As filed with the Securities and Exchange Commission on , 1996
Commission File Number
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
Under
The Securities Act of 1933
GRAND SLAM LICENSING, INC.
INDIANA 35-1952027
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdictions Classification Code Number) Indemnification Number)
of incorporation
or organization)
401 Pennsylvania Parkway
Suite 390
Indianapolis, Indiana 46280
Telephone: (317) 575-5900
(Address and telephone number of registrant's principal executive offices
and principal place of business.)
Milton Thompson
401 Pennsylvania Parkway
Suite 390
Indianapolis, Indiana 46280
Telephone: (317) 575-5900
(Name, address and telephone number of agent for service.)
with copies to:
Jody M .Walker
Attorney At Law
7841 South Garfield Way
Littleton, Colorado 80122
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 133, check the following box: | x |
<TABLE>
CALCULATION OF REGISTRATION FEE
===================================================
<CAPTION>
Title of each Proposed Proposed Amount of
class of Amount to be offering aggregate registration
securities registered price offering price fee,<F3>
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.001 par value 65,000 1.50 $97,500 $33.62
A Warrants 200,000 .001<F2> $200 .07
Common Stock<F4>
200,000 5.00 $1,000,000 $344.83
Common Stock<F5>
556,050 1.50 $ 834,075 $287.61
Common Stock<F6>
77,000 1.50 $ 115,500 $39.83
Total $2,047,275 $705.96
<FN>
<F1>Represents Shares of common stock necessary to effect the
distribution described in the Registration Statement.
<F2>Estimated solely for purposes of calculating the registration fee.
<F3>Represents 1/29 of 1% of the book value of the Shares of common
stock issuable being registered.
<F4>Represents Common Stock underlying the A Warrants being
registered hereunder on behalf of the Selling Securityholders.
<F5>Represents Common Stock being registered hereunder on behalf of
the Selling Securityholders.
<F6>Represents Common Stock to be issued upon conversion of the Class
C Preferred Shares and upon exercise of A Warrants underlying the Class
C Preferred Shares on behalf of a Selling Shareholder
</TABLE>
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.
<TABLE>
<CAPTION>
GRAND SLAM LICENSING, INC.
Cross Reference Sheet between Items of Form S-1
and Prospectus Pursuant to 501(b) of Regulation S-K.
<S> <C>
Items in Form S-1 Location in Prospectus
1. Forepart of the Registration Statement
and Outside Front Cover Page of
Prospectus Outside Front Cover Page.
2. Inside Front and outside Back Inside Front Cover Page;
Cover Pages of Prospectus Outside Back Cover Page;
3. Summary Information & Risk Factors Prospectus Summary;
Risk Factors.
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Selling Security Holders Selling Security Holders
8. Plan of Distribution Inside Front Cover Page;
Prospectus Summary;
The Distribution
9. Description of Common Stock Outside Front Cover Page
to be Registered Prospectus Summary;
Description of Securities
10. Interest of Named Experts Interest of Named Experts
and Counsel and Counsel.
11. Information with Respect to The Corporation; Legal
the Registrant Proceedings; Market
Information of Common
Shares; Financial Statements;
Selected Financial Data;
Management's Discussion and
Analysis of Financial
Condition, Management;
Certain Relationships and
Related Transactions;
Principal Shareholders.
12. Statement as to Indemnification Management -Indemnification.
</TABLE>
PRELIMINARY PROSPECTUS DATED JUNE 7, 1996
SUBJECT TO COMPLETION
65,000 Common Shares to be distributed
556,050 Common Shares on behalf of Selling Shareholders
200,000 A Warrants
200,000 Common Shares underlying the A Warrants
77,000 Common Shares underlying the Class C Preferred Shares
(includes 7,000 Common Shares underlying A Warrants to be
issued upon conversion of Class C Preferred Shares)
GRAND SLAM LICENSING, INC.
Common Stock ($.001 Par Value)
As more fully set forth herein, Pratt, Wylce & Lords, Ltd., a Nevada
corporation ("Pratt"), proposes to distribute (the "Distribution") on or about
1996 as a dividend to its shareholders of record at the close of
business on May 31, 1996 (the "Record Date"), one share of the common
stock, par value $.001 per share (the "Common Stock") of Grand Slam
Licensing, Inc., an Indiana corporation (the "Company"), for each forty
shares of Pratt common stock, par value $.001 per share (the "Pratt
Common Stock"), held by each Pratt shareholder on the Record Date. Pratt
will distribute 65,000 Common Shares (40.63% of the 160,000 shares of
Common Stock owned by it), which represents 4.89% of the Company's
outstanding Common Stock on the Record Date. The Distribution will be
made by Pratt without the payment of any consideration by its shareholders.
No fractional shares will be distributed. See "The Distribution." The
Common Shares of the Company owned by Pratt that are not being
distributed are being registered for sale by Pratt as a selling shareholder.
The expenses of the Distribution are estimated to be $33,705.96 and are to
be paid by the Company.
Additionally, the Company is registering 556,050 common shares on behalf
of its selling security holders. The Company is registering 70,000
common shares to be issued upon conversion of the Class C Preferred
Stock on behalf of Selling Shareholders and 7,000 common shares to be
issued upon exercise of A Warrants which shall be issue upon conversion
of the Class C Preferred Stock. The Company is also registering 200,000
A Warrants and the stock underlying said warrants on behalf of its selling
security holders. The A Warrants are exercisable into One common share
at the purchase price of $5.00. The A Warrants shall be effective for a
period of Two years from the date of issuance and shall be redeemable by
the Company at $.001 per A Warrant upon thirty days notice.
Prior to the date hereof, there has been no trading market for the Common
Stock of the Company. The Company has agreed to use its best efforts to
apply for the quotation of its Common Stock on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ"). There can
be no assurance, however, that the Common Stock will be quoted, that an
active trading and/or a liquid market will develop or, if developed, that it
will be maintained.
There are material risks in connection with the purchase of the securities.
See Risk Factors, page 8
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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 sales 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 state.
Available Information
The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C. office, a Registration Statement on
Form S-1 (Registration No. ) under the Securities Act of 1933, as
amended (the "Securities Act"), for the registration of the securities offered
hereby. This Prospectus omits certain of the information contained in the
Registration Statement, and reference is hereby made to the Registration
Statement and exhibits and schedules relating thereto for further information
with respect to the Company and the securities to which this Prospectus
relates. Statements contained herein c/oncerning 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. Each such statement is qualified in its entirety by such
reference. Items of information omitted from this Prospectus but contained
in the Registration Statement may be inspected without charge at the Public
Reference Room of the Commission, 450 Fifth Street, N.W., Judiciary
Plaza, Washington, D.C. 20549 and copies of such material can be obtained
from the Public Reference Section of the Commission, Washington, D.C.
20549 at prescribed rates.
Upon consummation of this offering and the Distribution, the Company will
become subject to the informational requirements of the Securities Exchange
Act of 1934, as amended, and in accordance therewith file reports and other
information with the Securities and Exchange Commission. The reports
and other information filed by the Company can be inspected and copied at
the public reference facilities maintained by the Commission in Washington,
D.C. and at the Chicago Regional Office, Northwestern Atrium Center, 500
W. Madison Street, Suite 1400, Chicago, Illinois 60621-2511 and the New
York Regional Office, 7 World Trade Center, New York, New York
10048. Copies of such material can be obtained from the Public Reference
Section of the Commission, Washington, D.C. 20549 at prescribed rates.
Reports to Security Holders
The Company will furnish to shareholders: (i) an annual report containing
financial information examined and reported upon by its certified public
accountants; (ii) unaudited financial statements for each of the first three
quarters of the fiscal year; and (iii) additional information concerning the
business and operations of the Company deemed appropriate by the Board
of Directors.
The approximate date on which this Prospectus is first being sent to holders
of Pratt Common Stock is , 1996.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------------
<S> <C>
PROSPECTUS SUMMARY 6
RISK FACTORS 8
THE DISTRIBUTION 12
SELLING SECURITY HOLDERS 12
USE OF PROCEEDS 15
THE COMPANY 15
BUSINESS ACTIVITIES 16
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION 18
Trends and Uncertainties
Capital and Source of Liquidity
Results of Operations
CERTAIN TRANSACTIONS 20
MANAGEMENT 21
Officers and Directors
Remuneration
Indemnification
PRINCIPAL SHAREHOLDERS 26
SHARES ELIGIBLE FOR FUTURE SALE 27
NASDAQ LISTING 27
DESCRIPTION OF SECURITIES 28
LEGAL MATTERS 29
LEGAL PROCEEDINGS 30
EXPERTS 30
INTERESTS OF NAMED EXPERTS AND COUNSEL 30
</TABLE>
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PROSPECTUS SUMMARY
- --------------------------------------------------------------------------------
The following summary is qualified in its entirety by the more detailed
information, financial statements and notes to the financial statements
including the notes thereto appearing elsewhere in this Prospectus.
The Company. The Corporation was incorporated in Indiana on April 28,
1995. The Corporation is authorized to issue Fifty Million (50,000,000)
Common Shares, $.001 par value. The Corporation has authorized a
dividend to shareholders of record as of May 15, 1995 of 250 Class A
Convertible Preferred Shares ("Class A Preferred") and 800 Class B
Convertible Preferred Shares (Class B Preferred"). The Class A Preferred
shall be convertible at a rate of 1,000 shares of common stock for each
share of Class A Preferred. Conversion will be authorized upon the first
fiscal year that the Corporation attains at least $1,000,000 in audited after
tax profits. Class B Preferred shall be convertible at a rate of 1,000 shares
of common stock for each share of Class B Preferred. The Class B
Preferred shall be convertible upon completion of the first fiscal year that
the Corporation attains audited after tax profits of at least $3,000,000.
During September, 1995, the Corporation authorized 1,000 Class C
Preferred
Shares. Each Class C Preferred Share is convertible, after four months
from the purchase date, into 100 Common Shares and One "A" Warrant to
purchase 10 additional Common Shares at $5.00 per share. The Class C
Preferred Stock is not entitled to voting rights or dividends. There are
currently 700 Class C Preferred Shares issued and outstanding.
Additionally, the Board of Directors of the Corporation have authorized a
dividend distribution of 200,000 A Warrants on a pro rata basis to the
shareholders of record as of May 15, 1995. The A Warrants shall be
exercisable for a period of two years from issuance. The A Warrants shall
be exercisable into Common Shares of the Corporation at the exercise price
of $5.00 per Common Share.
The Corporation's executive offices are located at 401 Pennsylvania
Parkway, Suite 390, Indianapolis, Indiana 46280. Telephone No. (317)
575-5900. These offices consist of 2,575 square feet provided, as part of a
total agreement of $10,000 per month with Grand Slam II to provide office
space, storage, access to office equipment and management services.
The operations and objectives of the Corporation are the acquisition of
licenses from sports and entertainment entities and personalities for the use
of logos and other marks and individual photographic images to
manufacture lapel pins, photo pins and similar collectible souvenir
memorabilia
The Distribution.
<TABLE>
<S> <C>
Securities Being Distributed 65,000 shares of the Company's
Common Stock.
Purpose of Distribution To enhance the Company's ability to
raise additional capital, if necessary,
in the future.
Shares of Common Stock
Outstanding
After Distribution 1,329,100 shares of Common Stock.
Distributing Company Pratt, Wylce & Lords, Ltd., a Nevada
corporation.
Distribution Ratio One share of Common Stock for
every Forty shares of Pratt
Common Stock owned of record on
May 31, 1996 (the "Record Date").
Use of Proceeds The securities to which this
Prospectus relates are being
distributed to holders of Pratt
Common Stock as a dividend
and neither the Company nor Pratt
will receive any cash or other
proceeds in connection with the
Distribution.
Additionally this Prospectus relates to
securities being registered on behalf
of selling securityholders and the
Company will not receive any cash or
other proceeds in connection with the
subsequent sale. Any proceeds
received from the subsequent exercise
of the A Warrants shall be used
as working capital and to expand
operations.
Certain Factors to be Considered See "Risk Factors."
Absence of Dividends;
Dividend Policy The Company does not currently
intend to pay regular cash dividends
on its Common Stock; such policy
will be reviewed by the Company's
Board of Directors from time to time
in light of, among other things, the
Company's earnings and financial
position. See "Risk Factors."
Transfer Agent The Company shall act as its own
Transfer Agent until further financing
is obtained.
Selected Financial Information. The selected financial information
presented below under the captions and "Balance Sheet" as of the ten
months ended October 31, 1995 and December 31, 1994 and "Statement of
Operations" for the ten months ended October 31, 1995 and for the years
ended December 31, 1993 and 1995 are derived from the audited financial
statements of the Company. The selected financial information present
below under the captions "Balance Sheet" as of April 30, 1996 and 1995
and the Statement of Operations for the six months ended April 30, 1996
and 1995 is derived from the unaudited financial statements of the
Company. The Balance Sheet and Statement of Operations have not been
audited by independent certified public accountants however, in the opinion
of management, all adjustments (which include only normal recurring
adjustments) have been made in order to present fairly the operations for
this period. See "Management's Discussion and Analysis of Financial
Condition" and "Financial Statements."
</TABLE>
<TABLE>
BALANCE SHEET
<CAPTION>
December 31, October 31, April 30,
1994 1995 1996
<S> <C> <C> <C>
Total Assets $45,924 $608,614 $356,553
Total Liabilities $36,625 $139,755 $ 82,602
Total Stockholders'
Equity (Deficit) $ 9,299 $468,859 $273,951
Total Liabilities &
Stockholders' Equity $45,924 $608,614 $356,553
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For Ten For Six For Six
For Year For Year Months Months Months
Ended Ended Ended Ended Ended
Dec. 31 Dec. 31, Oct. 31 April 30, April
30,
1994 1993 1995 1995 1996
<S> <C> <C> <C> <C> <C>
Revenues from continuing
operations $191,057 $178,099 $125,796 $23,007 $66,388
Income (Loss) from
continuing operations
(197,828) (73,644) (38,246) (33,427) (196,386)
Nonoperating Income
(Expense) (334,393) - - - 1,478
Provision (Credit) For
Income Taxes - - - - -
Net income (loss)
(532,221) (73,644) (38,246) (33,427)
(194,908)
Net income (loss) per common
share of outstanding stock
$ (0.53) $ (0.09) $ (0.05) (.04)
(.15)
</TABLE>
- ------------------------------------------------------- -----------------------
RISK FACTORS
- -------------------------------------------------------------------------------
In analyzing this offering, prospective investors should read this entire
Prospectus and carefully consider, among other things, the following Risk
Factors:
Uncertainty of Future Financial Results. The Company has experienced
accumulated losses from operations to date and future financial results are
uncertain. As such, there can be no assurance that the Company can be
operated in a profitable manner. Profitability depends upon many factors,
including the success of the Company's marketing program, the
maintenance or reduction of expense levels and the success of the
Company's business activities. The Company has accumulated losses
from operations as of April 30, 1996 of $693,702 . Lacking future
profitable operations, the Company will require additional capital. Even if
the Company obtains future financing or revenues to expand operations,
increased production or marketing expenses would adversely affect liquidity
of the Company. See FINANCIAL STATEMENTS.
Liquidity Dependent on Additional Capital and Debt Financing. On a long
term basis, liquidity is dependent on increased revenues from operations,
additional infusions of capital and debt financing. The Company believes
that additional capital and debt financing in the short term will allow the
Company to increase its marketing and sales efforts and thereafter result in
increased revenue and greater liquidity in the long term. However, there
can be no assurance that the Company will be able to obtain additional
equity or debt financing in the future, if at all.
No Ability to Control Affairs of the Company. The majority shareholders
and the officers and directors of the Company as a group own over 60.79%
of all of the outstanding common shares of the Company. As a result, these
individuals have the ability to control the affairs of the Company.
Therefore, the success of the Company's operations is dependent upon the
management expertise, judgment and experience of its officers and
directors. See MANAGEMENT and PRINCIPAL SHAREHOLDERS.
Dependence on Key Individuals. The future success of the Company is
highly dependent upon the Company's ability to attract and retain qualified
key employees. The Company has not yet entered into definitive
employment agreements with any such individuals. The inability to attract
and retain these individuals for the long term would have a material impact
upon the business of the Company. See COMPANY - Employees and
MANAGEMENT.
Lack of Experience of Management. The financial success of the Company
is partly dependent upon the management expertise and judgment of its
officers regarding the promotion of its products. The current officers all
have prior management experience with large and small businesses and
Milton Thompson, Harold Thompson and Joel Stein all have specific prior
experience in the specific type of product promotion being conducted by the
Company. The officers and directors will have the exclusive authority to
manage and control and make all decisions regarding the business and
affairs of the Company. There can be no assurance that management will
be able to successfully conduct the operations of the Company due to this
lack of experience.
The current officers of the Company devote all of their time to the affairs of
the Company. The remaining directors spend as much time as deemed
necessary on the corporate business affairs (estimated to be approximately
80% of their time) but are not required nor expected to devote their entire
time or efforts to the Company's business and affairs. Milton Thompson is
currently President, Treasurer and Director. Dennis DeYoung serves as Vice
President, Secretary and a Director, Harold Thompson and Joel Stein serve
as Directors.
Conflicts of Interest. Some of the directors of the Company are currently
principals of other businesses. As a result, conflicts of interest may arise.
The directors shall immediately notify the other directors of any possible
conflict which may arise due to their involvement with other businesses.
The interested directors in any conflict shall refrain from voting on any
matter in which a conflict of interest has arisen. The Company has
adopted a policy that any transactions with directors, officers or entities of
which they are also officers or directors or in which they have a financial
interest, will only be on terms which are fair and reasonable to the Company
and approved by a majority of the disinterested directors of the Company's
Board of Directors. For further discussion see Management - Conflicts of
Interest Policy. There can be no assurance that such other activities will not
interfere with the officers' and directors' ability to discharge their
obligation herein.
Competition. There is significant competition in the collector pin and
souvenir industry, particularly the logo pin market. The Corporation will be
competing with established companies and other entities (many of which
may possess substantially greater resources than the Corporation). Almost
all of the companies with which the Corporation competes are substantially
larger, have more substantial histories, backgrounds, experience and
records of successful operations, greater financial, technical, marketing and
other resources, more employees and more extensive facilities than the
Corporation now has, or will have in the foreseeable future. It is also likely
that other competitors will emerge in the near future. There is no assurance
that the Corporation will continue to compete successfully with other
established collector pin and souvenir enterprises. The Corporation shall
compete on the basis of quality and on public taste in addition to a price
basis. Inability to compete successfully might result in increased costs,
reduced yields and additional risks to the investors herein. See THE
CORPORATION - Competition.
Benefit to Management. Although currently, the officers and directors have
received minimal compensation and common shares for their services, the
Company may, in the future, compensate the Company's management with
substantial salaries and other benefits. Even though no compensation plan
has been proposed or agreed upon, the payment of future salaries and the
costs of these benefits may be a burden on the Company and may be a
factor in limiting or preventing the Company from achieving profitable
operations in the future. However, the Company would not continue to
compensate management with such substantial salaries and other benefits
under circumstances where to do so would have a material negative effect
on the Company's financial condition. See MANAGEMENT -
Remuneration.
Arbitrarily Determined Warrant Exercise Price. The exercise price of the A
Warrants being registered on behalf of the Selling Security holders was
established arbitrarily by the Company with no direct relationship to the
original offering price or the Company's assets, book value, shareholder's
equity or any other recognized criterion of value. Accordingly, the A
Warrants can be considered to have little or no value at the present time.
No Assurance of Public Market for Securities. There is no market for the
securities of the Company and there can be no assurance that an established
trading market (or any public market) will develop at the conclusion of this
Offering, or that if developed, it would be sustained, or that the securities
distributed hereunder may be resold at their original book value price or at
any other price. Any market for the securities of the Company that may
develop will, in all likelihood, be a substantially limited one.
Effect of Future Sales of Shares and Uncertainty of Market Development.
Upon completion of the distribution and a successful completion of the
registration of warrants herein the Company will have 1,329,100 common
shares outstanding, of which the Warrants and underlying Shares registered
in this Offering will be freely tradable without restriction or further
registration under the Securities Act of 1933 (the "Securities Act"). Upon
the effective date of this Registration Statement, 556,050 of the currently
1,329,100 restricted Shares subject to certain limitations of Rule 144 of the
Securities Act will become available for public sale. This does not include
any Common Shares underlying the Class A, Class B or Class C Preferred
Shares or A Warrants. No assurance can be given that the availability of
such Shares for sale will not have an adverse impact on the market price of
the Company's Shares, should one develop. Prior to this Offering, there
has been little public market for any securities of this Company.
Management of the Company cannot predict to what extent a secondary
market in the Shares will develop and provide liquidity for holders of the
Shares. See SALE OF SHARES PURSUANT TO RULE 144 and
MARKET INFORMATION ON COMMON SHARES.
Possible Restrictions to Sales of Company Securities. Until the Company
obtains a listing on NASDAQ, if ever, the Company's securities may be
covered by a Rule 15c2-6 under the Securities Exchange Act of 1934 that
imposes additional sales practice requirements on broker-dealers who sell
such securities to persons other than established customers and accredited
investors (generally institutions with assets in excess of $5,000,000 or
individuals with net worth in excess of $1,000,000 or annual income
exceeding $200,000 or $300,000 jointly with their spouse). For
transactions covered by the rule, the broker-dealer must make a special
suitability determination of the purchaser and have received the purchaser's
written agreement to the transaction prior to the sale. In order to approve a
person's account for transactions in designated securities, the broker or
dealer must (i) obtain information concerning the person's financial
situation, investment experience and investment objectives; (ii) reasonably
determined, based on the information required by paragraph (i) that
transactions in designated securities are suitable for the person and that the
person has sufficient knowledge and experience in financial matters that the
person reasonably may be expected to be capable of evaluating the rights of
transactions in designated securities; and (iii) deliver to the person a
written statement setting forth the basis on which the broker or dealer made
the determination required by paragraph (ii) in this section, stating in a
highlighted format that it is unlawful for the broker or dealer to effect a
transaction in a designated security subject to the provisions of paragraph
(ii) of this section unless the broker or dealer has received, prior to the
transaction, a written agreement to the transaction from the person; and
stating in a highlighted format immediately preceding the customer signature
line that the broker or dealer is required to provide the person with the
written statement and the person should not sign and return the written
statement to the broker or dealer if it does not accurately reflect the
person's financial situation, investment experience and investment
objectives
and obtain from the person a manually signed and dated copy of the written
statement. A designated security means any equity security other than a
security (i) registered, or approved for registration upon notice of issuance
on a national securities exchange that makes transaction reports available
pursuant to 17 CFR 11Aa3-1 (ii) authorized or approved for authorization
upon notice of issuance, for quotation in the NASDAQ system; or . . . (iv)
whose issuer has net tangible assets in excess of $2,000,000 demonstrated
by financial statements dated less than fifteen months previously that the
broker or dealer has reviewed and has a reasonable basis to believe are true
and complete in relation to the date of the transaction with the person.
Consequently, the rule may affect the ability of broker-dealers to sell the
Company's securities and also may affect the ability of purchasers in this
Offering to sell their shares in the secondary market. See NASDAQ Listing
- - Broker-Dealer Sales of Company's Securities.
Lack of Dividends. There can be no assurance that the continued operations
of the Company will result in any revenues or will be profitable. At the
present time, the Company intends to use any earnings which may be
generated to finance the growth of the Company's business. Accordingly,
while payment of dividends rests within the discretion of the Board of
Directors, the Company does not presently intend to pay dividends and
there can be no assurance that dividends will ever be paid. See DIVIDEND
POLICY.
Vulnerability to Fluctuations in Economy. Demand for the Company's
proposed products is dependent on, among other things, general economic
conditions which are cyclical in nature. Prolonged recessionary periods
may be damaging to the Company.
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THE DISTRIBUTION
- -----------------------------------------------------------------------------
After careful study and review, the Board of Directors of Pratt determined
that it would be in the best interests of Pratt and its shareholders to
distribute a portion of the Company's Common Shares held by Pratt to its
shareholders. In addition, the Company and Pratt determined that such a
distribution would be in the best interests of the Company. Pratt
shareholder's may realize economic benefits from the sale of any Common
Stock distribution if a market for the Company's Common Stock develops,
although there can be no assurances that any such market will result. Pratt
and the Company believe that the distribution to Pratt's shareholders, which
will result in an increased shareholder base of the Company, will be an
advantage to the Company at such time as the Company may require
additional capital and/or make application to NASDAQ. The increased
shareholder base of approximately 1,321 shareholders represents an
increase in potential future purchasers of additional stock in any subsequent
offering or in the stock market if these individuals are satisfied with the
performance of the Company's operations.
Accordingly, after obtaining the approval of the independent directors on
Pratt's Board of Directors, the Board of Directors of Pratt declared a
dividend pursuant to which, on or about , 1996, 65,000
shares of the issued and outstanding Common Stock of the Company,
constituting 39.39% of the shares of Common Stock owned by Pratt, will
be distributed to the shareholders of record of Pratt as of May 31, 1996 on
the basis of one share of Common Stock for each forty shares of Pratt
Common Stock held. The shares of Common Stock are being distributed
by Pratt as a dividend to holders of Pratt Common Stock and neither the
Company nor Pratt will receive any cash or other proceeds in connection
with the Distribution. No fractional shares of Common Stock will be
issued. Pratt had approximately 1,321 shareholders of record on the Record
Date. The Pratt Common Stock is quoted on over-the-counter under the
symbol "PWLS".
In order to comply with certain provisions of Indiana corporate law, on
, 1996 (the "Payment Date') Pratt deposited the shares of Common
Stock to be distributed with Florida Atlantic Stock Transfer, Inc. (the
"Depositary"). The Depositary will hold such shares for the benefit of Pratt
shareholders on the Record Date. The terms of the agreement with the
Depositary provides that the shares will be released promptly after the
Registration Statement to which this Prospectus relates is declared effective
by the Commission. However, if the Registration Statement is not declared
effective prior to May 31, 1997, then, unless such date is changed by notice
to the Depositary from the Company, the Depositary shall return all such
shares to Pratt without effecting the distribution.
- -----------------------------------------------------------------------------
SELLING SECURITY HOLDERS
- -----------------------------------------------------------------------------
The Company shall register pursuant to this prospectus 556,050 Common
Shares currently outstanding for the account of the following individuals or
entities. The percentage owned prior to and after the offering reflects all of
the then outstanding common shares. The amount and percentage owned
after the offering assumes the sale of all of the Common Shares being
registered on behalf of the selling shareholders.
<TABLE>
<CAPTION>
Name Amount Total % Owned Amount % Owned
Being Number Prior to Owned After
Registered of Shares Offering After Offering
Offering
<S> <C> <C> <C> <C> <C>
Lisa Railing 10,000 10,000 .75% 0 0%
Kerry Kenna 3,000 3,000 .23% 0 0%
Frances Stewart 3,000 3,000 .23% 0 0%
Alan Fiering 3,000 3,000 .23% 0 0%
William Paton 9,000 9,000 .68% 0 0%
Elaine Paton 9,000 9,000 .68% 0 0%
William Paton
IRA 9,000 9,000 .68% 0 0%
Robert Gerner 3,000 3,000 .23% 0 0%
Lauren Tracy 3,000 3,000 .23% 0 0%
Thomas Hayden 3,000 3,000 .23% 0 0%
Robert Kemmerer 30,000 30,000 2.3% 0 0%
Robert & Alisa
DeStefano 3,000 3,000 .23% 0 0%
Lois Zoll 3,000 3,000 .23% 0 0%
Carol & Paul Rice 3,000 3,000 .23% 0 0%
RE Hunt Trust 3,000 3,000 .23% 0 0%
Johnny &
Barbara Wong 3,000 3,000 .23% 0 0%
Francis Hong 3,500 3,500 .26% 0 0%
Elizabeth Gheen 3,000 3,000 .23% 0 0%
Kellye Moore 3,000 3,000 .23% 0 0%
Julius & Jean
Richmond 6,000 6,000 .46% 0 0%
Chloe Green 3,000 3,000 .23% 0 0%
Robert Brown 5,000 5,000 .38% 0 0%
Shirley Jean
Carroll 3,000 3,000 .23% 0 0%
Myron Wolf - 3,000 3,000 .23% 0 0%
Jeff McGuire - 3,000 3,000 .23% 0 0%
Michael Tower - 6,000 6,000 .46% 0 0%
Dominic & Julie
Cippola - 3,000 3,000 .23% 0 0%
Bradley Mays - 4,000 4,000 .30% 0 0%
Donald Burdsall - 3,000 3,000 .23% 0 0%
Michael Campbell 3,000 3,000 .23% 0 0%
William Brady &
James Curtis - 3,000 3,000 .23% 0 0%
Richard Roberts - 3,000 3,000 .23% 0 0%
James Haines - 3,334 3,334 .25% 0 0%
Domenic
Angelicchio - 4,000 4,000 .30% 0 0%
Butch Cameron - 3,000 3,000 .23% 0 0%
Thomas Kaminski 20,000 20,000 1.5% 0 0%
Greg Brown - 5,000 5,000 .38% 0 0%
Joseph Kack - 3,000 3,000 .23% 0 0%
Bradley Beck - 5,333 5,333 .40% 0 0%
Clifford Jaebker - 6,100 6,100 .46% 0 0%
William Taylor - 6,000 6,000 .46% 0 0%
CarolAnn Mihalik - 3,000 3,000 .23% 0 0%
Larry Konfirst - 9,000 9,000 .68% 0 0%
Richard Payne - 3,333 3,333 .25% 0 0%
Malcolm Thompson3,000 3,000 .23% 0 0%
Ethel Thompson &
Verna Saunders - 3,000 3,000 .23% 0 0%
Terrence Dooher - 4,000 4,000 .30% 0 0%
Gerald Dooher - 3,000 3,000 .23% 0 0%
Stephen Jones - 3,000 3,000 .23% 0 0%
Karen & Donald
Matthews - 3,000 3,000 .23% 0 0%
Nicholas Deets - 10,000 10,000 .75% 0 0%
Charles Poulsen - 3,500 3,500 .26% 0 0%
Ora Elliott - 6,000 6,000 .46% 0 0%
William Thompson -3,000 3,000 .23% 0 0%
Gary Muncy - 12,000 12,000 .90% 0 0%
Gavin Hart - 6,000 6,000 .46% 0 0%
David Solotkin - 6,000 6,000 .46% 0 0%
Daniel Carlson - 3,000 3,000 .23% 0 0%
Robin Cipolla - 3,000 3,000 .23% 0 0%
Fred Yde - 3,000 3,000 .23% 0 0%
R.K. Hunter - 3,000 3,000 .23% 0 0%
Roger Burch - 6,000 6,000 .46% 0 0%
Steven Worland - 3,000 3,000 .23% 0 0%
Donna Stocker - 3,000 3,000 .23% 0 0%
Jay Rifkind - 3,000 3,000 .23% 0 0%
Robert Kube - 3,000 3,000 .23% 0 0%
Roger Vosti - 3,000 3,000 .23% 0 0%
Mitsui & Betsy
Tatsugawa - 4,000 4,000 .30% 0 0%
Stephen Jones - 3,000 3,000 .23% 0 0%
James C. and Dorothy
Jane Filson Revocable
Living Trust 7,000 7,000 .53% 0 0%
Patrick J. O'Toole -5,000 5,000 .38% 0 0%
Milton
Thompson<F1> 32,320 323,200 4.32% 90,880 21.89%
Dennis
DeYoung<F2> 32,320 323,200 4.32% 90,880 21.89%
Harold
Thompson<F3> 8,080 80,800 6.08% 72,720 5.47%
Joel Stein <F4> - 8,080 80,800 6.08% 72,720 5.47%
Pratt, Wylce &
ords, Ltd.<F5> 95,000 160,000 12.04% 0 0%
Alan Filson - 34,150 34,150 2.57% 0 0%
<FN>
<F1> Milton Thompson is currently President, Treasurer and a Director of
the Company.
<F2>Dennis DeYoung is currently Vice President, Secretary and a Director
of the Company.
<F3> Harold Thompson is currently a Director of the Company.
<F4> Joel Stein is currently a Director of the Company.
<F5> Pratt, Wylce & Lords, Ltd. is distributing 65,000 of its common
shares to its shareholders. These common shares are being registered in
this Offering.
The Company shall register pursuant to this prospectus the common shares
underlying 200,000 A Warrants currently outstanding for the account of the
following individuals or entities. The percentage owned prior to and after
the offering reflects all of the then outstanding warrants. The amount and
percentage owned after the offering assumes the sale of all of the A
Warrants and does not include any Common Shares underlying the A
Warrants being registered on behalf of the selling security holders.
</TABLE>
<TABLE>
<CAPTION>
Name and Amount Total Number Of % Amount %
Being Registered A Warrants Owned Owned Owned
Registered Owned Prior to After After
Offering Offering Offering
<S> <C> <C> <C> <C>
Milton Thompson
- 80,000 80,000 40% 0 0%
Dennis DeYoung
- 80,000 80,000 40% 0 0%
Harold Thompson
- 20,000 20,000 10% 0 0%
Joel Stein
- 20,000 20,000 10% 0 0%
</TABLE>
The Corporation shall register pursuant to this prospectus the 70,000
Common Shares underlying the Class C Preferred Stock owned by Hugh
and Marianne Baker. Additionally, the Corporation shall register pursuant
to this prospectus, the 7,000 Common Shares which may be issued upon
exercise of the 700 A Warrants which are issuable to Hugh and Marianne
Baker upon conversion of the Class C Preferred Stock into Common
Shares.
- ------------------------------------------------------------------------------
USE OF PROCEEDS
- ------------------------------------------------------------------------------
The securities to which this Prospectus relates are being distributed to
holders of Pratt Common Stock as a dividend and neither the Company nor
Pratt will receive any cash or other proceeds in connection with the
Distribution.
Additionally, securities are being registered on behalf of the selling
securityholders and the Company will not receive any cash or other
proceeds in connection with the subsequent sale. Any proceeds received
from the subsequent exercise of the A Warrants shall be used as working
capital and to expand operations. If all of the A Warrants are exercised, the
proceeds shall be utilized over a twelve month period.
- -----------------------------------------------------------------------------
THE COMPANY
- -----------------------------------------------------------------------------
The Corporation. The Corporation was incorporated in Indiana on April
28, 1995. The Corporation is authorized to issue Fifty Million
(50,000,000) Common Shares, $.001 par value. The Corporation has
authorized a dividend to shareholders of record as of May 1, 1995 of 250
Class A Convertible Preferred Shares ("Class A Preferred") and 800 Class
B Convertible Preferred Shares (Class B Preferred"). The Class A
Preferred shall be convertible at a rate of 1,000 shares of common stock for
each share of Class A Preferred. Conversion will be authorized upon the
first fiscal year that the Corporation attains at least $1,000,000 in audited
after tax profits. Class B Preferred shall be convertible at a rate of 1,000
shares of common stock for each share of Class B Preferred. The Class B
Preferred shall be convertible upon completion of the first fiscal year that
the Corporation attains audited after tax profits of at least $3,000,000.
During September, 1995, the Corporation authorized 1,000 Class C
Preferred
Shares. Each Class C Preferred Share is convertible, after four months
from the purchase date, into 100 Common Shares and One "A" Warrant to
purchase 10 additional Common Shares at $5.00 per share. The Class C
Preferred Stock is not entitled to voting rights or dividends. There are
currently 700 Class C Preferred Shares issued and outstanding.
Additionally, the Board of Directors of the Corporation have authorized a
dividend distribution of 200,000 A Warrants on a pro rata basis to the
shareholders of record as of May 15, 1995. The A Warrants shall be
exercisable for a period of two years from issuance. The A Warrants shall
be exercisable into Common Shares of the Corporation at the exercise price
of $5.00 per Common Share.
The Corporation's executive offices are located at 401 Pennsylvania
Parkway, Suite 390, Indianapolis, Indiana 46280. Telephone No. (317)
575-5900. These offices consist of 2,575 square feet provided, as a part of
a total agreement for $10,000 per month with Grand Slam III to provide
office space, storage, access to office equipment and management services.
There are presently outstanding 1,329,100 Common Shares, 250 Class A
Preferred Shares, 800 Class B Preferred Shares and 700 Class C Preferred
Shares.
Business Objective. The operations and objectives of the Corporation are
the acquisition of licenses from sports and entertainment entities and
personalities for the use of logos and other marks and individual
photographic images to manufacture lapel pins, photo pins and similar
collectible souvenir memorabilia.
Employees. As of the date of this prospectus, the Corporation has five full
time employees, one retained lawyer and one part time independent
contractor working on commission. See "RISK FACTORS." The
Corporation will, as operations demand, sub-contract the balance of its
personnel through independent contractors or hire additional employees.
Competition. There is significant competition in the collector pin and related
souvenir industry, particularly the logo pin market. The Corporation will be
competing with established companies and other entities (many of which
may possess substantially greater resources than the Corporation. Almost
all of the companies with which the Corporation competes are substantially
larger, have more substantial histories, backgrounds, experience and
records of successful operations, greater financial, technical, marketing and
other resources, more employees and more extensive facilities than the
Corporation now has, or will have in the foreseeable future. It is also likely
that other competitors will emerge in the near future. There is no assurance
that the Corporation will continue to compete successfully with other
established collector pin and related souvenir enterprises. The Corporation
shall compete on the basis of quality and on public taste in addition to a
price basis. Inability to compete successfully might result in increased
costs, reduced yields and additional risks to the investors herein.
Consulting Agreement. On April 12, 1995, the Company entered into a
consulting agreement on with Pratt, Wylce & Lords, Ltd. ("Pratt") to assist
the Company in its capitalization and the obtainment of additional
financing. To date, Pratt provided consulting services regarding
capital structuring, initial equity financing, and preparation of a
registration statement. The term of the agreement is for one year from
April 12, 1995. To date, Pratt has received 160,000 Common Shares
valued
at $1.50 per common share which represents 12.04% of the currently
outstanding
common stock of the Company. As a result, Pratt would be deemed to be
an affiliate of the Company. Subsequent to the distribution pursuant to
this registration statement, Pratt shall be a nonaffiliate owning 7.15% of the
total outstanding common shares of the Company. In addition, Pratt
received total cash compensation of $30,000.
- -----------------------------------------------------------------------------
BUSINESS ACTIVITIES
- -----------------------------------------------------------------------------
General. The Corporation's business focuses on the acquisition of
licenses from sports and entertainment entities and personalities for the use
of logos and other marks and individual photographic images to
manufacture lapel pins, photo pins and similar collectible souvenir
memorabilia. When licenses are acquired, the Corporation designs and
imports high end products under an exclusive arrangement with a Far East
manufacturer. The Corporation then distributes its products through a
network of distributors currently covering the entire United States and
Canada.
Product Line. The Corporation acquires licenses in the following
categories of products:
Logo pins;
photo pins -- team and individual likenesses;
key chains and fobs;
earrings;
promotional pins;
sponsor pins;
collector sets;
commemorative pins (all star, anniversary year, etc.); and
limited edition sets.
The Corporation determines the wholesale price of its products by taking the
sum of the product cost, overhead, royalties, sales commission and margin.
The Corporation attempts to obtain a 15%-30% margin on volume orders
and a 30%-40% margin on high-end program. Royalties are approximately
9%-15% and commissions equal 8%-15%.
Distribution. The Corporation organizes the distribution of its products to
conform to the market of the particular license, sports or entertainment has
established the following primary channels of distribution:
1. Sports - For licensed sports products, six (6) independent
sales agencies have specific territorial and/or account assignments. In the
aggregate, these sales agencies create a strategic presence for the
Corporation's products all of the major markets in the United States. These
sales agencies brings current experience with other comparable product
lines, creating thereby access among retail buyers for the Corporation's
lines of collectibles.
Specialty marketing supplements the efforts of the independent dealers in
the Corporation's licenses sports product line in two (2) ways. First,
independent sales agencies, with specific experience, have been hired to
focus on particular markets. One such independent sales agency works
exclusively to place Corporation's products in mass merchants. At the
other end of the size continuum, an active telemarketing consultant services
the small store market by identifying and qualifying leads for the
independent dealers' follow up.
Venues, catalogue and television shopping markets and premium
sales to corporations are managed within the Corporation by the National
Sales Manager and the experienced consultants and staff supporting him.
2. Entertainment - The Corporation varied its distribution to
accommodate the marketing and purchasing practices of the market for
entertainment related products. In this segment of business, very specific
understanding and experience are essential. For this reason, the
Corporation established an exclusive distribution relationship with a major
entertainment products distributor, Baker and Taylor, to service all major
record and book store chains.
Labyrinth Sales, an independent sales representative,
conducts all other sales nationally. As a part of its sales effort, labyrinth
utilizes specialists concentrating on gift market distribution and on mass
merchants.
Finally, the Corporation's national sales management staff
retains responsibility for distribution to major department stores, catalogue
sales and the growing television sales markets.
A network of independent dealers - Currently Ten (10) independent sales
representatives are strategically located with access to major markets in the
United States. Most are established representatives who also represent
other product lines, thus providing the opportunity for headway among
retail buyers.
Market Research. The Corporation employs market research in the areas of
new product opportunities; niche market development, ongoing research in
market share and competition to enhance management decisions,
advertising/promotion planning and customer service analysis (especially
among the growing network of retail outlets).
- -----------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- -----------------------------------------------------------------------------
Trends and Uncertainties. Inasmuch as a major portion of the Company's
activities is the obtainment of licenses to manufacture and market lapel pins,
photo pins and similar collectible souvenir memorabilia pins, the
Company's business operations may be adversely affected by competitors
and prolonged recessionary periods. The sale of the Company's products
are seasonal in that the Olympics and other major sports events are strong
buying periods..
The Company utilizes McGillvrey Ltd. as the importer for its products from
pacific Rim manufacturers most notably Naigai, International of Japan who
has developed the photo likeness pin manufacturing process available
exclusively to the Company. Although there are several other
manufacturers which could be utilized, There can be no assurance that if
McGillvrey, Ltd. were unable to continue as the Company's source, that the
Company could obtain its injection molding at the same price level per
product.
The Company has been adding new accounts, representative groups,
expanding into new markets and channels of distribution in recent months.
See "Business Activities - Marketing Strategy" The continuation of
obtaining additional types of new business and markets is uncertain and the
continued success of any of the Company's new marketing strategies for
generating revenue is uncertain.
In addition, the future exercise of any of the A Warrants is uncertain based
on the current financial condition of the Company. The lack of future
exercise of the Warrants registered hereunder would negatively impact the
Company's ability to successfully expand operations.
Capital and Source of Liquidity. In June, 1995, the Company entered into
an agreement, which was modified on January 1, 1996 to a rate of $10,000
per month, with Grand Slam III for the provision of 2,575 square feet of
office space, storage, access to office equipment and management and
professional services. Other than the portion of this agreement related to
the provision of office space, the Company has no material commitments
for capital expenditures.
Plan of Operation. The Company has planned capital expenditures as
discussed in "Business Activities". The Company intends to use future
revenue and proceeds from future sales of its equity securities. There can
be no guarantee that the Company will be able to obtain the additional funds
from any of the sources listed and will not make the proposed acquisitions if
said funds are not available.
The Company has developed the following to implement the marketing plan
of its products. During 1995 and the first quarter of 1996, the Company
has concentrated on the diversification of this inventory of licensed
properties and on the design and development of collectible products. With
success in acquiring new licenses and the introduction of products into the
market place, the Company expects to achieve increases in sales in the
coming months. Also, with the advent of the 1996 NBA Playoffs and an
emphasis on its licensed products and the convening of Dream Team to
prepare for the 1996 Olympics in Atlanta, sales for already existing licensed
products are expected to dramatically improve.
Based on its established channels of distribution, its recent marketing and
current and projected sales levels, the Company should begin to have
positive cash flow from operations in the fourth quarter of 1996 and
management is of the opinion that the Company will be able to generate
sufficient cash flows to support these operations during fiscal year 1996.
The Company is currently financing its sales with a combination of cash
generated from internal operations and additional equity financing. The
Company has recently raised $591,459 in the private placement of common
shares and $105,000 in the private placement of preferred shares. The
Company shall pursue additional equity or debt financing, if necessary, to
continue or expand operations.
For the six months ended April 30, 1996, the Company purchased $6,355
of equipment and spent $4,523 for the purchase and development of
trademark and product development. As a result, the Compny had net cash
used in investing activities of $10,878 for the six months ended April 30,
1996.
For the ten months ended October 31, 1995, the Company utilized $36,425
in the purchase and development of trademark and product development
costs. This resulted in net cash used in investing activities of $36,425 for
the ten months ended October 31, 1995.
For the six months ended April 30, 1996, the Company had $0.00 cash
provided by financing activities.
For the ten months ended October 31, 1995, the Company received
$591,459 from the sale of its common stock and $47,822 from capital
contributions to partnership. The Company received $53,250 from a notes
payable. As a result, the Company had net cash provided by financing
activities of $692,531 for the ten months ended October 31, 1995.
For the year ended December 31, 1994, the Company received $76,520
from capital contributions to partnership. As a result, the Company had
net cash provided by financing activities of $692,531 for the year ended
December 31, 1994.
On a long term basis, liquidity is dependent on increased revenues from
operations, additional infusions of capital and debt financing. The
Company believes that additional capital and debt financing in the short term
will allow the Company to increase its marketing and sales efforts and
thereafter result in increased revenue and greater liquidity in the long term.
However, there can be no assurance that the Company will be able to obtain
additional equity or debt financing in the future, if at all.
Results of Operations. The Company had a net loss from operations of
$194,908 for the six months ended April 30, 1996. Sales increased from
$23,007 for the six months ended April 30, 1995 to $66,388 for the same
period in 1996. Cost of sales increased from $30,487 to $56,958 for those
same period due to increased operations. Selling and marketing increased
from $10,170 for the six months ended April 30, 1995 to $48,044 for the
six months ended April 30, 1996 due to increased operations. General and
administrative costs increase from $15,777 for the six months ended April
30, 1995 to $67,772 for the six months ended April 30, 1996 due to
management's attempt to obtain further capitalization and increase
operations. Additionally, management fees of $90,000 were paid to a
related party.
The Company had a decrease in accounts receivable of $3,806 and an
increase in inventory of $11,466 as the Company prepared for major
sporting events like the 1996 Olympics. The Company also had a decrease
in prepaid expenses $6,346 and a decrease in accounts payable of $49,156
for the six months ended April 30, 1996. Accrued expenses decreased
$7,997 as the Company continued operations. As a result, the Company
had net cash used in operations of $246,849 for the six months ended April
30, 1996.
The Company had a net loss from operations of $532,221 for the ten
months ended October 31, 1995 compared to a net loss of $73,644 for the
year ended December 31, 1994. Sales increased from $178,099 for the
year ended December 31, 1994 to $191,057 for the ten months ended
October 31, 1996. Cost of sales decreased from $121,359 for the year
ended December 31, 1994 to $91,567 (annualized to $109,880) for the ten
months ended October 31, 1995 due to the write-off of unsalable
merchandise in 1994. Selling and marketing increased from $71,231 for
the year ended December 31, 1994 to $122,163 for the ten months ended
October 31, 1995 due to increased operations. General and administrative
costs decreased from $59,153 for the year ended December 31, 1994 to
$38,153(annualized to $45,783) for the ten months ended October 31,
1995 due to the reduction of shared expenses with GS III. However,
management fees of $137,000, including payment of shared expenses) were
paid to a related party for the ten months ended October 31, 1995 compared
to $0.00 paid for the year ended December 31, 1994.
The Company had a net loss from operations of $74,644 for the year ended
December 31, 1994 compared to a net loss of $38,246 for the year ended
December 31, 1993. Sales increased from $125,796 for the year ended
December 31, 1993 to $178,099 for the year ended December 31, 1994.
Cost of sales increased from $72,847 for the year ended December 31,
1993 to $121,359 for the year ended December 31, 1994 due to increased
operations. Selling and marketing increased from $44,574 for the year
ended December 31, 1993 to $71,231 for the year ended December 31,
1994 due to increased operations. General and administrative costs
increased from $46,621 for the year ended December 31, 1993 to $59,153
for the year ended December 31, 1994 due to management's attempts to
obtain further capitalization and due to increased operations.
The Company is seeking to lower its operating expenses while expanding
operations and increasing its customer base and operating revenues. The
Company is focusing on decreasing administrative costs. However,
increased marketing expenses will probably occur in future periods as the
Company attempts to further increase its marketing and sales efforts.
- -----------------------------------------------------------------------------
CERTAIN TRANSACTIONS
- -----------------------------------------------------------------------------
Related Party Transactions. Effective May 15, 1995, the Company
entered into a management support agreement with Grand Slam III, an
affiliated limited partnership whereby Grand Slam III will supply support
services to the Company including the use of office space and equipment
and the use by the Company of employees of Grand Slam III in performing
administrative functions, planning and negotiation of license and sales
agreements. The contract provides for payments of $25,000 per month
plus 7% of gross revenues and expires on October 31, 1997. The contract
was modified effective January 1, 1996 to provide that certain employees of
Grand Slam III will become employees of the Company and to reduce the
fixed monthly payment to $10,000 per month. During the period from
May 15, 1995 to October 31, 1995, the Company made aggregate payments
under the contract of $164,819. The Company paid an additional $90,000
during the six months ended April 30, 1996.
Consulting Agreement. The Company has entered into a consulting
agreement with Pratt, Wylce & Lords, Ltd. ("Pratt") to assist the Company
in its capitalization and the obtainment of additional financing. As partial
payment for consulting services, the Company issued 165,000 of its
Common Shares to Pratt, of which 65,000 Common Shares are to be
registered and distributed to Pratt shareholders. Additionally, 32,000
Common Shares were issued to a nominee of Pratt. In addition, Pratt
has received cash compensation of $30,000.
Distribution of Securities. On May 16, 1995, the Board of Directors
authorized the distribution of 200,000 common stock purchase warrants
exercisable at $5.00 plus one warrant for each share of common stock.
The warrants are exercisable for a period of 48 months from the date of
issue and are callable with 30 days notice at a price of $.001 per warrant.
These distributions shall be made to the owners of record of common stock
on the books of the Company as of May 15, 1995. The Warrants and the
common stock underlying said Class A Warrants are being registered in this
Offering.
Lockup Agreement. Pursuant to a written agreement on March , 1996,
the principal shareholders and officers and directors (Milton Thompson,
Dennis DeYoung, Harold Thompson and Joel Stein) who received A
Warrants issued them pursuant to the Special Meeting of the Board of
Directors held on May 16, 1995 have agreed as follows:
In the event the shareholder exercises any warrants, the stock issued to the
shareholder pursuant to the exercise shall be locked in and restricted from
trading for a period of two years. A notice is to be placed on the face of
each stock certificate covered by the terms of the Agreement stating that the
transfer of the stock evidenced by the certificate is restricted until twenty-
four (24) months from the date of issuance. The shareholder also agrees
not to sell or otherwise transfer their interest in the warrants except to an
underwriter or other market makers in the stock once a market is
established. The shareholder further agrees that the total value in cash, or
other consideration, paid by the buyer to the seller shall not exceed $.01 per
warrant.
- -----------------------------------------------------------------------------
MANAGEMENT
- -----------------------------------------------------------------------------
Officers and Directors. Pursuant to the Articles of Incorporation, each
Director shall serve until the annual meeting of the stockholders, or until his
successor is elected and qualified. It is the intent of the Company to
support the election of a majority of "outside" directors at such meeting.
Directors may only be removed for "cause". The term of office of each
officer of the Company is at the pleasure of the Company's Board.
The principal executive officers and directors of the Company will be as
follows:
<TABLE>
<CAPTION>
Name Position Term(s) of Office
<S> <C> <C>
Milton O. Thompson, age 41 President, Treasurer Inception to
and Director present
Dennis DeYoung, age 50 Vice President, Secretary Inception to
Director present
Harold Thompson, age 52 Director Inception to
present
Joel K. Stein, age 39 Director Inception to present
</TABLE>
Resumes:
Milton O. Thompson. Mr. Thompson serves as the Chairman, President
and Treasurer of the Corporation. Since 1989, Mr. Thompson has served
as the Managing General Partner of Grand Slam II, L.P., a full sports and
entertainment marketing and management company representing athletes,
entertainers, events, licensors and licensees.
Mr. Thompson received his Bachelor of Arts in Political Science and
Philosophy from Wittenberg University in 1976 and his Doctor of
Jurisprudence from Indiana University in 1979. Mr. Thompson's
experience ranges from negotiations relating to individuals, teams and
events. From 1985-1988, he served as the Vice President for Development
and the General Counsel for the Organizing Committee for Tenth Pan
American Games.
Mr. Thompson is currently the Chairman of the Indianapolis Foundation
and on the Board of Directors of American States Insurance Company, IWC
Resources, a public utility and the Indianapolis Indians Triple A Baseball
Team, among many others.
Dennis DeYoung. Mr. DeYoung serves as a Director, Vice President and
Secretary of the Corporation. Mr. DeYoung received a Bachelor of Arts
Degree with a concentration in Restaurant Management from Washington
State University in 1968. Since his graduation from the University of
California at Davis with a Masters in Business Administration with a
concentration in Finance in 1975, he has been actively involved in the
animal feed business as corporate treasurer and comptroller of Lowell
DeYoung Co., Inc., an agricultural business in the Pacific Northwest..
Mr. DeYoung serves on several boards of Washington State University
including the Board of Directors of the University's Foundation and the
Advisory Boards of the College of Business and Economics and the Athletic
Department.
Harold Thompson. Mr. Thompson is a Director of the Corporation. Mr.
Thompson graduated from Indiana University's School of Business in
1969. Mr. Thompson worked from 1969 to 1979 in merchandising,
marketing and purchasing for Ayr-Way, a midwestern mass merchandiser.
In 1979, Mr. Thompson became the Vice President for Sales and marketing
of the Unit-Step Corporation of Indianapolis. For the past five (5) years,
Mr. Thompson has been responsible for the day to day procurement,
marketing and merchandising function of the licensed products division of
Grand Slam III, L.P.
Joel K. Stein. Mr. Stein is currently a Director of the Corporation. Mr.
Stein received a Bachelor of Arts with a major in Sociology from Marquette
University in 1983. Mr. Stein served as the Assistant to the Vice President
and Corporate Counsel of the Organizing Committee for the Tenth Pan
American Games in 1987. In 1988, Mr. Stein helped found Grand Slam
III, L.P. Mr. Stein also worked as the Director of the Professional
Division of United Way of Central Indiana from 1988 to 1991.
From 1991 to present, Mr. Stein has served as the founding President of the
Hoosier Alliance Against Drugs, a not-for-profit corporation created by the
Indiana General Assembly to advance the private sector's involvement in
community based substance abuse prevention and education. Mr. Stein
implemented the Alliance's start-up, including a comprehensive fund raising
program which has generated in excess of $1.5 million to support programs
in all of Indiana's 92 countries.
Remuneration. Since inception, no cash compensation has been paid by
the Corporation to its officers and directors, during which there were two
(2) officers and four (4) directors:
The Company has entered into an Employment Agreement with Milton
Thompson as of January 1, 1996. The Employment Agreement terminates
on December 31, 1998. Pursuant to the employment agreement, Mr.
Thompson shall receive $35,000 per annum.
The Board of Directors and shareholders have approved a Non-Statutory
Stock Option Plan to attract and retain persons of experience and ability and
whose services are considered valuable and to encourage the sense of
proprietorship in such persons and to stimulate the active interest of such
persons in the development and success of the Corporation.
1. Persons Eligible to Participate in Non-Statutory Stock Option Plan.
The persons eligible for participation in the Plan as recipients of Non-
statutory Stock Options ("NSOs") shall include full-time and part-time
employees (as determined by the Committee) and officers of the Company
or of an Affiliated Corporation. In addition, directors of the Company or
any Affiliated Corporation who are not employees of the Company or an
Affiliated Corporation and any attorney, consultant or other adviser to the
Company or any Affiliated Corporation shall be eligible to participate in the
Plan. For all purposes of the Plan, any director who is not also a common
law employee and is granted an option under the Plan shall be considered an
"employee" until the effective date of the director's resignation or removal
from the Board of Directors, including removal due to death or disability.
The Committee shall have full power to designate, from among eligible
individuals, the persons to whom NSOs may be granted. A person who
has been granted an NSO hereunder may be granted an additional NSO or
NSOs, if the Committee shall so determine. The granting of an NSO shall
not be construed as a contract of employment or as entitling the recipient
thereof to any rights of continued employment.
2. Stock Reserved for the Plan. Subject to adjustment, a total of
750,000 shares of Common Stock, no par value per share ("Stock"), of the
Company shall be subject to the Plan. The Stock subject to the Plan shall
consist of unissued shares or previously issued shares reacquired and held
by the Company or any Affiliated Corporation, and such amount of shares
shall be and is hereby reserved for sale for such purpose. Any of such
shares which may remain unsold and which are not subject to outstanding
NSOs at the termination of the Plan shall cease to be reserved for the
purpose of the Plan, but until termination of the Plan, the Company shall at
all times reserve a sufficient number of shares to meet the requirements of
the Plan. Should any NSO expire or be canceled prior to its exercise in full,
the unexercised shares theretofore subject to such NSO may again be
subjected to an NSO under the Plan.
3. Option Price. The purchase price of each share of Stock placed
under NSO shall not be less than Eighty Five percent (85%) of the fair
market value of such share on the date the NSO is granted. The fair market
value of a share on a particular date shall be deemed to be the average of
either (i) the highest and lowest prices at which shares were sold on the date
of grant, if traded on a national securities exchange, (ii) the high and low
prices reported in the consolidated reporting system, if traded on a "last sale
reported" system, such as NASDAQ, for over the counter securities, or (iii)
the high bid and high asked price for other over-the-counter securities. If
no transactions in the Stock occur on the date of grant, the fair market value
shall be determined as of the next earliest day for which reports or
quotations are available. If the common shares are not then quoted on any
exchange or in any quotation medium at the time the option is granted, then
the Board of Directors or Committee will use its discretion in selecting a
good faith value believed to represent fair market value based on factors
then known to them. The cash proceeds from the sale of Stock are to be
added to the general funds of the Company.
4. Exercise Period. (a) The NSO exercise period shall be a term of
not more than ten (10) years from the date of granting of each NSO and
shall automatically terminate:
(i) Upon termination of the optionee's employment with the
Company for cause;
(ii) At the expiration of twelve (12) months from the date of
termination of the optionee's employment with the Company for any reason
other than death, without cause; provided, that if the optionee dies within
such nine-month period, subclause (iii) below shall apply; or
(iii) At the expiration of fifteen (15) months after the date of
death of the optionee.
(b) "Employment with the Company" as used in the Plan shall
include employment with any Affiliated Corporation, and NSOs granted
under the Plan shall not be affected by an employee's transfer of
employment among the Company and any Parent or Subsidiary thereof. An
optionee's employment with the Company shall not be deemed interrupted
or terminated by a bona fide leave of absence (such as sabbatical leave or
employment by the Government) duly approved, military leave or sick
leave.
Board of Directors Compensation. Members of the Board of
Directors may receive an amount yet to be determined annually for their
participation and will be required to attend a minimum of four meetings per
fiscal year. All expenses for meeting attendance or out of pocket expenses
connected directly with their Board representation will be reimbursed by the
Corporation. Director liability insurance may be provided to all members of
the Board of Directors. No differentiation is made in the compensation of
"outside directors" and those officers of the Corporation serving in that
capacity.
Indemnification. The Corporation shall indemnify to the fullest extent
permitted by, and in the manner permissible under the laws of the State of
Indiana, any person made, or threatened to be made, a party to an action or
proceeding, whether criminal, civil, administrative or investigative, by
reason of the fact that he is or was a director or officer of the Corporation,
or served any other enterprise as director, officer or employee at the request
of the Corporation. The Board of Directors, in its discretion, shall have the
power on behalf of the Corporation to indemnify any person, other than a
director or officer, made a party to any action, suit or proceeding by reason
of the fact that he/she is or was an employee of the Corporation.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Corporation,
the Corporation 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 Corporation of expenses incurred or paid by a director, officer or
controlling person of the Corporation in the successful defense of any
action, suit or proceedings) is asserted by such director, officer, or
controlling person in connection with any securities being registered, the
Corporation 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
issues.
INDEMNIFICATION OF OFFICERS OR PERSONS CONTROLLING
THE CORPORATION FOR LIABILITIES ARISING UNDER THE
SECURITIES ACT OF 1933, IS HELD TO BE AGAINST PUBLIC
POLICY BY THE SECURITIES AND EXCHANGE COMMISSION
AND IS THEREFORE UNENFORCEABLE.
Conflicts of Interest Policy. The Company has adopted a policy that any
transactions with directors, officers or entities of which they are also
officers or directors or in which they have a financial interest, will only be
on terms fair and reasonable to the Company (based on competitive bids, if
appropriate, or on terms similar contracts with the Company by unaffiliated
entities) and approved by a majority of the disinterested directors of the
Company's Board of Directors. The Board of Directors resolved that the
Bylaws of the Company shall be amended to provide that no such
transactions by the Company shall be either void or voidable solely because
of such relationship or interest of directors or officers or solely because
such directors are present at the meeting of the Board of Directors of the
Company or a committee thereof which approves such transactions, or
solely because their votes are counted for such purpose if: (i) the fact of
such common directorship or financial interest is disclosed or known by the
Board of Directors or committee and noted in the minutes, and the Board or
committee authorizes, approves or ratifies the contract or transaction in good
faith by a vote for that purpose without counting the vote or votes of such
interested directors; or (ii) the fact of such common directorship or financial
interest is disclosed to or known by the shareholders entitled to vote and
they approve or ratify the contract or transaction in good faith by a majority
vote or written consent of shareholders holding a majority of the Common
Shares entitled to vote (the votes of the common or interested directors or
officers shall not be counted in any such vote of shareholders), or (iii) the
contract or transaction is fair and reasonable to the Company based on
competitive bids, if appropriate, and/or on terms consistent with similar
contracts with the Company by unaffiliated entities at the time it is
authorized or approved. In addition, interested directors may be counted in
determining the presence of a quorum at a meeting of the Board of Directors
of the Company or a committee thereof which approves such transactions.
Currently, there are only four directors. Two of the directors are brothers
who are also majority shareholders. As a result, until such time as
additional directors are appointed or elected to the Board of Directors, and
even though the directors are aware of their fiduciary duty to the
shareholders, there can be no assurance that the utilization of the policy will
result in the resolution of any conflict of interest.
- -------------------------------------------------------------------------------
PRINCIPAL SHAREHOLDERS
- -------------------------------------------------------------------------------
There are currently 1,329,100 Common Shares outstanding. The following
tabulates holdings of shares of the Company by each person who, subject to
the above, at the date of this Prospectus, holds of record or is known by
Management to own beneficially more than 5.0% of the Common Shares
and, in addition, by all directors and officers of the Company individually
and as a group.
<TABLE>
Shareholdings at Date of
This Prospectus
<CAPTION>
Amount
Amount of of Common Shares
Name and Address of Common Shares to be owned
Beneficial Owner Currently Owned % after Distribution %
<S> <C> <C> <C> <C>
Milton Thompson 323,200 24.32% 290,880 21.89%
5008 Fieldstone Trail
Indianapolis, Indiana 46254
Dennis DeYoung 323,200 24.32% 290,880 21.89%
805 4th Street West
Kirkland, Washington 98072
Harold Thompson 80,800 6.06% 72,720 5.47%
1070 Fleetwood Drive
Indianapolis, Indiana 46208
Joel Stein 80,800 6.06% 72,720 5.47%
7002 Bluff Grove Circle
Indianapolis, Indiana 46254
Pratt, Wylce & Lords 160,000 12.04% 0 0%
P.O. Box 1427
Idaho Springs, Colorado 80452
All Directors & Officers
as a group (four) 808,000 60.79% 727,200 54.71%
</TABLE>
There are currently 200,000 A Warrants outstanding. The following
tabulates holdings of A Warrants of the Company by each person who,
subject to the above, at the date of this Prospectus, holds of record or is
known by Management to own beneficially more than 5.0% of the Common
Shares and, in addition, by all directors and officers of the Company
individually and as a group.
<TABLE>
<CAPTION>
Name Total Number Of % Amount %
A Warrants Owned Owned Owned
Owned Prior to After After
Offering Offering Offering
<S> <C> <C> <C> <C>
Milton Thompson 80,000 40% 0 0%
Dennis DeYoung 80,000 40% 0 0%
Harold Thompson 20,000 10% 0 0%
Joel Stein 20,000 10% 0 0%
All Officers and
Directors
As a Group (four) 200,000 100% 0 0%
</TABLE>
- -----------------------------------------------------------------------------
SHARES ELIGIBLE FOR FUTURE SALE
- ----------------------------------------------------------------------------
Upon completion of the Distribution, the Company will have 1,329,100
shares of Common Stock outstanding, 504,900 of which are being
registered on behalf of selling shareholders in this Offering. This does not
include any Common Stock issued upon exercise of the Class A, Class B or
Class C Preferred Shares and 200,000 A Warrants currently being
registered on behalf of selling shareholders. Of these shares, 65,000 shares
distributed in the Distribution will be freely tradable without restriction or
further registration under the Securities Act, except for any shares
purchased by an existing "affiliate" of the Company, which will be subject
to the resale limitations of Rule 144 under the Securities Act. The remaining
shares, as well as other securities which may be issued, in the future, in
private transactions pursuant to an exemption from the Securities Act are
"restricted securities" and may be sold in compliance with Rule 144 adopted
under the Securities Act of 1933, as amended. Rule 144 provides, in
essence, that a person who has held restricted securities for a period of two
years may sell every three months in a brokerage transaction or with a
market maker an amount equal to the greater of 1% of the Company's
outstanding shares or the average weekly trading volume, if any, of the
shares during the four calendar weeks preceding the sale. The amount of
"restricted securities" which a person who is not an affiliate of the Company
may sell is not so limited: nonaffiliates may each sell without limitation
shares held for three years. The Company will make application for the
listing of its Shares in the NASDAQ system or the American Stock
Exchange. Sales under Rule 144 may, in the future, depress the price of the
Company's Shares in the over-the-counter market, should a market
develop.
Prior to this offering there has been no public market for the Common Stock
of the Company. The effect, if any, of a public trading market or the
availability of shares for sale at prevailing market prices cannot be
predicted. Nevertheless, sales of substantial amounts of shares in the
public market could adversely effect prevailing market prices.
- -----------------------------------------------------------------------------
NASDAQ LISTING
- -----------------------------------------------------------------------------
Criteria for NASDAQ Listing. Prior to the date hereof, there has been no
trading market for the Common Stock of the Company. The Company has
agreed to use its best efforts to apply for the quotation of its Common Stock
on the National Association of Securities Dealers Automated Quotation
System ("NASDAQ"). The Company will not meet the proposed criteria as
of the completion of the offering. In order to obtain the NASDAQ listing,
the Company must meet the following criteria: (i) have total assets in excess
of $4,000,000; (ii) have net equity in excess of $2,000,000; (iii) become a
reporting company under the Securities Exchange Act of 1934; (iv) have a
minimum of 300 shareholders; (v) have a public float of at least 100,000
shares and (vi) have a bid price of $3.00. The Company hopes to meet (i)
and (ii) upon the exercise of the warrants being registered in this offering.
There can be no assurance that any warrants will, in fact, be exercised.
Additionally, the Company shall file a Form 10 immediately after the
effective date of this registration statement to meet the requirements of
(iii). After the effective date of this registration statement, the Company
shall meet the criteria in (iv). Immediately after the effective date of this
registration statement, the Company shall apply for the quotation of its
Common Stock on the over-the-counter market. There can be no
assurance, however, that the Common Stock will be quoted, that an active
trading and/or a liquid market will develop or, if developed, that it will be
maintained. The Company does not intend to apply for quotation of its
Common Stock on NASDAQ until it meets the above criteria.
Broker-Dealer Sales of Company Securities. Until the Company
successfully obtains a listing on the NASDAQ quotation system, if ever, the
Company's securities may be covered by Rule 15c2-6 under the Securities
Exchange Act of 1934 that imposes additional sales practice requirements on
broker-dealers who sell such securities to persons other than established
customers and accredited investors (generally institutions with assets in
excess of $5,000,000 or individuals with net worth in excess of
$1,000,000 or annual income exceeding $200,000 or $300,000 jointly with
their spouse). Fortheir spouse). For transactions covered by the rule, the
broker-dealer must make a special suitability determination of the purchaser
and have received ived
- -------------------------------------------------------------------------------
PRINCIPAL SHAREHOLDERS
- -------------------------------------------------------------------------------
There are currently 1,329,100 Common Shares outstanding. The following
tabulates holdings of shares of the Company by each person who, subject to
the above, at the date of this Prospectus, holds of record or is known by
Management to own beneficially more than 5.0% of the Common Shares
and, in addition, by all directors and officers of the Company individually
and as a group.
ing the rights of transactions in designated securities; and (iii)
deliver to the person a written statement setting forth the basis on which the
broker or dealer made the determination required by paragraph (ii) in this
section, stating in a highlighted format that it is unlawful for the broker or
dealer to effect a transaction in a designated security subject to the
provisions of paragraph (ii) of this section unless the broker or dealer has
received, prior to the transaction, a written agreement to the transaction from
the person; and stating in a highlighted format immediately preceding the
customer signature line that the broker or dealer is required to provide the
person with the written statement and the person should not sign and return
the written statement to the broker or dealer if it does not accurately reflect
the person's financial situation, investment experience and investment
objectives and obtain from the person a manually signed and dated copy of
the written statement. A designated security means any equity security
other than a security (i) registered, or approved for registration upon notice
of issuance on a national securities exchange that makes transaction reports
available pursuant to 17 CFR 11Aa3-1 (ii) authorized or approved for
authorization upon notice of issuance, for quotation in the NASDAQ
system; or . . . (iv) whose issuer has net tangible assets in excess of
$2,000,000 demonstrated by financial statements dated less than fifteen
months previously that the broker or dealer has reviewed and has a
reasonable basis to believe are true and complete in relation to the date of
the transaction with the person. Consequently, the rule may affect the
ability of broker-dealers to sell the Company's securities and also may affect
the ability of purchasers in this Offering to sell their shares in the
secondary market.
- -----------------------------------------------------------------------------
DESCRIPTION OF SECURITIES
- -----------------------------------------------------------------------------
Qualification. The following statements constitute brief summaries of the
Corporation's Certificate of Incorporation and Bylaws, as amended. Such
summaries do not purport to be complete and are qualified in their entirety
by reference to the full text of the Certificate of Incorporation and Bylaws.
The Corporation's articles of incorporation authorize it to issue up to
50,000,000 Common Shares, $.001 par value per Common Share .
Shares of common stock purchased in this offering will be fully paid and
non-assessable.
Common Stock. Holders of Common Shares of the Corporation are
entitled to cast one vote for each share held at all shareholders meetings for
all purposes. Upon liquidation or dissolution, each outstanding Common
Share will be entitled to share equally in the assets of the Corporation
legally available for distribution to shareholders after the payment of all
debts and other liabilities. Common Shares are not redeemable, have no
conversion rights and carry no preemptive or other rights to subscribe to or
purchase additional Common Shares in the event of a subsequent offering.
All
outstanding Common Shares are, and the shares offered hereby will be
when issued, fully paid and non-assessable.
There are no limitations or restrictions upon the rights of the Board of
Directors to declare dividends out of any funds legally available therefor.
The Corporation has not paid dividends to date and it is not anticipated that
any dividends will be paid in the foreseeable future. The Board of Directors
initially may follow a policy of retaining earnings, if any, to finance the
future growth of the Corporation. Accordingly, future dividends, if any,
will depend upon, among other considerations, the Corporation's need for
working capital and its financial conditions at the time.
"A" Warrants. The Board of Directors of the Corporation have authorized
a dividend distribution of 200,000 "A" Warrants on a pro rata basis to the
shareholders of record as of May 15, 1995. The "A" Warrants shall be
exercisable for a period of two years from issuance. The "A" Warrants
shall be exercisable into Common Shares of the Corporation at the exercise
price of $5.00 per Common Share. The warrants will be callable with 30
days notice for a price of $.001 per warrant.
Preferred Stock. The Corporation has authorized a dividend to
shareholders of record as of May 1, 1995 of 250 Class A Convertible
Preferred Shares ("Class A Preferred"). The Class A Preferred shall be
convertible at a rate of 1,000 shares of common stock for each share of
Class A Preferred. Conversion will be authorized upon the first fiscal year
that the Corporation attains at least $1,000,000 in audited after tax profits.
The Corporation has also authorized a dividend to shareholders of record as
of May 1, 1995 of 800 Class B Convertible Preferred Shares (Class B
Preferred"). Class B Preferred shall be convertible at a rate of 1,000 shares
of common stock for each share of Class B Preferred. The Class B
Preferred shall be convertible upon completion of the first fiscal year that
the Corporation attains audited after tax profits of at least $3,000,000.
During September, 1995, the Corporation authorized 1,000 Class C
Preferred Shares. Each Class C Preferred Share is convertible, after four
months from the purchase date, into 100 Common Shares and One "A"
Warrant to purchase 10 additional Common Shares at $5.00 per share. The
Class C Preferred Stock is not entitled to voting rights or dividends. There
are currently 700 Class C Preferred Shares issued and outstanding.
Transfer Agent. The Corporation shall act as its own transfer agent until
after the completion of the Offering.
- -----------------------------------------------------------------------------
LEGAL MATTERS
- -----------------------------------------------------------------------------
The due issuance of the Common Shares offered hereby will be opined
upon for the Company by in which opinion Counsel
will rely on the validity of the Certificate and Articles of Incorporation
issued by the State of Indiana, as amended and the representations by the
management of the Company that appropriate action under Indiana law has
been taken by the Company.
- -----------------------------------------------------------------------------
LEGAL PROCEEDINGS
- -----------------------------------------------------------------------------
The Company is not involved in any legal proceedings as of the date of this
Prospectus.
- -----------------------------------------------------------------------------
EXPERTS
- -----------------------------------------------------------------------------
The audited financial statements included in this Prospectus have been so
included in reliance on the report of Winter, Scheifley & Associates P.C.,
Certified Public Accountants, on the authority of such firm as experts in
auditing and accounting.
- -----------------------------------------------------------------------------
INTERESTS OF NAMED
EXPERTS AND COUNSEL
- -----------------------------------------------------------------------------
None of the experts or counsel named in the Prospectus are affiliated with
the Company.
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
Grand Slam Licensing, Inc.
We have audited the accompanying balance sheets of Grand Slam
Licensing, Inc. and its predecessor (see Note 1) as of October 31, 1995 and
December 31, 1994, and the related statements of operations,
stockholders' equity, and cash flows for the ten months ended October
31, 1995 and each of the two years ended December 31, 1994. These
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 by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Grand Slam
Licensing, Inc. and its predecessor as of October 31, 1995 and December
31, 1994, and the results of its operations, and its cash flows for the
ten months ended October 31, 1995 and each of the two years ended
December 31, 1994, in conformity with generally accepted accounting
principles.
Winter, Scheifley & Associates, P.C.
Certified Public Accountants
Englewood, Colorado
January 30, 1996
<TABLE>
Grand Slam Licensing, Inc.
<CAPTION>
Balance Sheets
October 31, 1995 and December 31, 1994
ASSETS
<S> <C> <C>
1995 1994
Current assets: ----------- -----------
Cash and cash equivalents $ 411,523 $ -
Accounts receivable, trade, less
reserve for bad debts of $6,013 in 1994 23,873 15,963
Inventories 99,630 20,794
Prepaid expenses 15,107 -
Prepaid expenses - related party 27,813 9,167
----------- -----------
Total current assets 577,946 45,924
Other assets:
Product design costs 26,616 -
Trademarks 3,971 -
Organization costs 81 -
----------- -----------
$ 608,614 $ 45,924
======== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 26,625 $ -
Accounts payable, trade 66,591 36,625
Accrued expenses 19,914 -
----------- -----------
Total current liabilities 113,130 36,625
Long-term debt 26,625 -
Commitments (Note 5)
Stockholders' equity:
Preferred stock class A,
1, 000 shares authorized,
250 shares issued and outstanding - -
Preferred stock class B,
1, 000 shares authorized,
800 shares issued and outstanding - -
Preferred stock class C, $150 stated
value, 1,000 shares authorized,
700 shares issued and outstanding 105,000 -
Common stock, $.001 par value,
50,000,000 shares authorized,
1,329,100 and 808,000 shares
issued and outstanding 1,329 808
Additional paid-in capital 796,824 120,381
Subscriptions to common stock 64,500 -
----------- -----------
Accumulated deficit (498,794) (111,890)
----------- -----------
468,859 9,299
----------- -----------
$ 608,614 $ 45,924
======== =======
See accompanying notes to financial statements.
</TABLE>
<TABLE>
Grand Slam Licensing, Inc.
<CAPTION>
Statements of Operations
Ten Months Ended October 31, 1995 and
Years Ended December 31, 1994 and 1993
1995 1994 1993
----------- ----------- --------
<S> <C> <C>
Revenues:
Sales $ 191,057 $ 178,099 $125,796
Costs and expenses:
Cost of sales 91,567 121,359 72,847
Selling and marketing 122,165 71,231 44,574
General and administrative 38,153 59,153 46,621
Management fees paid to related party 137,000 - -
----------- ----------- -----------
388,885 251,743 164,042
------------ ----------- ---------
- -
Income (loss) from operations 197,828) (73,644) (38,246)
Other income and (expense):
Interest income 937 - -
Consulting expense associated with
private offering of securities (333,190) - -
Interest expense (2,140) - -
----------- ----------- ---------
(334,393) - -
Net income (loss) $ (532,221) $ (73,644) $(38,246)
======= ======= ======
Earnings (loss) per share:
Net income (loss) $ (0.5) $ (0.0) $ (0.05)
======= ======= =======
Weighted average shares
outstanding 987,436 808,000 808,000
====== ====== ======
See accompanying notes to financial statements.
</TABLE>
<TABLE>
Grand Slam Licensing, Inc.
<CAPTION>
Statement of Changes in Stockholders' Equity
Ten Months Ended October 31, 1995 and Years Ended
December 31, 1994 and 1993
Additional
Preferred Stock Common Stock Paid-In
ACTIVITY Shares Amount Shares Amount Capital
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1992
Assumed inception date
- $ - 808,000 $ 808 $ (6,539)
Capital contribution by partners
- - 50,400
Net (loss) for the year - - - - -
------- --------- ----------- --------- ----------
Balance,
December 31, 1993 808,000 808 43,861
Capital contribution by partners 76,520
Net (loss) for the year - - - - (73,644)
------- ---------- ----------- ---------- -----------
Balance,
December 31, 1994 808,000 808 120,381
Capital contribution
by partners 47,822
Common stock
issued for cash 329,100 329 486,130
Preferred stock
issued for cash 700 105,000 - - -
Common stock
issued for services - - 192,000 192 287,808
Common stock
subscribed for services - - - - -
Net (loss) for the period - - - - -
Reclassification
of partnership losses - - - - (145,317)
-------- --------- -------- ---------- -----------
Balance,
October 31, 1995 700 $105,000 1,329,100 $1,329 $796,824
==== ====== ======= ===== =======
</TABLE>
<TABLE>
Statement of Changes in Stockholders Equity
Continued
<CAPTION>
Stock Accumulated
ACTIVITY Subscriptions Deficit Total
<S> <C> <C> <C>
Balance, December 31, 1992
Assumed inception date $ - $ - $ (5,731)
Capital contribution by partners 50,400
Net (loss) for the year - (38,246) (38,246)
----------- ----------- ----------
Balance,
December 31, 1993 - (38,246) (38,246)
Capital contribution by partners 76,520
Net (loss) for the year - (73,644) (73,644)
---------- ----------- -----------
Balance,
December 31, 1994 - (111,890) 9,299
Capital contribution
by partners 47,822
Common stock
issued for cash - - 486,459
Preferred stock
issued for cash - - 105,000
Common stock
issued for services - - 288,000
Common stock
subscribed for services 64,500 - 64,500
Net (loss) for the period - (532,221) (532,221)
Reclassification
of partnership losses - 145,317 -
--------- ---------- -----------
Balance,
October 31, 1995 $64,500 $(498,794) $468,859
====== ======== ======
See accompanying notes to financial statements.
</TABLE>
<TABLE>
Grand Slam Licensing, Inc.
<CAPTION>
Statements of Cash Flows
Ten Months Ended October 31, 1995
and Years Ended December 31, 1994 and 1993
1995 1994 1993
----------- ----------- --------
<S> <C> <C> <C>
Cash flows from operating activities:
Net (loss) $ (532,221) $ (73,644) $ (38,246)
Adjustments to reconcile net (loss) to net
cash provided by operating activities:
Amortization 5,757 - -
Common stock issued or
subscribed for services 352,500 - -
Changes in assets and liabilities:
(Increase) decrease in accounts
receivable (7,910) 2,497 (18,460)
(Increase) decrease in inventory (78,836) (12,844) (1,950)
(Increase) decrease in prepaid
expenses (33,753) (5,833) (3,334)
Increase (decrease) in accounts
payable 29,966 13,304 11,590
Increase (decrease) in accrued liabilities 19,914 - -
----------- ----------- -----------
Total adjustments 287,638 (2,876) (12,154)
Net cash provided by (used in)
operating activities (244,583) (76,520) (50,400)
----------- ----------- -----------
Cash flows from investing activities:
Purchase and development of
Trademark and product development
costs (36,425) - -
----------- ----------- ----------
Net cash (used in) investing activities (36,425) - -
----------- ---------- ---------
Cash flows from financing activities:
Proceeds from sale of common stock 591,459 - -
Capital contributions to partnership 47,822 76,520 50,400
Proceeds from notes payable 53,250 - -
----------- ----------- -----------
Net cash provided by (used in)
financing activities 692,531 76,520 50,400
----------- ----------- ----------
Increase (decrease) in cash 411,523 - -
Cash and cash equivalents,
beginning of period 73,644 - -
----------- ----------- -----------
Cash and cash equivalents,
end of period $ 485,167 $ - $ -
======== ======= =======
Supplemental cash flow information:
Cash paid for interest $ - $ - $ -
Cash paid for income taxes $ - $ - $ -
See accompanying notes to financial statements.
</TABLE>
Grand Slam Licensing, Inc.
Notes to Financial Statements
Note 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING
POLICIES
The Company was incorporated on April 26 , 1995, in the State of Indiana.
The Company is a successor to the commemorative pin business carried on
by Grand Slam III (GS III), an Illinois limited partnership formed in
April 1993. The partnership continues to operate its sports management
business and to fulfill certain general and administrative functions for
the Company (See Note 5 ). The financial statements consist of the
separate operations of the commemorative pin business of the partnership
for the period from January 1, 1993 to May 31, 1995 and the operations of
the company since its inception.
Inventories: Inventories are stated at the lower of cost or market. Cost
is determined using the first-in, first-out method. Inventory consists
principally of commemorative pins manufactured by others.
Fixed assets: The company uses office equipment owned by GS III (See
Note 5).
Product design costs: Costs of dies and photographic images used in the
design and production of the Company's commemorative pins are
capitalized and amortized to expense over a three year period. The
Company
reviews the costs accumulated on an annual basis and charges off
unamortized
balances associated with pins that are no longer being sold.
Net loss per share: The net loss per share is computed by dividing the
net loss for the period by the weighted average number of common shares
outstanding for the period. Common stock equivalents are excluded from
the computation as their effect would be anti-dilutive. Shares issued to
the Company's founders in May 1995 are considered to be outstanding
from
the beginning of the periods presented.
Cash and cash equivalents: Cash and cash equivalents consist of cash and
other highly liquid debt instruments with original maturities of less than
three months.
Revenue recognition: The company recognizes revenue from the sale of its
products upon shipment.
Advertising costs: Advertising costs are charged to operations when
incurred. Advertising costs charged to operations were $9,086 for the ten
months ended October 31, 1995 and $2,045 and $970 respectively, for the
years ended December 31, 1994 and 1993.
Concentration of credit risk: Financial instruments that potentially
subject the Company to a concentration of credit risk consist principally
of cash and cash equivalents. During the year the Company did not
maintain cash deposits at financial institutions in excess of the
$100,000 limit covered by the Federal Deposit Insurance Corporation. The
Company has funds deposited in a money market account administered by
an
investment company amounting to $400,000 at October 31, 1995. Such
amount is not covered by the Federal Deposit Insurance Corporation or any
other deposit insurance program and any decline in the value of the
underlying investment securities which collateralize the account, may
have a negative impact on the availability of these funds.
Note 2. LONG-TERM DEBT
Long-term debt consists of three promissory notes given in exchange for
cash aggregating $53,250. The notes and interest accrued at 12.5% per
annum are due in two annual installments on the anniversary dates of the
notes (June and July, 1996 and 1997).
Note 3. STOCKHOLDERS EQUITY
Common stock:
During the periods covered by these financial statements the Company
issued
shares of common stock without registration under the Securities Act of
1933. Although the Company believes that the sales did not involve a public
offering of its securities and that the Company did comply with the safe
harbor exemptions from registration under section 4(2), it could be liable
for recision of the sales if such exemptions were found not to apply.
At inception, the Company issued 808,000 shares of its $.001 par value
common stock to four of its officers and/or directors in exchange for
certain assets of GS III. For the purpose of these financial statements,
these shares are considered to be outstanding as of beginning of the
periods presented and the value attributed thereto represents partnership
basis in certain net assets applicable to the pin business. Also, for
purpose of these financial statements, amounts necessary to fund the losses
of GS III applicable to the pin business have been shown as contributions
of capital in the accompanying statement of changes in stockholders' equity
for the years ended December 31, 1994 and 1993 and for the five month
period of partnership operation ended May 31, 1995.
During April, 1995 the Company entered into a one year consulting
agreement with an entity whereby the entity would provide to the Company
financial consulting services. Pursuant to the agreement the entity agreed to
assist the Company in preparing a private placement memorandum to obtain
equity financing in the amount of up to $600,000 and to assist the Company
in completing a registration statement by which the common stock may
become tradable in a public market. In exchange for these services the
Company agreed to pay $65,000 in cash and to issue 160,000 shares of its
$.001 par value common stock to the consultant. During the third quarter of
1995, the Company began offering shares of its common stock at $1.50 per
share pursuant to the private placement. The Company issued 329,100
shares of common stock for cash aggregating $486,459, net of offering
expenses of $7,191 through October 31, 1995. The stock issued to the
consultant was valued at $240,000 ($1.50 per share) and such amount is
included in other income and expense in the accompanying statement of
operations. The Company issued an additional 32,000 shares valued at
$48,000 to an individual for consulting services provided in connection
with the private offering.
During May 1995, the Company authorized the issuance of 200,000
common stock purchase warrants to shareholders of record on a pro rata
basis. The warrants are exercisable at $5.00 per share for a 24 month
period and may be redeemed prior to exercise upon 30 days notice for a
price of $.001 per warrant.
During July and September of 1995 the Company entered into consulting
agreements with two prominent sports persons for their assistance in the
acquisition of additional licenses for the sale of pin products with top
athletes in the golf and tennis professions. As compensation for these
services, the Company will issue an aggregate of 43,000 shares of its
restricted common stock valued at $1.50 per share. An amount of $64,500
has been included as subscriptions to common stock with a corresponding
charge to selling and marketing expense in the accompanying financial
statements.
Preferred stock:
During May 1995 the Company authorized the issuance of 250 shares of
Class A preferred stock and 800 shares of Class B preferred stock on a pro
rata basis to shareholders of record on May 15, 1995. The Class A
preferred stock is convertible into 1,000 shares of common stock for each
preferred share upon the conclusion of the first fiscal year that the Company
attains at least $1,000,000 of after tax profits.. The Class B preferred stock
is convertible into 1,000 shares of common stock for each preferred share
upon the conclusion of the first fiscal year that the Company attains at least
$3,000,000 of after tax profits. Neither class of preferred stock is entitled
to voting rights or dividends. No value was placed on the preferred stock.
During September 1995, the Company authorized the issuance of 700
shares of Class C preferred stock to an individual in exchange for $105,000
in cash. Each Class C preferred share is convertible, after four months
from the purchase date, into 100 shares of common stock and a warrant to
purchase 10 additional shares of common stock at $5 .00 per share. The
Class C preferred stock is not entitled to voting rights or dividends.
Other:
For purposes of these financial statements, the amounts necessary to fund
the losses of GS III applicable to its pin business for the period from
January 1, 1993 to May 31, 1995 have been shown as capital contributions
by the partners of GS III in the accompanying Statement of Changes in
Stockholders' Equity. Accumulated losses of the partnership during the
period from January 1, 1993 to May 31, 1995 amounting to $145,317 have
been charged to additional paid in capital at May 31, 1995 so that the
remaining accumulated deficit at October 31, 1995 represents only the
losses of the corporate entity.
Note 4. INCOME TAXES
The operations presented for the years ended December 31, 1994 and 1993
are those of GS III and are not attributed to the Company for federal and
state income tax purposes. The operations presented for the ten months
ended October 31, 1995 include GS III operations applicable to the
commemorative pin business from the period from January 1, 1995 to May
31, 1995 and are likewise excluded for income tax purposes. The Company
has adopted Financial Accounting Standards Board Statement No. 109,
Accounting for Income Taxes. Of the loss for the ten months ended October
31, 1995 approximately $485,900 will be available as an operating loss
carryforward for the Company expiring during 2010. The Company is
unable to predict future taxable income that would enable it to utilize the
loss carryforward and therefore the deferred tax asset attributable thereto of
approximately $165,000 is fully reserved.
Note 5. RELATED PARTY TRANSACTIONS
Effective May 15, 1995 the Company entered into a management support
agreement with GS III whereby GS III will supply support services to the
Company including the use of office space and equipment and the use by
the Company of employees of GS III in performing administrative
functions, planning and negotiation of license and sales agreements. The
contract provides for payments of $25,000 per month plus 7% of gross
revenues and expires on October 31, 1997. The contract was modified
effective January 1, 1996 to provide that certain employees of GS III
become employees of the Company and to reduce the fixed monthly
payment to $10,000 per month.
During the period from May 15, 1995 to October 31, 1995, the Company
made aggregate payments under the contract of $164,813 of which
$137,000 was charged to expense. The excess payments are classified as
prepaid expenses - related party in the accompanying balance sheet at
October 31, 1995.
During the years ended December 31, 1994 and 1993 and the five months
ended May 31, 1995, GS III incurred similar general and administrative
expenses as provided for in the management contract. For purposes of the
financial statements included herein, allocation of such costs between
the pin business and the sports management business carried on by GS III
was based upon the percentage of gross revenues provided by each
business activity. Allocation of these expenses to the pin business, of
which the Company is the successor, was as follows:
<TABLE>
<S> <C>
Five months ended May 31, 1995 $ 25,734
Year ended December 31, 1994 $ 71,212
Year ended December 31, 1993 $ 59,448
</TABLE>
Note 6. STOCK OPTION PLAN
During 1995, the Company adopted the 1995-1996 Non-Statutory Stock
Option Plan which provides for granting to the Company's officers,
directors, employees and certain other individuals who consult with or
advise the Company, options to acquire up to 750,000 shares of the
Company's common stock. The shares issuable under the 1995-1996 plan
are at a price not less than 85% of the fair market value of the stock on the
date of grant. The exercise periods of the options are not to exceed ten
years. No options have been granted pursuant to the plan as of October 31,
1995.
Note 7. SALES TO MAJOR CUSTOMERS
During the ten months ended October 31, 1995 and the years ended
December 31, 1994 and 1993, the Company made sales to customers that
comprise greater than 10% of total revenues as follows:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Camelot Music, Inc. $ 90,720 - -
Delco Electronics $ 26,020 $ 29,100 -
Nabisco Biscuit $ 21,747 - -
K Q Associates, Inc. $ 18,957 -
NBA Properties, Inc. $ 15,730 -
</TABLE>
<TABLE>
Grand Slam Licensing, Inc.
<CAPTION>
Balance Sheets
April 30, 1996 and April 30, 1995
(unaudited)
Assets 1996 1995
<S> <C> <C>
Current assets:
Cash $ 153,796 $ -
Accounts receivable-trade 20,067 1,000
Inventories 111,096 24,310
Prepaid expenses 36,574 10,289
----------- ---------
Total current assets 321,533 35,499
Equipment 5,894 -
Other assets:
Product design costs 25,828 11,218
Trademarks 3,236 150
Organization costs 72 90
------------ ------------
$ 356,553 $ 46,957
======= =======
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable-trade $ 17,435 $ 23,271
Accrued expenses 11,917 -
Current portion long-term debt 26,625 -
----------- -----------
55,977 23,271
Long-term debt 26,625 -
Stockholders' equity:
Preferred stockc class A,
1,000 shares authorized
250 shares issued & outstanding - -
Preferred stock class B
1,000 shares authorized,
800 shares issued & outstanding - -
Preferred stock class C
$105 stated value
1,000 shares authorized,
700 shares issued & outstanding 105,000 -
Common stock, $.001 par value,
50,000,000 authorized, 1,329,100 and
808,000 shares issued & outstanding 1,329 808
Additional paid in capital 796,824 168,195
Subscriptions to common stock 64,500
Accumulated deficit (693,702) (145,317)
------------ ------------
273,951 23,686
------------ ------------
$356,553 $46,957
======= =======
See accompanying notes to financial statements
</TABLE>
<TABLE>
Grand Slam Licensing, Inc.
<CAPTION>
Statements of Operations
Six Months Ended April 30, 1996 and 1995
(unaudited)
<S> <C> <C>
Revenues: 1996 1995
Revenues: --------- ---------
Sales $66,388 $23,007
Costs an dexpenses:
Cost of Sales 56,958 30,487
Selling and marketing 48,044 10,170
General & administrative 67,772 15,777
Management fees paid
to related party 90,000 -
---------- ----------
262,774 56,434
----------- ----------
Income (loss) from operations (196,386) (33,427)
Other income and expenses:
Interest income 4,806 -
Interest expenses (3,328) -
Net income (loss) $(194,908) $(33,427)
======== ========
Earnings (loss) per share:
Net income (loss) $(0.15) $(0.04)
------------- --------------
Weighted average shares outstanding
1,329,100 808,000
------------- ------------
See accompanying notes to financial statements
</TABLE>
<TABLE>
Grand Slam Licensing, Inc.
<CAPTION>
Statements of Cash Flows
Six Months Ended April 30, 1996 and 1995
(unaudited)
1996 1995
<S> <C> <C>
Cash Flows from operating activites:
Net income (loss) $(194,908) $(33,427)
Adjustments to reconcile net income
to net cash provided by operations
Amortization & depreciation 6,526 -
Changes in assets and liabilities:
(increase) decrease-accounts receivable 3,806 12,989
(Increase) decrease-inventory (11,466) (14,890)
(Increase) decrease-prepaid expesnes 6,346 (10,189)
Increase (decrease)-accounts payable (49,156) (6,383)
Increase (decrease)-accruedexpenses (7,997) -
---------- -----------
Total adjustments (51,941) (18,473)
----------- -----------
Net cash provided by (used) operations (246,849) (51,900)
Cash flows from investing activities:
Purchase of equipment (6,355) -
Purchase and development of tradement
and product development costs (4,523) (11,308)
----------- -----------
Net cash (used in) investing activities (10,878) (11,308)
Cash flows from financing activities:
Capital contributions to the partnership - 60,811
---------- -----------
Net cash provided by financing activities - 60,811
Increase (decrease) in cash (257,727) (2,397)
Cash and cash equivalents,
beginning of period 411,523 2,397
---------- ---------
Cash and cash equivalents,
end of period $153,796 $ -
======= =======
Supplemental cash flow information:
Cash paid for interest - -
Cash paid for income taxes - -
See accompanying notes to financial statements
</TABLE>
Grand Slam Licensing, Inc.
Notes to Financial Statements
Note 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING
POLICIES
The Company was incorporated on April 26, 1995 in the state
of Indiana. The Company is a successor in the commerative
pin business carried on by Grand Slam III (GBIII), an
Indiana limited partnership formedin April 1993. The
partnership continues to operate its sports an
dentertainment management business and to fulfill certain
general adn administrative functions for the Company (see
note5). The financial statements consist of the
commerative pin busin4ess of teh partnership for the six
month period ended April 30, 1995 and operations of the
Company for the six months ended April 30, 1996.
Inventories: Inventories are stated at the lower of cost
or market. Cost is determined using the first-in first-out
methodd. Inventory consists principally of commerorative
pins manufactured by others.
Fixed assets: The company uses office equipment owned or
leased by GSIII with the exception of a computer used in the
design and layoutof new pin designs, advertising and
packaging. Depreciation is provided for on the straight
line method over the estimated useful life of the equipment.
Accumulated depreciation as of April 30, 1995 was $461.
Product design costs: Costs of dies nad photographic
images usedin the design and production of the Company's
commemorative pins are capitalized and amortized over a
three year period. The Company reviews the costs
accumulated on an annual basis and charges off unamortized
balances associated with pins no longer being sold.
Cash and cash equivalents: Cash and cash equivalents
consist of cash and other ghighly liquid debt instruments
with original maturities of less than three months.
Advertising costs: Advertising are charged to operations
when incurred. Advertising costs were $9,210 for the six
months ended April 30, 1996 and $-0- for the six months
ended April 30, 1995.
Revenuerecognition: The Company recognizes revenue from
the sale of its products upon shipment.
Concentration of credit risk: Financial instruments that
potentially subject the Company to a concentration of credit
risk consist principally of cash and cash equivalents.
During the periods covered by these financial statements,
the Company did not maintain cash deposits at financial
institutions in excess of the $100,000 limit covered by the
Federal Deposit Insurance Corporation (FDIC). The Company
has funds deposited in a money market account administered
by an investment company amounting to $145,000 at April 30,
1996. Such ammount is not covered by the FDIC or any other
deposit insurance program and any decline in the value of
the underlying securities which collateralize the account,
may have a negative impact on the availability of these
funds.
Note 1. Continued
Net loss per share: The net loss per share is computed by
dividing the net loss for the period by the average number
of common shares outstanding for the period. Common stock
equivalents are excluded from the computation as their
effect would be ant-dilutive. Shares issued to the
Company's founders on May 31, 1995 are considered to be
outstanding from teh beginning of the periods presented.
Note 2. LONG-TERM DEBT
Long-term debt consists of three promissory notes given in
exchange for cash totaling $53,250. The notes and accrued
interest at 12.5% per annum are due in two annual
installments on the anniversay dates of the notes.
Note 3. STOCKHOLDERS EQUITY
At inception the Company issued 808,000 shares of its $.001
par value common stock to four of its officers and/or
directors in exchange for certain assets of GSIII. For the
purpose of these financial statements, these shares are
considered to be outstanding as of the beginning of the six
month period ended April 30, 1995 and the value attributed
thereto represents partnership basis in certain net assets
applicable to the pin business.
The Company has not issued any additional shares of stock
during the six month period ended April 30, 1996.
Note 4. INCOME TAXES
The operations presented for the six month period ended
April 30, 1995 are those of GSIII and are not attributed to
the COmpany for federal and state income tax purposes. The
COmpany has adopted Financial Accounting Standards Board
Statement No. 109, Acccounting for Income Taxes. The
Company has an operating loss carryforward from the period
ended October 31, 1995 approximating $485,900 (expiring
during 2010). The Company is unable to predict future
taxable income and therefore the deferred tax asset
attributable thereto of approximately $165,000 is fully
reserved.
Note 5. RELATED PARTY TRANSACTIONS
For the first two months of the period ended April 30, 1996
the Company operated under an agreement with GSIII whereby
GSIII supplied support services to the Company including the
use of office space, equip,ent and the use of GSZIII
employees. During this two month period the agreement
required a payment of $25,000 per month plus 7% of net
income. The agreement was modified effective January 1,
1996 to provide that certain employees of GSIII become
employees of the Company and to reduce the fixed monthly fee
to $10,000 per month.
Note 5. Continued
During the six month period ended April 30, 1996 the
Companyu made aggregate payments under the contract of
$61,396. Further, the Company charged off an additional
$27,813 which was prepaid at the beginning of the period and
currentnly owes GSIII a balance of $791.
Note 6. STOCK OPTION PLAN
During the six month period ended April 30, 1996, the
Company did not grant any stock options under its Non-
Statutory Stock Option Plan.
PART II
INFORMATION NOT REQUIRED BY PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
Other expenses in connection with this offering which will be paid
by Grand Slam Licensing, Inc. (hereinafter in this Part II referred to as the
"Company") are estimated to be substantially as follows:
<TABLE>
<CAPTION>
Amount
Payable
Item By Company
<S> <C>
S.E.C. Registration Fees $ 705.96
State Securities Laws (Blue Sky) Fees and Expenses 1,500.00
Printing and Engraving Fees 5,000.00
Legal Fees 15,000.00
Accounting Fees and Expenses 10,000.00
Transfer Agent's Fees 1,500.00
Total $33,705.96
</TABLE>
Item 14. Indemnification of Officers and Directors.
Indemnification. The Company shall indemnify to the fullest extent
permitted by, and in the manner permissible under the laws of the State of
Indiana, any person made, or threatened to be made, a party to an action or
proceeding, whether criminal, civil, administrative or investigative, by
reason of the fact that he is or was a director or officer of the Company, or
served any other enterprise as director, officer or employee at the request of
the Company. The Board of Directors, in its discretion, shall have the
power on behalf of the Company to indemnify any person, other than a
director or officer, made a party to any action, suit or proceeding by reason
of the fact that he/she is or was an employee of the Company. The extent of
the indemnification shall be determined on a case by case basis and will be
dependent on the nature of the action, suit or proceeding and the specific
facts and circumstances surrounding the situation.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Company, the
Company understands 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
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceedings) is asserted by such director, officer, or controlling person in
connection with any securities being registered, the Company 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 issues.
Item 15. Recent Sales of Unregistered Securities.
At inception, the Company issued 808,000 common shares to its officers
and directors in exchange for certain assets of Grand Slam III, an affiliated
limited partnership.
On May 16, 1995, the Company issued 160,000 common shares to Pratt,
Wylce & Lords, Ltd. and 34,150 common shares to Alan Filson for
consulting services pursuant to the terms of a consulting agreement filed as
an exhibit to the registration statement.
During May, 1995, the Company issued 250 Class A Preferred Stock and
800 Class B Preferred Stock on a pro rata basis to shareholders of record on
May 15, 1995 (Milton Thompson, Dennis DeYoung, Howard Thompson
and Joel Stein).
During September 1995, the Company issued 700 Class C preferred stock
to Hugh & Marianne Baker in exchange for $105,000 in cash.
During July and September of 1995, the Company entered into consulting
agreements with two prominent sports persons for their assistance in the
acquisition of additional licenses for the sale of pin products with top
athletes in the golf and tennis professions. As compensation for these
services, the Company will issue an aggregate of 43,000 common shares
valued at $1.50 per common share.
The Company also pursued a private placement at $1.50 per common shares
during the third quarter of 1995 and issued a total of 329,200 to the
following individuals. These issuances were made in compliance with Rule
505, Regulation D of the Securities Act of 1933 by Registrant's
management, consultants and selected broker/dealers. No commissions or
other remuneration was paid to anyone other than a NASD selected
broker/dealer. No general solicitation was utilized. There was less than
35 nonaccredited investors. The determination of whether an
investor was accredited or nonaccredited was based on the responses in the
subscription agreement filled out by each investor.
<TABLE>
<CAPTION>
Date Amount of Amount
Issued Name Common Stock Paid
- -------- -------- ------------------- ------------
<S> <C> <C> <C>
6/13/95 Malcolm Thompson 3,000 $4,500 cash
6/13/95 Ethel Thompson
& Verna Saunders 3,000 $4,500 cash
6/28/95 Richard Payne 3,333 $5,001 cash
7/3/95 Larry Konfirst 9,000 $13,500 cash
7/6/95 William Taylor 6,000 $9,000 cash
7/6/95 CarolAnn Mihalik 3,000 $4,500 cash
7/14/95 Clifford Jaebker 6,100 $9,150 cash
7/19/95 Greg Brown 5,000 $7,500 cash
7/19/95 Joseph Kack 3,000 $4,500 cash
7/19/95 Bradley Beck 5,333 $7,999.50 cash
7/20/95 Thomas Kaminski 20,000 $30,000 cash
7/24/95 Thomas Hayden 3,000 $4,500 cash
7/24/95 Lois Zoll 3,000 $4,500 cash
7/26/95 Kellye Moore 3,000 $4,500 cash
7/26/95 Domenic Angelicchio 4,000 $6,000 cash
7/26/95 Butch Cameron 3,000 $4,500 cash
7/28/95 Robert & Alisa DeStefano 3,000 $4,500 cash
7/31/95 James Haines 3,334 $5,001 cash
8/2/95 Richard Roberts 3,000 $4,500 cash
8/3/95 Robert Brown 5,000 $7,500 cash
8/4/95 Shirley Jean Carroll 3,000 $4,500 cash
8/4/95 Michael Campbell 3,000 $4,500 cash
8/4/95 William Brady
& James Curtis 3,000 $4,500 cash
8/7/95 Bradley Mays
8/7/95 Donald Burdsall 3,000 $4,500 cash
8/8/95 Kerry Kenna 3,000 $4,500 cash
8/8/95 Chloe Green 3,000 $4,500 cash
8/10/95 Lisa Railing 10,000 $15,000 cash
8/10/95 Jay Rifkind 3,000 $4,500 cash
8/16/95 Robert Kemmerer 30,000 $45,000 cash
8/16/95 Elizabeth Gheen 3,000 $4,500 cash
8/20/95 Lauren Tracy 3,000 $4,500 cash
8/21/95 Roger Vosti 3,000 $4,500 cash
8/21/95 Carol & Paul Rice 3,000 $4,500 cash
8/21/95 Johnny & Barbara Wong 3,000 $4,500 cash
8/21/95 Francis Hong 3 ,500 $5,250 cash
8/21/95 Julius & Jean Richmond 6,000 $9,000 cash
8/21/95 Michael Tower 6,000 $9,000 cash
8/21/95 Dominic & Julie Cippola 3,000 $4,500 cash
8/21/95 Terrence Dooher 3,000 $4,500 cash
8/22/95 Robert Kube 3,000 $4,500 cash
8/22/95 Myron Wolf 3,000 $4,500 cash
8/22/95 Jeff McGuire 3,000 $4,500 cash
8/24/95 RE Hunt Trust 3,000 $4,500 cash
8/24/95 Gerald Dooher 3,000 $4,500 cash
8/25/95 Gary Muncy 12,000 $18,000 cash
8/25/95 Stephen Jones 3,000 $4,500 cash
8/28/95 Daniel Carlson 3,000 $4,500 cash
8/28/95 Mitsui & Betsy Tatsugawa 4,000 $6,000 cash
8/29/95 Robert Gerner 3,000 $4,500 cash
8/29/95 Steven Worland 3,000 $4,500 cash
8/29/95 Donna Stocker 3,000 $4,500 cash
8/29/95 Roger Burch 3,000 $4,500 cash
8/31/95 Robin Cipolla 3,000 $4,500 cash
8/31/95 Fred Yde 3,000 $4,500 cash
8/31/95 R.K. Hunter 3,000 $4,500 cash
9/1/95 Karen & Donald Matthews 3,000 $4,500 cash
9/1/95 Gavin Hart 6,000 $9,000 cash
9/1/95 David Solotkin 6,000 $9,000 cash
9/6/95 William Paton 9,000 $13,500 cash
9/7/95 Alan Fiering 3,000 $4,500 cash
9/7/95 Nicholas Deets 10,000 $15,000 cash
9/7/95 Charles Poulsen 3,500 $5,250 cash
9/7/95 Ora Elliott 6,000 $9,000 cash
9/9/95 Elaine Paton 9,000 $13,500 cash
9/9/95 William Paton IRA 9,000 $13,500 cash
9/11/95 Frances Stewart 3,000 $4,500 cash
9/11/95 William Thompson 3,000 $4,500 cash
</TABLE>
Due to the integration rules of Section 502(a), all of the above issuances of
common stock would be deemed to be integrated and deemed to be part of
the same Regulation D offering (Section 505). As a result, the Company
obtained subscription agreements from all investors which indicated
whether or not the investors were accredited. There were a total
of 33 non-accredited investors. All of the above sales were made without
general solicitation. No commissions were paid to anyone other than
registered NASD broker-dealers. The total aggregate value of all of the
issuances were substantially less than $5,000,000.
<TABLE>
<CAPTION>
Exhibit Index.
<S> <C>
(1) Not Applicable
(2) Not Applicable
(3) Articles of Incorporation, Amendments and Bylaws
to be filed by amendment
(4) Specimen certificate for Common Stock - to be filed
by amendment
(5) Consent and Opinion of regarding legality of
securities registered under this Registration Statement
and to the references to such attorney in the Prospectus
filed as part of this Registration Statement - to be filed
by amendment
(6) Not Applicable
(7) Not Applicable
(8) Not Applicable
(9) Not Applicable
(10.1) Agreement to Provide Management, Professional and
Support Services between Grand Slam III and Grand Slam
Licensing, Inc., dated June 15, 1995
(10.2) Amendment to the Agreement to Provide Management,
Professional and Support Services, dated January 1, 1996
(10.5) Sales Agreement with Labyrinth Sales Company dated July
14, 1995
(11) Not Applicable
(12) Not Applicable
(13) Not Applicable
(14) Not Applicable
(15) Not Applicable
(16) Not Applicable
(17) Not Applicable
(18) Not Applicable
(19) Not Applicable
(20) Not Applicable
(21) Not Applicable
(22) Not Applicable
(23) Not Applicable
(24) Consent of Winter, Scheifley & Associates, P.C., Certified
Public Accountants for the Company
(25) Not Applicable
(26) Not Applicable
(27) Not Applicable
(28) Not Applicable
(99.1) Lease Agreement between Crowe-Lippe-Gillespie and
Sports Ventures II,
the predecessor of Grand Slam III, dated October 29, 1990
to be filed by amendment
(99.2) Amendments to Office Lease, dated October 12, 1995 and
October 19, 1995, - to be filed by amendment
(99.3) Consulting Agreement with Pratt, Wylce & Lords, Ltd.
(99.4) Lock Up Agreement - to be filed by amendment
(99.5) Employment Agreement with Milton Thompson
Item 17. Undertaking.
The undersigned registrant hereby undertakes:
(a)(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 of 1933;
(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 formation set forth in the 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) Delivery of Certificates.
The undersigned registrant hereby undertakes to provide to the
Transfer Agent at the closing, certificates in such denominations and
registered in such names as are required by the Transfer Agent to permit
prompt delivery to each purchaser.
(c) 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 provisions set forth in the Company's
Articles of Incorporation 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.
Signatures
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-1 as amended to be
signed on its behalf by undersigned, thereunto duly authorized, in the city
of Indianapolis, State of Indiana on the 28th day of June, 1996.
Grand Slam Licensing, Inc.
/s/ Milton O. Thompson
--------------------------------
By: Milton O. Thompson,
President
Pursuant to the requirements of the Securities Act of 1933, this Registration
on Form S-1 as amended has been signed by the following persons in the
capacities and on the dates indicated.
</TABLE>
<TABLE>
<CAPTION>
Signature Capacity Date
<S> <C> <C>
/s/ Milton O. Thompson 6/28/96
- ------------------------------------ Chief Executive Officer ----------------
Milton O. Thompson Chief Financial Officer
Controller
Director
/s/ Dennis DeYoung 6/28/96
- ------------------------------------ Vice President/Secretary ----------------
Dennis DeYoung Director
/s/ Harold Thompson 6/28/96
- ------------------------------------ Director ----------------
Harold Thompson
/s/ Joel K. Stein 6/28/96
- ------------------------------------ Director ----------------
Joel K. Stein
</TABLE>
<TABLE>
<CAPTION>
Exhibit Index.
<S> <C>
(1) Not Applicable
(2) Not Applicable
(3) Articles of Incorporation, Amendments and Bylaws
to be filed by amendment
(4) Specimen certificate for Common Stock - to be filed
by amendment
(5) Consent and Opinion of regarding legality of
securities registered under this Registration Statement
and to the references to such attorney in the Prospectus
filed as part of this Registration Statement - to be filed
by amendment
(6) Not Applicable
(7) Not Applicable
(8) Not Applicable
(9) Not Applicable
(10.1) Agreement to Provide Management, Professional and
Support Services between Grand Slam III and Grand Slam
Licensing, Inc., dated June 15, 1995
(10.2) Amendment to the Agreement to Provide Management,
Professional and Support Services, dated January 1, 1996
(10.5) Sales Agreement with Labyrinth Sales Company dated July
14, 1995
(11) Not Applicable
(12) Not Applicable
(13) Not Applicable
(14) Not Applicable
(15) Not Applicable
(16) Not Applicable
(17) Not Applicable
(18) Not Applicable
(19) Not Applicable
(20) Not Applicable
(21) Not Applicable
(22) Not Applicable
(23) Not Applicable
(24) Consent of Winter, Scheifley & Associates, P.C., Certified
Public Accountants for the Company
(25) Not Applicable
(26) Not Applicable
(27) Not Applicable
(28) Not Applicable
(99.1) Lease Agreement between Crowe-Lippe-Gillespie and
Sports Ventures II,
the predecessor of Grand Slam III, dated October 29, 1990
to be filed by amendment
(99.2) Amendments to Office Lease, dated October 12, 1995 and
October 19, 1995, - to be filed by amendment
(99.3) Consulting Agreement with Pratt, Wylce & Lords, Ltd.
(99.4) Lock Up Agreement - to be filed by amendment
(99.5) Employment Agreement with Milton Thompson
</TABLE>
AGREEMENT TO PROVIDE MANAGEMENT,
PROFESSIONAL and SUPPORT SERVICES
This agreement is entered into this 15th day of June, 1995 by and between
Grand Slam Licensing, incorporated, hereinafter referred to as GSL, an
Indiana C Corporation and Grand Slam III, L.P., hereinafter referred to as
GS III, an Indiana partnership.
RECITALS
1. GSL holds valuable licenses with professional sports league
licensors, entertainment properties, event licensors and individual licensors
under which GSL produces and markets logo and photo likeness collectible
lapel pins, collector sets containing pins, key chains and other similar
memorabilia.
2. GSL requires the use of management, professional and support
services, including marketing and sales, analysis of license proposals and
sales agreements, legal services, financial services, general management and
related matters in order to fully exploit its licensees.
3. GS III, as the predecessor company of GSL, and as a management
firm, specializing in athletes, entertainers, other personalities and events
possesses the expertise among its staff and independent contractors to meet
GSLs needs for management, professional and support services.
4. GS III currently leases square feet and located at 401
Pennsylvania Parkway, Suite 390, Indianapolis, Indiana 46208, a portion
of which may be made available to provide office and support space fo
GSL.
5. As its own need for space increases and/or GSLs need for space
increases, GS III may lease additional space at its current location, or at
some other location, a portion of which will be available to GSL to meet any
expanded needs it may have.
AGREEMENT
NOW THEREFORE, in consideration of these recitals and of
mutual representations and covenants contained herein, the parties hereby
agree as follows:
1. Professional Services: GS III shall provide services
including, but not limited to: marketing and sales planning and
development; analysis of license proposals; negotiation of license
agreements, sales agreements, agreements for the provision of product and
other agreement; general legal services; and, general financial services.
a. For any services not directly available from GS III,
the General Partner, or his designee, shall have the right to engage
competent sub-contractors in the area of need.
2. Office and Storage Space: GS III shall make sufficent space
available to GSL for GSL: to design its logo and photo likeness collectible
lapel pins, pin collector sets, key chains, and other similar memorabilia
products; to conduct the marketing and sales of its products; and, to store a
reasonable amount of inventory and materials supporting GSLs corproate
operations.
a. GSL shall have unlimited use of telephones,
facsimile, copier, computer hardware and software and any other office
equipment required for GSL to conduct business.
3. Term: This Agreement shall run from May 15, 1995
through October 31, 1997.
a. Either party may declare its intention to terminate this
Agreement sixty (60) days prior to its expiration.
b. Should neither party declare its intention to terminate
this Agreement by the specified date the Agreement shall be automatically
renewed with all existing terms and conditions remaining the same with the
exception of Compensation which may be reopened upon the election of
either party.
4. Compensation: GSL agrees to pay GS III an
inclusive fee of $25,000 per month due and payable on the first day of each
month and seven percent (7%) of gross revenues, calculated on revenues
actually received during the previous month and payable by the fifteenth day
of each month.
5. Entire Agreement: GSL and GS III agree that all prior
negotiations, statements, representations, warranties and agreements are
superseded by this Agreement and that the terms and conditions of this
Agreement constitute the complete Agreement between them.
6. Choice of Laws: This Agreement shall be governed by
and construed in accordance with the laws of the State of Indiana.
7. Severability: If any provision of this Agreement or any
subsequent modifications hereof are found unenforceable, the remaining
provisions shall continue to remain in full force and effect.
8. Modification: Any modifications to this Agreement shall
only be effective when in writing and signed by the person(s) from GSL
and GS III authorized to make commitments on behalf of the respective
parties.
WHEREFORE, this Agreement has been executed as of the day and
date first written above.
Grand Slam III Grand Slam Licensing, Inc.
By: /s/ Milton O. Thompson, Esq. /s/ Charles A. Richmond
----------------------------------- -----------------------------
Milton O. Thompson, Esq. Charles A. Richmond
General Partner Assistant/Recording Secretary
AGREEMENT TO PROVIDE MANAGEMENT,
PROFESSIONAL and SUPPORT SERVICES
This agreement is entered into this 15th day of June, 1995 by and between
Grand Slam Licensing, incorporated, hereinafter referred to as GSL, an
Indiana C Corporation and Grand Slam III, L.P., hereinafter referred to as
GS III, an Indiana partnership.
RECITALS
1. GSL holds valuable licenses with professional sports league
licensors, entertainment properties, event licensors and individual licensors
under which GSL produces and markets logo and photo likeness collectible
lapel pins, collector sets containing pins, key chains and other similar
memorabilia.
2. GSL requires the use of management, professional and support
services, including marketing and sales, analysis of license proposals and
sales agreements, legal services, financial services, general management and
related matters in order to fully exploit its licensees.
3. GS III, as the predecessor company of GSL, and as a management
firm, specializing in athletes, entertainers, other personalities and events
possesses the expertise among its staff and independent contractors to meet
GSL's needs for management, professional and support services.
4. GS III currently leases square feet and located at 401
Pennsylvania Parkway, Suite 390, Indianapolis, Indiana 46208, a portion
of which may be made available to provide office and support space fo
GSL.
5. As its own need for space increases and/or GSL's need for space
increases, GS III may lease additional space at its current location, or at
some other location, a portion of which will be available to GSL to meet any
expanded needs it may have.
AGREEMENT
NOW THEREFORE, in consideration of these recitals and of
mutual representations and covenants contained herein, the parties hereby
agree as follows:
1. Professional Services: GS III shall provide services
including, but not limited to: marketing and sales planning and
development; analysis of license proposals; negotiation of license
agreements, sales agreements, agreements for the provision of product and
other agreement; general legal services; and, general financial services.
a. For any services not directly available from GS III,
the General Partner, or his designee, shall have the right to engage
competent sub-contractors in the area of need.
2. Office and Storage Space: GS III shall make sufficent space
available to GSL for GSL: to design its logo and photo likeness collectible
lapel pins, pin collector sets, key chains, and other similar memorabilia
products; to conduct the marketing and sales of its products; and, to store a
reasonable amount of inventory and materials supporting GSL's corproate
operations.
a. GSL shall have unlimited use of telephones,
facsimile, copier, computer hardware and software and any other office
equipment required for GSL to conduct business.
3. Term: This Agreement shall run from May 15, 1995
through October 31, 1997.
a. Either party may declare its intention to terminate this
Agreement sixty (60) days prior to its expiration.
b. Should neither party declare its intention to terminate
this Agreement by the specified date the Agreement shall be automatically
renewed with all existing terms and conditions remaining the same with the
exception of Compensation which may be reopened upon the election of
either party.
4. Compensation: GSL agrees to pay GS III an
inclusive fee of $25,000 per month due and payable on the first day of each
month and seven percent (7%) of gross revenues, calculated on revenues
actually received during the previous month and payable by the fifteenth day
of each month.
5. Entire Agreement: GSL and GS III agree that all prior
negotiations, statements, representations, warranties and agreements are
superseded by this Agreement and that the terms and conditions of this
Agreement constitute the complete Agreement between them.
6. Choice of Laws: This Agreement shall be governed by
and construed in accordance with the laws of the State of Indiana.
7. Severability: If any provision of this Agreement or any
subsequent modifications hereof are found unenforceable, the remaining
provisions shall continue to remain in full force and effect.
8. Modification: Any modifications to this Agreement shall
only be effective when in writing and signed by the person(s) from GSL
and GS III authorized to make commitments on behalf of the respective
parties.
WHEREFORE, this Agreement has been executed as of the day and
date first written above.
Grand Slam III Grand Slam Licensing, Inc.
By: /s/ Milton O. Thompson, Esq. /s/ Charles A. Richmond
----------------------------------- ----------------------------------
Milton O. Thompson, Esq. Charles A. Richmond
General Partner Assistant/Recording Secretary
GRAND SLAM LICENSING, INC.
SALES AGREEMENT
THIS AGREEMENT is entered into this 14th day of July, 1995
by and between Grand Slam Licensing, Inc.., hereinafter
referred to as "Grand Slam", an Indiana C Corporation, with
its principal place of business located at 401 Pennsylvania
Parkway, Suite 390, Indianapolis, Indiana 46260, and
Labyrinth Sales Company, hereinafter referred to as "
Labyrinth", with its principal place of business at 4635
Richmond Road, Suite 101, Warrensville, Ohio 44128.
RECITALS
1. Grand Slam seeks relationships with sales
representatives who are able to present its licensed
collectible logo pins, photographic pins and related
collectibel jewelry to, and to secure orders from, buyers of
merchandise fo rretail chains, specialty stores, and other
retailers and mass merchandisers as agreed.
2. Labyrinth represents that it has an extensive sales
force with the access and contracts to present Grand Slam's
products to, and secure orders from, buyers for retail
chains, specialty stores and other retailers and mass
merchandisers as agreed.
AGREEMENT
NOW THEREFORE, in consideration of these Recitals and
the mutual representations contained herein, the parties
hereby agree as follows:
1. SERVICES: Grand Slam hereby engages Labyrinth as
its sales representative for the states of Michigan,
Kentucky, Ohio and West Virginia and the western part of teh
State of Pennsylvania as defined bya north side dividing
line running through, but including all of, the city of
Pittsgburgh with the exclusive right to present Grand Slam's
products to all local retailors and regional and/or
divisional buying offices of national retailers.
a. Labyrinth shall not have to right to present Grand
Slam's products, or take orders from, league venues,
including, but not limited to, the International Hockey
League franchises and arenas and th National Basketball
Association franchises and areas, or from institutional
venues, including, but not limited to the Rock & Roll Hall
of Fame Museum and Indiana University.
b. Labyrinth shall not have the right to present Grand
Slam products, or take orders from, the following without
the express written permission of the National Sales Manager
of Grand Slam:
* national accounts
* QVC
* HSN
* catalogue or direct mail companies
c. Labyrinth shall not develop corporate sponsor
premium programs without the express written permission of
the National Sales Manager.
2. PRODUCT LINE(S): Grand Slam hereby grants
Labyrinth the full and complete rights ot present, and take
orders for, the full line of its collectibel logo pins and
photo pins and related jewelry products with the exception
of collector sets.
a. Labrynith agrees that it shall not represent any
other collectible logo pins, photographic pins or related
jewelry during the term of this Agreement without the
express written permission of teh National Sales Manager of
Grand Slam.
3. TERM: The term of this Agreement shall be for a
period of one (1) year from the date this Agreement is fully
executed and on a month to month basis thereafter. Either
party shall have the right to cancel this Agreemenrt for
just cause upon thirty (30) days written notice.
a. The parties shall conduct a formal evaluation of
their relationship at the completion of six (6) months after
the date of the full execution of this Agreement. This
evaluation shall include, but not be limited to, the status
of Labyrinth's sales activity and Grand Slam's provision of
sales support through materials and product delivery.
4. COMPENSATION: Grand Slam shall pay Labyrinth the
following commissions:
15% on sales from Schedules A and B; and,
7% on sales from Schedule C.
All payments shall be basecd upon the total amount collected
in each and paid by the fifth day of the subsequent month.
a. The rate of commission for any new sales program
implemented by Grand Slam shall be determined at the time
such programs are implemented.
b. Grand Slam shall aggressively seek to promptly
collect accounts due.
1. Grand Slam shall provide Labyrinth with a
list of accounts due over thirty (30) days for Labyrinth's
information and support in clearing balances. Labyrinth
has no obligation to collect past due accounts.
5. EXPENSES: All direct sales expenses shall be the
responsibilty of Labyrinth.
a. Special expenses, including, but not limited to
those associated with trade shows and extra buyer incentive
programs shall be allocated between the parties on a case by
case basis.
6. CONFIDENTIALITY: Labyrinth agrees to devulge
only that proprietary information relating to Grand Slam and
its products that is necessary to represent Grand Slam and
its products to its customers.
7. GOOD FAITH AND FAIR DEALING: Labyrinth warrants
that it and its agents shall represent Grand Slam with
integrity and honesty and shall utilize the highest ethical
standards in its sales practices.
8. CHOICE OF LAWS: This Agreement shall be governed
by and construed in accordance with the laws of the State of
Indiana.
9. DISPUTE RESOLUTION: All disputes arising under
this Agremeent shall be the subject of binding arbitration
with teh procedures of the arbitration process to be
determined by the parties at the time of the dispute.
10. NOTICES: Any notices which may be sent under this
Agreement to teh respectice parties shall be sent via
certified mail to the following persons:
Steven Kaufman
Labyrinth Sales Company
4635 Richmond Road, Suite 101
Warrensville Heights, Ohio 44128
Milton O. Thompson, Esq.
President
Grand Slam Licensing, Inc.
401 Pennsylvania Parkway, Suite 390
Indianapolis, Indiana 46260
11. ENTIRE AGREEMENT: This Agreement represents the
entire agreement between the parties regarding the matt5ers
contained herein and supersedes any and all prior
understandings, whether written or oral, between parties
a. Any modifications to this Agreement shall only be
effecrtive when in writing and signed by Steven Kaufman, on
behalf of Labyrinth, and Milton O. Thompson, on behalf of
Grand Slam.
WHEREFORE, this agreement has been executed as the day
and year written above.
Labyrinth Sales Company Grand Slam Licensing, Inc.
By: /s/ Steven Kaufman By: /s/ Milton O. Thompson, Esq.
------------------------- -------------------------------------
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
We hereby consent to the use in this Registration Statement on Form S-1 of
our report dated January 30, 1996 relating to the financial statements of
Grand Slam Licensing, Inc. and the reference to our firm under the caption
"EXPERTS" in the Registration Statement.
/s/ Winter, Scheifley & Associates, P.C.
----------------------------------------------------
Winter, Scheifley & Associates, P.C.
Certified Public Accountants
June 28, 1996
Englewood, Colorado
CONSULTING AGREEMENT
This Consulting Agreement is entered into this 12th day of April,
1995 by and between Pratt, Wycle & Lords, Ltd. (PWL), a duly organized
Nevada Corporation in good standing, and GRAND SLAM III (GS III), a
duly organized Indiana Partnership in good standing.
RECITALS
1. GS III holds valuable licenses with professional sports
league licensors, entertainment related licensors, event licensors and
individual licensors under which GS III produces and markets logo and
photo likeness lapel pins, pin collector sets, key chains and other similar
memorabilia.
2. GS III, in recognition of the potential for its products with
adequate development and operating capital, wishes to take the steps
necessary to become a publicly held corporation to secure such financing.
3. PWL provides consulting services to companies wishing to
become publicly traded and desires to provide such services to GS III.
AGREEMENT
NOW THEREFORE, in consideration of these Recitals of the
mutual representations and covenants contained herein, the parties hereby
agree as follows;
1. Financing Strucutre: PWL shall recommend a financing
structure for GS III's entry into the public market. This structure shall
include distribution to shareholders, creditors and other parties and shall
include agreed upon capital formation requirements of GS III.
2. Private Placemenet Memorandum: PWL shall prepare,
through its securities counsel, a Private Placement Memorandum and/or
other documents necessary to acquire initial bridge financing in the amount
of $600,000 to be followed by an additional $1,000,000, through the
exercise of 200,000 warrants at approximately $5 per share, subsequent to
SG III's being publicly listed.
a. GS III shall provide in a timely and professional manner all
business and financial information and other related materials requested by
PWL and/or its attorneys as necessary to the completion of any service,
including Securities and Exchange Commission registrations and listings
services, under this Agreement. GS III warrants that all documents
provided are true, complete and duly adopted copies.
b. GS III shall promptly notify PWL of any change in the
status or nature of its business, any litigation or any other developments that
may require furhter disclosure in the registration or other documents.
3. Sale of Private Placement Shares: PWL shall exert its
best efforts with its contacts and sources to assist in the sale of all shares
available through the private placement.
4. Securities and Exchange Commission Filing: PWL shall
prepare and file, through its securities counsel, a Registration Statement on
Form S-1 with the Securities and Exchange Commission (SEC).
Securities, included in this S-1 Registration shall be the stock issued to
PWL, as set forth herein, and other such stock agree to by the parties.
a. Upon effectiveness of the Registration Statement, PWL shall
distribute 60,000 shares, thirty seven and a half percent (37.5%) of the
voting common shares it receives from GS III to the PWL shareholders.
5. Borkerage Filing: PWL shall prepare a Form 15c2-11 and
distribute it to the brokerage community at PWL's expense for the purpose
of establishing a market of GS III stock.
6. Market Listing: PWL shall arrange for the listing of GS III
stock on the Voer the Counter Market.
7. Market Development: Upon effectiveness of the Statement
of Registration and completion of the stock distribution, PWL shall use its
expertise and business contacts to establish a market for GS III's stock.
Market shall be defined as a listing on the Over the Counter Market (either
NASDAQ or Bulletin Boards) with a minimum of three (3) market makers
quoting the stock.
a. PWL shall use its expertise and business contacts to continue
promotion of GS III stock utilizing a financial relations program developed
jointly by the parties based upon a division of responsiblities agreed to by
the parties. All PWL responsibilities in the financial relations program
shall be billed to GS III at cost.
1. PWL shall be responsible for the development of
direct response leads through the implementation of a "card drop" mass
mailing to 100,000 investors and 50,000 brokers throughout the United
States.
b. PWL shall arrange for the inclusion of GS III in either of
Moody's company listing services for the purpose of expanding the
marketability fo the stock. PWL shall obtain the application for GS III and
assist GS III in completion of the application. PWL shall pay the initial
application fee.
c. GS III shall cause to be prepared the printed and video
components fo the financial relations program through its public relations
and media consultants in consultation with PWL.
1. PWL shall cooperate with GS III's consultants
invovled in developing these materials or in any other aspect of the
transaction covered by this Agreement in a timely and professional manner.
d. In the event additional financial relations activities are
required to complete capitalization, responsibilities for the preparation of
materials shall be determined jointly by PWL and GS III at the time.
8. PWL Ongoing Consulting: PWL shall provide consulting services
on as needed basis to GS III in areas covered under or related to the
successful execution of this Agreement, including, nbut not limited to
shareholder relations, market strategy, broker relations and additional
capitalization.
9. Ability to Perform: PWL shall disclose to GS III all material facts
and circumstances which may effect its ability to perform its undertaken
herein prior to the execution of the Agreement and shall promptly inform
GS III of any change in its status which may effect its ability to perform
during the course of the Agreement.
10. Compensation: In consideration for services provided, GS III
agrees to compensate Pwl as follows:
$15,000 upon complete execution of this Agreement;
$15,000 from the proceeds of the Private Placement once the first
$30,000 has been received by GS III
$25,000 upon filing of the registration with the Securities and
Exchange Commission
$10,500 upon the effective date of the registration unless otherwise
agreed upon in writing and signed by both parties; and,
160,000 shares of common stock in GS III when GS III is
incorporated and all licenses are assigned to the new corporate entity.
a. GS III shall take all steps necessary in a timely fashion to
incorporate and assign the licenses upon the complete execution of this
agreement to allow for its Board of Directors to approve distribution of the
160,000 shares to PWL.
1. GS III's incorporation shall provide for the issuance
shares in accordance with Exhibit B attached hereto.
11. Other Consultants: GS III and PWL reserve the right to employ
legal marketing and sales consultants in connection with the transactions
contemplated in this agreement. Each party shall indemnify the other with
respect to any claim for fees due and payable to any consultant it hires to
complete work in connection with this agreement. Each party warrants that
any such consultant shall be fully qualified to undertake the work for which
they employed.
a. GS III shall cause all necessary audits to be
conducted by auditors experienced in, and appropriately ccredentialed for,
Securities and Exchange Commission audits. All such audits shall be
conducted in close collaboration with PWL's securities attorney.
b. GS III represents that no person has acted as a finder
or investment advisor in connection with the transactions contemplated in
this letter other than those listed in Exhibit A attached hereto.
1. GS III shall indemnify PWL for any claim
for compensation for finder or investment services in connection with this
Agreement.
12. Conflicts of Interest: GS III and PWL shall disclose to each other
all potential conflicts of interest involving officers, directors, principal
stockholders and/or employees.
a. GS III specifically represents that none of its officers, direcotrs
or stockholder is a member of the National Association of Stock Dealers or
an employee or associated member of the National Association of Stock
Dealers.
13. Confidentiality: PWL shall treat all information, including lists of
persons to be contacted regarding the private placement, provided by GS
III, as confidential and not share such information to third parties, other
than such disclosure as is required by the Securities and Exchange
Commission, PWL attorneys, and PWL accountants, without the express
written consent of GS III.
14. Non-Disclosure: GS III shall not divulge any named source,
including but not limited to lending institutions, investors, individuals and
brokers, to whom it has been introduced in any fashion by PWL for a
period of one (1) year from the execution of this agrement.
15. Notice: Any notice from either party to the other shall be deemed
receiv ed by the other party on the day such notice is personally delivered.
Any notice sent by facsimile transmission shall be deemed received by the
other party on the date such notice is received at the receiving party's
offices. Any notice sent by mail by either party to the other shall be
deemed received on the day the notice is delivered at the receiving party's
designated address.
a. For purposes of delivering or sending notice to the parties to
this agreement shall be delivered or sent as follows:
if notice is delivered to PWL,
Pratt, Wylce & Lords, Ltd.
Attention: Timothy Miles
217 16th Avenue
P.O. Box 1427
Idaho Springs, Colorado 80452
Telephone: (303) 567-0839
Facsimile: (303) 567-0841
if notice is to be delivered to GS III,
Grand Slam III
Attention: Milton O. Thompson
401 Pennsylvania Parkway, Suite 390
Telephone: (317) 575-5900
Facsimile: (317) 575-5650
16. Entire Agreement: PWL and GS III agree that all prior negotiations,
statements, representations, warranties and agreements are superseded by
this Agreement and that the terms and conditions of this Agreement
constitute the complete Agreement between them.
17. Assignment: Neither party may assign any benefit due or delegate
performance under this Agreement without the express written consent of
the other party.
18. Choice of Laws: This Agreement shall be governed by and
construed in accordance with the laws of the State of Indiana. The
Agreement shall be construed as if Pwl and GS III participated equally in its
negotiation and drafting. PWL and GS III agree that the Agremeent shall
not be construed against one party over the other.
19. Dispute Resolution: PWL and GS III agree that any dispute arising
under this Agreement shall be submitted to binding arbitration with the
selection of an impartial Arbitrator to be determined at the time of the
dispute.
20. Waiver: The waiver of any portion of this Agremeent by either
party shall not be deemed to be a continuingwaiver or a waiver of any other
portion of this Agreement by either party.
21. Modifications: Any modifications to this Agreement shall only be
effective when in writing and signed by the person(s) from Pwl and GS III
authorized to make commitments on behalf of the respective parties.
22. Severability: If any provision of this Agreement or any subsequent
modifications hereof are found to be unenforceable, the remaining
provisions shall continue to remain in full force and effect.
23. Authority to Enter into Agreement: The individuals signed this
Agreement represent to each other that they have the authority to bind their
respective corproations to the terms and conditions of this Agreement.
These individuals shall not, however, incur personal liability by executing
this Agreement and sign this Agreement only in their representative
capacities as authorized officers of PWL and GS III respectively.
WHEREFORE, the parties have executed this Agreement to be
effective as of the date and year first above written.
Pratt, Wylce & Lords, Ltd. Grand Slam III
By: /s/ Timothy Miles By: /s/ Milton O. Thompson
----------------------------------------- ------------------
President General Partner
EXHIBIT A
The following individuals will be compensated by Pratt, Wylce & Lords,
Ltd. in the amounts shown:
Alan Filson $10,000
The following individuals will be compensated by Grand Slam III in the
amounts shown.
Alan Filson 32,000 shares
The above compensation is the total compensation to the above named
parties unless disclosed in writing.
EXHIBIT B
Grand Slam III and PWL will mutually agree upon the following
reorganization plan. Alternate reorganization structures may also be chosen
with the approval of both parties.
Grand Slam III will reorganize as a corporation and will authorize the
issuance of the 50,000,000 of common stock and adjust the total issued and
outstanding to provide current shareholders with 808,000 shares. The
Board of Directors will then approve the following:
The authorization and issuance to shareholders of record of 250 Class A
Convertible Preferred and 800 Class B Convertible Preferred Shares. The
Class A Shares shall be convertible at a rate of 1,000 shares of common
stock for each one share of Class A preferred stock. Conversation will be
authorized upon the first fiscal year that the company attains at least
$1,000,000 in audited after tax profits. Class B Preferred shall be
convertible at a rate of 1,000 shares of common for each share of Class B
Preferred and shall be authorized upon the completion of the first fiscal that
the company attains audited after tax profits of at least $3,000,000.
The issuance of 160,000 shares of common stock to Pratt, Wylce & Lords,
Ltd. and 32,000 common shares to Alan Filson as compensation pursuant
to this agreement.
The distribution of 200,000 A Warrants exercisable at $5.00. The warrants
will be distributed pro rata to shareholders of record following the issuance
of the 968,000 shares as previously mentioned.
The authorization and issuance of 400,000 shares of common stock subject
to a Private Placement Memorandum. Said shares shall be sold at a rate of
$1.50 per share.
EMPLOYMENT AGREEMENT
THIS AGREEMENT is enteredc into this 1st day of January,
1996 by and between Grand Slam Licensing, Inc., an Indiana C
Corporation, ehreinafter known as "GSL", with offices at 401
Pennsylvania Parkway, Suite 390, Indianapolis, Indiana
46280, and Milton O. Thompson, Esq., hereinafter referred to
as "Thompson", who resides at 5008 Fieldstone Trail,
Indianapolis, Indiana 46254.
RECITALS
1) GSL acquires the rights to the marks and logos of
sports and entertainment organizations and the likenesses of
individual sports and entertainment perosnalitieis for
thepurpose of designing, importing and distriubting
collectible lapel pins, collector pin sets, key chains and
related prodcuts.
2) GSL's Board of Directors requires an executive
with experience in identifying productive liccwenses to
seek, negoptiating to obtain those licenses at the most
favorable royalty rate nad for the lowest possible advances
and guarantees, finance, planning and management to provide
leadership to its licensing business.
3) Thompson represents that he has the necessary
skills, eduction and experience to provide the leadership
required by GSL.
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises
and covenants contained and other valuable considerations,
contained herein, the parties hereto agree as follows:
1) Employment: GSL's Board of Directors employs
Thompson to serve as President of GSL and to perform all
services which are required of the Presiddent, including but
not limited to the identification of licensed properties to
seek, the negotiation of those licenses at teh most
favorable possible royalty rates and for the lowest possible
guarantees and advance payment against the guarantees nad
financial and oeprational planning and management of all
aspects of GSL's business.
a) Thompson shall carry out all
responsibiltities and duties, not expressly reserved by
GSL's Board of Directors to itself, necessary to the
planning, management and execution of the business.
b) Thompson hereby agrees to devote eighty
percent (80%) of his professional time to the position of
president of Grand Slam Licensing, Inc.
2) Term: This Agreement shall commence as of the
date it is fully executed and continue through December 31,
1998.
a) GSL shall declare its intention in writing to
terminate this Agreement no later than September 31, 1998
and, in the absence of such notification the Agreement shall
automatically be renewed under the existing terms and
conditions of this Agreement and at the compensation as of
the Agreement's expiration.
3) Compensation: Thompson shall be paid $35,000 per
year in twelve (12) monthly installments, each installment
to be payable by the first day of the subsequent month, and
be eligible for participation in fringe benefit, bonus, and
stock option plans and increases in salary as might be
approved by the Board of Directors from time to time during
the term of this Agreement.
4. Restrictive Covenant: Thompsonn hereby agrees
that during the term of this Agreement he shall not engage
in any activity that will or may interfere with teh due
performance of the duties of President of GSL without the
express permission of the Board of Directors of GSL.
5. Severability: In the event any portion of this
Agreement is determined to void, invalid or unenforceable as
a result of any judicial or administrative proceeding, this
Agreement shall be construed and enforced as if such
provision were not contained in this Agreement.
6. Dispute Resolution: The parties agree that
disputes arising under this Agreement shall be the subject
of binding arbitration with teh arbitration proceduresto be
determined at the time of the dispute.
7. Notices: Any noticed which may be sent to the
respective parties under this Agreement shall be sent via
certified mail to the following persons:
Milton O. Thompson, Esq.
5008 Fieldstone Trail
Indianapolis, Indiana 46254
Charles A. Richmond
Assistant Secretary
Grand Slam Licensing, Inc.
401 Pennsylvania Parkway
Suite 390
Indianapolis, Indiana 46280
8. Choice of Laws: This Agreement shall be
construed and interpreted under, and the rights and
obligations of the parties hereunder shall be controlled and
governed by the laws of the State of Indiana.
9. No Party Deemed Drafter: Neither GSL nor
Thompson shall be deemed to be the drafter of this
Agreement, and, if this Agreement or any provision thereof
is construed in any court or arbitration proceeding, said
court or arbitrator shall not construe this Agreement or any
provision therof against either party as the drafte4r
thereof.
10. Complete Agreement: This Agreement represents
the entire Agreement between the parties regarding the
matters contained herein adn supersedes any and all prior
understandings, whether written or oral, between the parties
regarding the matters contained in the Agreement.
a. Any modifications to this Agreement shall
only be effective when in writing and signed ;by Thompson
adn Richmond on behalf of GSL.
WHEREFORE, this Agreement has been executed to be
effective as of the date and year first written above.
Grand Slam Licensing, Inc.
By: /s/ Charles A. Richmond
------------------------------------
By: /s/ Milton O. Thompson, Esq.
-----------------------------------
