REGISTRATION NO. 333-93521
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment Number 4
To
Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PROGOLFTOURNAMENTS.COM
(Exact name of registrant as specified in its charter
Nevada 0273 98-0215222
(State or other jurisdiction of(Primary Standard Industrial (IRS Employer
incorporation or organization) Classification Code Number)Identification No.)
3266 Yonge Street, Suite 1208, Toronto, Ontario M4N 3P6, CANADA (416)
962-4508
(Address, including zip code, and telephone number, including area
code,
of registrants principal executive offices)
Agent for Service: With a Copy to:
Michael Levine, Vice-President James Vandeberg
Progolftournaments.com Ogden, Murphy Wallace, P.L.L.C.
63 St. Clair Avenue West,Suite 1704 2100 Westlake Center Tower
Toronto, Ontario M4V 2Y9 CANADA 1601 Fifth Avenue
(416) 962-4508 Seattle, Washington 98101
(206) 447-7000
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration
statement.
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, 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, 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 this Form is a post-effective amendment filed pursuant to Rule
462(d) 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, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Title of each Amount Proposed Proposed Amount of
class of to be Maximum Maximum registration
securities to registered offering price Aggregate Fee
be registered per unit Offering price
Common stock 7,485,300 0.025 per share 187132.50 52.40
shares
_______________________________________________________________________
No exchange or over-the-counter market exists for
Progolftournaments.com common stock. The most recent price paid for
Progolftournaments.com common stock from one investor to another was
$0.025 per share. Progolftournaments.com believes this transaction
supports a bona fide estimate of $0.025 per share as the maximum
offering price solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(c) under the Securities Act.
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
Securities and Exchange Commission, acting pursuant to such section
8(a), may determine.
SUBJECT TO COMPLETION
Prospectus
____________, 2000
Progolftournaments.com
3266 Yonge Street, Suite 1208
Toronto, Ontario M4N 3P6, CANADA
(416) 962-4508
7,485,300 Shares of Common Stock to be sold by current shareholders at
a price of $0.025 per share. The price per share was arbitrarily
determined by management and bears no relationship to book value or
other methods of valuing stock.
This is a first offering of common stock by selling shareholders of
Progolftournaments.com.
Only current shareholders are able to sell shares if they wish and no
shares are being sold by Progolftournaments.com. The shares of
Progolftournaments.com. are not listed nor will they be listed on any
securities exchange, the NASDAQ Stock Market or the NASD OTC Bulletin
Board. None of the monies received from the sale of stock in this
offering will go to Progolftournaments.com.
This Prospectus is part of a registration statement that permits some
shareholders to sell their shares when this Prospectus is declared
effective. Progolftournaments.com will keep the registration
statement, of which this prospectus forms a part, current for a six
month period ending *****, 2001. These securities will be sold at
$0.025 per share. This price per share was
arrived at arbitrarily and is based partly on the most recent sale of
Progolftournaments.com common stock from one shareholder to another at
a price of $0.025 per share.
This investment involves a high degree of risk.
See Risk Factors beginning on page 1
The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the
offer or sale is not
permitted.
Neither the SEC nor any state securities commission has approved or
disapproved of these securities or passed upon the adequacy or accuracy
of this Prospectus. Nor have they made, nor will they make, any
determination as to whether anyone should buy these securities. Any
representation to the contrary is a criminal offense.
You should rely only on the information contained in this document. No
one has been authorized by Progolftournaments.com to provide you with
information that is different.
TABLE OF CONTENTS
Summary of Offering 1
Risk Factors 2
Use of Proceeds 14
Determination of Offering Price 14
Dilution 14
Selling Shareholders 14
Plan of Distribution 18
Description of Capital Stock 18
Description of Business 19
Description of Property 25
Legal Proceedings 25
Market Price of and Dividends on Capital Stock and
Related Stockholder Matters 25
Financial Statements 27
Selected Financial Data 41
Managements Discussion and Analysis of Financial Condition
and Results of Operations 42
Changes in and Disagreements with Accountants 44
Directors and Executive Officers 44
Executive Compensation 46
Security Ownership of Certain Beneficial
Owners and Management 46
Certain Relationships and Related
Transactions 47
Disclosure of Commission Position on
Indemnification for Securities
Act Liabilities 47
Financial Statements
SUMMARY
Here is a brief summary of some of the main points that you will find
inside of this Prospectus:
1. Progolftournaments.com was incorporated under the laws of the
State of Nevada on September 3, 1999. We have put together the
business plan and started up the business. We raised some start-up
money from several stockholders and we are spending that money to get
the business underway. There are no sales or other revenues. We do not
have any employees and we do not own any real estate.
2. Progolftournaments.com. is to be an Internet golf game played for
cash prizes. The prizes come from the fees people pay to play the game.
It brings together the skills necessary to play golf, the use of a
computer and the Internet and the thrill of playing for cash prizes.
Management has set a target of January 1, 2001 to have the game
operating on the Internet. The golf game is being converted from a
computer - played game to an Internet-played game.
3. Our Website is already established under
www.progolftournaments.com. While no one can yet play in a tournament,
the home page is there to be examined. The winners you see on this
first version of the Website are only examples to show how it will look
when there are actual winners.
4. We have two separate but related lines of business that are
potential revenue producers. Neither has produced any revenue to this
point. They are:
a) Our online virtual golf store that features a fill line of golf
equipment and accessories that are available to anyone with a credit
card. We receive 15%
of all revenues produced by this store.
b) Our online virtual golf competitions are described more fully in
point 2
above.
5. This Prospectus does not raise any money for
Progolftournaments.com. It is for the benefit of shareholders desiring
to make offers and sales of their stock. When this Registration
statement is declared effective by the Securities and Exchange
Commission (SEC) these shareholders will have the option of selling
their shares to another individual without a broker/dealer or through a
broker/dealer or other intermediary if a public market exists.
6. There are number of items that are not complete:
1) the conversion of the golf game that will take about four months;
2) the cost involved is approximately $150,000 for this conversion;
and
3) management has talked with several companies, some Internet based
and
some not, that we think will cooperate and cross-promote products with
us.
Every one of these concerns has withheld final approval until our game
conversion is complete and they can see the finished product.
RISK FACTORS
You should carefully consider the following risk factors and all other
information contained in this Prospectus before you decide to invest in
our common stock. There is a great deal of risk involved. Any of the
following risks could affect our business, its financial condition, its
potential profits or losses and could result in you losing your entire
investment.
The risks and uncertainties described below are all of the material
risks of which we are aware.
Risks related to the business of Progolftournaments.com
Progolftournaments.com chances of success in generating enough revenue
to be profitable must overcome several obstacles: Read them carefully.
- We have only recently developed our idea for Internet golf
tournaments and our business plan was done between June, 1999 and
September 3, 1999;
- We are a start-up company. We have never had any revenues or
profits and we cannot say for certain that it will operate profitably
in the future.
For these reasons, you cannot depend on Progolftournaments.com
providing a return on investment in the future - in fact, you could
lose your entire investment.
We may not be able to attract golfers and non-golfers to play our game
over the Internet.
Progolftournaments.com was formed in September of 1999 for the purpose
of developing a new online game that involves an existing computer game
and adapting it to be played over the Internet. While
Progolftournaments.com was formed to take advantage of the popularity
of both the Internet and the game of golf, we can not be sure that
golfers will like our Internet game.
We will attempt to attract golfers by advertising and doing cross-
promotion, perhaps with the theme of rain or shine, summer or winter
you can still get in your rounds of golf. We will be dependent to a
large degree on golfers for revenues as they pay for the privilege of
playing. This is how we expect to generate revenues - by charging a
fee to play this Internet golf game.
Our game will involve the same decisions by the player that are made on
a real golf course such as what club to use and how far it is to the
green. It will be easier for someone who has played golf to adapt to
our Internet game. Non-golfers who enter our proposed Internet
tournaments will have the same decisions to make as golfers do. As a
result many non-golfers may feel that this puts them at a disadvantage
and may not participate. For this reason we do not know that our
Internet golf game will appeal to the non-golfing Internet user.
We will be dependent on players, mostly golfers, who:
- understand the game
- understand how to play
- know what clubs to use
- know how far to hit the ball
- are golfers and non-golfers that desire to play like a
professional
- are easy to convince to pay-to-play.
People may find that the rules of Progolftournaments.com tournaments
may stop them from playing.
The Progolftournaments.com business plan is to market participation in
golf tournaments played on the Internet. What is unique about our game
is that players will play the same tournament on their computer on the
same golf course(s) as the professional golfers are playing on the same
weekend. Each computer golfer will play four rounds, the same as the
professional tour, one round on Thursday, one on Friday, one on
Saturday and the final round will be played on Sunday. You cannot miss
one days play and you can not play more than one round per entry per
day.
The proposed Internet tournament differs slightly from the professional
event because a player can enter more than once provided each entry is
purchased separately on or before Thursday of that weeks event. There
will be no cut or elimination of some players with the highest scores.
Some Internet players will not be available to play a round or rounds
on each of the four days of the professional tournament. This could
result in a lack of interest in our proposed Internet tournaments.
Progolftournaments.com cooperation with major golf organizations may
not attract players.
Progolftournaments.com plans to offer weekly Internet tournaments from
the four major professional tours; the PGA, the LPGA, Senior PGA and
the European PGA. Some of these events will have very limited appeal
to some computer players. As an example, players in Europe may have
little or no interest in one or more of the North American based
tournaments and North American computer players may have limited
interest in European events. If and when our Internet tournaments
commence these facts could result in a lack of interest in our product
in both Europe and North America resulting in our inability to ever
become profitable.
The golf industry conducts special international events during the
year, such as the Ryder Cup, the premier golf challenge between a team
from North America and a team from Europe. These special events
usually attract a great deal of interest and interfere with the play in
the regularly scheduled tournaments. If we should decide to offer
special events like the Ryder Cup, we may find that the interest is
split so many ways between the special event and the regularly
scheduled tour events, as to make every tournament and its prizes much
smaller.
Progolftournaments.com will be dependent on agreements with golf tours
and individual golf courses.
Agreements with the individual golf courses are necessary and
agreements with the tours are also necessary if we desire to call our
Internet tournaments by the same name as that of the actual
professional tournaments. Initial discussions have commenced with
several of the organizations and golf courses concerned. In every case
further discussions and decisions were deferred until our Website is
fully operational.
Being unable to reach agreement with any of the golf organizations and
golf courses will result in Progolftournaments.com having to change
some of its business plan. This change would be to convert the
computer golf game to an Internet golf game but not to market the game
that follows the professional golf tour events. We would market the game
as a golf game played over the Internet where a participant pays to play and to
possibly win a prize. This lack of agreements could result in a lack
of people interested in our game, resulting in less revenues and
profits, if any, or even losses. Please keep in mind that we are not
operational at this time and do not have any revenues.
If we do not get cross-promotion agreements to help promote our
Internet golf game, we may be unable to afford advertising. We have
made contact with several golf-related concerns, including magazines,
cable channels and equipment manufacturers. All have reserved their
decision as to whether they will cooperate in mutual promotions until
our Internet game is up and fully operational. If these agreements
were not in place we would be forced to heavily increase our
advertising. We would be forced to buy advertisements in golf
magazines, golf cable TV and other websites. We have not determined
the amount of advertising that will be necessary or the costs
associated with it. Costs vary according to frequency of advertising
but in all cases would be very expensive. Management estimates that
costs could run as high as $5,000,000. This increase in expenses could
lower or eliminate profits, if any, and could negatively affect the
price of our stock.
Progolftournaments.com may enter into revenue sharing arrangements to
help promote our Internet golf game that may result in failure of our
business plan.
There can be no guarantee that Progolftournaments.com ever will be
profitable. If we do become profitable, however, one or more of the
organizations that have indicated that they would be interested in
cross-promotion such as TV networks, Golf channels and golfing
publications, may ask for, and Progolftournaments.com may be forced to
give, a share of our potential revenues.
Should this happen, we may be forced to give up a large share or all of
our revenues, if any, thereby making the whole Internet golf game non-
profitable. You should keep in mind that we are not in business at this
time. This risk factor outlines potential problems that may come up if,
and when, we get into business.
As an example, Progolftournaments.com has entered into a software
licensing and revenue sharing agreement with Psygnosis, Ltd., a wholly
owned subsidiary of Sony Europe, effective June 26, 2000. Psygnosis,
Ltd. is the developer of the home computer golf game, Pro 18 World Golf
Tour, that is being adapted for use on the Worldwide Web. Psygnosis,
Ltd. will receive $1.25 of every $10.00 entry fee. If this amount were
to increase or if additional unexpected expenses were to be incurred we
would be unable to operate and may be required to go out of business.
You should carefully consider this when making a decision as to whether
or not you should invest in Progolftournaments.com.
We may face technical difficulties that could cause delays in launching
our online golf game.
Our existing golf game is a game for the computer that we will modify
to make it playable over the Internet. We face the highly technical
task of changing the computer code of the PC game to be able to
accomplish this. We do not know whether this can be done at a
reasonable cost in a reasonable time frame or if can be done at all.
The impact of delays could result in loss of
momentum in bringing the game to the market and could result in a
competitor beating us to the market and obtaining a dominating share of
the online golf game market. If the cost or the time frame prove to be
impractical an investor in our common stock could lose their entire
investment.
Technical problems in operating and maintaining our golf website could
cost us revenue and customers.
Our future players, if any, will pay a $10 entry fee for each entry in
the future weekly Internet tournaments and also for practice rounds
before each tournament. If Progolftournaments.com has a technical
breakdown during a tournament, all of the revenues from that tournament
could be lost. These breakdowns include any malfunction of the
Internet, the game software, the score recording, credit card
processing and the breakdown of our server, all of which are in the
development stage. Should any of these breakdowns occur, we could be
forced to refund all entry fees and stand a good possibility of losing
credibility with the players.
Our dependence on an outside service provider poses further risks. We
are not only exposed to the technical and operating risks of our own
systems but those of the provider as well. These could range from
equipment and software problems to financial and labor-related issues.
Any of the above problems of the hosting company could affect our
website and operations. Any downtime or interruption of our service
could cause us to lose credibility with our players and cause a loss of
revenues, if any.
Progolftournaments.com is dependent on the license agreement with
Psygnosis Ltd.
If we were forced to develop an Internet golf game from the very
beginning the costs would be prohibitive and the time frame very long.
Our license agreement with Psygnosis Ltd. allows us to eliminate a
large part of the costs and time required. If we were to lose our
license with Psygnosis Ltd. we would face the problem of finding
another computer golf game to convert to Internet play or to develop
our own game from scratch.
Management controls Progolftournaments.com and could use that control
to make decisions in their own interests.
Our management effectively controls Progolftournaments.com through the
stock it owns. They could use that control to make certain decisions
and affect certain transactions that are to managements advantage at
the expense of the other shareholders. For example a business
combination could be negotiated that would retain members of the
management team as highly paid employees of the resultant company while
offering nothing to the other shareholders.
Management should be keeping the interests of all shareholders first
and foremost but it is possible that situations like the one mentioned
above could occur because of their control position.
Management presently holds the following common stock positions:
Sandy Winick 1,475,000 shares 14.90%
Howard Klein 901,000 shares 09.14%
Totals 2,376,000 shares 24.10%
Progolftournaments.com may make decisions with which shareholders might
not agree should management decide to invest capital in other
companies, acquire another company or combine efforts with another
company.
We have made no investments in other companies nor do we intend to do
so. We have not talked with any other organizations about combining
our efforts. We cannot guarantee that these types of talks may not
take place some time in the future. If we acquire an asset or enter
into a business combination, this would likely include exchanging a
large amount of Progolftournaments.com common stock, which could dilute
the ownership interest of present stockholders.
The Bylaws of Progolftournaments.com give the Board of Directors the
right to enter into any contract for the Company without ratification
by the shareholders. Therefore, management could decide to make an
investment (buy shares, loan money, etc.) without shareholder approval.
If management decides to merge with or acquire another company, Nevada
Revised Statutes Section 92A.120 provides that a vote of the
shareholders be held to approve or disapprove the transaction.
However, according to Nevada Revised Statutes Section 92A.130, under
the following conditions a vote would not be necessary:
c) The Articles of Incorporation of Progolftournaments.com remain
the same;
d) No shareholder of Progolftournaments.com would have fewer shares
after the
merge or acquisition than they had before; and
e) The shares exchanged do not amount to over 20% of the total
issued and
outstanding shares after the merger or acquisition.
Management can take almost any action without Stockholder approval
under Nevada law. Some of the more important actions could be to:
- Increase salaries
- Give stock options
- Indefinitely delay shareholder meetings
- Vote stock and cash bonuses
- Issue additional shares
- Conduct public offerings or private placements.
Upon this registration statement being declared effective, under the
Securities Exchange Act of 1934 Progolftournaments.com will be
obligated to do the following among other things:
a) promptly report all material changes in the Company and its
affairs to the Securities and Exchange Commission on a Form 8K; and
b) file regular quarterly and annual reports on Forms 10Q SB and 10K
SB
respectively; and
c) comply with certain requirements when a matter is being submitted
to a vote of shareholders.
While all of the above reports will be available for viewing by
shareholders and any other interested parties at the SEC offices in
Washington, DC, New York or Chicago, management of
Progolftournaments.com intends to communicate on a regular basis with
its shareholders.
Even if shareholders are consulted, the management group has enough
votes to insure that any action they might take would be endorsed by a
majority of the voting shares.
Depending on the nature of the transaction, Progolftournaments.com
stockholders may not have an opportunity to vote on whether to approve
it. As a result, management could enter into a transaction in which an
investor would not want to be involved as an individual. In such a
case, you could lose your entire investment on a business decision that
you did not have an opportunity to evaluate and agree to.
Competitors could develop their own Internet - based golf games.
While Progolftournaments.com has no knowledge specifically, it is
possible that a competitor may already have a product that could
compete for the Internet golf dollar. It is possible that a competitor
may do things better than Progolftournaments.com. We are aware that
there are many
organizations that have the knowledge, technical support and financial
strength to duplicate what we are doing and possibly do it better,
without intruding on any copyrighted or proprietary material.
Some of our potential competitors for the Internet golf game are:
- pre-packaged computer golf games that may be either purchased or
rented
- other Internet golf games or online activities
Potential competition for our online store is:online retail facilities
- retail stores
- sporting goods stores
- discount stores
None of the above potential competitors have an Internet game based on
actual golf tournaments and offering prizes.
We are aware of two online games that charge to play:
- Everquest; and
- Ultima III
Both of these games are fantasy shoot em up games. They charge $10 to
play and offer no prizes.
Competition is increasing daily and investors should consider this when
making an investment in Progolftournaments.com. The more competitors
that we have could result in not attracting enough players to make us
profitable and have a negative affect on the price of our stock.
Progolftournaments.com may not have any exclusive intellectual
property.
The intellectual property of Progolftournaments.com is a combination of
already established technologies. A home computer golf game is being
modified for use on the Internet. Credit card processing will be done
by an established concern specializing in that function; basic business
software will record plays and scores. We are not sure that we have any
intellectual property to protect!
We believe that we have an unique combination of technologies. Whether
the combination can be defended is doubtful. If a clear violation
happens Progolftournaments.com may not have the money to defend its
intellectual property in one or more countries. If we do not have the
funds to defend our product we could not continue with our Internet
golf game. This could result in
Progoftournaments.com losing money, being forced to cease operations
and a loss of your complete investment. Consider these points
carefully before you decide to invest.
Heavy dependence on individuals who will not devote full time and
attention to the affairs of Progolftournaments.com could result in
delays or business failure.
Progolftournaments.com will be heavily dependent upon the directors
skills, talents and abilities to implement its business plan. It may,
from time to time, find that this inability to devote full time and
attention to its affairs could result in delay(s) in establishment of
its business or even in failure of the business. At the present time we
have no full-time employees. The officers and directors earn their
livelihood elsewhere. It is the feeling of the Board of Directors that
paying one or more of the directors as a full-time employee at this
stage in the development could put an unreasonable amount of strain on
our cash reserves. Because you will be dependent on the performance
and business judgement of management, should you decide to invest, you
should carefully and critically consider these three individuals
backgrounds. See Directors and Executive Officers.
We have no employment contracts or agreements with Directors and
Officers.
Progolftournaments.com depends on Howard Klein, Michael Levine and
Sandy Winick to continue to work to develop our game. At this time we do not
have an employment agreement with Mr. Klein, Mr. Levine or Mr. Winick. We
cannot be sure that they will continue to manage our affairs in the
future. If we should lose the services of one or all of the officers
and directors, or if one or more should decide to join a competitor or
otherwise compete with Progolftournaments.com, this could have a
negative affect on the business and could cause the
price of your stock to decline. Mr. Klein, Mr. Levine and Mr. Winick
would be difficult to replace.
Financial Risks
Progolftournaments.com has no operating history and financial results
are uncertain An investor in Progolftournaments.com common stock must
consider the risks and difficulties frequently encountered by early stage
companies in new and rapidly evolving markets.
Progolftournaments.coms ability to achieve and then sustain favorable
operating results will depend on costs related to:
- identifying and developing cooperative marketing relationships
with golf-related organizations;
- testing the Progolftournaments.com Internet golf game;
- identifying and marketing to prospective players;
- evaluation and expense of entering into a new business
opportunity;
- the expense of delays in introducing or making any necessary
adjustments and improvements to the Progolftournaments.com online game;
and
- general economic conditions, as well as those specific to the
related industries.
As a result of our limited operating history it is difficult to
accurately forecast potential revenue.
There is no historical financial data upon which to base planned
operating expenses.
Progolftournaments.com expects to significantly increase its operating
expenses to test, market and create a solid base of participating
players. ( See Liquidity and Capital Resources)
Progolftournaments.com has not commenced operations or achieved
profitability and expects to incur net losses for the foreseeable
future and may never become profitable. This limited operating history
makes it difficult to forecast its future operating results.
Progolftournaments.com expects to continue to incur marketing, sales,
product development and general and administrative expenses. As a
result it will need to generate revenues and/or raise additional funds
to achieve profitability and there can be no assurance that funds will
be available.
If Progolftournaments.com does not become profitable, it may be unable
to maintain its presence on the Worldwide Web and its Website. If
Progolftournaments.com does achieve profitability it cannot be certain
that it will sustain or increase profits.
Because of its limited financial resources, Progolftournaments.com will
be unable to diversify its activities to provide additional sources of
revenue to offset losses should its business plan prove to be
impractical.
It is possible that a severe economic downturn could result in
diminishing activity. Golf equipment and clothing manufacturers who
could possibly cross promote could shrink their advertising budgets and
eliminate any cross promotion.
We depend on additional financing to properly implement our Internet
golf game and to provide working capital.
Progolftournaments.com has only $4,536 in cash as of June 30, 2000 and
these funds are inadequate to fully implement its business plan and to
commence play. Progolftournaments.com
will require additional working capital to fund its business
development. We realize that an ongoing advertising and promotion
budget will be necessary in addition to any cross promotion arranged
with cooperating concerns.
Commencement of tournament play on the Worldwide Web will undoubtedly
require some hiring of staff and leasing of premises. Telephones,
Internet access charges, Website maintenance and other office costs
will add to the need for additional capital. Management estimates that
it will require between $600,000 and one million dollars of additional
capital to supply the needed funding over the next year until sales
volume is high enough to support
ongoing operations.
We will have to accomplish the following:
a) conversion of the computer game for play on the Internet
b) have lease deposits and have six months lease payments in reserve
c) purchase office equipment, furniture and supplies
d) purchase computer equipment and software
e) cover recruiting costs and have six months salaries in reserve
f) create an advertising campaign and budget
g) maintain a travel budget
Additional financing may not be available, or if available, may be on
terms that will seriously dilute ownership interests of investors.
If Progolftournaments.com raises additional funds through the issuance
of equity, equity-related or convertible debt securities, these
securities may have rights, preferences or privileges senior to those
of the rights of its common stock. If common stock is issued in return
for additional funds, the price per share could be lower than that paid
by present stockholders. The result of this would be a lessening of
each present stockholders relative percentage interest in
Progolftournaments.com. This condition is often referred to as
dilution.
The ultimate success of Progolftournaments.com will depend on its
ability to raise additional capital. No commitments to provide
additional funds have been made by management or other shareholders.
Progolftournaments.com has not investigated the availability, source or
terms that might come with additional financing. When additional
capital is needed, there is no assurance that funds will be available
from any source or, if available, that they can be obtained on
acceptable terms. If not available, the operations of
Progolftournaments.com would have to be terminated and we would be
forced to close the business, resulting in a complete loss of your
investment.
Potential business combinations could dilute stockholder value and
adversely affect operating results Progolftournaments.com may consider
a future financing or business combination that, because of the size of
the related stock issuance, could result in a majority of the voting
power being transferred to the new investor(s). The result would be
that the new shareholder(s) would control Progolftournaments.com and
persons unknown could replace current management. It is uncertain
whether any such replacement would continue to implement
Progolftournaments.com current business plan.
Large stockholders of Progolftournaments.com could sell their shares
resulting in a change of control and/or direction.
Progolftournaments.com significant shareholders, namely the President,
Howard Klein, the Treasurer, Sandy Winick, Mary McGowan and other large
shareholders could sell their shares to an outside party, resulting in
a change in control of the Company and a change in business direction.
If this occurs, the remaining holders of shares of
Progolftournaments.com stock could be affected adversely as a new
control group could reverse-split the stock, effectively eliminating
the small shareholders.
The following is a list of large shareholders and the percentage of the
issued and outstanding shares that they own.
Name Number of Shares Percentage Owned
Howard Klein 901,000 09.14
Sandy Winick 1,475,000 14.96
Mary McGowan 2,700,000 27.38
Deep Water
Investments Limited 475,000 04.82
H. Davidson
Construction Inc 475,000 04.82
Magnum Holdings, Ltd.476,000 04.82
Carolyn McGowan 400,300 04.06
Jennifer McGowan 400,368 04.06
Lynn Stewart 1,000,000 10.14
Ron Perlman 475,000 04.82
Charles Sciberras 476,000 04.82
Major shareholders as a group 9,253,668
93.84%
If you are considering investing in our stock you should be aware that
all shares in Progolftournaments.com other than those of Mr. Winick and
Mr. Klein are being registered and will be available for sale pursuant
to this prospectus.
The option given to Psygnosis Ltd. could result in depressed prices for
our stock or a shift of control.
We have given Psygnosis, Ltd., the developer of the computer golf game
a three-year option beginning June 26, 2000 to acquire 3,287,100 shares
of common stock equal to 25% of the company, if exercised. The terms
of the option are:
- Total exercise price for all 3,287,100 shares is one dollar;
- Option term is three years from April 26, 2000, the effective
date of the licensing agreement;
- Should we file a registration statement offering to sell our
securities to the public and should that registration statement be
declared effective prior to April 26, 2001, the first anniversary of
the licensing agreement, the option term would be shortened to two
years from the effective date of the offering; and
- Psygnosis has registration rights on the securities optioned and
exercise of this option and subsequent resale of the stock, when
eligible, could depress the market value, if any, and could result in
Psygnosis having control of the operations of Progolftournaments.com.
Risks Related to the Securities Market
There is no liquidity for the common stock of Progolftournaments.com.
There is presently no demand for the common stock of our
company. There is presently no public market in the shares. While we
intend to apply for a quotation on the NASD Bulletin Board quotation
service, we cannot guarantee that our application will be approved and
our stock listed and quoted for sale.
Progolftournaments.com common stock has no prior market and resale of
your shares may be difficult.
There is no public market for Progolftournaments.com common stock and
no assurance can be given that a market will develop or that any
shareholder will be able to liquidate their investment without
considerable delay, if at all.
The trading market price of Progolftournaments.com common stock may
decline below the price at which it was sold by selling stockholder(s).
If a market should develop, the price may be highly volatile. In
addition, an active public market for Progolftournaments.com common
stock may not develop or be sustained. If selling stockholders sell all
or substantial amounts of their common stock in the public market (see
Selling Stockholders), the market price of our
common stock could fall.
In addition, all 6,076,000 shares held by officers, directors and
affiliates, will be eligible for sale. They will be able to offer a
percentage of their shares every three months beginning September,
2000, under Rule 144 of the Securities Act. Rule 144 states that
officers, directors and others holding restricted securities, such as
those held by Mr. Klein, Mr. Winick, Ms. McGowan and Ms Stewart, after
an initial holding period on one year after issue, may each sell in a
broker transaction an amount equal to 1% of the total issued and
outstanding common stock every three months.
Owing to the low price of our securities many brokerage firms may not
be willing to deal in the securities. Even if a purchaser finds a
broker willing to make a transaction in Progolftournaments.com common
stock, the combination of brokerage commissions, state transfer taxes,
if any, and other selling costs may exceed the selling price. Further,
many lending institutions will not permit the use of such securities as
collateral for loans. Thus, a purchaser may be unable to sell or
otherwise realize the value invested in Progolftournaments.com stock.
SEC rules on penny stocks could affect your ability to re-sell
Progolftournaments.com stock.
The securities of Progolftournaments.com, when available for trading,
will be subject to the Securities and Exchange Commission rule that
imposes special sales practice requirements upon broker/dealers that
sell such securities to other than established customers or accredited
investors. For purposes of the rule, the phrase accredited investors
means:
- institutions with assets exceeding $5,000,000
- individuals having a net worth in excess of $1,000,000 or having
an annual income that exceeds $200,000 or that, combined with a spouses
income, exceeds $300,000.
For transactions covered by the rule, the broker/dealer must make a
special suitability determination for the purchaser and receive the
purchasers written agreement to the transaction prior to the sale.
Consequently, the rule may affect the ability of purchasers of the
Companys securities to buy or sell in any market that may develop.
Under Rule 15g(2) a broker/dealer wishing to transact a sale of a penny
stock must supply a document to the potential buyer that:
1) contains a description of the nature and level of risk;
2) Outlines the brokers or dealers duties to the purchaser and of
the rights and remedies available with respect to violations of such
duties and other
requirements of Federal Securities law;
3) defines significant terms used in the disclosure document; and
4) contains such other information in the proper form of language,
type size and format as the Commission might require.
Under Rule 15 (g)(3) a broker/dealer must:
1) reveal the bid and ask price of the securities in question and
reveal any other useful and reliable information concerning the securities.
2) disclose the number of shares to which the bid and ask prices
apply and any other information available concerning the liquidity of the
securities.
3) Reveal the amount of compensation to be received in connection
with the transaction.
4) provide the client with penny stocks in their account with a
monthly statement showing the market value of the stock or stating that a
market value cannot be determined because firm quotes are not available.
To Summarize:
- Progolftournaments.com stock is a penny stock.
- Some states will not allow you to sell to their citizens??
- Some broker/dealers will not handle transactions in penny
stocks.?
- SEC rules make selling your stock a cumbersome procedure??
- Penny stock markets can be very volatile with large swings up or
down.
Investors may face significant restrictions on the resale of
Progolftournaments.com stock due to state and laws and regulations
Progolftournaments.com securities have not been registered for resale
under the blue sky laws of any state and the holders of such shares and
those persons desiring to purchase them in any trading market that may
develop in the future should be aware that there may be significant
state blue sky law restrictions on the ability of investors to sell and
on purchasers to buy the securities of Progolftournaments.com.
Accordingly, investors should consider the secondary market for
Progolftournaments.com securities to be a limited one. Investors may be
unable to resell their stock without the significant expense of state
registration or qualification.
USE OF PROCEEDS
This Prospectus is part of a Registration statement that permits
selling shareholders to sell their shares in the future. Because this
Prospectus is solely for the purpose of selling shareholders,
Progolftournaments.com will not receive any proceeds from the sale of
stock being offered. Directors, Mary McGowan and Lynn Stewart
(affiliates due to the size of their holdings) will be restricted to
selling one percent of the total issued and outstanding common stock
each calendar quarter or 98,613 shares per quarter. All other
stockholders will be able to sell any or all of their shares at any
time they can locate a buyer.
DETERMINATION OF OFFERING PRICE
This offering is solely for the purpose of allowing
Progolftournaments.com shareholders to sell their stock. The selling
shareholders may sell their shares when the Registration statement
becomes effective or they may elect to sell some or all of their shares
at a later date as long as this Registration statement is effective at
a price of $ 0.025 per share
DILUTION
This offering is for sales of stock by existing Progolftournaments.com
shareholders upon the effective date of this prospectus or in the
future. Sales of common stock by shareholders will not result in any
substantial change to the net tangible book value per share before and
after the distribution of shares by the selling shareholders. There
will be no change in net tangible book value per share attributable to
cash payments made by purchasers of the shares being offered. The
current net tangible book value of the common stock is: $ 0.0053 per
share.
Prospective investors should be aware, however, that the price of
Progolftournaments.com shares was determined arbitrarily by management
and selling shareholders and does not bear any relationship to net
tangible book value per share. The price received by selling
stockholders and paid by purchasing investors will be determined by
supply and demand. If the demand for the common stock of
Progolftournaments.com exceeds the available supply, the price will
tend to go up. Conversely, if the supply exceeds the demand, the price
will tend to go down. In both of the above cases the change in price
may have no relation to the book value of the company or its profits or
losses.
SELLING SHAREHOLDERS
The following are the shareholders for whose accounts the shares are
being offered; the amount of securities owned by each shareholder
before this offering; the amount to be offered for the account of each
shareholder and the amount and percentage of the company owned by each
shareholder following completion of the offering:
Name Position with Number No of No. of Percent
Company of Shares Shares Shares Owned
Owned offered After After
Offering(1) Offering
731149 Ontario Limited None 1,000 1,000 -0- -0-
Bernie Anderson None 2,680 2,680 -0- -0-
Robert Baron None 268 268 -0- -0-
Baroness Investments
Limited None 1,000 1,000 -0- -0-
Building Supplies
International None 200 200 -0- -0-
C.A.P.S Consulting None 200 200 -0- -0-
William Davies None 200 200 -0- -0-
Deep Water
Investment Inc. None 475,000 475,000 -0- -0-
Geoffrey Earle None 200 200 -0- -0-
Jan Francis None 500 500 -0- -0-
Mark Francis None 500 500 -0- -0-
Jeffrey Goldberg None 500 500 -0- -0-
Maggie Goldberg None 500 500 -0- -0-
Debbie Green None 475,200 475,200 -0- -0-
Robert Hashimoto None 200 200 -0- -0-
David Hume None 600 600 -0- -0-
H. Davidson
Construction Inc. None 475,000 475,000 -0- -0-
Marcia Klein None 200 200 -0- -0-
Myer Klein None 200 200 -0- -0-
Raymond Teaitch None 400 400 -0- -0-
Tilley Levine None 2,000 2,000 -0- -0-
Joy Lipson None 600 600 -0- -0-
Marcia Lipson None 600 600 -0- -0-
Magnum Holdings, Ltd. None 476,000 476,000 -0- -0-
Miriam Manzo None 200 200 -0- -0-
Jack Martino None 200 200 -0- -0-
Sasha Mazzuca None 200 200 -0- -0-
Stefan Mazzuca None 200 200 -0- -0-
Carolyn McGowan None 400,300 400,300 -0- -0-
Jennifer McGowan None 400,368 400,368 -0- -0-
Lydia McGowan None 500 500 -0- -0-
Mary McGowan None 2,700,000 2,700,000-0- -0-
Robert McGowan None 300 300 -0- -0-
Thomas McGowan None 500 500 -0- -0-
Elizabeth McLeod None 9,384 9,384 -0- -0-
Lynn Stewart None 1,000,000 1,000,000-0- -0-
Monica Murad None 1,000 1,000 -0- -0-
Theodore Nemetz None 500 500 -0- -0-
Ron Pearlman None 475,000 475,000 -0- -0-
Resource Financial
Corporation None 200 200 -0- -0-
John Rosenthal None 600 600 -0- -0-
Brian Ross None 500 500 -0- -0-
Sheryl Ross None 500 500 -0- -0-
Sandringham Investments
Limited None 100,000 100,000 -0- -0-
Charles Sciberras None 476,000 476,000 -0- -0-
Doris Sciberras None 200 200 -0- -0-
Jeffrey Sciberras None 200 200 -0- -0-
Joseph Sciberras None 200 200 -0- -0-
Peter Scibarras None 200 200 -0- -0-
Derek Tennant None 1,200 1,200 -0- -0-
Kelly Ticknor None 600 600 -0- -0-
Cynthia Vella-Zarb None 200 200 -0- -0-
Pierre Vella-Zarb None 200 200 -0- -0-
hona Vinokur None 500 500 -0- -0-
Avital Weber None 400 400 -0- -0-
Diane Winick None 600 600 -0- -0-
Mark Zaretsky None 600 600 -0- -0-
TOTALS 7,485,300 7,485,300 -0- -0-
(1) This table assumes that each shareholder will sell all of the
shares available for sale during the effectiveness of the Registration
statement that includes this Prospectus. Shareholders are not required
to sell their shares. See Plan of Distribution.
While we believe that the selling shareholders are all individuals and
corporations that purchased their shares for investment purposes and
without a view to distribution of the Registrants securities, they may
be considered to be underwriters as that term is defined in the
Securities Act.
Progolgtournaments.com will deliver a copy of the current prospectus,
which is part of this registration statement for all of the time it is
effective.
PLAN OF DISTRIBUTION
This is not an underwritten offering. This Prospectus is part of a
registration statement that permits selling shareholders to sell their
shares in the future. Selling shareholders may sell their shares to the
public when this Registration statement becomes effective, or they may
elect to sell some or all of their shares at a later date.
Progolftournaments.com is committed to keeping the registration
statement, of which this prospectus forms a part, current until *****,
2001.
While the Registration statement is effective, selling shareholders may
sell their shares directly to the public, without the aid of a broker
or dealer, or they may sell their shares through a broker or dealer
whether or not Progolftournaments.com stock is authorized for inclusion
on the OTC bulletin board. Any commission, fee or other compensation of
a broker or dealer would depend on the brokers or dealers involved in
the transaction.
The selling price of $0.025 per share was arrived at arbitrarily
by management for the purposes of calculating the registration fee and
was arrived at partly because the most recent sale of common shares by
one shareholder to another was at $0.025 per share.
No public market currently exists for shares of Progolftournaments.com
common stock.
Progolftournaments.com intends to apply to have its shares traded on
the OTC bulletin board under the symbol PGLF.
None of the selling shareholders will act in a promotional fashion or
capacity during the effectiveness of this registration statement. They
will not attempt to induce or recommend the purchase of the Registrants
stock by potential investors.
DESCRIPTION OF CAPITAL STOCK
The following is a description of the material aspects of
Progolftournaments.com capital stock and the applicable provisions of
Nevada law.
Progolftournaments.com authorized capital consists of 50,000,000 shares
of common stock, par value $.001 per share and 10,000,000 shares of
preferred stock, par value $.001. Immediately prior to this offering
9,861,300 shares of common stock were issued and outstanding. No
preferred shares are issued and outstanding.
Each holder of record of common stock is entitled to one vote for each
share held on all matters properly submitted to the shareholders for
their vote. The Articles of Incorporation do not permit cumulative
voting for the election of directors, and shareholders do not have any
preemptive rights to purchase shares in any future issuance of
Progolftournaments.com common stock.
Preferred shares may be issued in Series; the terms and conditions of
which are decided by Progolftournaments.com Board of Directors. Our
Bylaws allow the Board of Directors to set all the terms for preferred
shares. Preferred shares may or may not be entitled to a dividend, may
or may not have voting power and have preference (after debt) on any of
the assets of Progolftournaments.com in the event of windup or
dissolution.
The above conditions for issuance of preferred shares are compatible
with Sections 78.195 and 78.196 of Nevada Revised Statutes.
Because the holders of shares of Progolftournaments.com common stock do
not have cumulative voting rights, the holders of more than 50% of
Progolftournaments.com outstanding common shares can elect all of the
directors if they so choose. In such event, the holders of the
remaining shares will not be able to elect any directors.
The holders of shares of common stock are entitled to dividends when
and as declared by the Board of Directors. The Board of Directors has
never declared a dividend and does not anticipate declaring a dividend
in the future. In the event of liquidation, dissolution or winding up
of the affairs of Progolftournaments.com, common stock owners are
entitled to receive, ratably, the net assets of Progolftournaments.com
available to shareholders after payment of all creditors.
All of the issued and outstanding shares of common stock are duly
authorized, validly issued, fully paid, and non-assessable. To the
extent that additional shares of Progolftournaments.com common stock
are issued, the relative interests of existing shareholders may be
diluted.
You should not rely on forward-looking statements.
This Prospectus contains forward looking statements that involve risks
and uncertainties. The words anticipates, believes, plans, expects,
future, intends, will, would, could hopes and similar expressions
identify forward looking statements. Actual results could differ
materially from those anticipated in these forward looking statements
as a result of certain
factors, including those set forth under Risk Factors and elsewhere in
this Prospectus.
DESCRIPTION OF BUSINESS
General
Progolftournaments.com was incorporated under the laws of the State of
Nevada on September 3, 1999, and is in its early developmental and
promotional stages. We are not operational and our only activities have
been organizational, directed at acquiring its principal asset, raising
its initial capital and developing its business plan. We have not
started commercial operations and do not have any full time employees.
We own no real estate.
The principal asset of Progolftournaments.com, referred to above is the
Internet golf game itself. It was conceived and refined by Sandy
Winick, a Director and the Treasurer of Progolftournaments.com. It was
obtained in exchange for 1,000,000 shares of common stock.
An important part of the principle asset and the projected business is
the name
Progolftournaments.com.
Progolftournaments.com has purchased its name for use on the Internet
and has established its Website and online store. No Internet
tournaments can be played until the computer game is successfully
converted for Internet use. The Progolftournaments.com home page is up
on the Internet under www.progolftournaments.com and is in the process
of being refined.
Progolftournaments.com was formed to take advantage of the popularity
of both the Internet and the game of golf. The online Internet golf
game combines the skills necessary to play golf, the use of a computer
and the thrill of playing for substantial cash prizes. The growth of
the
Worldwide Web and the game of golf all over the world is wrapped up in
one package in the Progolftournaments.com online game.
The Game and how it is played.
A portion of the golfing public watches with interest the results of
the four major golf tours in the world and note the results of the
weekend tournaments. Every radio and TV station in the US and Canada as
well as daily newspapers give detailed reports on weekly tournaments.
Golf tournaments are carried live on most TV networks such as CBS, NBC,
ABC and FOX in the US;
CBC, CTV and Global in Canada. Cable sports channels such as ESPN and
FOX SPORTS also carry live tournaments. There are several magazines
and cable channels devoted entirely to the game of golf. There is
coverage on radio, TV, newspapers and magazines in Europe and Asia.
Progolftournaments.com has developed an online Internet golf game and
business plan that is designed to take advantage of this interest in
the game of golf and the growth of the Internet and the Worldwide Web.
The at-home computer players will have the opportunity to play a
computer golf game that resembles the tournaments the professional
golfers are playing on the same weekend and play for cash prizes. Our
online tournament game resembles the Professional
tournament in that the course will be the exact same course that the
professionals play, only digitized and converted to an electronic
format for play on the Internet.
The business plan calls for one-half of each entry fee to be set aside
for prize money. The purse each weekend will be progressive; that is,
the size of the award will increase proportionately with the number of
players. Each entry in the online tournament will cost $10.00. For a
person to enter a Progolftournaments.com tournament, that person will
log on to our Internet site, register to play and pay through the use
of a credit card. Once they have finished this process they are then
eligible to play the tournament. Anyone may enter more than once as
long as the $10.00 fee is paid for each entry on or before Thursday of
each week.
Each entrant will play four rounds on their computer: one on Thursday,
one on Friday, one on Saturday and one final round on Sunday. These
rounds will follow the same format as the professionals, one round each
day. The difference in our game is that each round can be played any
time during that twenty-four hour period. The computer players will
have the same decisions to make as their professional counterparts:
distance to the green, what club to use. There will be no elimination
of players in the computer tournaments, thereby giving every
participant an opportunity to get into the prize money by pulling out a
come-from-behind outstanding final round. On the actual professional
golf tour, the field for the final two rounds is reduced to the seventy
best scores after the second round. Those who do not make the top
seventy are cut from the ability to play the final two rounds and earn
a share of the prize money. This is referred to as the cut. Having no
cut in the online tournament will result in more activity in the final
rounds.
At the end of play each Sunday the 100 players with the lowest scores
will share in the purse. If there is a tie for low score, a playoff
will be staged on Monday to decide the winner. Practice rounds will be
available to the tournament entrants at a cost of $5.00 for ten rounds
or $10.00 for twenty-five rounds. Each player is able to choose the
make of club he or she will use and the brand of golf ball to be used.
Anyone in the world will have an opportunity to play in a game
resembling some of the most prestigious tournaments such as the British
Open or the Masters. In fact, anybody will have the opportunity to
play an Internet game resembling any tournament held on the four major
tours: PGA, LPGA, Senior PGA and the European tour. There is a
possibility that some jurisdictions in the world may prohibit its
citizens from participating in the online tournaments. This
prohibition could be for economic or political reasons. Some countries
may have a problem with their citizens playing a US based game, golf,
that in some minds is an elitist pastime or the prohibition could stem
from currency restrictions. Others might prohibit receiving a prize or
prizes, if one or more were won. This, again, could be for political
or religious reasons. If either of these situations should arise our
business plan might not be fully implemented. As in most Internet
applications, there is no certain way of determining or confirming age
of players. Progolftournaments.com will include a provision in the
entry form whereby the registrant confirms that he or she is 21or
older. There is no certain way that we can confirm a persons age over
the Internet. We will ask the question on the registration form to
limit any potential liability.
Management has made extensive inquiries and can find no prohibition for
the offering of prizes on Internet games. Our game is keyed to
individual skill in playing the game of golf. Both professional and
amateur golf tournaments regularly give prizes to winners.
All participants will be playing on a level playing field with no
handicaps or other aids to improve a score. No computer golfer will
have an advantage over another other than individual skill and ability
Joint promotions are planned with some cable TV networks, the major
tours, golf publications and the manufacturers of golfing equipment,
however no contracts have been entered into.
Preliminary conversations have taken place with many of these
enterprises. In every case, commitment has been deferred until after
the Internet game is in place and the whole online package can be
assessed. Should all of those concerns decide not to cross-promote,
Progolftournaments.com would be forced to pay for most or all of its
promotion itself. This would result in a pressing need for new capital
injections, which may or not be available on terms acceptable to
Progolftournaments.com. Management has investigated the cost of
advertising and promotion in North America. In the event no cross-
promotion is available they
estimate this could cost up to $5,000,000.
Our game will be available anywhere that there is Internet service. We
could have players from every continent and every country in the world.
The only hindrance would be being unable to access the Internet and
lack of an acceptable credit card.
Progolftournaments.coms website was developed and is being currently
operated by a design firm that specializes in designing and developing
websites. We presently do not have the expertise or personnel to
operate our own website. If and when our revenues warrant it, we will
hire technical staff to take over operation of the website. Until then
we are dependent on an outside party.
Our website has various links with other golf and non-golf websites.
As we add other companies to help in the cross promotion we will be
adding their banners to our link page of our website and in return,
they will add our banner to their website. This will enable visitors
to their website to quickly and easily link back to our website. This
is the concept of cross promotion between websites.
INDUSTRY CONDITIONS, TECHNOLOGY AND COMPETITION
Progolftournaments.com does not yet know whether adapting computer golf
to the major golf tournaments will be a feasible moneymaking venture.
We are not aware of any other concern offering the same type of game.
Each tour has a weekly tournament. Each week our golf course layouts
and photo graphics will change. For a complete explanation, see: The
Game and how it is played.
Our technology and exposure to potential competition
Progolftournaments.com will not be developing any new technology but
will be utilizing existing technology that is readily available on the
market. The process of combining the computer golf game with the
various professional tour events that are held on a weekly basis
throughout the year, with the ability to accept payment to play these
tournaments over the Internet and monitor every participants scores can
be duplicated. All a potential competitor would require is the
resources and the time. All professional golf tours publish their
annual list of scheduled events well in advance.
We have what we believe is the best computer golf game available. We
have licensed it from Psygnosis, Ltd. We are in the process of making
arrangements for the conversion of the computer golf game to an
Internet golf game with a software development company, but as yet we
have not contracted this process out to anyone. This should be done
by September 1, 2000.
The estimated cost of development of the software is approximately
$150,000. There are several hosting companies in North America that
are capable of handling the necessary requirements of an Internet based
game. We have not yet contracted with any company to host our game for
us but we expect to select one by September 30, 2000.
The software development company that we hope to contract to do the
conversion of the computer game to the Internet game will also
incorporate the score keeping function into the software package.
Credit card processing software is readily available and adaptable.
There are several third party credit card processing services available
should we decide to use one of their services. We have made no decision
as to which, if any, we will use.
We require two third party service providers for our business, one for
hosting our web site and the other for the processing of credit card
transactions. There are many companies in existence in North America
providing each of these services. Should we have any problems we
believe it would not be difficult to move to another supplier very
quickly. We would suffer some short-term losses but would continue to
be in business. These software packages and/or service providers are
also available to a potential competitor.
The steps that are required for the game to be operational are as
follows:
1) Finalize contract to convert computer game to Internet game.
2) Contract with Credit Card processing company to process entry fee
payments.
3) Contract with an Internet service provider to host the game for
us.
Once these steps have been taken we should be ready to launch our first
tournament and accept
entry fees.
The intellectual property of Progolftournaments.com was developed by
Psygnosis Ltd. who licensed it to us. Our license is an exclusive
agreement. We are the only company that is entitled to use their
technology on the Internet. We have employed outside website designers
to develop the existing website that we have available on the Internet.
We have not begun the process to covert the PC game to and Internet
based golf game. Psygnosis employed a golf game development company in
London, England to develop the game originally. We have contacted
that company and several others and are in discussions with all of them
about converting the game for play on the Internet and for new courses
in the future. We anticipate that the game will be ready for play in
late November or early December, 2000. Our time frame is to launch the
game January 1, 2001. We will be launching one tour at a time.
There are existing PC golf games in the marketplace that are available
today besides the Psygnosis game. The same processes employed by our
company to come to market are available to any other company that
wishes to do so.
Our start up activities to date:
- Our website is developed and up.
- We have completed our license agreement with Psygnosis Ltd. for
their golf game to be converted to use on the Internet.
- We have contacted and had conversations with several golfing and
non-golfing companies to cross-promote our game.
- We have contacted several software developers regarding the
conversion of the game for play on the Internet.
- We have talked to Credit Card processors but have not chosen one.
- We have talked with some Internet service providers and plan to
select one as soon as we have finished evaluating their service and
costs.
- We have made contact with the major golf organizations; the PGA,
LPGA, Senior PGA and the European PGA and begun the dialogue to gain
their cooperation.
- We have had discussions with several golf magazines, cable
channels and equipment manufacturers and are optimistic about their
cooperating with us.
- We have contacted several private sources of capital but as yet
have no commitments.
- We have a working relationship with a golf fulfillment company.
It will pay us a percentage on any purchases made from our online golf
store.
While the above list includes a variety of issues that must be dealt
with before our online golf tournaments can be commenced, we have
solidified two situations that are key assets, along with the basic
idea for the game and business plan. They are:
- The development of our website at a cost of $4,395
- The executing of our contract with Psygnosis Ltd. for their
computer golf game Pro 18 World Tour Golf. We have paid one-half of
the advance royalties due under the terms of the contract in the amount
of $5,000 plus the expenses associated with acquiring the contract of
$3,200.
All other expenditures are associated with ongoing discussions and
negotiations with other service providers along with normal office
expenses.
EMPLOYEES
Progolftournaments.com is a development stage company and currently has
no employees.
Management plans to use consultants, attorneys and accountants as
necessary and does not plan to engage any full-time employees until
shortly before we are ready to begin play. If Progolftournaments.com
establishes the feasibility of their concept and successful
implementation of their business plan, one or more people will be
needed to handle administration, computer programming and marketing. A
portion of any employee compensation
likely would include the right to acquire stock in
Progolftournaments.com, which would dilute the ownership interest of
holders of existing shares of common stock.
AVAILABLE INFORMATION
Progolftournaments.com has filed with the Securities and Exchange
Commission a Registration statement on Form S-1 with respect to the
common stock offered by this Prospectus. This Prospectus, which
constitutes a part of the Registration statement, does not contain all
of the information set forth in the Registration statement or the
exhibits and schedules which is part of the Registration statement. For
further information with respect to Progolftournaments.com and its
common stock, see the Registration statement and the exhibits and
schedules thereto. Any document Progolftournaments.com files may be
read and copied at the Commissions public reference rooms at 450 Fifth
Street, NW, Washington, D.C.; 7 World Trade Center, Suite 1300, New
York, NY; and Suite 1400, Citicorp Center, 500 West Madison Street,
Chicago, IL. Please call the Commission at 1 -800-SEC-0330 for further
information about the public reference rooms. Progolftournaments.com
filings with the Commission are also available to the public from the
Commissions Website at http://www.sec.gov.
Upon completion of this offering, Progolftournaments.com will become
subject to the information and periodic reporting requirements of the
Securities Exchange Act and, accordingly, will file periodic reports,
proxy statements and other information with the Commission. Such
periodic reports, proxy statements and other information will be
available for inspection and copying at the Commissions public
reference rooms, and the Website of the
Commission referred to above.
DESCRIPTION OF PROPERTY
Progolftournaments.com currently maintains limited office space,
provided by Mr. Winick, for which it pays no rent. The address is 3266
Yonge Street, Suite 1208, Toronto, Ontario M4N 3P6 Canada, and the
phone number is (416) 962-4508. When the conversion of the computer
game for Internet play is near, adequate office space will be acquired
and equipped to begin tournament play. At this time we do not own any
communication or computer equipment.
Our website is being hosted on a temporary basis by the company that
developed it. Shortly before we begin tournament play we will move to
a hosting company with the capacity to handle a very large response.
LEGAL PROCEEDINGS
Progolftournaments.com is not a party to any material pending legal
proceedings, and none of its property is the subject of a pending legal
proceeding. Further, the officers and directors know of no legal
proceedings against Progolftournaments.com or its property contemplated
by any governmental authority.
MARKET PRICE OF, AND DIVIDENDS ON, CAPITAL STOCK AND OTHER
SHAREHOLDER MATTERS
No established public trading market exists for Progolftournaments.com
securities. Progolftournaments.com has an outstanding purchase option
for 3,287,100 shares (25% of the company) Progolftournaments.com has no
other securities convertible into its common equity.
There is no common equity that could be sold pursuant to Rule 144 under
the Securities Act.
Except for this offering, there is no common equity that is being, or
has been proposed to be, publicly offered.
As of June 30, 2000, there were 9,861,300 shares of common stock
outstanding, held by 60 shareholders of record. Upon effectiveness of
the Registration statement that includes this Prospectus, 7,485,300 of
Progolftournaments.com outstanding shares will be eligible for resale.
To date Progolftournaments.com has not paid any dividends on its common
stock and does not expect to declare or pay any dividends on its common
stock in the foreseeable future. Payment of any dividends will depend
upon Progolftournaments.com future earnings, if any, its financial
condition, and other factors as deemed relevant by the Board of
Directors.
INDEX TO FINANCIAL STATEMENTS
Progoltournaments.com
(A Development Stage Company)
Sept. 30, 1999 June 30, 2000
Audited Unaudited
Report of Certified Public Accountant
1
Consolidated Balance sheet 2 2
Consolidated Statement of Operations 3 3
Consolidated Statement of Stockholders
Equity 4
Consolidated Statement of Cash Flows 5 4
Notes to Financial Statements 6 & 7
PROGOLFTOURNAMENTS.COM
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(STATED IN UNITED STATES DOLLARS)
FOR THE NINE MONTH PERIOD ENDED JUNE 30, 2000
PROGOLFTOURNAMENTS.COM
UNAUDITED CONSOLIDATED BALANCE SHEET
AS AT JUNE 30, 2000
ASSETS
CURRENT ASSETS
CASH 6,952
ACCOUNTS RECEIVABLE 69
LOAN RECEIVABLE 65,000
OTHER ASSETS 3,325
TOTAL ASSETS 75,346
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES
ACcOUNTS PAYABLE 260
NOTE PAYABLE 24,251
TOTAL CURRENT LIABILITIES 24,511
STOCKHOLDERS EQUITY
COMMON STOCK PAR VALUE $0.001
50,000,000 SHARES AUTHORIZED,
9,861,300 SHARES OUTSTANDING
9,861
PREFERRED STOCK PAR VALUE $0.001
10,000,000 SHARES AUTHORIZED
NONE ISSUED AND OUTSTANDING
ADDITIONAL PAID-IN CAPITAL 85,080
DEFICIT ACCUMULATED DURING THE
DEVELOPMENT STAGE (44,106)
TOTAL SHAREHOLDERS EQUITY 50,835
TOTAL LIABILITIES AND
SHAREHOLDERS EQUITY $ 75,346
See accompanying notes to Financial Statements
PROGOLFTOURNAMENTS.COM
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTH PERIOD ENDED JUNE 30, 2000
REVENUE
INTEREST INCOME 1,950
OTHER INCOME 100
TOTAL REVENUE 2,050
OPERATING EXPENSES
WEB DESIGN 4,395
INTERNET PROMOTION 21,766
PROMOTION 1,207
TRAVEL 4,615
OFFICE SUPPLIES & EXPENSES 1,342
LEGAL FEES 0
ACCOUNTING FEES 0
OTHER OPERATING EXPENSES 476
BANK CHARGES 158
TOTAL OPERATING EXPENSES 33,959
NET INCOME (LOSS) (31,909)
NET INCOME (LOSS) PER COMMON SHARE 0.00
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
9,861,300
See accompanying notes to Financial Statements
PROGOLFTOURNAMENTS.COM
UNAUDITED STATEMENT OF CASH FLOWS
FOR THE NINE MONTH PERIOD ENDEDING JUNE 30, 2000
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME (LOSS) (31,909)
ADJUSTMENTS TO RECONCILE NET (LOSS) TO
CASH FLOW FROM OPERATING ACTIVITIES
DECREASE IN STOCK SUBSCRIPTION RECEIVABLE 6,426
INCREASE IN ACCOUNTS RECEIVABLE (69)
INCREASE IN LOAN RECEIVABLE (65,000)
INCREASE IN NOTES PAYABLE 24,251
INCREASE IN OTHER ASSETS ( 3,325)
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES (69,626)
CASH FLOWS FROM FINANCING ACTIVITIES 0
NET INCREASE (DECREASE) IN CASH (69,626)
CASH, BEGINNING OF THE PERIOD 76,578
CASH, END OF PERIOD 6,952
See Accompanying Notes to Financial Statements
PROGOLFTOURNAMENTS.COM
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with US Security and Exchange Commission
(SEC) requirements. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. The accompanying
statements should be read in conjunction with the audited financial
statements of September 30, 1999. In the opinion of management all
adjustments (consisting only of normal recurring accruals) considered
necessary in order to make the financial statements not misleading,
have been included. Operating results for the period ended June 30,
2000 are not necessarily indicative of the results that may be expected
for full fiscal years ending September 30. The financial statements
are presented on an accrual basis.
These Financial Statements are prepared on a consolidated basis. The
accounts of the subsidiary company are reflected in these Financial
Statements.
All amounts are in United States dollars, except where noted.
NOTE 2 - NOTE PAYABLE
The note payable bearing interest at 12% per annum 24,251
Less current portion (24,251)
Estimated principal repayments are:
2001 $ 24,251
PROGOLF TOURNAMENTS.COM AND SUBSIDIARY
(A Development Stage Enterprise)
AUDIT REPORT
September 30, 1999
Janet Loss, C.P.A., P.C.
Certified Public Accountant
3525 South Tamarac Drive, Suite 120
Denver, Colorado 80237
PROGOLF TOURNAMENTS.COM AND SUBSIDIARY
(A Development Stage Enterprise)
INDEX TO FINANCIAL STATEMENTS
TABLE OF CONTENTS
ITEM PAGE
Report of Certified Public Accountant..................... 1
Consolidated Balance Sheet, September 30, 1999 ........... 2
Consolidated Statement of
Operations, for the period September
3, 1999 through September 30, 1999 ....................... 3
Consolidated Statement of Stockholders
Equity (Deficit), from September
3, 1999 through September 30, 1999 ....................... 4
Consolidated Statement of Cash Flows,
For the period from September
3, 1999 through September 30, 1999 ..................... 5
Notes to Financial Statements..................... 6-7
Janet Loss, C.P.A., P.C.
Certified Public Accountant
REPORT OF INDEPENDENT AUDITOR
1780S. Belaire Suite 500
Denver, Colorado 80222
(303) 220-0227
Board of Directors
PROGOLF TOURNAMENTS.COM AND SUBSIDIARY
3266 Yonge Street, #1203
Toronto, ON M4N 3P6 Canada
Sirs:
I have audited the accompanying Balance Sheet of Progolftournaments.com
(A Development Stage Enterprise) as of September 30, 1999 and the
Statements of Operations, Stockholders Equity, and Cash Flows for the
period September 3, 1999 (Inception) through September 30, 1999. These
financial statements are the responsibility of the Companys management.
My responsibility is to express an opinion on these financial
statements based on my audits.
My audit was made in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audits
to obtain reasonable assurance as to whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. I believe
that our audit provides a reasonable basis for our opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Progolftournaments.com as of September 30, 1999, and the results of its
operations and changes in its cash flows for the period from September
3, 1999 (Inception) through September 30, 1999, in conformity with
generally accepted accounting principles.
Janet Loss, C.P.A., P.C.
August 30, 2000
PROGOLF TOURNAMENTS.COM AND SUBSIDIARY
(A Development Stage Enterprise)
CONSOLIDATED BALANCE SHEET
September 30, 1999
ASSETS
CURRENT ASSETS:
Cash in checking 76,578
Common Stock Subscription
Receivable 6,426
TOTAL CURRENTS ASSETS 83,004
TOTAL ASSETS $ 83,004
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES:
Accounts Payable, trade $ 260
STOCKHOLDERS EQUITY:
Common Stock, $0.001 par Value;
50,000,000 shares Authorized,
9,861,300 shares Issued and outstanding 9,861
Preferred Stock, $0.001 par Value;
10,000,000 shares Authorized, none issued 0
Additional Paid-In capital 85,080
(Deficit) Accumulated During the
Development Stage (12,197)
Total Stockholders Equity 82,744
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY 83,004
The accompanying notes are an integral part of the financial
statements.
PROGOLF TOURNAMENTS.COM AND SUBSIDIARY
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF OPERATIONS
For the period from September 3, 1999 (Inception)
Through September 30, 1999
REVENUES: 29
OPERATING EXPENSES:
Organizational Expenses 1060
Consulting and Promotional Expense 1,466
Legal and Accounting Expenses 5,500
Professional Fees 4,200
TOTAL OPERATING EXPENSES 12,226
NET (LOSS) (12,197)
NET (LOSS) PER
SHARE OF COMMON STOCK (.00)
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 9,861,300
The accompanying notes are an integral part of the financial
statements.
PROGOLF TOURNAMENTS.COM AND SUBSIDIARY
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (DEFICIT)
For the period from September 3, 1999 (Inception)
Through September 30, 1999
<TABLE>
<CAPTION>
Common Common Additional (Deficit) Total Stockholders
Stock stock Paid-in Accumulated Equity
Number of amount Capital During the
Shares Developement
Stage
<S> <C> <C> <C> <C> <C>
Balance
September 3, 1999 0 0 0 0 0
Shares Issued for
Cash, September
30, 1999 8861300 8,861 85080 0 93,941
Shares Issued for
Services Sept. 30,
1999 1000000 1,000 0 0 1,000
Net Loss for the
Period ended
Sept. 30, 1999 0 0 0 (12,197) (12,197)
Balances
September 30,
1999 9861300 9,861 85,080 (12,197) 82,744
</TABLE>
The accompanying notes are an integral part of these financial
statements
PROGOLF TOURNAMENTS.COM AND SUBSIDIARY
(A Development Stage Enterprise)Error! Bookmark not defined.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period from September 3, 1999 (Inception)
Through September 30, 1999 Error! Bookmark not defined.
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (Loss) for the Period (12,197)
ADJUSTMENTS TO RECONCILE NET (LOSS) TO
CASH FLOW FROM OPERATING ACTIVITIES:
Increase in Common Stock
Subscription Receivable (6426)
Increase in accounts payable 260
NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES (18,363)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of Common Stock 94,941
NET INCREASE IN CASH 76,578
CASH, BEGINNING OF THE PERIOD 0
CASH, END OF THE PERIOD 76,578
The accompanying notes are an integral part of the financial
statements.
PROGOLF TOURNAMENTS.COM AND SUBSIDIARY
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
September 30, 1999
NOTE I - ORGANIZATION AND HISTORY
(the Company) is a Nevada corporation and the Company has been in the
development stage since its formation on September 3, 1999. The wholly
owned subsidiary, PROGOLF TOURNAMENTS.COM, INC. is an Ontario-Canada
Corporation incorporated September 29, 1999.
The Companys only activities have been organizational, directed at
acquiring its principal assets, raising its initial capital and
developing its business plan.
NOTE II - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Development Stage Activities
The Company has been in the development stage since its inception.
Basis of Financial Statements
The financial statements reflect the assets and liabilities of PROGOLF
TOURNAMENTS.COM, a Nevada Corporation, and its wholly owned subsidiary,
PROGOLF TOURNAMENTS.COM, INC., an Ontario Corporation, incorporated
September 3, 1999 and September 29, 1999, respectively.
These financial statements are prepared on a consolidated basis. The
accounts of the subsidiary company are reflected in these financial
statements. All material inter-company accounts and transactions have
been eliminated.
Development Expenses
The Company expenses all costs associated with the development of the
Website and Internet golf game as occurred.
Basic and Diluted Loss Per Share
Basic loss per share is computed by dividing the net loss by the
weighted average number of
shares of common stock outstanding during the year. Diluted earnings
per share reflects the
potential dilution that could occur upon exercise of options or
warrants. As the Company has not issued any dilution instruments the
basic and diluted loss per share amounts are the same for the period.
Revenue Recognition
The Company is a development stage enterprise and accordingly has no
significant operations and revenue. The Company expects to generate
revenues when their online golf tournaments commence and will recognize
revenue at that time.
Financial Instruments
The carrying amounts of cash receivable and accounts payable
approximate fair market value because of the short term maturity of
those items.
Accounting Method
The Company records income and expenses on the accrual method.
Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand and cash on deposit in
financial institutions. The Company considers all highly liquid
investments with original maturities of three months or less to be cash
equivalents.
Income Taxes
Deferred tax assets and liabilities are recognized for future tax
consequences attributable to differences between the carrying amount of
existing assets and liabilities for reporting purposes and the amounts
used for income tax purposes. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in
the years that the temporary differences are expected to reverse.
Valuation allowances are established until realization is assured.
No provision for income taxes has been recognized for the period ended
September 30, 1999 as
the Company has incurred net operating losses for income tax purposes
and has no carry back
potential.
Deferred tax assets of September 30, 1999 consists of:
Net operating loss carry forward $12,197
Less valuation allowance 0
Net deferred tax asset 12,197
Organizational Costs
Costs incurred in organizing the Company are being expensed in the
period they were incurred.
Use of Estimates
Management uses estimates and assumptions in preparing financial
statements. Those estimates and assumptions affect the reported
amounts of assets and liabilities, the disclosure of contingent assets
and liabilities and the reported revenues and expenses.
Exchange
The Financial statements are presented in dollar amounts based on
United States Currency Exchange. All foreign translation adjustments
and foreign currency gains and losses are booked at the selling rate of
United States dollars by the Royal Bank of Canada on the day of the
deposits.
Fiscal Year
The Company adopted a fiscal year end of September 30th.
SELECTED FINANCIAL DATA
The following selected financial data should be read in conjunction
with Managements Discussion and Analysis of Financial Condition and
Results of Operations and the financial statements appearing elsewhere
in this Prospectus.
The Statement of Operations data set forth below for the period
September 3, 1999, (inception) to September 30, 1999 and the balance
sheet data as at September 30, 1999 are derived from
Progolftournaments.com audited financial statements; and
The Statement of Operations data for the interim period October 1, 1999
to June 30, 2000 And the balance sheet data as at June 30, 2000 are derived from
Progolftournaments.com unaudited statements prepared by management and included
elsewhere in this Prospectus.
The historical results are not necessarily indicative of results to be
expected for any future period.
Unaudited
Oct.1, 1999 Inception to
June 30, 2000 Sept. 30, 1999
Statement of operations data:
Net sales $ 00.00 $ 00.00
Income (Loss) from
continuing operations $ (31,909) $ (12,197)
Income (Loss) per common share
from continuing operations $ 0 0
Balance sheet data:
Total Assets $ 75,346 $83,004
Progolftournaments.com is in its early developmental and promotional
stages. To date, its only activities have been organizational, directed
at raising its initial capital and developing its concept and business
plan. Progolftournaments.com has not commenced commercial operations.
As a result, the selected financial data presented above bear no resemblance
to the results that Progolftournaments.com expects when it begins
operations. See Risk Factors, Description of Business and Managements
Discussion and Analysis of Financial Condition and Results of
Operations.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction
with our financial statements dated September 30, 1999 (audited) and
June 30, 2000 (unaudited).
Results of Operations
During the period from September 3, 1999, (inception) through June 30,
2000, we have accomplished the following:
- organizational activities and preparation for registration of its
securities under theSecurities Act of 1933. Progolftournaments.com
received no revenues during this period.
- have signed a contract with the software developer, Psygnosis,
Ltd. of Liverpool, Great Britain, a subsidiary of SONY Europe, for the
adaptation of its home computer game Pro 18 World Tour Golf. Psygnosis
will receive $1.25 from each ten-dollar entry fee and 12 1/2% of gross
advertising revenues.
Psygnosis, Ltd. has also agreed to accept a royalty advance of $10,000
and an option on 3,287,100 shares of Progolftournaments.com common
stock. We have paid the first $5,000 and the balance of $5,000 is due
and payable thirty days prior to the date that the Internet version of
the golf game is available to play. We estimate that date to be
January 1, 2001. The $10,000 advance royalty plus another $100,000
will be deducted from royalty payments due Psygnosis Ltd. This
recovery of the first $10,000 of royalties and offset or forgiveness of
the next $100,000 of royalties by Psygnosis Ltd., if and when they have
occurred, could be considered their contribution toward converting
the game for Internet play.
- entered into discussions to acquire credit card processing. We
are negotiating with several credit card processing companies. These
companies charge a fee for each credit card transaction processed. We
have not selected one of these companies as yet.
- Established our online virtual store. Progolftournaments.com has
entered into an arrangement with V-store to act as a sales agent for
that concern. We receive a 15% commission on all sales. V-Store
supplies the inventory, handles the shipping and all returns and
customer complaints. Purchases are paid by credit card and processed
by V-Store.
A copy of the contract and agreement with Psygnosis Ltd. and a copy of
the contract and agreement with V-Store is included in this document as
Exhibits 99. 1 and 99. 2. Respectively
Progolftournaments.com expects to introduce the online game one tour at
a time. January 1, 2001 is the target date to have the first Internet
golf game fully operational. We have not entered into any agreement
for the development of the necessary software to convert the computer
golf game to the Internet golf game but we expect to have a contract in
place to do this in the near future.
For the current fiscal year, Progolftournaments.com anticipates
incurring a loss as a result of organizational expenses, expenses
associated with registration under the Securities Act of 1933, and
expenses associated with setting up a company structure to begin
implementing its business plan. Progolftournaments.com anticipates that
until these procedures are completed it will not generate revenues and
may continue to operate at a loss thereafter, depending upon the
performance of the business.
Progolftournaments.com made an arms length loan to a company in the
automotive leasing business at a interest rate of one percent per month
on the unpaid balance. Since the June 30, 2000 interim financial
statements partial repayment has been made. As of August 24, 2000 the
outstanding balance was $25,674.
During the period from October 1, 1999 to June 30, 2000
Progolftournaments.com has increased its losses by $31,909.
The operating deficit increased from $12,197 to $44,106.
Shareholders equity dropped from $82,744 to $50,835. Both the
September, 30, 1999 audited financial statements and the June 30, 2000
interim statements are included in this Registration statement.
The following is a list of our expenses to date:
Advance royalties to Psygnosis Ltd. 5,000
Website design 4,395
Internet promotion 21,766
Promotion 2,673
Travel 4,615
Office supplies, etc. 1,342
Professional Fees 9,700
Write-off of Organizational Expenses 1,060
Other operating expenses 476
Bank Charges 158
Total Expenditures to date $ 51,185
Liquidity and Capital Resources
Progolftournaments.com remains in the development stage and since
inception has experienced no significant change in liquidity or capital
resources or shareholders equity. Consequently, our balance sheet as of
September 30, 1999 reflects total assets of $ 83,004 in the form of
cash, subscriptions receivable and capitalized organizational costs.
Our unaudited balance sheet as of June 30, 2000 reflects total assets
of $75,346.
The following is managements estimate of costs that will be incurred to
set up facilities and be ready to commence tournament play by January
1, 2001:
1) conversion of computer game to Internet game $150,000
2) lease deposits and six months office lease payments 37,500
3) office furniture, equipment and supplies 55,000
4) computer equipment and software 75,000
5) recruiting costs and six months salaries and benefits 104,000
6) advertising 100,000
7) travel and expense 35,000
8) contingencies 50,000
9) working capital 300,000
Total estimated expenses $906,500
Some expenses relating to the commencement or roll out of tournament
play cannot be accurately
estimated at this time. These include:
- License fees to the various golf courses;
- Costs of digitizing each course for conversion to the Internet;
- Costs of integrating each new course into the Online golf game;
- License fees to the various tours and special events; and
- Increases in wed hosting charges.
Progolftournaments.com has no revenues and will not have any have any
revenues until the game is on the Internet and available to play. The
anticipated expenses of $906,500 will contribute that same amount to
the losses of the Company.
Management is currently looking for the capital to complete our
business plan. Negotiations and exploration are continuing. We have
received no commitments as yet.
Progolftournaments.com expects to carry out its plan of business as
discussed above. In addition, we may engage in a combination with
another business. Progolftournaments.com cannot predict the extent to
which its liquidity and capital resources will be diminished prior to
the
consummation of a business combination or whether its capital will be
further depleted by the operating losses (if any) of that entity.
Progolftournaments.com has not engaged in discussions concerning
potential business combinations.
Progolftournaments.com will need additional capital to carry out its
business plan or to engage in a business combination. No commitments to
provide additional funds have been made by management or other
shareholders. We cannot assure you that any additional funds will be
available on acceptable terms or at all. Progolftournaments.com has no
commitments for capital expenditures other than the costs to convert
the Pygnosis computer game for use on the Internet.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
Janet Loss, C.P.A., P.C. has served as Progolftournaments.com
independent auditor since inception, and Progolftournaments.com has not
had any dispute with Janet Loss C.P.A., P.C. over accounting or
financial disclosure.
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the name, age and position of each
director and executive officer of Progolftournaments.com:
Name Age Position
Howard I. Klein 43 President, Secretary,
Director
Michael R. Levine 52 Vice President,
Director
Sandy Winick 41 Treasurer,Director
Howard I. Klein became Progolftournaments.com President, Secretary and
Director in September, 1999. For the past twenty years, in fact all of his
adult working life, Mr. Klein has been involved with the printing and
graphics industry, beginning as the proprietor of a Minuteman Press
franchise in 1979. Mr. Klein has recently sold his interest and
resigned his position as CEO and Managing Partner of Kleinbar Graphics,
Inc. of Markham, Ontario. He is currently the print buyer for Dupleum
Corp. Mr. Klein holds C.G.A.E. certification from Northwestern
University, Evanston, IL in the fields of Production, Financial and
Sales Management.
Michael R. Levine became Progolftournaments.com Vice-President and
Director in September, 1999. Mr. Levine is currently the Co-founder and
President of Danbury Financial Corp., an asset based lender
specializing in short term loans on machinery, equipment and rolling
stock. From 1985 through 1999 Mr. Levine served as President of Upper
Canada Equity Development, Inc. He received a BSc degree from Sir
George Williams University, Montreal, Quebec; MBA from University of
Western Ontario, London, Ontario and received the designation of
Certified General Accountant in 1986.
Sandy Winick became Progolftournaments.com Treasurer and Director in
September, 1999. He is currently Vice-President of Danbury Financial
Corp., providing liaison with clients, negotiation of funding
agreements, creating new business and monitoring that companys entire
loan portfolio.
For the two-year period, 1997 to 1999, Mr. Winick served as CEO of
Millenia Corporation;a US publicly traded company. His duties there, in
addition to day-to-day administration, included funding, acquisition
and consolidation of several businesses and completing a reverse
takeover with a private company. Previous activities include serving as
an independent financial consultant with Madison Consulting Group from
1992 through 1996; President and CEO of Naturally
Niagara Inc., a full service beverage manufacturer and distributor from
1991 to 1992 and from 1989 to 1991, President of Payless Furniture, a
thirteen-unit chain of furniture stores. Mr. Winick is the originator
of the Progolftournaments.com online Internet golf game.
The directors named above will serve until the first annual meeting of
Progolftournaments.com shareholders. Thereafter, directors will be
elected for one-year terms at the annual shareholders meeting. Officers
will hold their positions at the pleasure of the Board of Directors,
absent any employment agreement. No employment agreements currently
exist or are contemplated. There is no arrangement or understanding
between the directors and officers and any other person pursuant to
which any director or officer was or is to be selected as a director or
officer.
None of the directors and officers has any arrangements with each other
regarding serving on the board. They are personal and business
acquaintances and all share an avid interest in golf.
The directors and officers of Progolftournaments.com will devote their
time to
Progolftournaments.com affairs on an as needed basis. As a result, the
actual amount of time, which they will devote to Progolftournaments.com
is unknown and is likely to vary substantially from month to month.
EXECUTIVE COMPENSATION
No officer or director has received any remuneration from
Progolftournaments.com. Although there is no current plan in existence,
it is possible that Progolftournaments.com will adopt a plan to pay or
accrue compensation to its Directors and Officers for services related
to the implementation of the concept and business plan.
Progolftournaments.com has no stock option, retirement, incentive,
defined benefit, actuarial, pension or profit-sharing programs for the
benefit of directors, officers or other employees, but the Board of
Directors may recommend adoption of one or more such programs in the
future. The Company does not have a policy established for non-cash
remuneration or reimbursement for Directors and Officers.
Progolftournaments.com has no employment contract or compensatory plan
or arrangement with any executive officer. The directors currently do
not receive any cash compensation from Progolftournaments.com for their
service as members of the board of directors. There is no compensation
committee and no compensation policies have been adopted. See Certain
Relationships and Related Transactions.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth as of June 30, 2000,
Progolftournaments.com outstanding common stock owned of record or
beneficially by each executive officer and director and by each person
who owned of record, or was known by Progolftournaments.com to own
beneficially, more than 5% of the Companys common stock and the
shareholdings of all executive officers as a group.
Class Name and Address Shares Owned Percentage of Class
Common Howard I. Klein 901,000 9.14
6844 Johnson Wagon Crescent
Mississauga, ON L5W 1B1
Common Michael R. Levine -0- -0-
63 St. Clair Avenue, West
Suite 1704
Toronto, ON M4V 2Y9
Common Sandy Winick** 1,475,000 14.96
6021 Yonge Street
Suite 212
Toronto, ON M2M 3W2
Common Mary McGowan* 2,700,000 27.38
1839 Walkers Point Road
Gravenhurst, ON P1P 1R3
Common Lynn Stewart 1,000,000 10.14
RR #2
Mount Forrest, ON N0G 2L2
All Officers and Directors as a group 2,376,000 24.10
* Mary McGowan is a close associate of Mr. Levine. Ms McGowan has her
own independent means and both deny any beneficial ownership of her
shares by Mr. Levine.
** Includes 475,000 shares owned by Jodi Winick, wife of Sandy Winick
and which may be considered to be beneficially owned.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
No director, executive officer or nominee for election as a director of
Progolftournaments.com and no owner of five percent or more of the
outstanding shares or any member of their immediate family has entered
into or has proposed any transaction in which the amount involved
exceeds $10,000.00. Mr. Levine and Mr. Winick are both involved in
Danbury Financial Corp., a company having no direct or indirect
affiliation with Progolftournaments.com.
Mr. Winick could be considered a promoter of Progolftournaments.com.
He exchanged the business concept of the Internet golf tournaments and
an initial business plan for 1,000,000 shares of common stock at a
deemed price of $1,000 or $0.001 per share. Mr. Winicks costs are
difficult to determine. Time spent developing the idea and the
business plan at any reasonable rate would exceed the deemed price. If
Progolftournaments.com succeeds in implementing its business plan, it
is not inconceivable that one or all of the above-mentioned
individuals could become its full-time employees and executives.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
The Bylaws of Progolftournaments.com provide that the Company will,
absence a finding of negligence or misconduct in the performance of
duty, indemnify its officers and directors for costs and expenses
incurred in connection with the defense of actions, suits or
proceedings against them on account of their being or having been
directors or officers of Progolftournaments.com.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors officers or persons
controlling Progolftournaments.com and pursuant to the forgoing
provisions, we have been informed 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.
PART II
INFORMATION NOT REQUIRED IN Prospectus
Item 13. Other Expenses of Issuance and Distribution.
The securities are being registered for the account of selling
shareholders, and all of the following expenses will be borne by such
shareholders. The amounts set forth are estimates except for the SEC
registration fee:
SEC registration fee $ 35
Printing and engraving expenses 5,000
Attorneys fees and expenses 9,000
Accountants fees and expenses 1,500
Transfer agents and registrars fees and
expenses 500
Miscellaneous 965
Total $ 17,000
Item 14. Indemnification of Directors and Officers.
Pursuant to Nevada law, a corporation may indemnify a person who is a
party or threatened to be made a party to an action, suit or proceeding
by reason of the fact that he or she is an officer, director, employee
or agent of the corporation, against such persons costs and expenses
incurred in connection with such action so long as he or she has acted
in good faith and in a manner which he or she reasonably believed to be
in, or not opposed to, the best interests of the corporation, and, in
the case of criminal actions, had no reasonable cause to believe his or
her conduct was unlawful. Nevada law requires a corporation to
indemnify any such person who is successful on the merits or defense of
such action against costs and expenses actually and reasonably incurred
in connection with the action.
The bylaws of Progolftournaments.com, filed as Exhibit 3.2, provide
that Progolftournaments.com will indemnify its officers and directors for
costs and expenses incurred in connection with the defense of actions,
suits, or proceedings against them on account of their being or having
been directors or officers of Progolftournaments.com, absent a finding
of negligence or misconduct in office. The Companys Bylaws also permit
Progolftournaments.com to maintain insurance on behalf of its officers,
directors, employees and agents against any liability asserted against
and incurred by that person whether or not Progolftournaments.com has
the power to indemnify such person against liability for any of those
acts.
Item 15. Recent Sales of Unregistered Securities.
Set forth below is information regarding the issuance and sales of The
Companys securities without registration since its formation. No such
sales involved the use of an underwriter and no commissions were paid
in connection with the sale of any securities.
(a) On September 3, 1999, Progolftournaments.com issued 1,000,000
shares of common stock to an officer and director in exchange for his
development of the concept and business plan and his assigning of all
of his proprietary rights to those two items. The issuance of the
shares was exempt from registration under Regulation S of the
Securities Act of 1933
(b) On September 30, 1999, Progolftournaments.com issued a total of
8,861,300 shares of common stock to shareholders, in addition to the
issuance for the concept and preliminary business plan. Total
consideration for these shares was $ 83,004. The Companys shares were
valued from $ 0.001 per share to $ 0.50 per share. The issuance of
these shares was exempt from registration under Regulation S of the
Securities Act.
Name Number of Shares
731149 Ontario Limited 1,000
Bernie Anderson 2,680
Robert Baron 268
Baroness Investments Limited 1,000
Building Supplies International 200
C.A.P.S Consulting 200
William Davies 200
Deep Water Investment Inc. 475,000
Geoffrey Earle 200
Jan Francis 500
Mark Francis 500
Jeffrey Goldberg 500
Maggie Goldberg 500
Debbie Green 75,200
Robert Hashimoto 200
David Hume 600
H. Davidson Construction Inc. 475,000
Marcia Klein 200
Myer Klein 200
Raymond Teaitch 400
Tilley Levine 2,000
Joy Lipson 600
Marcia Lipson 600
Magnum Holdings, Ltd. 476,000
Miriam Manzo 200
Jack Martino 200
Sasha Mazzuca 200
Stefan Mazzuca 200
Carolyn McGowan 400,300
Jennifer McGowan 400,368
Lydia McGowan 500
Mary McGowan 2,700,000
Robert McGowan 300
Thomas McGowan 500
Elizabeth McLeod 9,384
Lynn Stewart 1,000,000
Monica Murad 1,000
Theodore Nemetz 500
Ron Pearlman 475,000
Resource Financial Corporation 200
John Rosenthal 600
Brian Ross 500
Sheryl Ross 500
Charles Sciberras 476,000
Doris Sciberras 200
Jeffrey Sciberras 200
Joseph Sciberras 200
Peter Scibarras 200
Derek Tennant 1,200
Kelly Ticknor 600
Cynthia Vella-Zarb 200
Pierre Vella-Zarb 200
Rhona Vinokur 500
Avital Weber 400
Diane Winick 600
Mark Zaretsky 600
Item 16. Exhibits.
Exhibit Name
3.1 Articles of Incorporation*
3.2 Bylaws*
5.1 Opinion re: Legality*
23.1 Consent of Independent Auditors
23.2 Consent of Counsel (see Exhibit 5.1)*
27.1 Financial Data Schedule
99.1 Psygnosis Ltd. Contract
99.2 V-Store Agreement
* Previously submitted
Financial Statement Schedules
As of September 30, 1999, Progolftournaments.com:
- has no valuation or qualifying accounts
- does not have a substantial portion of its business devoted to
acquiring and holding for
investment real estate or interests therein
- has one subsidiary
- has no investments in mortgage loans on real estate.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(a) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(b) To reflect in the prospectus any facts or events arising after
the effective date of the 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 the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent
no more than 20% change in the maximum aggregate offering price set
forth in the Calculation of Registration Fee table in the effective
registration statement; and
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(2) 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.
(3) 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.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrants annual report
pursuant to section 13(a) or 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City
of Toronto, Province of Ontario, Canada, on August 30, 2000.
PROGOLFTOURNAMENTS.COM
/s/ Howard I. Klein
By Howard I. Klein, its President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
s/s Howard I. Klein President, Secretary and Director Date:
08/31/00
Howard I. Klein
s/s Michael R. Levine Vice President and Director Date:
08/31/00
Michael R. Levine
s/s Sandy Winick Treasurer and Director Date: 08/31/00
Sandy Winick
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITOR
Janet Loss, C.P.A., P.C.
Certified Public Accountant
1780 South Bellaire
Suite 500
Denver, CO 80222
The Board of Directors
Progolftournaments.com
63 St. Clair Avenue, West
Suite 1704
Toronto, Ontario M4V 2Y9
Canada
Dear Sirs:
As an independent Certified Public Accountant we hereby consent to the
incorporation by reference in this registration statement of our reports
dated August 20, 2000 included in the Progolftournament.com Form S-1
amendment dated August 28, 2000 and to all references to
our firm included in this registration statement.
Yours Truly,
/S/ Janet Loss, C.P.A., P.C.
Janet Loss, C.P.A., P.C.
August 30, 2000
EXHIBIT 99.1
CONTRACT WITH
PSYGNOSIS LTD.
SOFTWARE LICENSE AND STOCK OPTION AGREEMENT
This Agreement is entered into and effective as of the26th day of April
2000.
Psygnosis Ltd. (Psygnosis), a corporation organized under the laws of
the United Kingdom, and progolftournaments.com (PGT) a corporation
organized under the laws of the State of Nevada, have decided to enter
into a software license agreement based on certain terms and conditions
set forth below.
1. Licensor (Psygnosis): Psygnosis Ltd.
Napier Court
Wavertree Technology Park
Liverpool Ll 3 1 EH, United Kingdom
2. Licensee (PGT): progolftournaments.com
3266 Yonge Street
Suite 1203
Toronto, Ontario M4N 3P6
3. Grant of Rights
Psygnosis grants to PGT an exclusive right to advertise, promote,
market, the Licensed Title on the Licensed Format (the Internet
Version) in the Licensed Territory during the Licensed Term excluding
any right to use the Internet Version on or in connection with the
PlayStation or PlayStation 2 formats or any other future Sony formats
including without limitation online or internet compatible Sony formats
or any mobile phone or palm top service. Psygnosis may add rights to
Sony formats such as Playstation2 at its absolute discretion on a non
exclusive basis by written notification at any time during the Term and
require PG;T to exploit the Internet Version and other games on such
formats.
4. Licensed Title
The Licensed Title is the computer software entertainment program
published by
Psygnosis on PCCD ROM format familiarly known as Pro 18 World Tour Golf
including the courses listed in Schedule 1 but excluding all likenesses
and names and usage of any featured players in the Licensed Title.
5. Licensed Format
PCCD Microsoft Windows 95/98/2000 software or MAC software formatted
for use via
the internet only. For the avoidance of doubt PGT shall have no rights
to sell or distribute the Licensed Title on any physical medium such as
CID o, DVID or cartridge or otherwise other than as necessary to enable
players to load data remotely to enable them to play the Internet
Version via the internet only.
6. Licensed Territory and Licensed Language:
6.1 Licensed Territory is World as covered by the internet only.
6.2 The Licensed Language is English and any other languages agreed
on by the
parties.
7. Licensed Term
7.1 Subject to 7.2 and 7.3 below, the Licensed Term shall be 5 (five)
years from mutual execution of this Agreement, subject always in
relation to the Licenced Title to renewal of any necessary licences at
the cost of PGT as set out in Schedule 1.
Psygnosis makes no warranty as to the various licensees willingness to
renew such licenses.
7.2.1 If Psygnosis has received at least US$5 million (five million US
dollars) in Royalties from PGT during the Licensed Term in accordance
with clause 16 hereof, then PGT shall have the automatic right to renew
the Licensed Term for a further five year period upon paying Psygnosis
an advance royalty of US$1 million (in addition to the US$5 million
guarantee) and subject to guaranteeing a further US$5 million an the
same basis as clause 16 over the extended term.
7.2.2 In any event, Psygnosis shall be entitled to renew this Agreement
for the
extended term by written notification to PGT, at any time prior to the
end of the Licensed Term.
7.2.3 Psygnosis shall be entitled to terminate this Agreement forthwith
on written notice if PGT has not commissioned a third party to
undertake development work for Internet Version pursuant to clause 14.1
within 6 weeks of the effective date of this Agreement.
7.3 Psygnosis shall be entitled to terminate this Agreement forthwith
on notice if PGT:
7.3.1 breaches any term of this Agreement and do not remedy such breach
within 14 days of notice from Psygnosis;
7.3.2 does not comply with provisions of clause 16;
7.3.3 becomes insolvent;
7.3.4 there is any change in ownership or control of PGT without
Psygnosis consent (which consent shall not be unreasonably withheld or
delayed)
7.4 Termination of this Agreement will be without prejudice to all
payment
obligations on PGT to Psygnosis under clauses 8, 9, 10, 11, 12, 13,
18.2 and any other terms regarding Psygnosis ownership of rights under
clauses 14, 17, 18.2 and 22.
8. Royalty Advance Payments
8.1 PGT shall pay to Psygnosis a royalty advance against Royalties
(collectively, Royalty Advance) in the amount of Ten Thousand US
Dollars ($10,000 US) which shall be recouped from Royalties before any
additional payments are due.
8.2 The actual out of pocket cost of development of the Internet
Version to PGT or the sum of $100,000 (whichever is less) shall be
added to Psygnosis Royalty Advance account for the purposes of
recoupment in consideration of PGT undertaking all
production/development costs, which will be recouped from Royalties
before additional royalty payments are made. (PGT shall supply
documentary evidence of its out of pocket development costs on request
to Psygnosis).
9. Royalty Advance Payment Schedules
The Royalty Advances set forth in Section 8. above shall be paid
directly into Psygnosis bank account, the details of which are provided in
Section 12 below in accordance with the following schedule (the Payment
Schedule):
(i) fifty percent (50%) of the Royalty Advance set forth in Section
8.1.
therefore Five Thousand US Dollars ($5,000), within thirty (30) days of
the mutual execution of this Agreement; and (ii) fifty percent
(50%) of the Royalty Advance set forth in Section 8.1, therefore Five
Thousand US Dollars ($5,000), within thirty (30) days of the Internet
Version first becoming available to access on the Internet;
10. Royalties
10.1 PGT shall pay to Psygnosis a royalty equal to twenty-five percent
(25%) of PGTs Gross Game Revenue net of the prize pool pay out and 12.5% of
Gross Advertising Revenue (Royalties) except that the Royalty Advance set
forth in Section 8.1 and 8.2 above shall first be recouped from such
Royalties before any additional Royalties are payable.
10.2 Gross Game Revenue shall mean all revenue earned by or on behalf
of PGT in connection with any of its golf web sites and/or in connection with
the exploitation of the Internet Version. Such shall include without
limitation all pay per play, competition, subscription or other revenue
connected directly or indirectly with the Internet Version. A unit of
the Internet Version shall be considered to be played upon the date
upon which it is first played or paid for.
10.3 The prize pool pay out or any other prizes agreed to be
deductible from
Royalties shall be subject to Psygnosis prior agreement in writing.
10.4 Gross Advertising Revenue shall mean all revenue earned by or on
behalf of
PGT in connection with advertising or sponsorship on its golf web sites
or other
web sites giving access to the Internet Version or within the Internet
Version
itself.
10.5 It is intended that PGT will be launching the Internet Version
with a three month free game contest to expose the name and product to
the maximum number of potential players. If PGT do not derive any Gross
Game Revenue during this first fiscal quarter no royalties will be due
to Psygnosis. However, Licensor shall deliver a Royalty Statement to
Psygnosis for such period.
11. Withholding Tax
PGT shall be permitted to withhold from its payments of the Royalty
Advances and subsequent Royalty payments due Psygnosis only those taxes imposed
on Psygnosis under US Tax Law and the Income Tax Convention between the US and
the U.K. and to remit such withheld taxes to the relevant US tax authorities.
PGT shall furnish Psygnosis with official written evidence of such tax
payments made on Psygnosis behalf, and give Psygnosis full assistance
including the execution of documents required by Psygnosis to reduce or
reclaim such tax payments. For the avoidance of doubt if PGT remits
monies to Psygnosis from any country other than the USA, then it shall
not be entitled to make any withholdings.
12. Accounting
Payments and 12.1 The Royalty Advances and Royalties and any
other payments which may be due Psygnosis under the Agreement(s) shall be
remitted by direct wire transfer of cleared funds into Psygnosis bank account as
indicated below or to such other bank account as Psygnosis shall notify
to PGT by seven (7) business days prior written notice:
Barclays Bank PLC
54 Lombard Street
London, EC3P 3AH, United Kingdom
Bank Sort Code: 20 00 00
Name of Account: Psygnosis Licensing Limited
Account Number: 87906499
12.2 PGT shall provide royalty reports to Psygnosis on a fiscal
quarterly basis within thirty (30) days of the end of each fiscal
quarter beginning with the first quarter in which the Internet Version
is released for play in the Licensed Territory (Royalty Report)
simultaneously with payment to Psygnosis of any Royalties due. Each
Royalty Report shall be certified to be complete and accurate by a
Senior Officer of PGT and shall include the following information for
the Licensed Title:
(i) the number and frequency of games played and pay-per-play revenue
during the relevant quarter;
(ii) number of subscriptions and subscription revenue;
(iii) sponsorship revenue;
(iv) advertising revenue;
(v) other revenue;
(vi) prizes allocated and unallocated prize fund;
(vii) Gross Game revenue;
(viii)Gross Advertising Revenue; and
(ix) the amount of Royalties calculated in accordance with the
provisions of
this Agreement as due to Psygnosis;
12.3 Psygnosis shall provide PGT with invoices for the Royalty Advance
payments
set forth in Section 8 per the payment terms of the Payment Schedule
and shall also provide invoices for Royalties due, if any, upon receipt
of each Royalty Report.
12.4 All payments required to be made by PGT under the Agreement(s)
shall be
made in US Dollars unless agreed by Psygnosis by prior written notice.
13. Audit
PGT agrees to keep full and accurate books of account and records
relating to all dealings and transactions and other matters relevant to
the Licensed Title on the Licensed Format at its principal place of
business for a period of not less than two (2) years after the making
of any Royalty Report or for two years after the termination of this
Agreement, which ever is later. All such books and records shall
contain all data information reasonably required for the accurate
computation and verification of the amounts owed, paid and due to be
paid to Psygnosis hereunder and the information given or to be given in
any Royalty Report required hereunder. Psygnosis shall have the right,
upon five (5) business days prior written notice to PGT, to cause a
certified public accountant (or the equivalent) to examine (and make
copies) of such books and records during normal business hours twice
during each twelve (12) month period. Such audit shall be at Psygnosis
expense, except that if the audit reveals that Psygnosis is entitled to
additional payments equal to five percent (5%) or more in addition to
the amounts previously paid for the period so audited, then PGT, in
addition to immediately forwarding to Psygnosis the amount owed, plus
interest thereon calculated at the rate of ten percent (10%) per annum
or
four percent (4%) over the base rate for the time being of Barclays
Bank PLC,
whichever is greater, from the date due until paid, shall pay the cost
of the audit,
14. Development
14.1 PGT shall be responsible for all production/development work
relating to Internet Version at its own cost. subject to clause 8.2 and
15. Prior to starting any such development work PGT shall require
Psygnosis written consent, including without limitation Psygnosis right
to approve any sub-contractor that PGT wishes to choose to undertake
such work. For the avoidance of doubt, Psygnosis shall own all rights
and title in and to the Internet Version, to the extent PGT becomes the
initial owner of such rights it hereby transfers and assigns all such
rights to Psygnosis and undertakes to execute any further documents
necessary to give effect to this provision. PGT undertakes that any
subcontractor appointed to undertake the work will be contracted on a
work for hire basis so that all rights in the Internet Version are
initially assigned
to PGT. Psygnosis shall have the right to approve PGTs contract with
such sub-
contractor.
14.2 In order to facilitate PGT development of Internet Version,
Psygnosis shall use its reasonable endeavors to supply the following to
the extent they are in its possession:
(i) artwork for packaging in computer readable format;
(ii) artwork and text files for user manual, and related end user
textual
materials, if any, in computer readable format;
(iii) one (1) Gold Master CD of the English language version of the
Licensed
Title as released by Psygnosis in the United States;
(iv) two (2) packaged copies each of the English language version(s)
as
released by Psygnosis in the United States and in the United Kingdom;
and
(v) source code for the English language version of the Licensed
Title
14.3 PGT acknowledges receipt of such materials set out in 14.2 above.
14.4 PGT will cause to be displayed conspicuously, legibly and
irremovably in so far as it is commercially practical the following
trademark and copyright notices and credit lines for use in all
packaging, user manuals, CD labels, title screen of the software
program, advertising and promotional materials relating to the Internet
Version of the Licensed Title, as set forth below or as otherwise
notified to PGT in writing:
Credit lines and notices:
Psygnosis Ltd. [Developed by Title Psygnosis and
the Psygnosis logo are ? or ? of Psygnosis Ltd. All rights reserved.
,Logos:
Web pages / title screen
Front of packaging - Psygnosis logo
Back of packaging - Psygnosis logo and [name of developer] logo
User Manual - Psygnosis logo and (name of developer] logo
CD label - Psygnosis logo
Advertising material - Psygnosis logo
Intelligent Games credit / logo as instructed by Psygnosis
14.5 PGT shall be responsible for all work required to create the
Internet Version including but not limited to packaging materials, user
manual and advertising and promotional materials, and all costs
associated therewith, as well as the publication, distribution.
marketing and customer and end user support of the Licensed Title in
the Licensed Territory, subject to clause 15 below.
15. Prior Approval of Internet Version
Psygnosis shall have right of prior written approval of aft elements of
the Internet Version of the Licensed Title (including without
limitation the software program, CD face, packaging materials, user
manual and advertising and promotional materials) and any other use of
their trademarks and/or copyrighted materials before any such materials
may be manufactured or disseminated. Such approvals by Psygnosis shall
not be unreasonably withheld or delayed. Psygnosis shall either give
written notice of approval or disapproval of each item submitted for
its approval within ten (10) business days after receipt of the
submission, and if it disapproves any submission, it will state the
reasons for disapproval and the changes required in order to obtain
approval, and PGT shall make the requested changes and resubmit the
items for approval as soon as practically possible. Failure by
Psygnosis to give written notice of approval or
disapproval of any submitted items within the ten (10) business day
period shall be deemed approval of said items.
16. Release of Internet Version
PGT shall use its best commercial efforts to release and commercialize
the Internet Version as soon as possible If Psygnosis has not received
US$1 million by way of Royalties or otherwise from PGT. by the first
anniversary of this Agreement then Psygnosis shall have, the option to
terminate this Agreement without liability to Psygnosis. If Psygnosis
does not receive an additional sum of $1 million in each subsequent
year, Psygnosis shall have right to terminate without liability at each
anniversary thereafter. It is also agreed by Psygnosis and PGT that
should there be- technical issues that inhibit the launch of the
internet version of the Licensed Title through no fault of either
party, both parties agree to extend the launch until these problems can
be resolved or eliminated.
17. Ownership of Other Translations
Ownership of the other language translations and modifications of all
copyrighted materials provided to PGT under the Agreement(s) shall be
vested in Psygnosis.
18. Representations and Warranties
18.1 Psygnosis represents and warrants solely for the benefit of PGT
that:
(i) Psygnosis has and expects that it Ml have throughout the Term of
this
Agreement all right, title and interest in the Licensed Title
sufficient to
grant rights to PGT in accordance with the terms and conditions of this
Agreement;
(ii) to the best of Psygnosis knowledge and belief, PGTs use of the
rights in
the Licensed Title in accordance with the provisions of the Agreements
do not and will not infringe upon the patents, copyrights, trademarks,
trade names or other proprietary rights of third parties in the
Licensed
Territory; and
(iii) the making and performance of this Agreement do not violate any
agreements, rights or obligations existing between Psygnosis and any
other person, firm or corporation in the Licensed Territory.
18.2 PGT represents and warrants solely for the benefit of Psygnosis
that:
(i) PGT has and expects that it will have throughout the Licensed
Term of
the Agreements or shall obtain any and all technology licenses that may
be necessary to market the Licensed Title the Licensed Format in the
Licensed Territory;
(ii) PGT has and expects that it will have throughout the Licensed
Term of
the Agreements or shall obtain any and all technology licenses that may
be necessary to market the Licensed Title the Licensed Format in the
Licensed Territory;
(iii) PGT shall not sell or solicit the sale of, distribute or market
the Licensed Title outside the Licensed Territory or knowingly permit
or authorize any third party to do so; and
(iv) PGT possesses full power and authority to enter into the
Agreements and
to fulfill its obligations under and terms of the Agreements without
violating any agreements, rights or obligations existing between PGT
and
any other person, firm or corporation.
(v) PGT warrants that Psygnosis will receive at least $1.25 in
Royalties for
each four rounds of competition golf (ie 72 holes or part thereof) of
the
Internet Version played by a third party. PGT plans to charge $5.00
(five
dollars) for each 10 practice rounds played and $10 (ten dollars) fbr
each
25 practice rounds played. PGT shall not change this business model
without Psygnosis consent.
19. Future Games
19.1 PGT appoints Psygnosis its exclusive supplier of web enabled
games of any
genre during the Term. Therefore, subject to 19.3 below, PGT shall not
commission or license or use other interactive games on any of its
owned or controlled (directly or indirectly) web sites or that are
otherwise accessible by online means other than as supplied by
Psygnosis during the Term. The supply of each new game shall be subject
to agreement of terms in each case provided always that Psygnosis will
only be obliged to supply PCCD code (if the relevant game is already in
existence) and/or relevant rights for PGT to convert to a web/internet
enabled version at PGTs cost. It is agreed that during the period of 12
(twelve months) from first release of the Internet Version PGT shall be
limited in its choice of new internet enabled games to those Psygnosis
listed games set out in Clause 19.2 below.
19.2 Psygnosis shall grant PGT an exclusive option to license PC
internet. versions (subject to exceptions noted in clause 3) of the
PCCD versions of Expert Pool, Rollcage, DD1 and 2 and the original
Wipeout. Such option shall expire on the second anniversary of this
Agreement. The option on each game is exercisable by PGT giving written
notice to Psygnosis accompanied by a recoupable payment to be agreed
per game.
19.3 If Psygnosis cannot provide either the relevant code or rights
for a particular game or the parties have not been able to agree terms
for the same within the period of six months from PGTs initial written
request to Psygnosis to acquire a particular game, then PGT shall be
entitled to source the relevant game itself PROVIDED ALWAYS that if the
reason for non-supply by Psygnosis was that shall only be entitled to
acquire such game from a third party if the terms are substantially
better for PGT than those offered by Psygnosis. PGT shall be obliged
to disclose such terms to Psygnosis at least 10 working days prior to
completing such acquisition from such third party.
20. Legal Notices
20.1 Legal notices required to be sent under The Agreements shall be
sent to the addresses set forth in Sections 1 (for Licensor) 2
(for Licensee) above and addressed to the attention of the following
persons:
Licensor: Attn: Director of Business Affairs
If by facsimile: (44)151-282-3353
Licensee: Attn: Chairman of the Board
If by facsimile: 416-972-1934
21. Choice of Law and Legal Jurisdiction
The Agreements shall be governed by and construed under English Law,
and disputes settled in the English Courts unless Psygnosis in its
absolute discretion chooses any different Law or jurisdiction.
22. Database Rights
PGT shall supply Psygnosis with a fully up to date detailed database of
all access and usage by persons to the golf web site and Internet
Version including names and addresses and other information reasonably
requested by Psygnosis quarterly within each Royalty Report. In
addition Psygnosis shall be entitled to access and use such Database at
least two times per year in connection with marketing of Psygnosis
products.
23. Sponsorship of Golf Event
If requested by Psygnosis, PGT shall support a golf event by
contributing $5,000
towards the costs of such event. In return, PGT shall be entitled to
enter 8 players in such event and arrange press conferences and other
PR activities as acceptable to the golf club.
24. Option Shares
24.1 In consideration of the license granted by Psygnosis to PGT under
clause 3 of this Agreement (receipt of which is hereby acknowledged)
Psygnosis is hereby granted by PGT an exclusive option to acquire 25%
of the issued share capital of PGT as calculated at the date hereof
(which equates to 3,287,100 shares of common stock). The option shall
last for the period set out in para 24.2.6 below (the Option Period).
The Option shall be exercisable by Psygnosis at its absolute discretion
by giving written notice to PGT and paying the aggregate exercise price
of $1.00 (one dollar).
24.2 During the Option Period, PGT and the shareholders of PGT as
defined in
Schedule 2 (*the Shareholders) agree with Psygnosis as follows:
24.2.1 Any expansion, development or evolution of PGTs business or any
part thereof would be effected only through PGT or a wholly owned
subsidiary of PGT. ( For the purpose of this Agreement and in
particular this clause 24.2.1 and 24.2.2, PGTs business shall include
all and any on-line or internet enabled games or gaming activities in
any genre including but not limited to golf and other sports.) No
holding or parent company of PGT shall be set up without Psygnosis
written consent.
24.2.2 The Shareholders will not directly or indirectly be engaged
or concerned in any business which is the same or similar or in
competition to PGTs business or any subsidiary or holding company of
PGT during any period they work for PGT, hold office with PGT or hold a
stock holding in PGT.
24.2.3 PGT shall not dispose of the whole or a material part of its
assets or liabilities.
24.2.4 PGT shall not cease to carry on its business or take any
steps for its dissolution, liquidation or winding up except if PGT is
insolvent.
24.2.5 PGT shall produce quarterly management accounts for
Psygnosis (details to be discussed, but including balance sheet, profit
and loss account and cash flow).
24.2.6 The Option Period shall remain in force until the happening
of one of the following events:
24.2.6.1 Psygnosis exercise its share option (see 24.2.7 below)
24.2.6.2 The 3rdh anniversary of the execution of the Agreement
referred to in 24.4 below or two years after date of an Initial Public
Offering of PGT CIPO*), whichever is earlier.
24.2.7 If Psygnosis choose to exercise the share purchase
option then a new agreement shall be entered into by Psygnosis, PGT and
the Shareholders that contain similar terms to those in this para 24.2
including registration rights for Psygnosis stock If such agreement is
not entered into within 60 days of Psygnosis delivering a first draft
to PGT and the Shareholders then this License Agreement shall
terminate.
The Shareholders agreement to the terms under this Clause 24.2 are
dealt with under clause 24.4 below
24.3 PGT warrants that:
24.3.1 at the date of this Agreement there are no more than
9,861,300 sharesof Common Stock issued and outstanding on a fully-
diluted basis, assuming exercise or conversion of all. options,
warrants and other rights to acquire Common Stock of PGT.
24.3.2 at the date of this Agreement PGT only has Common Stock
outstanding and there is no Preferred Stock.
24.3.3 It will not create any Preferred Stock that would have
preference over Common Stock without Psygnosis consent. Psygnosis
consent would be conditional on Psygnosis option transferring to
Preferred Stock and that Psygnosis is not diluted disproportionally to
other stock holders.
24.3.4 The creation of the Option or any other terms of this
Agreement will not create any obligations on Psygnosis to fund PGT or
contribute to any liability of PGT.
24.3.5 PGT has taken all necessary corporate action to reserve the
shares of Common Stock issuable upon exercise of the Option. The shares
of Common Stock issuable upon exercise of the Option, when issued in
accordance therewith, will be validly issued, fully paid and non-
assessable.
PGT will therefore issue to Psygnosis an Option to acquire 3,287,1100
shares of
Common Stock of PGT. Any dilution of Psygnosis option stock pre or post
IPO will only be effective to the extent it is on a pro rata basis and
on the same terms as all other shareholders stock (including the
Shareholders). PGT warrants that, prior to an IPO, it will not issue
Common Stock that has the effect of diluting Psygnosis option or stock
to less than 15% of issued shares of Common Stock (on a fully-diluted
basis) without Psygnosis written consent.
24.4 PGT, Psygnosis and Shareholders will enter a more formal long
form agreement in good faith containing terms based on this clause 24.
PGT shall procure that Shareholders enter such agreement. PGT shall not
undertake any Initial Public Offering until such long form agreement
has been executed by PGT and the Shareholders. If such long form
agreement is not entered into by PGT and
Shareholders within 60 days of Psygnosis delivering a first draft to
PGT then this License Agreement shall terminate with immediate effect.
25. Assignment
Psygnosis shall be entitled to assign this Agreement as a whole or the
share option under clause 24 as a separate part.
This Agreement is in addition to the Confidentiality Agreement between
the parties dated 17 March 2000 that shall continue in full force and
effect.
ACKNOWLEDGED AND AGREED: ACKNOWLEDGED AND AGREED:
Psygnosis Ltd progolftournaments.com
By: /s/ John Bickley By: /s/ Sandy Winick
John Bickley Sandy Winick
Title: Vice President Publishing Title: Chairman of the Board
SCHEDULE 1
LICENSED COURSES
Royal County Down Expiry 9 May 2004
Royal Birkdale Expiry June 2002
Cour dAlene Expiry 11 May 2007
Lost City Expiry 21 November 2003
Blue Monster Expiry 6 April 2001
SCHEDULE 2
SHAREHOLDERS
Name Current Stock Holding
1 Sandy Winwick 1,475,000
2 Mary McGowan 2,700,000
3 Howard Klein 901,000
4 Lynn Stewart 1,000,000
EXHIBIT 99.2
VSTORE AGREEMENT
Subject: Welcome to VStore!
Date: Mon, 21 Feb 2000 08:28:48 -0700 (MST)
From: [email protected]
To: spike1ev passport.ca
Dear Michael Levine,
congratulations on building your own store with Vstore.com's
revolutionary e commerce system. You now have the potential
to earn money by selling any of the products that we supply.
The following is the information that is associated with
your store: store Name: progolftournaments
Store Address:
http://www.vstore.com/vstoreproshop/golfproshopandgame
You also have access to the Vstore.com Administration
System. This tool allows you to modify the look and feel of
your store, change your product selection, promote your
store and even keep up to date with your sales and
commissions.
To access the Vstore.com Administration System go to:
http://www.vstore.com/admin
Your Login is spikelev passport.ca
Your password is the one you supplied when you built your
store- Please note that logins and passwords are CASE sensitive.
This means VStore and vstore are not the same. If you have
lost or misplaced your password, you can get a new one at:
http://www.rstore.com/pswd vstorepartner.html
Vstore.com is eager to hear about your ideas and opinions.
You can submit your comments at
http://www.vstore.com/feedback.html If at any time you have
any questions about your store, please feel free to contact
the Customer Assistance Center at
customerservice vstore.com.
Thank you,
Vstore.com
