<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 21, 1998.
REGISTRATION NO. 333- .
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------------
SPORT-HALEY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
COLORADO
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
84-1111669
(I.R.S. EMPLOYER IDENTIFICATION NO.)
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. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===============================================================================================================================
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.......................................... 22,250 $8.75 $194,688 $59.00
===============================================================================================================================
</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
THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE
AMENDED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE RELATED REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION OR ANY APPLICABLE
STATE SECURITIES COMMISSION BECOMES EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL NOR IS IT SEEKING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE
THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED DECEMBER , 1998
22,250 SHARES
[HALEY LOGO]
SPORT-HALEY, INC.
COMMON STOCK
This is an offering of 22,250 shares of Common Stock of Sport-Haley, Inc.
by a selling shareholder. The shares will not be issued until the selling
shareholder exercises warrants to purchase the shares and pays the exercise
price to Sport-Haley. Sport-Haley will receive the $6.50 per share exercise
price of the Warrants, but will not receive proceeds from the sale of the
shares by the selling shareholder. The expenses of registering the shares will
be paid by the selling shareholder.
The selling shareholder intends to sell the shares as principal for his own
account. He may sell the shares in the over-the-counter market or in privately
negotiated sales. See "Plan of Distribution."
On December 16, 1998, the last sale price of the Common Stock was $10.00
per share. Sport-Haley's Common Stock is traded on the Nasdaq National Market
under the symbol "SPOR".
-----------------------------
INVESTING IN THE COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 5.
-----------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES
OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------------------------
PROSPECTUS DATED DECEMBER ___, 1998.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary................................................................................................3
Risk Factors......................................................................................................6
Important Factors Related to Forward-Looking Statements
and Associated Risks............................................................................................10
Use of Proceeds..................................................................................................10
Selling Shareholder..............................................................................................10
Plan of Distribution.............................................................................................10
Legal Matters....................................................................................................11
Experts..........................................................................................................11
Additional Information...........................................................................................11
Incorporation of Certain Documents By Reference..................................................................11
</TABLE>
-------------------
2
<PAGE> 4
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus
or in the documents which are incorporated by reference, including
Sport-Haley's most recent Form 10-K and Form 10-Q. It is not complete and may
not contain all of the information that you should consider before investing in
the common stock. You should read the entire prospectus carefully, including
the "Risk Factors" section.
THE COMPANY
Sport-Haley designs, manufactures and markets men's and women's quality
fashion golf apparel known for its innovative design, quality fabrics, generous
fit and classic style. Sport-Haley's apparel is sold under the distinctive
Haley(R) label in the premium and mid-price market through a network of
independent sales representatives and distributors primarily to golf
professional shops, country clubs and resorts throughout the United States and
internationally. Sport-Haley's apparel collection includes a wide variety of
shirts, tops, pullovers, vests, shorts, sweaters, pants and skirts, as well as
outerwear and headwear. Sport-Haley custom embroiders a majority of its men's
apparel with a customer's club, resort, or corporate logo, thereby promoting
the image of both Sport-Haley and its customers. Sport-Haley's apparel is
presented to the golf industry in spring and fall collections at the two major
industry trade shows held each year.
Sport-Haley's marketing strategy is to enhance its position as a leading
provider of fashion golf apparel by capitalizing on the market awareness of the
Haley brand name and expanding distribution of its apparel lines. Sport-Haley
intends to implement this strategy by:
o increasing distribution through addition of new golf professional shops
to its customer base and promoting increases in purchases from existing
customers;
o securing and expanding distribution arrangements for international
sales;
o diversifying product lines by developing new styles and designs which
are natural variations on its existing apparel designs; and
o increasing market penetration in the corporate market.
In April 1998, Sport-Haley acquired a 52% ownership interest in one of its
principal cutting and sewing contractors, B & L Sportswear, Inc. Following the
acquisition, B & L Sportswear, Inc. began providing cutting and sewing services
exclusively to Sport-Haley. This acquisition was completed to centralize a
majority of Sport-Haley's cutting and sewing operations. In addition,
Sport-Haley believes that the acquisition of B & L Sportswear, Inc. will:
o enhance its ability to control manufacturing and inventory costs;
o assure the availability of cutting and sewing services when required;
and
o position Sport-Haley to remain competitive and generate margins
comparable to historical levels.
Sport-Haley 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.
3
<PAGE> 5
THE OFFERING
<TABLE>
<CAPTION>
<S> <C>
Common Stock offered by selling shareholder.... 22,250 shares
Common Stock outstanding at November 30, 1998.. 4,408,362 shares
Use of proceeds................................ The shares of Common Stock
are being offered by the
selling shareholder.
Sport-Haley will not receive
any proceeds from sale of the
shares. The exercise price
received by Sport-Haley upon
exercise of the warrants by
the selling shareholder will
be added to working capital.
Nasdaq National Market(R) symbol............... SPOR
</TABLE>
4
<PAGE> 6
SUMMARY FINANCIAL DATA
The following consolidated selected financial data should be read in
conjunction with the Consolidated Financial Statements and related Notes
thereto appearing in Sport-Haley's Report on Form 10-K and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
contained therein.
<TABLE>
<CAPTION>
FOR THE YEAR ENDED JUNE 30,
----------------------------------------------------------------------
1994 1995 1996 1997 1998
----------------------------------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE DATA)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS OF
OPERATIONS DATA:
Net sales ............................................ $ 6,649 $ 12,567 $ 20,287 $ 28,900 $ 31,299
Cost of goods sold ................................... 4,296 7,465 11,719 16,820 18,406
Gross profit ......................................... 2,352 5,102 8,568 12,080 12,893
Selling, general and
administrative expenses ........................... 1,747 3,361 4,995 6,970 7,681
Income from operations ............................... 605 1,741 3,573 5,110 5,212
Interest and other income, net ....................... 50 279 352 390 290
Income before minority interest
and provision for income taxes .................... 655 2,020 3,925 5,500 5,502
Income taxes ......................................... 248 743 1,453 1,590 1,238
Net income ........................................... 407 1,277 2,472 3,910 4,264
Net income per common and
equivalent shares outstanding
(basic) ........................................... $ .23 $ .84 $ .66 $ .40 $ .93
Net income per common and
equivalent shares outstanding
(diluted) ......................................... $ .22 $ .40 $ .65 $ .84 $ .93
Weighted average common and
equivalent shares outstanding
(basic)............................................ 1,769,565 3,201,303 3,769,859 4,658,796 4,564,355
Weighted average common and
equivalent shares outstanding
(diluted).......................................... 1,805,989 3,201,303 3,787,251 4,627,879 4,592,751
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS
ENDED SEPTEMBER 30,
-------------------------------
1997 1998
-------------------------------
(UNAUDITED)
<S> <C> <C>
CONSOLIDATED STATEMENTS OF
OPERATIONS DATA:
Net sales ............................................ $ 6,835 $ 7,496
Cost of goods sold ................................... 4,258 4,609
Gross profit ......................................... 2,577 2,887
Selling, general and
administrative expenses ........................... 1,652 1,842
Income from operations ............................... 925 1,045
Interest and other income, net ....................... 107 119
Income before minority interest
and provision for income taxes 1,032 1,164
Income taxes ......................................... 280 350
Net income ........................................... 752 827
Net income per common and
equivalent shares outstanding
(basic) ........................................... $ .16 $ .18
Net income per common and
equivalent shares outstanding
(diluted) ......................................... $ .16 $ .18
Weighted average common and
equivalent shares outstanding
(basic) ........................................... 4,659,185 4,501,946
Weighted average common and
equivalent shares outstanding
(diluted) ......................................... 4,799,805 4,501,946
</TABLE>
<TABLE>
<CAPTION>
JUNE 30,
------------------------------------------------------- SEPTEMBER 30,
1994 1995 1996 1997 1998 1998
------------------------------------------------------- -----------------
(UNAUDITED)
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Working capital ................... $ 5,233 $10,786 $21,427 $25,251 $28,658 $28,790
Total assets ...................... 6,711 14,211 27,766 30,922 35,236 33,649
Total liabilities ................. 1,118 2,269 3,400 2,216 3,771 1,874
Shareholders' equity .............. 5,593 11,942 24,365 28,706 31,465 31,725
</TABLE>
5
<PAGE> 7
RISK FACTORS
You should carefully consider the following factors and other information
in this Prospectus before deciding to invest in the shares.
COMPETITION
The fashion golf apparel market is intensely competitive. The golf apparel
industry is highly fragmented and no single company is believed to have in
excess of 10% of the market. Sport-Haley generally competes with Ashworth, Izod
Club, Polo/Ralph Lauren Corporation, Tommy Hilfiger and Cutter & Buck Inc. in
the golf apparel market. Sport-Haley also competes with manufacturers of
quality men's and women's sportswear and general leisure wear such as Nike and
Nautica Enterprises Inc. Many of Sport-Haley's primary competitors also sell
apparel in the corporate market. Competition is based primarily on brand
recognition and loyalty, quality, price, style and design, service and
availability of shelf space. Many of Sport-Haley's competitors have longer
operating histories and greater financial and marketing resources than
Sport-Haley. Because of intense competition, Sport Haley may be unable to
increase or even maintain its market share. Alternatively, Sport-Haley may have
to reduce prices or accept reduced margins to maintain market share. A decrease
in market share or reductions in prices and margins due to competition could
have a material adverse effect on Sport-Haley's financial results.
CHANGES IN APPAREL DESIGN; FORECASTING AND SCHEDULING
Design trends in the golf apparel business change rapidly. Sport-Haley must
anticipate these changes in trends because it generally designs and
manufactures its apparel substantially in advance of sales to customers.
Sport-Haley develops forecasts for each of its apparel products and establishes
production and delivery schedules to meet expected customer demand. If
Sport-Haley is unsuccessful in anticipating design trends or forecasting
apparel demand, it may:
o have insufficient or excess inventory;
o be unable to take advantage of market opportunities; or
o be required to reduce prices.
Any of these events could have a material adverse effect on Sport-Haley's
financial results. Although Sport-Haley has been successful in anticipating
apparel demand in most instances, it has marked down prices in the past to
reduce inventory of specific styles. Future price markdowns required to reduce
inventory would have a material adverse effect on Sport-Haley's financial
results.
DEPENDENCE ON SUPPLIERS AND OUTSIDE CONTRACTORS
In fiscal 1998, Sport-Haley purchased its fabric in bulk from approximately
15 different domestic and foreign mills and its trim and headwear components
from several suppliers. The four largest suppliers accounted for approximately
80% of total trim and headwear component expenditures in fiscal 1998.
Sport-Haley utilizes various suppliers to provide different portions of the
Elements line including suppliers that furnish Gore-tex(R) fabrics used in a
portion of the Elements line. Manufacturers must be approved vendors to use
Gore-tex(R) fabrics in the manufacturing process. Because different suppliers
provide portions of the Elements line, the loss of any of these suppliers,
particularly a supplier of Gore-tex(R) fabric, could adversely impact delivery
of outerwear.
6
<PAGE> 8
Sport-Haley does not have any formal contractual arrangements for the
purchase of fabric, trim or headwear components from its suppliers. Rather, it
issues purchase orders for these materials as required. Sport-Haley believes
that all of the components of its apparel are available from a large number of
domestic and foreign suppliers. If Sport-Haley is unable to obtain raw
materials from suppliers during periods of high seasonal demand, deliveries to
customers could be delayed. Delivery delays may adversely affect Sport-Haley's
financial results because customers can return apparel that arrives past
specified delivery dates.
Embroidery operations and headwear sewing and assembly are performed at
Sport-Haley's facility in Denver, Colorado. Contractors located primarily in
the United States and its territories are responsible for all other cutting and
sewing of apparel. During fiscal 1998, Sport-Haley used nine "cutting and
sewing" contractors. Approximately 75% of Sport-Haley's apparel was produced by
five of these cutting and sewing contractors. In April 1998, Sport-Haley
acquired a 52% ownership interest in one of its principal cutting and sewing
contractors. That contractor now manufactures exclusively for Sport-Haley. No
contractual arrangements exist between Sport-Haley and any of its other cutting
and sewing contractors. Sport-Haley believes that these services may be
purchased from a large number of domestic and foreign sources. Reliance on
foreign suppliers subjects Sport-Haley to various risks, including:
o changes in economic policies;
o political or labor conditions;
o imposition of new or additional currency or exchange controls; o
tariffs and other trade barriers; and
o adverse foreign tax consequences.
Although Sport-Haley contracts to purchase fabric or finished apparel in
U.S. dollars, changes in exchange rates could increase the effective prices
Sport-Haley pays for its products.
If suppliers or contractors do not deliver apparel in a timely manner or if
raw materials or finished products are inconsistent or of inferior quality,
Sport-Haley's relationships with its customers and independent sales
representatives may be adversely impacted. If Sport-Haley is unsuccessful in
managing these risks, its financial results may be materially adversely
affected.
LIMITED HIGH-END MARKET
Sport-Haley's target customers consist of approximately 7,500 high quality
golf professional shops out of the estimated total of 13,000 U.S. golf
professional shops. The domestic golf professional shop market is limited and
Sport-Haley already distributes its apparel to approximately half of the
targeted high quality golf professional shops. High quality sportswear and
general leisure wear, which is similar to fashion golf apparel, can be
purchased from a variety of sources, including:
o department stores;
o sporting goods stores;
o catalog retailers; and
o other retail outlets.
Customers seeking to purchase high quality sportswear may elect to purchase
apparel from these sources, thus creating competition for discretionary
consumer spending. Sport-Haley generally limits sales of its apparel in other
retail distribution channels to select high end retail accounts to foster
customer loyalty among golf professional shops. Sport-Haley's future growth and
profitability may be adversely impacted by reliance on a limited high-end
market.
7
<PAGE> 9
RISKS ASSOCIATED WITH EXPANSION INTO CORPORATE MARKET
Sport-Haley believes there is a natural synergy between the golf market and
corporate market as both markets can be served from substantially the same
inventory. Sport-Haley is actively pursuing sales in the corporate market
primarily though oral agreements with promotional product companies. These
promotional product companies generally create a catalog containing products
bearing the logos of corporations. Sport-Haley's apparel is currently appearing,
or confirmed to appear, in a variety of catalogs, including catalogs for
several Fortune 500 companies. Sport-Haley does not enter into a formal
agreement with these promotional product companies, but generally agrees to
keep sufficient inventory to fulfill orders for a period of time, usually a one
year period. Sport-Haley may not be able to compete successfully in this highly
competitive market. If Sport-Haley is unable to increase its market share in
the corporate market, revenue may increase at a slower rate than expenses. This
would adversely affect financial results.
FLUCTUATIONS IN QUARTERLY RESULTS; SEASONALITY
Sport-Haley may experience significant fluctuations in future quarterly
operating results due to a number of factors, including:
o changes in product and customer mix;
o acceptance of apparel designs introduced by Sport-Haley or its
competitors;
o seasonality in apparel purchases;
o poor weather conditions during the golf season;
o loss of independent sales representatives;
o adverse changes in material and manufacturing costs;
o failure to timely deliver apparel;
o pricing trends in the golf apparel industry;
o the level and pricing of international sales;
o foreign currency exchange rates; and
o general economic conditions.
If Sport-Haley's operating results fall below the expectations of
securities analysis and investors due to any of the foregoing factors, the
price of Sport-Haley's common stock would likely decrease. Price and volume
fluctuations in small capitalization stocks generally that are otherwise
unrelated to the operating performance of Sport-Haley may cause the price of
Sport-Haley's common stock to vary significantly.
Sport Haley's business is seasonal, with sales in the third and fourth
fiscal quarters typically exceeding the other two quarters of each fiscal year.
Quarterly operating results could vary significantly from prior periods due to
seasonality and other factors. Sport-Haley believes that sales growth in fiscal
1998 was negatively impacted by: (i) canceled sales orders and increased
returns and allowance costs, primarily resulting from late shipments during the
UPS strike; and (ii) inclement weather attributed to El Nino that negatively
impacted sales to many of its golf professional shops in California, North and
South Carolina, Florida and Arizona. Similar events in the future may adversely
affect operating results.
DEPENDENCE ON INDEPENDENT SALES REPRESENTATIVES
Sport-Haley sells its apparel to golf professional shops through a network
of independent sales representatives. Agreements with independent sales
representatives are generally terminable for any reason by either party on 30
days' notice. A number of Sport-Haley's independent sales representatives carry
other product lines that may compete directly or indirectly with Sport-Haley's
product lines. Sport-Haley's continued growth depends in part on existing
representatives increasing their sales per account or increasing
8
<PAGE> 10
their account base. Existing representatives may be unable to increase sales
per account or increase their number of accounts. Sport-Haley may be
unsuccessful in expanding the number of sales representatives if it seeks to do
so. The loss of existing sales representatives for any reason could have a
material adverse impact on Sport-Haley's financial results.
DEPENDENCE ON KEY PERSONNEL
Sport-Haley's continued success depends to a significant extent on its
executive officers, particularly Robert G. Tomlinson, Chairman of the Board and
Chief Executive Officer, and Robert W. Haley, President. Sport-Haley has an
employment agreement with Mr. Tomlinson that expires in December 1999 and with
Mr. Haley that expires December 1998. These agreements do not assure
Sport-Haley the continued services of these officers. Sport-Haley does not
maintain key man life insurance on the lives of any its executive officers. The
inability or unwillingness of either Mr. Tomlinson or Mr. Haley, or other
members of the senior management team, to continue their employment could have
an adverse effect on Sport-Haley. The success of Sport-Haley will also depend
on successful recruitment and retention of quality sales, manufacturing and
other personnel.
RIGHTS TO ACQUIRE SHARES
As of June 30, 1998, a total of 421,999 non-qualified and incentive options
were outstanding under Sport-Haley's stock option plan. Exercise prices of
these options range from $2.50 to $14.25 per share and the weighted average
exercise price per share is $10.85. The only other outstanding rights to
acquire shares are the selling shareholder's warrants to purchase the 22,250
shares offered hereby. Sport-Haley has registered the shares of Common Stock
issuable under its stock option plan and the 22,250 shares issuable upon
exercise of the warrants. All such shares are or will be freely tradeable upon
exercise of the options or warrants. Sale into the public market of common
stock underlying options or warrants may adversely affect the price of
Sport-Haley's common stock.
CERTAIN ANTI-TAKEOVER PROVISIONS; PREFERRED STOCK
Certain provisions of the Articles of Incorporation could make it more
difficult for a third party to acquire control of Sport-Haley, even if such
change in control would be beneficial to stockholders. The Articles of
Incorporation allow Sport-Haley to issue preferred stock without stockholder
approval. Such issuances could make it more difficult for a third party to
acquire Sport-Haley.
DIVIDENDS
Sport-Haley does not anticipate paying cash dividends in the foreseeable
future.
9
<PAGE> 11
IMPORTANT FACTORS RELATED TO
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS
This Prospectus and documents incorporated by reference herein contain
certain forward-looking statements. When used in this Prospectus and in such
documents, the words "may," "will," "expect," "anticipate," "continue,"
"estimate," "project," "intend," "believe" and similar expressions are intended
to identify forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 (the "Securities Act") and Section 21E of the Securities
Exchange Act of 1934 (the "Exchange Act") regarding events, conditions and
financial trends including, without limitation, business conditions and growth
in the fashion golf apparel market and the general economy; competitive factors
and price pressures in the highend golf apparel market; inventory risks due to
shifts in market conditions and/or price erosion of purchased apparel, raw
fabric and trim; changes in product mix; and other risks or uncertainties
detailed in other of the filings by Sport-Haley (the "Company") with the
Securities and Exchange Commission (the "Commission"). Such statements are
based on management's current expectations and are subject to risks,
uncertainties and assumptions. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
the Company's actual plan of operations, business strategy, operating results
and financial position could differ materially from those expressed in, or
implied by, such forward-looking statements.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
shares of Common Stock (the Shares") by the Selling Shareholder offered hereby.
Upon exercise of the Warrants, the Company will receive net proceeds of
approximately $130,000. 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.
SELLING SHAREHOLDER
Keith A. Koch (the "Selling Shareholder"), will own 22,250 Shares upon full
exercise of his Warrants, all of which are being registered for sale. The
Company has been advised that the Selling Shareholder has sole voting and
investment power with respect to all such 22,250 Shares. The Shares represent
less than 1% of the Company's total outstanding shares.
PLAN OF DISTRIBUTION
The Selling Shareholder has advised the Company that he intends to sell the
Shares offered as principal for his own account. 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 Shareholder sells any
Shares. The Company will maintain a current Registration Statement for six
months following the date of this Prospectus to enable the Selling Shareholder
to sell his Shares. Any securities sold in brokerage transactions may involve
customary broker's commissions which are payable by the Selling Shareholder.
The Company will not receive any proceeds from the sale of Shares by the
Selling Shareholder.
10
<PAGE> 12
LEGAL MATTERS
The validity of the Common Stock offered will be passed upon for the
Selling Shareholder by Berliner Zisser Walter & Gallegos, P.C., Denver,
Colorado. A shareholder of such firm owns 18,500 shares of Common Stock and
options to acquire 7,500 shares of Common Stock.
EXPERTS
The financial statements for the fiscal years ended June 30, 1996, 1997 and
1998 incorporated in this Prospectus by reference to the Company's Annual
Reports on Form 10-KSB and Form 10-K for the years ended June 30, 1996, 1997
and 1998 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 quarterly reports on Form
10-QSB and Form 10-Q incorporated by reference herein, 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.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act and, accordingly, files reports including Form 10-K, Form 10-Q and Form
8-K, proxy statements and other information with the Commission. The public may
read and copy any materials the Company files with the Commission at the
Commission's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.
20549. The public may obtain information on the operation of the Public
Reference Room by calling the Commission at 1-800-SEC-0330. The Commission also
maintains an Internet site that contains reports, proxy and information
statements, and other information regarding issuers that file electronically
with the Commission. The address of the Internet site is http://www.sec.gov.
The Company has filed with the Commission a registration statement
(together with all amendments thereto, the "Registration Statement") under the
Securities Act for 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. The Registration Statement 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-K filed with the Commission on
September 28, 1998 for the fiscal year ended June 30, 1998 and the quarterly
report on Form 10-Q filed with the Commission on November 16, 1998 for the
quarter ended September 30, 1998 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, 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),
both of which were declared effective on April 5, 1994, is hereby incorporated
by reference into this Prospectus.
11
<PAGE> 13
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 S. Auger, Treasurer, Sport-Haley, Inc., 4600
East 48th Avenue, Denver, Colorado 80216, Telephone: (303) 320-8800.
12
<PAGE> 14
==============================================================================
Sport-Haley has not authorized any dealer, salesperson or other person to
give any information or represent anything not contained in this Prospectus.
You must not rely on any unauthorized information. This Prospectus does not
offer to sell or buy any shares in any jurisdiction where it is unlawful. The
information in this Prospectus is current as of its date.
UNTIL , 1999, ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE
SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO
DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER
A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.
==============================================================================
==============================================================================
22,250 SHARES
[HALEY LOGO]
SPORT-HALEY, INC.
COMMON STOCK
---------------------
PROSPECTUS
---------------------
, 1999
==============================================================================
<PAGE> 15
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 the
Selling Shareholder are estimated to be substantially as follows:
<TABLE>
<CAPTION>
AMOUNT PAYABLE BY THE
ITEM SELLING SHAREHOLDER
- ---- ---------------------
<S> <C>
S.E.C. Registration Fees...................................................................... $ 59.00
Legal Fees.................................................................................... 1,000.00*
Accounting Fees and Expenses.................................................................. 500.00*
Miscellaneous Expenses........................................................................ 441.00*
------------
Total.................................................................................... $ 2,000.00*
============
</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 Sport-Haley, Inc. (hereinafter in this Part
II, 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 Articles 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.
ITEM 16. EXHIBITS.
The following is a complete list of Exhibits filed as part of this
Registration Statement and which are incorporated herein.
II-1
<PAGE> 16
EXHIBIT NO. DOCUMENT
- ----------- ---------
o 3.1.1 Articles of Incorporation of the Company as filed on January
1, 1991, and as amended on March 25, 1991, September 18, 1992
and September 2, 1993, with the Secretary of State of the
State of Colorado.
o 3.1.2 Amended and Restated Articles of Incorporation of the Company
as filed on March 7, 1994 with the Secretary of State of the
State of Colorado.
- - 3.2.3 Amended and Restated By-laws of the Company as adopted January
10, 1996.
o 4.1 Form of Specimen Certificate for Common Stock of the Company.
o 4.1.1 Form of Representative's Warrant issued by the Company to
Schneider Securities, Inc.
*** 5. Opinion of Berliner Zisser Walter & Gallegos, P.C., regarding
legality of the securities covered by this Registration
Statement.
~ 10.1 1993 Stock Option Plan, effective March 1993, as amended.
x 10.2.1 Employment Agreement, dated January 1, 1997, by and between
Robert G. Tomlinson and the Company.
x 10.2.2 Employment Agreement, dated January 1, 1997, by and between
Robert W. Haley and the Company.
x 10.2.3 Form of standard Endorsement Agreement by and between various
golf professionals and the Company.
# 10.3 Business Loan Agreement, dated October 30, 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.
+ 10.4.3 Laughlin Factory Outlet Store Lease, dated March 10, 1995,
between Horizon Outlet Centers Limited Partnership and the
Company.
** 10.4.4 Lease Agreement, dated April, 1998, between Larry M. Jones and
Roberta C. Jones, and B&L Sportswear, Inc.
o 10.5 Form of Independent Sales Representative Agreement.
+ 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.
II-2
<PAGE> 17
- - 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.
x 10.14 Form of Distribution Agreement by and between the Company and
Pacsports Phils, Inc., Pacsports, Ltd. and Bossports.
xx 10.15 Stock Purchase Agreement among the Company, Marvin Urquhart,
Larry M. Jones and Roberta C. Jones, and B&L Sportswear, Inc.
** 11 Schedule Computing Net Income Per Common Share
** 21 Subsidiaries of the Registrant
*** 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 is included in Exhibit 5.
*** 23.2 Consent of Levine Hughes & Mithuen, Inc., independent certified
public accountants for the Company.
* Incorporated by reference from the Company's Registration Statement on Form
SB-2 (File No. 333-1214).
o Incorporated by reference from the Company's Registration Statement on Form
SB-2 (File No. 33-74876-D).
+ Incorporated by reference from the Company's Form 10-KSB filed October 6,
1995 (File No. 1-12888).
@ Incorporated by reference from the Company's Form 10-KSB filed September
14, 1994 (File No. 1-12888).
= Incorporated by reference from the Company's Form 10-QSB filed November 14,
1995 (File No. 1-12888).
- - Incorporated by reference from the Company's Form 10-QSBA/1 filed February
2, 1996 (File No. 1-12888).
! Incorporated by reference from the Company's Form 10-KSB filed October 11,
1996 (File No. 1-12888).
~ Incorporated by reference from the Company's Form 10-QSB filed May 12, 1997
(File No. 1-12888).
# Incorporated by reference from the Company's Registration Statement on
Form S-3 (File No. 333-18831).
x Incorporated by reference from the Company's Form 10-KSB filed September
29,1997 (File No. 1-12888).
xx Incorporated by reference from the Company's Form 8-K filed April 27, 1998
(File No. 1-12888).
** Incorporated by reference from the Company's Form 10-K filed September 29,
1998 (File No. 1-12888).
*** Filed herewith.
ITEM 17. UNDERTAKINGS.
(a) Rule 415.
The undersigned Registrant hereby undertakes:
II-3
<PAGE> 18
(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 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, 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 shall be deemed to
be part of this Registration Statement as of the time it was declared
effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a
form of Prospectus 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.
II-4
<PAGE> 19
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 December 17, 1998.
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 December 17, 1998
- ------------------------------ Chief Executive Officer
Robert G. Tomlinson (Principal Executive Officer)
/s/ ROBERT W. HALEY President and Director December 17, 1998
- ------------------------------
Robert W. Haley
/s/ STEVE S. AUGER Treasurer (Principal Financial December 17, 1998
- ------------------------------ and Accounting Officer)
Steve S. Auger
/s/ MARK J. STEVENSON Director December 17, 1998
- ------------------------------
Mark J. Stevenson
/s/ RONALD J. NORICK Director December 17, 1998
- ------------------------------
Ronald J. Norick
/s/ JAMES H. EVEREST Director December 17, 1998
- ------------------------------
James H. Everest
</TABLE>
II-5
<PAGE> 20
EXHIBIT INDEX
o 3.1.1 Articles of Incorporation of the Company as filed on January 1,
1991, and as amended on March 25, 1991, September 18, 1992 and
September 2, 1993, with the Secretary of State of the State of
Colorado.
o 3.1.2 Amended and Restated Articles of Incorporation of the Company
as filed on March 7, 1994 with the Secretary of State of the
State of Colorado.
- - 3.2.3 Amended and Restated By-laws of the Company as adopted January
10, 1996.
o 4.1 Form of Specimen Certificate for Common Stock of the Company.
o 4.1.1 Form of Representative's Warrant issued by the Company to
Schneider Securities, Inc.
*** 5. Opinion of Berliner Zisser Walter & Gallegos, P.C., regarding
legality of the securities covered by this Registration
Statement.
~ 10.1 1993 Stock Option Plan, effective March 1993, as amended.
x 10.2.1 Employment Agreement, dated January 1, 1997, by and between
Robert G. Tomlinson and the Company.
x 10.2.2 Employment Agreement, dated January 1, 1997, by and between
Robert W. Haley and the Company.
x 10.2.3 Form of standard Endorsement Agreement by and between various
golf professionals and the Company.
# 10.3 Business Loan Agreement, dated October 30, 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.
+ 10.4.3 Laughlin Factory Outlet Store Lease, dated March 10, 1995,
between Horizon Outlet Centers Limited Partnership and the
Company.
** 10.4.4 Lease Agreement, dated April, 1998, between Larry M. Jones and
Roberta C. Jones, and B&L Sportswear, Inc.
o 10.5 Form of Independent Sales Representative Agreement.
+ 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.
<PAGE> 21
! 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.
x 10.14 Form of Distribution Agreement by and between the Company and
Pacsports Phils, Inc., Pacsports, Ltd. and Bossports.
xx 10.15 Stock Purchase Agreement among the Company, Marvin Urquhart,
Larry M. Jones and Roberta C. Jones, and B&L Sportswear, Inc.
** 11 Schedule Computing Net Income Per Common Share
** 21 Subsidiaries of the Registrant
*** 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 is included in Exhibit 5.
*** 23.2 Consent of Levine Hughes & Mithuen, Inc., independent certified
public accountants for the Company.
* Incorporated by reference from the Company's Registration Statement on Form
SB-2 (File No. 333-1214).
o Incorporated by reference from the Company's Registration Statement on Form
SB-2 (File No. 33-74876-D).
+ Incorporated by reference from the Company's Form 10-KSB filed October 6,
1995 (File No. 1-12888).
@ Incorporated by reference from the Company's Form 10-KSB filed September
14, 1994 (File No. 1-12888).
= Incorporated by reference from the Company's Form 10-QSB filed November 14,
1995 (File No. 1-12888).
- - Incorporated by reference from the Company's Form 10-QSBA/1 filed February
2, 1996 (File No. 1-12888).
! Incorporated by reference from the Company's Form 10-KSB filed October 11,
1996 (File No. 1-12888).
~ Incorporated by reference from the Company's Form 10-QSB filed May 12, 1997
(File No. 1-12888).
# Incorporated by reference from the Company's Registration Statement on
Form S-3 (File No. 333-18831).
x Incorporated by reference from the Company's Form 10-KSB filed September
29,1997 (File No. 1-12888).
xx Incorporated by reference from the Company's Form 8-K filed April 27, 1998
(File No. 1-12888).
** Incorporated by reference from the Company's Form 10-K filed September 29,
1998 (File No. 1-12888).
*** Filed herewith.
<PAGE> 1
EXHIBIT 5
BERLINER ZISSER WALTER & GALLEGOS
A PROFESSIONAL CORPORATION
ATTORNEYS AT LAW
ONE NORWEST CENTER
1700 LINCOLN STREET, SUITE 4700
DENVER, COLORADO 80203-4547
(303) 830-1700
(303) 830-1705 (FAX)
December 18, 1998
Sport-Haley, Inc.
4600 E. 48th Avenue
Denver, Colorado 80216
Re: Registration Statement on Form S-3
(S.E.C. File No. 333- ) Covering
Public Offering of 22,250 Shares
of Common Stock of Sport-Haley, Inc.
Gentlemen:
We have acted as counsel to Sport-Haley, Inc., a Colorado corporation
(the "Company"), in connection with the proposed offering by a selling
shareholder of 22,250 shares of Common Stock (the "Shareholder Shares"), all in
accordance with the registration provisions of the Securities Act of 1933, as
amended.
In such capacity, we have examined, among other documents, the
Registration Statement on Form S-3 which the Company is to file with the
Securities and Exchange Commission today or shortly hereafter (as the same may
be further amended from time to time, the "Registration Statement"), covering
the public offering of the above-described securities.
Based on the foregoing and on such further examination as we have
deemed relevant and necessary, we are of the opinion that:
1. The Company is a corporation duly organized and validly existing in
good standing under the laws of the State of Colorado.
2. The Shareholder Shares of Common Stock have been legally and validly
authorized under the Articles of Incorporation of the Company, and on receipt of
the consideration required by, and when issued in accordance with the
description set forth in, the Registration Statement, the Shareholder Shares
will constitute duly and validly issued, outstanding, and fully paid and
nonassessable securities of the Company.
We hereby consent to the use of our name and to the references to our
firm beneath the caption "LEGAL MATTERS" in the Prospectus forming a part of the
Registration Statement, and to the filing of a copy of this opinion as Exhibit
No. 5 thereto.
Very truly yours,
/s/ BERLINER ZISSER WALTER & GALLEGOS, P.C.
<PAGE> 1
EXHIBIT 23.2
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 and related prospectus of our report
dated September 4, 1998 appearing in and incorporated by reference in the Annual
Report on Form 10-K of Sport-Haley, Inc. for the year ended June 30, 1998. We
also consent to the reference to us under the caption "Experts" in this
prospectus.
Englewood, Colorado
December 18, 1998
