U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (Fee required)
For Fiscal Year Ended December 31, 1996
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT TO 1934 (No fee required)
For the transition period from ___ to___
Commission File Number 0-21585
WORLDWIDE ENTERTAINMENT & SPORTS CORP.
(Name of Small Business Issuer in its charter)
Delaware 22-3393152
(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
29 Northfield Avenue, West Orange, NJ 07052
(Address of Principal Executive Offices) (Zip Code)
(201) 325-3244
Issuer's Telephone Number, Including Area Code
Securities registered pursuant to Section 12(b) of the Exchange Act:
(None)
Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, $ .01 par value
Redeemable Warrants
-----------------------------
Title of Each class
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 [ ]
Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this form 10-KSB or any
amendment to this Form 10-KSB. ( )
State issuer's revenues for its most recent fiscal year. $322,378
State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the
average bid and asked prices of such stock, as of a specified date within the
last 60 days. $3,248,701 as of April 9, 1997
APPLICABLE ONLY TO CORPORATE REGISTRANTS
State the number of shares outstanding of each issuer's classes of common
equity, as of the latest practicable date. 5,153,255 shares
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
DOCUMENTS INCORPORATED BY REFERENCE
None.
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PART I
Item 1. Description of Business
Organization
The Company was organized in August 1995 for the purposes of succeeding
to the boxing management operations conducted by various entities controlled
by Marc Roberts and to engage in management of, and to provide agency services
to, athletes in other sports and entertainers. In November 1995, the Company
entered into a management agreement with heavyweight prospect Shannon Briggs,
and acquired all of the assets and assumed all of the liabilities of Shannon
Briggs I, L.P., an entity controlled by Marc Roberts which had previously
managed Mr. Briggs. In 1995, the Company acquired Marc Roberts Boxing, Inc.,
Merciless Management, Inc. and The Natural Management, Inc., entities owned
by Marc Roberts through which he managed Tracy Patterson, Ray Mercer and
Charles Murray, respectively. Such corporations, together with Marc Roberts
Inc. and SB Champion Management Inc., corporations also owned by Mr. Roberts,
were subsequently merged into the Company, and the Company entered into new
management agreements with these boxers. The business of managing the boxers
is conducted through the Boxing Division of the Company.
In January 1996, the Company established its Team Sports Division
through the formation of Worldwide Team Sports, Inc.(WWTS), initially
concentrating in the business of representing professional football players,
and employed a registered NFL contract advisor in connection therewith. In
August 1996, for the purpose of providing agency, marketing and management
services to professional basketball players, the Company formed Worldwide
Basketball Management, Inc. ("WWBM"), a corporation 80% owned by the Company
and 20% owned by WWBM's President and its Chief Executive Officer. The
Company intends to establish additional divisions within its Team Sports
Division for each additional team sport into which the Company expands its
operations. The Company is currently developing a marketing division to
cater to the development of commercial and marketing opportunities for
athletes and entertainers, including the Company's clients. In March 1997,
the Company established Worldwide Sports Promotions, Inc. for the purpose of
promoting sporting events; however such subsidiary has had only limited
operations to date.
The Boxing Division
The Company's boxing division is under the direct supervision of Marc
Roberts, the Company's President. Mr. Roberts has over 17 years experience
in the management of professional boxers. The Company's four boxers have
engaged in over 80 professional bouts while under Mr. Roberts' management.
In addition to the continuing management of the boxers identified below, the
Company seeks to selectively identify promising young boxers to solicit
management opportunities.
<PAGE>
Professional Boxing
The sport of boxing is overseen primarily by four organizations - the
World Boxing Association ("WBA"), the World Boxing Council ("WBC"), the
International Boxing Federation ("IBF") and the World Boxing Organization
("WBO") - which have established rules and regulations governing conduct in
the ring. Each of such entities, which are comprised of various foreign
national boxing commissions and certain state bodies, set their own rules,
establish their own medical and safety standards, create their own rankings
and designate their own "world champions." Each sanctions particular
championship and official title-elimination bouts. To hold a title in any of
such organizations, a boxer must compete in places, against opponents and
under conditions specified by the sanctioning body, one or more of which may
sanction a particular bout.
Professional boxers are divided into 17 weight classes ranging from
the "heavyweight" division (190 lbs. and over) to the "strawweight" division
(108 lbs. and under). Boxers are ranked within their weight class and
predominantly box opponents of the same or reasonably similar weight.
Champions are crowned in each division as well. Bouts can be as long as 12
rounds, usually reserved for championship bouts, or as short as four rounds
for bouts between young, untested boxers.
Boxing matches are judged by three judges under the rules dictated by
the state boxing authority of the state in which the bout is located. Unless
decided by a knockout or disqualification, bouts are won or lost according to
a system of points awarded to the boxer who landed the most, and most
effective punches during a bout. A referee presides over a match as the
third party in the ring, insuring that the boxers box in accordance with the
rules. While the judgment of the referees and the judges is generally not
subject to further review, the nature of bout judging is largely subjective.
Therefore, it is impossible to predict the outcome of a bout or, in turn,
the professional success of a boxer. A decision against a boxer can
seriously set back his development into a contender and thus his ability to
earn substantial purses.
In addition to the boxers, judges and referees, the business of
professional boxing is driven by promoters and managers. Promoters are
responsible for contracting boxers to bout agreements with designated
opponents, arranging sites, negotiating broadcast rights contracts and
establishing and paying the gross purses to the boxers. Promoters generally
are also authorized to sell tickets for the matches they promote and to
exploit and market all ancillary rights to the bout, including without
limitation, the broadcasting, telecasting, recording or filming of such
contests for exhibition on a live or delayed basis in any and all media.
The role of a manager, such as the Company, is to advise its boxers
on career development, training and business planning matters, to solicit the
arrangement of matches with potential opponents, to advise the boxers
regarding participation in bouts requested by others, and to negotiate the
terms thereof, including purse payments, and the selection of opponents with
promoters of bouts. A manager's success is dependent upon, among other
factors, its boxers participating in bouts with increasingly higher purses,
which is directly related to such factors as the continued success of the
boxers and the ability of the manager to arrange contests and exhibitions of
sufficient interest to the public to warrant substantially greater purses.
The Company believes that unless and until a boxer attains championship or,
in the case of a heavyweight, top contender status, his purses will not be at
a level which will generate sufficient revenues for the Company to offset its
costs and advances.
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The availability of increasing purse amounts will be subject, in part,
to the continuation of a significant level of public interest in the sport of
boxing, which is dependent in part upon the marketability of the top
contenders at any given time and the public's perception of the sport in
general. From time to time in recent years journalists, broadcasters and
other public figures have questioned the propriety of the current governance
system for professional boxing and suggested changes (i.e., use of protective
headgear) which may affect the popularity of professional boxing.
The recruitment and development of young professional boxers is a
major expense of boxer management. A would-be manager faces stiff
competition from other entities in pursuit of quality boxers. There are a
limited number of potential participants for bouts with significant purses
and a limited number of promoters to organize such bouts. The securing of a
boxer as a client requires a great deal of attention and a demonstration of
a willingness and ability to understand and appropriately handle the
professional and personal needs and aspirations of the athlete. The process
can be time consuming and costly. Early in a boxer's career, when revenues
from his matches are too low to cover his expenses and cost of living, a
manager must advance the costs for the boxer's professional and often
personal needs, including, but not limited to, training expenses, personal
services, cost of food, clothing, shelter and medical costs. It usually
takes several years of boxing before a boxer reaches a level of professional
success whereupon the revenue from his boxing is sufficient to support his
career and to pay off his manager's advances. There can be no assurance that
any boxer who may be managed by the Company in the future, will ever generate
sufficient revenues to allow the Company to recoup its expenditures.
The Boxers
The Company currently manages the following four professional boxers
pursuant to exclusive management contracts:
Tracy Harris Patterson is the former World Champion in two different
weight classes: WBC Super Bantamweight Champion and IBF Junior Lightweight
Champion. During 1996, Mr. Patterson won three bouts against Jose Figouera,
Harold Warren and Jose Aponte. In 1997, Mr. Patterson lost a title fight
with Arturo Gatti.
Charles "The Natural" Murray has been boxing professionally since
March 1989. Mr. Murray holds the North American Boxing Federation (a lesser
sanctioning body) Junior Welterweight Championship and is ranked in the top
ten by each of the WBC, IBF and WBA. Mr. Murray previously held the IBF
Junior Welterweight World Championship. Mr. Murray had three successful
matches during 1996, against Tony Lopez, Jake the Snake Rodriguez and Eric
Green.
Raymond "Merciless Ray" Mercer was the 1988 Olympic heavyweight gold
medalist and has been boxing professionally since February 1989. Mr. Mercer
was formerly the WBO Heavyweight World Champion and the IBF Intercontinental
Champion. Mr. Mercer lost to Lennox Lewis in May 1996, and won in October
1996 against Tim Whitherspoon.
<PAGE>
Shannon Briggs has been boxing professionally since July 1992. Mr.
Briggs fought three times during 1996. He was victorious against Tim Ray and
Eric French, and lost to Darroll Wilson.
Each of these boxers has entered into a management agreement with the
Company pursuant to which the Company will supervise and direct the boxer's
training activities, negotiate business opportunities on behalf of the boxer
and oversee all marketing and promotional activities regarding the boxer. The
Company negotiates with promoters on behalf of its boxers to determine which
bouts each boxer will engage in and the terms of the purses to be paid for
such bouts. In exchange for providing such services, the Company retains a
percentage of the purses from all professional boxing contests and
exhibitions and all fees, honoraria or other compensation payable to the
boxer for product endorsements, speaking engagements, personal appearances or
other commercial performances. An amount equal to 10% each of the purses as
well as all fees, honoraria or other compensation payable to the boxer is
generally paid by the boxer to his trainer. The balance of the purse is
retained by the boxer.
The initial term of each of the management contracts is five years
expiring in 2001 or late 2000. Although the Company's management agreements
are not subject to cancellation by the boxers, there can be no assurance that
any of such individuals will not fail to honor his contract during its term.
For the year ended December 31, 1996, the Company recognized purse
income of $232,437. The Company has recognized limited revenues relating to
product endorsements, speaking engagements, personal appearances or other
commercial performances from its boxers. Historically, boxers have not been
actively solicited for such opportunities, and therefore the generation of
significant revenue in this regard is uncertain. The Company nevertheless
intends to seek to maximize these opportunities for its boxers through the
efforts of its Marketing Division. There can be no guaranty of success in
these efforts.
Boxing Regulation
The management of professional boxers and other athletes is subject to
licensing and regulation by state athletic commissions and agencies. The
Company's President, Marc Roberts, has obtained licenses to act as a manager
from the governing agencies in New Jersey and Nevada. Management licenses
were obtained in the other host states immediately prior to the bouts held
therein, and the Company, or its employees or representatives, as applicable,
will seek the appropriate licenses from other states as warranted. The
various state athletic commissions have their own rules and regulations which
govern boxing contests and events taking place in their states and have
promulgated their own standards for boxer-management contracts, including
maximum permissible duration and management fees. In some instances, such
provisions conflict with the legislation and rules and regulations of other
states, as well as with the terms of the Company's management agreements. To
date, the terms of the Company's management agreements have not restricted
the Company's boxers from engaging in bouts in other states. The Company's
management agreements provide, however, that in the event any provision of
such agreements is held invalid or unenforceable by a host state, such
provision shall be deleted or construed in accordance with the rules of the
host state. Difficulties or failure in obtaining or maintaining required
licenses or approvals from state athletic commissions or agencies or
otherwise complying with their rules or regulations could prevent the Company
from enforcing its rights under its management contracts or placing its
boxers in contests or exhibitions in certain states. To date, there have
been no such difficulties with the Company's management agreements.
<PAGE>
Personal Injury Liability
The use of the Company's boxing training facility by professional
boxers and others entails a risk of liability claims for injuries sustained
while training or using equipment. The Company maintains liability insurance
coverage in the amount of $1,000,000 per occurrence and $2,000,000 in the
aggregate. In the event of a successful suit against the Company, lack or
insufficiency of insurance coverage could have a material adverse effect on
the Company.
Team Sports Division
The Company's Team Sports Division is currently comprised of two
subsidiaries, Worldwide Team Sports, Inc. ("WWTS") and Worldwide Basketball
Management, Inc. ("WWBM").
The Team Sports Division was formed for the purpose of engaging in the
business of providing contract negotiation and advisory services to, and on
behalf of, professional team sport athletes. The Company intends to operate
through sport-specific divisions (which, as in the case of basketball, may be
separate subsidiaries) employing professionals with experience as agents and
contract advisors ("Agents") in their respective sports. Currently, the Team
Sports Division has established only its Football Division and its Basketball
Division. There can be no assurance that any such additional divisions will
be successfully created or that acquisitions of established sports agency
practices will be successfully completed. To accomplish this goal, the
Company will need to establish direct connections with players in the various
professional sports leagues and, in accordance with established guidelines,
establish relationships with collegiate athletes across all of college sports
after termination of their eligibility to participate in collegiate sports.
The Company intends to seek to hire or engage as consultants established
professionals with rosters of athletes in various professional sports. The
Company will seek to integrate the operations of WWTS with its other
divisions so as to provide its clients with professional and commercial
services intended to enable athletes to maximize their earning potential
during their playing careers and to capitalize on the recognizability,
popularity and marketability of professional athletes in today's media
saturated sports environment.
WWTS retains two talent scouts on a commission basis to refer athletes
to the Company. The Company may be compelled to retain the services of
independent consultants to perform player contract negotiations on behalf of
the Company. In such event, the Company would be required to share revenues
generated from player contract negotiations.
Agents conduct compensation negotiations on behalf of individual
players and also provide advice and counsel in all other areas of the
players' professional careers, including career management decisions (e.g.,
free agency options), the development and execution of marketing strategies
and endorsement opportunities. In addition to establishing a relationship
with the athletes, a knowledge of the league, team personnel, the league
collective bargaining agreements and the mechanics of the league's salary cap
structure, which limits the aggregate amount of salaries a team can pay its
players, is
<PAGE>
material to fulfilling the Agent's function. Agents must be able
to assist their clients in all stages of their careers. They must be
familiar with the personnel needs of the teams in the league to appropriately
market and arrange showcases for their rookie clients, and also must be
familiar with each team's salary cap limitations to best position veteran
free agents to sign with a particular team. In exchange for such services,
an Agent generally receives 2% to 4% of his player's team salary each season
which includes the player's base salary, signing bonus and any performance
bonus actually received by the player), during the length of the contract
which the Agent negotiated for his client with the team. That revenue stream
continues for so long as the player is paid pursuant to such contract, even
if the client changes Agents during that span. Once that contract is
completed, a player is free to use another Agent with no obligation to his
former Agent. An Agent's success therefore depends as much on his ability
to maintain a long term relationship with his players and his ability to
attract new valuable veteran and rookie talent as on his ability to negotiate
favorable contracts for his players. Revenues generated by the renegotiation
of a contract originally negotiated by another Agent are based solely on the
incremental salary increase, if any, resulting from such renegotiation.
The Football Division
Through WWTS or a separate subsidiary, the Company intends to further
develop a football player agency business primarily through the acquisition
of existing agency businesses and also through additions to WWTS' existing
athlete clientele. The Company has employed an NFL registered Agent with
three years experience, to be WWTS' Vice President. The Company believes it
will be necessary to add only experienced management personnel to WWTS or a
separate subsidiary to achieve its growth objectives. The Company's football
agency success will depend on its ability to acquire existing sports agency
practices, attract and retain the services of football industry professionals,
and in turn on the ability of those professionals to undertake the
representation of successful professional athletes and to maintain such
relationships for a substantial period of time. The NFL Collective Bargaining
Agreement prohibits an organization from serving as a player's Agent, and
therefore the Company's football agency business growth will be dependent
upon its ability to retain the services, as employees or consultants, of
Agents able to secure athletic talent and who are also willing to assign the
commissions generated thereby to the Company in exchange for a salary, stock
and other compensation.
Basketball Division
In August 1996 the Company formed WWBM for the purpose of providing
player agent services to professional basketball players, including, but not
limited to, contract negotiation, professional and personal advisory services,
and the identification and exploitation of endorsement and marketing
opportunities. Initially, WWBM intends to focus on players in the National
Basketball Association ("NBA"), but in the future may expand to other
professional leagues in the United States and in other countries as well.
WWBM intends to seek to identify and establish relationships primarily with
those athletes whose athletic abilities and personal attributes make them, in
the opinion of WWBM's management, most likely to realize the maximum
financial benefit from their athletic careers under WWBM's direction.
NBA player agents are certified by the National Basketball Players
Association ("NBPA") and are regulated by the terms of the Regulations
Governing Player Agents which were adopted by the
<PAGE>
NBPA pursuant to the authority and duty conferred upon the NBPA as the
exclusive bargaining representative of NBA players pursuant to Section 9(a)
of the National Labor Relations Act. By regulation, a player agent must be
an individual and not a corporation or other entity. Although the maximum
fees which an Agent can charge or collect is 4% of a player's compensation f
rom the team, if an Agent negotiates a contract where the player receives
only the minimum season's compensation under the Collective Bargaining
Agreement, the Agent is entitled to only a $2,000 fee for such season. An
Agent may also receive a greater percentage, often 15% to 20%, of a player's
compensation from endorsements and other sources of income. As a rule, an
Agent can receive a commission only on moneys actually received by the player
and cannot force the player to pre-pay any commissions on moneys not yet
received by the player.
WWBM is owned 80% by the Company and 20% by its President and
Executive Vice President. In connection with the formation of WWBM, each
officer signed five year employment agreements with WWBM, effective September
1, 1996, pursuant to which they assigned their respective rights and
interests in the revenues generated by players signed before 1996 and any
players they sign to valid player's representation agreements during their
employment by WWBM.
For the year ended December 31, 1996, the Company recognized revenues
of $76,297, from these operations.
Marketing Division
The Company is developing a marketing division to cater to the
development of commercial and marketing opportunities for athletes and
entertainers, including the Company's clients. The Marketing Division will
seek to generate opportunities for non-sport exploitation of all of the
Company's clients' names and personalities by focusing on the lucrative
merchandising, endorsement, public appearance and licensing opportunities
available to today's better known athlete. For these efforts, the Company
will receive a stated percentage of any revenues generated by these
opportunities as a commission, customarily ranging from 10% and 20%. The
Marketing Division will also endeavor to arrange marketing opportunities and
public appearances for the athletes of other agencies, in which event the
Company would customarily share up to 50% of the commission. To date, the
Company has generated minimal revenues from such operations.
Competition
The Company faces intense competition from an increasingly crowded
field of sports agents. As professional athletes' salaries continue to grow,
and the opportunities for additional revenues from commercial exploitation
and endorsements expand, more agents enter into this field, which has limited
barriers to entry. In spite of the growing number of agents, each major
professional sport is dominated by one or two major agencies. For example,
six Agents, including Leigh Steinberg and Marvin Demoff, represent one third
of all players in the NFL, including those generating the highest salaries.
This concentration of the recognized revenue generating athletes in the hands
of a few agents presents a potential barrier which could prevent WWTS and
WWBM from realizing their growth objectives.
<PAGE>
The Marketing Division also faces competition from more established
and experienced agencies such as Nike Sports Management, Steiner Sport
Marketing, The Marquee Group, Inc., and Advantage International, which
currently provide endorsement opportunities to athletes. There are no
barriers to entry in this industry and success is dependent upon successfully
establishing and maintaining relationships with persons and entities capable
of providing endorsement opportunities and identifying trends and issues to
capitalize on fleeting popular currents.
The boxers managed by the Company face intense competition from
numerous professional boxers in their respective weight classes both in the
boxing ring as well as for participation in bouts and press coverage. Such
individuals also compete for access to the services of promoters who have
sufficient resources to arrange bouts with large purses. Many boxers have
long-term arrangements with promoters, potentially providing such boxers with
an advantage in arranging such bouts. There can be no assurance that the
individuals managed by the Company will be able to compete successfully on
any of these levels. Further, the Company will be competing with numerous
other managers and promoters, including Don King Productions, Top Rank,
Shelly Finkel Management, Cedric Kushner and Main Events, many of which may
have greater financial resources or recognition in the industry than the
Company, in the recruitment of new boxing talent.
Employees
At December 31, 1996, the Company had 11 employees. Three of such
persons perform executive functions, three are agents, one is a marketing
executive and four perform clerical or administrative functions. The Company
believes the number of persons currently employed is adequate to conduct the
Company's current level of business operations. Because of the service
nature of the sports management industry, the Company intends to continue to
seek to add new management personnel to expand into additional sports and to
add to the number of players represented by the Company.
Item 2. Description of Properties
The Company's principal executive offices are currently located in
West Orange, New Jersey on a month-to-month rental basis. The Company
currently occupies approximately 1,500 square feet of space, for which the
Company pays a monthly base rental of approximately $1,650. The Company
leases its boxing training facility, comprising approximately 2,000 square
feet, on a month-to-month basis, at a base monthly rental of $1,280. The
Company intends to relocate its training facility because the Company does
not believe these facilities are adequate for its present and projected needs.
The Company believes it will be able to locate suitable space at base rental
amounts similar to those currently paid by the Company.
Item 3. Legal Proceedings
There are no material legal proceedings to which the Company is a party.
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
PART II
Item 5. Market for Common Equity and Related Shareholder Matters.
The Common Stock and Redeemable Warrants are traded on the Nasdaq
SmallCap Market System under the, symbols "WWES" and "WWESW", respectively.
Until February 20, 1997, Units consisting of one share of Common Stock and
one Redeemable Warrant were also traded on such market. The following
reported high and low closing sales prices of the Company's Units, Common
Stock and Redeemable Warrants during the period October 22, 1996 (date of
initial trading for public offering of each security) through December 31,
1996 were as follows:
High Low
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Units $ 8 1/4 $ 5 9/16
Common Stock 7 4 3/4
Redeemable Warrant 1 1/4 11/16
As of December 31, 1996, the approximate number of holders of record of
shares of the Company's Common Stock was 97.
The Company has not paid a cash dividend on the Common Stock since
its public offering in October 1996. The Company intends to retain future
earnings for use in its operations and, accordingly, does not intend to pay
cash dividends in the foreseeable future.
Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
Results of Operations
General
Worldwide Entertainment & Sports Corp. was organized in August 1995, and
since such date has succeeded to the business operations of various entities
engaged in the management of professional boxers, each previously controlled
by the Company's Chief Executive Officer. In addition, in January 1996, the
Company formed Worldwide Team Sports, Inc. (WWTS") and hired a registered NFL
contract advisor. In August 1996, for the purpose of providing agency,
marketing and management services to professional basketball players, the
Company formed Worldwide Basketball Management, Inc. ("WWBM"), a corporation
80% owned by the Company and 20% owned by WWBM's President and Executive Vice
President, respectively. While the Company has succeeded to the operations of
these businesses, the prior operating results of such separate businesses
should not be viewed as representative of the future results of operations of
the Company. The Company has only recently expanded into
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the field of player agency and contract advisory services. The Company has
only limited experience in the negotiation of player contracts, and
consequently, may seek to retain the services of other registered NFL
contract advisors on an independent contractor or consultancy basis and share
a portion of fees generated therefrom with such persons. To date, the Company
has generated limited revenues from contract advisory services to
professional football and basketball players due to the timing of the seasons
for such sports.
Establishing and maintaining a presence in each of the Company's areas
of concentration, (i.e., boxing management and team sports player agency)
require significant expenditures. Each sports specific division must develop
a roster of clients, establish relationships within their prospective sports
and develop support services to provide to the athletes. Only a portion of
such expenses incurred by the Company will result in the engagement by a
client of the Company's services, and it is often uncertain the extent to
which, even if retained, a target client will generate significant revenues
to the Company. In addition, the Company incurs significant training expenses
for the boxers under the Company's management, not all of which are directly
reimbursed pursuant to bout agreements for such boxers. In the development
of a boxer, particularly a young amateur boxer, into a professional boxer who
can command significant purses, such expenses can be incurred over a period
of years and constitute hundreds of thousands of dollars or more. The Company
must continuously incur such expenses in contemplation of future revenues,
the receipt of which is uncertain. The Company's revenues are directly
related to the earnings of its clients. The Company derives revenues based
upon a percentage, currently ranging from 15% to 27-1/2%, of the boxers'
purses from professional bouts. The Company also derives revenues based upon
a percentage of salaries and other income received from contracts,
endorsement arrangements and other income producing activities of athletes
for whom the Company or its management acts as agent or representative.
These percentages currently range from 2% to 4% for professional basketball
and football player contracts (although occasionally lower percentages are
agreed upon) to 10% or 20% for endorsement and marketing revenues.
The timing of receipt of revenues by the Company is subject to seasonal
variations with respect to revenues generated from the negotiation of player
contracts and subject to irregular patterns in the case of boxing purse
revenues as a result of the irregular occurrence of the bouts. In addition,
the magnitude of the Company's revenues can be expected to experience wide
fluctuations based upon the success or failure of the Company's boxers or the
negotiation of player contracts with significant bonus provisions. The
Company's WWTS subsidiary can be expected to incur significant expenditures
during the first eight months of each calendar year (particularly March
through July) for recruitment and related expenses, and to receive its
revenues during the last four and first three months of the year during the
NFL and NBA seasons. If the Company were to expand into the representation
of baseball players (or other professional athletes with a spring/summer
season), of which there can be no assurance, the effects of such seasonality
would be diminished.
Year Ended December 31, 1996 Compared with the Year Ended December 31, 1995
Net revenues for the year ended December 31, 1996, were $322,378, as
compared to $241,621, for the year ended December 31, 1995. During 1996, the
Company was actively engaged in the management of its four boxers, as
compared to 1995, during much of which the Company was actively
<PAGE>
managing only one boxer, Mr. Briggs. Purse income increased to $232,437 for
1996 compared to $75,794 in 1995 as a result of an increase in the number of
bouts and an increase in the level of the purses. In addition, during 1996,
the Company first recognized endorsement and commission income from
representation of team sports athletes, aggregating $53,504. No such
revenues were received by the Company for 1995. During the year ended
December 31, 1995, the Company purchased tickets to bouts and then resold the
tickets to aid in the distribution of tickets. Such practice was not for the
purpose of generating gain on the sale of the tickets, and such practice was
suspended in 1996. Accordingly, ticket revenues for the year ended December
31, 1996 were $12,636, compared to $144,227 for 1995. Such revenues are
largely offset by a corresponding expense for ticket costs. Therefore, this
change does not result in a significant impact on the Company's results of
operations.
Total expense increased for the year ended December 31, 1996, increased
to $2,368,763, from $1,077,037, for 1995. Promotion and other operating
expenses increased to $2,069,039, for 1996, as compared to $645,124 for 1995
as a result of (1) $315,730 of travel and entertainment expenses incurred in
connection with the recruitment of professional football players and Agents
for Team Sports and in connection with bouts for the Company's four boxers,
and (2) $676,746, in payroll expenses as a result of the hiring of the
registered NFL Agent for the WWTS subsidiary and additional staff personnel.
In addition, there were approximately $324,389 of expenses for promotional
materials and other public relations expenses for the year. The year ended
December 31, 1996, also included $ 141,340, of interest expense attributable
to the 10% promissory notes issued in connection with the Company's private
placement which originated in September 1995, as well as $50,000 paid in
connection with the termination of an agreement with a trainer for one of the
Company's boxers. Accordingly, the Company's net loss for the year ended
December 31, 1996, increased to $2,150,198, from $869,303, for 1995.
Year Ended December 31, 1995 Compared with the Year Ended December 31, 1994
Purse income increased to $75,794 for the year ended December 31, 1995
from $5,200 for the year ended December 31, 1994. During most of 1994, the
Company had a management agreement with only one boxer, Shannon Briggs, who
was beginning his professional career at such time. In December 1994 and
early 1995, the Company executed management agreements with Ray Mercer,
Charles Murray and Tracy Patterson. Therefore, purse income in 1995
increased as a consequence of the resulting increase in the number of bouts
and size of the purses. Revenues for the year ended December 31, 1995
included $144,227 of revenues generated by ticket sales processed through the
Company for bouts. Operating expenses increased from $396,700 in 1994 to
$1,077,037 in 1995 due to a $189,700 increase in training expenses as a
result of the increased number of bouts during calendar 1995 and increased
promotional expenses in connection with the assumption by the Company of the
management of Messrs. Mercer, Murray and Patterson. In addition, and for the
same reasons, travel and entertainment expenses increased to $91,507 from
$15,758 for the prior year, promotional expenses increased to $87,751 from
$13,478 for the prior year and ticket purchase expense was $104,763 as
compared to less than $500 for the prior year. During the year ended December
31, 1995, the Company incurred a non-recurring expense in the amount of
$208,500 relating to the repurchase of a co-manager's interest in one of the
boxers. Accordingly the Company's loss from operations increased to
$(835,416) for the year ended December 31, 1995 from $(376,500) for the year
ended December 31, 1994. During such period, the Company also incurred
interest expense of $32,245 relating to notes issued through the private
placement commenced in 1995. As a result of these expenses, the net loss for
1995 was $(869,303).
<PAGE>
Liquidity and Capital Resources
Historically, the Company's principal source of operating capital has
been provided by loans and capital contributions from the Company's
stockholders as well as private sales of the Company's debt securities. At
December 31, 1996, the Company had working capital of $3,488,937, which
amount was obtained through the net proceeds for the company's initial public
offering in October 1996. Such proceeds were used to repay approximately
$2,150,000 of outstanding indebtedness to several individuals holding
promissory notes issued pursuant to a private placement.
The Company may relocate its boxing facility. It is anticipated that
the Company would incur expenditures of $150,000 in connection therewith.
Management salaries (aggregating approximately $650,000 per annum) and
anticipated training expenses (estimated at approximately $475,000, depending
upon the number of bouts) represent the expected significant uses of working
capital during the next twelve months, as well as recruitment expenses
(estimated to approximate $650,000, subject to variations depending upon
player availability and recruiting success) and rent (approximately $108,000
per annum). Prior to January 1, 1996, no officer of the Company was paid a
salary nor were there any salaries accrued therefor.
Although the Company believes that the remaining proceeds of its October
1996 initial public offering will be sufficient to fund its operations over
the next 12 months or longer, there can be no assurance that the Company will
have sufficient revenues after such time to fund its operating requirements.
Accordingly, the Company may be required to seek additional financing through
bank borrowings, debt or equity financing or otherwise. There can be no
assurance that any such financing will be available to the Company on
favorable terms, if at all.
Item 7. Financial Statements
WORLDWIDE ENTERTAINMENT & SPORTS CORP.
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Independent Auditors' Report..................................
Consolidated Balance Sheet as of December 31, 1996............
Consolidated Statements of Operations for the years
ended December 31, 1996 and 1995.............................
Consolidated Statement of Stockholders' Equity (Capital
Deficiency) as of December 31, 1996 and 1995................
Consolidated Statements of Cash Flows for the
for the years ended December 31, 1996 and 1995..............
Notes to the Financial Statements.............................
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and
Stockholders of Worldwide Entertainment
& Sports Corp. and Subsidiaries
29 Northfield Avenue
West Orange, NJ 07052
We have audited the accompanying balance sheet of Worldwide Entertainment &
Sports Corp. and Subsidiaries as of December 31, 1996 and the related
statements of operations, stockholders' equity and cash flows for the years
ended December 31, 1996 and 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Worldwide Entertainment &
Sports Corp. and Subsidiaries as of December 31, 1996 and the results of its
operations and its cash flows for the years ended December 31, 1996 and 1995
in conformity with generally accepted accounting principles.
ROSENBERG RICH BAKER BERMAN & COMPANY
Maplewood, New Jersey
February 18, 1997
<PAGE>
WORLDWIDE ENTERTAINMENT & SPORTS CORP.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
December 31,
1996
------------
CURRENT ASSETS:
Cash and cash equivalents including
restricted cash of $120,000 $ 791,505
Certificates of deposit 300,000
Marketable securities (at fair market value) 3,098,760
Accounts receivable net of allowance for
doubtful accounts of $600 12,396
Prepaid consulting expense 40,000
Due from boxers net of reserve of $38,853 92,458
Deposit 43,150
Other current assets 12,275
-----------
$ 4,390,544
-----------
PROPERTY AND EQUIPMENT - AT COST:
Net of accumulated depreciation 56,195
OTHER ASSETS:
Deferred consulting expense 150,000
Due from related party net of reserve of $ 30,710 30,711
Cash surrender value of life insurance 4,861
Security deposits 5,950
Other assets 15,000
-----------
206,522
-----------
$ 4,653,261
===========
See the Notes to the Consolidated Financial Statements.
<PAGE>
WORLDWIDE ENTERTAINMENT & SPORTS CORP.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES
December 31,
1996
------------
CURRENT LIABILITIES:
Current portion of long-term debt $ 25,515
Escrow funds payable 149,156
Due to related party 168,826
Accrued compensation and related items 227,585
Accrued expenses 245,539
Advance on letter of credit 70,000
Deferred income 14,536
Income taxes payable 450
-----------
901,607
-----------
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value; authorized
5,000 shares; no shares issued -
Common stock, $.01 par value; authorized
20,000,000 shares; 5,153,255 shares issued 51,533
Additional paid-in capital 6,763,561
Accumulated deficit (3,060,307)
Demand note receivable on private issuance
of Common Stock (12,350)
Unrealized gain on securities available for sale 9,217
-----------
3,751,654
-----------
$ 4,653,261
===========
See the Notes to the Consolidated Financial Statements.
<PAGE>
WORLDWIDE ENTERTAINMENT & SPORTS CORP.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended December 31,
---------------------------
1996 1995
------------ ----------
Purse income $ 232,437 $ 75,794
Agency fee revenue 30,424 -
Commission income 22,793 21,600
Endorsement income 23,080 -
Ticket revenues 12,636 144,227
Merchandise revenues 1,008 -
------------ ----------
322,378 241,621
------------ ----------
Training and related expenses 199,725 223,413
Promotion and other operating expenses 2,069,038 645,124
Other expenses 100,000 208,500
------------ ----------
2,368,763 1,077,037
------------ ----------
Loss from operations (2,046,385) (835,416)
------------ ----------
Other income and expenses:
Interest and dividend income 21,941 323
Other income 10,916 -
Interest expense (141,340) (33,573)
------------ ----------
(108,483) (33,250)
------------ ----------
Loss before income taxes (2,154,868) (868,666)
Income taxes 1,330 637
------------ ----------
Net Loss $ (2,156,198) $ (869,303)
============ ==========
WEIGHTED AVERAGE OF COMMON SHARES
OUTSTANDING 4,116,096 3,222,176
============ ==========
LOSS PER SHARE $ (0.52) $ (0.27)
============ ==========
See the Notes to the Consolidated Financial Statements.
<PAGE>
WORLDWIDE ENTERTAINMENT & SPORTS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(CAPITAL DEFICIENCY) FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
<TABLE>
Demand
Note
Add- Receiv- Unrealized
itional able Gain on
Preferred Stock Common Stock Pre- Paid- on Securities
--------------- ---------------- decessors' in Accumulated Common Available
Shares Amount Shares Amount Capital Capital Deficit Stock For Sale
------ ------ ------- ------- ---------- ------- ----------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance -
January 1, 1995 - $ - 0 $ 0 $ 293,501 $ 0 $ (444,656) $ 0 $ 0
Capital contributions - - - - 220,002 - - - -
Issuance of Common
Stock to original
holders - - 180 2 - (2) - - -
Stock split;
10,000 for 1 - - 1,799,820 17,998 - (17,998) - - -
Issuance of Common
Stock to original
holders - - 1,234,955 12,350 - - - (12,350) -
Issuance of Common
Stock to acquire
Shannon Briggs I, LP - - 500,000 5,000 (513,503) 508,503 - - -
Issuance of Common
Stock to acquire
subsidiaries - - 184,966 1,850 - (1,850) - - -
Reclassification of
Accumulated Deficit
from S corporation
subsidiaries - - - - - (409,850) 409,850 - -
Net loss for the
year ended
December 31, 1995 - - - - - - (869,303) - -
--- ----- ------- ------- --------- ---------- -------- ------- --------
Balance -
December 31, 1995 0 0 3,719,921 37,200 0 78,803 (904,109) (12,350) 0
Issuance of common
stock - - 33,334 333 - 199,667 - - -
Proceeds from stock
offering - - 1,400,000 14,000 - 6,485,091 - - -
Net loss for the
year ended
December 31, 1996 - - - - - - (2,156,198) - -
Unrealized gain on
securities available
for sale - - - - - - - - 9,217
--- ----- --------- -------- --------- ---------- ---------- ------- --------
0 $ 0 5,153,255 $ 51,533 $ 0 $ 6,763,561 $ (3,060,307) $ - $ 9,217
=== ===== ========= ======== ========= ========== =========== ======= ========
</TABLE>
See the Notes to the Consolidated Financial Statements.
<PAGE>
WORLDWIDE ENTERTAINMENT & SPORTS CORP.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31,
--------------------------
1996 1995
------------ ------------
Cash Flows from Operating Activities
Net loss $ (2,156,198) $ (869,303)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 24,014 7,272
Cash value of life insurance (2,548) (1,226)
Changes in operating assets and liabilities:
Increase accounts receivable (12,396) -
(Increase) decrease due from boxers
and trainers 58,900 (136,379)
Increase other current assets (12,050) (3,385)
Increase deposits (49,100) -
Increase other assets (9,675) -
Increase escrow funds payable 126,250 22,906
Increase accrued expenses 117,833 291,057
Increase (decrease) accrued interest (24,570) 24,570
Increase advance on letter of credit 70,000 -
Increase income taxes payable 150 75
Increase deferred income 14,536 -
------------ ------------
Net cash used in operating activities (1,854,854) (664,413)
------------ ------------
Cash Flows from Investing Activities
Purchase of marketable securities (3,389,543) -
Purchase of property and equipment (39,045) (13,161)
Advances to stockholder 131,956 (100,046)
------------ ------------
Net cash used in investing activities (3,296,632) (113,207)
------------ ------------
Cash Flows from Financing Activities
Proceeds from issuance of common stock
and initial public offering 6,499,092 -
Deferred costs in connection with
proposed public offering 47,148 (47,148)
Proceeds from notes payable and debt 31,000 1,171,000
Repayment of notes payable and debt (1,181,385) (5,000)
Capital contributions - 220,002
------------ ------------
Net cash provided by financing activities 5,395,855 1,338,854
------------ ------------
Net increase in cash 244,369 561,234
Cash and cash equivalents (overdraft) at
beginning of year 547,136 (14,098)
------------ ------------
Cash and cash equivalents at end of year $ 791,505 $ 547,136
============ ============
Supplemental Disclosure of Cash
Flows Information:
Cash paid during the year for:
Income Taxes $ 880 $ 253
============ ============
Interest $ 141,341 $ 9,159
============ ============
See the Notes to the Consolidated Financial Statements
<PAGE>
WORLDWIDE ENTERTAINMENT & SPORTS CORP.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - NATURE OF ORGANIZATION AND BASIS OF PRESENTATION:
Nature of Organization
Worldwide Entertainment & Sports Corp. and Subsidiaries (the "Company") was
incorporated in Delaware on August 15, 1995, for the purpose of providing
management, agency, and marketing services to professional athletes, artists
and entertainers, principally to boxers, football and basketball players.
In August 1996, the Company formed a new corporation, Worldwide Basketball
Management, Inc. ("WWBM") with an 80% interest owned by the Company. The
remaining 20% interest is owned by two principals formerly associated with
Impact Sports Management, LLC ("Impact"). One of the principals is a
certified NBA player agent. These principals have signed five year employment
agreements with WWBM, effective September 1, 1996. WWBM has been assigned
the revenues resulting from existing representation agreements and future
revenues that may be generated from future agreements.
On October 22, 1996, the Company consummated its initial public offering (the
"Offering") and, accordingly, issued and sold to the public 1,400,000 Units
(the "Units"), each Unit consisting of one share of common stock, $.01 par
value, of the Company (the "Common Stock"), and one redeemable Common Stock
Purchase Warrant (the "Warrants") to purchase one share of Common Stock at
$7.20 for a period of 48 months commencing on October 22, 1997. The Common
Stock and the Warrants will be separately tradeable and transferable.
The proceeds from these transactions (amounting to approximately $7.5 million)
were used, in part, to repay outstanding indebtedness of approximately
$2,150,000 and legal, accounting and other expenses (totaling approximately
$550,000) associated with the Offering; the balance (to be used to fund
future operations), was invested in short-term instruments.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
On December 1, 1995, the Company acquired all of the shares of Marc Roberts,
Inc., Marc Roberts Boxing, Inc., Shannon Briggs Champion Management, Inc.,
Merciless Management Inc. and The Natural Management Inc. in exchange for
184,966 shares of Common Stock and acquired the business operations of
Shannon Briggs I, L.P. in exchange for 500,000 shares of Common Stock. The
business combination has been accounted for as a pooling of interests, and
accordingly, the consolidated financial statements include the combined
results of operations of such companies for the periods presented as though
the business combination were effective as of January 1, 1995.
Principals of Consolidation
The consolidated financial statements include the accounts of Worldwide
Entertainment & Sports Corp. and its wholly-owned subsidiary Worldwide Team
Sports, Inc. and an 80% majority-owned subsidiary, Worldwide
<PAGE>
Basketball Management, Inc. All significant intercompany balances and
transactions have been eliminated.
Cash and Cash Equivalents
For the purpose of the statements of cash flows, cash equivalents include all
highly liquid instruments with original maturities of three months or less.
Marketable Investment Securities
The Company invests in debt securities. These securities are classified at
the date of purchase as available-for-sale securities. Available-for-sale
securities are reported at fair value with unrealized gains and losses, net
of the related tax effect, reflected as a separate component of stockholders'
equity until such gains or losses are realized.
Property and Equipment
Property and equipment are carried at cost. Depreciation is computed using
primarily accelerated methods based upon the estimated useful lives of the
assets which range from 5 to 7 years. Repairs and maintenance which do not
extend the useful lives of the related assets are expensed as incurred.
Organization Costs
Organization costs of $3,342 are amortized over sixty months on a straight-
line basis. Total amortization expense for the years ended December 31, 1996
and 1995 was $1,004 and $668, respectively.
Net Loss Per Share
Net loss per share is computed by dividing net loss by the weighted average
number of shares of Common Stock outstanding during the period. Common Stock
equivalents have not been included in this computation since the effect would
be anti-dilutive.
Revenue Recognition
Purse revenue is recognized upon completion of a fight, as a percentage of
the boxer's purse. If a fight is canceled, any monies that may have been
received in advance will be recognized as income at that time. Ticket and
commission revenues are recognized upon the commencement of a scheduled fight.
Agency fee revenue is recognized during the various athletic seasons on a pro
rata basis. Revenue is therefore recognized from the period November 1
through May 1 for basketball, and September 1 through January 1 for football.
<PAGE>
Use of Estimates in the Preparation of Financial Statements
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.
Income Taxes
The Company provides Federal and state income taxes in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" (SFAS 109).
Stock-Based Compensation
The Financial Accounting Standards board has issued a new standard,
"Accounting for Stock-Based Compensation" ("SFAS 123"). SFAS 123 requires
that an entity account for employee stock compensation under a fair value
based method. However, SFAS 123 also allows an entity to continue to measure
compensation cost for employee stock-based compensation using the intrinsic
value based method of accounting prescribed by APB Opinion No. 25,
"Accounting for Stock Issued to Employees" ("Opinion 25"). Entities electing
to remain with the accounting under Opinion 25 are required to make pro forma
disclosures of net income and earnings per share as if the fair value based
method of accounting under SFAS 123 had been applied. The Company adopted
the disclosure requirements of SFAS 123 during 1996, however, no options were
granted.
NOTE C - CONCENTRATIONS OF BUSINESS AND CREDIT RISK
The Company maintains cash balances in several financial institutions.
Accounts at each institution are insured by the Federal Deposit Insurance
Corporation up to $100,000. At December 31, 1996, the Company's uninsured
cash balances total $483,407.
NOTE D - RELATED PARTY TRANSACTIONS
The net balance due to the principal officer/shareholder at December 31, 1996
amounts to $168,826. Amounts due to related parties represent the net
balance due from advances to the principal officer/shareholder which
represents a net accumulation of loans to and from the principal officer/
shareholder of the corporation from the inception of the various corporations.
The loans bear no interest and are unsecured.
The Company leased, on a month-to-month basis, a facility owned by the
principal officer of the Company. Total rent expense relating to the lease
was $53,400 and $9,000 for the years ended December 31, 1996 and 1995,
respectively.
Pursuant to an oral agreement, the Company has paid down liabilities on
behalf of both of its subsidiary officers amounting to $ 61,421 during the
year ended December 31, 1996. Terms of this unsecured receivable to the
<PAGE>
Company are such that, if the officer's employment is terminated, the total
non-interest bearing amount will become due upon demand. Should the officer
remain employed by the Company, the amount will be offset against future
bonuses earned by the officer. At December 31, 1996, $30,710 has been
reserved against the receivable.
Purchases of boxing tickets amounting to $28,453 from a company owned by the
principal officer were used for promotional purposes and are included in
promotion and other operating expenses in 1996. There were no tickets
purchases from such company in 1995.
NOTE E - PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
1996
----------
Gym equipment and furniture $ 56,450
Leasehold improvements 7,116
Transportation equipment 31,000
----------
Total 94,566
Less accumulated depreciation and amortization 38,371
----------
Balance $ 56,195
==========
Depreciation expense amounted to $11,027 and $6,604 for the years ended
December 31, 1996 and 1995, respectively.
NOTE F - CASH SURRENDER VALUE OF LIFE INSURANCE
The Company is the owner and beneficiary of 7 life insurance policies on the
lives of the boxers with a total face amount of $1,800,000. The cash value
of these policies is $4,861. The Company is the owner and beneficiary of a
life insurance policy on the life of the chief executive officer with a face
amount of $2,000,000. The Company is also the owner of another life
insurance policy on the life of another officer. The face amount of this
policy is $750,000.
NOTE G - MARKETABLE SECURITIES
Cost and fair value of the Company's investments in debt securities as of
December 31, 1996 are as follows:
<PAGE>
Gross
Amortized Unrealized Fair
Cost Gains Value
----------- ---------- -----------
Available-for-sale:
Debt securities $ 3,089,543 $ 9,217 $ 3,098,760
=========== ========== ===========
The amortized costs and fair values of debt securities available for sale at
December 31, 1996 by expected maturity are shown below. Expected maturities
may differ from contractual maturities because such securities may be subject
to call or prepayment by the borrower.
Securities Available-for-Sale
-----------------------------
Amortized Fair
Cost Value
----------- -----------
Due in one year or less $ 3,089,543 $ 3,098,760
=========== ===========
Information regarding available-for-sale securities for the years ended
December 31, 1996 and 1995 follows:
Gross unrealized gain $ 9,217
Income tax effect -
--------
Change in unrealized gain on investment securities $ 9,217
NOTE H - NOTES AND LOANS PAYABLE
Escrow funds payable
The Company has received funds earned by two of the boxers through a
percentage of gross proceeds earned by each of the boxers. These funds are
being held in escrow on behalf of the boxers until such time as their release
is requested.
Long-term debt consists of the following:
1996
---------
Note payable to bank, payable in monthly installments of
$786, including interest at 10%, loan repaid February 13,
1997 $ 25,515
Less current maturities of long-term debt -
---------
$ 25,515
<PAGE>
NOTE I - INCOME TAXES
The income tax provision is comprised of the following at:
December 31, December 31,
1996 1995
------------ ------------
State current position $ 1,330 $ 637
The Company's total deferred tax asset, comprised solely of federal and state
net operating loss carryforwards, and valuation allowance at December 31,
1996 and 1995 are as follows:
Total deferred tax asset $ 786,977 $ 94,461
Less valuation allowance (786,977) (94,461)
------------ ------------
Net deferred tax asset $ - $ -
============ ============
The Company has available an $1,830,479 net operating loss carryforward which
may be used to reduce future federal taxable income available through December
31, 2011. The Company also has available an $1,829,049 net operating loss
carryforward which may be used to reduce future state taxable income
available through December 31, 2003.
NOTE J - LEASE COMMITMENT
The Company leases space which serves as the gym and training facility. The
original lease expired August 31, 1993 with the option to renew for a maximum
of five one year terms. The options have not been exercised, but the Company
continues to occupy such space on a month-to-month basis. The terms of the
lease include escalation for real estate taxes. Total rent expense is
$15,503 and $16,355 for 1996 and 1995, respectively.
The Company pays rent on behalf of the boxers, their personal attendants and
strength coaches.
Total rent expense amounted to the following:
December 31, 1996 $ 54,585
December 31, 1995 $ 33,980
The Company rents office space on a month-to-month basis. Total rent was
$34,237 and $- 0 - for 1996 and 1995, respectively.
<PAGE>
The Company is responsible for all taxes, licenses, insurance and general
maintenance related to the above leases.
NOTE K - COMMITMENTS AND OTHER MATTERS
Management Contracts
The Company holds various long-term management contracts with numerous boxers,
football and basketball players. The boxers' contracts expire from November
7, 2000 to April 9, 2001. The football and basketball players' contracts
run for the term of their individual players' contracts. The Company may
receive anywhere from 15% to 27.5% of the boxers' purses from professional
bouts and may receive approximately 20% for any type of endorsements, public
appearances or commercials. The Company may receive approximately 4% of the
football or basketball players' contracts; occasionally lower percentages are
agreed upon. They may also receive 10% or 20% for endorsement and marketing
revenues.
Due from Boxers
Pursuant to the boxers' management agreement, the corporation makes unsecured
interest-free loan advances to the boxers who then authorize the corporation
to deduct the amount of their loan advance from the proceeds of their fight
purse.
Settlement Agreement and Release of Co-Manager
On October 9, 1995 a settlement agreement was reached with a co-manager of
one of the boxers which provided for the termination of a contract which was
previously made with such co-manager. Total payments made to the co-manager
for the release of his contract were $208,500.
Settlement Agreement and Release of Boxers' Trainer
On August 29, 1996 a settlement agreement was reached with a trainer for one
of the boxers which provided for the termination of a contract which was
previously made with such trainer. Total payments made on this release were
$100,000.
Prepaid and Deferred Consulting Expense
The Company has entered into a consulting agreement with Summit Management
Group. Summit Management Group received 33,334 shares of the Company's
Common Stock valued at $200,000 worth of consulting services. These services
are to be amortized over 5 years. To date total consulting expenses amounted
to $10,000 and $- 0 - for the years ended December 31, 1996 and 1995,
respectively.
<PAGE>
Letter of Credit
As of December 31, 1996 the Company has $120,000 open letter of credit.
Therefore $120,000 of the Company's cash and cash equivalents are restricted.
Subsequently on January 7, 1997 the funds applicable to the letter of credit
for $120,000 was drawn.
NOTE L - FAIR VALUE OF FINANCIAL INSTRUMENTS
Cash and cash equivalents, accounts receivable, loans from officers/
stockholders/affiliates, and accounts payable and accrued expenses, and notes
payable:
The carrying amount approximates fair value because of the short maturity of
these instruments.
Marketable investment securities:
The fair value of the Company's marketable investment securities are based on
quoted market prices.
NOTE M - STOCK OPTION PLAN
On July 1, 1996, the Company adopted the 1996 Stock Option Plan (the "SOP").
the Plan provides that certain options granted thereunder are intended to
qualify as "incentive stock options" within the meaning of Section 422A of
the United States Internal Revenue Code of 1986, while non-qualified options
may also be granted under the Plan. The Plan provides for authorization of
up to 500,000 shares. The option price per share of stock purchasable under
an incentive stock option shall be determined at the time of grant but shall
be not less than the fair market value of the Common Stock on such date, or,
in the case of a 10% stockholder, the option price per share shall be no less
than 110% of the fair market value of the stock on the date an incentive
stock option is granted to such 10% stockholder. The following is a summary
of 1996 transactions:
Non-Qualified Shares
Under Option
December 31, 1996
---------------------
Outstanding, beginning of year 0
Granted during the year 60,000
Exercised during the year at $5.00 per share 0
------
Outstanding, end of year at $5.00 per share 60,000
======
Eligible, end of year for exercise currently
at $5.00 per share 60,000
======
<PAGE>
NOTE N - EQUITY TRANSACTIONS
In August 1995 the Company issued 150 shares of its Common Stock to its
president for a purchase price of $150, and 30 shares of its Common Stock to
a director for a purchase price of $30. In September 1995, the Company
authorized the amendment of its Certificate of Incorporation to increase the
number and par value of its common stock. Also in September 1995, the
Company authorized a 10,000 for 1 stock split converting these outstanding
180 shares of Common Stock to 1,800,000 shares.
In September 1995, in connection with the organization of the Company, the
Company issued to 55 persons an aggregate of 1,234,955 shares. Each person
paid a purchase price of $.01 per share price of such common stock. In November
1995, the Company entered into an Asset Acquisition Agreement with Shannon
Briggs Boxing I, L.P. (the "Briggs Partnership") to acquire all of the assets
of the Briggs Partnership. Marc Roberts was the sole shareholder of Shannon
Briggs Champion Management, Inc., the general partner of the Briggs
Partnership. In accordance with the terms of the Asset Acquisition Agreement,
the existing management agreement with Shannon Briggs was terminated, and a
new management agreement was entered into between the Company and Shannon
Briggs. Pursuant to the Asset Acquisition Agreement, the Company was
authorized to issue to the Briggs Partnership 500,000 shares of Common Stock.
In December 1995, Marc Roberts assigned all of his shares in Merciless
Management Inc.,The Natural Management Inc., Marc Roberts Inc., Shannon
Briggs Champion Management, Inc. and Marc Roberts Boxing, Inc., to the
Company in exchange for an additional 184,966 shares of Common Stock. Each
of those companies was subsequently merged into the Company.
NOTE O - SUBSEQUENT EVENTS
Formation of a new subsidiary
On March 4, 1997, Worldwide Sports Promotions Inc. was incorporated in the
State of Delaware. The company was formed for the purpose of promoting
sporting events. This new subsidiary is 100% owned by the Company.
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
<PAGE>
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance With Section 16(a) of the Exchange Act.
The directors and executive officers of the Company are as follows:
Name Age Position
Marc Roberts 37 President, Chief Executive Officer, President of
Worldwide Team Sports, Inc. and Director
Roy Roberts 58 Chief Financial Officer, Director
Allan Cohen, M.D. 55 Director
Dan Drykerman 49 Director
Herbert F. Kozlov 43 Director
Harvey Silverman 56 Director
Erik Rudolph 34 President, Worldwide Basketball Management, Inc.
Marc Roberts has been President and Chief Executive Officer of the
Company since its inception in August 1995. Mr. Roberts is involved in
various real estate, restaurant and other business ventures as a passive
investor, none of which occupies any significant portion of his business time.
Roy Roberts has been Chief Financial Officer of the Company since its
inception and as a director of the Company since July 1996. Mr. Roberts
devotes his full time and attention to the Company. Since 1991, Mr. Roberts
serves as the President of Sparkle Industries, a commercial maintenance
company in New Jersey. He also served, until 1995, as the Chairman and Chief
Operating Office of Palisades Entertainment, Inc., a motion picture film
distributor specializing in special interest, rock and roll and animation
films. Mr. Roberts is Marc Roberts' father.
Allan Cohen, M.D. has been a director of the Company since July 1996.
Dr. Cohen is engaged in the practice of medicine, specializing in
gastroenterology, and has been President of Gastroenterology Associates, a
professional corporation, since 1974 and is President of the Medical Staff at
Muhlenburg Hospital in Plainfield, New Jersey. Dr. Cohen is Marc Robert's
uncle.
Dan Drykerman has been a director of the Company since July 1996, and as
the Operating Partner of Drykerman Investment Group, an investment
partnership (f/k/a Drykerman Enterprises) since 1976.
Herbert F. Kozlov has served as general counsel to the Company since its
inception, and as a director of the Company since July 1996. Mr. Kozlov has
been a practicing attorney for more than the past fifteen years and is
currently a partner in the firm of Parker Duryee Rosoff & Haft A Professional
Corporation. Mr. Kozlov is also a member of the Board of Directors of HMG
Worldwide Corporation.
<PAGE>
Harvey Silverman has been a director of the Company since July 1996.
Mr. Silverman is a Senior Managing Director of Spear Leeds & Kellogg in New
York, where he has been employed since 1963. Mr. Silverman is a Governor on
the American Stock Exchange and a director of Intermarket Clearing Corp.
To the Company's knowledge, based upon a review of Forms 4 and 5 and any
amendments thereto, submitted to the Company, all Directors, Officers, and
Beneficial Owners of more than 10% of the Common Stock of the Company have
filed all reports required to be filed pursuant to Section 16(a) of the
Exchange Act; however Form 5's filed by the directors of the Company to
report gifts of common stock and the receipt, in December 1996, of options
under the Company's Stock Option Plan were filed four days after the due date.
Item 10. Executive Compensation
The following table sets forth the annual compensation paid by the
Company during fiscal 1996 to the Chief Executive Officer and President, and
the other executive officers of the Company:
Annual Compensation
----------------------------
Name and Principal Position Salary Bonus Other
- - - ---------------------------- ------ ----- -----
Marc Roberts
Chief Executive Officer, $190,000 $ - $ -
President
Roy Roberts
Chief Operating Officer, 20,000 - -
Chief Financial Officer
Eric Rudolph
President, Worldwide 43,334 $50,000 -
Basketball Management, Inc.
- - - -----------------
(1) The Company did not make any restricted stock awards, grant any stock
appreciation rights or make any long-term incentive plan payments to the
named executive officers during 1996.
(2) Other compensation in the form of perquisites and other personal
benefits has been omitted where the aggregate amount of such perquisites
and other personal benefits constituted the lesser of $50,000 or 10% of
the total annual salary and bonus of the Officer for the year.
<PAGE>
Employment Agreements
Marc Roberts has entered into a five-year employment agreement with the
Company commencing January 1, 1996 which provides for a base annual salary of
$190,000 with annual minimum guaranteed increases of $25,000. Mr. Roberts
shall also be paid an annual bonus of an amount equal to a minimum of 10% of
the pretax operating income of the Company before income taxes, depreciation
and amortization. Bonuses in excess of that amount shall be determined by the
Company's Board of Directors or its executive compensation committee, if any.
Mr. Roberts shall also be entitled to participate in the Company's incentive
stock option plan and shall be granted a minimum of 30% of the stock options
to be issued by the plan at an exercise price of 110% of the fair value of
the stock, as determined by the Board of Directors, on the date of grant.
The agreement provides that upon termination of Mr. Roberts' employment
without cause or upon certain changes in control of the Company resulting in
Mr. Roberts' termination, he will be entitled to receive any accrued but
unpaid amounts due him under the agreement from the period prior to his
termination. In addition, the Company is obligated to pay Mr. Roberts (i)
within five (5) days of notice of termination, an amount equal to sixty
percent (60%) of the present value of the sum of (x) all salary which would
have been earned but for such termination for a period of 2.99 years
commencing on the date of such termination based on Mr. Roberts' then current
salary, plus (y) the present value of an amount determined by multiplying the
amount of incentive compensation earned by Mr. Roberts for the last fiscal
year of the Company preceding termination by 2.99 ("Severance Compensation").
The remaining forty percent (40%) of the Severance Compensation shall be
paid to Mr. Roberts in twelve (12) equal monthly installments commencing on
the first month after the month in which he was terminated. In the event of
Mr. Roberts' termination for cause, or if Mr. Roberts voluntarily terminates
the agreement within its first two years, the Company is under no obligation
to pay him his compensation beyond the date of termination. If Mr. Roberts
voluntarily resigns from the Company after the second anniversary of his
agreement, he shall be entitled to receive all of the compensation and
benefits he would be afforded if he had been terminated without cause. Mr.
Roberts' agreement provides that Mr. Roberts will not compete with the
Company for a one (1) year period after the termination of his employment.
The Company has obtained a $2,000,000 key person life insurance policy on Mr.
Roberts' life naming the Company as beneficiary.
In connection with the formation of WWBM, Messrs. Rudolph and Goodson
signed five year employment agreements with WWBM, effective September 1, 1996,
pursuant to which Messrs. Rudolph and Goodson assigned their respective
rights and interests in the revenues generated by (i) Samaki Walker, Jason
Osborne and Shawnelle Scott, and (ii) any players Messrs. Rudolph and Goodson
sign to valid player's representation agreements during their employment by
WWBM. Messrs. Rudolph and Goodson shall each receive a salary of $130,000 per
annum, and shall each also receive a signing bonus of $50,000 upon the
completion of the Initial Public Offering. Messrs. Goodson and Rudolph shall
also be entitled to divide, as annual bonus compensation, 10% of the annual
net revenues of WWBM up to $250,000 and 17% of the annual net revenues of
WWBM above $250,000. The Company is committed to fund up to $700,000 of
operating expenses of WWBM which will increase to up to $1,000,000 if WWBM
achieves certain performance goals tied to the successful recruitment of NBA
players. The Company has the right to terminate the agreements if WWBM's
aggregate costs of operations exceeds the above stated funding obligations.
In the event of the non-renewal of the employment agreements, or their
termination for any reason, Messrs. Goodson and Rudolph will (i) be
reassigned the rights to the
<PAGE>
revenues from Mr. Walker's contract, and any revenues to be derived from Mr.
Osborne, who currently does not have a professional basketball contract, and
(ii) pay WWBM (a) 50% of the revenues from all other players signed during
the terms of their employment (including Mr. Scott) until the Company recoups
all of the amounts funded by the Company, and (b) 30% of such revenues
thereafter. In the event Messrs. Goodson and Rudolph voluntarily terminate
their employment without cause, however, the revenues derived from Messrs.
Walker and Osborne shall not be reassigned and the revenue generated thereby
will be treated like the other players.
In December 1996, the Company granted to each of its four non-employee
directors options, exercisable over a five year period, to purchase 15,000
shares of Common Stock at an exercise price of $5.00 per share.
Item 11. Security Ownership and Certain Beneficial Owners and Management
The following table sets forth certain information concerning stock
ownership of all persons known by the Company to own beneficially 5% or more
of the outstanding shares of the Company's Common Stock, each director, and
all officers and directors of the Company as a group.
Number Percentage of Common Stock
Name and Address of Shares Beneficially Owned
- - - -------------------------------- ------------ --------------------------
Marc Roberts (1) 1,584,966 30.2%
Roy Roberts 83,334 1.6%
Allan Cohen, M.D. 56,667(2) 1.1%
Dan Drykerman 55,000(3) 1%
Herbert F. Kozlov 310,000(4) 5.9%
Harvey Silverman 98,334(5) 1.9%
All officers and directors
as a group (6 persons) (3)(4)(5) 2,188,301 40.1%
- - - ------------------------
(1) The address of the beneficial owner is that of the Company's principal
executive office.
(2) Includes 40,000 shares which may be acquired upon the exercise of
currently exercisable options and warrants.
(3) Includes 52,500 shares which may be acquired upon the exercise of
currently exercisable options and warrants.
(4) Does not include 45,000 shares and warrants to acquire an additional
25,000 shares held by members of a law firm of which Mr. Kozlov is a
member. Mr. Kozlov disclaims beneficial ownership of such shares.
Includes 8,000 shares held under the NYUGMA for the benefit of his minor
children and 15,000 shares which may be acquired upon the exercise of
currently exercisable options.
(5) Includes 15,000 shares which may be acquired upon the exercise of
currently exercisable options.
<PAGE>
Stock Option Plan
On July 1, 1996, the Company adopted the 1996 Stock Option Plan (the "SOP")
covering 500,000 shares of the Company's Common Stock, $.01 par value,
pursuant to which officers, directors and key employees of the Company are
eligible to receive incentive and/or non-qualified stock options. The SOP
will be administered by the Board of Directors or a committee designated by
the Board of Directors. The selection of participants, allotment of shares,
determination of price and other conditions of purchase of options will be
determined by the Board or committee at its sole discretion. The purpose of
the SOP is to attract and retain persons instrumental to the success of the
Company. Incentive stock options granted under the SOP are exercisable for
a period of up to 10 years from the date of grant at an exercise price which
is not less than the fair market value of the Common Stock on the date of the
grant, except that the term of an incentive stock option granted under the
SOP to a stockholder owning more than 10% of the outstanding Common Stock may
not exceed five years and its exercise price may not be less than 110% of the
fair market value of the Common Stock on the date of the grant. At December
31, 1996, options to purchase up to 60,000 shares have been granted under the
SOP.
Item 12. Certain Relationships and Related Transactions
In August 1995, the Company issued 150 shares of its Common Stock to Marc
Roberts for a purchase price of $150, and 30 shares of its Common Stock to
Herbert Kozlov for a purchase price of $30. In September 1995, the Company
authorized a 10,000 for 1 stock split converting these outstanding 180 shares
of Common Stock to 1,800,000 shares. Also in September 1995, the Company
issued to 55 persons an aggregate of 1,234,955 shares, of which 185,835 were
issued to officers and directors of the Company.
Commencing in September 1995 and ending in June 1996, the Company
privately sold an aggregate of 39.8 units ("Units"), resulting in net
proceeds to the Company of $1,990,000, each consisting of (a) a $50,000
promissory note bearing interest at a rate of 10% per annum payable in full
upon the earlier of (i) the Company's receipt of at least $3,000,000 from an
underwritten public offering of the Company's securities (the "Initial Public
Offering") or (ii) 18 months after the date of the closing of the unit
investment (the "Placement Closing Date") and (b) a warrant to purchase
25,000 shares of the Company's Common Stock exercisable for a period of five
years from the Placement Closing Date, provided that an Initial Public
Offering is consummated during such five year exercise period, at an exercise
price per share equal to 120% of the price per share in the Initial Public
Offering. Messrs. Drykerman and Cohen purchased 1.5 and 1 Unit, respectively,
through such private placement.
In November 1995, the Company entered into an Asset Acquisition Agreement
with Shannon Briggs Boxing I, L.P. (the "Briggs Partnership") to acquire all
of the assets and assume all of the liabilities of the Briggs Partnership.
Pursuant to the Asset Acquisition Agreement, the Briggs Partnership received
500,000 shares of Common Stock. The number of shares of Common Stock was
determined based upon management's estimation of the value to the Company of
the management rights to Mr. Briggs relative to the Company's other three
boxers. The shares of Common Stock were distributed on a pro rata basis to
the limited partners of the Briggs Partnership upon the dissolution of
<PAGE>
such partnership. Marc Roberts was the principal of the general partner of
the Briggs Partnership, S.B. Champion Management, Inc. In accordance with
the terms of the Asset Acquisition Agreement, the then existing management
agreement with Shannon Briggs, pursuant to which the Briggs Partnership was
entitled to participate in the fees generated by the management of Shannon
Briggs, was terminated, and a new management agreement was entered into
between the Company and Shannon Briggs.
In December 1995, the Company issued 184,966 shares to Marc Roberts in
exchange for all of the outstanding shares of Merciless Management Inc., The
Natural Management, Inc., S.B. Championship Management, Inc., Marc Roberts
Inc. and Marc Roberts Boxing Inc. Subsequent thereto, each of the management
agreements between such corporations and Ray Mercer, Charles Murray and Tracy
Patterson were terminated and such boxers executed new management agreements
with the Company. In July 1996, each of those corporations was merged into
the Company.
From time to time Marc Roberts has made loans and advances to the Company
and the Company has advanced funds to Mr. Roberts. In June 1996, Mr. Roberts
repaid $200,000 of amounts due to the Company, thereby eliminating the
balance due from Mr. Roberts. Subsequent to June 1996, Mr. Roberts made
additional loans to the Company. At December 31, 1996, $169,000 was due to
Mr. Roberts. Mr. Roberts has agreed to forgo repayment of such amounts until
the Company has generated operating revenue in excess of such amount.
Commencing in November 1995, the Company paid $4,500 per month to Marc
Roberts for the use of a portion of Mr. Roberts' personal residence to house
certain of the Company's boxers and other related personnel, such as strength
coaches, from time to time and to offset the costs and expenses of food and
other living expenses of such persons. In April 1996 such monthly payment
was increased to $5,700.
The Company believes the terms and conditions of the foregoing
transactions are no less favorable to the Company than those available from
unaffiliated parties. Future transactions between the Company and any
affiliate will be on terms and conditions approved by this Board of Directors.
Pursuant to a Shareholders Agreement among Goodson, Rudolph and the
Company, upon the occurrence of certain events, including the termination of
the employment of Messrs. Rudolph and Goodson, the shares of WWBM held by
Messrs. Rudolph and Goodson (representing 20% of the outstanding shares of
WWBM) will be exchanged for up to an aggregate of 300,000 shares of Common
Stock of the Company, depending upon the time of such exchange and the
financial condition of WWBM as of the time of such exchange.
Marc Roberts was the President and a director of Triple Threat Enterprises,
Inc. ("Triple Threat"), and Harvey Silverman and Allan Cohen, directors of
the Company, were also directors of Triple Threat. In November 1990, Triple
Threat completed an initial public offering of its common stock. At the time
of Triple Threat's initial public offering, Triple Threat was engaged in the
business of managing three boxers, two of whom were Ray Mercer and Charles
Murray. In February 1991, Mr. Roberts resigned as President and Chief
Executive Officer as a result of a difference of opinion with certain members
of management and controlling stockholders of such company. Mr. Roberts, Mr.
Silverman and Dr. Cohen subsequently resigned as directors of such company;
Messrs. Roberts and Cohen in 1991, and Mr. Silverman in 1992. Triple Threat
subsequently changed its name to Capital
<PAGE>
Gaming International Inc. and is currently engaged in casino development and
management. Such company is a public company filing reports under the
Exchange Act.
Item 13. Exhibits, List and Reports on Form 8-K
Exhibit
Number Description of Exhibit
3.1(a)* Certificate of Incorporation of the Registrant
3.1(b)* Certificate of Amendment filed August 21, 1995
3.1(c)* Certificate of Amendment filed July 18, 1996
3.1(d)* Certificate of Ownership and Merger among the Registrant,
Merciless Management, Inc., The Natural Management, Inc., Marc
Roberts Inc., S.B. Champion Management, Inc. and Marc Roberts
Boxing, Inc. filed July 19, 1996
3.2* Amended By-Laws of the Registrant
4.1* Form Certificate representing the Common Stock, par value $.01
per share
4.2* Form of Redeemable Warrant
4.3* Form of Warrant issued in private placement
10.1* 1996 Stock Option Plan
10.2* Employment Agreement between Registrant and Marc Roberts
10.3* Employment Agreement between Registrant and Ryan Schinman
10.4* Management Agreement between the Registrant and Shannon Briggs
10.5* Management Agreement between the Registrant and Tracy Patterson
10.6* Management Agreement between Registrant and Charles Murray
10.7* Management Agreement between Registrant and Ray Mercer
10.8* Form of Subscription Agreement between Registrant and Private
Placement Investors
10.9* Asset Purchase Agreement between Registrant and Shannon Briggs
I, L.P.
10.10* Employment Agreement between Registrant and Erik Rudolph
10.11* Employment Agreement between Registrant and Michael Goodson
10.12* Shareholders Agreement among Registrant, Erik Rudolph and
Michael Goodson
10.13* Consulting Agreement with Summit Management Group
21.1* Subsidiaries of the Registrant
- - - -------------------
* Incorporated by reference to the Registration Statement on Form SB-2, File
No. 333-08855, declared effective October 22, 1996
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
WORLDWIDE ENTERTAINMENT & SPORTS CORP.
Date: April 11, 1997 By:/s/ Marc Roberts
-----------------------------------
Marc Roberts,
President (Chief Executive Officer)
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 dates indicated.
Date: April 11, 1997 /s/ Roy Roberts
-------------------------------------------
Roy Roberts
(Principal Financial and Accounting Officer)
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