Corporate History
Hoops Scouting USA was incorporated on October 31, 2016 under the laws of the State of Wyoming. Hoops Scouting USA is a basketball scouting website for high school basketball players with aspirations of playing post-secondary basketball to upload stats. It is also an avenue for smaller university coaches who do not have the means to recruit larger areas of the United States and Internationally.
We are in the development stage, and have not realized any revenues from our operations. Jamie Oei has served as our President, Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer since our inception. Our board of director is comprised of one person: Jamie Oei. Our officer and director, Jamie Oei, currently lives in Canada, and our current assets are located in the United States. We have never declared bankruptcy, have never been in receivership, and have never been involved in any legal action or proceedings. Since incorporation, we have not made any significant purchase or sale of assets. We are not a blank check registrant as that term is defined in Rule 419(a)(2) of Regulation C of the Securities Act of 1933, since we have a specific business plan or purpose. We have not had preliminary contact or discussions with, nor do we have any present plans, proposals, arrangements or understandings with any representatives of the owners of any business or company regarding the possibility of an acquisition or merger.
From inception until the date of this Report, we have had limited operating activities, primarily consisting of the incorporation of our company, development of our business plan, opening a bank account, the initial equity funding by our officers and directors, and registering and launching our website. We received our initial funding of $50 through the sale of common stock from our officer and director, who purchased 500,000 shares of common stock at $0.0001 per share.
We are a development stage company which is in the business of providing a website for high school basketball players with aspirations of playing post-secondary basketball. It is also an avenue for smaller university coaches who do not have the means to recruit larger areas of the United States and Internationally. Hoops Scouting USA will allow high school players to set up accounts, which include game film, schedules for high school and AAU games, stats, and high school academic marks. This will allow coaches to be able to see players and their stats and can plan their recruiting with the team schedules. This brings international recruiting to the desk of every college coach in the United States from Division 1, Division 2, Divisions 3, NAIA, and Junior College.
To implement our business plan, we require a minimum funding of $36,000 over the next twelve months. After twelve months period, we may need additional financing. If we do not generate any revenue, we may need a minimum of $7,700 of additional funding to pay for legal and accounting fees, and for costs associated with being a “reporting issuer” under the Securities Exchange Act of 1934, as amended SEC filing requirements. Our officer and director, has agreed to loan the company funds, however, he has no firm commitment, arrangement or legal obligation to advance or loan funds to the company and there is also no guarantee that he will continue to loan the funds to the company in the future as well. We have no revenues and have incurred losses since inception.
Our operations to date have been devoted primarily to startup and development activities, which include: (i) formation of the Company; (ii) development of our business plan; (iii) opening a bank account; (iv) the initial equity funding by our officer and director; and (v) registering and launching our website.
Our products and products description
Hoops Scouting USA is a basketball website for high school basketball players with aspirations of playing post-secondary basketball. It is also an avenue for smaller university coaches who do not have the means to recruit larger areas of the United States and Internationally.
Hoops Scouting USA will allow high school players to set up accounts which include game film, schedules for high school and AAU games, stats, and high school academic marks. This will allow coaches to be able to see players and their stats and can plan their recruiting with the team schedules. This brings international recruiting to the desk of every college coach in the United States from Division 1, Division 2, Divisions 3, NAIA, and Junior College.
This also allows players from Europe, Australia, Asia, and South America to pursue opportunities in the United States to schools that would normally not be able to recruit in such a wide range. Many of the larger schools with bigger recruiting budgets are often the only ones to be able to see these international players. Often only the top players get a chance and the second and third tier players do not get a chance to be recruited. This will all change with Hoops Scouting USA.
The website will be the main hub but being able to upload stats and game film directly from a smart phone will allow players and coaches to get almost immediate information. Development of an app to allow this will eventually work in unison with the website.
Revenue will be split between several revenue streams.
1. Player Membership
a. Players sign up for full memberships which allow players to upload unlimited videos to or website and app
b. Players sign up for partial memberships to upload one or two videos at a time.
2. Coaching Membership - Coaches sign up to receive emails and check players.
3. Sponsorship- Website and app will have sponsors who can display their ads on videos or on the website or the app. Sponsors can receive info from the company on what pages and what videos are being viewed the most.
A small fee for players and coaches will be invoked but sponsorship on the website and the app will be the main source of revenue.
Current market trend
College-basketball fans’ insatiable (and Internet-fueled) desire for information about up-and-coming players has made high-school-hoops scouting a big business. And corporate America has taken notice. According to New York Magazine, Fox acquired Scout.com, which primarily covers college basketball and football recruiting, for $60 million. Two years later, Yahoo bought Scout.com’s main competitor, Rivals.com, for $100 million. This shows the significant growth of the industry of recruitment and data tracking.
A Stanford Business Article titled “Five Key Trends That Are Driving the Business of Sports” explains that the data are changing the way the game is played, shifting emphasis from how many total points a player scores to measures of player efficiency. “It has been hard, historically, to quantify defense,” said Brian Kopp, senior vice president of STATS, the company that developed SportVU player tracking. “Now we have four camera views helping you do that.” In addition, the data have influenced the types of shots players take on the court. All sports are at that point where, like in a lot of businesses, they’re using a lot of (data) to make better decisions.
Marketing
Our officer and director will promote our scouting service. We plan to market our products through the following methods: (i) our website, (ii) search engine optimization, (iii) social networking websites, (iv) printing, mailing and emailing catalogues and flyers to potential customers, (v) word of mouth, (vi), telephoning potential customers (vii) content marketing and (viii) paid ads. We hope to have repeat customers coming and buying new products online from our website.
Competition
There are many well established companies in our industry. We expect to face medium to high level of resistance, and it will be up to our marketing efforts and negotiation skills to acquire customers. Most of our competitors may have greater financial resources than we do and will be able to withstand sales or price decreases better than we are. We also expect to continue to face competition from new market entrants. We may be unable to continue to compete effectively with these existing or new competitors, which could have a material adverse effect on our financial condition and results of operations.
Insurance
We do not maintain any insurance as of the date of this prospectus.
Employees
We are a development stage company and currently have no employees. Our sole officer and director manages the day-to-day operations of the Company.
Government Regulation
We will be required to comply with all regulations, rules and directives of governmental authorities and agencies in any jurisdiction which we would conduct activities in the future. As of now there are no required government approvals present that we need approval from or any existing government regulation on our business.
Patents, trademarks and copyrights
We do not own, either legally or beneficially, any patents or trademarks. We intend to protect our website with copyright laws. Beyond our trade name, we do not hold any other intellectual property.
Bankruptcy or similar proceedings
There has been no bankruptcy, receivership or similar proceeding.
“Shell” Company Status
The proposed business activities described herein classify us as a “shell” company. The Securities and Exchange Commission and certain states have enacted statutes, rules and regulations regarding the sales of securities of shell companies, as well as limitations on a shareholder’s ability to sell their “restricted” securities. Rule 144 is not available to a shareholder of a shell company unless and until the Company files a registration statement with the SEC that includes certain specific information about existing business operations of a registrant and thereafter must wait an additional one year to take advantage of that exemption from registration.
Rule 12b-2 of the 34 Act defines a shell company as a company that has:
(1) No or nominal operations; and
(2) Either:
(i) No or nominal assets;
(ii) Assets consisting solely of cash and cash equivalents; or
(iii) Assets consisting of any amount of cash and cash equivalents and nominal other assets.
We will continue to file all reports required of us under the Exchange Act until we organically build our business from cash raised from investors. No assurance can be given that this will occur or, if it does, for how long.
ITEM 1A. RISK FACTORS.
We are a smaller reporting company and not required to include this disclosure in our Form 10-K annual report.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES.
Our executive offices are located at 63 Rico Court Palm Desert, CA 92260. Our telephone number is (604) 715-0887. We currently use space in our sole officer and directors home and we believe this space is sufficient to meet our needs for the foreseeable future. We do not currently own any real estate.
ITEM 3. LEGAL PROCEEDINGS.
We are not a party to any legal proceeding as of the date of this Report.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
As of the date of this Report, there is no public trading market for our common stock and no assurance that a trading market for our securities will ever develop or, if any market does develop, it may not be sustained. Our common stock is not traded on any exchange or on the over-the-counter market. We anticipate that as soon as practicable following the date of this Report, to have a market maker file an application with the Financial Industry Regulatory Authority (“FINRA”) for our common stock to be eligible for trading on the Over-the-Counter Bulletin Board. As of the date of this Report, we have yet to identify a market maker to file such application.
ITEM 6. SELECTED FINANCIAL DATA.
As a smaller reporting company, we are not required to provide this information.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion should be read in conjunction with our audited financial statements and notes thereto included herein. In connection with, and because we desire to take advantage of, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, we caution readers regarding certain forward looking statements in the following discussion and elsewhere in this Report and in any other statement made by, or on our behalf, whether or not in future filings with the Securities and Exchange Commission. Forward looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward looking statements made by, or on our behalf. We disclaim any obligation to update forward looking statements.
Accounting and audit plan
We intend to have our officer and director prepare our quarterly and annual financial statements and have these financial statements reviewed or audited by our independent auditor. As the financial statements are being prepared by our officer and director, the expected cost to our company will be minimal. Our independent auditor is expected to charge us approximately $2,700 to review our quarterly financial statements and approximately $5,000 to audit our annual financial statements. In the next twelve months after completion of this offering, we anticipate spending approximately $7,700 to pay for our accounting and audit requirements.
Limited operating history
There is no historical financial information about us upon which to base an evaluation of our performance. We are in startup stage operations and have not generated any revenues. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.
Need for additional capital
We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.
Off balance sheet arrangements
We have no off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Results of operations
During the year ended June 30, 2018, we incurred $7,923 of operating expenditures comprised of bank charges, professional fees as well as transfer agent/filing fees compared to $274 of general and administrative fees incurred during the period from October 31, 2016 (date of inception) to June 30, 2017. The increase in operating expenses is due to increase in operating activity during the current period. Our net loss since inception is $8,197 as of June 30, 2018 related primarily to professional fees, the incorporation of the company, bank charges, office supplies, registration of our domain name, and launching of the website.
Since inception, we have offered and sold (i) 500,000 shares of common stock to our officers and directors, at a purchase price of $0.0001 per share, for aggregate proceeds of $50. During the period ended June 30, 2018, we did not issue any common shares.
Liquidity and Capital Resources
As of June 30, 2018, the company had a cash balance and total assets of $1,451 compared to cash and total assets of $6,674 as at June 30, 2017. The decrease in cash and total assets was due to professional fees and transfer agent/filing fees. As at June 30, 2018 and June 30, 2017 we had total liabilities of $9,598 and $6,898 respectively. Our working capital deficit was $8,147 as at June 30, 2018 compared to $224 as at June 30, 2017.
The available capital reserves of the company are not sufficient for the company to remain operational. During 2016, our officer and director, who is currently our sole shareholder, advanced the Company $6,898 to pay expenses. The loan is an oral contract, and is unsecured, bears no interest and is payable on demand.
We cannot guarantee that we will be able to sell all the shares required. If we are successful, any money raised will be applied to the items set forth in the use of proceeds section of this prospectus. As of the date of this registration statement, the current funds available to the company will not be sufficient to continue maintaining a reporting status. Our primary priority will be to retain our reporting status with the SEC which means that we will first ensure by being a “reporting issuer” under the Securities Exchange Act of 1934, as amended.” that we have sufficient capital to cover our legal and accounting expenses. Once these costs are accounted for, in accordance with how much cash we are able to retain, we will focus on meeting all our planned expenses.
We are highly dependent upon the success of the private offerings of equity or debt securities, as described herein. Therefore, the failure thereof would result in the need to seek capital from other resources such as taking loans, which would likely not even be possible for the company. At such time these funds are required, management would evaluate the terms of such debt financing. If the company cannot raise additional proceeds via a private placement of its equity or debt securities, or secure a loan, the company would be required to cease business operations. As a result, investors would lose all of their investment.
Cash Flows
During the year ended June 30, 2018, we used $5,223 of cash for operating activities compared to the use of $274 for operating activities during period from October 31, 2016 (date of incorporation) to June 30, 2017. During the year ended June 30, 2018 we did not have any investing or financing activities. During the period from October 31, 2016 (date of incorporation) to June 30, 2017, we received $6,948 from financing activities including $6,898 from our President and Director and $50 from the issuance of common shares.
Going concern consideration
Our auditors have issued a “going concern” opinion, meaning that there is substantial doubt if we can continue as an ongoing business for the next twelve months unless we obtain additional capital. No substantial revenues are anticipated until we have completed the financing from this offering and implemented our plan of operations. Our only source for cash at this time is investments by others in this offering. We must raise cash to implement our strategy and stay in business. The amount of the offering will likely allow us to operate for at least one year and have the capital resources required to cover the material costs with becoming a publicly reporting. The company anticipates over the next 12 months the cost of being a reporting public company including legal and accounting fees will be approximately $9,000.
Summary of significant accounting policies
Basis of presentation
The financial statements of the company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. The Company's fiscal year end is June 30.
Income taxes
The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Income Taxes”. The asset and liability method provides that deferred income tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred income tax assets to the amount that is believed more likely than not to be realized.
A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the company will not realize tax assets through future operations.
Use of estimates
Management uses estimates and assumption in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.
Cash and cash equivalents
The Company considers all highly liquid instruments with original maturities of three months or less when acquired, to be cash equivalents. We had no cash equivalents at June 30, 2018 and 2017.
Fair value of financial instruments
Accounting Standards Codification Topic 820, “Disclosures About Fair Value of Financial Instruments”, requires the company to disclose, when reasonably attainable, the fair market values of its assets and liabilities which are deemed to be financial instruments. The company’s financial instruments consist primarily of cash.
Stock based compensation
Stock based compensation is accounted for at fair value in accordance with ASC Topic 718. To date, the Company has not adopted a stock option plan and has not granted any stock options.
Per share information
The Company computes net loss per share accordance with ASC 205 “Earnings per Share”. ASC 205 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all potentially dilutive common shares outstanding during the period. Diluted EPS excludes all potentially dilutive shares if their effect is antidilutive.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary financial information required by this Item are set forth immediately following the signature page and are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation, under the supervision and with the participation of our management, including our sole executive officer (who is our Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer), of the effectiveness of the design of our disclosure controls and procedures (as defined by Exchange Act Rules 13a-15(e) or 15d-15(e)) as of June 30, 2018 pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not effective as of June 30, 2018 in ensuring that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s (the “SEC”) rules and forms. This conclusion is based on findings that constituted material weaknesses. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s interim financial statements will not be prevented or detected on a timely basis.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the participation of our management, which currently consists of our sole executive officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO” - 2013) and SEC guidance on conducting such assessments. Our management concluded, as of June 30, 2018, that our internal control over financial reporting was not effective. Management realized there were deficiencies in the design or operation of the Company’s internal control that adversely affected the Company’s internal controls which management considers to be material weaknesses.
In performing the above-referenced assessment, management had concluded that as of June 30, 2018, there were deficiencies in the design or operation of our internal control that adversely affected our internal controls which management considers to be material weaknesses including those described below: