<PAGE>
September 4, 1996
Electronic Transmittal by EDGAR
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, DC 20549
Attn: Filing Desk
Re: Ajay Sports, Inc. (the "Registrant")
Ladies and Gentlemen:
On behalf of Ajay Sports, Inc. (the "Registrant"), following this
letter we are transmitting for filing under the Securities Act of 1933 one
conformed copy of a Registration Statement on Form S-3 and the exhibits thereto
(the "Registration Statement") covering the registration for resale by certain
security holders of up to 666,667 shares the Registrant's common stock. The
signature page and consents have been have been signed and will be retained by
the Registrant in accordance with Rule 302 of Regulation S-T.
The registration fee of $100 is available in the Registrant's filing
fee account with the SEC.
If you have any questions, please call me at the letterhead address and
phone number.
Very truly yours,
Mary M. Maikoetter
For the Firm
Enclosures
cc: Thomas W. Itin, President, Ajay Sports, Inc.
Duane R. Stiverson, Chief Financial Officer, Ajay Sports, Inc.
Ronald N. Silberstein, C.P.A., Hirsh & Silberstein, P.C.
Michael Valocchi, C.P.A., Coopers & Lybrand, L.L.P.
Nasdaq (three copies)
12472_1
<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 4, 1996
Registration No. 333-_______
- --------------------------------------------------------------------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------
AJAY SPORTS, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
39-1644025
(I.R.S. Employer Identification No.)
1501 E. Wisconsin Street, Delavan, Wisconsin 53115
(414) 728-5521
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Thomas W. Itin, President
Ajay Sports, Inc.
1501 E. Wisconsin Street, Delavan, Wisconsin 53115
(414) 728-5521
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
Mary M. Maikoetter, Esq.
Friedlob Sanderson Raskin Paulson & Tourtillott, LLC
1400 Glenarm Pl., Suite 300
Denver, Colorado 80202
(303) 571-1400
Approximate date of proposed sale to the public: As soon as practicable
after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
4285_1
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed maxi-
maximum mum aggregate Amount of
Title of each class of securities Amount to be offering price offering price registration fee
to be registered registered per unit (1) (1) (1)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 666,667 $.425 $283,334 $100
====================================================================================================================
</TABLE>
(1) Pursuant to Rule 457(c), the registration fee is based on the average
of the closing bid and asked prices quoted by Nasdaq on August 26, 1996
(a date within five business days prior to the filing of this
registration statement).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
4285_1
<PAGE>
SUBJECT TO COMPLETION, DATED SEPTEMBER 4, 1996
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PROSPECTUS
AJAY SPORTS, INC.
1501 E. Wisconsin Street
Delavan, Wisconsin 53115
666,667 Shares of Common Stock
The shares of common stock of Ajay Sports, Inc. offered hereby will be
sold by the Selling Security Holders named herein from time to time in the
over-the-counter market. All proceeds from this offering will be retained by the
Selling Security Holders and they will pay their respective cost of selling
their shares of common stock.
Only holders who are residents of states in which this offering is
registered will be able to sell their shares of common stock pursuant to this
Prospectus.
The common stock of Ajay Sports, Inc. is quoted on the Nasdaq SmallCap
Market under the trading symbol "AJAY."
See "Risk Factors" beginning on page 5 for a discussion of certain risks
associated with an investment in the common stock offered hereby.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is _________ __, 1996
4285_1
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<PAGE>
(inside front cover of prospectus)
AVAILABLE INFORMATION
Ajay Sports, Inc. is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and, in accordance
therewith files periodic reports, proxy statements and other information with
the United States Securities and Exchange Commission (the "Commission"). In
addition, the Company has filed a Registration Statement on Form S-3 under the
Securities Act of 1933 (the "Securities Act") with respect to the securities
offered hereby with the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549. This prospectus does not contain all of the information contained in the
Registration Statement. For further information regarding both the Company and
the securities offered hereby, reference is made to the Registration Statement,
including all exhibits and schedules therein. The Company's periodic reports,
proxy statements and other information, and the Registration Statement may be
inspected at the Commission's Washington, D.C. office, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the regional offices of the Commission located at
7 World Trade Center, Suite 1300, New York, New York 10048; and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of all
or any of the foregoing may be obtained from the Public Reference Section of the
Commission at its Washington, D.C. address upon request and payment of the
prescribed fee. In addition, the Company files its information with the
Commission electronically through EDGAR and the Commission maintains a Web site
(http://www.sec.gov) that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission.
No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus, and, if given or made, such information or representations must not
be relied on as having been authorized by the Company. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy, by any person
in any jurisdiction in which it is unlawful for such person to make such offer
or solicitation. Neither the delivery of this Prospectus nor any offer,
solicitation or sale made hereunder shall under any circumstances create an
implication that the information herein is correct as of any time subsequent to
the date of this Prospectus.
4285_1
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<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements and related notes appearing elsewhere in
this Prospectus or incorporated in this Prospectus by reference.
The Company
Ajay Sports, Inc. (the "Company") markets and distributes golf clubs,
golf bags, golf accessories, hand-pulled carts and additional items such as
billiard accessories through its wholly-owned subsidiaries, Ajay Leisure
Products, Inc. ("Ajay") located in Delavan, Wisconsin, and Palm Springs Golf,
Inc. ("Palm Springs"), located in Cathedral City, California. The Company is
presently one of the largest United States distributors of golf accessories, as
well as one of the nation's largest manufacturers and distributors of golf bags
and hand-pulled golf carts. Through another wholly owned subsidiary, Leisure
Life, Inc. ("Leisure Life"), the Company also designs, manufactures, and markets
casual living furniture.
The Company's principal executive offices are located at 1501 E.
Wisconsin Street, Delavan, Wisconsin 53115 and its telephone number at that
address is (414) 728-5521.
For a detailed summary of the Company's business, See "Item 1 -
Description of Business" in the Company's 1995 Form 10-K, which report is
incorporated herein by reference.
The Offering
Securities offered ........................666,667 shares of common stock by the
holders thereof.
Common Stock outstanding
at June 30, 1996 .......................23,244,039 (1)
Nasdaq symbol for the Common Stock.........AJAY
- ----------
(1) Does not include (a) 4,307,927 shares issuable upon optional conversion
of the Company's 296,170 outstanding shares of Series C 10% Cumulative
Convertible Preferred Stock (the "Series C Preferred Stock"); (b)
472,727 shares of common stock issuable upon optional conversion of the
32,500 shares of Series C Preferred Stock and 32,500 shares of common
stock issuable upon exercise of warrants, included in the derivative
securities issued to the representative of the underwriter's in
connection with the Company's sale of its Series C Preferred Stock; (c)
1,208,470 shares of common stock underlying warrants to purchase common
stock exercisable at $1.00 per share through December 31, 1996; (d)
3,676,500 shares issuable upon optional conversion of 12,500
outstanding shares of the Company's Series B Preferred Stock; or (e)
14,922,873 shares of common stock issuable upon exercise of stock
options exercisable at prices between $.34 and $.90 per share.
-3-
<PAGE>
Summary Consolidated Financial Information
<TABLE>
<CAPTION>
Six Months
Year Ended December 31, Ended June 30,
--------------------------------------------------- --------------
(in thousands, except per share amounts and ratios)
Statement of Operations: 1991 1992 1993 1994 1995 1995 1996
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales..........................$20,049 $21,014 $15,902 $12,899 $18,728 $9,939 $14,587
Gross profit....................... 3,914 3,858 1,730 608 3,437 2,007 2,785
Operating income (loss)............ 677 962 (1,104) (2,139) 190 559 327
Net income (loss).................. (2,121) 381 (1,921) (3,080) (652) 164 (175)
Net income (loss)
per common share................. (.26) .02 (.24) (.27) (.03) .01 (.02)
Weighted average common
shares outstanding .............. 8,270 8,457 8,812 12,218 22,722 22,546 23,268
</TABLE>
June 30, 1996
-------------
(in thousands)
Balance Sheet Data:
Working capital.......................................................$ 5,778
Total assets.......................................................... 20,330
Long-term debt.................................................. ..... 5,102
Stockholders' equity.................................................. 4,435
The operating and balance sheet data shown above were derived from
audited financial statements of the Company for full fiscal years, as well as
unaudited interim period financial statements. The data should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations," as well as the Consolidated Financial Statements of
the Company and notes thereto, included in the Company's 1995 Form 10-K, which
is incorporated herein by reference and its Quarterly Report on Form 10-Q for
the period ended June 30, 1996. The results of operations for the six months
ended June 30, 1996 are not necessarily indicative of the operating results for
the full year.
-4-
4285_1
<PAGE>
RISK FACTORS
Any investment in the common stock offered hereby will involve a high
degree of risk and may result in the loss of some or all of the entire amount
invested. Prospective investors should consider carefully the following risks,
as well as all other information incorporated in this Prospectus.
Losses from Operations. For the year ended December 31, 1995, the
Company had a small operating profit of $190,000. With the exception of the 1995
and 1992 fiscal years, the Company has incurred losses from operations since its
inception. At June 30, 1996, the accumulated deficit was $9,311,000 (unaudited).
There is no assurance that the Company will maintain or increase its operating
profitability in 1996. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the Consolidated Financial Statements
contained in the Company's 1995 Form 10-K and June 1996 Form 10-Q, which are
incorporated herein by reference.
Significant Indebtedness. At June 30, 1996, the Company has bank
indebtedness of approximately $12,902,000, the current portion of which was
approximately $7,800,000. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Company's 1995 Form 10-K and June
1996 Form 10-Q, which are incorporated herein by reference.
Price Sensitivity. Sales of golf accessories, golf bags, hand-pulled
golf carts, billiard accessories, indoor and outdoor leisure furniture to mass
merchandisers and regional retailers are highly price-sensitive. Increases in
labor, material and manufacturing costs could adversely affect the Company's
margins and, therefore, its profits.
See "Business."
Reliance on Foreign Supplies and the Conduct of Business in Foreign
Jurisdictions. Ajay purchases certain parts, components, and products abroad.
Accordingly, the relative value of the U.S. dollar against foreign currencies,
the imposition of tariffs, import and export controls, and changes in
governmental policies could significantly affect its margins and, therefore, its
profits. Furthermore, a portion of its manufacturing operations are conducted in
Mexico, where such operations may be subject to local economic, social and
political influences, including but not limited to, transportation delays and
interruptions, political and economic uncertainty and disruptions, and labor
strikes, any of which could adversely affect its operations. To date, the
Company has not experienced any material adverse effects as a result of its
foreign operations. See "Business - Competition" in the Company's 1995 Form 10-K
which is incorporated herein by reference.
Competition. Ajay and Palm Springs compete with other manufacturers of
golf clubs, golf accessories, golf bags, hand-pulled golf carts and related
sports accessories, some of which have greater assets, name recognition, broader
product lines, distribution networks, and financial, managerial, and marketing
resources than the Company. Leisure Life, the other operating subsidiary of the
Company, has had only limited operations and sales to date. At this time, as
compared to the large number of manufacturers of indoor and outdoor furniture,
it is not a significant competitor. See "Business - Competition" in the
Company's 1995 Form 10-K which is incorporated herein by reference.
Reliance on Significant Customers. During the years ended December 31,
1994 and 1995 approximately 72% and 62%, respectively, of the Company's sales
were attributable to its top ten customers, most of whom were mass
merchandisers. Ajay's largest customer accounted for approximately 36% of Ajay's
sales in 1995. The Company has experienced the loss of a significant customer in
the past, resulting in a marked decrease in sales. The loss of any of these
customers could adversely affect the Company's business. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Results of Operations" and "Business - Marketing and Distribution" in the
Company's 1995 Form 10-K which is incorporated herein by reference.
Dependence on Discretionary Consumer Spending. Approximately 89% of the
Company's sales in 1995 were golf products. The demand for golf products is
related to the number of persons playing golf and the number of rounds of golf
played, as well as the amount of discretionary spending by consumers. Each of
these factors may be adversely affected by general economic conditions. A
decrease in consumer spending on golf could have an adverse effect on the
-5-
<PAGE>
Company's financial condition and results of operations. Seasonal weather
condition patterns can significantly affect the golf business and all products
involved. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Results of Operations" and "Business" in the Company's
1995 Form 10-K which is incorporated herein by reference.
Dependence on Management. The Company is dependent upon the management
of Ajay, Palm Springs and Leisure Life for the day-to-day operation of its
business and in particular is dependent upon the services of Thomas W. Itin,
Chairman and President of the Company, Clarence H. Yahn, President of Ajay and
Leisure Life and Ross Kvinge, President of Palm Springs. The loss of services of
any of these officers for any reason could have a material adverse effect on the
Company's business. The Company has an employment agreement with Mr. Itin which
expires December 31, 1996. The Company does not have an employment agreement
with Mr. Yahn. No assurance can be given that the Company would be able to
replace these men should the Company lose their services. The Company does not
have key man insurance on any of its officers. See "Executive Officers of the
Company" and "Executive Compensation" in the Company's Proxy Statement dated
April 22, 1996, which is incorporated in this Prospectus by reference.
Product Liability. The Company faces the risk of exposure to product
liability claims if consumers using its products are injured in connection with
their use. While the Company will continue to attempt to take appropriate
precautions, there can be no assurance that they will avoid significant product
liability exposure. Although management believes that the Company has adequate
product liability insurance based on its historical coverage, there can be no
assurance that its current insurance coverage is adequate, that economically
affordable insurance coverage can be maintained or will be available at all in
the future, or that a product liability claim would not materially adversely
affect the business or financial condition of the Company. See "Legal
Proceedings" in the Company's 1995 Form 10-K which is incorporated herein by
reference.
Dependence on License Agreements. A significant portion of the
Company's revenues result from the sale of products manufactured and sold
pursuant to various license agreements. No assurance can be given that the
Company will be able to remain a licensee under such agreements and the loss of
any such license could have a material adverse effect on the Company's business.
See "Description of Business - Licensing" in the Company's 1995 Form 10-K which
is incorporated herein by reference.
Authorization of Preferred Stock. The Company is authorized to issue up
to 10,000,000 shares of preferred stock, in one or more series, with such
rights, preferences, qualifications, limitations, and restrictions as shall be
fixed and determined by the Company's Board of Directors from time to time. Any
such preferences may operate to the detriment of the rights of the holders of
the Common Stock. As of June 30, 1996, the Company had issued and outstanding
12,500 shares of Series B Preferred Stock and 296,170 shares of Series C
Preferred Stock and warrants to purchase up to 32,500 shares of Series C
Preferred Stock held by the representative of the underwriters in the Company
public offering of its Series C Preferred Stock.
Control by Management. The present management of the Company owns,
assuming no exercise of the Warrants or other stock options and no conversion of
the outstanding Preferred Stock, approximately 47% of the outstanding common
stock. Given the magnitude of convertible securities owned by management, the
lack of cumulative voting, and the fact that one-third of the Company's
outstanding common stock constitutes a quorum, persons not affiliated with
management may not have the power to elect any director. See "Principal
Shareholders" in the Company's Proxy Statement dated April 22, 1996 which is
incorporated herein by reference.
Possible Volatility of Stock Market/Penny Stock Regulation. In recent
years the stock market has experienced significant price and volume
fluctuations. These fluctuations, which are often unrelated to the operating
performance of specific companies, have had a substantial effect of the market
price for many small capitalization companies. The Company's common stock is
quoted on the Nasdaq SmallCap Market under the symbol "AJAY," and is publicly
traded in the over-the-counter market. There can be no assurance of continued
inclusion on Nasdaq or continuance of a public market for the Company's common
stock. Securities which are not listed on a national securities exchange or
quoted on the Nasdaq system, which have a share price of less than $5.00
(provided that current price and volume information with respect to transactions
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<PAGE>
in such securities is provided by the exchange or system) may be classified as
"penny stocks." Broker-dealers trading in penny stocks must provide potential
purchasers certain risk disclosure information about penny stock in accordance
with Securities and Exchange Commission regulations. These disclosure
requirements may have the effect of reducing the level of trading activity in
the secondary market.
Potential Future Sales Under Rule 144. Of the 23,244,039 shares of
common stock outstanding at June 30, 1996, 14,893,495 (including the shares
offered for sale hereunder) are "restricted securities" and may in the future be
sold in compliance with Rule 144 under the Securities Act of 1933, as amended
(the "Securities Act"). Rule 144 generally provides that beneficial owners of
shares who have held such shares for two years may sell within a three-month
period a number of shares not exceeding one percent of the total outstanding
shares or the average trading volume of the shares during the four calendar
weeks preceding such sale. Sales of substantial amounts of Common Stock in the
public market after the offering pursuant to Rule 144 or otherwise, or the
perception that such sales could occur may adversely affect prevailing market
prices of the Common Stock. Approximately 50% of these restricted shares are now
eligible for sale under Rule 144 and substantially all of the remaining
restricted shares will be eligible for sale under Rule 144 in October 1996.
Exercise of Registration Rights. If the Company proposes to register
shares of Common Stock under the Securities Act, either for its own account or
for the account of stockholders exercising registration rights, holders subject
to outstanding options may require the Company, subject to certain limitations,
to include all or part of their shares in the registration. The exercise of any
of these registration rights may hinder the Company in making public offerings
of its securities in the future and may adversely affect the market price of the
Common Stock.
Options, Warrants and Convertible Securities; Potential Dilution and
Adverse Impact on Additional Financing. As of June 30, 1996, the Company had
outstanding options, warrants, and convertible securities to acquire an
aggregate of 24,620,997 shares of Common Stock. If these outstanding options,
warrants, and convertible securities are exercised or converted, dilution to the
interests of the Company's shareholders may occur. For the life of the options,
warrants, and convertible securities described above, the holders will have the
opportunity to profit from a rise in the price of the underlying Common Stock.
The existence of such options, warrants, and convertible securities may
adversely affect the terms on which the Company can obtain additional financing,
and the holders of such options, warrants, and convertible securities can be
expected to exercise them at a time when the Company would, in all likelihood,
be able to obtain additional capital by an offering of its unissued capital
stock on terms more favorable to the Company than those provided by such
options, warrants, and convertible securities.
Dividends. The Company's Series B Preferred Stock and Series C
Preferred Stock, are entitled to certain dividends and have a preference as to
the payment of any dividend on any other shares of capital stock of the Company.
Accordingly, the Company does not contemplate paying cash dividends on Common
Stock in the foreseeable future since it will use all of its earnings, if any,
after the payment of dividends on the Series B Preferred Stock and Series C
Preferred Stock, to finance expansion of its operations.
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<PAGE>
USE OF PROCEEDS
The Company will not receive any proceeds of sales of common stock made
by the Selling Security Holders under this Prospectus. The shares being offered
by the holders were issued by the Company in connection with the acquisition of
its Palm Springs golf business, which acquisition is described in the Company's
Current Report on Form 8-K dated October 6, 1995, which report is incorporated
herein by reference.
SELLING SECURITY HOLDERS
The 666,667 shares of common stock offered hereunder and the holders
thereof are described in the table below. The Selling Security Holders are the
former owners of the Company's Palm Springs golf business and received their
shares in connection with the Company's acquisition of this business.
<TABLE>
<CAPTION>
Number of Shares Number of Shares
of Common Stock Number of Shares of Common Stock to be
Name and Address Beneficially Owned of Common Stock Beneficially Owned
of Selling Security Holder Prior to the Offering Being Offered After the Offering
------------------------- --------------------- --------------- ---------------------
<S> <C> <C> <C>
Adrian Marsden
1717 University Ave. West
St. Paul, MN 55104-3688 234,666 234,666 -0-
A. Jerri Marsden
12 Point Road
Bayport, MN 55003 234,666 234,666 -0-
Edward Ball
205 North Chestnut
McPherson, KS 67460 37,334 37,334 -0-
William Johnson
520 South Park
McPherson, KS 67460 18,667 18,667 -0-
Joe Giuffre
1460 S.E. 15th St., #C
Ft. Lauderdale, FL 33316 70,667 70,667 -0-
Katherine G. Kittrell
8027 N. 5th Street
Phoenix, AZ 85020 70,667 70,667 -0-
</TABLE>
PLAN OF DISTRIBUTION
The 666,667 shares of Common Stock offered hereunder may be sold from
time to time by the holders thereof on the Nasdaq SmallCap Market, in the
over-the-counter market, or otherwise at prices and at terms then prevailing or
at prices related to the then current market price, or in negotiated
transactions. The shares of common stock may be sold by one or more of the
following: (a) a block trade in which the broker or dealer so engaged will
attempt to sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction; (b) purchases by a broker or
dealer as principal and resale by such broker or dealer for its account pursuant
to this prospectus; and (c) ordinary brokerage transactions and transactions in
which the broker solicits purchasers. Brokers or dealers will receive
commissions or discounts from the selling stockholders in amounts to be
negotiated immediately prior to the sale. The brokers or dealers and any other
participating brokers or dealers may be deemed to be "underwriters" within the
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<PAGE>
meaning of the Securities Act in connection with such sales. To the Company's
knowledge, no underwriter has agreed to purchase from the selling security
holders any particular common stock being sold under this Prospectus; nor has
any broker or dealer agreed to act as a placement agent for the selling security
holders. The selling security holders may, from time to time during the
offering, enter into agreements with various brokers or dealers for the offer
and sale of the common stock offered hereunder, but the Company is not aware of
any such agreement. In such an event, each broker or dealer will be obligated to
offer and sell all or a portion of the common stock under the terms and
conditions and for the fees or commissions set forth in those agreements.
Upon their sale under this Prospectus, the shares of common stock
offered by the holders thereof will be freely transferable and tradeable without
restriction or further registration under the Securities Act, except that any
shares purchased or held by any affiliate of the Company will be subject to
certain resale limitations of Rule 144 promulgated under the Securities Act.
EXPERTS
The consolidated financial statements of Ajay Sports, Inc. and
subsidiaries for the years ended December 31, 1994 and 1995, have been
incorporated herein by reference in reliance upon the report of Hirsch &
Silberstein, P.C., independent certified public accountants, upon the authority
of that firm as experts in accounting and auditing.
The consolidated financial statements of Ajay Sports, Inc. and
subsidiary for the year ended December 31, 1993 have been incorporated herein by
reference in reliance upon the report of Coopers & Lybrand, L.L.P., independent
certified public accountants, upon the authority of that firm as experts in
accounting and auditing.
MATERIAL CHANGES
There have been no material changes in the Company's affairs which have
occurred after December 31, 1995, the latest year for which financial statements
were included in the Company's 1995 Annual Report on Form 10-K and which have
not been described in subsequent reports on Form 10-Q or current reports on Form
8-K filed by the Company under the Exchange Act.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the
Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934 (the "Exchange Act") are incorporated herein by reference:
1. Current Report on Form 8-K, Date of Report October 6, 1995, as filed
with the Commission on or about October 23, 1995, as amended by a Form 8-KA
which was filed with the Commission on or about December 12, 1995.
2. Annual Report on Form 10-K for the year ended December 31, 1995 (the
"1995 Form 10-K"), filed with the Commission on or about March 31, 1996.
3. Proxy Statement dated April 22, 1996 used by the Company in
connection with its 1996 Annual Meeting of Stockholders.
4. Quarterly Report on Form 10-Q for the period ended March 31, 1996,
filed with the Commission on or about May 9, 1996 ("March 1996 Form 10-Q").
5. Quarterly Report on Form 10-Q for the period ended June 30, 1996,
filed with the Commission on or about August 13, 1996 ("June 1996 Form 10-Q").
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<PAGE>
6. The description of the common stock contained in the Company's
Registration Statement on Form 8-A filed with the Commission on January 2, 1990.
7. All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act prior to termination of this
offering.
The Company will provide, without charge, to each person to whom this
Prospectus is delivered, on written or oral request of such person, a copy
(without exhibits) of any or all documents incorporated by reference in this
Prospectus. Requests for such copies should be addressed to Ajay Sports, Inc.,
Attention: Duane R. Stiverson, CFO, 1501 E. Wisconsin Street, Delavan, WI 53115,
(414) 728-5521.
-10-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Category of Expense Amount
Registration and filing fees.........................$ 100
Blue sky fees and filing fees........................ 1,500
Legal fees and expenses.............................. 5,000
Accounting fees and expenses......................... 750
Miscellaneous........................................ 650
-----------------
Total................................................$ 8,000
=================
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law and Section 11 of
the Registrant's Restated Certificate of Incorporation, under certain
circumstances provide for the indemnification of the Registrant's officers,
directors, employees and agents against liabilities which they may incur in such
capacities. A summarization of the circumstances in which such indemnification
is provided for is contained herein, but that description is qualified in its
entirety by reference to Section 11 of the Registrant's Restated Certificate of
Incorporation and the relevant Section of the Delaware General Corporation Law.
In general, the statute provides that any director, officer, employee
or agent of a corporation may be indemnified against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement, actually and
reasonably incurred in a proceeding (including any civil, criminal,
administrative or investigative proceeding) to which the individual was a party
by reason of such status. Such indemnity may be provided if the indemnified
person's actions resulting in the liabilities: (i) were taken in good faith;
(ii) were reasonably believed to have been in or not opposed to the Registrant's
best interest; and (iii) with respect to any criminal action, such person had no
reasonable cause to believe the actions were unlawful. Unless ordered by a
court, indemnification generally may be awarded only after a determination of
independent members of the Board of Directors or a committee thereof, by
independent legal counsel or by vote of the stockholders that the applicable
standard of conduct was met by the individual to be indemnified.
The statutory provisions further provide that to the extent a director,
officer, employee or agent is wholly successful on the merits or otherwise in
defense of any proceeding to which he was a party, he is entitled to receive
indemnification against expenses, including attorneys' fees, actually and
reasonably incurred in connection with the proceeding.
Indemnification in connection with a proceeding by or in the right of
the Corporation in which the director, officer, employee or agent is successful
is permitted only with respect to expenses, including attorneys' fees actually
and reasonably incurred in connection with the defense. In such actions, the
person to be indemnified must have acted in good faith, in a manner believed to
have been in the Registrant's best interest and must not have been adjudged
liable to the Registrant unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability, in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expense which the Court of Chancery or such other court shall
deem proper. Indemnification is otherwise prohibited in connection
with a proceeding brought on behalf of the Registrant in which a director is
adjudged liable to the Registrant, or in connection with any proceeding charging
improper personal benefit to the director in which the director is adjudged
liable for receipt of an improper personal benefit.
II-1
<PAGE>
Delaware law authorizes the Registrant to reimburse or pay reasonable
expenses incurred by a director, officer, employee or agent in connection with a
proceeding in advance of a final disposition of the matter. Such advances of
expenses are permitted if the person furnishes to the Registrant a written
agreement to repay such advances if it is determined that he is not entitled to
be indemnified by the Registrant.
The statutory section cited above further specifies that any provisions
for indemnification of or advances for expenses does not exclude other rights
under the Registrant's Restated Certificate of Incorporation, Bylaws,
resolutions of its stockholders or disinterested directors, or otherwise. These
indemnification provisions continue for a person who has ceased to be a
director, officer, employee or agent of the corporation and inure to the benefit
of the heirs, executors and administrators of such persons.
The statutory provision cited above also grants the power to the
Registrant to purchase and maintain insurance policies which protect any
director, officer, employee or agent against any liability asserted against or
incurred by him in such capacity arising out of his status as such. Such
policies may provide for indemnification whether or not the corporation would
otherwise have the power to provide for it. No such policies providing
protection against liabilities imposed under the securities laws have been
obtained by the Registrant.
Article VII of the Registrant's Bylaws provides that the Registrant
shall indemnify its directors, officers, employees and agents to the fullest
extent permitted by the Delaware General Corporation Law.
The Selling Security Holders Agreements between the Registrant and each
of the Selling Security Holders provides that the respective Selling Security
Holders will indemnify and hold harmless the Registrant, the directors of the
Registrant, and each person, if any, who controls the Registrant within the
meaning of Section 15 of the Securities Act of 1933, as amended (the "Securities
Act") against any and all losses, claims, expenses and liabilities to which it
may become subject, arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in this Registration Statement or
Prospectus or in any blue sky application, or amendments thereto, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
resulting from the use of written information furnished to the Registrant by
said Selling Security Holders for use in the preparation of this Registration
Statement or the Prospectus, or in any amendment or amendments to this
Registration Statement or Prospectus or in any blue sky application.
The Underwriting Agreement between the Registrant and the underwriters
of Registrant's 1995 public offering effected through a registration statement
on Form S-2 (Registration No. 33-58753) provides that the underwriters will
indemnify and hold harmless the Registrant, the directors, officers, employees
and agents of the Registrant, and each person, if any, who controls the
Registrant within the meaning of Section 15 of the Securities Act, against any
and all losses, claims, demands, liabilities, joint or several, and legal or
other expenses (including the cost of any investigation and preparation) to
which it or they may become subject, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in said
registration statement or in any blue sky application or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, resulting from the use
of information peculiarly within its knowledge and furnished to the Registrant
in writing by the underwriters for use in the preparation of said registration
statement or in any blue sky application.
Item 16. Exhibits
Exhibit Consecutive
Number Exhibit Page Number
4.1 Restated Certificate of Incorporation See Note (1)
4.2 Bylaws of the Registrant See Note (1)
II-2
<PAGE>
5.1 Opinion Regarding Legality __
23.1 Consent of Hirsch & Silberstein, P.C. __
23.2 Consent of Coopers & Lybrand, L.L.P. __
24.1 Power of Attorney--Included on Signature Page __
- ----------
(1) Previously filed with and incorporated by reference from the
Registrant's Registration Statement on Form S-18, Registration No. 33-30760.
Item 17. Undertakings
1. The undersigned Registrant will:
(a) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to: (i) include any
additional or changed material information on the plan of distribution, and if
so required, (ii) include any prospectus required by Section 10(a)(3) of the
Securities Act; and (iii) reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information in
the registration statement; and 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) of the Securities Act) if, in the aggregate, the changes in the volume
and price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the effective
registration statement.
(b) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(c) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
2. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer, or controlling person of the registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
4285_1
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of West Bloomfield, State of Michigan, on August __,
1996.
AJAY SPORTS, INC.
By\s\ Thomas W. Itin
-------------------------
Thomas W. Itin, President
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and/or
directors of Ajay Sports, Inc., by virtue of their signatures appearing below,
hereby constitute and appoint Thomas W. Itin and Robert R. Hebard, each with
full power of substitution, as attorneys-in-fact, in their names, places and
steads to execute any and all amendments to this Registration Statement on Form
S-3 in the capacities set forth opposite their names below and hereby ratify all
that said attorneys-in-fact may do by virtue thereof.
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
President, Chief Executive Officer and
/s/Thomas W. Itin Director (Principal Executive Officer) September 4, 1996
- ------------------------------------------ --------------------
Thomas W. Itin
/s/Robert R. Hebard Director September 4, 1996
- ------------------------------------------ --------------------
Robert R. Hebard
Chief Financial Officer (Principal
/s/Duane R. Stiverson Financial and Accounting Officer) September 4, 1996
- ------------------------------------------ --------------------
Duane R. Stiverson
/s/ Clarence H. Yahn Director September 4, 1996
- ------------------------------------------ --------------------
Clarence H. Yahn
/s/Stanley V. Intihar Director September 4, 1996
- ------------------------------------------ --------------------
Stanley V. Intihar
/s/Anthony B. Cashen Director September 4, 1996
- ------------------------------------------ --------------------
Anthony B. Cashen
/s/Robert D. Newman Director September 4, 1996
- ------------------------------------------ --------------------
Robert D. Newman
</TABLE>
4285_1
II-4
<PAGE>
August 30, 1996
Ajay Sports, Inc.
1501 East Wisconsin Street
Delaware, Wisconsin 53115
Re: Registration Statement on Form S-3
Opinion of Counsel
Gentlemen:
As counsel for Ajay Sports, Inc., a Delaware corporation (the
"Corporation"), we have examined the Certificate of Incorporation, as amended,
the bylaws and minutes of the Corporation and such other corporate records,
documents, certificates and other instruments as in our judgment we have deemed
relevant for the purposes of this opinion. We also have examined the
Registration Statement on Form S-3 (the "Registration Statement"), covering the
registration on behalf of certain selling security holders of 666,667 shares of
the Corporation's common stock, $.01 par value (the "Shares").
Based upon the foregoing, we are of the opinion that the Shares are
and, following sale by the selling security holders pursuant to the Registration
Statement, will remain legally and validly issued, fully paid and
non-assessable.
We know that we are referred to under the caption "Legal Matters"
included in the Prospectus, forming a part of the Registration Statement. We
hereby consent to such use of our name in such Registration Statement and to the
filing of this Opinion as Exhibit 5.1 thereto. In giving this consent, we do not
thereby admit that we come within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933 or the Rules and
Regulations of the Securities and Exchange Commission promulgated thereunder.
Sincerely,
/s/Friedlob Sanderson Raskin Paulson & Tourtillott, LLC
Friedlob Sanderson Raskin Paulson & Tourtillott, LLC
12368_1
<PAGE>
HIRSCH & SILBERSTEIN, P.C.
31731 Northwestern Highway
Suite 156W
Farmington Hills, MI 48334-1662
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this Registration
Statement of Ajay Sports, Inc. and Subsidiaries on Form S-3 of our report dated
March 21, 1996, appearing in the Annual Report on Form 10-K of Ajay Sports, Inc.
and Subsidiaries for the year ended December 31, 1995 and to the reference to us
under the headings "Summary Consolidated Financial Information" and "Experts" in
the Prospectus, which is part of this Registration Statement.
/s/Hirsch & Silberstein
Hirsch & Silberstein
August 29, 1996
12360_1
<PAGE>
COOPERS & LYBRAND L.L.P.
The 411 East Wisconsin Building
Milwaukee, WI 53202
Consent of Independent Accountants
We consent to the inclusion in this registration statement on Form S-3
of our report, which includes an explanatory paragraph related to substantial
doubt about the Company's ability to continue as a going concern, dated March
25, 1994, on our audit of the consolidated statements of operations,
stockholders' equity and cash flows and financial statement schedule of Ajay
Sports, Inc. and Subsidiary for the year ended December 31, 1993. We also
consent to the reference to our firm under the caption "Experts."
/s/Coopers & Lybrand LLP
COOPERS & LYBRAND L.L.P.
Milwaukee, Wisconsin
August 30, 1996
12376_1
<PAGE>
