<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 15, 1997.
REGISTRATION NO. 333-18831
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
SPORT-HALEY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
COLORADO 84-1111669
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
</TABLE>
4600 EAST 48TH AVENUE
DENVER, COLORADO 80216
TELEPHONE: (303) 320-8800
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S
PRINCIPAL EXECUTIVE OFFICES)
ROBERT G. TOMLINSON
4600 EAST 48TH AVENUE
DENVER, COLORADO 80216
TELEPHONE: (303) 320-8800
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
ROBERT W. WALTER, ESQ.
BERLINER ZISSER WALTER & GALLEGOS, P.C.
SUITE 4700, 1700 LINCOLN STREET
DENVER, COLORADO 80203
TELEPHONE: (303) 830-1700
---------------
Approximate Date Of Commencement Of Proposed Sale To Public:
As soon as practicable after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [ X ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================================
AMOUNT PROPOSED PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE MAXIMUM OFFERING AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT(1) OFFERING PRICE(1) FEE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCK.......................................... 90,000 $13.75 $1,237,500 $ 375.00
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o).
-------------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
SPORT-HALEY, INC.
CROSS REFERENCE SHEET BETWEEN ITEMS OF FORM S-3
AND PROSPECTUS
<TABLE>
<CAPTION>
ITEM IN FORM S-3 LOCATION IN PROSPECTUS
---------------- ----------------------
<S> <C> <C>
1. Forepart of Registration Statement and Outside
Front Cover of Prospectus................................ Facing Page; Cross Reference Sheet; Outside
Front Cover Page.
2. Inside Front and Outside Back
Cover Pages of Prospectus................................ Inside Front Cover Page; Outside Back
Cover Page.
3. Summary Information, Risk Factors and Ratio
of Earnings to Fixed Charges............................. Prospectus Summary; Risk Factors.
4. Use of Proceeds.......................................... Prospectus Summary; Use of Proceeds.
5. Determination of Offering Price.......................... Outside Front Cover Page; Plan of
Distribution.
6. Dilution................................................. Not Applicable.
7. Selling Security Holders................................. Selling Shareholders.
8. Plan of Distribution..................................... Plan of Distribution.
9. Description of Securities to be Registered............... Outside Front Cover Page; Capitalization;
Description of Capital Stock.
10. Interests of Named Experts and Counsel................... Legal Matters; Experts.
11. Material Changes......................................... Not Applicable.
12. Incorporation of Certain Information by
Reference................................................ Incorporation of Certain Documents by
Reference.
13. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities........... Not Applicable.
</TABLE>
<PAGE> 3
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.
SUBJECT TO COMPLETION, DATED JANUARY 15, 1997
90,000 SHARES
[SPORT-HALEY LOGO]
SPORT-HALEY, INC.
COMMON STOCK
This Prospectus relates to 90,000 shares of Common Stock (the "Shares")
of Sport-Haley, Inc. (the "Company"), of which 70,000 Shares are issuable upon
exercise of representative's warrants (the "Representative's Warrants") sold to
Schneider Securities, Inc. (the "Representative") in connection with an
underwritten public offering undertaken in April 1994, and 20,000 Shares are
issuable upon exercise of advisor's warrants (the "Advisor's Warrants"; the
Representative's Warrants and the Advisor's Warrants hereinafter collectively
referred to as the "Warrants") sold to Cruttenden Roth Incorporated (the
"Advisor") in connection with an investment banking agreement executed by and
between the Company and the Advisor dated July 6, 1995. The Shares will be
offered by the holders of the Warrants who exercise their Representative's
Warrants and Advisor's Warrants and thereby purchase the underlying Shares (the
"Selling Shareholders"). The Company will receive the $6.50 per Share exercise
price of the Representative's Warrants and the $8.00 per Share exercise price
of the Advisor's Warrants, but will not receive any of the proceeds from the
sale of Shares by the Selling Shareholders. The Company has agreed to pay the
expenses of registering the Shares offered hereby estimated at $15,000.
The Selling Shareholders have advised the Company that they intend to
sell the Shares offered hereby as principals for their own accounts from time to
time in the over-the-counter market at prices prevailing at the time of sale.
The Registration Statement of which this Prospectus forms a part must be current
at the time of sale. See "Plan of Distribution."
On January 13, 1997, the last sale price of the Common Stock was
$13.55 per share. See "Price Range of Common Stock." The Company's Common Stock
is traded on the Nasdaq National Market under the symbol "SPOR".
------------
SEE "RISK FACTORS" ON PAGE 5 FOR A DISCUSSION OF CERTAIN RISKS ASSOCIATED
WITH AN INVESTMENT IN THE SECURITIES OFFERED HEREBY.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
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 , 1997.
<PAGE> 4
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company under the Exchange Act may
be inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the Commission's Regional Offices at Seven World Trade Center, 13th Floor, New
York, New York 10048, and Northwestern Atrium Center, 500 West Madison Street,
Chicago, Illinois 60661. Copies of such material may also be obtained from the
Public Reference Section of the Commission at prescribed rates.
The Company has filed with the Commission a registration statement
(together with all amendments thereto, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act") with respect to the
Shares offered hereby. This Prospectus, filed as part of the Registration
Statement, omits certain information contained in the Registration Statement in
accordance with the rules and regulations of the Commission. For further
information, reference is hereby made to the Registration Statement which may be
inspected and copied in the manner and at the sources described above. Any
statements contained herein concerning the provisions of any document are not
necessarily complete and in each instance, reference is made to the copy of such
document filed as an exhibit to the Registration Statement or otherwise filed
with the Commission. Each such statement is qualified in its entirety by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-KSB filed on October 12, 1996,
as amended on October 30, 1996, for the fiscal year ended June 30, 1996 and the
quarterly report on Form 10-QSB filed on November 14, 1996 for the quarter ended
September 30, 1996, both of which were filed with the Commission pursuant to the
Exchange Act, are hereby incorporated by reference into this Prospectus. The
description of the Company's capital stock contained in the Company's
Registration Statement on Form 8-A filed March 8, 1994, which Form 8-A
incorporated by reference the description of the Company's capital stock
contained in the Company's Registration Statement on Form SB-2 (S.E.C. File No.
33-74876-D) initially filed with the Commission on February 4, 1994, both of
which were declared effective on April 5, 1994 pursuant to the Exchange Act and
Securities Act, respectively, is hereby incorporated by reference into this
Prospectus.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold, or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference into this Prospectus and to be a part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated by reference herein shall be deemed to be modified or superseded to
the extent that a statement contained herein or in any other document
subsequently filed and incorporated by reference herein modifies or supersedes
such statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
Any person receiving a copy of this Prospectus may obtain without
charge, upon written or oral request, a copy of any of the documents
incorporated by reference herein, other than exhibits to such documents.
Requests for such copies should be directed to Steve Auger, Treasurer,
Sport-Haley, Inc., 4600 East 48th Avenue, Denver, Colorado 80216, Telephone:
(303) 320-8800.
2
<PAGE> 5
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this Prospectus. See "Risk Factors" for
information prospective investors should consider.
THE COMPANY
Sport-Haley designs, markets, and contracts for the manufacture of men's
and women's fashion golf apparel under the distinctive Haley label. The
Company's fashion golf apparel is known for its innovative styling, high quality
fabrics, generous fit and classic appearance. The Company's apparel is sold in
the premium and mid-price market through a network of independent sales
representatives to approximately 3,000 golf professional shops, country clubs
and resorts throughout the United States and Canada. The Company targets
distribution of its apparel to high quality golf professional shops, which
generally offer superior customer service and contribute to the appeal of the
Haley brand name. The Company custom embroiders a majority of its men's apparel
with a customer's club or resort logo, thereby promoting the image of both
Sport-Haley and its customer base and enhancing the marketability of the
Company's products. Sport-Haley's apparel is presented semi-annually to the golf
industry in the spring and fall collections consisting of a broad variety of
styles of men's and women's fashion golf apparel.
The Company's strategy is to enhance its position as a leading provider of
fashion golf apparel for golf professional shops by capitalizing on the market
awareness of the Haley brand name and expanding its distribution of existing and
recently introduced apparel lines. The Company intends to implement this
strategy by (i) increasing distribution through expansion of its network of
independent sales representatives and golf professional shop customer base, (ii)
expanding apparel lines through its recently introduced outerwear and headwear
products, (iii) exploiting new distribution arrangements in the United Kingdom,
Ireland and Japan and through securing additional international distribution,
(iv) diversifying existing apparel collections with continuing innovative
designs and styles, and (v) expanding sales to corporate, university and
tournament customers through brand name recognition and capitalizing on
additional embroidery capacity.
The Company was incorporated in Colorado in January 1991. Its principal
executive offices are located at 4600 East 48th Avenue, Denver, Colorado 80216,
and its telephone number is (303) 320-8800.
THE OFFERING
Common Stock offered by Selling Shareholders .... 90,000 shares
Common Stock outstanding at December 31, 1996 ... 4,344,647 shares
Use of proceeds.................................. The shares of Common Stock
are being offered by the
Selling Shareholders. The
Company will not receive any
proceeds from sale of the
Shares offered hereby.
Proceeds received by the
Company upon exercise of the
Warrants by the Selling
Shareholders will be added
to the Company's working
capital.
Nasdaq National Market(R) symbol ................. SPOR
3
<PAGE> 6
SUMMARY FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS
FISCAL YEAR ENDED JUNE 30, ENDED SEPTEMBER 30,
-------------------------- -------------------
1994 1995 1996 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
STATEMENTS OF INCOME DATA:
Net sales................................... $ 6,648 $ 12,567 $ 20,287 $ 4,168 $ 6,266
Gross profit................................ 2,352 5,102 8,568 1,795 2,620
Income from operations...................... 606 1,741 3,573 747 1,134
Net income.................................. 407 1,277 2,472 522 797
Net income per share........................ $ .23 $ .40 $ .66 $ .15 $ .17
Weighted average shares outstanding 1,806 3,201 3,770 3,511 4,776
<CAPTION>
JUNE 30, 1996 SEPTEMBER 30, 1996
------------- ------------------
<S> <C> <C>
BALANCE SHEET DATA:
Working capital.................................... $ 21,427 $ 21,023
Total assets....................................... 27,766 27,555
Long-term debt..................................... 68 89
Shareholders' equity............................... 24,365 25,194
</TABLE>
4
<PAGE> 7
RISK FACTORS
In addition to the other information in this Prospectus, prospective
investors should carefully consider the following risk factors prior to making
an investment in the Common Stock offered hereby.
COMPETITION
Competition in the golf apparel market is intense and is based primarily on
brand recognition and loyalty, quality, price, style and design, availability of
shelf space and service. Although the Company believes that it competes
favorably with respect to certain of these factors, there can be no assurance
that the Company will compete successfully with its present or potential
competition. The Company currently views Ashworth, Izod and Polo/Ralph Lauren as
its most significant competitors. While the golf apparel market is highly
fragmented, recent entries into the market by competitors offering apparel
comparable to that of the Company may intensify competitive pressures. Many of
the Company's current competitors have longer operating histories, better name
recognition and greater financial, marketing and other resources than the
Company. There can be no assurance that the Company will be able to maintain
market share as new competition develops, to increase its market share at the
expense of its existing competition, or that the Company will not experience
pricing pressures as a result of intensifying competition within the golf
apparel market.
In addition to competing with fashion golf apparel manufacturers, the
Company also competes with manufacturers of high quality men's and women's
sportswear and general leisure wear, including Tommy Hilfiger, a well-known
men's sportswear manufacturer, which entered the golf apparel market in 1996. A
number of these other manufacturers have substantially greater experience,
financial and marketing resources, manufacturing capacity, distribution and
design capabilities than the Company. Increased competition in the fashion golf
apparel market from these manufacturers or others could result in price
reductions, reduced margins or loss of market share, all of which could have a
material adverse effect on the Company's results of operations and financial
condition.
CHANGES IN APPAREL DESIGN; FORECASTING AND SCHEDULING
Fashion trends in the golf apparel business, while not as volatile as
certain segments of the apparel industry, are subject to rapid innovation and
change. Because the Company typically designs and arranges for the manufacture
of its apparel substantially in advance of sales to customers, there can be no
assurance the Company will accurately anticipate shifts in design trends. Should
the Company be unsuccessful in responding to fashion trends or changes in market
demand, the Company may experience insufficient or excess inventory levels,
missed market opportunities or higher markdowns, any of which may have a
material adverse effect on the Company's results of operations. The Company
develops forecasts for each of its apparel products and establishes production
schedules based upon these forecasts in order to build sufficient inventory to
meet expected customer demand. If the Company misjudges market demand for a
particular product, or if shipment delays from suppliers are experienced, the
Company's delivery schedules may be disrupted. Although the Company has been
successful in anticipating product demand in most instances, it has been
required to mark down inventory in the past in order to reduce inventory of
specific styles. There can be no assurance that the Company's forecast and
production schedules will accurately anticipate market demand, or that the
Company's results of operations will not be adversely affected by design trends,
changes in the market or other factors.
DEPENDENCE ON SUPPLIERS AND OUTSIDE CONTRACTORS
The Company obtains a majority of its raw fabric and trim from third party
independent domestic suppliers. The Company relies on certain foreign suppliers
for fabric used in producing pants and jackets and also utilizes three foreign
suppliers and one domestic supplier to source its Elements outerwear line.
Because each of these suppliers provides different portions of the Elements
line, the loss of any of these suppliers could
5
<PAGE> 8
have a potentially greater negative effect on the Company's ability to make
timely delivery of outerwear as opposed to its other apparel products. A portion
of the Elements line uses Gore-tex(R) products. Manufacturers using Gore-tex(R)
products must be approved vendors to use Gore-tex(R) fabrics in the
manufacturing process. Although the Company's current suppliers are approved for
use of Gore-tex(R) fabrics in the manufacturing process, there can be no
assurance the Company would be successful in identifying alternate approved
manufacturers on short notice in the event of loss of an existing supplier. The
Company relies on outside contractors for the cutting and sewing of 100% of the
Company's apparel products, and relies on outside suppliers for the provision of
headwear components such as bills, adjustable headbands and panels. The Company
does not have formal contracts with any of its suppliers or contractors, and
does not anticipate entering into such contracts in the future. Delays in
shipments to the Company, inconsistent or inferior quality and other factors
influenced by the Company's suppliers may adversely affect the Company's
relationships with its customers and independent sales representatives, its
reputation in the golf apparel industry and its sales and results of operations.
Reliance on foreign suppliers subjects the Company to risks including changes in
economic policies and political or labor conditions, and could result in the
imposition of new or additional currency or exchange controls. Although the
Company contracts to purchase fabric or finished apparel in United States
dollars, changes in exchange rates could increase the effective prices the
Company pays for its products.
During fiscal 1995, the Company utilized a supplier in Saipan, a United
States territory, from which the Company purchased finished apparel. The
supplier was responsible for obtaining fabric and trim, as well as cutting and
sewing operations. The Company experienced delivery delays from this supplier
and returned some finished apparel to this supplier for failure to meet the
Company's quality standards. The Company inspected the finished apparel received
from this supplier and believes that no substandard apparel was delivered to any
customer. The Company believes that its profitability was adversely impacted as
a result of the actions of this former supplier. In the event the Company
experiences similar production or delivery delays in the future, the Company's
results of operations may be materially adversely affected.
LIMITED HIGH-END MARKET
The Company targets distribution of its fashion golf apparel toward high
quality golf professional shops, country clubs and resorts. Of the estimated
13,000 U.S. golf professional shops, the Company estimates that approximately
7,500 golf professional shops comprise the Company's target customer base.
Because the Company currently distributes its apparel to approximately 3,000
high quality golf professional shops, the domestic market for distribution of
existing apparel lines may be limited. High quality sportswear and general
leisure wear, being similar to fashion golf apparel, can be purchased from a
variety of sources including department stores, sporting goods stores, catalog
retailers and other retail outlets. Customers seeking to purchase high quality
sportswear may elect to purchase apparel from any of these sources, thus
creating competition for discretionary consumer spending. The Company has
elected to restrict sales of its apparel to high quality golf professional
shops, thereby foregoing other retail distribution channels which account for a
high percentage of sales of high quality sportswear. Reliance on a limited
high-end market could inhibit the Company's future growth and profitability.
RISKS ASSOCIATED WITH PRODUCT LINE EXPANSION
In January 1996, the Company introduced a new line of Haley outerwear at
the PGA industry trade show in Orlando, Florida. The line of outerwear is being
marketed under the Haley label and the "Elements" brand name. The Company has
engaged in an in-depth evaluation of the golf headwear industry and has
initiated production and marketing of headwear under the Haley label. The
Company's future growth and profitability will in part be dependent on achieving
market acceptance of, and expanding the market share for, its new apparel and
headwear products. The Company's sales of Haley headwear will also be dependent
on the Company securing headwear distribution through its existing independent
sales representatives or through additional representatives not currently
marketing the Company's products. A number of the Company's
6
<PAGE> 9
existing sales representatives represent other headwear lines and may therefore
be unable or unwilling to represent the Company's headwear line. Although
management believes that the outerwear and headwear product lines are natural
extensions of the Company's existing apparel business, the Company may encounter
manufacturing and marketing obstacles which could adversely impact sales of
these product lines and the Company's results of operations. There can be no
assurance that efforts to introduce and increase sales of these product lines
will be successful.
FLUCTUATIONS IN QUARTERLY RESULTS; SEASONALITY
The Company may experience significant fluctuations in future quarterly
operating results due to a number of factors including, among other things,
changes in the Company's product and customer mix, forecasting of apparel
demand, acceptance of apparel designs introduced by the Company or its
competitors, seasonality in apparel purchases by customers, poor weather
conditions in the spring and summer seasons, loss of independent sales
representatives, changes in material and manufacturing costs, timely delivery of
products, pricing trends in the golf apparel industry, the level and pricing of
international sales, foreign currency exchange rates, general economic
conditions and other factors. The Company's business is seasonal, with sales in
the third and fourth fiscal quarters typically exceeding the other two quarters
of each fiscal year. Although the effect of seasonality and other factors on the
Company's operating results has been obscured to date by the Company's growth,
any of these factors could cause quarterly operating results to vary
significantly from prior periods. While the Company's sales have increased for
over 12 consecutive quarters, certain of the Company's expenses are fixed in the
short term and are based on forecasts of product orders. Significant variations
between the Company's forecasts and actual orders may adversely affect operating
results if the Company is unable to proportionately reduce its expenses in a
timely manner.
DEPENDENCE ON INDEPENDENT SALES REPRESENTATIVES
The Company sells its products through a network of independent sales
representatives. The Company's independent sales representative agreements are
generally terminable for any reason by either party on 30 days' notice. A number
of the Company's independent sales representatives carry apparel or other
product lines which may compete directly or indirectly with the Company's
existing and anticipated apparel lines. The Company's continued growth is
dependent in part on existing representatives increasing their sales per
account, increasing their account base, or upon the Company increasing the
number of sales representatives offering its products. There is no assurance the
Company will be successful in expanding the number of sales representatives, in
retaining existing representatives or that existing representatives will
increase their sales of the Company's products. The loss of existing
representatives for any reason could have a material adverse impact on the
Company's results of operations.
DEPENDENCE ON KEY PERSONNEL
The Company's success depends to a significant extent on its executive
officers, including Robert G. Tomlinson, Chairman of the Board and Chief
Executive Officer, and Robert W. Haley, President. The loss of the services of
either of these officers would have an adverse effect on the Company. The
Company has an employment agreement with Mr. Tomlinson which expires in June
1998, although this agreement does not assure the Company the continued services
of Mr. Tomlinson. The Company does not maintain key man life insurance on the
lives of any its executive officers. The success of the Company will depend,
among other factors, on the successful recruitment and retention of quality
management and other personnel.
MANAGEMENT OF GROWTH
The Company's sales increased from approximately $4.0 million for the
fiscal year ended June 30, 1993 to approximately $20.3 million for the fiscal
year ended June 30, 1996. This significant growth has placed and, if sustained,
will continue to place, a substantial strain on the operational, administrative
and
7
<PAGE> 10
financial resources of the Company and has resulted in an increase in the level
of responsibility for the Company's management personnel. The addition of the
outerwear and headwear product lines, although complementary to the Company's
existing product lines, will require the Company to improve its operating and
financial systems and to continue to expand, train and manage its employee base
and network of independent sales representatives. The Company's future operating
results will depend in part on management's ability to manage future growth, the
success of which cannot be assured.
RIGHTS TO ACQUIRE SHARES
At the date of this Prospectus, the Company has reserved 950,000 shares of
Common Stock for issuance on exercise of options granted under its stock option
plan, of which options to purchase 423,940 shares were outstanding at September
30, 1996. Warrants to purchase 90,000 Shares, including the Representative's
Warrants to purchase 70,000 Shares and the Advisor's Warrants to purchase 20,000
Shares, all of which are being registered hereby, were also outstanding at
September 30, 1996. The exercise prices of the options outstanding range from
$1.60 per share to $12.75 per share, with a weighted average exercise price per
share of $5.30. The Company has registered the shares of Common Stock underlying
outstanding options issued pursuant to its stock option plan and is registering
hereby the 90,000 shares of Common Stock underlying the Warrants. All such
shares are or will be freely tradeable upon exercise of the options or Warrants,
respectively. Sale into the public market of shares of Common Stock underlying
options or upon exercise of the Warrants may adversely affect the price of the
Company's Common Stock.
ABILITY TO ISSUE PREFERRED STOCK
The Company's Articles of Incorporation authorize the issuance of up to
1,500,000 shares of Preferred Stock. The Preferred Stock may be issued in series
with the material terms of any series determined by the Board of Directors. Such
material provisions would likely include dividend rights, conversion features,
voting rights, redemption rights and liquidation preferences. The Company does
not currently anticipate that it will issue any Preferred Stock. However, if the
Company does issue any series of Preferred Stock in the future, it is likely
that such shares will have dividend privileges and liquidation preferences
superior to those of the Common Stock. Further, the Preferred Stock may be
issued with voting, conversion or other terms determined by the Board of
Directors which could be used to delay, discourage or prevent a change in
control of the Company. Such terms could include, among other things, dividend
payment requirements, redemption provisions, preferences as to dividends and
distributions and preferential voting rights.
IMPORTANT FACTORS RELATED TO FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS
The statements contained in this Prospectus or incorporated by reference
herein that are not purely historical are forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act, including statements regarding the Company's expectations, hopes,
intentions or strategies regarding the future. All forward-looking statements
included in this document or incorporated by reference herein are based on
information available to the Company on the date hereof, and the Company assumes
no obligation to update any such forward-looking statements. It is important to
note that the Company's actual results could differ materially from those in
such forward-looking statements. Among the factors that could cause actual
results to differ materially are the risk factors set forth elsewhere within
this Prospectus. You should consult the risk factors listed from time to time in
the Company's reports on Form 10-QSB, 10-KSB and annual reports to shareholders.
Forward-looking statements include those relating to: (i) development of brand
loyalty for Haley apparel, (ii) enhancement of sales of the Elements outerwear
line and Haley headwear line as a result of existing relationships among the
Company, its independent sales representatives and golf course professional shop
customers, (iii) success of additional marketing initiatives to be undertaken by
the Company, (iv) increases in international sales as a result of the execution
of distribution agreements in the United Kingdom, Ireland and Japan and new
distribution in other countries, (v)
8
<PAGE> 11
increased distribution through expansion of its network of independent sales
representatives and the golf professional shop customer base, (vi) expansion of
sales to corporate and tournament customers through brand recognition and
capitalizing on additional embroidery capacity, (vii) success of the Company in
establishing its factory outlet store, as well as its ability to obtain retail
prices for its closeout apparel sold through the factory outlet store, (viii)
achieve increases in per-account sales by broadening the Company's product line,
(ix) reducing the effect of seasonality through reliance on outside suppliers
and contractors for production of apparel, (x) success of the Company in
forecasting demand for particular apparel styles and its success in establishing
production schedules and forecasts which accurately anticipate market demand,
(xi) the Company's success in diversifying its market through increasing sales
to large corporate accounts and universities, and (xii) achievement of high
gross profit margins by targeting the premium and mid-priced fashion golf
apparel market, controlling manufacturing costs and expansion of the Company's
apparel lines to include other high margin products.
The forward-looking statements included or incorporated by reference herein
are based on current expectations that involve a number of risks and
uncertainties. These forward-looking statements were based on assumptions that
the Company would continue to develop and introduce new products on a timely
basis, that competitive conditions within the fashion golf apparel industry
would not change materially or adversely, that demand for the Company's fashion
golf apparel would remain strong, that the market would accept the Company's new
apparel lines, that inventory risks due to shifts in market demand would be
minimized, that the Company's forecasts would accurately anticipate market
demand, and that there would be no material adverse change in the Company's
operations or business. Assumptions relating to the foregoing involve judgments
with respect to, among other things, future economic, competitive and market
conditions, and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond the control of the
Company. Although the Company believes that the assumptions underlying the
forwardlooking statements are reasonable, any of the assumptions could prove
inaccurate and, therefore, there can be no assurance that the forward-looking
information will prove to be accurate. In addition, as disclosed elsewhere under
"Risk Factors," the business and operations of the Company are subject to
substantial risks which increase the uncertainty inherent in such
forward-looking statements. Any of the other factors disclosed under "Risk
Factors" could cause the Company's net sales or net income, or growth in net
sales or net income, to differ materially from prior results. Budgeting and
other management decisions are subjective in many respects and thus susceptible
to interpretations and periodic revisions based on actual experience and
business developments, the impact of which may cause the Company to alter its
marketing, capital expenditure or other budgets, which may in turn affect the
Company's results of operations. In light of the significant uncertainties
inherent in the forward-looking information included herein, the inclusion of
such information should not be regarded as a representation by the Company or
any other person that the objectives or plans of the Company will be achieved.
9
<PAGE> 12
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares offered hereby. Upon exercise of the Warrants, the Company will receive
net proceeds of approximately $585,000. Such proceeds will be used as working
capital and for general corporate purposes. Net proceeds not immediately
required will be invested principally in U.S. government securities, short-term
certificates of deposit, money market funds or other short-term, interest-
bearing securities.
PRICE RANGE OF COMMON STOCK
The Company's Common Stock is traded on the Nasdaq National Market(R) under
the symbol "SPOR." The Company's Common Stock traded on The Nasdaq SmallCap
Market(sm) from the time of its initial public offering on April 5, 1994 through
December 15, 1994. The following table sets forth for each fiscal period
indicated the high and low closing sale prices for the Company's Common Stock as
reported by the Nasdaq National Market(R) for the periods since December 15,
1994, and the high and low closing bid prices for the Common Stock as reported
by The Nasdaq SmallCap Market(SM) for the fiscal periods from April 5, 1994
through December 15, 1994. Bid quotations reflect interdealer quotations,
without retail markups, markdowns or commissions, and do not necessarily
represent actual transactions.
<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
Fiscal 1995:
First Quarter.......................................................... 7 5/8 5 7/8
Second Quarter......................................................... 7 1/2 6 1/4
Third Quarter.......................................................... 9 6 7/8
Fourth Quarter......................................................... 9 1/2 7 7/8
Fiscal 1996:
First Quarter.......................................................... 10 1/2 8 7/8
Second Quarter......................................................... 10 5/8 8 7/8
Third Quarter.......................................................... 12 9 5/8
Fourth Quarter......................................................... 16 7/8 11 7/16
Fiscal 1997:
First Quarter ......................................................... 16 1/8 10 7/8
Second Quarter (through November 30, 1996) ............................ 16 3/8 12 1/4
</TABLE>
The last reported sale price of the Common Stock on January 13, 1997
was $13.55 per share.
DIVIDEND POLICY
The Company has never paid any cash dividends on its Common Stock. The
Company anticipates that for the foreseeable future all earnings will be
retained for use in the Company's business and no cash dividends will be paid to
shareholders. The Company's current bank credit agreement does not prohibit the
payment of dividends.
10
<PAGE> 13
SELLING SHAREHOLDERS
The following tables set forth the number of Shares to be owned by
each of the Selling Shareholders upon full exercise of the Representative's
Warrants and the Advisor's Warrants, and the number of Shares to be sold. The
Company has been advised that the Selling Shareholders have sole voting and
investment power with respect to all of the Shares listed opposite their name.
REPRESENTATIVE'S WARRANTS:
<TABLE>
<CAPTION>
AMOUNT OF BENEFICIAL
OWNERSHIP
--------------------------- NUMBER OF SHARES
NAME NO. OF SHARES % OF CLASS BEING OFFERED
- ---- ------------- ---------- -----------------
<S> <C> <C> <C>
Keith A. Koch...................................... 22,250 * 22,250
Scott B. Olson..................................... 22,250 * 22,250
Thomas W. Schneider................................ 9,374 * 9,374
Gene Geiger........................................ 3,500 * 3,500
Thomas A. Kaufmann................................. 3,500 * 3,500
Floyd Murray LLC................................... 3,437 * 3,437
Thomas J. O'Rourke................................. 1,563 * 1,563
Roger P. May....................................... 1,563 * 1,563
Siegfried P. Duray-Bito............................ 1,563 * 1,563
Nicholas J. Moceri................................. 1,000 * 1,000
</TABLE>
- ------------------
* Less than 1%
ADVISOR'S WARRANTS:
<TABLE>
<CAPTION>
AMOUNT OF BENEFICIAL
OWNERSHIP
--------------------------- NUMBER OF SHARES
NAME NO. OF SHARES % OF CLASS BEING OFFERED
- ---- ------------- ---------- -----------------
<S> <C> <C> <C>
Walter Cruttenden, III............................. 3,000 * 3,000
Byron Roth......................................... 3,000 * 3,000
David Walters...................................... 2,000 * 2,000
Alan Zuckerman..................................... 4,000 * 4,000
Cruttenden Roth Incorporated....................... 8,000 * 8,000
</TABLE>
PLAN OF DISTRIBUTION
The Selling Shareholders have advised the Company that they intend to
sell the Shares offered as principals for their own accounts. The Shares will be
sold from time to time in the over-the-counter market, in privately negotiated
sales or on other markets. The Registration Statement of which this Prospectus
forms a part must be current at any time during which the Selling Shareholders
sell Shares. The Company has agreed that it shall maintain a current
Registration Statement for nine months following the date of this Prospectus to
enable the Selling Shareholders to sell their Shares. Any securities sold in
brokerage transactions will likely involve customary broker's commissions which
are payable by the Selling Shareholders. The Company will not receive any
proceeds from the sale of Shares by the Selling Shareholders.
11
<PAGE> 14
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 15,000,000
shares of Common Stock, without par value and 1,500,000 shares of Preferred
Stock, without par value.
COMMON STOCK
At December 24, 1996, 4,344,647 shares of Common Stock were issued and
outstanding. The holders of Common Stock are entitled to one vote for each share
held of record on all matters submitted to a vote of shareholders. The Company's
Articles of Incorporation deny cumulative voting rights in the election of
directors. Accordingly, holders of a majority of the shares of Common Stock
entitled to vote in any election of directors may elect all of the directors
standing for election. Subject to preferences that may be applicable to any
outstanding Preferred Stock, holders of Common Stock are entitled to receive
ratably such dividends as may be declared by the Board of Directors out of funds
legally available therefor. See "Dividend Policy." In the event of a
liquidation, dissolution or winding up of the Company, holders of Common Stock
are entitled to share ratably in the assets remaining after payment of
liabilities and the liquidation preference of any outstanding Preferred Stock.
Holders of Common Stock have no preemptive, conversion or redemption rights. All
of the outstanding shares of Common Stock are, and the Shares offered hereby
when issued to the Selling Shareholders will be, fully paid and non-assessable.
PREFERRED STOCK
The Board of Directors has the authority, without further shareholder
approval, to issue up to 1,500,000 shares of Preferred Stock from time to time
in one or more series, to establish the number of shares to be included in each
such series, and to fix the designation, powers, preferences and rights of the
shares of each such series and the qualifications, limitations or restrictions
thereof. The issuance of Preferred Stock may have the effect of delaying or
preventing a change in control of the Company. The issuance of Preferred Stock
could decrease the amount of earnings and assets available for distribution to
the holders of Common Stock or could adversely affect the rights and powers,
including voting rights, of the holders of the Common Stock. In certain
circumstances, such issuances could have the effect of decreasing the market
price of the Common Stock. No shares of Preferred Stock are outstanding and the
Company currently has no plans to issue any shares of Preferred Stock.
OUTSTANDING WARRANTS AND REGISTRATION RIGHTS
As of December 31, 1996, there were outstanding warrants to purchase
an aggregate of 90,000 shares of Common Stock at exercise prices ranging from
$6.50 to $8.00 per share. The Representative's Warrants to purchase 70,000
Shares are exercisable through April 1999 and the Advisor's Warrants to purchase
20,000 Shares are exercisable through July 1998. The Shares underlying such
Representative's Warrants and Advisor's Warrants are being registered on the
Registration Statement of which this Prospectus forms a part. All fees, costs
and expenses of such registration, with the exception of underwriting discounts
and commissions, will be borne by the Company.
12
<PAGE> 15
LEGAL MATTERS
The validity of the Common Stock offered will be passed upon for the
Selling Shareholders by Berliner Zisser Walter & Gallegos, P.C., Denver,
Colorado.
EXPERTS
The financial statements for the fiscal years ended June 30, 1994, 1995
and 1996 incorporated in this Prospectus by reference to the Company's Annual
Reports on Form 10-KSB for the years ended June 30, 1994, 1995 and 1996, have
been so included in reliance on the report of Levine Hughes & Mithuen Inc.,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
With respect to the information contained in the quarterly reports on
Form 10-QSB, Levine Hughes & Mithuen Inc. has not audited or reviewed such
information and accordingly, such firm does not express an opinion or any other
form of assurance on that information.
13
<PAGE> 16
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS, AND
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING SHAREHOLDERS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON
TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.
------------
TABLE OF CONTENTS
------------
PAGE
----
Available Information.................................... 2
Incorporation of Certain Documents
by Reference........................................... 2
Prospectus Summary....................................... 3
Risk Factors............................................. 5
Use of Proceeds.......................................... 10
Price Range of Common Stock.............................. 10
Dividend Policy.......................................... 10
Selling Shareholders..................................... 11
Plan of Distribution..................................... 11
Description of Capital Stock............................. 12
Legal Matters............................................ 13
Experts.................................................. 13
90,000 SHARES
SPORT-HALEY, INC.
COMMON STOCK
------------
PROSPECTUS
------------
, 1997
<PAGE> 17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Other expenses in connection with this offering which will be paid by
Sport-Haley, Inc. (hereinafter in this Part II, the "Company") are estimated to
be substantially as follows:
<TABLE>
<CAPTION>
AMOUNT PAYABLE
BY THE
ITEM COMPANY
- ---- --------------
<S> <C>
S.E.C. Registration Fees.................................... $ 375.00
Legal Fees.................................................. 10,000.00*
Accounting Fees and Expenses................................ 3,000.00*
Miscellaneous Expenses...................................... 1,625.00*
---------
Total.................................................. $ 15,000.00*
=========
</TABLE>
- --------------------
* Estimated for the purpose of this filing.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Colorado Business Corporation Act permits a corporation organized
thereunder to indemnify its directors and officers for certain of their acts.
The Articles of Incorporation of the Company have been framed so as to conform
to the Colorado Business Corporation Act.
In general, any officer, director, employee or agent may be indemnified
against expenses, fines, settlements or judgments arising in connection with a
legal proceeding to which such person is a party, if that person's actions were
in good faith, were believed to be in the Company's best interest and were not
unlawful. Unless such person is successful upon the merits in such an action,
indemnification may be awarded only after a determination by independent
decision of the Board of Directors, by legal counsel or by a vote of the
shareholders that the applicable standard of conduct was met by the person to be
indemnified.
The circumstances under which indemnification is granted in connection
with an action brought on behalf of the Company are generally the same as those
set forth above; however, with respect to such actions, indemnification is
granted only with respect to expenses actually incurred in connection with the
defense or settlement of the action. In such actions, the person to be
indemnified must have acted in good faith, in a manner believed to have been in
the Company's best interest and with respect to which such person was not
adjudged liable for negligence or misconduct.
Indemnification may also be granted pursuant to the terms of agreements
which may be entered into in the future pursuant to a vote of shareholders or
directors. The statutory provision cited above and the referenced portion of the
Certificate of Incorporation also grant the power to the Company to purchase and
maintain insurance which protects its officers and directors against any
liabilities incurred in connection with their services in such a position, and
such a policy may be obtained by the Company in the future.
II-1
<PAGE> 18
ITEM 16. EXHIBITS.
The following is a complete list of Exhibits filed as part of this
Registration Statement and which are incorporated herein.
EXHIBIT NO. DOCUMENT
- ----------- --------
- -4.1 Form of specimen certificate for Common Stock of the Company.
- -4.1.1 Form of Representative's Warrant issued by the Company to
Schneider Securities, Inc.
+4.1.2 Form of Advisor's Warrant issued by the Company to Cruttenden Roth
Incorporated.
***5. Opinion of Berliner Zisser Walter & Gallegos, P.C., regarding
legality of the securities covered by this Registration Statement.
8. Not applicable.
- -10.1.1 1993 Stock Option Plan, effective March 1, 1993, authorizing
750,000 shares of Common Stock for issuance pursuant to the Plan.
+10.1.2 1993 Stock Option Plan, effective March 1, 1993, as amended,
authorizing 950,000 shares of Common Stock for issuance pursuant
to the Plan.
+10.1.1 Employment Agreement, dated July 1, 1995, by and between Robert G.
Tomlinson and the Company.
+10.1.2 Employment Agreement, dated July 12, 1995, by and between William
J. McCabe and the Company.
+10.1.3 Consulting Agreement, dated July 12, 1995, by and between M-Corp.
and the Company.
++10.2.1 Endorsement Agreement, dated on or about May 1, 1994, by and
between Scott Hoch and the Company.
+10.2.2 Endorsement Agreement, dated on or about December 1, 1994, by and
between Neal Lancaster and the Company.
+10.2.3 Endorsement Agreement, dated on or about November 29, 1994, by and
between Hal Sutton and the Company.
**10.2.4 Endorsement Agreement, dated on or about January 1, 1996, by and
between Jim Rutledge and the Company.
***10.3.2 Business Loan Agreement, dated October 25, 1996, by and between
Colorado National Bank and the Company.
++10.4.1 Lease Agreement, dated July 29, 1994, by and among Thomas J. Hilb,
individually, Thomas J. Hilb, as Trustee of the Connie Hilb Trust,
and the Company.
++10.4.2 Amendment to Lease Agreement, dated January 12, 1996, by and among
Thomas J. Hilb, individually, Thomas J. Hilb, as Trustee of the
Connie Hilb Trust, and the Company.
II-2
<PAGE> 19
EXHIBIT NO.
++10.4.3 Bill of Sale, dated on or about July 29, 1994, from Ocean Pacific
Children's Wear, Inc. to the Company.
+10.4.4 Laughlin Factory Outlet Store Lease, dated March 10, 1995, between
Horizon Outlet Centers Limited Partnership and the Company.
++10.5 Form of Independent Sales Representative Agreement.
+10.6 Investment Banking Agreement, dated June 20, 1995, by and between
Cruttenden Roth Incorporated and the Company.
+10.7 Trademark Registrations, dated February 21, 1995, issued by the
United States Patent and Trademark Office to the Company.
+10.8 Agreement, dated July 13, 1995, by and between Rogue Golf Co.,
Ltd. and the Company.
+++10.9 Agreement, dated October 5, 1995, by and between Mplus & Company,
Yokohama, Japan, and the Company.
++10.10 Trademark Licensing Agreement, dated October 14, 1995, by and
between W.L. Gore & Associates, Inc. and the Company.
**10.11 Distribution Agreement, dated February 22, 1996, by and between
Transview Golf Pte Ltd. and the Company.
**10.12 Amendment to Distribution Agreement, dated May 25, 1996, by and
between Rogue Golf Co. Ltd. and the Company.
**10.13 Distribution Agreement, dated May 7, 1996, by and between Silva
Golf and the Company.
**10.14 Consulting Agreement, dated May 29, 1996, by and between Nancy
Haley and the Company.
12. Not applicable.
15. Not applicable.
***23.1 The consent of Berliner Zisser Walter & Gallegos, P.C., to the use
of its opinion with respect to the legality of the securities
covered by this Registration Statement and to the references to
such firm in the Prospectus filed as part of this Registration
Statement was previously included in Exhibit 5.
****23.2 Consent of Levine Hughes & Mithuen, Inc., independent certified
public accountants for the Company.
24. Not applicable.
25. Not applicable.
26. Not applicable.
27. Not required.
II-3
<PAGE> 20
- ------------------
* Incorporated by reference from the Company's Registration
Statement on Form SB-2 (S.E.C. File No. 333-1214).
- - Incorporated by reference from the Company's Registration
Statement on Form SB-2 (S.E.C. File No. 33-74876-D).
+ Incorporated by reference from the Company's Form 10-KSB filed
October 6, 1995 (S.E.C. File No. 1-12888).
++ Incorporated by reference from the Company's Form 10-KSB filed
September 14, 1994 (S.E.C. File No. 1-12888).
+++ Incorporated by reference from the Company's Form 10-QSB filed
November 14, 1995 (S.E.C. File No. 1-12888).
++ Incorporated by reference from the Company's 10-QSBA/1 filed
February 2, 1996 (S.E.C. File No. 1- 12888).
** Incorporated by reference from the Company's Form 10-KSB filed
October 14, 1996 (S.E.C. File No. 1-12888).
*** Previously filed.
**** Filed herewith.
ITEM 17. UNDERTAKINGS.
(a) Rule 415.
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:
(iii) 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.
(b) Filings Incorporating Subsequent Exchange Act Documents by
Reference.
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
II-4
<PAGE> 21
securities offered therein and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(h) Indemnification.
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.
(i) Rule 430A.
The undersigned Registrant hereby undertakes that:
(1) For determining any liability under the Securities Act of
1933, treat the information omitted from the form of Prospectus filed
as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of Prospectus filed by the Registrant under Rule
424(b)(1) or (4) or 497(h) under the Securities Act as part of this
Registration Statement as of the time the Commission declared it
effective.
(2) For determining any liability under the Securities Act of
1933, treat each post-effective amendment that contains a form of
Prospectus as a new registration statement, and that offering of the
securities at that time as the initial bona fide offering of those
securities.
II-5
<PAGE> 22
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Denver, State of Colorado, on January 15, 1997.
SPORT-HALEY, INC.
By: /s/ ROBERT G. TOMLINSON
------------------------------------------
Robert G. Tomlinson, Chairman of the Board
and Chief Executive Officer
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.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ ROBERT G. TOMLINSON Chairman of the Board and January 15, 1997
- ------------------------- Chief Executive Officer
Robert G. Tomlinson (Principal Executive Officer)
/s/ ROBERT W. HALEY President and Director January 15, 1997
- ---------------------
Robert W. Haley
/s/ STEVE S. AUGER Treasurer (Principal Financial January 15, 1997
- -------------------- and Accounting Officer)
Steve S. Auger
/s/ MARK J. STEVENSON Director January 15, 1997
- -----------------------
Mark J. Stevenson
/s/ RONALD J. NORICK Director January 15, 1997
- ----------------------
Ronald J. Norick
/s/ JAMES H. EVEREST Director January 15, 1997
- ----------------------
James H. Everest
</TABLE>
II-6
<PAGE> 23
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE NO.
- ----------- ----------- --------
****23.2 Consent of Levine Hughes & Mithuen, Inc., independent
certified public accountants for the Company.
<PAGE> 1
EXHIBIT 23.2
[LEVINE, HUGHES & MITHUEN, INC. LETTERHEAD]
CONSENT OF LEVINE, HUGHES & MITHUEN, INC.
Consent of Independent Auditors
We hereby consent to the incorporation by reference in this Registration
Statement of Sport-Haley, Inc. on Form S-3, Amendment No. 1 (Registration No.
333-18831) and related Prospectus of our report dated August 12, 1996 appearing
in and incorporated by reference in the Annual Report on Form 10-KSB of
Sport-Haley, Inc. for the year ended June 30, 1996.
We also consent to the reference to us under the caption "Experts" in this
Prospectus.
/s/ LEVINE, HUGHES & MITHUEN, INC.
Englewood, Colorado
January 15, 1997
