REGISTRATION NO. 333-93521
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment Number 5
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 registrant's principal executive offices)
Agent for Service: With a Copy to:
Michael Levine, Vice-President Christopher J. Moran, Jr.
Progolftournaments.com Attorney at Law
63 St. Clair Avenue West, Suite 1704 4625 Clary Lakes Drive
(416) 962-4508 Roswell, GA 30075
770-518-9542 770-518-9640
fax
(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 7485300 0.025 per share 187,132.50 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
Management's 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 day's 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 week's 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 management's 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.com's 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 stockholder's 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 Company's 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 broker's or dealer's 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-
Rhona 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 Registrant's securities, they may be
considered to be underwriters as that term is defined in the Securities Act.
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 in December, 1999.
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 Registrant's
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 person's 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.com's 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 participant's 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 Commission's 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 Commission's 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 Commission's 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
Note Payable, unsecured, due on demand,
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 Company's 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.
October 2, 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 1466
Legal and Accounting Expenses 5500
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 (6,426)
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
Progolftournaments.com (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 Company's 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. The
company's activity is directed at converting a personal computer based golf
game into a game that is enable to be played on the Internet. The company
is also developing it's web site and developing strategic partnerships to
help promote the game and website.
Revenue Recognition
The company is a development stage enterprise and accordingly has no
significant operations and revenue. The company expects to generate revenue
when their online golf tournament commences and will be charging a fee each
time the game is played. The company will recognize revenue on the accrual
basis as the service is provided.
Commitments
The company has entered into a software license agreement with Psygnosis
Ltd. , the owner of the personal computer software program known as Pro 18
World Tour Golf ('the game"). The company been granted an exclusive five
year contract to advertise, promote and market the internet version of the
game. The company has a option to renew the contract for a further five
years if Psygnosis Ltd. receives at least $5 million in royalties during the
initial term. The company also the access and right of first refusal of any
other games that Psygnosis Ltd. owns.
The terms of the contract require that the company develop the internet
version of the game at its cost. Psygnosis Ltd. will contribute $100,000
toward the development of the software which will be considered a royalty
advance. Psygnosis Ltd. will be entitled to royalties of 25% of the gross
game revenues net of prize pool pay out and 12.5 % of gross advertising
revenue with minimum royalty payments of $1 million per year. The company
has advanced $5,000 to Psygnosis Ltd. as a royalty advance with a further
$5,000 required within 30 days of the internet version becoming available on
the internet. These advances will be applied against the royalties payable
as the royalties become due.
Psygnosis Ltd. has also been granted an option to purchase 25% of the
issued share capital of the company, calculated at 3,287,100 shares, for an
aggregate price of $1. The option is effective to March 17, 2003 or two
years after the date of the Initial Public Offering of the company.
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.
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 $12,197
Net deferred tax asset $ 0
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
"Management's 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 in this S1 registration statement.
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 "Management's Discussion and
Analysis of Financial Condition and Results of Operations".
MANAGEMENT'S 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
10.1 and 10. 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 1381038 Ontario Inc., a
company in the automotive leasing business at a interest rate of one percent
per month on the unpaid balance. The purpose of the loan was to generate
interest earnings on funds that might otherwise remain idle. This loan was
made to an unrelated party and is completely at arms length. 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 management's 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 company's 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 Company's
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. Winick's 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 agent's and registrar's 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 person's 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 Company's 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
Company's 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 Company's 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 475,200
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 Page
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
10.1 Psygnosis Ltd. Contract*
10.2 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 registrant's 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 October 2, 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: 10/02/00
Howard I. Klein
s/s Michael R. Levine Vice President and Director Date: 10/02/00
Michael R. Levine
s/s Sandy Winick Treasurer and Director Date: 10/02/00
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 in this registration statement of our report dated October 2,
2000 included in the Progolftournament.com Form S-1 amendment dated October
3, 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.
October 3, 2000
PROGOLFTOURNAMENTS.COM
3266 Yonge Street, suite 1203
Toronto, ON M4N 3P6
(416) 962-4508
October 3, 2000
United States Securities and Exchange Commission
Division of Corporate Finance
Washington, DC 20549
File No. 333-93521
Attention: Ms. Nicole Maddrey
Ladies and Gentlemen:
This letter is in response to your comment letter dated September 29, 2000
on our Company's amended S-1 registration statement, filed August 28, 2000.
We are simultaneously filing plain and marked hard copies of the amended
filing and plain and marked copies via EDGAR. This response to comments
letter, any undertakings and all other supplemental information requested by
you will be included with the filings by both methods.
1. We note your comment and are including a letter of request for
acceleration with this filing via EDGAR with a copy under separate cover
directly to you.
Selling Shareholders
2. Sentence eliminated as per comment.
Plan of Distribution
3. Revision made
Financial Statements as of June 30, 2000.
4. Revisions made.
Financial Statements as of September 30, 1999
5. We have made many changes to the footnotes of the September 30, 1999
statements. However, there were no transactions with anyone as of September
30, 1999. Undoubtedly our auditor will deal thoroughly with these items in
our next audited statements for our current year ending September 30, 2000.
Development Stage Activities
6. Revisions made.
Revenue Recognition
7. Disclosure is revised
Consent of Independent Auditor
8. Appropriate changes have been made to the consent and to the Independent
Auditor's report.
Results of Operations
9. Appropriate Changes have been made throughout the document.
10. Revisions have been made to comply with this comment.
11. This comment is noted and complied with. Please see Comment and
response #9.
Please find a copy of our request for acceleration which follows this
letter.
Thank you.
Yours Truly
Progolftournaments.com
/S/ Michael Levine
Michael Levine, Vice President
Progolftournaments.com
63 St. Clair Avenue, West
Suite 1702
Toronto, ON M4V 2Y9 Canada
October 3, 2000
United States Securities and Exchange Commission
Division of Corporate Finance
Washington, DC 20549
Re: Request for acceleration of the effective date of the Form S1 of
Progolftournaments.com.
Ladies and Gentlemen:
Pursuant to the requirements of Section 8(a) of the Securities Act the
undersigned hereby requests that the Form S 1 Registration Statement of
Progolftournaments.com be declared effective at 5:00 PM Eastern Daylight
Time on October 11, 2000 or on such earlier or later date as the Commission,
acting pursuant to this Section 8(a), shall determine.
Yours Truly,
Progolftournaments.com
/S/ Sandy Winick
Sandy Winick, Chairman of the Board
EXHIBIT 27. 1
FINANCIAL DATA SCHEDULE
