As filed with the Securities and Exchange Commission on February 12, 1998
Registration No. 333-29859
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
Amendment No. 4 to
FORM SB-2
REGISTRATION STATEMENT
Under
The Securities Act of 1933, as Amended
----------------------
WALLSTREET RACING STABLES, INC.
(Exact name of registrant as specified in charter)
Colorado 7948 84-1313024
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code) Identification No.)
5525 Erindale Drive, Suite 201
Colorado Springs, Colorado 80918
(719) 260-8509
(Address and telephone number of registrant's
principal executive offices and place of business)
Raymond E. McElhaney, President
5525 Erindale Drive, Suite 201
Colorado Springs, Colorado 80918
(719) 260-8509
(Name, address and telephone number of agent for service)
Copies of all communications, including all communications sent to the agent
for service, should be sent to:
David J. Babiarz, Esq.
Brad Ramming, Esq.
Overton, Babiarz & Sykes, P.C.
7720 East Belleview Avenue, Suite 200
Englewood, Colorado 80111
(303) 779-5900
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the Registration Statement becomes effective.
CALCULATION OF REGISTRATION FEE
Title of each Amount Proposed Proposed Amount of
class of securities to be maximum aggregate registration
to be registered registered offering price offering price fee
Common Shares, par value
$.001, issuable for cash.. 500,000 $1.00 $500,000 $151.52
AMENDMENT FILED IN ACCORDANCE WITH RULE 473(a)
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to dely its effective date until the
Registrant shall file a further amendment which specifically states
that this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933, as
amended, or until the Registration Statement shall become effective on
such date as the Commission acting pursuant to said Section 8(a) may
determine.
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
offering. [ ]
If this Form is a post effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 of the
Securities Act of 1933, as amended, check here:
EXPLANATORY NOTE
Wallstreet Racing Stables, Inc. hereby requests that the Commission
deregister 54,500 shares of Common Stock issuable upon exercise of outstanding
Warrants and originally included in the Registration Statement. The balance
of this Amendment No. 4 relates to the 500,000 shares of Common Stock issuable
for cash.
Prospectus
WALLSTREET RACING STABLES, INC.
500,000 Shares of Common Stock,
Par Value $.001 per share
Offering Price: $1.00 per share
Wallstreet Racing Stables, Inc. (the "Company") offers hereby
500,000 shares of its Common Stock, par value $.001 per share (the
"Common Shares") on a "best efforts" basis at an offering price of
$1.00 per share. The offering will be conducted by the Company
through its officers and directors commencing with the date of this
Prospectus and continuing for a period of ninety (90) days thereafter,
unless such period is extended in the sole discretion of the Company
for an additional period of time not to exceed thirty (30) days in the
aggregate. The offering will be conducted by the Company through its
President, Mr. Raymond E. McElhaney, its Vice President of Corporate
Development, Ronald R. McGinnis, and its Directors Clifford Thygesen
and Wayne Bamford. The Common Shares may also be offered through
broker/dealers ("Participating Broker/Dealers") who are members of the
National Association of Securities Dealers, Inc. ("NASD"). A commission
will not be paid to the Company or its officers and directors for sales
effectuated by them. There is no minimum number of Common Shares or sales
proceeds which must be received to complete the offering. As a result, all
proceeds will be immediately deposited into the Company's bank account and
available for all valid corporate purposes. The Company may receive no or
nominal proceeds from this offering, and in that event, such level of
proceeds would significantly restrict the Company's operations and would
have a substantial adverse effect on the Company and investors.
THIS OFFERING AND THE COMMON SHARES OFFERED HEREBY INVOLVE A HIGH
DEGREE OF RISK AND IMMEDIATE SUBSTANTIAL DILUTION. (SEE "RISK
FACTORS" AND "DILUTION")
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Price Underwriting Proceeds
to the Discounts and to the
Public Commissions(1) Company(2)
Per Common Share....$ 1.00 $ 0.10 $ .90
Total...............$ 500,000 $ 50,000 $ 450,000
1. Includes a maximum ten percent (10%) selling commission payable to
Participating Broker/Dealers in connection with sales made through
the efforts of such firms. In connection with any engagement of
Participating Broker/Dealers, the Company may agree to indemnify
Participating Broker/Dealers against certain liabilities, including
liabilities under the Securities Act of 1933. No commission or other
renumeration will be paid to officers or directors of the Company,
although such persons may be reimbursed for out-of-pocket expenses
incurred in connection with the offering. (See "PLAN OF DISTRIBUTION").
2. Before deducting expenses of the offering payable by the Company
and estimated to be $20,000. (See "USE OF PROCEEDS").
The date of this Prospectus is February 12, 1998.
The Common Shares currently trade in the over-the-counter market
and are quoted on the NASD Bulletin Board under the symbol "WRSB".
On February 11, 1998, the most recent date for which information
is available, the price of the Common Shares as quoted in the Bulletin
Board, was $2.00 bid and $3.00 asked. Prior to this offering,
there has been an extremely limited market for the Common Shares and
there is no assurance that one will continue after completion of this
offering. The offering price of the Common Shares has been arbitrarily
determined by the Company based on recent sales prices of the Common
Shares and bears no necessary relationship to the Company's assets, book
value, results of operations or other generally accepted criteria.
(See "RISK FACTORS" and "DESCRIPTION OF SECURITIES").
This offering is not contingent upon a minimum number of shares
being sold and is being conducted on a first come, first served
basis. If subscriptions exceed 500,000 Common Shares, all excess
subscriptions will be promptly returned to subscribers, without
interest thereon or deduction therefrom. Subscribers to the first
500,000 Common Shares will not be entitled to a return of their
subscription following receipt by the Company.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission,
450 5th Street N.W., Washington, D.C. 20549, its Registration Statement
on Form SB-2 (herein, together with all amendments thereto, the
"Registration Statement") under the Securities Act of 1933, as amended,
regarding the securities offered hereby. This Prospectus, filed as part
of the Registration Statement, omits certain information contained in the
Registration Statement. For further information regarding the Company and
the securities offered, reference is made to the Registration Statement
and the exhibits filed therewith.
ii
The Offering
Securities Offered.............. 500,000 Common Shares, par value,
$.001 per share.
(See "DESCRIPTION OF SECURITIES").
Offering Price.................. $1 per Share.
Common Shares Outstanding
Before the Offering(1)(2)....... 697,000
Common Shares Outstanding
After the Offering(1)(2)(3)..... 1,197,000
Net Proceeds(4)................. $480,000
________________________
(1) Does not include up to 1,000,000 Common Shares reserved for
issuance under the Company's Non-Qualifying Stock Option
Plan. (See"MANAGEMENT- Stock Option Plan").
(2) Excludes 54,500 Common Shares underlying Warrants
previously issued by the Company.
(3) Assumes sale of all Common Shares offered hereby for cash,
of which there is no assurance.
(4) After taking into effect the estimate expenses of this
offering $20,000.
Use of Proceeds
The proceeds of this offering will be used primarily for
repayment of debt, the purchase of additional thoroughbred racing
stock, for expenses to be incurred in training and preparing the
prospects for racing, other maintenance expenses, general and
administrative expenses and working capital. (See "USE OF PROCEEDS").
Risk Factors
This offering involves a high degree of risk. Risk factors
involving the Company include lack of operating history, need for
additional working capital, dependence on key personnel, limited
racing prospects, risks inherent in the thoroughbred industry,
possible uninsured losses and inexperience of management. Risk
factors relating to the offering include lack of minimum offering
proceeds, "penny stock" regulation, arbitrary offering price
and limited trading market for the securities offered. (See "RISK
FACTORS").
3
syndication of Company Thoroughbreds, if any, and additional borrowings
or financing. In order to generate revenue pending maturation of the three
three-year olds, the Company may claim or purchase privately one or more
horses of racing age, if additional financing to obtain these prospects is
available. However, there is no assurance such horses will be available
or generate sufficient revenue to continue the Company's operation beyond
the initial 12 months for which the proceeds have been budgeted. There is
no assurance that the proceeds of this offering could, if invested as
indicated in this Prospectus, result in growth or profitability for the
Company. (See "USE OF PROCEEDS" and "BUSINESS").
23. Investors Bear Risk of Loss. Substantially all of the
proceeds required to operate the Company for the next 12 months are
being sought from investors in this offering. The total investment
by present shareholders of the Company is $124,000 in cash and
contribution of a 15% interest in Da Hoss and another thoroughbred
which was subsequently sold. Accordingly, investors in this offering
will bear the risk of the Company's operations for the foreseeable
future, with no assurance that management will be successful in
applying the proceeds to increase growth and profitability of the
Company. (See- "DILUTION").
24. Limitation on Share Ownership. Existing regulations
governing thoroughbred racing in various states may limit the ability
of individuals and entities to acquire and retain Common Shares of
the Company. Such provisions are designed to regulate ownership and
control of corporations engaged in thoroughbred racing. Such
statutes provide that ownership of a substantial portion of Common
Shares, generally greater than 5 or 10% of the outstanding equity in
a corporation, must be approved by the racing commission in those
jurisdictions and submit to background checks regarding financial
history and criminal record. In order to comply with these
regulations, the Company's Articles of Incorporation, as amended,
contain a provision requiring shareholders to sell their stock back
to the Company in the event such individuals or entities fail or
refuse to become licensed where such license may be required. The
repurchase price for shares of Common Shares subject to this
provision is based on the prevailing market price of the Common
Shares at the time of repurchase. The effect of such provisions may
be to discourage acquisition of large blocks of the Company's Common
Stock and depress the price of the Company's stock in any market
which may develop. (See "DESCRIPTION OF SECURITIES - Possible
Restrictions on Common Stock").
PLAN OF DISTRIBUTION
Plan of Distribution
The Company is offering, through its officers and directors, on
a "best efforts" basis at an offering price of $1.00 per Common
Share a total of 500,000 Common Shares of the Company. These shares
are being offered by the Company for cash for a period of ninety days
from the date of this Prospectus, unless extended for an additional
period not to exceed thirty days in the aggregate. The Common Shares
will be offered on the Company's behalf primarily by Raymond E. McElhaney,
and to a lesser extent, Ronald R. McGinnis, Clifford C. Thygeson and
Wayne Bamford. Mr. McGinnis is the Vice President-Corporate Development
of the Company and Messrs. Thygeson and Bamford are directors of the Company.
In connection with their efforts, these officers and directors will rely
on the "safe harbor" provisions of Rule 3a4-1 of the Securities Exchange Act
of 1934 (the "1934 Act"). Generally speaking, Rule 3a4-1 provides an
exemption from the broker/dealer registration requirements of the 1934 Act
for associated persons of an issuer. A commission will not be paid to the
Company or its officers and directors for sales effectuated by them. No one,
including the Company, has made any commitment to purchase any or all of the
Common Shares. Rather, the officers and directors will use their best efforts
to find purchasers for the Common Shares for a period of 90 days from the date
of this Prospectus, subject to an extension in the sole discretion of the
Company for an additional period not to exceed 30 days in the aggregate.
There is no minimum number of Common Shares or sales proceeds which
must be received to complete the Offering. As a result, all proceeds will be
immediately deposited in the Company's bank account and available for all valid
corporate purposes. Purchasers in this offering will not be entitled to a
return of their purchase price following receipt by the Company.
The Company anticipates making sale of Common Shares to persons
whom it believes may be interested or who have contacted the Company
with interest in purchasing the securities. The Company may sell
Common Shares to such person if they reside in a state in which the
Common Shares may be sold and in which the Company is permitted to
sell the Common Shares. The Company is not obligated to sell Common
Shares to any such person.
Officers, directors, present shareholders of the Company and
persons associated with them may be sold some of the Common Shares.
However, officers, directors, and their affiliates shall not be
permitted to purchase more than 20% of the Common Shares sold
hereunder and such purchases will be held for investment and not for
resale. In addition, no proceeds from this offering will be used to
finance any purchases by such persons.
43
Investors should be aware that while this offering is being
conducted through its officers and directors, the Company retains the
right to utilize the services of Broker/Dealers ("Participating
Broker/Dealers") who are members of the National Association of
Securities Dealers, Inc. ("NASD"). The Company reserves the right to
pay commission in connection with sales effectuated through Participating
Broker/Dealers in an amount not to exceed 10% of the sales price for sale
effectuated by them. The Company will amend the Prospectus and the
Registration Statement of which it is a part to identify any Participating
Broker/Dealer who sells more than 5% of the securities offered hereby.
In the view of the Commission, any Participating Broker/Dealer
that sells securities in this offering would be deemed a "underwriter"
as defined in Section 2(11) of the 1933 Act. Further, prior to the
participation of any Participating Broker/Dealer, the Company must obtain
a no objection opinion from the NASD regarding the contemplated underwriting
compensation and arrangements.
Pricing the Offering
The offering price of the Common Shares was determined by the Company
based primarily upon recent sales prices of the Common Shares. In arriving
at the offering price, the Company took into account such factors as the
history and lack of operation of the Company, its assets and anticipated
expenses of acquiring and maintaining the thoroughbreds and the current
trading price of the Common Shares. However, the offering price of the
Common Shares should not be utilized as an indication of value of the
securities or an assurance that purchasers will be able to resell these
securities for an amount equal to the offering price or any price in excess
of that amount. The exercise price of the Warrants was arbitrarily
determined by the Company. The offering price of the Common Shares and
exercise price of the Warrants bears no necessary relationship to the
Company's assets, book value, lack of earnings, net worth or any other
traditional criterion of value.
In as much as the Company is offering the Common Shares and an
underwriter was not retained for such purposes, the Company's
determination of the offering price and the exercise price of the
Warrants has not been determined by negotiation with an underwriter,
as is customary in most offerings. To the extent an underwriter has
not been involved in determining the offering price, subscribers are
subject to an increased risk that the price of the Company's
securities has been arrived at arbitrarily.
44
realized proceeds from that offering of $58,500 representing the purchase of
58,500 similar Units of the Company by certain individuals and entities
determined to be "qualified investors" as that term was defined in the Private
Placement Memorandum, dated October 4, 1996. Qualified investors include those
individuals or entites who (a) have (i) gross income of at least $50,000 per
annum and a net worth in excess of $100,000, exclusive of home, furnishings and
automobiles, or are purchasing in a fiduciary capacity for a person or entity
having such an income and net worth; or (ii) have a net worth in excess of
$500,000, exclusive of home, furnishings and automobiles, or are purchasing in
a fiduciary capacity for a person or entity having such an income and net
worth; or (iii) in the case of a IRA or a qualified retirement plan fiduciary,
are purchasing in a fiduciary capacity for a person or entity who meets the
suitabilities set forth in clause (i) or (ii) above; and (b) can bear the
economic risk of an investment for an indefinite period of time, can afford a
substantial loss of his for her investment and have sufficient knowledge and
experience in financial matters that they are capable of evaluating the
financial aspects of the investment.
In connection with the non-public offerings of the Company's securities
referenced in Nos. 9 and 10 above, the Company relied on Regulation D, Rule 504
of the 1933 Act for an exemption from the registration requirements for such
securities. The Units sold in those offerings were issued pursuant to private
placement memoranda. Each investor in these offerings was required to meet
or exceed certain conditions contained within the Private Placement Memoranda
which were included to ensure that the investor was qualified to purchase
such securities. Each investor was able to fend for himself in the transaction.
Furthermore, each investor was furnished with information concerning the
proposed operation of the Company and each had the opportunity to verify the
information supplied. The securities issued to said investors did not contain
a legend restricting the transfer of said shares.
In connection with the offerings not covered under Regulation D, Rule 504,
the Company relied on exemptions from the registration requirements contained
at Section 4(2) and/or 3(b) of the 1933 Act. Each of the purchasers was a
sophisticated investor and the Company obtained a representation from such
individuals or entites to that effect. The Company obtained a representation
from each investor of his intent to acquire the shares of the Company for the
purpose of investment only and not with a view toward resale or redistribution
thereof. Finally, each certificate was embossed with a legend restricting
transfer and the Company has issued stop transfer instructions with regard to
those shares.
The firm of Overton, Babiarz & Sykes, P.C. received 10,000 shares of
Common Stock in consideration for legal services rendered to the Company.
For the purposes of this transaction, the shares were considered to have been
issued for the sum of $.75 per share.
Item 27. Exhibits
The following is a complete list of exhibits filed ^ as part
of this Registration Statement.
1 Not applicable.
2 Not applicable.
II - 3
3.1 Articles of Incorporation of the Company as filed
July 18, 1995 with the Secretary of State of the State
of Colorado.
3.2 Articles of Amendment to the Articles of
Incorporation of the Company as filed September 18,
1995 with the Secretary of State of Colorado
3.3 Bylaws of the Company.
3.4 Amendment to the Bylaws of the Company.
4.1 Non-Qualified Stock Option and Grant Plan dated August 1, 1995.
4.2 Form of Certificate for Common Shares, $.0001 par value per share.
4.3 Form of Warrant.
4.4 Form of Warrant Agreement between the Company and Corporate Stock
Transfer.
5 Opinion of Overton, Babiarz & Sykes, P.C., 7720 E. Belleview Ave.,
Suite 200, Englewood, Colorado 80111, regarding the legality of the
securities registered under this Registration Statement.
6 Not applicable.
7 Not applicable.
8 Not applicable.
9 Not Applicable.
10 Purchase and Sale Agreement between the Company and Wallstreet
Racing Stables III dated January 1, 1996.
10.1 Employment Agreement with Raymond E. McElhaney dated June 1, 1997.
10.2 Employment Agreement with William M. Conrad dated June 1, 1997.
10.3 Form of Promissory Note between the Company and certain investors.
11 Not applicable.
12 Not applicable.
13 Not applicable.
II- 4
14 Not applicable.
15 Not applicable.
16 Not applicable.
21 Not applicable.
22 Not Applicable.
24.1 Consent of Overton, Babiarz & Sykes, P.C., counsel for the
Registrant, to the use of their opinion with regard to the
legality of the securities covered by the Registration Statement
and to the references to such firm in the Prospectus filed as part
of the Registration Statement is contained in such opinion as
Exhibit 5 to this Registration Statement.
24.2* Consent of Kish, Leake & Associates, independent certified public
accountants for the Registrant.
25 Not applicable.
26 Not applicable.
27 Financial Data Schedule for the unaudited period end September 30,
1997.
28 Not applicable.
29 Not applicable.
________________________________
* Filed herewith.
________________________________
Item 28. Undertakings
The Registrant hereby undertakes to:
(1) File, during any period in which it offers sells securities,
a post-effective amendment to this registration statement to:
(i) Include any prospectus required by section 10(a)(3) of
the Securities Act;
II - 5
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1933,
as amended, the Registrant certifies that it has reasonable grounds to
believe that it meets all the requirements for filing on Form SB-2 and has
duly caused this Registration Statement or Amendment to be signed on its
behalf by the undersigned thereunto duly authorized in Colorado Springs,
Colorado on the 12th. day of February, 1998.
WALLSTREET RACING STABLES, INC.
By: /s/ Raymond E. McElhaney
Raymond E. McElhaney, President,
Chief Executive Officer, Chief
Financial Officer and Chairman of the
Board of Directors
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement or Amendment thereto has been signed by the
following persons in the capacities and on the dates indicated.
Signatures Title Date
/s/ Raymond E. McElhaney President, Chief Executive Officer, 02/12/98
Raymond E. McElhaney Chief Financial Officer and
Chairman of the Board of Directors
/s/ Bill M. Conrad Vice President, Secretary, Treasurer 02/12/98
Bill M. Conrad and Director
/s/ Ronald R. McGinnis Vice President-Corporate Development 02/12/98
Ronald R. McGinnis and Director
/s/ Clifford C. Thygesen Director 02/12/98
Clifford C. Thygesen
/s/ Wayne Bamford Director 02/12/98
Wayne Bamford
KISH LEAKE & ASSOCIATES, P.C.
Certified Public Accountants
J.D. Kish, C.P.A., M.B.A. 7901 E. Belleview Ave., Suite 220
James D. Leake, C.P.A., M.T. Englewood, Colorado 80111
-------------------- Telephone (303) 779-5006
Arleen R. Brogan, C.P.A. Facsimile (303) 779-5724
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
We hereby consent to the use in this Amendment #4 to Form SB-2 of our report
dated September 9, 1997, relating to the financial statements of Wallstreet
Racing Stables, Inc. for the fiscal year ended June 30, 1997 and the
period July 18, 1995 (inception) through June 30, 1996.
/s/ Kish, Leake and Associates, P.C.
Kish, Leake and Associates, P.C.
Certified Public Accountants
February 11, 1998
