<PAGE>
As filed with the Securities and Exchange Commission on November 24, 1998
SEC Registration No. ______________________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
COYOTE SPORTS, INC.
-------------------------
(Exact Name of Registrant as Specified in its Charter)
Nevada 88-0326730
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(State of Incorporation) (I.R.S. Employer I.D. No.)
2291 Arapahoe Avenue, Boulder, CO 80302 , (303) 417-0942
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(Address, including zip code, and telephone number, including area
code of Registrant's Principal Executive Offices)
James M. Probst
Chief Executive Officer
Coyote Sports, Inc.
2291 Arapahoe Avenue
Boulder, CO 80302
(303) 417-0942
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(Name, Address, Including Zip Code and Telephone Number
including Area Code of Agent for Service)
Copies to:
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Laurie P. Glasscock, Esq.
Chrisman, Bynum & Johnson, P.C.
1900 Fifteenth Street
Boulder, CO 80302
(303) 546-1300
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Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, 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 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. /x /
_
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same 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. /_ /
__________________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed
Proposed Maximum
Title of Each Shares Maximum Aggregate Amount of
Class of Securities to be Offering Price Offering Registration
to be Registered Registered Per Share* Price* Fee
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<S> <C> <C> <C> <C>
Common Stock 1,091,526 $4.2815 $4,673,369 $1,299.20
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</TABLE>
*Estimated solely for the purpose of calculating the registration fee. Computed
pursuant to Rule 457(c) on the basis of the average of the bid and asked price
on the NASDAQ Small Cap Market system as of the close of trading on November 20
1998.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay 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 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
===============================================================================
<PAGE>
PROSPECTUS
COYOTE SPORTS, INC.
2291 ARAPAHOE AVENUE
BOULDER, CO 80302
(303) 417-0942
1,091,526 Shares of Common Stock
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This Prospectus relates to up to 1,091,526 shares of common stock of Coyote
Sports, Inc., a Nevada corporation ("Coyote"), held by current Coyote
stockholders who may offer the shares for sale from time to time. Coyote will
not receive any of the proceeds from the sale of the shares registered in this
Registration Statement.
As of the close of trading on November 20, 1998, the closing sale price of
Coyote common stock as quoted on the NASDAQ Small Cap Market was $4.2815 per
share. Coyote common stock trades on the NASDAQ Small Cap market under the
symbol "COYT".
The selling stockholders may offer to sell the shares from time to time at
designated prices, which may vary based on market prices prevailing at the time
of sale, or negotiated prices. The distribution of the shares by selling
stockholders is not subject to any underwriting agreement. Selling stockholders
may sell their shares directly in negotiated transactions or through customary
brokerage channels, to or through broker-dealers acting as agents or principals.
These broker-dealers may receive compensation in the form of underwriting
discounts, concessions, commissions, or fees from the selling stockholders
and/or from the purchasers of the shares. Compensation to a particular broker-
dealer might be in excess of customary commissions. Any broker-dealers who
participate with the selling stockholders in the distribution of shares may be
deemed to be underwriters and any commissions or profits they receive on the
resale of shares they position might be deemed to be underwriting discounts and
commissions within the meaning of the Securities Act of 1933.
Coyote will pay all the expenses of the offering, which are estimated to be
$25,000.
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS ON PAGE
2".
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
___________________________
The date of this Prospectus is ________________, 1998
<PAGE>
TABLE OF CONTENTS
Page
----
Summary............................................................... 1
Risk Factors.......................................................... 2
Additional Information................................................ 7
Documents Incorporated by Reference................................... 7
Use of Proceeds....................................................... 8
Determination of Offering Price....................................... 8
Selling Stockholders.................................................. 8
Common Stock.......................................................... 8
Plan of Distribution.................................................. 9
Experts............................................................... 9
Legal Opinion......................................................... 9
<PAGE>
SUMMARY
Certain current shareholders of Coyote Sports, Inc., a Nevada corporation
("Coyote"), common stock (collectively, the "Selling Stockholders") desire to
publicly trade their shares of common stock that they acquired in various
private transactions exempt from registration under the Securities Act of 1933.
In order to permit public secondary trading of these shares, Coyote has agreed
to register these shares in a Form S-3 Registration Statement filed with the
Securities and Exchange Commission.
THE COMPANY
Coyote designs, engineers, manufactures, markets and distributes brand-name
sports equipment and recreational products worldwide. Through an aggressive
acquisition strategy, we have an ownership interest in six operating companies
worldwide:
1. Apollo Sports Technologies, Limited;
2. Reynolds Cycle Technology, Limited;
3. Apollo Golf, Inc.;
4. Sierra Materials, LLC;
5. Unifiber Corporation; and
6. Unggul Galakan Sdn. Bhd.
Our products include steel and graphite golf shafts and premium grade
bicycle tubing. We also produce graphite and other advanced composite materials
for use in the production of golf shafts, fishing poles, ski poles, hockey
sticks and other sporting goods products.
Our business objective is to become a leading provider of sports equipment
and recreational products. Our management team intends to build a consolidated
group of companies engaged in related and complementary businesses that work
together to compete effectively in the sports equipment and recreation products
industry. We intend to continue to purchase companies within the sports
equipment and recreation products industry with experienced management that have
well-established brand names and product lines and strong engineering and design
capabilities. Management intends to strengthen and foster the growth of these
companies through the introduction of additional manufacturing capabilities and
techniques, and through expanded sales and marketing efforts. In addition, we
intend to pursue vertical integration of company-wide manufacturing and
distribution capabilities.
We will continue to seek financing and acquisition candidates. The
following paragraphs describe our acquisition activities since the end of our
last fiscal year, December 31, 1997.
UNIFIBER ACQUISITION. On March 19, 1998, we acquired all of the
outstanding stock of Unifiber Corporation ("Unifiber"), a supplier of graphite
golf shafts to premium original equipment manufacturers. The purchase price was
$3,000,000 in cash and 521,739 shares of Coyote's common stock recorded at fair
market value of $1,500,000. The purchase agreement gives the previous owner the
option to sell the 521,739 shares of Coyote common stock back to Coyote for a
period of two years after the sale at a price of $5.17 per share. This option
was assigned to Paragon Coyote Texas Ltd., a Texas limited partnership
("Paragon") in connection with the $6,000,000 loan described below. In
addition, we have agreed to pay the previous owner of Unifiber $100,000 per year
for the next five years for his agreement not to own, manage, operate, be
employed at or be connected to in any manner any business of the type conducted
by Unifiber. The Agreement provides for an upward adjustment of the purchase
price in the event Unifiber's financial performance for the calendar year ending
December 31, 1998 results in net income before income taxes equal to at least
$1,500,000. The upward adjustment of the purchase price ranges from $500,000 to
$2,000,000 based upon net income before income taxes
<PAGE>
of $1,500,000 to $2,500,000. Based on operating results through September 30,
1998, we do not expect to pay any of the upward purchase price adjustment.
PARAGON TRANSACTION. On March 19, 1998, Coyote borrowed $6,000,000 from
Paragon. The funds were used to, among other things, finance the Unifiber
acquisition described above. The loan from Paragon bears interest at 12% per
annum, payable quarterly with principal due September 19, 1999. The loan is
secured by our co-founders' shares of Coyote common stock. As part of the loan,
Coyote also issued 163,265 shares of Coyote common stock to Paragon. Paragon
may receive additional Coyote shares or cash if (1) the loan is not paid in full
by March 19, 1999 and the value of the shares Coyote issued to Paragon is less
than $1,000,000; or (2) the loan is not paid in full by September 19, 1999 and
the value of the shares Coyote issued to Paragon is less than $1,000,000; or (3)
the loan is prepaid in full prior to September 19, 1999 and the value of the
shares Coyote issued to Paragon on the date of prepayment is less than
$1,000,000. As of September 30, 1998, $6,000,000 was outstanding on this loan.
Paragon is a Selling Stockholder in this Prospectus.
RELINQUISHMENT OF ASSETS. On June 15, 1998, Coyote gave up its right to
use the ICE*USA trade name, and certain other property, to the previous owner of
ICE*USA. Coyote will not distribute its winter sports products under the
ICE*USA trade name. Coyote has removed all of the assets and liabilities of
ICE*USA from its consolidated financial statements as of June 15, 1998,
resulting in a net extraordinary gain of $346,581 during the six months ended
June 30, 1998.
EXCHANGE OF ASSETS. On July 23, 1998, we exchanged our 77% ownership
interest in Pentiumatics Sdn. Bhd. for a 28% ownership interest in the
outstanding common stock of Unggul Galakan Sdn. Bhd. ("Unggul"). Unggul owns
100% of Action Wear Sdn. Bhd. ("Action Wear"), a southeast Asian manufacturer of
athletic apparel. For the twelve months ended December 31, 1997 (unaudited)
Action Wear reported net income of $819,000 on revenue of $8,500,000. As of
December 31, 1997, Action Wear had net assets of $3,042,000.
HERMES ADVISORS. On September 4, 1998, Hermes Advisors ("Hermes")
purchased in managed accounts 250,000 shares of Coyote common stock from
Coyote at $4.00 a share for a total purchase price of $1,000,000.
COBRA GOLF, INCORPORATED - ASSET PURCHASE. On September 9, 1998, Coyote
purchased substantially all of the assets of West Coast Composites, Inc., a
subsidiary of Cobra Golf Incorporated ("Cobra"). The assets we purchased
included inventory and equipment which are used to manufacture graphite golf
shafts. Coyote paid Cobra a total of $6,000,000, $500,000 of which was paid on
September 9, 1998, with the balance due March 31, 1999. The balance of
$5,500,000 bears interest at 10% and is secured by all of the common stock of
Unifiber and by the assets purchased from Cobra.
RISK FACTORS
Prior to purchasing the shares offered by this Prospectus, you should
carefully read the information contained in the entire Prospectus and consider
the following risk factors relating to Coyote and its business.
SUBSTANTIAL CHANGES IN CORPORATE STRUCTURE. During 1998, Coyote acquired
all of the outstanding stock of Unifiber, a supplier of graphite golf shafts to
premium original equipment manufacturers, and acquired substantially all of the
assets of a subsidiary of Cobra. In addition, Coyote relinquished its rights to
the ICE*USA trade name and line of winter sports equipment. Coyote cannot
assure that it will be able to execute the business plan of the newly-combined
businesses or that the combined companies will generate profits in the future.
SUBSTANTIAL DEBT FINANCING. During 1998, Coyote incurred substantial debt
to finance acquisitions of complementary businesses within the sports equipment
and recreation industry. On March 19, 1998, Coyote
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borrowed $6,000,000 from Paragon Coyote Texas, Ltd., a Texas limited
partnership, to finance the acquisition of Unifiber Corporation. The principal
on the loan is due September 19, 1999. On September 9, 1998, Coyote purchased
certain assets of Cobra in part with a note for $5,500,000 due March 31,1999
secured by all of the common stock of Unifiber. Coyote cannot assure that the
combined revenues of its subsidiaries will be sufficient to generate enough cash
to repay these and other debt obligations.
LIQUIDITY. Management believes that the combination of cash on hand,
projected cash flows from operations, extending the due dates of current debt
agreements and entering into new debt agreements will provide sufficient cash to
meet its obligations as they come due. However, there can be no assurance that
operations will generate positive cash flows, that the debt agreements will be
extended or that new debt agreements will provide sufficient cash to meet its
obligations as they come due.
Coyote continues to consider the acquisition of additional businesses
complementary to its business. Coyote would require additional debt or equity
financing, if it were to engage in a material acquisition in the future.
RISKS INVOLVED WITH EXPANSION STRATEGY AND UNSPECIFIED ACQUISITIONS. Since
inception, Coyote has acquired an equity interest in eight operating companies.
In May 1997, Coyote and its partner dissolved one of the companies, which
evaluated business opportunities in marketing and selling sporting goods
apparel. An important part of Coyote's growth strategy is to increase sales
through product innovation and to pursue growth opportunities domestically and
internationally, including growth through acquisitions. Coyote expects to
continue to acquire businesses in complementary industries in furtherance of
this strategy and in most cases, Coyote will not be required to obtain
stockholder approval to complete such acquisitions. Although Coyote regularly
evaluates acquisition and business combination opportunities, we currently have
no agreements to enter into any additional acquisitions.
Acquisitions involve numerous risks to Coyote. For example, Coyote may not
be able to retain key employees of the acquired corporation. The amortization
of acquired intangible assets, if any, may negatively affect Coyote's financial
position. Coyote's management may be required to divert their attention away
from daily operating activities. In addition, acquisitions involve the risk
that liabilities of the acquired company that predate the acquisition might
exceed any indemnities Coyote obtained in the acquisition from the acquired
company.
NO ASSURANCE THAT ACQUISITIONS WILL BE EFFECTIVELY ASSIMILATED. Coyote's
future financial success depends substantially upon the successful integration
of any future acquisitions into Coyote's consolidated group business operations.
It could take several fiscal quarters to accomplish complete integration.
Integration would require, among other considerations, assimilation of the
operations, management, personnel and procedures of the acquired company, and
the coordination of sales and marketing and research and development efforts.
In addition, the process of combining two organizations could seriously
interrupt the daily business activities of either or both organizations. Coyote
cannot assure that present and potential customers of Coyote or any acquired
company would remain customers following an acquisition or other business
combination. Nor can Coyote assure that recent or future acquisitions will
successfully or profitably integrate with Coyote's existing consolidated group.
FURTHER CAPITAL REQUIREMENTS ASSOCIATED WITH EXPANSION. Coyote's capital
requirements have been and will continue to be significant. Coyote's ability to
consummate future acquisitions and execute its growth strategy will depend
largely on our ability to obtain additional debt or equity financing. However,
expansion or acquisition costs could adversely affect Coyote's liquidity and
financial stability. Coyote cannot assure that a future acquisition will not
require further debt or that we will be successful in obtaining favorable
financing arrangements in the future. Coyote's access to capital markets depend
upon, among other factors, the cost of such
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<PAGE>
capital, which relates to the perception in capital markets of Coyote's growth
potential in the industries in which our subsidiaries conduct business, results
of operations, leverage, financial condition and business prospects.
POTENTIAL PROBLEMS ASSOCIATED WITH GROWTH. Coyote has experienced
significant growth in the past two years and expects such growth to continue.
This growth may significantly strain our future management, staff, working
capital and operating and financial control systems. Coyote cannot assure that
our management, staff, working capital and operating and financial control
systems can adequately support future anticipated growth. If Coyote is unable
to continue to upgrade our operating and financial control systems, to recruit
qualified staff or to respond effectively to difficulties that arise during
expansion, Coyote's operating results and financial position could be materially
harmed.
DEPENDENCE ON ECONOMIC CONDITIONS AND CONSUMER TRENDS. The business of
Coyote and our subsidiaries is subject to economic cycles and changing consumer
trends. Our customers are generally manufacturers of finished goods sold to
consumers, primarily discretionary sports equipment and recreational products.
Any period of economic uncertainty or decline that impacts consumer spending
could significantly harm Coyote's business, results of operations and financial
condition. In addition, any general decline in the size of the market for golf
shafts, or bicycle tubing due to market conditions or otherwise, would
substantially harm Coyote's business, results of operations and financial
condition. Although consumer spending on golf and bicycle products has
increased in the past ten years, Coyote cannot assure that this trend will
continue.
MARKET VOLATILITY. The market for golf clubs is subject to considerable
volatility based on changing consumer demand for golf club brands. This
volatility could significantly harm Coyote's operations and financial position.
It will often be impossible to predict such shifts in advance.
NO ASSURANCE OF FUTURE PROFITS; EXPENSES ASSOCIATED WITH PUBLIC COMPANY
OBLIGATIONS. Coyote recorded its first profitable quarter in June 1998 and saw
record revenues, which grew 64% from $12,750,000 to $20,878,000 million for the
six months ended June 30, 1997 and 1998, respectively. In addition, for the
nine months ended September 30, 1998, Coyote experienced net income of $571,035
or $0.13 per diluted share. In order to remain profitable, Coyote must continue
to increase sales while effectively managing operating costs. Profitability also
depends largely on management's ability to utilize existing plant capacities
more efficiently at Apollo Sports Technologies, Unifiber and Reynolds Cycle
Technology, Limited, and to expand manufacturing capacity at Sierra Materials.
Although Coyote believes that it can further enhance profitability by acquiring
companies with complementary and compatible business operations to the existing
businesses of our subsidiaries, Coyote cannot assure that it will be able to
achieve these goals or that its growth strategy will ensure future
profitability.
SEASONALITY. Our customers have historically built inventory in
anticipation of golf club purchases by golfers in the spring and summer, the
principal selling seasons for golf clubs. As a result of Coyote's present
dependence upon Apollo Sports Technologies and Unifiber golf shaft sales,
management expects for the foreseeable future that our business will remain
seasonal. Therefore, the seasonal fluctuations in the demand for golf clubs and
in the sale of golf shafts, our primary product, will likely continue to affect
our operating results.
POSSIBLE DELISTING OF COMMON STOCK FROM NASDAQ SMALL CAP MARKET. Coyote
common stock, registered in Coyote's initial public offering in September, 1997,
is publicly traded on the NASDAQ Small Cap Market under the symbol "COYT." In
order to maintain its listing, Coyote must meet certain requirements relating to
net assets, net income or market capitalization. Coyote cannot guarantee that
it will be able to satisfy these listing requirements and that its common stock
will not be suspended or terminated from inclusion in the NASDAQ Small Cap
Market. If Coyote's common stock were delisted, the secondary market would be
limited to trading in the over-the-counter market and investors would find it
more difficult to dispose of their stock or obtain accurate quotations as to
share price. In addition, Coyote would be in default of its loan with Paragon
if its common stock were delisted.
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COMPETITION. Coyote operates in a fragmented, intensely competitive and
rapidly evolving environment. Most of Coyote's competitors are larger and have
substantially greater financial, research and development, marketing and
personnel resources than it does. Coyote's future success, if any, will depend
on its ability to remain competitive with these larger sports equipment
manufacturers. This environment may pressure Coyote to accept lower profit
margins, which could adversely effect Coyote's operating results and financial
condition.
DEPENDENCE UPON KEY PERSONNEL; CHANGES IN MANAGEMENT GROUP; ATTRACTION AND
RETENTION OF QUALIFIED PERSONS. Coyote's success depends on the continued
service of certain executive officers, including James M. Probst, Chief
Executive Officer and President; Mel S. Stonebraker, Chairman, and Secretary;
and J. P. McNeill, Chief Financial Officer. All of these officers have
employment contracts which expire May 31, 2000. These officers are all either
stockholders or hold options to purchase common stock of Coyote. If one or more
of these executives decides to end his employment with Coyote, it could
negatively impact Coyote's business operations and financial condition.
Equally important to our future growth and success is our ability to
attract, retain and expand our qualified personnel staff. Competition for such
personnel is high and Coyote cannot assure that we will be successful in our
efforts to attract and retain them.
YEAR 2000 ISSUE. Coyote is aware of the issues associated with the
programming code in existing computer systems and is working to resolve the
potential impact of the year 2000 on the ability of its computerized information
systems to accurately process information that may be date sensitive. Any of
Coyote's programs that recognize a date using "00" as the year 1900 rather than
the year 2000 could result in errors or system failures ("Year 2000 Issue").
Coyote utilizes a number of computer programs across its operations.
Coyote has developed a Year 2000 project team to address the Year 2000 Issue. An
initial assessment has been completed for each of its operations. The evaluation
revealed that a number of computer hardware and software systems utilized by
Coyote have Year 2000 compliance issues. These systems will need to be replaced
or upgraded. The majority of the systems and/or programs are "off the shelf"
products with Year 2000 compliant versions now available. However, there are
some custom programs which will need to be reprogrammed to be Year 2000
compliant.
A year 2000 plan has been developed for most of Coyote's operations,
some of which are in the implementation and testing stages. The system and
programs are scheduled to be replaced or upgraded at various times over the next
10 months. Coyote expects to have all critical systems and/or programs
Year 2000 compliant by August 1999.
Coyote relies on third parties for many products and services and it may be
adversely impacted if these companies are unable to address this issue in a
timely manner which could result in a material financial risk to Coyote. Coyote
has not performed an assessment on the state of readiness and/or compliance of
key suppliers and customers. Management plans to identify key suppliers and
customers by March 31, 1999.
Management expects that completion of its Year 2000 compliance project will
result in additional expenditures or approximately $100,000.
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Coyote's failure to resolve the Year 2000 Issue on or before December 31,
1999, could result in system failures or miscalculations causing disruption in
operations, including among other things, a temporary inability to process
transactions, send invoices, send and/or receive e-mail and voice mail, or
engage in similar normal business activities. Additionally, failure of third
parties upon whom Coyote's business relies to timely remediate their Year 2000
issues could result in disruptions in Coyote's supply of parts and materials,
late, missed or unapplied payments, temporary disruptions in order processing
and other general problems related to Coyote's daily operation. While Coyote
believes its Year 2000 compliance actions will adequately address its internal
Year 2000 Issue, until Coyote completes its assessment of its suppliers and
customers, the overall risks cannot be accurately described and quantified, and
there can be no guarantee that the Year 2000 Issue will not have a material
adverse effect on Coyote and its operations.
Coyote has not, to date, implemented a Year 2000 contingency plan. It
is Coyote's goal to have the major Year 2000 issues resolved by mid 1999.
Final verification and validation is scheduled to occur by August 1999.
However, Coyote intends to develop and implement a contingency plan by mid
1999, in the event that its Year 2000 Issue plan should fall behind
schedule.
VOLATILITY OF MARKET; UNCERTAINTY OF MARKET. From the time of Coyote's
initial public offering in September 1997, its common stock has publicly traded
on the NASDAQ Small Cap Market. Potential investors should not assume that a
secondary market for Coyote common stock exists or that there will be liquidity
in the trading market. The development of a secondary trading market for Coyote
common stock will depend on the financial performance of Coyote and its
subsidiaries. Other factors which will also influence the price and trading
market of Coyote common stock include investor confidence in the sports
equipment market generally and in Coyote. If the trading market for the common
stock is limited and an investor decides to dispose of its stock, the price
received may be affected.
GOVERNMENT REGULATION. Coyote's operations are subject to government laws
and regulations, including the laws of the United States, the United Kingdom and
Malaysia, that regulate activities such as labor practices and the emission,
storage, treatment and disposal of certain pollutants and other materials or
substances. Although compliance with such regulations has not yet materially
impacted Coyote's operating results or financial position, we cannot assure that
Coyote will not incur material costs or liabilities associated with future
compliance requirements. Changes in such laws or regulations may also give rise
to additional compliance costs or business interruptions with negative
consequences on Coyote's operational results and financial condition.
NO DIVIDENDS. Coyote has not paid any dividends on its common stock since
its inception and does not anticipate paying dividends in the future.
POSSIBLE RESALES UNDER RULE 144. As of November 15, 1998, 4,231,265 shares
of Coyote's issued and outstanding common stock are "restricted securities" and
may be resold under certain circumstances in compliance with Rule 144 of the
Securities Exchange Act of 1934 ("Rule 144"). Under Rule 144, a person,
including an affiliate of Coyote, who has beneficially owned stock for one year
may dispose of such number of shares of the stock in any three month period that
does not exceed the greater of (i) 1% of the total number of outstanding shares
of the same class, or (ii) if the common stock is quoted on a NASDAQ market, the
average weekly trading volume of common stock during the four calendar weeks
immediately preceding the sale. A person who is not an affiliate of Coyote and
who has beneficially held such stock for two years may sell such stock without
restriction.
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Sales or the prospect of future sales of stock may place downward pressure on
the price and the market for the stock.
ADDITIONAL INFORMATION
Coyote files annual, quarterly, and special reports, proxy statements, and
other information with the Securities and Exchange Commission (the
"Commission"). This information is available for inspection and copying at the
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Public Reference Room maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, DC 20549; and at the regional offices of the
Commission located at 75 Park Place, 14th Floor, New York, NY 10007, and 500
West Madison Street, Suite 1400, Chicago, IL 60661-2511. Information on the
operation of the Public Reference Room may be obtained by calling the Commission
at 1-800-SEC-0330. The Commission also maintains an Internet site at
http://www.sec.gov that contains reports, proxy and information statements, and
other information regarding issuers that file electronically with the
Commission.
Coyote has filed a Registration Statement under the Securities Act of 1933
for the shares of common stock covered by this Prospectus. This Prospectus
omits certain information, exhibits and amendments contained in the Registration
Statement. You can find further information in the Registration Statement about
Coyote's business and operations, and the shares of common stock covered by this
Prospectus.
DOCUMENTS INCORPORATED BY REFERENCE
Upon written request, Coyote will furnish without charge to each person to
whom this Prospectus is delivered a copy of any or all of the documents referred
to below, including exhibits specifically incorporated by reference. All
requests for copies of such documents should be mailed to Secretary, Coyote
Sports, Inc., 2291 Arapahoe Avenue, Boulder, Colorado 80302, telephone number
(303) 417-0942.
Coyote filed the following documents with the Commission and incorporates
them in this Prospectus:
1) Annual Report on Form 10-KSB for the fiscal year ended December
31, 1997;
2) Form 8-K filed April 3, 1998 for the Paragon financing;
3) Form 8-K filed April 3, 1998 for the Unifiber acquisition;
4) Form 8-KA filed April 3, 1998 for the Unifiber acquisition;
5) Definitive Proxy Statement dated April 20, 1998;
6) Information Statement dated April 20, 1998;
7) Form 8-KA filed May 14, 1998 for the Unifiber acquisition;
8) Quarterly Report on Form 10-QSB for quarter ended March 31, 1998;
9) Quarterly Report on Form 10-QSB for quarter ended June 30, 1998;
10) Quarterly Report on Form 10-QSB for quarter ended September 30,
1998;
11) Form 8-K filed September 23, 1998, for the acquisition of Cobra
assets; and
12) A description of the Common Stock contained in Coyote's
Registration Statement No. 333-29077 on Form SB-2
All documents Coyote files after the date of this Prospectus with the
Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934 and before the offering of the shares terminates will be
incorporated in this Prospectus by reference from the filing date of these
documents. With respect to the documents listed above, if a statement in this
Prospectus conflicts with a statement in a document incorporated by reference in
this Prospectus, the statement in this Prospectus will modify or supersede it.
The statement will constitute a part of this Prospectus only in its modified or
superseded form.
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Coyote intends to furnish its stockholders with Annual Reports containing
audited financial statements for each fiscal year.
USE OF PROCEEDS
The Selling Stockholders will receive the net proceeds from the sale of the
shares. Coyote will not receive any portion of the proceeds.
DETERMINATION OF OFFERING PRICE
The Selling Stockholders may use this Prospectus in connection with an
offer or sale of their shares. The Selling Stockholders will determine the
offering price for these shares, which may vary based on market prices
prevailing at the time of sale or negotiated prices. See "Plan of
Distribution."
SELLING STOCKHOLDERS
Coyote is registering the shares of common stock for the Selling
Stockholders to permit public secondary trading of these shares. The "Selling
Stockholders" include the shareholders listed below in the section entitled
"Common Stock," and the persons to whom the shareholders give or pledge their
shares after the date of this Prospectus. The Selling Stockholders or their
nominees may offer these shares for resale from time to time. The Selling
Stockholders, or their agents, may be considered to be "underwriters" under the
Securities Act of 1933 if they decide to offer their shares for resale. As a
result, they may be required to deliver a copy of this Prospectus to the person
to whom they offered to sell their shares. See "Plan of Distribution."
The shares of common stock the Selling Stockholders are offering fall into
two categories: (i) 513,265 shares acquired from Coyote in various private
transactions in 1998 in reliance on Section 4(2) of the Securities Act and
Regulation D promulgated thereunder as the basis for an exemption from
registration and (ii) 578,261 shares that the Selling Stockholders acquired for
performing services for Coyote. Coyote has agreed to register all of these
shares of Common Stock. Except as set forth below and in the "Summary" section,
the only relationship the Selling Stockholders have had with Coyote within the
past three years has been as Coyote stockholders.
COMMON STOCK
The following table sets forth certain information about the common stock
that each Selling Stockholder beneficially owned as of November 15, 1998.
<TABLE>
<CAPTION>
Name of Common Stock Beneficially Common Stock Common Stock Beneficially
Selling Stockholders Owned Prior to Offering Offered Owned After Offering
-------------------- ----------------------- ------- --------------------
Amount Percent Amount Percent
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Paragon Coyote Texas Ltd. 1,063,265/(1)/ 19.3% 541,526 521,739 9.5%
Investor Resource Services, Ltd. 200,000 4.1% 200,000 0 -
Litespeed Titanium Components, Inc. 100,000 2.0% 100,000 0 -
Hermes Partners, L.P. 100,000 2.0% 100,000 0 -
Ultra Hermes Fund, Ltd. 150,000 3.0% 150,000 0 -
</TABLE>
- ---------------------------------------------
(1) Includes an option to acquire 521,739 shares of Common Stock.
Pursuant to agreements with Paragon, Coyote has agreed to take steps
necessary to elect one representative of Paragon to Coyote's Board of Directors
for so long as any part of the loan from Paragon remains outstanding. Pursuant
to this agreement, Mr. Mark A. Pappas, the president of the general partner of
Paragon, has served as a director of Coyote since 1997. In addition, Coyote has
a ten-year consulting agreement with Paragon pursuant to which Paragon acquired
378,261 shares of common stock for services rendered to Coyote.
-8-
<PAGE>
PLAN OF DISTRIBUTION
Coyote is registering the shares for the Selling Stockholders. Coyote will
bear all costs, expenses and fees in connection with the registration of the
offered shares. The Selling Stockholders will pay all brokerage commissions and
similar selling expenses, if any, arising out of the sale of shares. Selling
Stockholders may dispose of their shares from time to time in one or more types
of transactions, including on the NASDAQ Small Cap Market, in the over-the-
counter market, in negotiated transactions or in put or call option transactions
relating to the shares. The offering price may vary, based on market prices
prevailing at the time of sale or negotiated prices.
Selling Stockholders may or may not involve brokers or dealers in the sale
of their shares. Selling Stockholders may sell shares directly to purchasers or
to or through broker-dealers acting as agents or as principals. Broker-dealers
may receive compensation in the form of discounts, concessions, commissions or
fees from the Selling Stockholders and/or the purchasers of shares for whom such
broker-dealer acted as agent. Compensation to a particular broker-dealer may be
in excess of customary commissions.
Any broker-dealers who participate with the Selling Stockholders in the
distribution of shares may be deemed to be "underwriters" under (S) 2(11)of the
Securities Act of 1933, and any commissions or profits they receive on the
resale of shares as broker-dealers might be deemed to be underwriting discounts
and commissions within the meaning of the Securities Act of 1933. As a result,
Selling Stockholders may be required to comply with the prospectus delivery
requirements of the Securities Act of 1933. Coyote has agreed to provide the
Selling Stockholders with sufficient copies of the prospectus to satisfy these
requirements. There is no underwriting agreement relating to the distribution
of the shares by the Selling Stockholders.
Selling Stockholders may resell all or a portion of their shares in open
market transactions in reliance on Rule 144 under the Securities Act of 1933,
provided they meet the criteria and comply with the requirements of the Rule.
Coyote has agreed to indemnify each Selling Stockholder against certain
liabilities, including certain liabilities arising under federal securities
laws. The Selling Stockholders may agree to indemnify any agent, dealer or
broker-dealer who participates in the sales of shares against liabilities,
including liabilities arising under the Securities Act of 1933.
EXPERTS
The financial statements of Coyote Sports, Inc. and subsidiaries as of
December 31, 1997 and 1996, and for the years then ended, which appear in the
Company's annual report on Form 10-KSB for the fiscal year ended December 31,
1997, have been incorporated by reference herein and in the Registration
Statement in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
LEGAL OPINION
Chrisman, Bynum & Johnson, P.C., 1900 Fifteenth Street, Boulder, CO 80302,
will furnish an opinion as to the validity of the shares covered by this
Prospectus.
-9-
<PAGE>
----------------------------------------------
No person has been authorized to give any information or make any
representations other than those contained in this Prospectus in connection with
the sale or offering of any shares of common stock covered by this Prospectus,
and if given or made, such other information or representations must not be
relied upon as having been authorized by Coyote Sports Inc. or the Selling
Stockholders. This Prospectus does not constitute an offer of any securities
other than those to which it relates or an offer to sell, or a solicitation of
an offer to buy, in any jurisdiction to any person to whom it is not lawful to
make such offer or solicitation in such jurisdiction. Under no circumstances
should the delivery of this Prospectus or the sale or offering of any shares of
common stock covered by this Prospectus create any implication that there has
been no change in the business or operations of Coyote Sports, Inc. since the
date of this Prospectus.
----------------------------------------------
1,091,526 Shares
COYOTE SPORTS, INC.
Common Stock ($.001 Par Value)
PROSPECTUS
________________, 1998
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. Other Expenses of Issuance and Distribution.
--------------------------------------------
The expenses in connection with the issuance and distribution of the
securities being registered, other than brokerage discounts, fees or
commissions, are:
Commission Registration Fee $ 1,299.20
Accounting Fees and Expenses $ 5,000.00
Legal Fees and Expenses $17,500.00
Miscellaneous Expenses $ 1,200.80
Total $25,000.00
All expenses, except the registration fee, are estimates. Coyote will pay
all expenses in connection with this Offering.
ITEM 15. Indemnification of Officers and Directors.
------------------------------------------
Section 78.751 of the General Corporation Law of the State of Nevada
contains provisions permitting corporations organized in Nevada to indemnify
their directors, officers and other representatives from certain liabilities. A
Nevada corporation may indemnify against liabilities in connection with any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (except an action by or on behalf of
the corporation), that arise out of a person's role as a director, officer,
employee or agent of the corporation. Article X of Coyote's Certificate of
Incorporation provides for the indemnification, to the maximum extent permitted
by Nevada law, of any person for liabilities or expenses that arise by reason
of the fact that the person is or was a director, officer, employee, fiduciary,
or agent of Coyote.
ITEM 16. Exhibits
--------
1.1 Selling Agreement
4.1 Specimen Common Stock Certificate /(1)/
5.1 Opinion of Chrisman, Bynum & Johnson, P.C., counsel to Coyote Sports,
Inc.
23.1 Consent of Chrisman, Bynum & Johnson, P.C. (contained in the opinion
filed as Exhibit 5.1)
23.2 Consent of KPMG Peat Marwick LLP independent public accountants -
Coyote Sports, Inc.
23.3 Consent of PricewaterhouseCoopers, LLP, auditors on Current Report
on Form 8-K/A Amendment No. 2 dated March 19, 1998
/(1)/ Denoted as Exhibit 4.1 to Registration Statement No. 333-29007on Form SB-2
and incorporated herein by reference.
II-1
<PAGE>
ITEM 17. Undertakings
------------
(1) The undersigned Registrant hereby undertakes:
A. To file, during any period in which offers or sales are being
made of the securities registered hereby, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
provided, however, that the undertakings set forth in paragraphs (i) and (ii)
above do not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic reports filed
by the Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this Registration
Statement.
B. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification by Coyote for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of Coyote pursuant to the foregoing provisions, or
otherwise, Coyote has been advised that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that the claim for
indemnification against such liabilities (other than the payment by Coyote of
expenses incurred or paid by a director, officer or controlling person of Coyote
in the successful defense of any action, suit or proceeding) is asserted against
Coyote by such director, officer or controlling person in connection with the
securities being registered, Coyote will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boulder, State of Colorado, on the 23rd day of
November, 1998.
COYOTE SPORTS, INC.
By: /s/ James M. Probst
-----------------------------------------
James M. Probst, President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints James M. Probst his true and lawful attorney-in-
fact and agent, with full powers of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities, to sign any and all
amendments to this Registration Statement, including post-effective amendments,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, and hereby ratifies and confirms all his said attorney-in-fact and
agent, or his substitute or substitutes, may lawfully do or cause to be done by
virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ James M. Probst President, Chief Executive November 23, 1998
- --------------------------------------
James M. Probst Officer (Principal Executive Officer)
and Director
/s/ Mel Stonebraker Chairman, Secretary, November 23, 1998
- --------------------------------------
Mel Stonebraker and Director
/s/ John Paul McNeill Chief Financial Officer November 23, 1998
- --------------------------------------
John Paul McNeill (Principal Financial Officer)
/s/ Jeffrey Kates Director November 23, 1998
- --------------------------------------
Jeffrey Kates
/s/ Mark A. Pappas Director November 23, 1998
- --------------------------------------
Mark A. Pappas
Director November 23, 1998
- --------------------------------------
Don A. Forte
</TABLE>
II-3
<PAGE>
EXHIBIT INDEX
Exhibits
--------
1.1 Selling Agreement
4.1 Specimen Common Stock Certificate /(1)/
5.1 Opinion of Chrisman, Bynum & Johnson, P.C.
23.1 Consent of Chrisman, Bynum & Johnson, P.C. (contained in the
opinion filed as Exhibit 5.1)
23.2 Consent of KPMG Peat Marwick LLP, independent public accountants -
Coyote Sports, Inc.
23.3 Consent of PricewaterhouseCoopers, LLP, auditors on Current Report
on Form 8-K/A Amendment No. 2 dated March 19, 1998.
_________
/(1)/ Denoted as Exhibit 4.1 to Registration Statement 333-29077 on
Form SB-2 and incorporated herein by reference.
II-4
<PAGE>
Exhibit 1.1
SELLING AGREEMENT
This SELLING AGREEMENT is made as of this _______ day of
___________________, 1998, between COYOTE SPORTS, INC., a Nevada corporation
("Company"), with principal offices at 2291 Arapahoe Avenue, Boulder, Colorado
80302, and those persons whose names appear on the signature pages hereof
("Selling Shareholders").
RECITALS:
WHEREAS, the Company has issued to Selling Shareholders shares of the
Company's common stock (the shares of Common Stock being hereinafter referred to
as the "Shares");
WHEREAS, the Company intends to file a registration statement on Form
S-3 ("Registration Statement") with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"),
registering the Shares for sale;
WHEREAS, this Agreement is entered into between the Company and the
Selling Shareholders to facilitate a legal and orderly distribution of the
Shares pursuant to the Registration Statement.
NOW, THEREFORE, in consideration of the promises made herein and for
other good and valuable consideration, the parties agree as follows:
1. Covenants, Representations and Warranties of the Company.
---------------------------------------------------------
(a) The Company shall use its best efforts to keep the
Registration Statement effective so as to permit the public sale of the Shares
for a period of one (1) year after the effective date of the Registration
Statement.
(b) The Company will provide the Selling Shareholders with
sufficient copies of the Registration Statement (and the prospectus contained
therein) as shall be required to satisfy prospectus delivery requirements under
federal and state securities laws.
(c) The Company will pay all expenses of the public offering of
the Shares except for fees of attorneys, accountants and other advisors retained
by the Selling Shareholders and brokerage and other selling commissions
associated with the distribution of the Shares.
<PAGE>
(d) In the case of the happening, at any time after the commencement
of the offering of the Shares, and prior to the termination thereof, of any
event which materially affects the Company or the Shares which should be set
forth in an amendment of or supplement to the Registration Statement in order to
make the statements therein not misleading, the Company agrees, upon receiving
knowledge of such event, to notify the Selling Shareholders as promptly as
possible of the happening of such an event. In such event, the Company agrees
to prepare and furnish to the Selling Shareholders copies of an amended
Registration Statement or a supplement to the Registration Statement (including
the prospectus contained therein) in such quantities as the Selling Shareholders
may reasonably request, in order that the Registration Statement as so amended
or supplemented will not contain any untrue statement of material fact, or omit
to state any material fact necessary in order to make the statements therein not
misleading in light of the circumstances under which they were made.
(e) The Company shall obtain the necessary state securities and blue
sky registrations or clearances in only those states in which it elects to do
so.
(f) No order preventing or suspending the use of any preliminary
prospectus contained in the Registration Statement has been issued by the
Commission, and such preliminary prospectus, at the time of filing thereof,
conformed in all material respects to the requirements of the Act and the rules
and regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that this representation and warranty does not apply to any state ments or
omissions made in reliance upon and in conformity with information furnished in
writing to the Company by and with respect to the Selling Shareholders expressly
for use therein.
(g) The Company meets the requirements for the use of Form S-3 under
the Act and the rules and regulations of the Commission.
(h) The Registration Statement and the final prospectus contained
therein and any further amendments or supplements thereto (including any
document incorporated by reference therein filed after the effective date of the
Registration Statement) will, when they become effective or are filed with the
Commission, as the case may be, conform in all material respects to the
requirements of the Act, the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations of the Commission thereunder.
All documents incorporated by reference into the Registration Statement will
conform in all material respects to the requirements of the Commission. No part
of the Registration Statement, the prospectus or any amendment or supplement
thereto (including documents incorporated by reference therein) will contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions in the Registration Statement or prospectus made in
reliance upon and in conformity with substantive information furnished in
writing to the Company by and with respect to the Selling Shareholders expressly
for use therein.
-2-
<PAGE>
2. Covenants, Representations and Warranties of the Selling Shareholders.
---------------------------------------------------------------------
(a) In the case of the happening, at any time after the commencement
of the offering of the Shares, and prior to the termination thereof, of any
event which materially affects the plan of distribution of the Shares, which
event should be set forth in an amendment of or supplement to the Registration
Statement in order to make the statements therein not misleading, each Selling
Shareholder who or which receives knowledge of such event, upon receiving such
knowledge, shall notify the Company, as promptly as possible, of the happening
of such an event, whereupon the provisions of Section l(d) above shall then
apply.
(b) Each Selling Shareholder agrees to deliver copies of the final
prospectus contained in the Registration Statement, as it may be amended and
supplemented from time to time, to purchasers of the Shares as required by
applicable federal and state securities laws. Each Selling Shareholder agrees
that it will offer and sell the Shares in only those states as to which counsel
for the Company has advised each Selling Shareholder in writing that the
necessary state securities or blue sky clearances have been obtained. Each
Selling Shareholder will notify the Company in writing at the time the
distribution of its Shares has been completed.
(c) Statements contained in the Registration Statement, the
prospectus or any amendments or supplements thereto (including any document
incorporated by reference therein) made in reliance upon and in conformity with
substantive information furnished in writing to the Company by and with respect
to the Selling Shareholders expressly for use therein do not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make such statements therein not misleading.
(d) If during the effectiveness of the Registration Statement, the
Company notifies the Selling Shareholders of the occurrence of any intervening
event that, in the opinion of the Company's legal counsel, causes the prospectus
included in the Registration Statement not to comply with the Act, each Selling
Shareholder, promptly after receipt of the Company's notice, shall cease making
any offers, sales or other dispositions of the Shares included in the
Registration Statement until the Selling Shareholders receive from the Company
copies of a new, amended or supplemented prospectus complying with the Act.
Notwithstanding the above, the Selling Shareholders may offer and sell the
Shares in compliance with the Act during such time without the use or reliance
upon registration or the Registration Statement.
3. Suspension of Offering. It is understood that the Company and the
----------------------
Selling Shareholders will advise each other immediately, in writing, of the
receipt of any threat or the initiation of any steps or procedures by any
federal or state instrumentality or any individual which reasonably would be
expected to impair or prevent the offer of the Shares or the issuance of any
suspension orders or other prohibitions preventing or impairing the proposed
offering. In the case of the happening of any such event, the Company agrees
actively to defend against any such steps, procedures, orders or prohibitions
unless all parties agree in writing to the acquiescence in such actions or
orders.
-3-
<PAGE>
4. Indemnification.
----------------
(a) Company's Indemnification. The Company hereby agrees to indemnify
-------------------------
and hold harmless each Selling Shareholder, its officers and directors, and each
other person, if any, who controls the Selling Shareholders within the meaning
of the Act, against any losses, claims, damages or liabilities, joint or
several, to which such Selling Shareholder or any such person controlling such
Selling Shareholder may become subject under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or proceedings in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained, on the effective date thereof, in the
Registration Statement, or in any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact necessary to make the statements therein not misleading, and will
reimburse such Selling Shareholder or such person controlling such Selling
Shareholder for any legal or other expenses reasonably incurred in connection
with investigating or defending any such loss, claim, damage, liability or
proceeding; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such Registration Statement, amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by such Selling Shareholder.
(b) Selling Shareholder's Indemnification. Each Selling Shareholder
-------------------------------------
hereby agrees to indemnify and hold harmless the Company, its officers and
directors, and each other person, if any, who controls the Company within the
meaning of the Act, against any losses, claims, damages or liabilities, joint or
several, to which the Company or such other person controlling the Company may
become subject under the Act or otherwise, but only to the extent that such
losses, claims, damages or liabilities (or proceedings in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained, on the effective date thereof, in the Registration
Statement or in any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
necessary to make the statements therein not misleading, which, in each such
case, has been made in or omitted from the Registration Statement, amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by such Selling Shareholder and will reimburse the Company or
such person controlling the Company for any legal or other expenses reasonably
incurred in connection with investigating or defending any such loss, claim,
damage, liability or proceeding.
5. Miscellaneous:
-------------
(a) This Agreement is made pursuant to and governed by the laws of the
State of Colorado, without regard to its choice of law principles.
(b) Any notices by the Company to Selling Shareholders shall be deemed
delivered if in writing and delivered personally, or sent by certified mail, or
by a nationally-recognized overnight delivery service, to the Selling
Shareholders addressed to them at their
-4-
<PAGE>
addresses as set forth in the Company's books and records. Any notice by Selling
Shareholders to the Company shall be deemed delivered if in writing and
delivered personally, or sent by certified mail or by a nationally-recognized
overnight delivery service, addressed to the Company at its address as set forth
at the beginning hereof.
(c) All covenants, representations and warranties of the Selling
Shareholders set forth herein are made severally and not jointly.
(d) In the event that (i) any obligation of the Company pursuant to
that certain Registration Rights Agreement dated as of March 19, 1998 between
the Company and Paragon Coyote Texas Ltd., a Texas limited partnership (each a
"Preexisting Company Obligation"), conflicts or is inconsistent with this
Agreement and (ii) such Preexisting Company Obligation is in any respect more
stringent than the conflicting or inconsistent obligation of the Company set
forth in this Agreement, then in each such event the Preexisting Company
Obligation shall control.
-5-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Selling Agreement as of
the date first above written.
COMPANY:
COYOTE SPORTS, INC.
By:_____________________________
Mel Stonebraker
Its: Chairman and Secretary
SELLING SHAREHOLDERS:
-6-
<PAGE>
Exhibit 5.1
November 22, 1998
Coyote Sports, Inc.
2291 Arapahoe Avenue
Boulder, CO 80302
Gentlemen:
We have acted as counsel to Coyote Sports, Inc. (the "Company") in connection
with the preparation and filing of a Registration Statement on Form S-3 (the
"Registration Statement") registering under the Securities Act of 1933, as
amended, an aggregate of 1,091,526 shares (the "Shares") of common stock of the
Company ("Common Stock"). As such, we have examined the Registration Statement,
the Company's Articles of Incorporation and Bylaws (as amended), and minutes of
meetings of the Company's Board of Directors.
Based upon the foregoing, and assuming that the Shares will be sold in
accordance with the Registration Statement at a time when effective, we are of
the opinion that, the shares of Common Stock will be validly issued, fully paid
and non-assessable securities of the Company.
We consent to the use of this opinion as an exhibit to the Registration
Statement and to the references to our firm in the Prospectus which is made a
part of the Registration Statement.
Sincerely,
CHRISMAN, BYNUM & JOHNSON, P.C.
<PAGE>
EXHIBIT 23.2
Consent of Independent Auditors
The Board of Directors
Coyote Sports, Inc.:
We consent to incorporation by reference in the registration statement on Form
S-3 of Coyote Sports, Inc. of our report dated March 23, 1998, relating to the
consolidated balance sheets of Coyote Sports, Inc. and subsidiaries as of
December 31, 1997 and 1996, and the related consolidated statements of
operations, stockholders' equity (deficit) and cash flows for the years then
ended which report appears in the December 31, 1997, annual report on Form
10-KSB of Coyote Sports, Inc., and to the reference to our firm under the
heading "Experts" in the prospectus.
KPMG Peat Marwick LLP
Boulder, Colorado
November 23, 1998
<PAGE>
EXHIBIT 23.3
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report
dated May 23, 1997, except as to Note 1, which is as of December 19, 1997,
relating to the financial statements of Unifiber Corporation, which appears on
page 3 of Coyote Sports, Inc.'s Current Report on Form 8-K/A Amendment No. 2
dated March 19, 1998.
PricewaterhouseCoopers, LLP
San Diego, California
November 18, 1998
