROCEEDS FROM SALES OF REGISTERED SECURITIES.
 
On July 24, 2013, an aggregate principal amount of $41,100 of the Company’s outstanding promissory notes, bearing interest at an annual rate of 5.25%, were converted, at the election of the holders thereof, into an aggregate of 798,808 shares of common stock, at fixed conversion rates ranging from $0.033 to $0.08 per share as stated in each respective promissory note.
 
 
7

 
 
ITEM 6. SELECTED FINANCIAL DATA
 
None.
 
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
FORWARD LOOKING STATEMENTS
 
When used in this Report, words or phrases such as “will likely result,” “management expects,” “we expect,” “will continue,” “is anticipated,” “estimated” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any such forward-looking statements, each of which speaks only as of the date made. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. We have no obligation to publicly release the result of any revisions which may be made to any forward-looking statements to reflect anticipated or unanticipated events or circumstances occurring after the date of such statements. Forward-looking statements involve a number of risks and uncertainties including, but not limited to, general economic conditions, our ability to find a suitable company to effect a business combination with, competitive factors and other risk factors as set forth in Exhibit 99.1 included in the 10-K Report for the year ended August 31, 2008 as filed on November 7, 2008.
 
The following discussion should be read in conjunction with the financial statements and related notes included in this Report.
 
Critical Accounting Policies and Use of Estimates

The preparation of consolidated financial statements requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts and classification of expense, and the disclosure of contingent assets and liabilities. We evaluate our estimates and assumptions on an ongoing basis. We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values 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 following items in our consolidated financial statements require significant estimates and judgments:

Accounting for stock options. The Company recognizes compensation expense for stock-based compensation in accordance with ASC Topic No. 718. For employee stock-based awards, the Company calculates the fair value of the award on the date of grant using the Black-Scholes method for stock options; the expense is recognized over the service period for awards expected to vest. For non-employee stock-based awards, the Company calculates the fair value of the award on the date of grant in the same manner as employee awards, however, the awards are revalued at the end of each reporting period and the prorata compensation expense is adjusted accordingly until such time the nonemployee award is fully vested, at which time the total compensation recognized to date shall equal the fair value of the stock-based award as calculated on the measurement date, which is the date at which the award recipient’s performance is complete. The estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period estimates are revised.

RESULTS OF OPERATIONS
 
We have had no revenues (other than interest and dividend income) since 1992 and will not generate any revenues (other than interest and dividend income) until, at the earliest, the completion of a business combination.
 
Fiscal year 2013 compared to fiscal year 2012
 
For the year ended August 31, 2013, other income (expense) was ($571) as compared to $30 for the year ended August 31, 2012. The decrease in interest income to $0 from $30 was due to fewer funds invested in money market fund investments in the current year. The increase in interest expense to ($571) from $0 was due to the issuance of $58,350 of notes payable.
 
 
8

 
 
General, administrative and other expenses were $109,284 for the year ended August 31, 2013, as compared to $101,613 for the year ended August 31, 2012. The increase in expenses was due to higher legal expenses of $15,343, stockholder service expenses of $6,248, postage expense of $225 and bank charges of $60, offset by lower payroll expenses of $7,903, office sharing expenses of $2,700, audit and accounting fee expenses of $2,000, directors and officers liability insurance expenses of $1,372, dues and subscriptions of $176, and taxes and licenses of $54.
 
General, administrative and other expenses for the year ended August 31, 2013, consisted of legal expenses of $34,350, payroll expenses of $22,500, audit and accounting fee expenses of $18,250, stockholder service expenses of $17,100, office sharing expenses of $8,100, directors and officers liability insurance expenses of $7,795, taxes and license expenses of $593, bank charges of $371 and dues and postage expenses of $225.
 
LIQUIDITY AND CAPITAL RESOURCES
 
General
 
At August 31, 2013, cash and cash equivalents were $801, which includes $74 invested in a money market account with an effective yield of 0.02% and $727 in a non-interest bearing checking account. At August 31, 2013, we had a working capital deficiency of $21,595.
 
Cash flows used in operating activities for the year ended August 31, 2013 of $50,883 relates to a net loss of $109,855 and an increase in prepaid expenses of $5,510, offset by convertible notes issued for services rendered of $7,000 and an increase in accounts payable and accrued expenses of $57,482.
 
Currently, our working capital may not be sufficient to last for more than 12 months. If we acquire a business, our-post acquisition capital needs may be more substantial and our current capital resources may not be sufficient to meet our requirements. We currently believe that if we need capital in the future, we will be able to raise capital through sales of equity and institutional or investor borrowings, although we cannot assure you we will be able to obtain such capital. We anticipate that after any acquisition we may complete in accordance with our business plan, we will use substantially all our then existing working capital to fund the operations of the acquired business. In addition, we believe that any new business operations may require additional capital to fund its operations.
 
Contractual obligations
 
The Company has no material contractual obligations other than those relating to employment as described in Item 11, “Executive Compensation.”
 
Our Ability to Continue as a Going Concern

The report of the Company’s independent registered public accounting firm contained in the Company’s consolidated financial statements for the year ended August 31, 2013 includes an explanatory paragraph describing the existence of conditions that raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements as of August 31, 2013 have been prepared under the assumption that we will continue as a going concern. If we are not able to continue as a going concern, it is likely that holders of our common stock will lose all of their investment. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
RECENT ACCOUNTING PRONOUNCEMENTS

In February 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2013-04, “Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date (a consensus the FASB Emerging Issues Task Force)”. ASU 2013-04 provides guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date, except for obligations addressed within existing guidance in U.S. generally accepted accounting principles (GAAP). The guidance requires an entity to measure those obligations as the sum of: (a) the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and (b) any additional amount the reporting entity expects to pay on behalf of its co-obligors. The amendments in this Update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The Company does not expect the adoption of this guidance to have a material effect on the Company’s consolidated financial statements.
 
 
9

 
 
In March 2013, the FASB issued ASU 2013-05, “Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (a consensus the FASB Emerging Issues Task Force)”. ASU 2013-05 resolves the diversity in practice about whether Subtopic 810-10, Consolidation—Overall, or Subtopic 830-30, Foreign Currency Matters—Translation of Financial Statements, applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity. In addition, the amendments in this Update resolve the diversity in practice for the treatment of business combinations achieved in stages (sometimes also referred to as step acquisitions) involving a foreign entity. The amendments in this Update are effective prospectively for fiscal years (and interim reporting periods within those years) beginning after December 15, 2013. The Company does not expect the adoption of this guidance to have a material effect on the Company’s consolidated financial statements.
 
In July 2013, the FASB issued ASU 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force)”. The objective of the amendments in this Update is to eliminate diversity in practice on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. An unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The amendments in this Update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The Company does not expect the adoption of this guidance to have a material effect on the Company’s consolidated financial statements.
 
We have implemented all new accounting standards that are in effect and that may impact our consolidated financial statements and do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our consolidated financial position or results of operations.
 
 
10

 
 
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
Index to Financial Statements:
 
   
Page
 
       
Report of Independent Registered Public Accounting Firm
    F-1  
         
Consolidated Balance Sheets as of August 31, 2013 and 2012
    F-2  
         
Consolidated Statements of Operations for the years ended August 31, 2013 and 2012
    F-3  
         
Consolidated Statements of Stockholders’ Equity (Deficiency) for the years ended August 31, 2013 and 2012
    F-4  
         
Consolidated Statements of Cash Flows for the years ended August 31, 2013 and 2012
    F-5  
         
Notes to Consolidated Financial Statements for the years ended August 31, 2013 and 2012
    F-6 — F-13  

 
11

 
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
To the Board of Directors and Stockholders:
Golf Rounds.com, Inc.

We have audited the accompanying consolidated balance sheets of Golf Rounds.com, Inc. and subsidiary (the “Company”) as of August 31, 2013 and 2012, and the related consolidated statements of operations, stockholders’ equity (deficiency) and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Golf Rounds.com, Inc. and subsidiary as of August 31, 2013 and 2012, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has suffered recurring losses and negative cash flows from operations which have resulted in a negative working capital and a stockholders' deficiency as of August 31, 2013. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 
Weinberg & Company, P.A.
 
Los Angeles, CA
November 15, 2013
 
 
F-1

 
 
GOLF ROUNDS.COM, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
 
   
August 31, 2013
   
August 31, 2012
 
Assets
             
Current assets:
           
Cash and cash equivalents
  $ 801     $ 334  
Prepaid expenses
    10,700       5,190  
Total current assets
    11,501       5,524  
                 
Total assets
  $ 11,501     $ 5,524  
                 
Liabilities and Stockholders’ Deficiency
                 
Current liabilities:
               
Accounts payable and accrued expenses (includes $0 and $43,500
               
due to related parties, respectively)
  $ 33,096     $ 49,714  
Total current liabilities
    33,096       49,714  
                 
Notes payable
    17,250       -  
Total liabilities
    50,346       49,714  
                 
Stockholders’ deficiency:
               
Common stock, $0.01 par value; 12,000,000 shares authorized,
               
5,848,185 and 3,567,377 shares issued and outstanding, respectively
    58,481       35,673  
Additional paid-in capital
    3,270,942       3,178,550  
Accumulated deficit
    (3,368,268 )     (3,258,413 )
Total stockholders’ deficiency
    (38,845 )     (44,190 )
                 
Total liabilities and stockholders’ deficiency
  $ 11,501     $ 5,524  
 
See accompanying notes to consolidated financial statements.
 
 
F-2

 
 
GOLF ROUNDS.COM, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS

   
For the
   
For the
 
   
Year Ended
   
Year Ended
 
   
August 31, 2013
   
August 31, 2012
 
             
Expenses:
           
General, administrative and other
  $ 109,284     $ 101,613  
Total operating expenses
    109,284       101,613  
                 
Loss from operations
    (109,284 )     (101,613 )
                 
Other income (expense):
               
Interest income
    -       30  
Interest expense
    (571 )     -  
Total other income (expense)
    (571 )     30  
                 
Net loss
  $ (109,855 )   $ (101,583 )
                 
Net loss per common share - basic and diluted
  $ (0.03 )   $ (0.03 )
                 
Weighted average number of common shares
               
outstanding - basic and diluted
    3,804,831       3,567,377  
 
See accompanying notes to consolidated financial statements.
 
 
F-3

 
 
GOLF ROUNDS.COM, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIENCY)
FOR THE YEARS ENDED AUGUST 31, 2013 AND 2012
 
                           
Total
 
               
Additional
         
Stockholders'
 
   
Common Stock
   
Paid-In
   
Accumulated
   
Equity
 
   
Shares
   
Amount
   
Capital
   
Deficit
   
(Deficiency)
 
Balance, August 31, 2011
    3,567,377     $ 35,673     $ 3,178,550     $ (3,156,830 )   $ 57,393  
Net loss
    -       -       -       (101,583 )     (101,583 )
Balance, August 31, 2012
    3,567,377       35,673       3,178,550       (3,258,413 )     (44,190 )
Conversion of convertible notes payable to common shares
    798,808       7,988       33,112       -       41,100  
Conversion of accrued expenses to common shares
    1,482,000       14,820       59,280       -       74,100  
Net loss
    -       -       -       (109,855 )     (109,855 )
Balance, August 31, 2013
    5,848,185     $ 58,481     $ 3,270,942     $ (3,368,268 )   $ (38,845 )
 
See accompanying notes to consolidated financial statements.
 
 
F-4

 
 
GOLF ROUNDS.COM, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS

   
For the
   
For the
 
   
Year Ended
   
Year Ended
 
   
August 31, 2013
   
August 31, 2012
 
             
Cash flows from operating activities:
           
Net loss
  $ (109,855 )   $ (101,583 )
Adjustments to reconcile net loss to net cash used in operating activites:
               
Convertible notes issued for services rendered
    7,000       -  
Changes in operating assets and liabilities:
               
(Increase) decrease in prepaid expenses
    (5,510 )     6,727  
Increase in accounts payable and accrued expenses
    57,482       41,789  
Net cash used in operating activities
    (50,883 )     (53,067 )
                 
Cash flows from financing activities:
               
Proceeds from related party for convertible notes
    14,100       -  
Proceeds from issuance of convertible notes payable
    20,000       -  
Proceeds from issuance of notes payable
    17,250       -  
Net cash provided by financing activities
    51,350       -  
                 
Net increase (decrease) in cash and cash equivalents
    467       (53,067 )
                 
Cash and cash equivalents - beginning
    334       53,401  
                 
Cash and cash equivalents - ending
  $ 801     $ 334  
                 
Supplemental disclosure of cash flow information:
               
Interest paid
  $ 550     $ -  
Income taxes paid
  $ -     $ -  
                 
Non-cash investing and financing activities:
               
Conversion of convertible notes payable to common shares
  $ 41,100     $ -  
Conversion of accrued expenses to common shares
  $ 74,100     $ -  
 
See accompanying notes to consolidated financial statements.
 
 
F-5

 
 
GOLF ROUNDS.COM, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED AUGUST 31, 2013 AND 2012
 
NOTE 1 — NATURE OF OPERATIONS

Golf Rounds.com, Inc. (the “Company”) was incorporated in 1968 as a Delaware corporation and is also authorized to conduct business in New Jersey and Georgia. Until the fourth quarter of fiscal 1992, the Company was engaged in the wholesale distribution of aluminum alloys, steel and other specialty metals under the name American Metals Service, Inc. In the fourth quarter of fiscal 1992, the Company liquidated its assets and did not conduct any business operations until May 1999. In May 1999, the Company acquired the assets of PKG Design, Inc., the developer of two (2) sports-related Internet websites: golfrounds.com and skiingusa.com. In connection with the acquisition of these websites, the Company changed its name to Golf Rounds.com, Inc.

In August 2001, the Company determined to cease operations of its golfrounds.com and skiingusa.com websites since continued maintenance of these websites was not a productive use of the Company’s resources.

On September 19, 2003, the Company and its wholly owned subsidiary, DPE Acquisition Corp. (formed on September 2, 2003), entered into an agreement and plan of reorganization and merger with Direct Petroleum Exploration, Inc. (“DPE”), which was not consummated. The Company continues to maintain the subsidiary for use in any other potential future acquisition. This subsidiary is currently inactive and has no operations.

On July 26, 2013, the Company executed a reorganization agreement with PH Squared LLC (“PharmHouse”). Under the terms of the agreement, the Company would have engaged in a business combination with PharmHouse, with Pharmhouse becoming a wholly owned subsidiary of the Company, and the equity owners of PharmHouse being issued approximately 90% of the common stock of the Company, on an after issued basis. On October 11, 2013, the Company delivered a letter to PharmHouse notifying PharmHouse that the agreement had expired on its stated termination date of August 30, 2013 and that the agreement would not be extended. Upon expiration of the agreement with PharmHouse, the Company determined to actively pursue alternative business combination opportunities in the near term. 

The Company’s current business plan is primarily to serve as a vehicle for the acquisition of or merger or consolidation with another company (a “target business”). The Company intends to use its available working capital, capital stock, debt, or a combination of these to effect a business combination with a target business which management believes has significant growth potential.

NOTE 2 — GOING CONCERN

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. During the year ended August 31, 2013, the Company had a net loss of $109,855, had net cash used in operations of $50,883, and had no revenues from operations. These factors among others indicate that the Company may be unable to continue as a going concern. The Company’s existence is dependent upon management’s ability to effect a business combination with a target business and/or obtain additional funding sources. There can be no assurance that the Company’s financing efforts will result in profitable operations or the resolution of the Company’s liquidity problems. The accompanying financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(A) PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Golf Rounds.com, Inc. and its wholly-owned subsidiary DPE Acquisition Corp. All inter-company balances and transactions have been eliminated in consolidation.

(B) USE OF ESTIMATES

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of our consolidated financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our consolidated financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. Significant estimates include valuation of stock-based compensation and the valuation allowance on deferred tax assets.
 
 
F-6

 
 
GOLF ROUNDS.COM, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED AUGUST 31, 2013 AND 2012
 
(C) CASH EQUIVALENTS

The Company considers all money market funds and highly liquid debt instruments with an original maturity of three months or less to be cash equivalents.

(D) STOCK-BASED COMPENSATION

The Company recognizes compensation expense for stock-based compensation in accordance with ASC Topic No. 718. For employee stock-based awards, the Company calculates the fair value of the award on the date of grant using the Black-Scholes method for stock options; the expense is recognized over the service period for awards expected to vest. For non-employee stock-based awards, the Company calculates the fair value of the award on the date of grant in the same manner as employee awards, however, the awards are revalued at the end of each reporting period and the prorata compensation expense is adjusted accordingly until such time the nonemployee award is fully vested, at which time the total compensation recognized to date shall equal the fair value of the stock-based award as calculated on the measurement date, which is the date at which the award recipient’s performance is complete. The estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period estimates are revised.

(E) INCOME TAXES

Current income taxes are based on the year’s taxable income for federal and state income tax reporting purposes. Deferred income taxes are provided on a liability basis whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax law and rates on the date of enactment.

(F) LOSS PER SHARE

Net loss per common share is based on the weighted average number of shares of common stock outstanding during each year. Common stock equivalents, including 330,000 and 360,000 stock options for the years ended August 31, 2013 and 2012, respectively, are not considered in diluted loss per share because the effect would be anti-dilutive.

(G) FAIR VALUE MEASUREMENTS

The Company has adopted the provisions of Accounting Standards Codification (“ASC”) Topic 820, “Fair Value Measurements and Disclosures”. ASC Topic 820 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. Fair value is defined as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The accounting standard established a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.
 
The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.
 
 
F-7

 
 
GOLF ROUNDS.COM, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED AUGUST 31, 2013 AND 2012
 
(H) RECENT ACCOUNTING PRONOUNCEMENTS

In February 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2013-04, “Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date (a consensus the FASB Emerging Issues Task Force)”. ASU 2013-04 provides guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date, except for obligations addressed within existing guidance in U.S. generally accepted accounting principles (GAAP). The guidance requires an entity to measure those obligations as the sum of: (a) the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and (b) any additional amount the reporting entity expects to pay on behalf of its co-obligors. The amendments in this Update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The Company does not expect the adoption of this guidance to have a material effect on the Company’s consolidated financial statements.
 
In March 2013, the FASB issued ASU 2013-05, “Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (a consensus the FASB Emerging Issues Task Force)”. ASU 2013-05 resolves the diversity in practice about whether Subtopic 810-10, Consolidation—Overall, or Subtopic 830-30, Foreign Currency Matters—Translation of Financial Statements, applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity. In addition, the amendments in this Update resolve the diversity in practice for the treatment of business combinations achieved in stages (sometimes also referred to as step acquisitions) involving a foreign entity. The amendments in this Update are effective prospectively for fiscal years (and interim reporting periods within those years) beginning after December 15, 2013. The Company does not expect the adoption of this guidance to have a material effect on the Company’s consolidated financial statements.
 
In July 2013, the FASB issued ASU 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force)”. The objective of the amendments in this Update is to eliminate diversity in practice on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. An unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The amendments in this Update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The Company does not expect the adoption of this guidance to have a material effect on the Company’s consolidated financial statements.
 
We have implemented all new accounting standards that are in effect and that may impact our consolidated financial statements and do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our consolidated financial position or results of operations.
 
NOTE 4 — NOTES PAYABLE

On December 20, 2012, the Company issued a $3,500 two-year convertible promissory note due December 20, 2014, to a consultant for services rendered. The note bears interest at a variable rate of 2% plus the “Base Rate” (the greater of (i) the rate in the Wall Street Journal for notes maturing in three months after issuance and (ii) the prime rate in the Wall Street Journal). The overall interest rate through July 24, 2013 (the settlement date) was 5.25%. The note is convertible into common shares of the Company at the rate of $0.033 per share. The Company evaluated the convertible note and determined that, for the embedded conversion option, there was no beneficial conversion value to record as the conversion price was the same as the fair market value of the common shares on the note issue date. On July 24, 2013, the convertible note payable was converted into 106,061 common shares (See Note 5).
 
 
F-8

 
 
GOLF ROUNDS.COM, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED AUGUST 31, 2013 AND 2012
 
On January 18, 2013, the Company’s chief executive officer (“CEO”) loaned the Company $10,000 and received a convertible promissory note due January 18, 2015. The note bears interest at a variable rate of 2% plus the “Base Rate” (the greater of (i) the rate in the Wall Street Journal for notes maturing in three months after issuance and (ii) the prime rate in the Wall Street Journal). The overall interest rate through July 24, 2013 (the settlement date) was 5.25%. The note is convertible into common shares of the Company at the rate of $0.07 per share. The Company evaluated the convertible note and determined that, for the embedded conversion option, there was no beneficial conversion value to record as the conversion price was the same as the fair market value of the common shares on the note issue date. On July 24, 2013, the convertible note payable was converted into 142,857 common shares (See Notes 5 and 7).

On January 24, 2013, the Company issued a $1,750 two-year convertible promissory note due January 24, 2015, to a consultant for services rendered. The note bears interest at a variable rate of 2% plus the “Base Rate” (the greater of (i) the rate in the Wall Street Journal for notes maturing in three months after issuance and (ii) the prime rate in the Wall Street Journal). The overall interest rate through July 24, 2013 (the settlement date) was 5.25%. The note is convertible into common shares of the Company at the rate of $0.07 per share. The Company evaluated the convertible note and determined that, for the embedded conversion option, there was no beneficial conversion value to record as the conversion price was the same as the fair market value of the common shares on the note issue date. On July 24, 2013, the convertible note payable was converted into 25,000 common shares (See Note 5).

On May 2, 2013, the Company’s chief executive officer (“CEO”) loaned the Company $4,100 and received a convertible promissory note due May 2, 2015. The note bears interest at a variable rate of 2% plus the “Base Rate” (the greater of (i) the rate in the Wall Street Journal for notes maturing in three months after issuance and (ii) the prime rate in the Wall Street Journal). The overall interest rate through July 24, 2013 (the settlement date) was 5.25%. The note is convertible into common shares of the Company at the rate of $0.07 per share. The Company evaluated the convertible note and determined that, for the embedded conversion option, there was no beneficial conversion value to record as the conversion price was the same as the fair market value of the common shares on the note issue date. On July 24, 2013, the convertible note payable was converted into 58,571 common shares (See Notes 5 and 7).

On May 15, 2013, the Company issued a $1,750 two-year convertible promissory note due May 15, 2015, to a consultant for services rendered. The note bears interest at a variable rate of 2% plus the “Base Rate” (the greater of (i) the rate in the Wall Street Journal for notes maturing in three months after issuance and (ii) the prime rate in the Wall Street Journal). The overall interest rate through July 24, 2013 (the settlement date) was 5.25%. The note is convertible into common shares of the Company at the rate of $0.08 per share. The Company evaluated the convertible note and determined that, for the embedded conversion option, there was no beneficial conversion value to record as the conversion price was the same as the fair market value of the common shares on the note issue date. On July 24, 2013, the convertible note payable was converted into 21,875 common shares (See Note 5).

On July 3, 2013, the Company issued a two-year convertible promissory note due July 3, 2015 in exchange for cash proceeds of $20,000. The note bears interest at a variable rate of 2% plus the “Base Rate” (the greater of (i) the rate in the Wall Street Journal for notes maturing in three months after issuance and (ii) the prime rate in the Wall Street Journal). The overall interest rate through July 24, 2013 (the settlement date) was 5.25%. The note is convertible into common shares of the Company at the rate of $0.045 per share. The Company evaluated the convertible note and determined that, for the embedded conversion option, there was no beneficial conversion value to record as the conversion price was the same as the fair market value of the common shares on the note issue date. On July 24, 2013, the convertible note payable was converted into 444,444 common shares (See Note 5).

On July 30, 2013, the Company issued a two-year promissory note due July 29, 2015 in exchange for cash proceeds of $6,000. The note bears interest at 3.25% and requires quarterly interest payments.

On August 29, 2013, the Company issued a two-year promissory note due August 28, 2015 in exchange for cash proceeds of $11,250. The note bears interest at 3.25% and requires quarterly interest payments.
 
 
F-9

 
 
GOLF ROUNDS.COM, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED AUGUST 31, 2013 AND 2012
 
During the year ended August 31, 2013, interest expense of $571 (of which $318 is for related parties) was recognized on the aforementioned notes payable. During the year ended August 31, 2013, $550 (of which $318 was for related parties) of accrued interest was repaid. As of August 31, 2013, accrued interest payable was $21 (of which $0 is for related parties), which is included in accounts payable and accrued expenses on the accompanying consolidated balance sheet (See Note 7).
 
Notes payable consisted of the following at August 31, 2013:
 
   
August 31,
2013
 
Note payable - originating July 30, 2013; quarterly interest payments required; bearing interest at 3.25%; maturing at July 29, 2015
  $ 6,000  
         
Note payable - originating August 29, 2013; quarterly interest payments required; bearing interest at 3.25%; maturing at August 28, 2015
    11,250  
Total
    17,250  
Less: Current maturities
    -  
Amount due after one year
  $ 17,250  
 
Future maturities of notes payable are as follows:

 Year Ending August 31,
     
2014
  $ -  
2015
    17,250  
    $ 17,250  
 
NOTE 5 — STOCKHOLDERS’ EQUITY (DEFICIENCY)

(A) COMMON STOCK

On July 24, 2013, the Company issued an aggregate of 798,808 common shares upon the conversion of an aggregate of $41,100 of convertible notes payable. The convertible notes payable were converted at the fixed conversion rate stated in each respective note ranging from $0.03 to $0.08 per share (See Notes 4 and 7).

On July 24, 2013, the Company issued an aggregate of 1,482,000 common shares to settle $21,600 of accrued office sharing expenses and $52,500 of accrued officer’s salary. The accrued expenses were converted at the rate of $0.05 per common share (See Note 7).

(B) STOCK OPTIONS

The Company estimates the fair value of stock-based compensation utilizing the Black-Scholes option pricing model, which is dependent upon several variables such as the expected option term, expected volatility of our stock price over the expected term, expected risk-free interest rate over the expected option term, expected dividend yield rate over the expected option term, and an estimate of expected forfeiture rates. The Company believes this valuation methodology is appropriate for estimating the fair value of stock options granted to employees and directors which are subject to ASC Topic 718 requirements. These amounts are estimates and thus may not be reflective of actual future results, nor amounts ultimately realized by recipients of these grants. The Company recognizes compensation on a straight-line basis over the requisite service period for each award. The Company did not grant any stock options during the years ended August 31, 2013 and 2012.
 
 
F-10

 
 
GOLF ROUNDS.COM, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED AUGUST 31, 2013 AND 2012
 
A summary of the Company’s stock option activity during the year ended August 31, 2013 is presented below:
 
               
Weighted
       
         
Weighted
   
Average
       
         
Average
   
Remaining
   
Aggregate
 
   
No. of
   
Exercise
   
Contractual
   
Intrinsic
 
   
Shares
   
Price
   
Term
   
Value
 
Balance outstanding at August 31, 2012
    360,000     $ 0.67              
Granted
    -                      
Exercised
    -                      
Forfeited
    -                      
Expired
    (30,000 )   $ 0.51              
Balance outstanding at August 31, 2013
    330,000     $ 0.68       2.2     $ -  
                                 
Exercisable at August 31, 2013
    330,000     $ 0.68       2.2     $ -  
 
NOTE 6 — INCOME TAXES

The components of the benefit (provision) for income taxes from continuing operations are as follows:

 
   
For the
   
For the
 
   
Year Ended
   
Year Ended
 
   
August 31,
2013
   
August 31,
2012
 
Current (benefit) provision: federal
  $ -     $ -  
Current (benefit) provision: state
    -       -  
Total current provision
    -       -  
                 
Deferred (benefit) provision: federal
    -       -  
Deferred (benefit) provision: state
    -       -  
Total deferred provision
    -       -  
                 
Total provision (benefit) for income taxes
               
from continuing operations
  $ -     $ -  
 
Significant items making up the deferred tax assets and deferred tax liabilities are as follows:
 
   
August 31,
2013
   
August 31,
2012
 
Long-term deferred taxes:
           
Operating loss carryforwards-federal
  $ 632,000     $ 598,000  
Operating loss carryforwards-state
    131,000       124,000  
Total deferred taxes
    763,000       722,000  
Less: valuation allowance
    (763,000 )     (722,000 )
Net deferred tax assets
  $ -     $ -  
 
 
F-11

 
 
GOLF ROUNDS.COM, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED AUGUST 31, 2013 AND 2012
 
A valuation allowance is established if it is more likely than not that all or a portion of the deferred tax asset will not be realized. Accordingly, a valuation allowance was established in 2013 and 2012 for the full amount of the deferred tax asset due to the uncertainty of realization. Management believes that based upon its projection of future taxable operating income for the foreseeable future, it is more likely than not that the Company will not be able to realize the benefit of the deferred tax asset at August 31, 2013. The net change in the valuation allowance during the year ended August 31, 2013 was an increase of $41,000. The valuation allowance as of August 31, 2013 was $763,000.

The amounts and corresponding expiration dates of the Company’s unused net operating loss carryforwards are shown in the following table as of August 31, 2013:
 
Year
 
Federal
   
Georgia
 
2014
  $ 43,000     $ -  
2015
    389,000       89,000  
2016
    218,000       129,000  
2017
    187,000       207,000  
2018
    157,000       175,000  
2024
    321,000       340,000  
2025
    117,000       168,000  
2026
    72,000       165,000  
2027
    32,000       141,000  
2028
    86,000       134,000  
2029
    124,000       126,000  
2030
    139,000       139,000  
2031
    135,000       135,000  
2032
    115,000       115,000  
2033
    123,000       123,000  
    $ 2,258,000     $ 2,186,000  
 
The Company’s effective income tax (benefit) rate for continuing operations differs from the statutory federal income tax benefit rate as follows:
 
   
For the
   
For the
 
   
Year Ended
   
Year Ended
 
   
August 31,
2013
   
August 31,
2012
 
Federal tax benefit (provision) rate
    28 %     28 %
State tax benefit (provision) rate
    4 %     4 %
Temporary differences
    4 %     4 %
Permanent differences
    0 %     0 %
Change in valuation allowance
    -36 %     -36 %
Effective Income tax (benefit) provision rate
               
from continuing operations
    0 %     0 %
 
In accordance with certain provisions of the Tax Reform Act of 1986 a change in ownership of greater than 50% percent of a corporation within a three-year period will place an annual limitation on the corporation’s ability to utilize its existing tax benefit carryforwards. Such a change in ownership may have occurred in connection with the private placement of securities. Additionally, the Company’s utilization of its tax benefit carryforwards may be restricted in the event of possible future changes in the ownership of the Company from the exercise of options or other future issuances of common stock.
 
 
F-12

 
 
GOLF ROUNDS.COM, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED AUGUST 31, 2013 AND 2012
 
NOTE 7 — RELATED PARTY TRANSACTIONS

On March 1, 2000, the Company executed a month-to-month agreement to sub-lease office space and share office equipment and a bookkeeper’s time for $900 a month from R. D. Garwood, Inc. (“Garwood”). The Company’s President/Treasurer/Secretary is the Chief Financial Officer of Garwood. Effective June 1, 2013, due to the financial status of the Company, R.D. Garwood, Inc. began providing the aforementioned services at no charge to the Company. The Company’s expense for these shared facilities and bookkeeping services was $8,100 and $10,800 for the years ended August 31, 2013 and 2012, respectively.

On July 24, 2013, $21,600 of accrued office sharing expenses and $52,500 of accrued officer’s salary were converted into an aggregate of 1,482,000 common shares at the rate of $0.05 per common share (See Note 5).

As of August 31, 2012, accounts payable and accrued expenses include $13,500 for rent and $30,000 for officer’s salary.

During the year ended August 31, 2012, the Company paid $2,000 to Donehew Capital, LLC for income tax preparation. The Company’s President/Treasurer/Secretary is the CEO of Donehew Capital, LLC.

On January 18, 2013, the Company’s chief executive officer (“CEO”) loaned the Company $10,000 and received a convertible promissory note due January 18, 2015. The note bears interest at a variable rate of 2% plus the “Base Rate” (the greater of (i) the rate in the Wall Street Journal for notes maturing in three months after issuance and (ii) the prime rate in the Wall Street Journal). The overall interest rate through July 24, 2013 (the settlement date) was 5.25%. The note is convertible into common shares of the Company at the rate of $0.07 per share. The Company evaluated the convertible note and determined that, for the embedded conversion option, there was no beneficial conversion value to record as the conversion price was the same as the fair market value of the common shares on the note issue date. On July 24, 2013, the convertible note payable was converted into 142,857 common shares (See Notes 4 and 5).

On May 2, 2013, the Company’s chief executive officer (“CEO”) loaned the Company $4,100 and received a convertible promissory note due May 2, 2015. The note bears interest at a variable rate of 2% plus the “Base Rate” (the greater of (i) the rate in the Wall Street Journal for notes maturing in three months after issuance and (ii) the prime rate in the Wall Street Journal). The overall interest rate through July 24, 2013 (the settlement date) was 5.25%. The note is convertible into common shares of the Company at the rate of $0.07 per share. The Company evaluated the convertible note and determined that, for the embedded conversion option, there was no beneficial conversion value to record as the conversion price was the same as the fair market value of the common shares on the note issue date. On July 24, 2013, the convertible note payable was converted into 58,571 common shares (See Note 4 and 5).

During the year ended August 31, 2013, interest expense of $318 was recognized on notes payable to related parties. During the year ended August 31, 2013, $318 of accrued interest was repaid to related parties (See Note 4).

NOTE 8 — SUBSEQUENT EVENTS

On October 18, 2013, the Company issued a six-month promissory note due April 15, 2014 in exchange for cash proceeds of $39,000. The note bears interest at 3.0% and requires principal and interest at maturity.

On November 4, 2013, the Company issued a six-month promissory note due May 5, 2014 in exchange for cash proceeds of $24,000. The note bears interest at 3.0% and requires principal and interest at maturity.
 
 
F-13

 
 
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A(T). CONTROLS AND PROCEDURES

Pursuant to Rules adopted by the Securities and Exchange Commission the Company carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rules. This evaluation was done as of the end of the fiscal year under the supervision and with the participation of the Company’s principal executive officer (who is also the principal financial officer). There have been no significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of the evaluation. Based upon that evaluation, he believes that the Company’s disclosure controls and procedures are effective in gathering, analyzing and disclosing information needed to ensure that the information required to be disclosed by the Company in its periodic reports is recorded, summarized and processed timely. The principal executive officer is directly involved in the day-to-day operations of the Company.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal controls over financial reporting during its fourth fiscal quarter that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

There is no information required to be filed on a Form 8-K during the fourth quarter of the fiscal year covered by this Form 10-K.
 
 
12

 

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Our current directors and officers are as set forth in the table below.
 
Name
 
Age
 
Position
         
Robert H. Donehew
 
61
 
President, Treasurer, Secretary and Director*
___________
*
 
Member of audit committee
 
ROBERT H. DONEHEW has served as director, president and treasurer since November 2000 and as director, vice president and treasurer from February 2000 until October 31, 2000. He has served as our secretary since December 2005. Since May 2008, Mr. Donehew has been the Chief Financial Officer and a member of the Board of Directors of EndogenX, Inc., a specialty pharmaceutical company. Since July 1996, Mr. Donehew has been the chief executive officer of Donehew Capital, LLC, the general partner of Donehew Fund Limited Partnership, a private investment partnership specializing in the securities market. Since 1983, he has also served as chief financial officer of R.D. Garwood, Inc. and Dogwood Publishing Company Inc. From 1976 through 1983, Mr. Donehew had his own tax and financial planning practice.

Audit Committee

Our entire board serves as our audit committee. We do not currently have a “financial expert,” as such term is defined under the securities law, on the committee, but we are in the process of seeking an additional director who will also serve as the financial expert. Previously, the board of directors did not believe it was necessary to have a financial expert on the Committee given our lack of commercial operations and limited financial activities.

Section 16(A) Beneficial Ownership Reporting Compliance Section 16(a) of the Exchange Act requires our officers, directors and persons who beneficially own more than ten percent of our common stock (“ten percent stockholders”) to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and ten-percent stockholders also are required to furnish us with copies of all Section 16(a) forms they file. Based solely on our review of the copies of such forms furnished to us, and written representations that no other reports were required, we believe that during the fiscal year ended August 31, 2013, all of our officers, directors and ten-percent stockholders complied with the Section 16(a) reporting requirements.

Code of Ethics

We have adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions, as well as other employees and our directors and meets the requirements of the SEC. A copy of our Code of Ethics was previously filed as an exhibit to our Annual Report on Form 10-KSB for the fiscal year ended 2004. We intend to disclose any amendments to any waivers from a provision of our Code of Ethics on a Form 8-K filed with the SEC.
 
 
13

 

ITEM 11. EXECUTIVE COMPENSATION
 
The following table sets forth the compensation for the three years ended August 31, 2013 for our president (and principal executive and accounting officer). No executive officer’s compensation exceeded $100,000 (or would have exceeded $100,000 if employed for the full year) for the year ended August 31, 2013.

SUMMARY COMPENSATION TABLE
 
                   
Long-Term
     
           
Compensation
     
        Annual Compensation(1)    
Number of
 
All Other
 
Name and Principal Position
 
Year
 
Salary
 
Bonus
   
Options
 
Compensation
 
Robert H. Donehew
 
2013
  $ 22,500     $ 0       0     $ 0  
President and Principal
 
2012
  $ 30,000     $ 0       0     $ 0  
Accounting Officer
 
2011
  $ 34,108     $ 0       0     $ 0  
___________
(1)
 
The above compensation does not include other personal benefits, the total value of which does not exceed the lesser of $50,000 or 10% of such person’s or persons’ cash compensation). Effective June 1, 2013, due to the financial status of the Company, Mr. Donehew continued to perform his duties as President, Secretary and Treasurer at no charge to the Company.
 
Option Grants

The following table represents the stock options granted in the fiscal year ended August 31, 2013 to such executive officers.

OPTION GRANTED IN THE LAST FISCAL YEAR
 
   
Number of
Securities
Underlying Options
   
Percent of Total
Options Granted to
Employees in Fiscal
   
Exercise Price of
   
Market Price
on Date
   
Expiration
 
Name of Executive
 
Granted
   
Year
   
Options
   
of Grant
   
Date
 
Robert H. Donehew
    0       N/A       N/A       N/A       N/A  
 
The following table sets forth the fiscal year end option values of outstanding options at August 31, 2013 and the dollar value of unexercised, in-the-money options for our executive officers identified in the Summary Compensation table above.

AGGREGATED FISCAL YEAR-END OPTION VALUES
 
Name
 
Exercisable
   
Unexercisable
 
Exercisable(1)
 
Unexercisable(1)
 
Robert H. Donehew
    215,000       0     $ 0     $ 0  
________________
(1)
 
These values are based on the difference between the closing sale price of our common stock on August 30, 2013 (the last trading day of the fiscal year) of $0.09 and the exercise prices of the options, multiplied by the number of shares of common stock subject to the options.
 
 
14

 
 
Employment Arrangements

In fiscal year 2010, we issued to Mr. Donehew ten-year options to purchase 120,000 shares at an exercise price of $0.33 per share and vested immediately to compensate him for additional services rendered to the Company during fiscal 2009 and 2010. On September 27, 2010, the 120,000 stock options were exercised and the Company received $39,600.

Compensation Arrangements for Directors

Our director does not currently receive any cash compensation for his services.

In August 2010, we granted to our sole director ten-year options to purchase 120,000 shares of our common stock. All of these options were exercisable at an exercise price of $0.33 per share and vested immediately. On September 27, 2010, the 120,000 stock options were exercised and the Company received $39,600.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The table and accompanying footnotes set forth certain information as of November 15, 2013, with respect to the ownership of our common shares by: to each person or group who beneficially owns more than 5% of our common shares;

 
 
each of our directors;
       
 
 
each of our named executive officers; and
       
 
 
all of our directors and executive officers as a group.

A person is deemed to be the beneficial owner of securities that can be acquired by the person within 60 days from the record date upon the exercise of warrants or options. Accordingly, common shares issuable upon exercise of options and warrants that are currently exercisable or exercisable within 60 days of November 15, 2013 have been included in the table with respect to the beneficial ownership of the person owning the options or warrants, but not with respect to any other persons.
 
 
15

 
 
   
Amount and Nature of
 
   
Beneficial
    Percent of  
Name and Address of Beneficial Owner
 
Ownership(1)
   
Class(2)
 
             
Robert H. Donehew
    1,721,428 (3)     28.4 %
111 Village Parkway
Building #2
               
Marietta, GA 30067
               
                 
Paul O. Koether
    484,690 (4)     8.3 %
6808 Mystic Woods Lane
               
Colleyville, TX 76034
               
Marietta, Georgia 30067
               
                 
Harold Woolfolk
    444,444       7.6 %
4500 E Sam Houston Pkwy So
               
Suite 100
               
Pasadena, TX 77050
               
                 
R.D. Garwood
    432,000       7.4 %
111 Village Parkway
Building #2
               
Marietta, GA 30067
               
                 
Shamrock Associates
    409,470 (5)     7.0 %
211 Pennbrook Road
               
Far Hills, NJ 07931
               
                 
Ronald I. Heller
    325,980 (6)     5.6 %
74 Farview Road
               
Tenafly, NJ 07670
               
                 
All directors and executive officers as a group (one person)
    1,721,428 (3)     28.4 %
____________
(1)
 
Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, involving the determination of beneficial owners of securities, a beneficial owner of securities is a person who directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has, or shares, voting power and/or investment power with respect to the securities, and any person who has the right to acquire beneficial ownership of the security within sixty days through means including the exercise of any option, warrant or conversion of a security.
     
(2)
 
The percentage of shares owned is based on 5,848,185 shares of common stock outstanding as of November 15, 2013. Where the beneficially owned shares of any individual or group in the following table includes any options, warrants, or other rights to purchase shares, the percentage of shares owned includes such shares as if the right to purchase had been duly exercised.
     
(3)
 
Includes 100,000 shares of common stock owned by Donehew Fund Limited Partnership, of which Donehew Capital LLC, a Georgia limited liability company, is the general partner. Mr. Donehew is the manager of Donehew Capital LLC. Also includes 215,000 shares of common stock issuable upon exercise of exercisable options.
     
(4)
 
Includes 209,470 shares of common stock beneficially owned by Shamrock Associates, of which Mr. Koether is the general partner, 200,000 shares held by Asset Value Holdings, Inc., of which Mr. Koether is President, 7,166 shares owned by Sun Equities Corporation, of which Mr. Koether is Chairman and a principal stockholder; 1,666 shares held by Mr. Koether’s IRA, 20,000 shares owned by Mr. Koether’s wife; and 15,000 shares held in discretionary accounts for Mr. Koether’s brokerage customers.
     
(5)
 
Includes 200,000 shares of common stock held by Asset Value Holding, of which Shamrock Associates is the ultimate parent. Shamrock Associates disclaims beneficial ownership of these shares.
     
(6)
 
Includes 144,615 shares of common stock held of record by the Ronald I. Heller Revocable Trust dated 12/23/97 (“Ronald Trust”), 144,615 shares of common stock held of record by the Joyce L. Heller Revocable Trust dated 12/23/97 (“Joyce Trust”) and 36,750 shares of common stock held of record by the Delaware Charter Guarantee & Trust Co., for the benefit of the Ronald I. Heller IRA (“Ronald IRA”). Joyce L. Heller does not directly own any shares of common stock. As the co-trustee of the Ronald Trust and Joyce Trust, Joyce has shared voting and dispositive power over the shares held in such trusts. Although Joyce disclaims any voting or dispositive power over the 36,750 shares of common stock held for the benefit of the Ronald IRA, which Ronald has sole voting and dispositive power over, Joyce may be deemed to beneficially own such shares pursuant to interpretations of the Securities and Exchange Commission.

 
16

 
 
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

See Note 7 to the consolidated financial statements contained in this report.
 
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

 
2013
 
2012
 
Audit Fees(1)
  $ 18,250     $ 18,250  
Tax Fees
    0       0  
Total
  $ 18,250     $ 18,250  
____________
(1)
 
Represents the aggregate fees incurred for professional services rendered by our principal accountant for the audit of our annual financial statements for the years ended August 31, 2013 and 2012 and review of financial statements included in our quarterly reports on Form 10-Q or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those periods.
 
 
17

 
 
PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES

 
(a)
 
Exhibits Filed.
       
     
See Exhibit Index appearing later in this Report.
       
 
(b)
 
Reports on Form 8-K.
       
     
Current Report on Form 8-K with respect to items 1.01 and 9.01 filed with the Securities and Exchange Commission on August 19, 2013.
 
Current Report on Form 8-K with respect to items 7.01 and 9.01 filed with the Securities and Exchange Commission on October 16, 2013.
 
 
18

 
 
SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
 
GOLF ROUNDS.COM, INC.
(Registrant)
 
     
Dated: November 15, 2013
By:
/s/ Robert H. Donehew
 
    Name: Robert H. Donehew   
    Title: President, Treasurer and Secretary   
 
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dated indicated.
 
 
 
By:
/s/ Robert H. Donehew  
    Robert H. Donehew  
    President, Treasurer, Secretary and Director (Principal Executive and Principal Accounting and Financial Officer)  
 
 
19

 
 
EXHIBIT INDEX
 
       
Incorporated By
   
Exhibit
     
Reference from
 
No. in
Number
 
Description
 
Document
 
Document
             
1.1
 
Agreement and Plan of Merger between American Metals, Inc. and American Metals Service, Inc.
 
A
 
2
             
3.1
 
Certificate of Incorporation
 
A
  3(I)
             
3.1.1
 
Bylaws
 
A
 
3(II)
             
10.1
 
Stock Purchase Agreement, dated January 18, 2000, among Asset Value Holdings, Inc., Bradford Trading Company, Paul Koether, Shamrock Associates, Sun Equities Corporation, Thomas K. Van Herwarde, The Rachel Beth Heller1997 Trust Dated 7/9/97, The Evan Todd Heller Trust Dated 6/17/97, Martan & Co., Donehew Fund Limited Partnership, Jonathan & Nancy Glaser Family Trust Dated 12/16/98, W. Robert Ramsdell and Nagelberg Family Trust Dated 9/24/97
 
B
 
2.1
             
10.2
 
Form of option agreement for executives and directors
 
C
 
10.6
             
10.4
 
Code of Ethics
 
D
 
10.16
             
31.1
 
Section 302 Certification
 
Filed herewith
 
             
32.1
 
Section 906 Certification
 
Filed herewith
 
             
99.1   Risk Factors  
Filed herewith
 
_________________
A
 
Company’s Quarterly Report on Form 10-QSB for the quarter ended May 31, 1999.
     
B
 
Company’s Current Report on Form 8-K, filed with the SEC on January 19, 2000.
     
C
 
Company’s Annual Report on Form 10-KSB for the year ended August 31, 2005.
     
D
 
Company’s Annual Report on Form 10-KSB for the year ended August 31, 2004.
 
 
 
20