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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES ACT OF 1934
Date of Report: March 19, 1998
COYOTE SPORTS, INC.
(Exact name of Registrant as specified in its charter)
Nevada 333-29077 88-0326730
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer No.)
of Incorporation)
2291 Arapahoe Avenue, Boulder, CO 80301
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (303) 417-0942
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
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On March 19, 1998, Coyote Sports, Inc. (the "Company") purchased all of the
outstanding shares of common stock of Unifiber Corporation, a California
corporation, ("Unifiber") from its sole shareholders, Richard L. and Judy R.
Tennent (the "Seller") pursuant to a Stock Purchase Agreement (the "Agreement").
The assets owned by Unifiber include inventory, trade receivables, equipment,
and intellectual property which are used to manufacture graphite golf shafts.
The Company intends to continue such use.
The Company paid the Seller a total of Six Million Dollars ($6,000,000)
comprised of Three Million ($3,000,000) in cash at closing and 521,739
restricted shares of the Company's common stock (the "Coyote Shares"). The
Coyote Shares represent Three Million Dollars ($3,000,000) in fair market
value of the Company's Common Stock based upon the average of the closing quotes
of a share of the Company's Common Stock on the NASDAQ Small Cap market system
for the ten-day period ending one day prior to the closing (the "Issue Price").
The purchase price was negotiated in an arms length transaction between the
Company's officers and the Seller. The cash portion of the purchase price was
financed by a private lender. The purchase price is subject to upward
adjustment in the event that Unifiber achieves certain financial performance
thresholds during the twelve month period beginning March 20, 1998. For each
$1 of Net Income Before Income Taxes (as defined in the Agreement) which exceeds
$1,500,000 during said twelve-month period, the purchase price shall be
increased by $2, up to a maximum adjustment of $2,000,000.
The Coyote Shares are subject to a Shareholders' Agreement between the
Seller and the Company (the "Shareholder Agreement"). The Seller has the right
to sell the Coyote Shares to the Company at 90% of the Issue Price beginning on
March 20, 1999. The Company's obligation to repurchase the Coyote Shares from
the Seller are subject to certain trading volume limitations.
Of the Unifiber shares acquired by the Company, 51% are subject to a Stock
Pledge Agreement with the Seller to secure the Company's obligations under the
terms of the Agreement and the Shareholders' Agreement, including the purchase
price adjustment, if any.
Mr. Tennent was the Chief Executive Officer and founder of Unifiber.
Mr. Tennent has agreed to provide consulting services to Coyote and Unifiber
pursuant to a five-year consulting agreement. The consulting services will
include all matters relating to the design, manufacture and marketing of
Unifiber's products and the products of Coyote or its subsidiaries. For his
services, Mr. Tennent will be paid $100,000 per year. As part of the Consulting
Agreement, Mr. Tennent has executed a non-compete agreement which will expire
one year after the termination of his consulting agreement. Richard Tennent is a
director of Unifiber.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
a) Financial Statements of business acquired:
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Financial statements for Unifiber as required by Item 310 of
Regulation S-B will be filed by amendment not later than June 3, 1998.
b) Pro forma financial information.
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Pro forma financial information for Unifiber and the Company will
be filed by amendment not later than June 3, 1998.
c) Exhibits.
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10.1 Stock Purchase Agreement entered into and effective as of
February 3, 1998, between and among Unifiber Corporation,
Richard L. Tennent, Judy R. Tennent, Richard L. Tennent
and Judy R. Tennent, or their successor as Trustees of the
Tennent Family Trust dated as of November 20, 1989, and
Coyote Sports, Inc.
10.2 Shareholder Agreement dated March 19, 1998 between Coyote
Sports, Inc., and Richard L. Tennent and Judy R. Tennent
10.3 First Amendment to Stock Purchase Agreement dated March
19, 1998
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COYOTE SPORTS, INC.
By:/s/ John P. McNeill
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John P. McNeill, Chief Financial Officer
Date: April 2, 1998
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EXHIBIT 10.3
FIRST AMENDMENT
TO
STOCK PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT (the "First Amendment") is
entered into as of the 19th day of March, 1998 by, between and among UNIFIBER
CORPORATION, a California corporation ("Unifiber"), RICHARD L. TENNENT, an
individual resident of the State of Nevada ("Mr. Tennent"), JUDY R. TENNENT, an
individual resident of the State of Nevada ("Mrs. Tennent"), ROBERT W. TENNENT,
Special Trustee of the Tennent Family Trust dated as of November 20, 1989
("Tennent Trust") (Mr. Tennent, Mrs. Tennent, Tennent Trust and Unifiber may be
collectively referred to herein as "Sellers"), and COYOTE SPORTS, INC., a Nevada
corporation ("Buyer"), with reference to the following facts:
a) Sellers and Buyer are all of the parties to that certain Stock
Purchase Agreement dated as of February 3, 1998 (the "Stock Purchase
Agreement"), wherein Sellers have agreed to sell and Buyer has agreed to buy,
all of the issued and outstanding shares of capital stock of Unifiber (the
"Shares").
b) At the time the Stock Purchase Agreement was executed, the Shares were
held of record, and beneficially, solely and exclusively by Tennent Trust,
subject to certain security interests and pledges noted in the Stock Purchase
Agreement.
c) For administrative convenience, the Shares have subsequently been
retransferred to Mr. Tennent and Mrs. Tennent and, as of the Closing, it is the
intention of the parties that the Shares will be held of record, and
beneficially, solely and exclusively by Mr. Tennent and Mrs. Tennent, subject to
certain security interests and pledges noted in the Stock Purchase Agreement.
d) Accordingly, Sellers and Buyer desire to amend the Stock Purchase
Agreement to reflect the foregoing and confirm ownership of the Shares.
e) Further, the original date by which the Closing was to occur has
passed and the parties desire to amend the date for Closing.
f) The purpose of this First Amendment is to memorialize in writing such
amendments.
NOW, THEREFORE, the parties hereto agree as follows:
1. Ownership of the Shares; Stock Purchase Agreement References. The parties
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hereto agree that, as of the Closing, the Shares will be held of record,
and beneficially, solely and exclusively by Mr. Tennent and Mrs. Tennent
and not Tennent Trust as provided in the Stock Purchase Agreement.
Accordingly, all references in the Stock Purchase Agreement shall be deemed
to refer to Mr. Tennent and Mrs. Tennent and not Tennent Trust, with the
effect that
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any and all promises, covenants, undertakings and/or other agreements set
forth in the Stock Purchase Agreement shall be deemed to be given on behalf
of Mr. Tennent and Mrs. Tennent, not Tennent Trust, including, without
limitation, any and all representations and warranties set forth in the
Stock Purchase Agreement. Notwithstanding the foregoing, nothing set forth
in this First Amendment shall prohibit, prevent and/or otherwise preclude
Tennent Trust from (a) subscribing for, investing in and/or holding any
shares of Buyer's stock which are to be issued to some of the parties
comprising Sellers (including Tennent Trust) in accordance with the terms
and provisions of the Stock Purchase Agreement as a portion of the
consideration for the Shares, and (b) entering into various written
agreements and instruments in connection with the issuance of shares of
Buyer's stock, as aforesaid, including, without limitation, any
subscription agreement, shareholders' agreement and/or any other agreement
or instrument to be entered into in connection therewith.
2. Closing Date. The date for Closing referenced in Section 1 of the Stock
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Purchase Agreement shall be March 19, 1998.
3. General Provisions.
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a. All capitalized terms not defined herein shall have the meanings
ascribed to such terms in the Stock Purchase Agreement.
b. This First Amendment may be executed in counterparts, all of which
taken together shall be deemed one original instrument.
c. In the event either party commences litigation for the judicial
interpretation, enforcement or rescission of this First Amendment or
the Stock Purchase Agreement, the prevailing party shall be entitled
to a judgment against the other for an amount equal to reasonable
attorneys' fees and court and other costs incurred.
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d. Except to the extent inconsistent with the terms and provisions of
this First Amendment (in which case the terms and provisions of this
First Amendment shall be controlling), all terms and provisions of the
Stock Purchase Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, this First Amendment has been executed and is effective
as of the date first set forth above.
SELLERS:
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UNIFIBER CORPORATION,
a California corporation
By: /s/ John S. Turnbull
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John S. Turnbull, President
/s/ Richard L. Tennent
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Richard L. Tennent, an individual, by
Robert W. Tennent, attorney-in-fact
/s/ Judy R. Tennent
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Judy R. Tennent, an individual, by
Robert W. Tennent, attorney-in-fact
/s/ Robert W. Tennent
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Robert W. Tennent, Special Trustee of the
Tennent Family Trust dated as of
November 20, 1989
BUYER:
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COYOTE SPORTS, INC.,
a Nevada corporation
By: /s/ James M. Probst
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[Signature]
James M. Probst, President
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