AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 2, 1998
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
PLAY-BY-PLAY TOYS & NOVELTIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 5092 74-2623760
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
INCORPORATION OR
ORGANIZATION)
4400 TEJASCO
SAN ANTONIO, TEXAS 78218-0267
(210) 829-4666
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
RAYMOND G. BRAUN
CHIEF FINANCIAL OFFICER
PLAY-BY-PLAY TOYS & NOVELTIES, INC.
4400 TEJASCO
SAN ANTONIO, TEXAS 78218-0267
(210) 829-4666
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S AGENT FOR SERVICE)
------------------------
COPIES OF COMMUNICATION TO:
MICHAEL L. BENGTSON, ESQ.
CHRISTOPHER D. RAY, ESQ.
1200 SAN JACINTO TOWER
98 SAN JACINTO BOULEVARD
AUSTIN, TEXAS 78701
(512) 469-6100
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, 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>
=====================================================================================================
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED PRICE(1)(2) REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock, no par value........... $ 27,256,687.50 $ 8,040.72
=====================================================================================================
</TABLE>
(1) In accordance with Rule 457(o) under the Securities Act of 1933, the number
of shares being registered and the proposed maximum offering price per share
are not included in this table.
(2) Estimated in accordance with Rule 457(c) under the Securities Act of 1933,
as amended, solely for the purpose of calculating the registration fee based
upon the average of the high and low sales prices reported on the Nasdaq
National Market on June 1, 1998.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
================================================================================
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PROSPECTUS (SUBJECT TO COMPLETION)
DATED JUNE 2, 1998
1,639,500 SHARES
PLAY-BY-PLAY TOYS & NOVELTIES, INC. -- [LOGO]
COMMON STOCK
------------------------
This Prospectus relates to the public offering, which is not being
underwritten, of up to 1,639,500 shares (the "Shares") of Common Stock, no par
value ("Common Stock"), of Play-By-Play Toys & Novelties, Inc., a Texas
corporation (the "Company"), which may be offered from time to time by certain
shareholders of the Company, certain holders of warrants to acquire shares of
common stock and certain holders of convertible debt of the Company, as
identified under the caption "Selling Shareholders" or by pledgees, donees,
transferees or other successors in interest (the "Selling Shareholders"). The
Company will receive no part of the proceeds of such sales.
The Shares may be offered by the Selling Shareholders from time to time in
one or more transactions as described under "Plan of Distribution." To the
extent required, the number of Shares to be sold, the name of the Selling
Shareholder(s), the purchase price, the name of any agent or broker-dealer, and
any applicable commissions, discounts or other items constituting a compensation
to such agent or broker-dealer with respect to a particular offering will be set
forth in a supplement or supplements to this Prospectus (each, a "Prospectus
Supplement"). The aggregate proceeds to the Selling Shareholder(s) from the
sale of the Shares offered from time to time hereby will be the purchase price
of the Shares sold less commissions, discounts and other compensation, if any,
paid by the Selling Shareholder(s) to any agent or broker-dealer. The price at
which any of the Shares may be sold, and the commissions, if any, paid in
connection with any such sale, are unknown and may vary from transaction to
transaction. The Company will pay the expenses incident to the offering and sale
of the Shares to the public other than any commissions and discounts of
underwriters, dealers or agents and any transfer taxes. See "Selling
Shareholders" and "Plan of Distribution."
The Common Stock is traded on the Nasdaq National Market under the trading
symbol "PBYP." On June 1, 1998, the last reported sales price of the
Common Stock on the Nasdaq National Market was $16.50 per share.
------------------------
THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" ON
PAGE 4 HEREOF.
------------------------
The Securities and Exchange Commission (the "Commission") may take the
view that, under certain circumstances, the Selling Shareholders and any
broker-dealers or agents that participate with the Selling Shareholders in the
distribution of the Shares may be deemed to be "underwriters" within the
meaning of the Securities Act. Commissions, discounts or concessions received by
any such broker-dealer or agent may be deemed to be underwriting commissions
under the Securities Act. The Company and the Selling Shareholders have agreed
to certain indemnification arrangements. See "Plan of Distribution."
------------------------
<PAGE>
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 , 1998
<PAGE>
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 and information statements and other information
with the Commission. Such reports, proxy and information statements and other
information may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
NW, Washington, D.C. 20549, and at the following Regional Offices of the
Commission: New York Regional Office, Seven World Trade Center, Suite 1300, New
York, New York 10048 and Chicago Regional Office, Northwest Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material may be obtained by mail at prescribed rates from the Public Reference
Section of the Commission at Judiciary Plaza, 450 Fifth Street, NW, Washington,
D.C. 20549. The Commission maintains a Web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission. The address of the site is
http://www.sec.gov. The Common Stock of the Company is listed on the Nasdaq
National Market, and such reports, proxy and information statements and other
information concerning the Company may be inspected at the offices of Nasdaq
Operations, 1735 K Street, NW, Washington, D.C. 20006.
This Prospectus constitutes a part of a Registration Statement on Form S-3
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Commission under the
Securities Act of 1933, as amended (the "Securities Act"). This Prospectus
does not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information with respect to the Company and the
Shares offered hereby, reference is hereby made to the Registration Statement.
The Registration Statement may be inspected at the public reference facilities
maintained by the Commission at the addresses set forth in the preceding
paragraph. The Company has filed the Registration Statement electronically with
the Commission via the Commission's Electronic Data Gathering, Analysis, and
Retrieval (EDGAR) system. Statements contained herein concerning any document
filed as an exhibit 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. Each such statement is qualified in its entirety by such
reference. The Company intends to distribute to its shareholders annual reports
containing audited financial statements and will make available copies of
quarterly reports for the first three quarters of such fiscal year containing
unaudited interim financial information.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company (File No.
0-26374) pursuant to the Exchange Act are hereby incorporated by reference in
this Prospectus:
(1) The Company's Annual Report on Form 10-K for the fiscal year
ended July 31, 1997;
(2) The Company's Quarterly Reports on Form 10-Q for the fiscal
quarters ended October 31, 1997 and January 31, 1998;
(3) The Company's Proxy Statement for its Annual Meeting of
Shareholders held on December 11, 1997;
(4) All other documents filed by the Company pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered
by the annual report referred to in (1) above; and
(5) The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A, filed with the Commission on October
26, 1995.
All reports and other documents subsequently filed by the Company pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the completion or termination of this offering shall be
deemed to be incorporated by reference into this Prospectus, to the extent
required, and to be a part of this Prospectus from the date of filing of such
reports and documents.
2
<PAGE>
Any statement contained in a document incorporated by reference into this
Prospectus shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference herein modified 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.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, upon written or oral request of such person, a copy of any or all of
the foregoing documents incorporated by reference into this Prospectus (other
than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents). Requests for such documents
should be submitted in writing to Raymond G. Braun, Chief Financial Officer,
Play-By-Play Toys & Novelties, Inc., 4400 Tejasco, San Antonio, Texas 78218-0267
or by telephone at (210) 829-4666.
THE COMPANY
The Company designs, develops, markets and distributes stuffed toys,
novelty items and its Play-Faces(R) line of sculpted toy pillows based on
licensed characters and trademarks. The Company also designs, develops, markets
and distributes electronic toys and non-licensed stuffed toys, and markets and
distributes a broad line of non-licensed novelty items. The Company markets and
distributes its products in both amusement and retail markets and believes that
it is the leading supplier of stuffed toys and novelty items to the domestic
amusement industry. Unless the context otherwise requires, all references in
this Prospectus to "Play-By-Play" or the "Company" include Play-By-Play Toys &
Novelties, Inc., its predecessors and their subsidiaries.
The Company develops its licensed stuffed toys based principally on
popular, classic characters such as Looney Tunes, Animaniacs, Batman, Superman,
characters featured in Space Jam (the motion picture), The Flinstones(TM) and
Popeye(TM) and on classic trademark licenses such as Coca-Cola(TM) brand stuffed
toys, including the Coca-Cola Polar Bear, and Harley-Davidson Motor Company's
Harley Hog(TM). The Company's non-licensed products include traditional stuffed
toys in various sizes, interactive dolls and novelty items such as low-priced
plastic toys and games used primarily as redemption prizes by its amusement
customers.
The Company has a diversified base of customers within the amusement and
retail distribution channels. Amusement customers include theme parks such as
Six Flags, Busch Gardens and SeaWorld, family entertainment centers such as Dave
& Buster's, Inc., Tilt and Namco, and carnivals and state fairs. In addition to
theme parks, family entertainment centers and carnivals, the Company's amusement
distribution channels include Fun Services(TM) (sales through franchisees),
fundraising and premium (products designed for specific companies) customers.
Retail customers principally consist of mass merchandisers such as Wal-Mart,
Kmart and Target, and specialty retailers such as Toys "R" Us and Kay Bee Toy.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
THIS PROSPECTUS AND THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE CONTAIN
FORWARD-LOOKING STATEMENTS THAT HAVE BEEN MADE PURSUANT TO THE PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH FORWARD-LOOKING
STATEMENTS ARE BASED ON CURRENT EXPECTATIONS, ESTIMATES AND PROJECTIONS ABOUT
THE COMPANY'S INDUSTRY, MANAGEMENT'S BELIEFS AND ASSUMPTIONS MADE BY MANAGEMENT.
WORDS SUCH AS "ANTICIPATES," "EXPECTS," "INTENDS," "PLANS,"
"BELIEVES," "SEEKS," "ESTIMATES" AND VARIATIONS OF SUCH WORDS AND SIMILAR
EXPRESSIONS ARE INTENDED TO IDENTIFY SUCH FORWARD-LOOKING STATEMENTS. THESE
STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND ARE SUBJECT TO CERTAIN
RISKS, UNCERTAINTIES AND ASSUMPTIONS THAT ARE DIFFICULT TO PREDICT; THEREFORE,
ACTUAL RESULTS MAY DIFFER MATERIALLY
3
<PAGE>
FROM THOSE EXPRESSED OR FORECASTED IN ANY SUCH FORWARD-LOOKING STATEMENTS. SUCH
RISKS AND UNCERTAINTIES INCLUDE THOSE NOTED IN THE DOCUMENTS INCORPORATED HEREIN
BY REFERENCE, INCLUDING THOSE SET FORTH IN THE ANNUAL REPORT ON FORM 10-K FOR
THE FISCAL YEAR ENDED JULY 31, 1997 (THE "FORM 10-K") UNDER "BUSINESS-RISK
FACTORS." UNLESS REQUIRED BY LAW, THE COMPANY UNDERTAKES NO OBLIGATION TO
UPDATE PUBLICLY ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW
INFORMATION, FUTURE EVENTS OR OTHERWISE. HOWEVER, INVESTORS SHOULD CAREFULLY
REVIEW THE RISK FACTORS AND OTHER INFORMATION SET FORTH IN THE REPORTS AND OTHER
DOCUMENTS THE COMPANY FILES FROM TIME TO TIME WITH THE COMMISSION.
RISK FACTORS
THE SHARES OFFERED HEREBY ARE SPECULATIVE IN NATURE AND INVOLVE A HIGH
DEGREE OF RISK. THE RISK FACTORS AND OTHER INFORMATION CONTAINED IN THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JULY 31, 1997 ARE
INCORPORATED BY REFERENCE HEREIN. SEE "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE." SUCH RISK FACTORS AND OTHER INFORMATION SHOULD BE CONSIDERED
CAREFULLY BEFORE PURCHASING THE OFFERED SHARES.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares. All proceeds from the sale of the Shares will be for the account of the
Selling Shareholders, as described below. See "Selling Shareholders" and
"Plan of Distribution" below.
In order to sell certain of the Shares covered by this Prospectus, certain
Selling Shareholders would need to exercise warrants to purchase Shares or
convert convertible debt of the Company. In such case, the Company would receive
the applicable exercise price of the warrants being exercised or retire the
applicable principal amount of the convertible debt being converted.
4
<PAGE>
SELLING SHAREHOLDERS
The following table sets forth, as of the date of this Prospectus, the name
of each of the Selling Shareholders, the position or office, if any, held by the
Selling Shareholder with the Company, the number of Shares that each such
Selling Shareholder owns as of such date, the number of Shares owned by each
Selling Shareholder that may be offered for sale from time to time by this
Prospectus, and the number of Shares to be held by each such Selling Shareholder
assuming the sale of all of the Shares offered hereby. The Selling Shareholders
may also be pledgees, donees, transferees or other successors in interest that
receive shares from the Selling Shareholders listed below as a gift, partnership
distribution or other non-sale related transfer. The Company may amend or
supplement this Prospectus from time to time to update the disclosure set forth
herein.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
SELLING OWNED PRIOR TO THE SHARES BEING OWNED AFTER THE
SHAREHOLDER POSITION OR OFFICE OFFERING(1) OFFERED OFFERING(2)
- ------------------------------------- --------------------------- -------------------- ------------ --------------------
NUMBER(1) PERCENT NUMBER(1) PERCENT
--------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Arturo G. Torres..................... Chairman of the Board 1,635,990 22.0% 500,000 1,135,990 15.3%
and Chief Executive Officer
Mark A. Gawlik....................... President, Chief Operating 217,821 3.0% 50,000 167,821 2.3%
Officer and Director
Francisco Saez Moya.................. Vice Chairman of the Board 293,086 4.0% 70,000 223,086 3.1%
and President --
Play-By-Play Toys &
Novelties Europe S.A.
Renaissance Capital Growth & Income Fund III, Inc................. 156,250 2.1% 156,250 0
Renaissance US Growth & Income Trust PLC.......................... 156,250 2.1% 156,250 0
Banc One Capital Partners II, Ltd................................. 625,000 7.9% 625,000 0
Gerard Klauer Mattison & Co., Inc................................. 41,000 0.6% 41,000 0
Dain Rauscher Incorporated........................................ 36,900 0.5% 36,900 0
Gregory Robitaille................................................ 4,100 0.05% 4,100 0
</TABLE>
- ------------
(1) The number and percentage of shares beneficially owned is determined in
accordance with Rule 13d-3 of the Exchange Act, and the information is not
necessarily indicative of beneficial ownership for any other purpose. Under
such rule, beneficial ownership includes any shares as to which the
individual has sole or shared voting power or investment power and also any
shares which the individual has the right to acquire within 60 days of the
date of this Prospectus through the exercise of any stock option or other
right. Unless otherwise indicated in the footnotes, each person has sole
voting and investment power (or shares such power with his or her spouse)
with respect to the shares shown as beneficially owned.
(2) Assumes the sale of all Shares offered hereby.
5
<PAGE>
PLAN OF DISTRIBUTION
The Shares covered by this Prospectus may be offered and sold from time to
time by the Selling Shareholders. The Selling Shareholders will act
independently of the Company in making decisions with respect to the timing,
manner and size of each sale. The Selling Shareholders may sell the Shares being
offered hereby on the Nasdaq National Market, or otherwise, at prices and under
terms then prevailing or at prices related to the then current market price or
at negotiated prices. The Shares may be sold by one or more of the following
means of distribution: (a) a block trade in which the broker-dealer so engaged
will attempt to sell Shares as agent, but may position and resell a portion of
the block as principal to facilitate the transaction; (b) purchases by a
broker-dealer as principal and resale by such broker-dealer for its own account
pursuant to this Prospectus; (c) an over-the-counter distribution in accordance
with the rules of the Nasdaq National Market; (d) ordinary brokerage
transactions and transactions in which the broker solicits purchasers; and (e)
in privately negotiated transactions. To the extent required, this Prospectus
may be amended and supplemented from time to time to describe a specific plan of
distribution. In connection with distributions of the Shares or otherwise, the
Selling Shareholders may enter into hedging transactions with broker-dealers or
other financial institutions. In connection with such transactions,
broker-dealers or other financial institutions may engage in short sales of the
Company's Common Stock in the course of hedging the positions they assume with
Selling Shareholders. The Selling Shareholders may also sell the Company's
Common Stock short and redeliver the Shares to close out such short positions.
The Selling Shareholders may also enter into option or other transactions with
broker-dealers or other financial institutions which require the delivery to
such broker-dealer or other financial institution of Shares offered hereby,
which Shares such broker-dealer or other financial institution may resell
pursuant to this Prospectus (as supplemented or amended to reflect such
transaction). The Selling Shareholders may also pledge Shares to a broker-dealer
or other financial institution, and, upon a default, such broker-dealer or other
financial institution, may effect sales of the pledged Shares pursuant to this
Prospectus (as supplemented or amended to reflect such transaction). In
addition, any Shares that qualify for sale pursuant to Rule 144 may be sold
under Rule 144 rather than pursuant to this Prospectus.
In effecting sales, brokers, dealers or agents engaged by the Selling
Shareholders may arrange for other brokers or dealers to participate. Brokers,
dealers or agents may receive commissions, discounts or concessions from the
Selling Shareholders in amounts to be negotiated prior to the sale. Such brokers
or dealers and any other participating brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with
such sales, and any such commissions, discounts or concessions may be deemed to
be underwriting discounts or commissions under the Securities Act. The Company
will pay the expenses incident to the offering and sale of the Shares to the
public other than any commissions and discounts of underwriters, dealers or
agents and any transfer taxes.
In order to comply with the securities laws of certain states, if
applicable, the Shares must be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
The Company has advised the Selling Shareholders that the anti-manipulation
rules of Regulation M under the Exchange Act may apply to sales of Shares in the
market and to the activities of the Selling Shareholders and their affiliates.
In addition, the Company will make copies of this Prospectus available to the
Selling Shareholders and has informed them of the need for delivery of copies of
this Prospectus to purchasers at or prior to the time of any sale of the Shares
offered hereby. The Selling Shareholders may indemnify any broker-dealer that
participates in transactions involving the sale of the shares against certain
liabilities, including liabilities arising under the Securities Act.
At the time a particular offer of Shares is made, if required, a Prospectus
Supplement will be distributed that will set forth the number of Shares being
offered and the terms of the offering, including the name of any underwriter,
dealer or agent, the purchase price paid by any underwriter, any discount,
commission and other item constituting compensation, any discount, commission or
concession allowed or reallowed or paid to any dealer, and the proposed selling
price to the public.
6
<PAGE>
The sale of Shares by the Selling Shareholders is subject to compliance by
the Selling Shareholders with certain contractual restrictions with the Company.
There can be no assurance that the Selling Shareholders will sell all or any of
the Shares. The Company intends to keep the Registration Statement of which this
Prospectus constitutes a part effective at least until the earlier to occur of
(i) the expiration of one year following the effectiveness of this Registration
Statement, and (ii) the sale of all the Shares covered hereby; provided, that
the Company in its sole discretion may terminate the effectiveness of such
Registration Statement prior to the end of such time periods. The Company
intends to de-register any of the Shares not sold by the Selling Shareholders at
the end of such time period; however, any unsold shares will be freely tradable
subject to compliance with Rule 144 of the Securities Act.
VALIDITY OF THE SHARES
The validity of the Shares offered hereby will be passed upon by Thompson &
Knight, P.C., Austin, Texas, counsel to the Company.
EXPERTS
The consolidated balance sheets of Play-By-Play Toys & Novelties, Inc. as
of July 31, 1997 and 1996 and the related consolidated statements of income,
changes in shareholders' equity, and cash flows for the years ended July 31,
1997, 1996 and 1995 incorporated by reference in this Prospectus and the
consolidated statements of operations and cash flows of Ace Novelty Co., Inc.
for the years ended December 31, 1995 and 1994 included in this Prospectus have
been included herein in reliance on the reports of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
7
<PAGE>
ACE NOVELTY CO., INC. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
PAGE
----
Report of Independent Accountants.... F-2
Consolidated Statements of Operations
for the Three Months Ended March
31, 1996
(Unaudited) and for the Years Ended
December 31, 1995 and 1994......... F-3
Consolidated Statements of Cash Flows
for the Three Months Ended March
31, 1996 (Unaudited) and for the
Years Ended December 31, 1995 and
1994............................... F-4
Notes to Consolidated Financial
Statements......................... F-5
F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors
Ace Novelty Co., Inc. and Subsidiaries
We have audited the accompanying consolidated statements of operations and
cash flows of Ace Novelty Co., Inc. and Subsidiaries for each of the two years
in the period ended December 31, 1995. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As discussed in Note 9 to the consolidated financial statements, in May
1996, the Company entered into an agreement to sell substantially all of its net
assets and operations in exchange for cash, notes and the assumption of
liabilities.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated results of operations
and cash flows of Ace Novelty Co., Inc. and Subsidiaries for each of the two
years in the period ended December 31, 1995 in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND,
L.L.P.
Seattle, Washington
April 25, 1996, except for Note 9 as to which
the date is May 1, 1996
F-2
<PAGE>
ACE NOVELTY CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS YEAR ENDED DECEMBER 31,
ENDED -------------------------------
MARCH 31, 1996 1995 1994
-------------- -------------- ---------------
(UNAUDITED)
<S> <C> <C> <C>
Sales................................... $ 11,324,632 $ 66,036,152 $ 86,015,180
Cost of sales........................... 7,460,882 45,808,236 69,356,564
-------------- -------------- ---------------
3,863,750 20,227,916 16,658,616
Selling, general and administrative
expenses.............................. 3,868,549 20,508,075 31,283,883
-------------- -------------- ---------------
Loss from continuing operations.... (4,799) (280,159) (14,625,267)
-------------- -------------- ---------------
Other income (expense):
Interest income.................... (133,714) 593,804 608,726
Interest expense................... (990,480) (5,009,045) (4,878,319)
Other.............................. (56,523) 1,096,260 1,079,739
-------------- -------------- ---------------
(1,180,717) (3,318,981) (3,189,854)
-------------- -------------- ---------------
Loss from continuing operations
before
income tax benefit............... (1,185,516) (3,599,140) (17,815,121)
Income tax benefit...................... 380,474 2,470,500 1,691,988
-------------- -------------- ---------------
Loss from continuing operations.... (805,042) (1,128,640) (16,123,133)
Discontinued operations, net of income
tax................................... -- 320,794 --
-------------- -------------- ---------------
Net loss........................... $ (805,042) $ (807,846) $ (16,123,133)
============== ============== ===============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements
F-3
<PAGE>
ACE NOVELTY CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS YEAR ENDED DECEMBER 31,
ENDED ---------------------------------
MARCH 31, 1996 1995 1994
-------------- --------------- ----------------
(UNAUDITED)
<S> <C> <C> <C>
Operating activities:
Net loss........................ $ (805,042) $ (807,846) $ (16,123,133)
Adjustments to reconcile net
loss to net cash
provided by (used in)
operating activities:
Depreciation and
amortization............ 253,677 1,044,268 1,444,248
Gain on sale of assets..... 10,346 (251,416) (37,962)
Deferred income taxes...... -- (2,470,500) 1,356,427
Changes in:
Notes and accounts
receivable, net.... (2,715,009) 6,182,237 1,277,282
Inventories........... (1,043,294) 6,429,161 6,545,626
Prepaid expenses and
other current
assets............. 7,742 461,265 1,857,920
Due from related
parties............ 75,677 (616,658) 452,039
Adjustment due from
related parties.... -- -- 2,627,998
Accounts payable and
accrued
liabilities........ 634,915 (1,994,919) 389,427
Accrued employee
retirement......... 4,513 (151,453) 12,872
Federal, state and
foreign income
taxes
receivable/payable... (20,717) 1,140,150 2,287,201
-------------- --------------- ----------------
Net cash
provided by
(used in)
operating
activities.... (3,597,192) 8,964,289 2,089,945
-------------- --------------- ----------------
Investing activities:
Acquisition of business......... -- -- (4,001,000)
Additions to equipment and
leasehold improvements........ (44,282) (1,313,086) (2,426,081)
Proceeds from sale of
discontinued operations,
equipment and other assets.... -- 1,746,294 37,962
-------------- --------------- ----------------
Net cash
provided by
(used in)
investing
activities.... (44,282) 433,208 (6,389,119)
-------------- --------------- ----------------
Financing activities:
Advances to shareholders and
related parties............... (116,040) (249,064) (2,556,496)
Repayments from shareholders and
related
parties....................... 497,931 2,842,138 --
Principal payments on long-term
debt.......................... (349,574) (2,522,977) (721,534)
Proceeds from long-term debt.... -- -- 7,625,606
Bank overdraft.................. 367,798 230,551 (4,093,536)
Proceeds from notes payable..... 14,604,249 89,846,730 106,619,000
Principal payments on notes
payable....................... (11,344,000) (99,741,960) (101,551,643)
Advances from shareholders and
related parties............... 2,167 56,968 278,430
Repayments to shareholders and
related parties............... (12,386) (121,617) (1,058,699)
-------------- --------------- ----------------
Net cash
provided by
(used in)
financing
activities.... 3,650,145 (9,659,231) 4,541,128
-------------- --------------- ----------------
Foreign currency translation......... 24,290 133,271 (335,689)
-------------- --------------- ----------------
Net increase (decrease) in cash and
cash equivalents................... 32,961 (128,463) (93,735)
Cash and cash equivalents:
Beginning of Period............. 32,421 160,884 254,619
-------------- --------------- ----------------
End of Period................... $ 65,382 $ 32,421 $ 160,884
============== =============== ================
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements
F-4
<PAGE>
ACE NOVELTY CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
DESCRIPTION OF BUSINESS
Ace Novelty Co., and Subsidiaries (the "Company") sells stuffed toys and
novelty products to the amusement industry in the United States and Canada,
including the nation's premier theme parks and family entertainment centers. The
Company designs, develops, markets and distributes stuffed toys based upon
licenses for children's entertainment characters and corporate trademarks as
well as proprietary characters developed and owned by the Company.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Ace Novelty
Co., Inc. and its wholly-owned subsidiaries, Specialty Manufacturing Ltd.,
Bairnbright Company, Ltd., Carecraft Co., Ltd., Easy Success Company, Ltd. and
TTM Manufacturing Company. TTM Manufacturing Company was liquidated in 1994.
Bairnbright Company, Ltd. and Carecraft Co., Ltd. were liquidated in 1995. All
significant intercompany balances and transactions have been eliminated in the
financial statements.
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements are depreciated on the straight-line
method over the estimated useful lives of the assets as follows:
Equipment............................... 4 - 8 years
Leasehold improvements.................. Term of lease or useful
life, whichever is shorter
Maintenance and repairs are charged to expense as incurred and expenditures
for major improvements are capitalized. Gains or losses on dispositions of
properties are reflected in income at the time of disposal.
INCOME TAXES
The differences between the tax bases of assets and liabilities and their
financial statement amounts are reflected as deferred income taxes using enacted
tax rates. A valuation allowance is established for deferred tax assets if it is
more likely than not that all or some portion of the deferred tax asset will not
be realized. Income tax expense or benefit is the tax payable or receivable for
the period and the change during the period in net deferred tax assets and
liabilities.
FOREIGN EXCHANGE
The Company translates the assets and liabilities of its foreign operations
at rates of exchange in effect at year-end. Revenues, expenses and cash flows of
foreign operations are translated at the average rates of exchange during the
year. Gains and losses resulting from translations of the balance sheet accounts
are accumulated as a separate component of stockholders' equity until such time
that the foreign entity is sold or liquidated.
REVENUE RECOGNITION
Sales and related costs are recorded by the Company upon shipment of
products to buyers.
ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
F-5
<PAGE>
ACE NOVELTY CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
2. ACME ACQUISITION:
In January 1994, the Company acquired substantially all the assets of ACME
Premium Supply Co. and K&A Enterprises, Inc. ("Collectively "ACME"). The
acquisition of ACME's assets was accounted for as a purchase. The purchase price
of the assets acquired including assumed liabilities was approximately
$4,001,000. In addition, the Company advanced $2,000,000 to a related entity to
acquire real property previously leased to ACME. Net assets acquired included
approximately $14,278,000 of current assets, $1,165,000 of property, plant and
equipment, $162,000 of other assets and $11,604,000 of assumed liabilities.
3. DISCONTINUED OPERATIONS:
In 1994, the Company decided to sell its Print Shop division. Accordingly,
the operations of the Print Shop division are stated separately as a
discontinued operation in the accompanying consolidated financial statements of
the Company. In 1995 and 1994, the division's sales were $2,304,187, and
$6,315,538, respectively. In April 1995, the division was sold for $4,520,000
which resulted in a gain of $320,794, net of the 1995 loss from operation of the
division of $179,206.
4. EMPLOYEE BENEFIT PLANS:
DEFINED BENEFIT PENSION PLAN:
Prior to 1991, the Company suspended its defined benefit pension plan such
that employees in the plan at the date of suspension no longer earn additional
benefits and no new employees are eligible to enter the plan.
The funding policy for the suspended defined benefit plan is to contribute
amounts actuarially determined as necessary to provide benefits to participants,
and in amounts necessary to meet the minimum contribution level stipulated by
the Employee Retirement Income Security Act of 1974 and the Internal Revenue
Code.
Pension cost (credit) included the following components:
1995 1996
---------- ------------
Interest cost on projected benefit
obligation......................... $ 88,152 $ 88,676
Expected return on plan assets....... (89,472) (37,654)
Net amortization of prior gains...... (16,554) (148,386)
---------- ------------
Net periodic pension (credit)........ $ (17,874) $ (97,364)
========== ============
The assumptions used in the actuarial calculations were as follows:
1995 1994
--------- ---------
Discount or settlement rate............. 7.25% 8.0%
Expected long-term rate of return on
assets................................ 8.00% 8.0%
DEFINED CONTRIBUTION PLAN:
The defined contribution plan covers substantially all employees with at
least one year of service and who have attained the age of 21 years. A portion
of the Company contribution is discretionary and a portion is a percentage match
of the employees contribution. The Company contributions for December 31, 1995
and 1994 were $47,670 and $63,128, respectively.
F-6
<PAGE>
ACE NOVELTY CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
5. COMMITMENTS AND CONTINGENCIES:
LEASES
The Company leases office, sales and warehouse space, primarily from
related parties, under non-cancelable operating leases expiring through 2010.
Net rental expense under these leases and other month-to-month agreements
was $1,302,742 and $1,706,200 in 1995 and 1994, respectively.
ROYALTIES
The Company licenses trademarks and entertainment characters and pays
associated royalties based on sales of the related products. Substantially all
of the license agreements are for periods of one to four years and include
guaranteed minimum royalty payments over the life of the agreements. Royalty
expenses are reported in cost of sales in the statement of operations.
CONTINGENCIES
The Company is involved in various legal matters arising in the normal
course of business including a dispute with the purchaser of the print shop
division. The dispute arose over the operation of the business during the
transition of ownership. In addition, certain regulatory agencies are reviewing
the sale of the division for possible regulatory violations. Although the
outcome is not determinable at this time, management believes that the ultimate
outcome of these matters will not have a material adverse effect on the
Company's financial position or results of operations.
CONCENTRATION OF CREDIT RISK
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of note and trade receivables.
The concentration of credit risk with respect to note and trade receivables is
generally limited due to the large number of customers comprising the Company's
customer base, and their dispersion across different industries and geographies.
As such, the Company generally does not require collateral from its customers.
6. TRANSACTIONS WITH RELATED PARTIES:
The Company sells certain merchandise and provides management services to
companies owned by officers/shareholders of the Company. In addition, the
Company leases certain offices, sales and warehouse space from related parties.
A summary of these transactions and the balances at December 31 is presented
below:
1995 1994
------------ ------------
Sales of merchandise.................... $ -- $ 1,910,666
Rent expense............................ 1,327,777 1,339,870
Interest expense........................ 174,632 130,561
Interest and management fee income...... 965,673 996,171
F-7
<PAGE>
ACE NOVELTY CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
7. INCOME TAXES:
Income taxes consist of the following:
1995 1994
-------------- --------------
Taxes currently refundable before giving
effect to foreign tax credits:
Federal................................. $ -- $ (2,558,048)
State................................... -- (430,058)
Foreign................................. -- (60,309)
-------------- --------------
-- (3,048,415)
Deferred taxes.......................... (2,470,500) 1,356,427
-------------- --------------
Total income tax (benefit)......... $ (2,470,500) $ (1,691,988)
============== ==============
Deferred Federal income taxes are provided for temporary differences which
result principally from use of accelerated depreciation methods for certain
assets, inventory costs (Uniform Capitalization Rules), bad debts, and certain
other accruals.
The Company's effective income tax rate differs from the U.S. Statutory
Federal income tax rate of 34% due to certain expenses that are not deductible
for income tax purposes, the lower rates of foreign jurisdictions and state
taxes.
8. SUPPLEMENTAL CASH FLOW DISCLOSURES:
The Company made interest payments of $4,932,461 and $4,502,764 in the
years ended December 31, 1995 and 1994, respectively. The Company made no income
tax payments in 1995 and 1994.
9. SUBSEQUENT EVENT:
In May 1996, the Company entered into an agreement to sell substantially
all its net assets and operations in exchange for cash, notes and the assumption
of liabilities. The Company will also receive forgiveness of debt from certain
lenders.
F-8
<PAGE>
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE BY THIS
PROSPECTUS TO GIVE ANY INFORMATION OR TO MAKE REPRESENTATIONS NOT CONTAINED IN
THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY, ANY SELLING SHAREHOLDER OR BY ANY OTHER PERSON. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITY OTHER THAN THE SHARES OFFERED HEREBY, NOR DOES IT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SHARES OFFERED HEREBY TO
ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE OF OR OFFER
TO SELL THE SHARES MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
PAGE
----
Available Information................ 2
Incorporation of Certain Documents By
Reference.......................... 2
The Company.......................... 3
Disclosure Regarding Forward-Looking
Statements......................... 3
Risk Factors......................... 4
Use of Proceeds...................... 4
Selling Shareholders................. 5
Plan of Distribution................. 6
Validity of the Shares............... 7
Experts.............................. 7
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Company will pay the expenses incident to the offering and sale to the
public of the shares being registered other than any commissions and discounts
of underwriters, dealers or agents and any transfer taxes. Such expenses are set
forth in the following table. All of the amounts shown are estimates except the
Securities and Exchange Commission ("SEC") registration fee.
SEC registration fee................. $ 8,070.72
Legal fees and expenses.............. 15,000.00
Accounting fees and expenses......... 4,000.00
Miscellaneous expenses............... 5,000.00
----------
Total........................... $32,070.72
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Play-By-Play Toys & Novelties, Inc. (the "Registrant") is incorporated in
Texas. Under Section 2.02 of the Business Corporation Act of the State of Texas,
a Texas corporation has the power, under specified circumstances, to indemnify
its directors, officers, employees and agents in connection with actions, suits
or proceedings brought against them by a third party or in the right of the
corporation, by reason of the fact that they were or are such directors,
officers, employees or agents, against expenses incurred in any action, suit or
proceedings. Article Eight of the Articles of Incorporation and Section 59 of
the Bylaws of the Registrant provides for indemnification of directors and
officers to the fullest extent permitted by the Business Corporation Act of the
State of Texas. Reference is made to the Articles of Incorporation and the
Bylaws of the Registrant, filed as exhibits to the Company's Annual Report on
Form 10-K for the fiscal year ended July 31, 1997, which is incorporated herein
by reference.
The Registrant carries liability insurance coverage for its directors and
officers for certain liabilities incurred in connection with the performance of
their duties.
ITEM 16. EXHIBITS
EXHIBIT NO. IDENTIFICATION OF EXHIBIT
- ----------- -------------------------
4.1 -- Specimen of Common Stock Certificate (filed as Exhibit 4.1 to the
Registration Statement on Form S-1 (File No. 33-92204) incorporated
herein by reference).
4.2 -- Form of Warrant Agreement and Form of Warrant (filed as Exhibit 4.2
to the Registration Statement on Form S-1 (File No. 33-92204)
incorporated herein by reference).
4.3 -- Form of Play-By-Play Toys & Novelties, Inc. Grant of Incentive
Stock Option (filed as Exhibit 4.3 to the Registration Statement on
Form S-1 (File No. 33-92204) incorporated herein by reference).
4.4 -- Form of Play-By-Play Toys & Novelties, Inc. Non-qualified Stock
Option Agreement (filed as Exhibit 4.4 to the Registration Statement
on Form S-1 (File No. 33-92204), incorporated herein by reference).
4.5 -- Warrant to Purchase Common Stock issued by the Registrant to Ace
Novelty Co., Inc. (filed as Exhibit 4 to Form 8-K (Date of Event: May
1, 1996), incorporated herein by reference).
5 -- Opinion of Thompson & Knight, P.C., counsel for the Registrant.*
23.1 -- Consent of Thompson & Knight, P.C. (included as a part of Exhibit 5)
23.2 -- Consent of Coopers & Lybrand L.L.P.*
23.3 -- Consent of Coopers & Lybrand L.L.P.*
24 -- Powers of Attorney (included at pages II 3-4).*
- ------------
* Filed herewith.
II-1
<PAGE>
ITEM 17. UNDERTAKINGS.
A. Undertaking Pursuant to 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:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement;
(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, 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 this offering.
B. Undertaking Regarding Filings Incorporating Subsequent Exchange Act
Documents By Reference.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) 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.
C. Undertaking in Respect of Indemnification.
Insofar as indemnification for liabilities arising under the Securities Act
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 SEC such indemnification, is against
public policy as expressed in the Securities 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 Securities Act and will be governed by the final
adjudication of such issue.
II-2
<PAGE>
D. Undertaking Pursuant to Rule 430A.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of the prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to 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 purposes of determining any liability under the
Securities Act, 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-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS 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 SAN ANTONIO, STATE OF TEXAS, ON THIS 2ND DAY OF JUNE,
1998.
PLAY-BY-PLAY TOYS & NOVELTIES, INC.
By: /s /RAYMOND G. BRAUN
RAYMOND G. BRAUN
CHIEF FINANCIAL OFFICER
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors and
officers of Play-By-Play Toys & Novelties, Inc., a Texas corporation, which is
filing a Registration Statement on Form S-3 with the Securities and Exchange
Commission, Washington, D.C. 20549 under the provisions of the Securities Act of
1933, hereby constitutes and appoints Raymond G. Braun his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign
such Registration Statement and any or all amendments, including post-effective
amendments, to the Registration Statement, including a Prospectus or an amended
Prospectus therein and any registration statement for the same offering that is
to be effective upon filing pursuant to Rule 462(b) under the Securities Act,
and all other documents in connection therewith to be filed with the Securities
and Exchange Commission, granting unto said attorney-in-fact and agent, full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact as agent, or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1993, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ARTURO G. TORRES Chairman of the Board and June 2, 1998
ARTURO G. TORRES Chief Executive Officer
(Principal Executive Officer)
/s/MARK A. GAWLIK President, Chief Operating June 2, 1998
MARK A. GAWLIK Officer and Director
/s/RAYMOND G. BRAUN Chief Financial Officer, June 2, 1998
RAYMOND G. BRAUN Treasurer and Director
(Principal Financial and
Accounting Officer)
/s/SAUL GAMORAN Executive Vice President, June 2, 1998
SAUL GAMORAN General Counsel, Secretary and
Director
/s/FRANCISCO SAEZ MOYA Vice Chairman of the Board and June 2, 1998
FRANCISCO SAEZ MOYA President -- Play-By-Play Toys
& Novelties Europe S.A.
/s/OTTIS W. BYERS Director June 2, 1998
OTTIS W. BYERS
/s/STEVE K.C. LIAO Director June 2, 1998
STEVE K.C. LIAO
/s/TOMAS DURAN Director June 2, 1998
TOMAS DURAN
/s/BERTO GUERRA, JR. Director June 2, 1998
BERTO GUERRA, JR.
/s/JAMES F. PLACE Director June 2, 1998
JAMES F. PLACE
II-4
EXHIBIT 5.1
June 2, 1998
Play-By-Play Toys & Novelties, Inc.
4400 Tejasco
San Antonio, Texas 78218-0267
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-3 to be filed by you
with the Securities and Exchange Commission on or about the date hereof (the
"Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended, of up to 1,639,500 shares of your Common
Stock (the "Shares"). All of the Shares are issued and outstanding and may be
offered for sale for the benefit of the selling shareholders named in the
Registration Statement. We understand that the Shares are to be sold from time
to time in the over-the-counter-market at prevailing prices or as otherwise
described in the Registration Statement. As your legal counsel, we have also
examined the proceedings taken by you in connection with the issuance of the
Shares.
It is our opinion that the Shares are validly issued, fully paid and
non-assessable.
In rendering the opinion set forth above with respect to any Shares which
will be acquired through the exercise of warrants to purchase Common Stock of
the Company, or the conversion of debt of the Company convertible into Common
Stock of the Company, we have assumed that such Shares will be issued and
acquired in the manner and for the consideration provided for in the pertinent
documents and instruments governing such warrants or convertible debt, as
applicable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name under the caption
"Validity of the Shares" appearing in the Prospectus constituting a part of
the Registration Statement, and any amendments thereto.
Very truly yours,
THOMPSON & KNIGHT
A Professional Corporation
By: /s/ MICHAEL L. BENGTSON
MICHAEL L. BENGTSON, SHAREHOLDER
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement
on Form S-3 (File No. 333- ) of our report dated October 20, 1997, on our
audits of the consolidated financial statements and financial statement schedule
of PlayXbyXPlay Toys & Novelties, Inc. and Subsidiaries as of July 31, 1997 and
1996, and for each of the three years in the period ended July 31, 1997. We also
consent to the reference to our firm under the caption "Experts."
COOPERS & LYBRAND L.L.P.
Austin, Texas
June 2, 1998
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on Form S-3
(File No. 333- ) of our report dated April 25, 1996, except for Note 9 as
to which the date is May 1, 1996, on our audits of the consolidated statements
of operations and cash flows of Ace Novelty Co., Inc. and Subsidiaries for the
years ended December 31, 1995 and 1994. We also consent to the reference to our
firm under the caption "Experts."
COOPERS & LYBRAND L.L.P.
Seattle, Washington
June 2, 1998
