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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 20, 1996
REGISTRATION STATEMENT NO.
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AMERICAN PROFESSIONAL BILLIARDS, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
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NEVADA 88-0339674
(STATE OF INCORPORATION) (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
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AMERICAN PROFESSIONAL BILLIARDS, INC. ROBERT M. STANDER
1700 EAST DESERT INN ROAD AMERICAN PROFESSIONAL BILLIARDS, INC.
SUITE 108 1700 EAST DESERT INN ROAD
LAS VEGAS, NV 89109 SUITE 108
(702) 893-1277 LAS VEGAS, NV 89109
(ADDRESS OF PRINCIPAL PLACE OF BUSINESS) (702) 893-1277
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL (NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR
EXECUTIVE OFFICES) SERVICE)
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COPIES OF ALL COMMUNICATIONS TO:
GEORGE S. BALIS, ESQ. GERALD L. FISHMAN, ESQ.
HERZFELD & RUBIN, P.C. FISHMAN & MERRICK, P.C.
40 WALL STREET 30 NORTH LASALLE STREET, SUITE 3800
NEW YORK, NEW YORK 10005 CHICAGO, IL 60602
(212) 344-5500 (312) 726-1224
(212) 344-3333-FACSIMILE (312) 726-2649-FACSIMILE
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If any of the Securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PER SECURITY(1) OFFERING PRICE(1) FEE
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Units, each consisting of one share of Common
Stock, 0.001 par value ("Common Stock") and
one Common Stock Purchase Warrant
("Warrant")(2)................................ 2,250,000 $5.00 $11,250,000 $ 3,879.30
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Common Stock issuable upon exercise of
Warrants included in the Units(2)(3).......... 2,250,000 $7.50 $16,875,000 $ 5,818.96
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Underwriter's Unit Purchase Option.............. 100,000 $0.01 $ 1,000 $ 0.35
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Units issued upon exercise of Underwriter's Unit
Purchase Option, each Unit consisting of one
share
of Common Stock, and one Warrant(2)........... 100,000 $6.00 $ 600,000 $ 206.90
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Common Stock issuable upon exercise of
Warrants included in the Units, issued upon
exercise of Underwriter's Unit Purchase
Option(3)..................................... 100,000 $7.50 $ 750,000 $ 258.52
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Total........................................... $29,476,000 $10,164.13
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(1) Estimated solely for purposes of calculation of the Registration Fee.
(2) Amount to be Registered includes 1,100,000 Units issuable upon conversion of
Private Placement Notes and also includes 150,000 Units subject to sale upon
exercise of Underwriter's Over-Allotment Option granted to the
Representative which may be offered to cover over-allotments, if any.
(3) Pursuant to Rule 416, there are also being registered such indeterminable
number of shares of Common Stock as may be issued as a result of the
antidilution provisions of the Warrants.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant will
file a further amendment which specifically states that this Registration
Statement will thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until the Registration Statement becomes
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
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AMERICAN PROFESSIONAL BILLIARDS, INC.
CROSS-REFERENCE SHEET
FORM SB-2
ITEM NUMBER AND CAPTION LOCATION OR CAPTION IN PROSPECTUS
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1. Front of Registration Statement and Outside
Front Cover Page of Prospectus........... Outside front cover
2. Inside Front and Outside Back Cover Pages
of Prospectus............................ Inside front cover page; Outside back cover
page
3. Summary of Information and Risk Factors.... Prospectus Summary; Selected Financial
Data; Risk Factors
4. Use of Proceeds............................ Use of Proceeds
5. Determination of Offering Price............ Outside Front Cover Page of Prospectus;
Risk Factors; Underwriting
6. Dilution................................... Dilution
7. Selling Security Holders................... Private Placement Selling Stockholders
8. Plan of Distribution....................... Outside Front Cover Page of Prospectus;
Underwriting
9. Legal Proceedings.......................... Business
10. Directors, Executive Officers, Promoters
and Control Persons...................... Management
11. Security Ownership of Certain Beneficial
Owners and Management.................... Principal Stockholders
12. Description of Securities.................. Outside Front Cover Page of Prospectus;
Description of Securities
13. Interests of Named Experts and Counsel..... Legal Matters
14. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities.............................. Management
15. Organization within Last Five Years........ Prospectus Summary; Management's Discussion
and Analysis of Financial Condition and
Results of Operations; Business; Certain
Transactions
16. Description of Business.................... Prospectus Summary; Business
17. Management's Discussion and Analysis or
Plan of Operation........................ Management's Discussion and Analysis of
Financial Condition and Results of
Operations
18. Description of Property.................... Business
19. Certain Relationships and Related
Transactions............................. Certain Transactions; Underwriting
20. Market for Common Stock and Related
Stockholder Matters...................... Risk Factors; Shares Eligible for Future
Sale; Description of Securities
21. Executive Compensation..................... Management
22. Financial Statements....................... Financial Statements
23. Changes in and Disagreements With
Accountants on Accounting and Financial
Disclosure............................... Inapplicable
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
PROSPECTUS SUBJECT TO COMPLETION DATED SEPTEMBER 20, 1996
1,000,000 UNITS
AMERICAN PROFESSIONAL BILLIARDS, INC.
$5.00 PER UNIT
EACH UNIT CONSISTING OF ONE SHARE OF COMMON STOCK
AND ONE THREE YEAR REDEEMABLE COMMON STOCK PURCHASE WARRANT
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Each Unit consists of one share of common stock, $0.001 par value (the
"Common Stock"), and one three year redeemable common stock purchase warrant
(the "Warrant") of American Professional Billiards, Inc., a Nevada corporation
(the "Company"). The Common Stock and the Warrants are separately transferable,
and the Warrants are exercisable, commencing on the date of this Prospectus (the
"Effective Date"). Each Warrant entitles the registered holder thereof to
purchase one share of Common Stock at a public offering price of $7.50 per share
("Offering Price") commencing on the Effective Date until , 1999
(three (3) years after the date of this Prospectus). The Company may call the
Warrants for redemption, in whole or in part, upon a minimum of 30 days prior
written notice to holders, at a redemption price of $.10 per Warrant, provided
that the closing average bid price for the Company's Common Stock has been at
least 100% of the then effective exercise price of the Warrants on each of the
20 consecutive trading days prior to the day on which notice is given. See
"Description of Securities."
The Company intends to qualify the Common Stock and the Warrants for
quotation on the NASDAQ SmallCap Market. Prior to this offering (the
"Offering"), there has been no public market for the Company's securities and no
assurance can be given that such a market will develop or be sustained upon
completion of this Offering. The Offering Price and the exercise price and terms
of the Warrants have been determined by negotiations between the Company and
Joseph Roberts & Co., Inc. (the "Representative of the Underwriters" or
"Representative") and bear no relation to the book value or the results of
operations of the Company or any other recognized criteria of value. See "Risk
Factors" and "Underwriting."
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES AN EXTREMELY HIGH
DEGREE OF RISK AND IMMEDIATE SUBSTANTIAL DILUTION OF THE BOOK VALUE OF THE
COMMON STOCK FROM THE INITIAL PUBLIC OFFERING PRICE. SEE "PROSPECTUS SUMMARY",
"RISK FACTORS" BEGINNING ON PAGE 5 AND "DILUTION."
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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.
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PRICE TO
PUBLIC
UNDERWRITING PROCEEDS TO
DISCOUNTS(1) COMPANY(2)
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Per Unit........................... $5.00 $0.50 $4.50
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Total(3)........................... $5,000,000 $500,000 $4,500,000
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(1) In addition, the Company has agreed to pay to the Representative a 3%
non-accountable expense allowance, and to grant the Representative an option
to purchase up to 100,000 Units (the "Underwriter's Unit Purchase Option")
and to indemnify the Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933. (See "Description of
Securities" and "Underwriting.")
(2) Before deducting expenses, including the non-accountable expense allowance
in the amount of $150,000 ($172,500 if the Underwriter's Over-Allotment
Option (as defined below) is exercised in full), estimated at $550,000 or
$572,500, respectively.
(3) The Company has granted to the Representative an option, exercisable within
30 days from the date hereof, to purchase up to 150,000 additional Units
upon the same terms and conditions as set forth above, solely to cover over-
allotments (the "Underwriter's Over-Allotment Option"), if any. If such
over-allotment option is exercised in full, the total price to public,
underwriting discounts and proceeds to Company will be $5,750,000, $575,000
and $5,175,000, respectively. See "Underwriting."
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The Units are offered by the Underwriters on a "firm commitment" basis
when, as and if delivered to and accepted by the Underwriters, subject to prior
sale, and to compliance with the Underwriting Agreement. See "Underwriting." The
Underwriters reserve the right to withdraw or cancel the Offering and to reject
any order in whole or in part. It is expected that delivery of certificates
representing the securities will be made against payment therefor at the offices
of Joseph Roberts & Co., Inc., 416 East Atlantic Blvd., Pompano Beach, FL
33060-6256 on or about , 1996.
JOSEPH ROBERTS & CO., INC.
The date of this Prospectus is , 1996.
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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE UNITS, THE
COMMON STOCK OR THE WARRANTS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL
IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY
TIME.
A SIGNIFICANT NUMBER OF THE UNITS TO BE SOLD IN THIS OFFERING MAY BE SOLD
TO CUSTOMERS OF THE UNDERWRITERS. SUCH CUSTOMERS SUBSEQUENTLY MAY ENGAGE IN
TRANSACTIONS FOR THE SALE OR PURCHASE OF THE UNITS OR THE COMMON STOCK OR THE
WARRANTS CONTAINED THEREIN THROUGH OR WITH THE UNDERWRITERS. ALTHOUGH THEY HAVE
NO OBLIGATION TO DO SO, THE UNDERWRITERS FROM TIME TO TIME MAY BECOME MARKET
MAKERS AND OTHERWISE EFFECT TRANSACTIONS IN SUCH SECURITIES.
THE REPRESENTATIVE, IF IT PARTICIPATES, MAY BECOME A DOMINATING INFLUENCE
AND THEREAFTER A FACTOR OF INCREASING IMPORTANCE IN THE MARKETING OF THE UNITS
OR THE COMMON STOCK OR WARRANTS CONTAINED THEREIN. THE PRICES AND LIQUIDITY OF
THE SECURITIES MAY BE SIGNIFICANTLY AFFECTED BY THE DEGREE, IF ANY, OF THE
REPRESENTATIVE'S PARTICIPATION IN SUCH MARKET.
AS OF THE DATE OF THIS PROSPECTUS, THE COMPANY WILL BECOME SUBJECT TO THE
REPORTING REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934 AND IN ACCORDANCE
THEREWITH WILL FILE REPORTS, PROXY STATEMENTS, AND OTHER INFORMATION WITH THE
SECURITIES EXCHANGE COMMISSION. THE COMPANY INTENDS TO FURNISH ITS STOCKHOLDERS
WITH ANNUAL REPORTS CONTAINING AUDITED FINANCIAL STATEMENTS, AND SUCH OTHER
PERIODIC REPORTS AS THE COMPANY MAY DETERMINE TO BE APPROPRIATE OR AS MAY BE
REQUIRED BY LAW.
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements, including notes thereto, appearing
elsewhere in this Prospectus. Each prospective investor is urged to read this
Prospectus in its entirety, including the Risk Factors. Summaries of documents
contained in this Prospectus are qualified in their entirety by reference to the
complete document.
THE COMPANY
American Professional Billiards, Inc. (the "Company") was organized under
the laws of the State of Nevada on May 18, 1995, to develop its proposed
business of administering, promoting and marketing amateur and professional
billiard tournaments and events and related activities worldwide. The Company is
a development stage corporation which to date has engaged primarily in the (i)
financing of its developmental activities, (ii) consummating the acquisition of
certain of the billiards related assets of World Wide Collectibles, Inc. and
(iii) negotiating and concluding the Exclusive Event Management Agreement with
the Professional Billiards Tour, Inc. See "Business." The Company's corporate
headquarters are located at 1700 East Desert Inn Road, Las Vegas, Nevada 89109,
and its telephone number is (702) 893-1277.
Unless otherwise indicated, all information in this Prospectus does not
give effect to the exercise of (a) the Underwriter's Over-Allotment Option, (b)
the Warrants offered hereby as a component of the Units, (c) the Underwriter's
Unit Purchase Option, and (d) any securities issued to the Private Placement
Selling Stockholders upon completion of this Offering. See "Business,"
"Underwriting," and "Description of Securities."
THE OFFERING
Shares of Common Stock
outstanding prior to the
Offering...................... 2,550,000
Securities Offered.............. 1,000,000 Units, each Unit consisting of one
share of Common Stock and one Warrant. Each
Warrant entitles the holder to purchase one
share of Common Stock at a price of $7.50
(150 percent of the Offering Price) per share
and is exercisable for a period of three
years commencing on the date hereof. See
"Description of Securities."
Shares of Common Stock to be
outstanding after the
Offering*..................... 4,650,000
Use of Proceeds................. The Company intends to apply the net proceeds
of this Offering for the Pro Billiards
Tour -- Event Management, Television
Production costs, Celebrity Tournaments, and
working capital and general corporate
purposes. See "Use of Proceeds."
Risk Factors.................... Investment in the securities involves an
extremely high degree of risk and should be
purchased only by investors who can afford
the loss of their entire investment. See
"Risk Factors" beginning on page 5.
Dilution........................ There will be immediate and substantial
dilution. See "Dilution."
Proposed NASDAQ SmallCap Market
Symbols....................... Common Stock:
Warrants:
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* Includes 1,100,000 shares of Common Stock issued to Private Placement Selling
Stockholders upon completion of this Offering. See "Business -- Private
Placement" and "Private Placement Selling Stockholders." Assumes no exercise
of (a) the Underwriter's Over-Allotment Option, (b) the Warrants offered
hereby as component of the Units, (c) the Underwriter's Unit Purchase Option
or (d) any Warrants issued to the Private Placement Selling Stockholders upon
consummation of this Offering. See "Description of Securities," "Underwriting"
and "Certain Transactions." If all of the options and warrants set forth in
clauses (a), (b), (c) and (d) above were exercised to their fullest extent,
the number of shares of Common Stock to be outstanding after the Offering
would be 7,250,000.
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SUMMARY FINANCIAL INFORMATION
The summary financial information set forth below is derived from the
financial statements appearing elsewhere in this Prospectus. Such information
should be read in conjunction with the financial statements, including the Notes
thereto and the Management's Discussion and Analysis of Financial Condition and
Results of Operations appearing elsewhere in this Prospectus.
STATEMENTS OF OPERATIONS DATA:
PERIOD FROM
INCEPTION SIX MONTHS
PERIOD ENDED TO ENDED
DECEMBER 31, JUNE 30, JUNE 30,
1995 1995 1996
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(UNAUDITED)
Revenues............................................. $ 1,370 $ 0 $ 20,948
Expenses............................................. $ 158,500 8 $ 552,840
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Net (loss)........................................... $ (157,130) $ (8) $ (531,892)
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Weighted Average shares of Common Stock.............. 4,750,000 4,750,000 4,750,000
Net (loss) per share................................. $ (0.03) $ (0.00) $ (0.11)
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BALANCE SHEETS DATA AS AT:
JUNE 30, 1996
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DECEMBER 31, AS
1995 ACTUAL ADJUSTED(1)
------------ ----------- -----------
Total assets......................................... $ 462,028 $ 626,819 $ 4,510,819
Working capital (deficit)............................ $ (494,590) $(1,003,190) $ 3,980,810
Total liabilities.................................... $ 498,608 $ 1,195,291 $ 95,291
Stockholders' equity (deficit)....................... $ (36,580) $ (568,472) $ 4,415,528
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(1) To give effect to the receipt of the net proceeds of this Offering,
including at the time of the completion of this Offering, shares of Common
Stock issuable upon conversion of the Private Placement Notes issued
pursuant to the Company's private placement in March 1996 through May 1996.
See "Business -- Private Placement."
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RISK FACTORS
An investment in the securities offered hereby involves an extremely high
degree of risk and immediate substantial dilution, including, but not limited
to, the risk factors described below. Prospective investors should carefully
consider the following risk factors inherent in and affecting the business of
the Company and this Offering before making an investment decision. The purchase
of the securities offered hereby should be considered only by persons who can
afford to sustain a total loss of their investment.
1. Development Stage Company. The Company is in its development stage.
Potential investors should be aware of the difficulties normally encountered by
development stage enterprises, and that as a result of the Company's lack of
operational history, there is no possibility to evaluate whether the Company
will prove to be successful or even viable. See "Business -- Proposed Plan of
Operation."
2. Continued Losses; Going Concern Doubts. Since its inception, the
Company has experienced and continues to experience significant losses, with
loss from its activities for the period ended December 31, 1995 of $157,130, and
for the six months ended June 30, 1996 of $531,892, which casts significant
doubt upon its ability to continue as a going concern. In the event the Company
does not complete this Offering, it is likely that the Company will be required
to cease its activities. If this Offering is completed, there can be no
assurance that the Company will remain operational. See "Management's Discussion
and Analysis of Financial Condition," "Results of Operations" and
"Business -- Proposed Plan of Operation" and Note 1 to Financial Statements.
3. Limited Prior Industry Business Experience; Need for Experienced
Personnel. Although Donald E. Mackey, a director and consultant to the Company,
and the Commissioner of the Pro Billiards Tour, Inc., has extensive billiards
industry experience (see "Management"), the Company's management which operates
its day to day activities currently consisting of Robert M. Stander, Chairman
and Chief Executive Officer, and three other individuals, have limited prior
business experience in the billiards industry. Consequently, the Company will
have to retain the services of additional employees and outside consultants to
build its operations. The Company is currently seeking to hire such individuals,
including an experienced employee to serve as its chief financial officer. There
can be no assurances, however, that the Company will be able to locate such
capable, qualified management personnel, or if such personnel can be located,
that the Company will be able to attract, afford or retain such personnel. The
Company's failure to obtain or to retain such management personnel could
materially and adversely affect the business of the Company. See "Business --
Operations to Date."
4. Need for Additional Financing. The Company expects that it will
continue to incur operating losses until at least the end of 1997. No assurances
can be given that the Company will ever become profitable. Such losses have been
and will continue to be principally the result of the absence of any significant
revenues and of the various costs associated with the Company's product
development and market research activities. The Company believes, however, that
the net proceeds from this Offering will enable it to fund its operations for
twelve months following the completion of this Offering. It is likely that the
Company will be required to seek additional capital to continue its operations
beyond that time, which may result in further dilution to the purchasers of the
securities offered hereby. The Company has no commitments for any future
funding, and there can be no assurances given that the Company will be able to
obtain additional capital in the future or if available, that it can be obtained
at commercially reasonable terms. The existence of the Warrants may complicate
future capital raising activities. If the Company is unable to obtain the
necessary capital, it will be required to significantly curtail its activities
or cease operations entirely. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations," "Use of Proceeds," and
"Business -- Proposed Plan of Operation."
5. Inability to Keep Pace with Competitor Innovation or Consumers' Changing
Preferences and Tastes. The sports and entertainment industry is subject to
rapid innovative change. There can be no assurances that the Company will be
able to keep pace with the innovative developments in the industry or to
implement such changes. Therefore, competitors may promote sports or media
products which may make the Company's proposed plan of operation obsolete. As a
result of the continual changing nature of consumer preferences and tastes, the
success of the Company is dependent upon its ability to change and adapt to such
changing tastes and preferences. Sports entertainment and media products are
often characterized by fads of limited life
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cycles. There can be no assurances that billiards related entertainment will not
be considered a fad and have a limited life. See "Business -- Proposed Plan of
Operation."
6. Competition. While the Company believes that there are currently no
other billiards related businesses seeking to implement a business plan similar
to that of the Company, there are a number of organizations, including, but not
limited to the American Pool-Players Association (APA), the World Pool Billiards
Association (WPA), the Professional CueSports Association (PCA), the Women's
Professional Billiards Association (WPBA), the Billiards Congress of America
(BCA), and The McDermott Tour, which have organized the billiards sport on a
professional and amateur level. At least one of these organizations has
organized an amateur tournament in a format comparable to that proposed by the
Company, which was televised by ESPN, a nationwide distributed sports TV
channel. Given the low level of organization presently existing in the billiards
sport, and considering that nearly all of the elements of the Company's proposed
plan of operation are neither protected by intellectual property rights, or
otherwise proprietary to the Company, any of the foregoing organizations could
develop a business plan similar to that of the Company. No assurances can be
given that such a potential competitor would not be able to align itself with
partners or others that are better financed and have greater resources than the
Company. The rise of any such potential competitor could have a materially
adverse impact on the Company's operation and financial condition, and might
force it to abandon or to significantly alter its proposed plan of operation. In
addition, the Company does not have any agreements with professional billiard
players, and no assurance can be given that they will ever join, or remain part
of the Professional Billiards Tour, Inc. (the "PBT"). See "Business -- Proposed
Plan of Operation," and "-- Competition."
7. Dependence on Suppliers. The Company does not currently, nor does it
plan in the future to, own or operate any manufacturing facilities. Hence, to
the extent the Company's business involves the licensing or sales of billiards
related merchandise, it will be wholly dependent on outside manufacturers for
such goods. As a development stage company, the Company has not yet entered into
any licensing contracts with manufacturers of apparel or billiards equipment.
Even if the Company should be able to contract with such manufacturers, it is
uncertain under what terms such arrangements will be available, if at all, and
if the licensing of billiards related merchandise will generate any licensing
fees. See "Business -- Operations to Date" and "-- Proposed Plan of Operation."
8. Adverse Impact of Negative Publicity. Companies operating in the
entertainment or leisure industry are extremely dependent on a positive public
relations image and sustained public interest. Adverse publicity resulting from
allegations of misconduct, scandal or other negative developments in the
billiards sport, including potential identification with the tobacco industry,
may materially and adversely affect the Company, irrespective of whether such
allegations are valid or are directed at the Company. See "Business --
Operations to Date."
9. Adverse Impact of Litigation. The Company may become subject to
litigation with investors, employees or unaffiliated parties. In addition, to
the extent the Company designs and licenses merchandise, it may become exposed
to product liability or trademark related litigation. There can be no assurances
given that the Company in the future will be able to withstand any such
liability or to purchase sufficient insurance to cover such liability. See
"Business."
10. Dependence on Professional Billiards Tour Endorsement. The Company's
ability to conduct its future business activities will be dependent to large
measure upon the continued endorsement of its operations by the PBT and on the
enforceability of certain proprietary rights acquired from World Wide
Collectibles, Inc., for which there can be no assurance. See
"Business -- Proposed Plan of Operation."
11. Reliance on Key Personnel. The Company's success will depend upon
Robert M. Stander, its Chairman and Chief Executive Officer, with whom the
Company anticipates entering into a three-year employment contract, and Donald
R. Mackey, who will serve at will as a director and a consultant. In the absence
of Messrs. Stander and Mackey, there can be no assurances that the Company will
remain operational. The Company does not maintain key man insurance, and may
never obtain any, on the lives of either Mr. Stander or Mr. Mackey. In addition,
Mr. Mackey will continue to serve as the Commissioner of the PBT, which may
result in a conflict, from time to time, with his duties as a director and
consultant of the
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Company. In particular, Mr. Mackey may be required to present business
opportunities to the PBT, which he might not be able to present to the Company.
Due to the highly specialized nature of its marketing concept, the Company will
be highly dependent on its ability to attract celebrities of the sports and
entertainment world as corporate spokespeople. The Company presently has no
contracts with celebrities. There can be no assurance that such personalities
will become associated with the Company or the PBT. See "Business -- Proposed
Plan of Operation" and "Management."
12. No Public Market for Securities, Possible Volatility of
Securities. Prior to this Offering, there has been no public market for the
securities of the Company, and no assurances can be given that an active public
market for the securities offered hereby will develop after the Offering, or if
one does develop, that it will be sustained. Therefore, purchasers of the
securities offered herein may be unable to resell the securities purchased
hereunder at or near their original offering prices or at any price. Even if an
active public market for the securities of the Company should develop, the
trading prices of the Common Stock and Warrants could be subject materially and
adversely to wide fluctuations in response to variations in operating results,
announcements of material business events by the Company or its competitors,
significant fluctuations in the entertainment and related industries and other
events or factors or to general stock market volatility and fluctuations in
price and volume. See "Description of Securities."
13. Shares Available for Resale. The Company presently has 2,550,000
shares of Common Stock issued and outstanding. All of these shares are
"restricted securities" as that term is defined in the Securities Act of 1933,
as amended (the "Act"), and in the future may be sold only in compliance with
Securities and Exchange Commission (the "Commission") Rule 144 promulgated under
the Act. Of those shares, 2,000,000 will become available for sale in October
1997, and 550,000 will become available for sale in May 1998. Notwithstanding
the foregoing, all of the officers, directors and five percent stockholders of
the Company and their affiliates have agreed not to sell any of their shares of
Common Stock for a period of one year after the date of this Prospectus, without
prior consent of the Representative. In general, under Rule 144, a person (or
group of persons whose shares are aggregated) who has beneficially owned
restricted shares of the Company for at least two years, including any person
who may be deemed to be an "affiliate" of the Company (as the term "affiliate"
is defined in Rule 144 of the Act), is entitled to sell in customary brokerage
transactions during the periods when certain information regarding the Company
is publicly available, within any three-month period, an amount of shares that
does not exceed the greater of (i) the average weekly trading volume in the
Company's shares during the four calendar weeks preceding such sale, or (ii) 1%
of the total shares then outstanding. A person who has not been an "affiliate"
of the Company for the three months prior to a sale and who has held restricted
shares for at least three years would be entitled to sell such shares without
restriction. Sales of the Company's Common Stock by present stockholders
pursuant to Rule 144 or otherwise may, in the future, have a depressive effect
on the price of the Common Stock. See "Description of Securities" and "Shares
Eligible for Future Sale."
14. Sales by Private Placement Selling Stockholders. The Registration
Statement, of which this Prospectus forms a part, includes shares of Common
Stock and Warrants owned by those stockholders who will receive their shares
automatically upon the consummation of the Offering contemplated hereby (the
"Private Placement Selling Stockholders"). See "Business -- Private Placement,"
and "Private Placement Selling Stockholders". Although the costs incurred with
the registration of those shares and the securities being registered for future
sale by the Private Placement Selling Stockholders, which are not subject to any
limits, are to be borne by the Company, the Private Placement Selling
Stockholders, and not the Company, will receive the proceeds from the sale of
their respective securities, thus receiving a benefit from the Company. The
securities owned by the Private Placement Selling Stockholders may be sold 180
days after the date of this Prospectus, unless the Representative permits
earlier sales. Sales of such securities or the potential of such sales may have
an adverse effect on the market prices of the securities being offered hereby,
should a public market for such securities develop, of which there can be no
assurance. See "Description of Securities" and "Underwriting."
15. Market Overhang From Warrants. Immediately after this Offering,
assuming full exercise of the Underwriter's Over-Allotment Option, and the
exercise of the Underwriter's Unit Purchase Option, the Company will have
outstanding an aggregate of 2,350,000 Warrants, including the Warrants in the
Units offered hereby and the Warrants issued in connection with the automatic
conversion of the Private Placement
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Notes. To the extent that such Warrants are exercised, dilution to the interests
of the Company's stockholders may occur. Moreover, the terms upon which the
Company will be able to obtain additional equity capital may be adversely
affected since the holders of the outstanding Warrants can be expected to
exercise them, to the extent they are able to, at a time when the Company would,
in all likelihood, be able to obtain any needed capital on terms more favorable
to the Company than those provided in the Warrants. Furthermore, the sale of
shares of Common Stock held by or issuable to the Warrant holders, or merely the
potential of such sales, could have an adverse effect on the market price of the
Company's Common Stock. See "Description of Securities."
16. Current Prospectus and State "Blue Sky" Registration Required to
Exercise the Warrants. Purchasers of the Warrants will have the right to
exercise the Warrants to purchase shares of Common Stock only if such shares are
so registered or qualified. The Company has undertaken to maintain a
registration statement covering this Prospectus with the Commission which will
permit the purchase and sale of the Common Stock underlying the Warrants, but
there can be no assurance that the Company will be able to do so. Although the
Company intends to seek to qualify the shares of Common Stock underlying the
Warrants for sale in those states in which the Units are to be offered, no
assurance can be given that such qualification will occur. The Warrants may be
deprived of any value if a current registration statement and prospectus
covering the shares issuable upon the exercise thereof is not kept effective or
if such underlying shares are not, or cannot be, registered in the applicable
states. See "Description of Securities."
17. Potential Adverse Effect of Redemption of Warrants. The Warrants may
be redeemed by the Company, at a price of $.10 per Warrant, at any time they are
exercisable, subject to 30 days prior written notice to the holders thereof,
provided that the last sale price of the Common Stock has been at least 100% of
the effective exercise price of the Warrants on each of the 20 consecutive
trading days prior to the day on which notice is given, provided that such
Warrants are covered by a registration statement in effect at the time at which
notice of redemption is given. Notice of the redemption of the Warrants could
force the holders thereof to exercise the Warrants and pay the exercise price at
a time when it may be disadvantageous for them to do so, and to sell the
Warrants at the current market price when they might otherwise wish to hold the
Warrants, or to accept the redemption price which is likely to be substantially
less than the market value of the Warrants at the time of redemption. See
"Description of Securities -- Redeemable Warrants."
18. Broad Discretion in Allocation of Proceeds. The Company's management
will have broad discretion in the use of the proceeds of this Offering. See "Use
of Proceeds."
19. No Dividends. The Company has not paid any cash dividends on the
common stock and does not expect to pay any cash or other dividends in the
foreseeable future. See "Dividend Policy."
20. Underwriter's Possible Ability to Dominate or Influence the Market for
the Securities. The Representative may act in a brokerage capacity with respect
to the purchase or sale of the Common Stock or Warrants in the over-the-counter
market where each will trade. Unless granted an exemption by the Commission from
its Rule 10b-6 promulgated under the Securities Exchange Act of 1934 (the "1934
Act"), the Representative and any soliciting broker-dealer will be prohibited
from actively engaging in any market making activity or soliciting brokerage
activities with regard to the Company's securities during a specified period
prior to the commencement of any such solicitation and ending on the later of
the termination of such solicitation activity or the termination (by waiver or
otherwise) of any right that the Representative and soliciting broker-dealers
may have to receive a fee for soliciting the exercise of the Warrants. As a
result, the Representative and soliciting broker-dealers may be unable to
continue to make a market for the Company's securities during certain periods
when the Warrants are exercisable. Such a limitation, while in effect, could
impair the liquidity and market price of these securities. See "Underwriting."
21. Immediate Substantial Dilution. The purchasers of the Units offered
hereby will incur immediate substantial dilution from their purchase price in
the adjusted pro forma net tangible book value of each share of Common Stock of
approximately $4.14 per share or approximately 83% of their initial investment
as of June 30, 1996, assuming the entire Offering Price is allocated to the
Common Stock. Accordingly, if the Company's future operations are unsuccessful,
the persons who purchased the Units offered hereby will sustain the principal
losses. The dilution, in part, is due to the fact that the Company will only
receive
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$3,950,000 ($4,602,500 if the Underwriter's Over-Allotment Option granted by the
Company is exercised in full) of the net proceeds of the Offering, after the
deduction of underwriting discounts and the Company's payment of the expenses of
the Offering. See "Dilution."
22. Possible Future Dilution. The Company has authorized capital stock of
20,000,000 shares of Common Stock par value $.001 per share. Inasmuch as the
Company may issue authorized but unissued shares of Common Stock without
shareholder approval, there may be further dilution of the shareholders'
interests. The Company may sell equity securities in a future public offering or
private transaction to raise additional capital, which offering or transaction
may dilute the interest of potential investors in this Offering. See
"Description of Securities."
23. Indemnification of Officers and Directors. As permitted under Nevada
law, the Company's certificate of incorporation provides for the indemnification
and elimination of the personal liability of its directors to the Company or any
of its shareholders for damages for breaches of their fiduciary duties as
directors. As a result of the inclusion of such provision, shareholders may be
unable to recover damages against directors for actions taken by them which
constitute negligence or gross negligence or that are in violation of their
fiduciary duties. See "Management."
24. Arbitrary Offering Price of Units and Exercise Price of Warrants. The
Offering Price of the Units, and the exercise price of the Warrants, have been
determined by negotiations between the Company and the Representative on an
arbitrary basis and bear no direct relationship to the assets, earnings or any
other recognized criteria of value. Factors considered in determining such
price, in addition to prevailing market conditions, included the history of and
the business prospects for the Company and an assessment of the net worth and
financial condition of the Company, as well as such other factors as were deemed
relevant, including an evaluation of management and the general economic
climate. Prior to this Offering, there has been no public market for any of the
Company's securities. See "Dilution" and "Underwriting."
25. Possible Delisting of Securities from NASDAQ System; Risks of Low
Priced Stocks. The Commission has approved rules imposing more stringent
criteria for listing of the securities on the NASDAQ SmallCap Market ("NASDAQ").
In order to continue to be listed on NASDAQ, the Company would be required to
maintain (i) total assets of at least $2,000,000, (ii) total shareholders'
equity of $1,000,000, (iii) a minimum bid price of $1.00, (iv) one market maker,
(v) 300 shareholders, (vi) at least 100,000 shares in the public float and (vii)
a minimum market value for the public float of $200,000. In the event the
Company's securities are delisted from NASDAQ, trading, if any, in the
securities would thereafter be conducted in the over-the-counter market on the
OTC Bulletin Board or the National Quotation Bureau ("Pink Sheets").
Consequently, an investor may find it more difficult to dispose of, or to obtain
accurate quotations as to the price of, the Company's securities. The Company
has applied for a listing on NASDAQ of the securities being offered hereby.
Quotation on NASDAQ does not imply that a meaningful, sustained market for the
Company's securities will develop or if developed that it will be sustained for
any period of time. See "Description of Securities."
26. Penny Stock Regulation. Broker/dealer practices in connection with
transactions in "penny stocks" are regulated by certain penny stock rules
adopted by the Commission. Penny stocks generally are equity securities with a
price of less than $5.00 (other than securities registered on certain national
securities exchanges or quoted on NASDAQ provided that current price and volume
information with respect to transactions in such securities is provided by the
exchange or system). The penny stock rules require a broker/dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document that provides information about penny
stocks and the risks in the penny stock market. The broker/dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker/dealer and its salesperson in connection with the
transactions, and monthly account statements showing the market value of each
penny stock held in the customer's account. In addition, the penny stock rules
generally require that prior to a transaction in a penny stock the broker/dealer
must make a special written determination that the penny stock is a suitable
investment for the purchaser and receive the purchaser's written agreement to
the transaction. These disclosure requirements may have the effect of reducing
the level of trading activity in the secondary market for a stock that becomes
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subject to the penny stock rules. If the Company's securities become subject to
the penny stock rules, investors in this Offering may find it more difficult to
sell their securities. See "Description of Securities."
27. Underwriter's Unit Purchase Option. The Representative will acquire,
for nominal consideration, an option (the "Underwriter's Unit Purchase Option")
to purchase up to 100,000 Units, at an exercise price of $6.00 per Unit. The
Underwriter's Unit Purchase Option is exercisable in whole or in part for a
period of four years commencing one year from the date of this Prospectus. The
Units and the underlying securities contained in the Underwriter's Unit Purchase
Option are identical to the Units and the underlying securities being offered
hereby. The Company has agreed to register the Underwriter's Unit Purchase
Option and the underlying securities at its expense, one time only, upon request
of the holders of a majority of the Underwriter's Unit Purchase Options and of
the underlying securities. In addition, the Company has agreed, for a period of
four years following the expiration of a twelve-month period after the effective
date of this Prospectus, to give advance notice to the holders of the
Underwriter's Unit Purchase Option or underlying Warrants or shares of Common
Stock of its intention to file a registration statement, and in such case the
holders of the Underwriter's Unit Purchase Option and underlying securities
shall have the right to require the Company to include the Underwriter's Unit
Purchase Option and underlying securities in such registration statement at the
Company's expense. The Underwriter's Unit Purchase Option can be expected to be
exercised at a time when the Company would, in all likelihood, be able to obtain
equity capital by the sale of securities on terms more favorable than those
provided by the Underwriter's Unit Purchase Option, whereby these obligations
could be a hindrance to any future financing. Furthermore, in the event the
Representative exercises its registration rights to effect the distribution of
the Common Stock or Warrants underlying the Underwriter's Unit Purchase Option,
the Representative and any holder of such Warrants who is a market maker in the
Company's securities, prior to such distribution, will be unable to make a
market in the Company's securities for up to a specified period prior to the
commencement of such distribution and until such distribution is completed. If
the Representative ceases making a market, the market and market prices for the
Company's securities may be adversely affected, and the holders thereof may be
unable to sell such securities. See "Description of Securities."
28. Seasonality. The Company believes that its business may be considered
seasonal with a large portion of its revenues and profits being derived during
the fall and winter months. The Company believes that outdoor amusement centers
and sports activities will take business away from the indoor billiards events
during the spring and summer months resulting in a decline in revenues. The
seasonality of its business may cause the Company severe cash flow problems from
time to time. See "Business -- Proposed Plan of Operation."
DIVIDEND POLICY
The Company has not paid dividends on its Common Stock and intends to
retain earnings, if any, for use in its activities. Payment of dividends in the
future will be wholly dependent upon the Company's earnings, financial
condition, capital requirements and other factors deemed relevant by the Board
of Directors, which has the discretion to declare dividends out of the funds
legally available therefor. It is not likely that cash dividends will be paid in
the foreseeable future or at all. Accordingly, investors needing immediate or
future income by way of dividends should not purchase the securities offered
hereby.
DILUTION
The difference between the Offering Price per share and the adjusted pro
forma net tangible book value per share after this Offering constitutes the
dilution per share of Common Stock to the new investors. The adjusted pro forma
net tangible book value per share is determined by dividing the adjusted pro
forma net tangible book value (total tangible asset less total liabilities) by
the number of outstanding shares of Common Stock.
As of June 30, 1996, the Company had total assets of $626,819 and net
tangible deficit (total assets of $626,819 less intangible assets of $531,500
and less $1,195,291 total liabilities) of $1,099,972. As of June 30,
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1996, the Company had 2,550,000 shares of Common Stock outstanding, or net
tangible book value (deficit) per share of ($0.43).
After giving effect to the estimated $3,950,000 net proceeds from the sale
of the Units offered hereby, (without giving effect to the Underwriter's
Over-Allotment Option) and the automatic conversion of $1,100,000 of Private
Placement Notes into Units, the adjusted pro forma net tangible book value of
the Company at June 30, 1996 would have been $3,990,028. The number of shares of
the Company's Common Stock outstanding will be increased from 2,550,000 by the
1,000,000 Units offered hereby, and upon the 1,100,000 Units issued upon the
automatic conversion of the Private Placement Notes for a total of 4,650,000
shares outstanding, or an adjusted pro forma net tangible book value per share
of $0.86. As a result, there will be an immediate substantial increase in the
adjusted pro forma net tangible book value per share of $1.29 to existing
shareholders and an immediate dilution to new investors of $4.14 per share.
"Dilution" is determined by subtracting the adjusted pro forma net tangible book
value per share after the Offering from the Offering Price to investors. The
following table illustrates this dilution:
Offering Price per Unit(1)................................................. $ 5.00
Adjusted pro forma net tangible book value (deficit) per share as at June
30, 1996................................................................. $(0.43)
Increase in net tangible book value per share attributable to public
investors................................................................ 1.29
Adjusted pro forma net tangible book value per share after the Offering.... 0.86
------
Dilution per share to public investors(2).................................. 4.14
======
- ---------------
(1) Offering Price before deduction of Underwriters' discounts and before
deduction of estimated expenses of the Offering. This table assumes that the
entire $5.00 Offering Price of the Unit is attributable to the one share of
Common Stock included in the Unit.
(2) The dilution per share of Common Stock expressed as a percentage of the
Offering Price is 83%. Assumes no exercise of the Warrants (including the
Warrants issued as a component of the Units to Private Placement Selling
Stockholders) or the Underwriter's Unit Purchase Option.
The exercise of the Underwriter's Over-Allotment Option to its fullest
extent would increase the number of shares of Common Stock outstanding by
150,000 to 4,800,000, would increase the Company's net tangible assets by
$652,500 to $4,642,528 and would increase the Company's adjusted pro forma net
tangible book value per share by $0.11 to $0.97, which would reduce the dilution
per share to public investors by $0.11 to $4.03 (2.6%).
The following table summarizes on an unaudited pro forma basis as of June
30, 1996, the number and percentage of shares of Common Stock purchased from the
Company, the amount and percentage of consideration and the average
consideration per share given by existing shareholders and by public investors
pursuant to this Offering. See "Business" and "Certain Transactions."
TOTAL
SHARES PURCHASED CONSIDERATION PAID AVERAGE
------------------- -------------------- CONSIDERATION
NUMBER PERCENT AMOUNT PERCENT PER SHARE
--------- ------- ---------- ------- -------------
Existing Shareholders...................... 2,550,000 54.8% $ 120,550 1.9% $0.05
Private Placement Selling Stockholders..... 1,100,000 23.7% 1,100,000 17.7% $1.00
Public Investors........................... 1,000,000 21.5% 5,000,000 80.4% $5.00
------- ------ ------- ------ -------
4,650,000 100.0% $6,220,550 100.0%
======= ====== ======= ======
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USE OF PROCEEDS
The net proceeds to the Company from the sale of the securities offered
hereby after deducting underwriting discounts and estimated expenses of this
Offering of $1,050,000 is $3,950,000 ($4,602,500 if the Underwriter's
Over-Allotment Option is exercised in full). The Company expects to use the
proceeds of this Offering substantially as follows:
APPROXIMATE
APPROXIMATE PERCENTAGE
APPLICATION OF PROCEEDS DOLLAR AMOUNT OF NET PROCEEDS
- -------------------------------------------------------------- ------------- ---------------
Pro Billiards Tour -- Event Management........................ $ 1,500,000 38.0%
Television Production Costs................................... $ 750,000 19.0%
WTB Celebrity Tournaments..................................... $ 300,000 7.6%
Repayment of Demand Promissory Notes(1)....................... $ 297,500 7.5%
Working Capital and Other General Corporate Purposes.......... $ 1,102,500 27.9%
------------- ---------------
Total............................................... $ 3,950,000 100.0%
=========== ===========
- ---------------
(1) See "Description of Securities -- Promissory Notes."
The amounts set forth above are the Company's best estimates based upon its
present plans and certain assumptions regarding general economic and industry
conditions and the Company's anticipated future revenue and expenditures, and
merely indicate the proposed use of proceeds. Actual expenditures may vary
substantially from these estimates depending upon many factors, such as the
fiscal health of the Company, economic conditions, the success, if any, of the
Company's business and operations and the availability of other financing
arrangements, such as lines of credit and loans. Accordingly, stockholders of
the Company must rely upon the judgment and discretion of management with regard
to the allocation and use of the net proceeds of this Offering.
To the extent that the Underwriter's Over-Allotment Option or the Warrants
are exercised, any proceeds received from such exercise will be used for working
capital and general corporate purposes of the Company.
Pending use of the proceeds from this Offering as set forth above, the
Company may invest all or a portion of such proceeds in short-term bank
certificates of deposit, U.S. Government obligations, money market investments
and short-term investment grade securities. The Company does not intend to
register under the Investment Company Act of 1940 and, therefore, will be
limited to the types of investments which may temporarily be made with the
proceeds of this Offering. Interest earned on these investments will be used to
augment working capital.
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CAPITALIZATION
The following table sets forth the notes payable and capitalization of the
Company as of June 30, 1996, and on a pro forma basis as adjusted to give effect
to the sale of the Units offered herein and the anticipated application of the
estimated net proceeds of such sale:
JUNE 30, 1996
--------------------------------------
PRO FORMA
ACTUAL AS ADJUSTED (1)
---------- ---------------------
Notes Payable.............................................. $1,100,000 $ 0
=========== =========
Stockholders' Equity (Deficit):
Common Stock, par value $0.001; 20,000,000 shares
authorized; 2,550,000 shares issued and outstanding
actual; 4,650,000 shares issued and outstanding pro
forma as adjusted..................................... $ 2,550 $ 4,650
Additional paid-in capital............................... $ 118,000 $ 5,165,900
Deficit accumulated during the development stage......... $ (689,022) $ (755,022)
Total Stockholders' equity (deficit)....................... $ (568,472) $ 4,415,528
----------- ---------
Total Capitalization....................................... $ (568,472) $ 4,415,528
=========== =========
- ---------------
(1) Assumes the issuance of 1,100,000 shares of common stock upon the conversion
of $1,100,000 Private Placement Notes. See "Business -- Private Placement"
and "Underwriting -- Private Placement." Includes the sale of 1,000,000
shares of Common Stock as part of the 1,000,000 Units offered herein and the
application of the estimated net offering proceeds as set forth in "Use of
Proceeds." Does not include securities issuable upon the exercise (i) of the
Underwriter's Over-Allotment Option, (ii) the Warrants or (iii) the
Underwriter's Unit Purchase Option. Following June 30, 1996 and through
September 30, 1996, the Company issued and sold an aggregate of $297,500
principal amount of unsecured demand promissory notes to four individuals,
bearing interest at eight percent per annum. These notes will be repaid from
the proceeds of this Offering. See "Use of Proceeds" and "Description of
Securities -- Promissory Notes".
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SELECTED FINANCIAL DATA
The selected financial data presented below was derived from the financial
statements included elsewhere in this Prospectus. This selected financial data
should be read in conjunction with the financial statements of the Company and
the notes thereto and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" contained elsewhere in this Prospectus.
STATEMENTS OF OPERATIONS DATA:
PERIOD FROM SIX MONTHS
PERIOD ENDED INCEPTION TO ENDED
DECEMBER 31, JUNE 30, JUNE 30,
1995 1995 1996
------------ ------------- -----------
(UNAUDITED)
Revenues............................. $ 1,370 $ 0 $ 20,948
Expenses............................. $ 158,500 $ 8 $ 552,840
---------- ---------- ----------
Net (loss)........................... $ (157,130) $ (8) $ (531,892)
========== ========== ==========
Weighted Average shares of Common
Stock.............................. 4,750,000 4,750,000 4,750,000
Net (loss) per share................. $ (0.03) $ (0.00) $ (0.11)
---------- ---------- ----------
BALANCE SHEETS DATA AS AT:
JUNE 30, 1996
-----------------------------
DECEMBER 31, AS
1995 ACTUAL ADJUSTED(1)
------------ ------------- -----------
Total assets......................... $ 462,028 $ 626,819 $ 4,510,819
Working capital (deficit)............ $ (494,590) $ (1,003,190) $ 3,980,810
Total liabilities.................... $ 498,608 $ 1,195,291 $ 95,291
Stockholders' equity (deficit)....... $ (36,580) $ (568,472) $ 4,415,528
- ---------------
(1) To give effect to the receipt of the net proceeds of this Offering,
including at the time of the completion of this Offering, shares of Common
Stock issuable upon conversion of the Private Placement Notes issued in the
Company's private placement in March 1996 through May 1996. See
"Business -- Operations to Date" and "Business -- Private Placement."
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with
the financial statements and notes thereto appearing elsewhere in this
Prospectus.
PLAN OF OPERATION
The Company is a development stage company. Since its inception in May
1995, the Company's efforts have been principally devoted to raising capital.
From its inception through June 30, 1996, the Company has sustained cumulative
losses of $689,022. These losses have resulted from expenditures in connection
with product development, market research, and the acquisition of certain
assets, and general and administrative activities, including legal and
professional activities.
The Company expects to continue to incur substantial costs in the future
due to ongoing product development, the organization of an event management
organization and market research activities. The Company also expects that
general and administrative costs necessary to support its product and event
development activities, market research and development and the expansion of its
workforce in connection with the creation of a marketing and event management
organization, will increase in the future. Accordingly, the Company expects to
incur increasing losses for the foreseeable future. There can be no assurance
that the Company will be able to cease experiencing losses.
LIQUIDITY AND CAPITAL RESOURCES
The Company has funded its activities to date through loans and a private
placement of convertible debt securities. As of June 30, 1996, the Company had a
working capital deficit of $1,003,190.
In May 1996, the Company completed a private placement which consisted of
$1,100,000 principal amount of Private Placement Notes bearing interest at an
annual rate of ten percent (the "Private Placement"). See "Business -- Private
Placement." The net proceeds of the Private Placement, which were approximately
$1,012,000 (net of $88,000 in commissions), have been utilized by the Company
for working capital purposes. See "Capitalization."
During the twelve month period following the Offering, the Company intends
to pay approximately $350,000 in compensation to its current or future executive
officers. See "Management -- Employment Agreements."
ACCOUNTANTS' GOING CONCERN REPORT
The report of the independent auditors on the Company's financial
statements as of December 31, 1995 and June 30, 1996 contains an explanatory
paragraph regarding the Company's development stage status and recurring losses
from operations, which raise substantial doubts about the ability of the Company
to continue as a going concern.
The Company has had no significant revenue and has incurred an accumulated
deficit through June 30, 1996 of $689,022. However, the Company believes that
upon the completion of the Offering and the receipt of the proceeds therefrom,
it will have the necessary liquidity and capital resources to sustain planned
operations for the twelve month period following the Offering. In the event that
the Company's internal estimates relating to its planned expenditures prove
materially inaccurate, the Company may be required to reallocate funds among its
planned activities or curtail certain planned expenditures. In any event, the
Company anticipates that it will require substantial additional financing after
such time. There can be no assurance as to the availability or terms of any
required additional financing, when and if needed. In the event that the Company
fails to raise any funds it requires, it may be necessary for the Company to
significantly curtail its activities or cease operations entirely. See "Use of
Proceeds", "Business -- Proposed Plan of Operation" and "Risk Factors."
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At June 30, 1996, the Company had net operating loss carryforwards ("NOLs")
for federal income tax purposes of approximately $145,000. In addition, the
Company has approximately $420,000 of capitalized start-up costs, which will be
amortized to expense for income tax purposes over 5 years. The net operating
loss carryforwards expire in 2010 and 2011. The Company's ability to use its
NOLs to offset future income may be subject to restrictions under the Internal
Revenue Code of 1986, as amended (the "Code"). These restrictions could limit
the Company's future use of its NOLs if there are certain stock ownership
changes described in the Code, which may include the changes of ownership
related to the Offering. See Note 6 of Notes to Financial Statements.
SEASONALITY
The Company believes that its business may be considered seasonal with a
large portion of its revenues and profits being derived during the fall and
winter months. The Company believes that outdoor amusement centers and sports
activities will take business away from the indoor billiards events during the
spring and summer months, resulting in a decline in revenues. The seasonality of
its business may cause the Company severe cash flow problems from time to time.
See "Business -- Proposed Plan of Operation."
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BUSINESS
GENERAL BACKGROUND
American Professional Billiards, Inc. (the "Company") was organized under
the laws of the State of Nevada on May 18, 1995, in order to develop its
proposed business of administering, promoting and marketing amateur and
professional billiard tournaments and events and related activities worldwide.
The Company is a development stage corporation which to date has engaged
primarily in the (i) financing of its developmental activities, (ii)
consummating the acquisition of certain of the billiards related assets of World
Wide Collectibles, Inc. ("WWC") and (iii) negotiating and concluding the
Exclusive Event Management Agreement with the Professional Billiards Tour, Inc.
(the "PBT"). WWC and the PBT are not affiliated with the Company, although the
Company, WWC and PBT have certain common officers and directors.
WWC is a Nevada corporation. At the time the Company acquired certain of
the billiards related assets of WWC, WWC was engaged in the collectibles
industry, primarily relating to billiards and the authentication process
regarding billiards and other collectibles. In October 1995, WWC acquired World
Team Billiards, Inc. ("WTB"). The acquisition by the Company of certain WWC
intangible assets was consummated in October 1995. Certain of the billiards
related intangibles that the Company has acquired from WWC were included in the
assets acquired by WWC from WTB. John P. O'Meara, director, secretary and
treasurer of the Company, is also a director of WWC. In addition, Donald E.
Mackey, director of and consultant to the Company, and Commissioner of the PBT,
was also a director and shareholder of WTB. Furthermore, Nicky D. Varner, a
director of the Company, was also a director and shareholder of WTB. No
operations of WWC were acquired by the Company in this transaction. See "Certain
Transactions".
PBT is a non-profit Delaware corporation, which organizes and promotes
men's professional billiards tournaments both nationwide and worldwide. The PBT
sanctions the players who may participate in the official prize money events of
the PBT. Pursuant to the exclusive Management Agreement between the Company and
the PBT, the Company and the PBT have articulated certain rights and obligations
that each shall have in the operation, promotion, marketing and conduct of the
PBT sanctioned events. Messrs. Mackey and Varner are directors of the PBT. See
"Certain Transactions".
OPERATIONS TO DATE
On October 3, 1995, the Company acquired certain intangible assets of WWC,
a significant shareholder of the Company. The assets acquired by the Company
include the sanctions (the "Sanctions") from the PBT described below, the name
"World Team Billiards" and certain other related assets. The purchase price for
such assets was $340,000 secured by a promissory note (the "WWC Note") and two
million shares of Common Stock of the Company. The WWC Note was paid from part
of the proceeds of the Private Placement.
The Sanctions which the Company acquired from WWC entitle the Company to
use exclusively the PBT logo in all advertising, marketing materials, TV
commercials and all official apparel and equipment. The Sanctions also grant the
Company the exclusive right to promote and market the WTB professional team
format, and any professional team tournament which uses the WTB professional
team format. The WTB professional team format incorporates professional team
competition and utilizes a set period of time within which any competition must
take place, a set period of time in which each shot must be taken, a set line-up
of players, participation by a minimum of two players per team up to a maximum
of 5 players per team, and other elements and variations of the rules of play
for 9-Ball competition. The Sanctions also provide that any national billiards
league using players drawn from the PBT will use the WTB team format. See
"Business -- Proposed Plan of Operation".
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On June 3, 1996, the Company entered into an Exclusive Event Management
Agreement (the "Management Agreement") with the PBT which the Company believes
to be the governing body of men's professional billiards. Under the terms of the
Management Agreement, the Company is required to promote, market and sponsor
between twelve and fifteen billiards tournaments through January 1997, for the
1996 tournament schedule. As part of its responsibilities, the Company is
required to prepare media kits, player photographs and updated biographies,
organize television coverage, and provide overall supervision and coordination
of the various sponsored tournaments and events. In addition, the Company is
required to provide prize money for tournament contestants, event staff and
promotional and related activities. Under the Management Agreement, the PBT is
required to provide first class professional players, the related rules of entry
and other requirements of a tournament such as referees, timekeepers and
statisticians, and the Company is required to bear such costs. The PBT will also
have influence on the pricing of the tickets and arrangements for tour sponsors.
The Company believes that, as a result of the Management Agreement, the PBT will
be able to engage top ranking professional billiards players of national acclaim
in sufficient numbers to field the billiards tournaments provided for in the
Management Agreement.
All revenues derived from ticket sales, sponsorship, television rights,
fees and commercial sales and certain other revenues from the tournaments and
events will be applied first to reimburse the Company for the actual amounts
invested (the "Invested Amount") by it to produce, market, promote and televise
a particular event. If the revenues exceed the invested amount, the Company will
also be entitled to receive an amount equal to one hundred (100%) percent (the
"Second Return") of the Invested Amount in respect of such tournament or event
after it recoups the Invested Amount. After the Company recoups the Invested
Amount and the Second Return, all remaining revenues derived from such
tournament or event will be distributed between the Company and the PBT on a
50-50 basis. The term of the Management Agreement is five (5) years and the
Company has the first right of refusal to extend the contract for an additional
five (5) years. There can be no assurances that the Company will be successful
in promoting and marketing any of these anticipated tournaments or events, and
even if successful in promoting and marketing any or all of such tournaments or
events, that it will receive any revenues or revenues in excess of the expense
it incurred in promoting or sponsoring such tournament or event.
The Company and the PBT have jointly operated and promoted several PBT
sanctioned tournaments, pursuant to the Management Agreement, including the
"Sands Regency XXIII" held from June 4, through June 9, 1996 at the Sands
Regency Hotel and Resort in Reno, Nevada with guaranteed total prize money of
$50,000; "The California Clash" held from June 25 through June 30, 1996 at the
Town & Country Inn in San Diego, California, with guaranteed total prize money
of $50,000; the "World 8-Ball Championship" held from August 4 through August
10, 1996 at the Riviera Hotel and Casino in Las Vegas, Nevada, with guaranteed
prize money of $100,000; and the "Gran Prix de Puerto Rico", held from August 28
through September 2, 1996 at the El Conquistador Resort in Fajardo, Puerto Rico,
with guaranteed total prize money of $100,000. These tournaments were part of
the PBT's 1996 Camel Pro Billiards Series, pursuant to which Camel has
established a total prize of $250,000 to be divided among the top 16 PBT players
for the year ending 1996 based upon each such player's ranking for such year.
R.J. Reynolds & Co., through its Camel Brand, is the title sponsor of the PBT
1996 Camel Pro Billiards Series.
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The following sets forth the remaining schedule for the PBT 1996 Camel Pro
Billiards Series:
PRIZE
DATE EVENT MONEY
September 17-22 FLORIDA FLARE UP III $100,000
Convention Center, Fort Lauderdale, FL
October 8-13 1996 CAMEL WORLD 9-BALL CHAMPIONSHIP $150,000
Adams Mark Charlotte, Charlotte, NC
October 15-20 SOUTHERN 9-BALL CHAMPIONSHIP $100,000
Superdome, New Orleans, LA
October 22-27 THE PLAYERS TRADITION $100,000
Nashville Convention Center, Nashville,
TN
November 5-10 THE WESTERN OPEN $100,000
Holiday Inn, Denver, CO
November 13-17 ATLANTA PRO 9-BALL CLASSIC $100,000
Crowne Plaza Revinia, Atlanta, GA
December 4-8 THE NORTHERN PRO 9-BALL OPEN $100,000
Seasons Resort, Great Gorge, NJ
December 10-15 1996 PRO TOUR CHAMPIONSHIP $150,000
Convention Center, Providence, RI
January 7-12, 1997 COMMERCE CASINO LEGENDS OF 9-BALL $100,000
Commerce Casino, Los Angeles, CA
The PBT has entered into an agreement with AMF to supply the tables and
lighting for these PBT events.
The PBT has procured for the PBT 1996 Camel Pro Billiards Series a contract
with the Prime Cable Network (the "Camel/Prime Contract") to broadcast a minimum
of twenty-eight hours (two hours per event) of television coverage of the final
match of fourteen PBT sanctioned tournaments commencing with the above mentioned
"World 8-Ball Championships" at the Riviera Hotel and Casino in Las Vegas,
Nevada. Pursuant to the Camel/Prime Contract, the PBT has obtained the right to
sell for its account eight minutes of commercial time for each hour of cable
broadcast time. The Company and the PBT will share any revenues derived from
such sales of commercial time pursuant to the Management Agreement. The Company
assisted the PBT in obtaining the Camel/Prime Contract. The Company anticipates
that the first cablecast of a PBT Tournament pursuant to the Camel/Prime
Contract will take place in November, 1996.
PRIVATE PLACEMENT
In May, 1996, the Company completed the Private Placement of $1,100,000
principal amount of non-negotiable ten percent convertible subordinated Notes
(the "Private Placement Notes"). Unless earlier converted into equity
securities, the principal of the Private Placement Notes, together with the
accrued and unpaid interest thereon, will be due and payable at the close of
business December 31, 1996. The Private Placement Notes will be automatically
converted into Units as defined herein upon the occurrence of either of the
following events: (i) the completion of a public offering of the Company's
common stock (including this Offering) or (ii) the Company acquiring, merging or
entering into any other combination with a publicly held Company which results
in the Company being deemed a public company under the federal securities laws.
The Private Placement Notes will convert into Units at the rate of one (1) unit
for each dollar ($1.00) of principal amount of Private Placement Notes. The
proceeds of the Private Placement were used to pay the WWC Note and for general
working capital purposes. See "Private Placement Selling Stockholders."
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PROPOSED PLAN OF OPERATION
Formation of National Billiards League. The Company's management intends
to conduct other billiards activities in addition to performing its obligations
under the Management Agreement. The Company's management anticipates
establishing a nationwide program of amateur billiards competitions set in local
billiards centers, wherein the Company anticipates that it will be able to
charge certain fees for team and individual memberships. In addition, the
Company's management anticipates establishing a professional billiards league
(the "U.S. Billiards League") with team competition, using the WTB format for
team play, on a nationwide and worldwide basis, similar in concept, but smaller
in scale, to the National Football League, National Hockey League and Major
League Baseball.
The Company is proposing that team league play for the U.S. Billiards
League be established in major metropolitan areas, such as New York City, Los
Angeles, San Francisco, Atlanta, Orlando, Philadelphia, Boston and Chicago. The
cities of Miami and Denver are also being considered by the Company for U.S.
Billiards League teams. The U.S. Billiards League team format is expected to use
the WTB format for league play. The Sanctions for such format have been granted
on an exclusive basis to the Company. See "Business -- Operations to Date." The
WTB format was developed by Mr. Mackey, formerly president of World Team
Billiards, Inc., the Commissioner of the PBT, and director and consultant to the
Company. Mr. Mackey is also the second largest shareholder of the Company. See
"Principal Shareholders." Several key players on the PBT 1996 Camels Pro
Billiards Tour, such as Nicky Varner, Johnny Archer, Kim Davenport, Jim Rempe
and Buddy Hall, are also shareholders of the Company. It is expected that the
billiards players for the U.S. Billiards League will be drawn from the players
on the PBT 1996 Camels Pro Billiards Tour based on a lottery related to each
player's ranking on such Tour. In order for a billiards player to participate in
the U.S. Billiards League, if he were not part of the PBT 1996 Camels Pro
Billiards Tour, it is anticipated, that such player will have to be approved by
both the PBT and the Company.
Television Programming. The Company's management also anticipates
producing and distributing billiards event programming for domestic and foreign
television, and merchandising and licensing billiards related apparel and
equipment, primarily related to team competition.
There can be no assurance that the Company will be able to implement any or
all of the foregoing, including its plan for the U.S. Billiards League, or if
implemented, that it will be successful.
Billiards Entertainment Centers. The Company's management anticipates
creating a concept for billiards entertainment centers (the "Centers") which it
currently anticipates will consist of a billiards room with restaurant and bar
facilities in sophisticated styling. Such Centers will be based on a club-like
structure and operate as a home for local amateur billiards leagues and as
retail outlets for billiards related merchandise licensed by the Company, as
well as points of sale for tickets for various events sponsored by the PBT. The
Company may choose to own and operate such Centers directly or to franchise
them. Accordingly, the Company expects to be able to derive revenues from such
Centers in the form of membership fees, franchise fees, licensing fees, and
ticket sales.
The Company believes that the proceeds of this Offering should enable it to
fund its operations under the Management Agreement for a twelve month period
following the Offering, and fund the development of or determine the feasibility
of the Centers and National Billiards League. The Company believes, however,
that it will require future financing, in connection with the full
implementation of its plan for the Centers and the National Billiards League. In
the event additional financing is required, there can be no assurances the
Company will be able to do so. Any future financing may result in further
dilution to the purchasers of Units in this Offering.
Even if such financing should be available on acceptable terms, there can
be no assurance that the Company will in fact be able to implement its plan of
operation. The Company's failure to do so would materially and adversely affect
its business or financial condition, such that it could be required to curtail
or cease its operations.
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MARKETING
The Company expects to rely on a variety of marketing techniques: it
expects to contact local chambers of commerce, government and private entities,
such as, hotels and other entertainment or billiards related businesses with
respect to participation in promoting and sponsoring events; it expects to use
logos and other identified trademarks; and it will seek to present endorsements
by nationally recognized sporting figures.
TOUR PARTICIPANTS
The operation of the PBT sanctioned events is contingent upon the ability
of the Company to engage a sufficient number of top ranking professional
billiards players for the tournaments and other events scheduled. Although the
Company believes that through its underwriting of the expenses and the prize
monies for certain PBT tournaments, as provided in the Management Agreement, it
is creating strong incentives for the permanent establishment of a group of
professional billiards players, there can be no assurances given that such
players will become available and, if available, will continue to be available
in such numbers as required to form and maintain a professional, competitive
sport. At present, the Company does not have any agreements with professional
billiard players, and no assurance can be given that they will ever join, or
remain part of the PBT.
SUPPLIERS
For the creation of the Centers, the Company depends on the availability of
suitable properties at competitive terms, and its ability to attract franchisees
to operate such Centers, should the Company decide to franchise such Centers.
For its licensing operation, the Company will depend on its success in the
locating of and contracting with manufacturers of goods such as sportswear and
billiards equipment at competitive prices. As the Company has yet to implement
its business plan with respect to creation of the Centers, it is not possible
for the Company to predict whether it will be able to locate the required
suppliers at competitive prices and terms, failing which would have a materially
adverse effect on the Company's operations.
COMPETITION
While the Company believes that there are currently no other billiards
related businesses seeking to implement a business plan similar to that of the
Company, there are a number of organizations, including, but not limited to the
American Pool-Players Association (APA), the World Pool Billiards Association
(WPA), the Professional CueSports Association (PCA) the Women's Professional
Billiards Association (WPBA), the Billiards Congress of America (BCA), and The
McDermott Tour, which have organized the billiards sport on a professional and
amateur level. At least one of these organizations has organized an amateur
tournament in a format comparable to that proposed by the Company, which was
televised by ESPN, a nationwide distributed sports TV channel. Given the low
level of organization presently existing in the billiards sport, and considering
that nearly all of the elements of the Company's proposed plan of operation are
neither protected by intellectual property rights, or otherwise proprietary to
the Company, any of the foregoing organizations could develop a business plan
similar to that of the Company. No assurances can be given that such a potential
competitor would not be able to align itself with partners or others that are
better financed and have greater resources than the Company. The rise of any
such potential competitor could have a materially adverse impact on the
Company's operation and financial condition, and might force it to abandon or to
significantly alter its proposed plan of operation.
As the Company intends to operate in a variety of billiards related
activities, it will be exposed to all of the risk factors existing in its
various areas of operation, which may have a cumulative material and adverse
impact on the overall viability of the Company. To the extent the Company
intends to operate in the area of licensing apparel and billiards related
equipment, it will be subject to all of the risks affecting the retail and
sporting goods industry. Such risks are in general: the unpredictability of
continued acceptance for the merchandise licensed by the Company, the level of
consumer confidence in general to expend monies on essential items, the
availability of suppliers of raw materials at competitive prices and the
Company's ability to build and to sustain a distribution network. To the extent
the Company intends to market billiards events through media outlets, it is
subject to all of the risks of the entertainment industry, which are compounded
by
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the fact that in its efforts to place such events with the media, the Company
will have to compete with virtually all sports franchises most of which are
better established and better financed than the Company, and which represent
sports which are more popular and better known to the general public than
billiards. The same holds true for Company's plan to create billiards related
organizations and franchises, on the professional level as well as on the
amateur level. No assurances can be given that billiards will ever become
sufficiently popular to attract players and sponsors in such numbers that any
form of commercial exploitation will be successful. Without a significant
increase in the media appeal of billiards, all other ventures of the Company,
such as licensing of billiards related merchandise or the commercialization of
billiards related events through the media, would likely fail. See
"Business -- Proposed Plan of Operation."
SEASONALITY
The Company believes that its business may be considered seasonal with a
large portion of its revenues and profits being derived during the fall and
winter months. The Company believes that outdoor amusement centers and sports
activities will take business away from the indoor billiards events during the
spring and summer months resulting in a decline in revenues.
INSURANCE
The Company maintains a general business and liability insurance for an
aggregate amount of $200,000. The term of the current policy will expire on
October 16, 1996. While the Company believes that, at present, its insurance
coverage is adequate, any future expansion of its business may require the
Company to seek additional insurance, which may not be available at commercially
reasonable terms.
GOVERNMENT REGULATIONS
Billiards related events may be subject to regulation by the states in
which the events are held. Also, to the extent the Company develops and markets
a franchise for its Billiards Entertainment Centers, it will be subject to
federal and state regulations governing franchises.
EMPLOYEES
At the present time, there are four full time employees of the Company,
including the Chairman and Chief Executive Officer, Robert M. Stander. The
Company intends to enter into an employment agreement with Robert M. Stander
upon completion of the Offering. The Company relies on the services, from time
to time, of various consultants, including Donald E. Mackey. None of the
Company's employees are union members. Upon completion of the Offering, the
Company intends to recruit a qualified individual to serve as chief financial
officer of the Company.
PROPERTIES
The Company's headquarters are located at 1700 East Desert Inn Road, Suite
108, Las Vegas, Nevada 89109, where it subleases 2,000 square feet of office
space from World Wide Collectibles, Inc., a significant shareholder of the
Company. The Company intends to relocate its office in Las Vegas on or before
November 30, 1996, on which date its sublease terminates.
LITIGATION
The Company is not involved in any material legal proceedings.
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MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the names and ages of all directors and
executive officers of the Company and their positions in the Company.
NAME AGE POSITION
---- --- --------
Robert M. Stander..................... 60 Chief Executive Officer, Chairman of
the Board and Director
John P. O'Meara....................... 57 Secretary, Treasurer and Director
Donald E. Mackey...................... 48 Director
Nicky D. Varner....................... 48 Director
Jerry M. Syrop........................ 49 Director
Directors are elected to serve until the next annual meeting of
stockholders and until their successors have been duly elected and qualified.
Officers serve at the discretion of the Board of Directors.
ROBERT M. STANDER is one of the founders of the Company and is the Chairman
of the Board and Chief Executive Officer of the Company. Prior to his becoming
affiliated with the Company, Mr. Stander worked from September 1990 until
January 1995 exclusively as a consultant for WSR, Inc., a Nevada corporation,
owned by William Si Redd, the founder of International Gaming Corporation.
Mr. Stander's duties from 1985 to 1990 included serving as President of the
Oasis Resort Hotel & Casino in Mesquite, Nevada which required an unrestricted
gaming license from the State of Nevada. He also supervised the purchase of
1,200 acres in Mesquite for Mr. Redd which today comprises the master planned
community known as Mesquite Vistas which includes two Arnold Palmer designed
golf courses.
From 1979 to 1985, Mr. Stander was Executive Vice President and Chief
Operating Officer of Grand Auto, Inc., a company operating more than 100
specialty retail stores serving the automotive after-market industry. Grand
Auto, Inc. is headquartered in Oakland, CA.
DONALD E. MACKEY has been a member of the Company's Board of Directors and
a consultant to the Company since its inception. From 1992 through the present
time, he has been the Commissioner of the PBT. From 1989 to 1992, Mr. Mackey was
the Chief Executive Officer of WTB headquartered in Spring Hill, Florida. In
these capacities, Mr. Mackey has been responsible for (i) developing, promoting,
organizing and conducting a substantial number of billiards tournaments, both
nationwide and worldwide, and (ii) developing and producing programming of such
events for broadcast on ESPN and the Prime Cable Network.
NICKY D. VARNER is a member of the Company's Board of Directors and has
been a professional billiards player in excess of ten years. Mr. Varner had been
a director of WTB and is a director of the PBT.
JOHN P. O'MEARA is a director, secretary and treasurer of the Company.
Since 1992, Mr. O'Meara has been the president and a director of Kerry
Contractors, Inc., a general contracting and construction management company
located in Los Angeles, CA. Prior to joining Kerry Contractors, Inc., Mr.
O'Meara was Vice President of JOM Enterprises, Inc., a construction management
company headquartered in Los Angeles, CA. In addition, since 1991, Mr. O'Meara
has been providing consulting, marketing and technical services to WTB and the
PBT through Orion Associates, Inc., a Nevada company controlled by Mr. O'Meara.
Mr. O'Meara is a director and the treasurer of WWC.
JERRY M. SYROP, C.P.A., a graduate of the Baruch School of Business and
Public Administration in New York City, has been a director since April 1996.
Since May 1993, Mr. Syrop has been a principal of Gerstenfeld & Syrop P.A.,
Coral Springs, Florida. From 1986 to May 1993, Mr. Syrop practiced accounting in
New York and Coral Springs, Florida. Mr. Syrop is the brother of Randy Syrop, a
principal of the Representative.
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EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth the compensation earned
by the Company's Chief Executive Officer for services rendered in all capacities
to the Company for that fiscal year. No executive earned in excess of $100,000
for the 1995 fiscal year.
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
-------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
RESTRICTED SECURITIES
NAME AND OTHER STOCK UNDERLYING ALL
PRINCIPAL ANNUAL AWARD(S) OPTIONAL/ LTIP OTHER
POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(1) ($) SARS(#) PAYOUTS COMPENSATION($)
- ------------- ---- --------- -------- ------------------ ---------- ---------- ------- ---------------
Robert M.
Stander...... 1995 -- -- $ 25,000(1) -- -- -- --
Chairman 1996 $24,000(2) -- -- -- -- -- --
and Chief
Executive
Officer
- ---------------
(1) Consulting fees. See "Certain Transactions".
(2) Received during time period from January 1, 1996 through June 30, 1996. It
is anticipated that Mr. Stander will receive $125,000 for the balance of
1996.
The Company intends to enter into an employment agreement with Mr. Stander
to be effective on completion of this Offering. The proposed employment
agreement is expected to provide for a three-year term and will include annual
compensation for Mr. Stander of approximately $140,000, plus certain benefits
including health and life insurance. Mr. Stander and other members of
management, if any, may receive annual bonuses, provided such payment is
warranted by the performance of the Company.
LIMITATIONS OF LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Certificate of Incorporation and its By-Laws contain
provisions for indemnification of officers, directors, employees and agents of
the Company. The Company's By-Laws require the Company to indemnify such persons
to the full extent permitted by the Nevada General Corporation Law (Nev. Rev.
Stat. Ann. sec.78.751 (1995). Each person will be indemnified in any proceeding
if he acted in good faith and in a manner which he reasonably believed to be in,
or not opposed to the best interests of the Company. Indemnification would cover
expenses, including attorneys' fees, judgments, fines and amounts paid in
settlement.
The Company's By-Laws also provide that the Board of Directors may cause
the Company to purchase and maintain insurance on behalf of any present or past
director or officer insuring against any liability asserted against such person
incurred in the capacity of director or officer or arising out of such status,
whether or not the Company would have the power to indemnify such person.
The Company may seek to obtain directors' and officers' liability insurance
upon completion of this Offering.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Company pursuant
to the foregoing provisions, or otherwise, the Company has been advised that in
the opinion of the 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 the 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
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appropriate jurisdiction the question of whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such court.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors does not currently have any separate compensation,
audit or nominating committees. However, the Board of Directors may establish
audit, compensation or nominating committees after the completion of this
Offering. The Company currently intends to identify and thereafter to appoint
two independent directors to the Board within 90 days following the Effective
Date although no assurances of this can be given.
DIRECTORS' COMPENSATION
Non-employee directors of the Company will be reimbursed for their expenses
incurred and may receive compensation for each meeting of the Board of Directors
attended and for each telephone meeting of the Board of Directors in which he or
she participates.
CERTAIN TRANSACTIONS
On May 25, 1995, the Company authorized the issuance to Robert M. Stander,
Donald E. Mackey, and Orion Associates, Inc., 225,000, 125,000 and 100,000
shares, respectively, for a price of $.001 per share. The purchase price for
such shares was paid in cash. Mr. Stander is Chairman of the Board and Chief
Executive Officer of the Company; Mr. Mackey is a director of and consultant to
the Company; and John P. O'Meara, the sole shareholder of Orion Associates,
Inc., is the secretary/treasurer and a director of the Company.
In October 1995, the Company acquired certain of the billiards related
assets of WWC for a purchase price of $340,000 secured by the WWC Note and two
million shares of Common Stock of the Company. Mr. O'Meara, the
secretary/treasurer and a director of the Company, is also treasurer and a
director of WWC.
WWC received 2,000,000 shares of Common Stock of the Company as partial
consideration in connection with the acquisition of certain billiards related
assets by the Company from WWC in October, 1995. See "Business -- Operations to
Date". Of those 2,000,000 shares of Common Stock, 425,000 shares were
transferred by WWC to certain shareholders of WTB in connection with the
acquisition of WTB by WWC.
As a shareholder of WTB, Mr. Mackey received 168,750 shares of Common Stock
of the Company as his allocable portion of such 425,000 shares.
On June 3, 1996 the Company entered into the Management Agreement (see
"Business -- Operations to Date") with the PBT. Mr. Mackey, a director of and
consultant to the Company, is the Commissioner of the PBT.
As of June 30, 1996, the Company advanced $90,000 to the PBT. The
promissory notes evidencing such advance are unsecured, bear interest at eight
percent with interest payments due monthly. The notes and accrued interest are
due on various dates through November 1, 1996. The PBT is not current in the
payment of principal and interest on these notes and the Company cannot be
certain the PBT will generate sufficient revenues to pay the amounts due.
Accordingly, collection of these notes cannot be assured. The Company believes
the PBT is seeking financing to enable it to satisfy the notes.
As of December 31, 1995, WWC advanced $91,050 to the Company to fund
operations, and of that amount, $81,046 has been repaid.
Messrs. Stander, Mackey and Orion Associates, Inc. and certain other
employees of the Company received consulting fees and commissions with respect
to the private placement. These payments for commissions and consulting fees
amounted to an aggregate of $52,000 through December 31, 1995, and $126,200
through June 30, 1996.
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PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of Common Stock as of June 30, 1996 and as adjusted to reflect the
sale of the Common Stock offered hereby, of each person known by the Company to
be the beneficial owner of more than five percent of the outstanding Common
Stock, of each director of the Company, and of all officers and directors of the
Company as a group.
SHARES % BEFORE % AFTER
BENEFICIALLY THIS THIS
NAMES AND ADDRESSES OF BENEFICIAL OWNERS OWNED OFFERING OFFERING(6)
- ---------------------------------------- ------------ -------- -----------
World Wide Collectibles, Inc.(1) ........................... 1,575,000 61.76 33.16
1700 East Desert Inn Road
Las Vegas, NV 89109
Robert M. Stander(5)........................................ 225,000 8.82 4.74
1700 East Desert Inn Road
Las Vegas, NV 89109
Donald E. Mackey(2)(5)...................................... 293,750 11.52 6.18
1700 East Desert Inn Road
Las Vegas, NV 89109
Orion Associates, Inc.(3)................................... 100,000 3.92 2.11
1700 East Desert Inn Road
Las Vegas, NV 89109
Officers and Directors as a Group (three (3) persons)(4).... 618,750 24.26 13.03
- ---------------
(1) WWC received 2,000,000 shares of Common Stock of the Company as partial
consideration in connection with the acquisition of certain billiards
related assets by the Company from WWC in October, 1995. See
"Business -- Operations to Date" and "Certain Transactions". Of those
2,000,000 shares of Common Stock, 425,000 shares were transferred by WWC to
certain shareholders of WTB in connection with the acquisition of WTB by
WWC.
(2) Includes 168,750 shares of Common Stock of the Company Mr. Mackey received
as a stockholder of WTB as his allocable portion of the 425,000 shares of
Common Stock of the Company the shareholders of WTB received from WWC.
(3) All of the issued and outstanding shares of Orion Associates, Inc. are
beneficially owned by John P. O'Meara, secretary/treasurer and director of
the Company.
(4) Includes the shares beneficially owned by Orion Associates, Inc.
(5) Messrs. Stander and Mackey each may be deemed a parent and promoter of the
Company.
(6) Includes 1,100,000 shares of Common Stock issued to Private Placement
Selling Stockholders upon completion of this Offering. See
"Business -- Private Placement" and "Private Placement Selling
Stockholders." Assumes no exercise of (a) the Underwriter's Over-Allotment
Option, (b) the Warrants offered hereby as component of the Units, (c) the
Underwriter's Unit Purchase Option or (d) any warrants issued to the Private
Placement Selling Stockholders upon consummation of this Offering. See
"Description of Securities," "Underwriting" and "Certain Transactions." If
all of the options and warrants set forth in clauses (a), (b), (c) and (d)
above were exercised to their fullest extent, the number of shares of Common
Stock to be outstanding after this Offering would be 7,250,000.
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PRIVATE PLACEMENT SELLING STOCKHOLDERS
The following table sets forth information with respect to the Private
Placement Selling Stockholders, who will own an aggregate of 1,100,000 shares of
Common Stock and 1,100,000 Warrants issuable upon conversion of the Private
Placement Notes, all of which are being registered in the Registration Statement
of which this Prospectus forms a part. Such securities may be sold by such
stockholders, from time to time, commencing 180 days after the date of this
Prospectus, unless the Representative consents in writing to earlier sales of
such securities. The Company will not receive any proceeds from the sale of
these securities. The cost of qualifying these shares under federal and state
securities laws, together with other costs in connection with their offering,
will be paid by the Company. See "Description of Securities -- Promissory Notes
and "Underwriting -- Private Placement."
NAME SHARES OF COMMON STOCK WARRANTS
- ---- ---------------------- ---------
Marlborough Corporation..................................... 150,000 150,000
Merton Trustees, Ltd........................................ 80,000 80,000
Herod Investments, Ltd...................................... 100,000 100,000
Societe Financiere de Lac S.A............................... 70,000 70,000
BCM Money Purchase Pension Plan............................. 20,000 20,000
David Grasso, Jr. and Deborah A. Grasso..................... 20,000 20,000
Rudolph Baboun.............................................. 125,000 120,000
Vincent L. Celentano & Alice J. Celentano................... 105,000 105,000
Laura Fiero................................................. 25,000 25,000
Greentree Securities, L.P................................... 25,000 25,000
Esther Friedberg............................................ 20,000 20,000
Salem Management............................................ 250,000 250,000
Nancy A. Wright............................................. 50,000 50,000
Patricia M. Maietta......................................... 50,000 50,000
Polydius Partners........................................... 10,000 10,000
--------- ---------
Total............................................. 1,100,000 1,100,000
========= =========
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DESCRIPTION OF SECURITIES
The total authorized capital stock of the Company consists of 20,000,000
shares of Common Stock, $0.001 par value per share. The following description of
the capital stock is complete in all material and relevant terms and is
qualified in all respects by reference to the Certificate of Incorporation and
By-Laws of the Company, copies of which are filed as exhibits to the
Registration Statement of which this Prospectus forms a part. Prior to the
commencement of this Offering, there were 2,550,000 shares of Common Stock
issued and outstanding.
COMMON STOCK
The holders of Common Stock elect all directors by a majority vote and are
entitled to one vote for each share held of record. All shares of Common Stock
participate equally in dividends, when, as and if declared by the Board of
Directors and in net assets on liquidation. All shares of Common Stock presently
outstanding are, and the shares of Common Stock offered hereby and purchasable
upon the exercise of the Warrants, when issued will be duly authorized, validly
issued, fully paid and nonassessable by the Company. The shares of Common Stock
have no preference, conversion, exchange, preemptive or cumulative voting
rights.
REDEEMABLE WARRANTS
The Warrants will be issued in registered form pursuant to an agreement,
dated the date of this Prospectus (the "Warrant Agreement"), between the Company
and American Stock Transfer, Inc. (the "Warrant Agent"). The following
discussion of certain terms and provisions of the Warrants is qualified in its
entirety by reference to the detailed provisions of the Warrant Agreement, the
form of which has been filed as an exhibit to the Registration Statement of
which this Prospectus forms a part.
One Warrant represents the right of the registered holder to purchase one
share of Common Stock at an exercise price of $7.50 (150% of the Offering Price)
per share, subject to adjustment (the "Purchase Price") from the Effective Date
of this Offering until 5:00 p.m. New York time on , 1999 (three
years after the Effective Date) (the "Expiration Date"). The Company has the
right to reduce the Purchase Price, extend the Expiration Date or increase the
number of shares of Common Stock issuable upon the exercise of the Warrants. The
Warrants will be entitled to the benefit of adjustments in the Purchase Price
and in the number of shares of Common Stock or other securities deliverable upon
the exercise thereof in the event of a stock dividend, stock split,
reclassification, reorganization, consolidation or merger.
At any time commencing on the date of this Prospectus and prior to the
close of business on the Expiration Date (on which date the Warrants become
wholly void and of no value), the Warrants, unless previously redeemed, may be
exercised at the office of the Warrant Agent. No holder, as such, of Warrants
shall be entitled to vote or receive dividends or be deemed the holder of shares
of Common Stock for any purpose whatsoever until such Warrants have been duly
exercised and the Purchase Price has been paid in full.
Under the provisions of the Warrant Agreement, the Company has the right,
at any time, to redeem the Warrants, in whole or in part, at a price of $0.10
each, by written notice mailed 30 days prior to the redemption date to each
Warrant holder at his address as it appears on the books of the Warrant Agent;
provided however that the Company may redeem the Warrants only if and when the
Company has an effective Registration Statement covering the shares of Common
Stock underlying the Warrants in place. Such notice shall only be given
following any period of 20 consecutive trading days during which the last sales
price for the shares of Common Stock is at least 100% of the then effective
exercise price of the Warrants to be redeemed. If the Warrants are called for
redemption, they must be exercised prior to the close of business on the date of
any such redemption or the right to purchase the applicable share of Common
Stock is forfeited.
The Company is required, when necessary, to file a post-effective amendment
or a new Registration Statement with the Commission with respect to the
securities underlying the Warrants and to deliver a prospectus with respect to
such securities to all Warrant holders.
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The Warrants will be exercisable only when there is a current effective
Registration Statement covering the shares of Common Stock underlying the
Warrants. If the Company does not or is unable to maintain a current effective
Registration Statement, the Warrant holders will be unable to exercise the
Warrants and the Warrants may become valueless. Because the Warrants may be
transferred, it is possible that the Warrants may be acquired by persons
residing in states where the Company has not registered, or is exempt from
registration, such that the shares of Common Stock underlying the Warrants may
not be sold or transferred upon exercise of the Warrants. Warrant holders
residing in those states would have no choice but to attempt to sell their
Warrants or let them expire unexercised.
Holders of the Warrants will be able to sell the Warrants if a market
exists rather than exercise them. However, there can be no assurance that a
market will develop, or if developed, will continue as to such Warrants.
Each Warrant will be exercisable by surrendering the Warrant certificate,
with the formal subscription form on the reverse side of the Warrant certificate
properly completed and executed, together with payment of the exercise price to
the Warrant Agent. Prior to their expiration or redemption by the Company, the
Warrants will be exercisable in whole or, from time to time, in part. If less
than all of the Warrants evidenced by a Warrant certificate are exercised, a new
Warrant certificate will be issued for the remaining number of Warrants.
PROMISSORY NOTES
As of June 30, 1996 the Company had outstanding $1,100,000 principal amount
of non-negotiable ten percent convertible subordinated notes, due December 31,
1996 (the "Private Placement Notes"). The Private Placement Notes are
subordinate to all bank debt currently outstanding as well as any additional
amounts that may be incurred by the Company during the term of the Private
Placement Notes. Unless earlier converted into equity securities as described
below, the principal of the Private Placement Notes, together with accrued
unpaid interest at the rate of ten percent per annum from the date of issuance,
will be due and payable on the close of business on December 31, 1996 (the
"Maturity Date"). However, no interest shall be payable in the event of
automatic or optional conversion.
The Private Placement Notes will be automatically converted into Units upon
the completion of this Offering, provided that such completion occurs on or
before the Maturity Date, and, if not automatically converted, will be converted
into Units at the option of the holder at any time through the Maturity Date.
The Private Placement Notes are convertible into Units consisting of one share
of Common Stock and one Warrant at the rate of one Unit for each dollar ($1.00)
of principal amount of the Private Placement Notes. See "Private Placement
Selling Stockholders" and "Underwriting -- Private Placement."
For the period from June through September 1996, the Company borrowed
$297,500 from certain individuals, pursuant to unsecured demand promissory notes
bearing eight percent interest per annum. These notes will be repaid out of the
proceeds of this Offering. See "Use of Proceeds".
TRANSFER AND WARRANT AGENT
The Company's transfer and warrant agent is American Stock Transfer, Inc.,
40 Wall Street, New York, NY 10005.
REPORTS TO SHAREHOLDERS
The Company intends to furnish its shareholders with annual reports
containing audited financial statements, and such other periodic reports as the
Company may determine to be appropriate or as may be required by law.
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this Offering, the Company will have outstanding
4,650,000 shares of Common Stock, assuming the Underwriter's Over-Allotment
Option, the Underwriter's Unit Purchase Option and the
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32
Warrants are not exercised. Of those shares, 2,100,000 shares of Common Stock
will be freely tradable without restriction or further registration under the
Act.
Holders of the Warrants included in the Units offered hereby to the public
will be entitled to purchase an aggregate of 1,000,000 additional shares of
Common Stock upon exercise of the Warrants at any time during the three-year
period following the date of this Prospectus, provided that the Company
satisfies certain securities registration qualification requirements with
respect to the securities underlying the Warrants. Any and all shares of Common
Stock purchased upon exercise of the Warrants will be freely tradable, provided
such registration requirements are met.
In addition, the Private Placement Selling Stockholders are entitled to
purchase an aggregate of 1,100,000 shares of Common Stock upon exercise of the
Warrants included in the Units received by the Private Placement Selling
Stockholders as a result of the automatic conversion of the Private Placement
Notes upon consummation of this Offering. The shares of Common Stock obtained by
the Private Placement Selling Stockholders upon exercise of the Warrants will
also be freely tradable, provided the securities registration requirements are
met.
All of the 2,550,000 shares of Common Stock currently outstanding are
"restricted securities" within the meaning of Rule 144 under the Act and, in
general, if held for at least two years, will be eligible for sale, in the
public market in reliance upon and subject to the limitations of Rule 144.
Accordingly, of those shares, 200,000 will become available for sale in October
1997, and 550,000 will become available for sale in May 1998. In addition to any
restrictions on transfer imposed by the Act, all of the officers, directors and
five percent stockholders of the Company and their affiliates have agreed not to
sell any of their shares of Common Stock for a period of one year after the date
of this Prospectus, without prior consent of the Representative.
In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated), including a person who may be deemed to be an
"affiliate" of the Company as that term is defined under the Act, is entitled to
sell, within any three month period, a number of shares beneficially owned for
at least two years that does not exceed the greater of (i) one percent of the
number of then outstanding shares of Common Stock, or (ii) the average weekly
trading volume in the Common Stock during the four calendar weeks preceding such
sale. Sales under Rule 144 are also subject to certain requirements as to the
manner of sale, notice and the availability of current public information about
the Company. Furthermore, a person who is not deemed to have been an affiliate
of the Company during the ninety days preceding a sale by such person and who
has beneficially owned such shares for at least three years is entitled to sell
such shares without regard to the volume, manner of sale or notice requirements.
Prior to this Offering, there has been no public market for the Company's
securities. Following this Offering, the Company cannot predict the effect, if
any, that market sales of the Common Stock, or the availability of such shares
for sale, will have on the market price prevailing from time to time.
Nevertheless, sales by the existing stockholders of substantial amounts of
Common Stock in the public market could adversely affect prevailing market
prices for the Common Stock. In addition, the availability for sale of
substantial amounts of Common Stock acquired through the exercise of the selling
securityholders' Warrants, the Warrants included in the Units or the Unit
Purchase Option could adversely affect prevailing market prices for the
Company's activities.
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UNDERWRITING
Joseph Roberts & Co., Inc. (the "Representative") as Representative of the
several underwriters (the "Underwriters") has agreed, subject to the terms of an
underwriting agreement dated the date of this Prospectus (the "Underwriting
Agreement"), to purchase from the Company on a firm commitment basis an
aggregate of 1,000,000 Units, consisting of 1,000,000 shares of Common Stock and
1,000,000 Warrants, offered hereby, in the respective amounts set forth opposite
their names below.
UNDERWRITER NUMBER OF UNITS
----------- ---------------
Joseph Roberts & Co., Inc.............................................
Total............................................................ 1,000,000
---------
The Underwriters are obligated to take and pay for all of the Units offered
hereby if any are taken.
The Company has been advised by the Representative that the Underwriters
propose initially to offer the Units directly to the public at the offering
price set forth on the cover page of this Prospectus and to certain dealers (who
may include the Underwriters) at such price less a concession not in excess of
$ per Unit. The Underwriters may allow, and such dealers may reallow, a
concession to certain other dealers (who may include the Underwriters) not in
excess of $ per Unit. After the initial offering to the public, the
Offering Price and other selling terms may be changed by the Representative.
The Representative has advised the Company that the Underwriters do not
intend to confirm sales to any accounts over which they exercise discretionary
authority as to such sale.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act. The Company also
has agreed to pay to the Representative an expense allowance on a
non-accountable basis equal to three percent of the selling price of each Unit
derived from the sale by the Underwriter (including the sale of any Units
subject to the Underwriter's Over-Allotment Option), $15,000 of which has been
paid to date. The Company also has agreed to pay all filing fees in connection
with qualifying the Units offered hereby for sale under the laws of such states
as the Representative may designate and filing this Offering with the National
Association of Securities Dealers, Inc., ("NASD").
The Company has granted to the Representative an option, exercisable during
the 30-day period after the Effective Date, to purchase from the Company at the
Offering Price, less underwriting discounts, up to 150,000 additional Units for
the sole purpose of covering over-allotments, if any.
In connection with this Offering, the Company has agreed to sell to the
Representative or its designees, upon the completion of the sale of the Units,
at a price of one cent ($.01) per option (the "Option Price"), options (the
"Underwriter's Unit Purchase Option") entitling the Underwriter to purchase one
Unit upon the terms described below for each ten Units purchased by it in the
Offering (excluding the sale of Units under the Underwriter's Over-Allotment
Option). The Underwriter's Unit Purchase Option shall be non-transferable for a
period of one year after the effective date of the Offering (the "Effective
Date") except to partners or officers of the Representative or to those of the
other members of the Underwriting Group. The Underwriter's Unit Purchase Option
which shall expire five years from the Effective Date, shall not be exercisable
during the first twelve months after the Effective Date (the "Option Exercise
Term"), and shall provide a right to purchase one Unit for each Underwriter's
Unit Purchase Option exercisable at a price of $6.00 per Unit (120% of the
Offering Price of each Unit) on the Effective Date (the "Option Exercise
Price"), payable in cash or by "cashless exercise," as described in the
Underwriting Agreement. As used herein, "cashless exercise" occurs when the
Representative exercises its Underwriter's Unit Purchase Option and pays not
with cash or other consideration but by surrendering the applicable number of
common stock purchase warrants for the underlying common stock. No other form of
consideration is involved. The Underwriter's Unit Purchase Option shall be
exercisable at any time and from time to time, in whole or in part, during the
Option Exercise Term. The Underwriter's Unit Purchase Option contains
anti-dilution provisions providing for adjustment of
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these exercise prices or the number of shares upon the occurrence of certain
events, including the issuance of shares of Common Stock at a price per share
less than the exercise price or the market price of the Common Stock, or in the
event of any recapitalization, reclassification, stock dividend, stock split,
stock combination, or similar transaction. The Underwriter's Unit Purchase
Option grants to the holders thereof certain piggyback and demand registration
rights as described below. Unless granted an exemption by the Commission from
Rule 10b-6 under the Exchange Act, the Representative will be prohibited from
engaging in any market making activities or solicited brokerage activities with
regard to the securities until the later of the termination of such solicitation
activity or the termination by waiver or otherwise of any right the
Representative may have to receive a fee for the exercise of the Underwriter's
Unit Purchase Option following such solicitation.
With regard to the demand registration rights, the Company has agreed that
upon the expiration of a twelve month period after the Effective Date, and at
any time during a period of four years thereafter, no more than once, to
register all or a portion of the Underwriter's Unit Purchase Option or the Units
issuable upon the exercise of the Underwriter's Unit Purchase Option and the
underlying securities, at the Company's sole cost and expense including Blue Sky
fees for counsel and Blue Sky filing fees to qualify the Underwriter's Unit
Purchase Option and underlying securities for sale in up to three jurisdictions
requested by the Representative, at a time determined by the Representative.
With regard to the piggyback Registration rights, the Company agrees that
during the four year period described above, that if the Company shall seek to
register an offering of its securities, each holder of the Underwriter's Unit
Purchase Option shall be notified and shall be entitled to elect to have
included in such proposed registration, without cost or expense, any or all of
his, hers, or its Underwriter's Unit Purchase Option or underlying securities.
In the event of such a proposed registration, the Company shall furnish the
holders of the Underwriter's Unit Purchase Option with no less than forty days
written notice prior to the proposed filing of a registration statement. Such
notice shall continue to be given by the Company to such holders for each
proposed registration by the Company until such time as all of the Underwriter's
Unit Purchase Option or underlying securities have been registered, or until the
four year period described above has elapsed. Such holders shall exercise these
piggyback rights by giving written notice within twenty days of the receipt of
the Company's notice of intention to file a registration statement.
Pursuant to the Underwriting Agreement, all of the officers, directors, and
five percent stockholders of the Company and their affiliates have agreed not to
sell any of their shares of Common Stock for a period of one year after the
Effective Date without the prior written consent of the Representative.
The Company has granted to the Representative, for a period of five years
from the Effective Date, at the Representative's election, the right to have its
representative attend all of the meetings of the Company's Board of Directors.
Prior to this Offering there has been no public market for the Company's
securities. Accordingly, the Offering Price of the Units offered hereby and the
exercise price and other terms of the Warrants were determined by negotiation
between the Company and the Representative. Factors considered in determining
such prices and terms, in addition to prevailing market conditions, included the
history of and the prospects for the industry in which the Company competes, an
assessment of the Company's management, the prospects of the Company, its
capital structure, and such other factors as were deemed relevant.
The foregoing is a summary of the principal terms of the Underwriting
Agreement and the Underwriter's Unit Purchase Option and does not purport to be
complete, though all material and relevant terms have been disclosed. Reference
is made to a copy of the Underwriting Agreement and the Underwriter's Unit
Purchase Option, which are on file as exhibits to the Registration Statement of
which this Prospectus forms a part.
On October 6, 1994, the NASD District No. 8 Business Conduct Committee
issued a complaint against the Representative and two of its principals alleging
that they sold unregistered securities of two issuers without making certain
disclosures concerning one of them and failing to comply with a technical
agreement with the NASD. On December 9, 1994, the Representative and the
principals filed an answer denying all of the allegations and requesting a
formal hearing to prove that no violations occurred. On October 17, 1995, a
second complaint was issued alleging continuing failure to comply with the
restrictive agreement with the
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NASD. Also, on May 18, 1995, a complaint was issued against the Representative
and certain of its principals and current or former employees alleging improper
sales practices and failure to supervise personnel.
Without admitting or denying the truth of the allegations, the
Representative and its principals have settled all these matters with the NASD.
Pursuant to a Decision and Order of Acceptance of Offer of Settlement, dated
December 31, 1995, the Representative and its principals consented to the entry
of findings of certain violations and the imposition of the following sanctions:
(i) the censure and $50,000 fine of the Representative and a principal; (ii) a
one-year prohibition against the Representative participation in the purchase
and sale of restricted or control securities under Rule 144 of the Act; (iii)
the suspension of a principal for a total of 135 days; and (iv) the suspension
of a second principal for 30 days and a fine of $25,000.
PRIVATE PLACEMENT
From March 1996 through May 1996 the Representative acted as a placement
agent for the Company's Private Placement. The Representative has been paid a
commission of $88,000 for acting as placement agent. The Company is required,
when necessary, to file a post-effective amendment or new registration statement
with the Commission with respect to the sale of shares of Company's securities
issued upon conversion of the Private Placement Notes. While such securities
have been registered in the Registration Statement, of which this Prospectus
forms a part, the holders of such securities have agreed with the
Representative, that for 180 days following the date of this Prospectus, they
will not offer or sell such securities without the prior permission of the
Representative. See "Private Placement Selling Stockholders".
INDEMNIFICATION
The Company has agreed to indemnify and hold harmless the Representative
and each of the other Underwriters and each director, officer, employee and
agent of the Underwriters and each person, if any, who controls the
Representative and each of the other Underwriters within the meaning of Section
15 of the Act, from and against any and all losses, claims, demands, liabilities
and expenses arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or in this
Prospectus or in any amendment to either of them or in any Blue Sky application
or amendment thereto, or the omission or alleged omission to state therein any
material fact required to be stated therein or necessary to make the statements
therein not misleading, except if such losses, claims, demands, liabilities and
expenses result from the use of written information furnished to the Company by
the Underwriters for use in the preparation of the Registration Statement or
Prospectus or in any amendment to either of them or in any Blue Sky Application
or amendment thereto.
The Underwriters have severally agreed to indemnify and hold harmless the
Company and each director, officer, employee and agent of the Company and each
person, if any, who controls the Company within the meaning of Section 15 of the
Act, from and against any and all losses, claims, demands, liabilities and
expenses arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or in this
Prospectus or in any amendment to either of them or in any Blue Sky application
or amendment thereto, or the omission or alleged omission to state therein any
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only to the extent such losses, claims, demands,
liabilities and expenses result from the use of written information furnished to
the Company by the Underwriters for use in the preparation of the Registration
Statement or Prospectus or in any amendment to either of them or in any Blue Sky
application or amendment thereto. In addition, Nevada law provides for the
indemnification by the Company of corporate officers and directors, and the
Company's Articles of Incorporation and By-Laws provide for such indemnification
to the fullest extent available under Nevada law.
Insofar as indemnification for liabilities under the Act may be permitted
to directors, officers and controlling persons of the Representative or of the
other Underwriters pursuant to the foregoing provisions, or otherwise, each of
the other Underwriters have been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Act and is,
therefore unenforceable.
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EXPERTS
The December 31, 1995 and June 30, 1996 financial statements included in
this Prospectus have been audited by McGladrey & Pullen, LLP Independent
Certified Public Accountants, to the extent and for the periods set forth in
their report appearing elsewhere herein, and are included in reliance upon such
report given upon the authority of said firm as experts in auditing and
accounting.
LEGAL MATTERS
Certain legal matters, including the legality of the issuance of the
securities offered hereby, are being passed upon for the Company by Herzfeld &
Rubin, P.C., 40 Wall Street, New York, New York 10005. Fishman & Merrick, P.C.,
30 North LaSalle Street, Chicago, Illinois 60602, has acted as counsel to the
Representative in connection with this Offering.
ADDITIONAL INFORMATION
The Company will furnish without charge to each person to whom this
Prospectus is delivered, upon request, a copy of any and all of the documents
described herein. Written or telephone requests should be directed to: Robert M.
Stander, Chairman of the Board, American Professional Billiards, Inc., 1700 East
Desert Inn Road, Suite 108, Las Vegas, NV 89109, (702) 893-1277.
The Company has filed with the Commission a registration statement under
the Securities Act on Form SB-2 (the "Registration Statement") with respect to
the securities offered hereby. No distribution of the securities will be made
until the Registration Statement, as it may be amended, has been declared
effective. This Prospectus, which constitutes a part of the Registration
Statement, does not contain all of the information set forth in the Registration
Statement and the exhibits thereto, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. Statements
contained in this Prospectus as to the contents of any contract or other
document referred to are not necessarily complete and in each instance reference
is made to the copy of such contract or other document filed as an exhibit to
the Registration Statement, each such statement being qualified in all respects
by such reference. For further information with respect to the Company and the
securities offered hereby, reference is hereby made to the Registration
Statement and the exhibits thereto. All of these documents may be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the Commission's Regional Offices at 7 World Trade Center, 13th Floor, New York,
New York 10007. Copies may be obtained at the prescribed rates from the Public
Reference Section of the Commission at its principal office in Washington, D.C.
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INDEX
INDEPENDENT AUDITOR'S REPORT........................................................... F-2
FINANCIAL STATEMENTS
Balance Sheets....................................................................... F-3
Statements of Operations............................................................. F-4
Statements of Stockholders' Deficit.................................................. F-5
Statements of Cash Flows............................................................. F-6
Notes to financial statements........................................................ F-7
F-1
38
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
American Professional Billiards, Inc.
Las Vegas, Nevada
We have audited the accompanying balance sheets of American Professional
Billiards, Inc., a development stage company, as of December 31, 1995 and June
30, 1996, and the related statements of operations, stockholders' deficit, and
cash flows for the periods from May 18, 1995, (date of inception) to December
31, 1995 and June 30, 1996 and the six months ended June 30, 1996. 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 made 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 American Professional
Billiards, Inc. as of December 31, 1995 and June 30, 1996, and the results of
its operations and its cash flows for the periods from May 18, 1995, (date of
inception) to December 31, 1995 and June 30, 1996, and the six months ended June
30, 1996 in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will conduct operations as a going concern. As discussed in Note 1 to
the financial statements, the Company has not yet substantially commenced the
operations for which it was organized and needs substantial capital to begin to
implement its business plan. This lack of sufficient capital has contributed to
losses since inception and its total liabilities exceeding its total assets.
This lack of capital and lack of operations raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 1. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ McGladrey & Pullen, LLP
Las Vegas, Nevada
August 13, 1996
F-2
39
AMERICAN PROFESSIONAL BILLIARDS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
DECEMBER 31, JUNE 30,
1995 1996
------------ ----------
ASSETS
Current Assets
Cash........................................................... $ 68 $ 47,308
Receivables:
Accounts.................................................... -- 18,536
Notes, less provision for doubtful note of $90,000 (Note
2)......................................................... -- --
Accrued interest............................................ -- 2,407
Other current assets (Note 3).................................. 3,950 123,850
--------- -----------
TOTAL CURRENT ASSETS................................... 4,018 192,101
--------- -----------
Property and Equipment, net (Note 4)............................. 9,510 9,218
--------- -----------
Sanction and tradename, at cost, less accumulated amortization
June 30, 1996 $34,500, December 31, 1995 $11,500, (Note 7)..... 448,500 425,500
--------- -----------
TOTAL ASSETS........................................... $ 462,028 $ 626,819
========= ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable (Note 10)..................................... $ 60,834 $ 59,138
Related party advances (Note 10)............................... 91,050 10,554
Notes payable (Note 5)......................................... 340,000 1,100,000
Accrued expenses............................................... 6,724 25,599
--------- -----------
TOTAL CURRENT LIABILITIES.............................. 498,608 1,195,291
--------- -----------
Commitments and Contingencies (Notes 1, 2 and 9)
Stockholders' Deficit
Common stock, par value $.001 per share; authorized 20,000,000
shares:
Issued and outstanding 2,550,000 shares..................... -- 2,550
Issuable 2,550,000 shares (Note 8).......................... 2,550 --
Additional paid-in capital..................................... 118,000 118,000
Deficit accumulated during the development stage............... (157,130) (689,022)
--------- -----------
TOTAL STOCKHOLDERS' DEFICIT............................ (36,580) (568,472)
--------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT............ $ 462,028 $ 626,819
========= ===========
See Notes to Financial Statements.
F-3
40
AMERICAN PROFESSIONAL BILLIARDS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
PERIOD FROM PERIOD FROM PERIOD FROM
MAY 18, 1995 MAY 18, 1995 MAY 18, 1995,
(DATE OF (DATE OF SIX MONTHS (DATE OF
INCEPTION) TO INCEPTION) TO ENDED INCEPTION) TO
DECEMBER 31, 1995 JUNE 30, 1995 JUNE 30, 1996 JUNE 30, 1996
----------------- ------------- ------------- ------------
(UNAUDITED)
Revenues:
Event management revenues......... $ -- $ -- $ 18,536 $ 18,536
Interest.......................... -- -- 2,412 2,412
Other............................. 1,370 -- -- 1,370
---------- ---------- ---------- ---------
TOTAL REVENUES............ 1,370 -- 20,948 22,318
Expenses:
Event management.................. -- -- 125,150 125,150
General and administrative........ 151,776 8 416,002 567,778
Loss on disposition of
equipment...................... -- -- 647 647
Interest.......................... 6,724 -- 11,041 17,765
---------- ---------- ---------- ---------
TOTAL EXPENSES............ 158,500 8 552,840 711,340
---------- ---------- ---------- ---------
NET LOSS.................. $ (157,130) $ (8) $ (531,892) $ (689,002)
========== ========== ========== =========
Weighted Average Common Shares
Outstanding....................... 4,750,000 4,750,000 4,750,000
========== ========== ==========
Net loss per common share........... $ (0.03) $ (0.00) (0.11)
========== ========== ==========
See Notes to Financial Statements.
F-4
41
AMERICAN PROFESSIONAL BILLIARDS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' DEFICIT
COMMON STOCK
-----------------------------------------
DEFICIT
ISSUED AND SHARES ACCUMULATED
OUTSTANDING ISSUABLE (NOTE 8) ADDITIONAL DURING THE
------------------ -------------------- PAID-IN DEVELOPMENT
SHARES AMOUNT SHARES AMOUNT CAPITAL STAGE TOTAL
--------- ------ ---------- ------- ---------- ----------- ---------
Balance, May 18, 1995 (Date of
Inception).................... -- $ -- -- $ -- $ -- $ -- $ --
Shares issuable to founders,
May 25, 1995 (Note 8)....... -- -- 550,000 550 -- -- 550
Shares issuable under asset
purchase agreement, October
3, 1995 (Notes 7 and 8)..... -- -- 2,000,000 2,000 118,000 -- 120,000
Net loss for the period from
May 18, 1995 (date of
inception) to December 31,
1995........................ -- -- -- -- -- (157,130) (157,130)
--------- ------ ---------- ------ ---------- ----------- -----------
Balance, December 31, 1995...... -- -- 2,550,000 2,550 118,000 (157,130) (36,580)
Issuance of shares (Note 8)... 2,550,000 2,550 (2,550,000) (2,550) -- -- --
Net loss for six months ended
June 30, 1996............... -- -- -- -- -- (531,892) (531,892)
--------- ------ ---------- ------ ---------- ----------- -----------
Balance, June 30, 1996.......... 2,550,000 $2,550 -- $ -- $118,000 $(689,022) $(568,472)
========= ====== ========== ====== ========== =========== ===========
See Notes to Financial Statements.
F-5
42
AMERICAN PROFESSIONAL BILLIARDS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
PERIOD FROM PERIOD FROM
PERIOD FROM MAY 18, 1995 SIX MONTHS MAY 18, 1995
MAY 18, 1995 (DATE OF ENDED (DATE OF
(DATE OF INCEPTION) INCEPTION) JUNE 30, INCEPTION)
TO DECEMBER 31, 1995 TO JUNE 30, 1995 1996 TO JUNE 30, 1996
-------------------- ---------------- ------------ ----------------
(UNAUDITED)
Cash Flows from Operating Activities
Cash paid to suppliers and employees....... $ (80,873) $ (8) $ (452,419) $ (533,292)
--------- ------ ---------- ----------
Cash Flows from Investing Activities
Purchase of property and equipment......... (10,209) -- (2,295) (12,504)
Disbursement on note receivable............ -- -- (90,000) (90,000)
--------- ------ ---------- ----------
Net cash used in investing
activities....................... (10,209) -- (92,295) (102,504)
--------- ------ ---------- ----------
Cash Flows from Financing Activities
Proceeds from initial capital
contribution............................ 100 100 -- 100
Proceeds from issuance of common stock..... -- -- 450 450
Increase (decrease) in related party
advances................................ 91,050 -- (80,496) 10,554
Proceeds from short-term borrowings........ -- -- 1,100,000 1,100,000
Payment on note payable.................... -- -- (340,000) (340,000)
Disbursement of debt issuance costs........ -- -- (88,000) (88,000)
--------- ------ ---------- ----------
Net cash provided by financing
activities....................... 91,150 100 591,954 683,104
--------- ------ ---------- ----------
Net increase in cash............... 68 92 47,240 47,308
Cash, beginning.............................. -- -- 68 --
--------- ------ ---------- ----------
Cash, ending................................. $ 68 $ 92 $ 47,308 $ 47,308
========= ====== ========== ==========
Reconciliation of Net Loss to Net Cash Used
in Operating Activities:
Net loss................................... (157,130) (8) (531,892) (689,022)
Depreciation............................... 699 -- 1,940 2,639
Amortization............................... 11,500 -- 45,000 56,500
Provision for doubtful note receivable..... -- -- 90,000 90,000
Loss on disposition of equipment........... -- -- 647 647
Changes in assets and liabilities:
Increase in accounts receivable......... -- -- (18,536) (18,536)
Increase in accrued interest
receivable............................ -- -- (2,407) (2,407)
Increase in other current assets........ (3,500) -- (54,350) (57,850)
Increase (decrease) in accounts
payable............................... 60,834 -- (1,696) 59,138
Increase in accrued expenses............ 6,724 -- 18,875 25,599
--------- ------ ---------- ----------
Net cash used in operating
activities....................... $ (80,873) $ (8) $ (452,419) $ (533,292)
========= ====== ========== ==========
Supplemental Disclosures of Noncash Investing
and Financing Activities
Common stock issuable (Note 8)............. $ 550 $ 550 $ -- $ 550
Common stock issuable under asset purchase
agreement (Notes 7
and 8).................................. 120,000 -- -- 120,000
Issuance of note payable under asset
purchase agreement (Note 7)............. 340,000 -- -- 340,000
See Notes to Financial Statements.
F-6
43
AMERICAN PROFESSIONAL BILLIARDS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Nature of business
American Professional Billiards, Inc. (the "Company") is a development
stage company founded on May 18, 1995 to develop, administer and market
regional, national and international amateur and professional billiard
tournaments and events, develop a national billiards league, operate billiard
entertainment centers and merchandise billiard related products at the retail
level. Approximately 62% of the Company is beneficially owned by WWC (see Note
7). The Company has begun its efforts to sponsor and manage events on the
Professional Billiards Tour. However, as of June 30, 1996 no significant
revenues have been generated. No substantial efforts have begun regarding the
other business plans for which the Company was founded.
The Company has incurred significant losses since its inception. At June
30, 1996 the Company does not have in place sufficient debt or equity financing
arrangements to fund future event management of the Professional Billiards Tour
nor to implement its future business development plans. The Company estimates
that it needs substantial additional debt or equity financing to initiate its
future business development plans, and to fund anticipated losses in managing
events of the Professional Billiards Tour until such events become profitable
which it presently plans to obtain from the proceeds of an initial public
offering (IPO) of equity securities. In addition, the Company anticipates the
proceeds of the planned IPO will be sufficient to fund the initial development
or determine the feasibility of a national billiards league and the billiards
entertainment center concepts. However, the Company estimates the implementation
of a national billiards league and billiards entertainment center concepts will
require substantial additional debt or equity financing. The Company's plans
with regard to obtaining this additional capital include additional equity
offerings or seeking debt financing.
There is no assurance that the Company will be able to generate sufficient
revenue through the operation of its event management of the Professional
Billiards Tour to provide sufficient working capital to satisfy future
liabilities and operating expenses, even before implementation of its further
business development plans. The Company's ability to commence operations as a
going concern is dependent upon obtaining sufficient additional financing to
allow it to implement its business plan. The Company's ability to sustain
operations as a going concern depends on its ability to attain profitable
operations from its event management activities. Management expects to complete
the IPO and use the proceeds for working capital and to implement its business
plan. In the event the Company does not complete the planned IPO and it is
unable to secure alternative sources of capital, it is likely the Company will
be required to cease operations.
A summary of the Company's significant accounting policies follows:
Cash
The Company maintains cash in bank deposit accounts which at times may
exceed federally insured limits. The Company has not experienced any losses in
such accounts.
Debt issuance costs
Debt issuance costs are amortized over the term of the corresponding debt.
Deferred offering costs
Deferred offering costs consist of professional fees incurred for the
completion of a future public offering of the Company's common stock. The
professional fees will be offset by future proceeds of a public offering or
expensed if the offering does not occur.
F-7
44
AMERICAN PROFESSIONAL BILLIARDS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
Property and equipment
Property and equipment are recorded at cost. Depreciation is computed by
the straight-line method over the following estimated useful lives:
YEARS
-----
Computer equipment and software....................................... 3 - 5
Furniture and fixtures................................................ 5
Revenue recognition
Revenues from event management is expected to consist primarily of ticket
sales, sponsorships, television rights fees, and commercial sales, and will be
recognized upon completion of event management obligations required for each
tournament or event.
Amortization of intangibles
The cost of the sanction and trade name is being amortized by the
straight-line method over a period of ten years, which is the anticipated life
of certain business arrangements the Company has regarding the sanction and the
trade name.
It is reasonably possible that the estimate of the remaining estimated
economic life will be reduced significantly in the near term due to going
concern considerations. As a result, the carrying amount of the intangibles may
be reduced materially in the near term. The Company periodically reviews the
value assigned to the intangibles to determine whether any events have occurred
which would lead the Company to believe that the future cash flows expected from
the business activities supported by the intangibles would have declined below
the net reported value of the intangibles, and whether such potential
impairments are other than temporary. Based on such a review, management
believes that the intangibles in the accompanying balance sheets are not
impaired.
Advertising costs
The Company follows the policy of charging the production costs of
advertising to expense the first time the advertising takes place.
Deferred taxes
Deferred taxes are provided on a liability method whereby deferred tax
assets are recognized for deductible temporary differences, operating losses and
tax credit carryforwards and deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences between the
reported amounts of assets and liabilities and their tax bases. Deferred tax
assets relate primarily to capitalized start-up costs and net operating loss
carryforwards. Deferred tax assets are reduced by a valuation allowance when, in
the opinion of management, it is more likely than not that some or all of the
deferred tax assets will not be realized. Deferred tax assets and liabilities
are adjusted for the effects of changes in tax laws and rates on the date of
enactment.
Net loss per common share
Net loss per common share is computed on the weighted average number of
common shares outstanding during each period. The Company has common stock
equivalents consisting of common stock warrants
and convertible debt, as disclosed in Note 5. These common stock equivalents
have been
F-8
45
AMERICAN PROFESSIONAL BILLIARDS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
included in the weighted average number of shares as if they had been exercised
or converted at May 18, 1995 (date of inception).
Use of estimates in the preparation of financial statements
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of expenses during the
reporting period. Actual results could differ from those estimates.
Fair value of financial instruments
The carrying amounts of financial instruments including cash, accounts
receivable, notes receivable, accounts payable, notes payable and accrued
expenses approximate fair value because of their short maturity.
NOTE 2. NOTES RECEIVABLE AND EVENT MANAGEMENT AGREEMENT
The Professional Billiards Tour (PBT) organizes and sanctions official
professional billiard player tournaments and other billiard related events. The
Company is related to the PBT in that the Commissioner and director of the PBT
is also a shareholder and member of the Board of Directors of the Company.
Certain other directors of the PBT are members of the Company Board of Directors
or professional billiard players competing in Company managed events.
During the period ended June 30, 1996, the Company advanced $90,000 to the
PBT. The notes are unsecured, bear interest at eight percent and interest
payments are due monthly. The notes and accrued interest are due various dates
through November 1, 1996. The PBT is not current on principal and interest
payments and the Company cannot be certain the PBT will generate sufficient
revenues to pay the amounts due on these notes when due, therefore, the ultimate
collection of these notes can not be assured. The Company believes that the PBT
is seeking financing to enable it to satisfy the notes. However, due to the
uncertainty of ultimate collection, the Company has provided an allowance equal
to the balance of the notes.
In June 1996, the Company entered into an exclusive event management
agreement with the PBT to provide management and organizational services in
connection with official professional billiard player tournaments and other
billiard related events. The agreement has a five year term with a five year
renewal option by the Company. The agreement includes a commitment from the PBT
to schedule at least twelve tournaments or events each year at over the life of
the agreement. Under the terms of the agreement the Company is required to fund
all the expenditures of the tournament or event, including: purse monies, site
procurement, and the implementation of a nationwide marketing and advertising
concept. Purse monies committed for that portion of the 1996 Tour remaining
after June 30, 1996 total $1,400,000. In return the Company will receive up to
200% of such expenses out of revenues from ticket, sponsorship, television fees,
commercial sales, and certain other revenues as reimbursement of expenses
invested for each event. If event revenues exceed 200% of expenses, the Company
and PBT will split any excess revenues equally.
F-9
46
AMERICAN PROFESSIONAL BILLIARDS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 3. OTHER CURRENT ASSETS
DECEMBER 31, JUNE 30,
1995 1996
------------ --------
Debt issuance costs, net of accumulated amortization June
30, 1996 $22,000......................................... $ -- $ 66,000
Deferred offering costs for the proposed IPO............... -- 40,000
Other, principally prepaid event costs..................... 3,950 17,850
------ --------
$3,950 $123,850
====== ========
NOTE 4. PROPERTY AND EQUIPMENT
DECEMBER 31, JUNE 30,
1995 1996
------------ --------
Computer equipment and software............................. $ 9,344 $ 10,272
Furniture and fixtures...................................... 865 1,400
------- -------
10,209 11,672
Less accumulated depreciation and amortization.............. 699 2,454
------- -------
$ 9,510 $ 9,218
======= =======
NOTE 5. NOTES PAYABLE AND STOCK WARRANTS
During the period ended June 30, 1996, the Company issued, unsecured,
convertible notes payable of $1,100,000 in a private placement. The notes
payable bear interest at ten percent, payable at maturity, and are subordinated
to any bank debt incurred by the Company during the term of the notes payable.
The notes payable are convertible into units at a conversion rate of $1 per
unit. A unit consists of one share of the Company's common stock and one
redeemable common stock purchase warrant. The notes payable are automatically
converted upon the completion of a public offering of the Company's securities.
If the Company does not complete an offering of its securities, the noteholders
have the option to convert their notes at any time through their maturity date
of December 31, 1996. These common stock purchase warrants entitle the holder to
purchase one share of common stock for a period of three years commencing with
the date of a public offering registration statement is declared effective by
the Securities and Exchange Commission at a price equal to 150% of the initial
public offering price. The Company has the option, during the exercise period,
to redeem the warrants at a price of $.10 per warrant, subject to certain
conditions.
In connection with the purchase of certain billiard related assets (Note
7), the Company had a promissory note payable of $340,000 at December 31, 1995.
The note payable was due on demand bearing interest at eight percent. The note
payable was paid in full during May 1996 and all accrued interest, totaling
$18,208, was waived by the note holder.
F-10
47
AMERICAN PROFESSIONAL BILLIARDS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 6. INCOME TAXES
Deferred tax assets and liabilities are summarized as follows:
DECEMBER 31, JUNE 30,
1995 1996
------------ ---------
Capitalized start up costs.................................. $ 47,000 $ 140,000
Net operating loss carryforwards............................ 2,000 49,000
-------- ---------
49,000 189,000
Less valuation allowance.................................... (49,000) (189,000)
-------- ---------
$ -- $ --
======== =========
Due to the inherent uncertainty in forecasts of future events and operating
results, the Company has provided for a valuation allowance in an amount equal
to net deferred tax assets resulting in no net deferred tax assets at December
31, 1995 and June 30, 1995 and 1996.
No income tax benefit has been recorded in the statement of operations due
to the valuation allowances on the deferred tax assets. The net change in the
valuation allowance from 1995 to 1996 is due primarily to the period ended June
30, 1996 net operating loss and the capitalization of start up costs deductible
in future periods.
The Company has federal net operating loss carryforwards of approximately
$145,000 which are available to offset future taxable earnings of the Company
and expire in 2010 and 2011. The annual usage of these NOL's may be limited
based on certain significant shifts in ownership. The planned IPO may trigger
such a limitation. The Company has not evaluated the likelihood or impact, if
any, of such a limitation, if triggered.
NOTE 7. ASSET PURCHASE
In October 1995, the Company purchased certain intangible assets from World
Wide Collectibles, Inc. (WWC), a company which developed and sold various
consumer collectibles. WWC and the Company were related when this transaction
was consummated in that the secretary/treasurer and a director of the Company
was also the treasurer and a director of WWC. The intangible assets purchased
included: a sanction from the PBT for the exclusive right to organize and stage
all PBT tournaments and other events and exclusive rights in the use of the name
"World Team Billiards." The purchase price of $460,000 was comprised of a
$340,000 demand note payable and the agreement to issue 2,000,000 shares of the
Company's common stock, valued at $120,000. The Company valued the transaction
at the amount of the monetary consideration (the $340,000 note) plus the
estimated fair value of the shares issued ($.06 per share), since it believes
that the value of the shares issued are more reliably determinable than the fair
value of the assets obtained.
NOTE 8. STOCK ISSUANCES
The Company was incorporated on May 18, 1995. On May 25, 1995, the Board of
Directors authorized issuance to the initial founders of the Company 550,000
shares of common stock at $.001 per share.
On October 3, 1995, the Company agreed to issue 2,000,000 shares of common
stock in partial payment of its purchase of certain intangibles from WWC (see
Note 7).
In May 1996, the Company issued the 550,000 initial founder shares and the
2,000,000 WWC shares, as agreed and authorized.
F-11
48
AMERICAN PROFESSIONAL BILLIARDS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 9. COMMITMENTS
Lease
The Company subleases office space under a lease expiring November 30, 1996
from World Wide Collectibles Inc., a significant shareholder of the Company. The
lease provides that the lessee pay all insurance and maintenance plus an annual
rental of $27,600. The minimum rental commitment at June 30, 1996 under this
lease is $11,500 through November 1996.
The total rental expense included in the statements of operations for the
periods ended December 31, 1995, and June 30, 1995 and 1996, and period from
inception to June 30, 1996 is $14,600, $0, $15,068 and $29,668, respectively.
Employment agreement
The Company intends to enter into an employment agreement with an
officer/shareholder upon completion of an initial public offering. The proposed
agreement is expected to include a three year term, minimum annual compensation
levels, bonus provisions, and certain other benefits.
NOTE 10. RELATED PARTY TRANSACTIONS
During the periods ended December 31, 1995 and June 30, 1995 and 1996 and
period from inception to June 30, 1996 the Company paid consulting fees and
commissions on private placement of $52,000, $0, $126,200 and $178,200,
respectively to certain officers and shareholders of the Company.
Included in accounts payable at December 31, 1995 and June 30, 1996 were
$34,000 and $5,000, respectively, for these consulting services.
During the period ended December 31, 1995 a major shareholder advanced
$91,050 to the Company to fund operations, and of that amount $81,046 was repaid
during the period ended June 30, 1996.
NOTE 11. SUBSEQUENT EVENT
On August 7, 1996, the Company issued notes payable totalling $297,500 in
exchange for cash. The proceeds are intended to fund ongoing operations. The
notes payable bear interest at 8% per annum, are unsecured, and are due on
demand. One holder of these notes payable is also a holder of the Company's
convertible notes payable (See Note 5).
F-12
49
- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESMAN OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION
OR MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY THE UNITS CONSISTING OF SHARES OF COMMON STOCK AND WARRANTS OFFERED HEREBY
BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
------------------------
TABLE OF CONTENTS
PAGE
----
Prospectus Summary.................... 3
Risk Factors.......................... 5
Dividend Policy....................... 10
Dilution.............................. 10
Use of Proceeds....................... 12
Capitalization........................ 13
Selected Financial Data............... 14
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 15
Business.............................. 17
Management............................ 23
Certain Transactions.................. 25
Principal Shareholders................ 26
Private Placement Selling
Stockholders........................ 27
Description of Securities............. 28
Underwriting.......................... 31
Experts............................... 34
Legal Matters......................... 34
Additional Information................ 34
Index to Financial Statements......... F-1
UNTIL , 1996 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE SECURITIES, WHETHER OR NOT PARTICIPATING
IN THE DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN
ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
1,000,000 UNITS
AMERICAN PROFESSIONAL
BILLIARDS, INC.
EACH UNIT CONSISTING OF ONE SHARE OF
COMMON STOCK AND ONE THREE YEAR
REDEEMABLE COMMON STOCK PURCHASE
WARRANT
--------------------
PROSPECTUS
--------------------
JOSEPH ROBERTS & CO., INC.
, 1996
- ------------------------------------------------------
- ------------------------------------------------------
50
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATIONS OF DIRECTORS AND OFFICERS
The Company's Certificate of Incorporation and its By-Laws contain
provisions for indemnification of officers, directors, employees and agents of
the Company. The Company's By-Laws require the Company to indemnify such persons
to the full extent permitted by Nevada law. Each person will be indemnified in
any proceeding if he acted in good faith and in a manner which he reasonably
believed to be in, or not opposed to the best interests of the Company.
Indemnification would cover expenses, including attorneys' fees, judgments,
fines and amounts paid in settlement.
The Company's By-Laws also provide that the Board of Directors may cause
the Company to purchase and maintain insurance on behalf of any present or past
director or officer insuring against any liability asserted against such person
incurred in the capacity of director or officer or arising out of such status,
whether or not the Company would have the power to indemnify such persons.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses in connection with
the issuance and distribution of the securities offered herein, other than
underwriting discounts and the non-accountable expense allowable payable to the
Underwriter:
Securities and Exchange Commission registration fee..................... $ 10,164.13
N.A.S.D. filing fee..................................................... 3,448.00
Printing and engraving fees............................................. 125,000.00
Accounting fees and expenses............................................ 75,000.00
Legal fees and expenses................................................. 125,000.00
Blue Sky fees and expenses (including fees of counsel).................. 45,000.00
NASDAQ Fees............................................................. 10,000.00
Miscellaneous expenses.................................................. 6,387.87
-----------
Total*.................................................................. $400,000.00
==========
- ---------------
* All amounts except the Securities and Exchange Commission registration fee and
N.A.S.D. filing fee are estimates.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
In connection with its acquisition on October 3, 1995, of certain assets of
World Wide Collectibles, Inc., the Company issued as partial consideration
2,000,000 shares of common stock to World Wide Collectibles Inc.
On May 25, 1995, the Company authorized the issuance to Robert M. Stander,
Donald E. Mackey, and Orion Associates, Inc., 225,000, 125,000 and 100,000
shares for a price of $.001 per share, respectively. The purchase price for such
shares was paid in cash. Mr. Stander is Chairman of the Board and Chief
Executive Officer of the Company; Mr. Mackey is a director of and consultant to
the Company; and Mr. O'Meara, the sole shareholder of Orion Associates, Inc., is
the secretary/treasurer and a director of the Company.
From March, 1996 through May, 1996, the Company issued in a private
placement $1,100,000 of principal amount of non-negotiable ten percent
convertible subordinated Notes to fifteen purchasers. Unless earlier converted
into equity securities, the principal of these Notes, together with the accrued
and unpaid interest thereon, will be due and payable at the close of business
December 31, 1996. These Notes will be automatically converted into units each
consisting of one share of common stock and one redeemable common stock purchase
warrant (the "Units") upon the occurrence of either of the following events: (i)
the
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completion of a public offering of the Company's common stock or (ii) the
Company acquiring, merging or entering into any other combination with a
publicly held Company which results in the Company being deemed a public company
under the federal securities laws. These Notes will convert into Units at the
rate of one unit for each dollar ($1.00) of principal amount of Notes. The
proceeds of this private placement were used to pay part of the costs for the
Company's acquisition of certain assets of World Wide Certificates, Inc. and for
general working capital purposes.
Following June 30, 1996 and through December 30, 1996, the Company issued
and sold an aggregate of $297,500 principal amount of unsecured demand
promissory notes to four individuals, bearing interest at eight percent per
annum. These notes will be repaid out of the proceeds of this Offering. See "Use
of Proceeds" and "Description of Securities -- Promissory Notes".
All of the securities described above were issued without registration
under the Securities Act of 1933, as amended (the "Act"), inasmuch as they were
deemed not subject to registration pursuant to Sections 4(2) or 4(6) of the Act
or the rules and regulations promulgated thereunder as securities sold in
transactions not involving any public offering.
ITEM 27. EXHIBITS
(a) Exhibits
EXHIBIT NO. DESCRIPTION
- ----------- --------------------------------------------------------------------------------
1.1 Form of Underwriting Agreement
1.2 Form of Selective Dealer's Agreement
1.3 Form of Agreement among Underwriters
3.1 Certificate of Incorporation of the Company
3.2 By-Laws of the Company
*4.1 Specimen of Common Stock certificate
4.2 Form of Warrant Agreement including specimen Warrant certificate
4.3 Form of Private Placement Memorandum dated March 1, 1996
4.4 Form of Subscription Agreement and Promissory Note executed by any persons
having interest in the Private Placement.
4.5 Form of Underwriter's Unit Purchase Option
*5 Opinion of Herzfeld & Rubin, P.C.
10.1 Asset Purchase Agreement, dated October 3, 1995, by and between the Company and
World Wide Collectibles Inc.
10.2 Sanction granted by Professional Billiards Tour, Inc. to World Team Billiards,
Inc.
10.3 Event Management Agreement, dated June 3, 1996 between the Company and the
Professional Billiards Tour, Inc.
*10.4 Form of Employment Agreement between the Company and Robert M. Stander.
*10.5 PBT 1996 Camel Agreement
*10.6 Agreement with Prime Network
*10.7 Form of Lock-up Agreement
23 Consent of the Accountants, see page II-5.
24 Power of Attorney, see page II-4.
- ---------------
* To be filed by Amendment.
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ITEM 29. UNDERTAKINGS
The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made
of the securities registered hereby, 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, as amended (the "Act");
(ii) To reflect in the Prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in this Registration Statement; and
(iii) To include any additional or changed material information on
the plan of distribution.
(2) That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To file a post-effective amendment to remove from registration any
of the securities which remain unsold at the end of the offering.
The Registrant will provide to the Representative at the closing specified
in the Underwriting Agreement certificates in such denominations and registered
in such names as required by the Representative to permit prompt delivery to
each purchaser.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that it is the opinion of the Securities and Exchange Commission (the
"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 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.
For determining any liability under the Act, the Registrant will treat the
information, omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
Prospectus filed by the Registrant under Rule 424(b)(1) or (4) or 497(H) under
the Act (sec.sec.230.424(b)(1), (4) or 230.497(h)) as part of this Registration
Statement as of the time the Commission declared it effective.
For determining any liability under the Act, the Registrant will treat each
post-effective amendment that contains a form of Prospectus as a new
registration statement for the securities offered in the Registration Statement,
and that offering of the securities as that time as the initial bona fide
offering of those securities.
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SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and has authorized this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Las Vegas, State of Nevada on September 19, 1996.
AMERICAN PROFESSIONAL BILLIARDS, INC.
By: /s/ ROBERT M. STANDER
------------------------------------
Robert M. Stander
Chairman of the Board and Chief
Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned whose
signature appears below constitutes and appoints Robert M. Stander, his true and
lawful attorney-in-fact, with full power of substitution and resubstitution for
him and on his behalf, and in his name, place and stead, in any and all
capacities to execute and sign any and all amendments or post-effective
amendments to this registration statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or his substitute, may lawfully do or cause to be done by
virtue hereof and the Registrant hereby confers like authority on its behalf.
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates stated:
SIGNATURE TITLE DATE
- --------------------------------------------- ------------------------ -------------------
/s/ ROBERT M. STANDER Chairman of the Board, September 19, 1996
- --------------------------------------------- Chief Executive Officer
Robert M. Stander and Director
/s/ JOHN P. O'MEARA Secretary, Treasurer, September 19, 1996
- --------------------------------------------- Director
John P. O'Meara
/s/ DONALD E. MACKEY Director September 19, 1996
- ---------------------------------------------
Donald E. Mackey
/s/ NICKY D. VARNER Director September 19, 1996
- ---------------------------------------------
Nicky D. Varner
/s/ JERRY M. SYROP Director September 19, 1996
- ---------------------------------------------
Jerry M. Syrop
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CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
American Professional Billiards, Inc.
Las Vegas, Nevada
We hereby consent to the use in this Registration Statement on Form SB-2 of our
report dated August 13, 1996 relating to the financial statements of American
Professional Billiards, Inc., and to the reference to our Firm under the caption
"Experts" in the Prospectus.
/s/ McGladrey & Pullen, LLP
Las Vegas, Nevada
September 19, 1996
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EXHIBIT SEQUENTIAL
NO. DESCRIPTION PAGE NUMBER
- ------- -------------------------------------------------------------------------- -----------
1.1 Form of Underwriting Agreement............................................
1.2 Form of Selective Dealer's Agreement......................................
1.3 Form of Agreement among Underwriters......................................
3.1 Certificate of Incorporation of the Company...............................
3.2 By-Laws of the Company....................................................
*4.1 Specimen of Common Stock certificate......................................
4.2 Form of Warrant Agreement including specimen Warrant certificate..........
4.3 Form of Private Placement Memorandum dated March 1, 1996..................
4.4 Form of Subscription Agreement and Promissory Note executed by any persons
having interest in the Private Placement..................................
4.5 Form of Underwriter's Unit Purchase Option................................
*5 Opinion of Herzfeld & Rubin, P.C. ........................................
10.1 Asset Purchase Agreement, dated October 3, 1995, by and between the
Company and World Wide Collectibles Inc. .................................
10.2 Sanction granted by Professional Billiards Tour, Inc. to World Team
Billiards, Inc. ..........................................................
10.3 Event Management Agreement, dated June 3, 1996 between the Company and the
Professional Billiards Tour, Inc. ........................................
*10.4 Form of Employment Agreement between the Company and Robert M. Stander....
*10.5 PBT 1996 Camel Agreement..................................................
*10.6 Agreement with Prime Network..............................................
*10.7 Form of Lock-up Agreement.................................................
23 Consent of the Accountants, see page II-5.................................
24 Power of Attorney, see page II-4..........................................
- ---------------
* To be filed by Amendment.