UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
(Mark One)  
þ
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended September 30, 2009
 
o
TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 
OR
 
For the transition period from                      to
 
Commission file number 3330-153699
 
FEEL GOLF COMPANY, INC.
(Exact name of small business issuer as specified in its charter)
 
California
  
77-0532590
State or other jurisdiction of
  
(IRS Employer
Incorporation or organization
  
Identification Number)
     
1354-T Dayton Street Salinas, CA
  
93901
(Address of principal executive offices)
  
(Zip Code)
 
(831) 422-9300
(Issuer’s telephone number, including area code)
 
(Former name, former address and former fiscal year, if changed)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x   No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). o Yes x No
 
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.

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

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
 
Indicate by check mark whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes þ   No o

APPLICABLE ONLY TO CORPORATE ISSUERS
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 19,206,175 common shares outstanding as of November 16, 2009.

 
 
 
 
FEEL GOLF COMPANY, INC.
 
TABLE OF CONTENTS
 
   
Page
     
Part I — Financial Information
 
   
 
Item 1 — Financial Statements
F-1
 
  Balance Sheets as of September 30, 2009 (Unaudited) and December 31, 2008
F-2
 
  Unaudited Statements of Operations for the Three Months and Nine Months Ended September 30, 2009 and March 31, 2008
F-3
 
  Unaudited Statements of Cash Flows for the Nine Months Ended September 30, 2009 and September 31, 2008.
F-5
 
  Notes to Financial Statements
F-6
 
Item 2 — Management’s Discussion and Analysis or Plan of Operation
13
 
Item 3 — Quantitative and Qualitative Disclosures About Market Risk
13
 
Item 4T  — Controls and Procedures
13
     
Part II — Other Information  
   
 
Item 1 — Legal Proceedings
16
 
Item 1A — Risk Factors
16
 
Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds
17
 
Item 3 — Defaults Upon Senior Securities
17
 
Item 4 — Submission of Matters to a Vote of Security Holders
17
 
Item 5 — Other Information
17
 
Item 6 —Exhibits
17
  Certification of CEO Pursuant to Section 302
18
  Certification of CFO Pursuant to Section 302  
  Certification of Officers Pursuant to Section 906  

 
 
 
 PART I — FINANCIAL INFORMATION
 
 

Index to Financial Statements
 
 
   
BALANCE SHEETS
F-2
   
STATEMENTS OF OPERATIONS
F-3
   
STATEMENTS OF CASH FLOWS
F-4
   
NOTES TO THE FINANCIAL STATEMENTS
F-5
 
 
F-1
 
FEEL GOLF COMPANY, INC.
Balance Sheets
 
ASSETS            
   
September 30,
    
December 31,
  
   
2009
    
2008
  
    (Unaudited)        
CURRENT ASSETS
            
             
Cash
   $ 2,737     $ 5,220  
Accounts Receivable, Net (Note 5)
     1,637       33,933  
Receivable from Shareholder (Note 6)
     17,137       18,137  
Barter Receivable (Note 7)
     56,759       65,577  
Non-trade Receivable
     24,089       -  
Inventory (Note 8)
     2,018,759       159,259  
Prepaid Expenses
     56,667       12,146  
                 
Total Current Assets
     2,177,785       294,272  
                 
PROPERTY, PLANT and EQUIPMENT, net
     555,311       49,181  
OTHER ASSETS, net
                
Intellectual Property
     871,620       -  
Other Assets
     3,952       4,396  
                 
TOTAL ASSETS
   $ 3,608,668     $ 347,849  
                 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                
                 
CURRENT LIABILITIES
                
                 
Accounts Payable and Accrued Expenses
   $ 377,053     $ 298,652  
Note Payable
     5,205       -  
Short-Term Related Party Payable
     -       234,515  
                 
Total Current Liabilities
     382,258       533,167  
                 
LONG-TERM RELATED PARTY NOTES PAYABLE
     801,009       539,195  
                 
TOTAL LIABILITIES
     1,183,267       1,072,362  
                 
COMMITMENTS AND CONTINGENCIES
                
                 
STOCKHOLDERS' EQUITY (DEFICIT)
                
                 
Common stock, $0.01 par value; 100,000,000 shares
                
authorized, 19,206,175 and 15,845,575 shares issued and
                
outstanding as of September 30, 2009 and December 31, 2008
     19,206       15,846  
Additional Paid-in Capital
     8,508,052       4,630,755  
Accumulated Deficit
     (6,101,857 )     (5,371,114 )
                 
Total Stockholders' Equity (Deficit)
     2,425,401       (724,513 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS'
                
  EQUITY (DEFICIT)
   $ 3,608,668     $ 347,849  
 
The accompanying condensed notes are an integral part of these financial statements.
 
 
F-2
 
 
FEEL GOLF COMPANY, INC.
Statements of Operations
(Unaudited)
 
   
For the Three Months Ended
    
For the Nine Months Ended
  
   
September 30,
    
September 30,
  
   
2009
    
2008
    
2009
    
2008
  
                         
REVENUES, NET
   $ 127,061     $ 151,462     $ 378,919     $ 517,843  
COST OF SALES
     58,939       142,089       125,406       217,578  
GROSS PROFIT
     68,122       9,373       253,513       300,265  
                                 
OPERATING EXPENSES
                                
                                 
Salaries
     113,459       40,701       177,903       93,915  
Advertising
     4,190       33,652       13,431       52,860  
Rent
     9,300       15,455       29,440       36,280  
Professional Fees
     182,112       1,257,879       577,900       1,312,926  
Depreciation and Ammortization
     10,825       9,539       33,664       28,523  
Other Selling, General and Administrative Expenses
     33,104       72,276       77,512       156,948  
                                 
Total Operating Expenses
     352,990       1,429,502       909,850       1,681,452  
                                 
LOSS FROM OPERATIONS
     (284,868 )     (1,420,129 )     (656,337 )     (1,381,187 )
                                 
OTHER INCOME AND (EXPENSE)
                                
                                 
Interest income
     -       -       97       316  
Interest expense
     (24,069 )     (26,766 )     (74,503 )     (52,432 )
                                 
NET LOSS BEFORE TAXES
     (308,937 )     (1,446,895 )     (730,743 )     (1,433,303 )
                                 
Provision for income taxes
     -       -       -       -  
                                 
NET LOSS
   $ (308,937 )   $ (1,446,895 )   $ (730,743 )   $ (1,433,303 )
                                 
BASIC AND DILUTED LOSS PER COMMON SHARE
   $ (0.02 )   $ (0.10 )   $ (0.04 )   $ (0.10 )
                                 
WEIGHTED AVERAGE NUMBER
                                
  OF SHARES OUTSTANDING
     17,796,054       14,582,308       16,626,581       14,596,021  
 
The accompanying condensed notes are a integral part of these financials statements.

 
F-3
 

FEEL GOLF COMPANY, INC.
Statements of Stockholders' Equity (Deficit)
 
               
Additional
              
   
Common Stock
    
Paid-In
    
Accumulated
        
   
Shares
    
Amount
    
Capital
    
Deficit
    
Total
  
                               
Balance, December 31, 2007
    
13,537,349
    
$
13,537
    
$
2,324,838
    
$
(4,063,002
)
  
$
(1,724,627
)
                                         
Common stock issued in debt conversion
                                        
at $1.00 per share
    
1,000,000
      
1,000
      
999,000
      
-
      
1,000,000
  
                                         
Common stock issued for cash
                                        
at $1.00 per share
    
77,500
      
78
      
77,422
      
-
      
77,500
  
                                         
Stock issued for services
                                        
at $1.00 per share
    
1,230,726
      
1,231
      
1,229,495
      
-
      
1,230,726
  
                                         
Net loss for the year ended
                                        
  December 31, 2007
    
-
      
-
      
-
      
(1,308,112
)
    
(1,308,112
)
                                         
Balance, December 31, 2008
    
15,845,575
      
15,846
      
4,630,755
      
(5,371,114
)
    
(724,513
)
                                         
Stock issued for services
                                        
at $1.00 per share (unaudited)
    
310,000
      
310
      
309,690
      
-
      
310,000
  
                                         
Stock issued for services
                                        
at $0.25 per share (unaudited)
    
710,600
      
710
      
176,940
      
-
      
177,650
  
                                         
Stock issued for services
                                        
at $0.05 per share (unaudited)
    
750,000
      
750
      
36,750
      
-
      
37,500
  
                                         
Stock issued for services
                                        
at $0.05 per share (unaudited)
    
200,000
      
200
      
45,800
      
-
      
46,000
  
                                         
Stock issued for services
                                        
at $0.10 per share (unaudited)
    
50,000
      
50
      
4,950
      
-
      
5,000
  
                                         
Stock issued for services
                                        
at $0.33 per share (unaudited)
    
90,000
      
90
      
29,910
      
-
      
30,000
  
                                         
Stock issued for purchase of assets
                                        
at $2.62 per share (unaudited)
    
1,250,000
      
1,250
      
3,273,257
      
-
      
3,274,507
  
                                         
Net loss for the nine months
                                        
ended September 30, 2009 (unaudited)
    
-
      
-
      
-
      
(730,743
)
    
(730,743
)
                                         
Balance, September 30, 2009 (unaudited)
    
19,206,175
    
$
19,206
    
$
8,508,052
    
$
(6,101,857
)
  
$
2,425,401
  
 
The accompanying condensed notes are an integral part of these financial statements.
 
 
F-4
 

FEEL GOLF COMPANY, INC.
Statements of Cash Flows
(Unaudited)
 
   
For the Nine Months Ended
  
   
September 30,
  
   
2009
    
2008
  
CASH FLOWS FROM OPERATING ACTIVITIES
            
             
Net Income (Loss)
   $ (730,743 )   $ (1,433,303 )
Adjustments to Reconcile Net Income (Loss) to Net
                
Cash Used by Operating Activities:
                
Depreciation
     33,664       28,521  
Stock Issued for Services
     606,150       1,230,726  
Changes in operating assets and liabilities:
                
Accounts receivable
     8,207       10,362  
Barter Receivable
     8,818       (3,648 )
Inventory
     19,153       71,658  
Prepaid Expenses
     (44,521 )     (3,508 )
Accounts Payable and Accrued Expenses
     78,401       125,085  
Other Assets
     444       2,701  
                 
Net Cash Provided by (Used in) Operating Activities
     (20,427 )     28,594  
                 
CASH FLOWS FROM INVESTING ACTIVITIES
                
                 
Proceeds from Receivable from Shareholder
     1,000       -  
Purchase of Property and Equipment
     (15,562 )     (12,121 )
                 
Net Cash Used in Investing Activities
     (14,562 )     (12,121 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES
                
                 
Net Proceeds from Sale of Common Stock
     -       77,500  
Repayment of Related Party Payable
     (73,987 )     (134,949 )
Repayment of Notes Payable
     -       (5,774 )
Proceeds  from Notes Payable
     5,205       -  
Proceeds from Related Party Notes Payable
     101,288       50,190  
                 
Net Cash Provided by (Used in) Financing Activities
     32,506       (13,033 )
                 
NET INCREASE (DECREASE) IN CASH
     (2,483 )     3,440  
CASH AT BEGINNING OF PERIOD
     5,220       6,606  
                 
CASH AT END OF PERIOD
   $ 2,737     $ 10,046  
                 
SUPPLEMENTAL DISCLOSURES OF
                
CASH FLOW INFORMATION
                
                 
CASH PAID FOR:
                
Interest
   $ 18,272     $ -  
Income Taxes
     -       -  
                 
NON CASH FINANCING ACTIVITIES
                
Common stock issued for purchase of assets
   $ 3,275,507     $ -  
Debt conversion
     -       1,000,000  
 
The accompanying condensed notes are an integral part of these financial statements.

 
F-5
 
 
FEEL GOLF COMPANY, INC.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008

 NOTE 1 - DESCRIPTION OF BUSINESS

Feel Golf Company, Inc. (the "Company") was incorporated on February 14, 2000 under the laws of the State of California in the United States of America. The Company designs, manufactures and conducts international marketing and sales of its golf clubs and golf club grips.  The Company's products are based on proprietary patented technology that is used to produce golf clubs and golf grips which the Company believes have the best "feel" of any golf clubs and golf grips in the market.
 
Control by Principal Stockholders
  
The Company’s directors, executive officers and their affiliates or related parties, own beneficially and in the aggregate, the majority of the voting power of the outstanding shares of the common stock of the Company. Accordingly, if voting their respective shares uniformly, the directors, executive officers and their affiliates would have the ability to control the approval of most corporate actions, including increasing the authorized capital stock of the Company and the dissolution, merger or sale of the Company’s assets or business.

NOTE 2 – BASIS OF PRESENTATION

In the opinion of management, the accompanying balance sheets and related interim statements of income, cash flows, and stockholders' equity include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP").  Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses.  Actual results and outcomes may differ from management's estimates and assumptions. Management has reviewed and evaluated material subsequent events from the balance sheet date of September 30, 2009, through the financial statements issue date of November 16, 2009.  All appropriate subsequent event disclosures have been made in the notes to our unaudited condensed financial statements.

Interim results are not necessarily indicative of results for a full year.  The information included in this Form 10-Q should be read in conjunction with information included in the Form 10-K for our year ended December 31, 2008.
 
NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Recent Accounting Pronouncements

In April 2009, the FASB issued FSP No. FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies, to address some of the application issues under SFAS 141(R). The FSP deals with the initial recognition and measurement of an asset acquired or a liability assumed in a business combination that arises from a contingency provided the asset or liability’s fair value on the date of acquisition can be determined. When the fair value cannot be determined, the FSP requires using the guidance under SFAS No. 5, Accounting for Contingencies, and FASB Interpretation (FIN) No. 14, Reasonable Estimation of the Amount of a Loss. This FSP was effective for assets or liabilities arising from contingencies in business combinations for which the acquisition date is on or after January 1, 2009. The adoption of this FSP has not had a material impact on our financial position, results of operations, or cash flows.

In April 2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments. This FSP amends FASB Statement No. 107, Disclosures about Fair Value of Financial Instruments, to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This FSP also amends APB Opinion No. 28, Interim Financial Reporting, to require those disclosures in summarized financial information at interim reporting periods. This FSP is effective for interim reporting periods ending after June 15, 2009. The adoption of this FSP has not had a material impact on our financial position, results of operations, or cash flows.
 
F-6

FEEL GOLF COMPANY, INC.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent Accounting Pronouncement