Filed Pursuant to Rule 424(b)(3)
Registration No. 333-105075
PROSPECTUS
Up to 400,000 Shares Offered by
OGDEN GOLF CO. CORPORATION
and
2,188,500 Shares offered by Selling Shareholders
This is our initial public offering. We are offering, on a "best efforts" basis,
a minimum of 300,000 shares and a maximum of 400,000 shares of our common stock
during the offering period which ends not later than August 12, 2005 (which may
be extended for 30 days). We are also registering for our selling shareholders a
total of 2,188,500 shares of common stock, including shares which may be issued
upon the conversion of our Series A preferred stock into common stock. We will
not receive any of the proceeds from the sale of our common stock by selling
shareholders. The concurrent offering of 2,188,500 shares of our common stock by
the selling shareholders is separate from our offering of up to 400,000 shares.
Our common stock is not listed on any national securities exchange or the NASDAQ
stock market. There is presently no market for our securities. The selling
shareholders will sell their shares at $.50 per share until our securities are
listed on the OTC Bulletin Board and thereafter at prevailing market prices or
at privately negotiated prices. Those selling shareholders that are officers,
directors or 10% or greater shareholders are deemed to be affiliates of the
Company and will, during this offering, offer the shares at $.50 per share.
These affiliates are be deemed to be "underwriters" under the rules and
regulations of the Securities and Exchange Commission.
WE URGE YOU TO READ CAREFULLY THE "RISK FACTORS" SECTION BEGINNING ON PAGE 7
WHERE WE DESCRIBE SPECIFIC RISKS ASSOCIATED WITH AN INVESTMENT IN OGDEN GOLF,
AND THESE SECURITIES BEFORE YOU MAKE YOUR INVESTMENT DECISION.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
THESE SHARES HAVE NOT BEEN APPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION NOR HAVE THESE ORGANIZATIONS DETERMINED WHETHER
THIS PROSPECTUS IS COMPLETE OR ACCURATE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Price to Underwriting Proceeds
Public Commission (1) to Company
- ------------------------------------------------------------------------------
Per Share $.50 $.055 $.445
Total Minimum 300,000 Shares(2) $150,000 $16,500 $133,500
Total Maximum 400,000 Shares $200,000 $22,000 $178,000
Underwriter:
ACAP Financial, Inc.
(1) In addition, we will issue to ACAP for the sum of $100, Warrants to
purchase shares of the our common stock, representing one share for every ten
shares sold in the offering. The warrants will be exercisable at $.83 per share.
(See "Plan of Distribution.")
(2) The entire amount of the proceeds received under this offering will be
promptly deposited (by noon of the next business day after receipt) in an escrow
account with Irwin Union Bank, Salt Lake City, Utah. This offering will not
close unless a minimum escrow amount of $150,000 is deposited into escrow within
120 days (which may be extended for thirty days) from the effective date of this
prospectus. If the minimum amount is not reached during the offering period, all
proceeds received will be promptly refunded to purchasers without any deduction
for commissions or other expenses and without interest thereon.
THE DATE OF THIS PROSPECTUS IS APRIL 14, 2005
PROSPECTUS SUMMARY
This section summarizes what we believe are the material aspects of our
offering. We encourage you to read this prospectus in its entirety before making
an investment decision. References in this prospectus to "Ogden Golf," "we,"
"us," and "our" refer to Ogden Golf Co. Corporation . In some cases a reference
to we or us will include Ogden Discount Golf, our wholly-owned subsidiary. Our
Business
We own and operate a retail golf equipment store in Ogden, Utah. We are a
retailer of brand-name golf clubs, golf bags, apparel, golf balls and
accessories. We intend to expand our operations by increasing our local
advertising and by initiating advertising through the development and operation
of a web site advertising our products. If we are successful, of which there can
be no assurance, we may attempt to commence efforts to sell our products on an
online basis as well as in our retail store. Our operations are conducted by our
wholly-owned subsidiary, Ogden Discount Golf, Inc.
We have operated at a loss since our inception and there can be no
assurance that we will operated at a profit in the future. Because we have
operated at loss, we have relied upon private placements of common stock and
preferred stock to fund our operations since our inception, and must continue to
rely on equity and debt investments until we operate profitably, if ever.
Our auditor's report dated November 11, 2004 on our financial statements
for the year ended June 30, 2004 included a going concern qualification which
stated that there was substantial doubt as to our ability to continue as a going
concern. Although we have raised additional capital from debt transactions, we
continue to be undercapitalized because of our continued losses from operations.
Corporate Background
We were incorporated on May 10, 2000. We were formed to acquire the assets
and business operations of an existing retail golf shop which was owned by
persons not affiliated with us or our management. The business we purchased had
been in operation for several years prior to the time we purchased it.
In January 2003, we formed Ogden Discount Golf, Inc. as our wholly-owned
subsidiary. We intend to assign all of our retail golf operations, and related
assets and liabilities to our subsidiary leaving us, for the time being, as a
holding company.
Since our inception, in May 2000, through September 30, 2004, we have
incurred a cumulative loss of $257,718.
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Offices
Our retail store and our executive offices are at 1781 Washington
Boulevard, Ogden, UT 84401, and our telephone number is (801) 627-4442.
The Offering of Shares by Ogden Golf
This prospectus relates to an offering by us of up to 400,000 shares of
common stock at $.50 per share. We are offering, on a "best efforts" basis,
300,000 shares minimum and 400,000 shares maximum during the offering period.
All funds will be held in escrow in an account with Irwin Union Bank until at
least 300,000 shares are sold. If 300,000 shares are sold within the offering
period, there will be initial closing of the sale of shares under this
prospectus and the funds will be delivered to us by the escrow agent. If the
initial closing does not occur by August 12, 2005, we may extend the initial
offering date for an additional thirty days. If we do not sell at least 300,000
shares within the offering period, all funds placed in the escrow account will
be promptly returned to investors, without interest or deduction. Subscribers
will have no right to the return of their funds during the term of the escrow.
We have entered into an underwriting agreement with ACAP Financial, Inc.
which will use its best efforts to sell the 400,000 shares we are offering. We
have agreed to pay ACAP Financial an underwriting commission of 11% if the
minimum offering is reached. If the minimum offering is reached, we will also
pay ACAP an accountable expense allowance of 1% of the gross offering proceeds.
If the minimum offering is reached, we will also issue ACAP Financial a warrant
to purchase one share of our common stock for each ten shares sold in the
offering (40,000 shares if the maximum offering is reached and 30,000 if only
the minimum offering is reached), at the price of $.83 per share.
Selling Shareholders
This prospectus also relates to the possible resale by the selling
shareholder of up to 2,188,500 shares of our common stock, including 950,000
shares which will be issued if our outstanding shares of Series A preferred
stock are converted into common stock. The selling shareholders are not required
to sell their shares and any sales of our common stock by the selling
shareholders are entirely at the discretion of the selling shareholders. Non-
affiliate selling shareholders will sell their shares at $.50 per share until
our securities are listed on the OTC Bulletin Board or other specified market
and thereafter at prevailing market prices or at privately negotiated prices,
and they may pay broker commissions in connection with such transactions. Those
selling shareholders that are officers, directors or 10% or greater shareholders
are deemed to be affiliates of the Company and will, during this offering, offer
the shares at $.50 per share. These affiliates are deemed to be "underwriters"
under the rules and regulations of the Securities and Exchange Commission. We
will not receive any of the proceeds of sale of our common stock by the selling
shareholders. We will not pay any broker commissions in connection with sale of
our common stock by selling shareholders.
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Common Stock
Common stock outstanding 1,238,500 shares
Common stock issuable upon conversion of
Series A Preferred Stock 950,000 shares
Common stock offered by Ogden Golf 400,000 shares
Common stock Offered by Selling Stockholders 2,188,500 shares *
*Includes all shares of common stock outstanding and 950,000 shares of common
stock issuable upon the conversion of our Series A Preferred Stock into common
stock.
Use of Proceeds
We will have net offering proceeds of approximately $151,000, if all
400,000 shares are sold and $107,000, if only 300,000 shares are sold. We intend
to use the net offering proceeds to (1) fund our current operating losses; (2)
increase our inventory; (3) increase print and radio advertising; (4) develop a
web site; and (5) increase our working capital. We will not receive any proceeds
from the sale of the shares of common stock by the selling shareholders. (See
"Use of Proceeds.")
SUMMARY FINANCIAL INFORMATION
The following table shows selected summarized financial data for Ogden Golf
at the dates and for the periods indicated. The data should be read in
conjunction with the financial statements and notes included in this prospectus
beginning on page F-1.
Statement of Operations Data: Six Months
Ended Year Ended Year Ended
12/31/04 6/30/04 6/30/03
---------- ---------- ----------
Sales . . . . . . . . . . . . . . . . $ 27,561 $ 79,313 $ 86,672
Gross Profit . . . . . . . . . . . . . . . 7,289 23,897 22,221
Expenses . . . . . . . . . . . . . . . . . 25,540 78,160 89,988
Net (Loss) . . . . . . . . . . . . . . . . (24,280) (66,270) (80,213)
Basic (Loss) per Share . . . . . . . . . . (.02) (.05) (.07)
As of As of As of
12/31/04 6/30/04 6/30/03
---------- ---------- ----------
Balance Sheet Date:
Total Current Assets . . . . . . . . . . . $ 28,524 $ 49,187 $ 50,512
Total Assets . . . . . . . . . . . . . . . 138,481 150,127 154,515
Total Current Liabilities . . . . . . . . 254,974 150,612 79,102
Total Long Term Liabilities . . . . . . -0- 91,767 106,241
Working Capital . . . . . . . . . . . . . (226,450) (101,425) (28,590)
Shareholders' Equity (Deficit) . . . . . . (116,492) (92,252) (30,828)
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RISK FACTORS
The shares offered in this prospectus are speculative and involve a high degree
of risk. If you purchase shares you may lose your entire investment. Prior to
making an investment decision, you should carefully consider all of the
information contained in this prospectus, including the following risk factors.
Risks Related to the Business
Our recurring operating losses, working capital deficit and negative cash flow
from operations cause substantial doubt about our ability to continue our
business.
We have incurred significant operating losses since our inception. At
December 31, 2004, our accumulated deficit was $312,309. There can be no
assurance that we will ever operate at a profit. We expect to continue
experiencing losses through at least the end of the year 2004. Because we expect
to continue to incur significant sales and marketing and administrative
expenses, we will need to generate significant revenues to become profitable and
sustain profitability on a quarterly or annual basis. We may not achieve or
sustain our revenue or profit goals. To the extent that increases in operating
expenses are not matched by increased revenue, our business, operating results
and financial condition will be harmed. Our auditor's report dated November 11,
2004 on our financial statements for the year ended June 30, 2004 included a
going concern qualification which stated that there was substantial doubt as to
our ability to continue as a going concern. Although we raised additional
capital from debt transactions, we continue to be undercapitalized because of
our continued losses from operations.
We will likely need additional financing in order to fully implement our
business plan, the failure to obtain additional financing will require us to
terminate our operations.
To date, we have had insufficient revenues to satisfy our ongoing expenses
of operation and we have funded our operations, primarily by the sale of our
securities in private transactions. Due to our history of losses, we cannot
assure you that we will ever be profitable. If we do not become profitable or
obtain additional financing, we will be unable to continue our current
operations. We cannot assure you we will have adequate capital to implement our
business plan and to maintain our current level of operation. We currently have
no commitments or understandings with any third parties to obtain any additional
financing. We cannot assure you that we will be able to obtain any additional
financing in the amounts or at the times we may require the financing, or if we
do obtain any financing that it would be on acceptable terms. Our failure to
obtain sufficient additional financing could result in the termination of our
operations, which could result in a total loss of your investment.
If the popularity of golf decreases, our revenues will likely decrease and our
ability to grow will be impaired, which likely resulting in continued loses and
give rise to the potential termination of our operations.
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We generate substantially all of our revenues from the sale of golf-related
equipment and accessories. If the demand for golf equipment decreases, our
revenues will likely decrease and we may never operate profitably. If this
happens, you may lose your entire investment in the Company. The demand for our
golf products is directly related to the popularity of golf, the number of golf
participants and the number of rounds of golf being played by these
participants. If golf participation decreases, sales of our products would
likely decrease. If products sales decrease, our revenues will decrease, and it
can be expected that our operating losses will increase.
The popularity of golf organizations, such as the Professional Golfers
Association, also affects the sales of our golf equipment and golf-related
apparel. We depend on the exposure of our brands to increase brand recognition
and reinforce the desirability of our products. Any significant reduction in
television coverage of PGA or other golf tournaments, or any other significant
decreases in either attendance at golf tournaments or viewership of golf
tournaments, will reduce the visibility of our products which could result in
lower sales.
We do not believe there has been any material increase in golf
participation or the number of golf rounds played during the last three years.
We believe that since 1997, the overall worldwide premium golf club market has
experienced little growth in dollar volume from year to year. We cannot assure
you that the overall dollar volume of the worldwide market for golf-related
products will grow, or that it will not decline, in the future. A decline in the
golf industry will likely result in a further decrease in our revenues.
A reduction in discretionary consumer spending could reduce sales of our
products which would result in continued losses and potentially the termination
of our operations.
Our products are recreational in nature and are, therefore, discretionary
purchases for consumers. Consumers are generally more willing to make
discretionary purchases of golf products during favorable economic conditions.
Discretionary spending is affected by many factors, including, among others,
general business conditions, interest rates, the availability of consumer
credit, taxation, and consumer confidence in future economic conditions. Our
customers' purchases of discretionary items, including our products, could
decline during periods when disposable income is lower, or periods of actual or
perceived unfavorable economic conditions. Any significant decline in these
general economic conditions or uncertainties regarding future economic prospects
that adversely affect discretionary consumer spending could lead to reduced
sales of our products. In addition, our sales could be adversely affected by a
downturn in the economic conditions in the markets in which our retail business
operates. The general slowdown in the United States economy and the uncertain
economic outlook has adversely affected consumer spending habits, which has
adversely affected our net revenues. A prolonged economic downturn could have a
material adverse effect on our business, financial condition, and results of
operations.
We have limited revenues and cannot predict when and if revenues will increase.
If revenues do not increase, we may not be able to continue our operations.
For the year ended June 30, 2002, we had total revenues of $108,095 and a
loss of $63,043. For the year ended June 30, 2003 we had total revenues of
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$86,672 and a loss of $80,213. For the year ended June 30, 2004, we had total
revenues of $79,313 and a loss of $66,270. For the six months ended December 31,
2004 we had total revenues of $27,561 and a loss of $24,240. Despite efforts we
may take to increase sales at our retail store and to develop a website to
market our products, there can be no assurance that our revenues will
significantly increase or that we will operate at a profit. If we cannot
commence profitable operations we may ultimately have to terminate operations
which could result in a total loss to you.
We do not know if our internet website will be effective in marketing our
merchandise and services. If the website is not effective in helping us to
increase our revenues, we may not be able to continue our operations.
We are proposing to develop an internet website which will be able to
showcase our golf merchandise and golf club repair services; however, potential
customers will not be able to make purchases via the website due to cost
constraints, at least initially. Actual purchases will have to be made via
telephone or e-mail ordering. Other companies with substantially greater
financial resources, experience, and technical and marketing personnel may offer
similar products through fully developed e-commerce websites. We believe that we
can achieve and maintain a competitive advantage by providing good prices and
personalized services, but may still be at a disadvantage in making the internet
marketing of our products competitive. If we are unable to develop an effective
website, or if our website does not significantly increase revenues, we will
likely continue to operate at a loss, which could result in a total loss of your
investment. See "Description of Business."
Our sales may be adversely affected if our suppliers fail to successfully
develop and introduce new product. A reduction in sales would result in
continued and even greater losses which could result in the termination of our
operations.
Our future success will depend, in part, upon our suppliers' continued
ability to develop and introduce innovative products in the golf equipment
market. The success of new products depends, in part, upon the various
subjective preferences of golfers, including a golf club's look and "feel," and
the level of acceptance that a golf club has among professional and recreational
golfers. The subjective preferences of golf club purchasers are difficult to
predict and may be subject to rapid and unanticipated changes. If we or our
suppliers fail to successfully develop and introduce innovative products on a
timely basis, then our sales and profits may suffer.
In addition, if we or our suppliers introduce new golf clubs too rapidly,
it could result in close-outs of existing inventories. Close-outs can result in
reduced margins on the sale of older products, as well as reduced sales of new
products given the availability of older products at lower prices. These reduced
margins and sales may result in a reduction in our revenues and an increase of
our losses.
Our sales may be adversely affected if new competitors enter the golf products
industry. A reduction in sales would result in continued and even greater losses
which could result in the termination of our operations.
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Increased competition in our markets due to the entry of new competitors,
including companies which currently supply us with products that we sell, could
reduce our net revenues. Our competitors currently include other specialty
retailers, mass merchandise retailers, conventional sporting goods retailers,
on-course pro shops, and online retailers of golf equipment. These businesses
compete with us in one or more product categories. In addition, traditional and
specialty golf retailers are expanding more aggressively in marketing brand-name
golf equipment, thereby competing directly with us for products, customers and
locations. Some of these potential competitors have been in business longer than
us and/or have greater financial or marketing resources than we do and may be
able to devote greater resources to sourcing, promoting and selling their
products. As a result of this competition, we may experience lower sales or
greater operating costs, such as marketing costs, which would likely increase
our operating losses.
Our business is highly seasonal and if we do not accurately predict our sales
and expenses during our peak seasons and they are lower than we expect, we would
suffer even greater losses which could result in a termination of our
operations.
Our business is highly seasonal. Our sales during our second fiscal quarter
of each year, which includes the Father's Day selling season, and the Christmas
holiday selling season have historically contributed a disproportionate
percentage of our net revenues and most of our net income for the entire year.
We make decisions regarding merchandise well in advance of the season in which
it will be sold, particularly for the Father's Day and Christmas holiday selling
seasons. We incur significant additional expenses leading up to and during our
second fiscal quarter and the month of December in anticipation of higher sales
in those periods, including acquiring additional inventory, preparing and
mailing our catalogs, advertising, creating in-store promotions and hiring
additional employees. If our sales during our peak seasons are lower than we
expect for any reason, we may not be able to adjust our expenses in a timely
fashion. As a result, our margins may be significantly effected, our revenues
may decrease, our losses may decrease and you may lose your entire investment.
Our daily operations are managed by Paul Larsen, our only full-time employee.
The loss of his services could result in a void in dealing with suppliers,
customers and others while a new manager is trained. Such an event could result
in reduced resources and greater operating losses.
Our future success depends, in large part, on the continued service of Paul
Larsen. We do not maintain key-person insurance on Mr. Larsen or on any of our
officers or managers. Any loss or interruption of the services of Mr. Larsen
could significantly reduce our ability to effectively manage our operations and
implement our growth strategy because we cannot assure you that we would be able
to find appropriate replacements for our key executives and managers should the
need arise. Paul Larsen is the only member of our management team that is
employed by the Company on a full-time basis.
If we do not anticipate and respond to the changing preferences of our
customers, our revenues could significantly decline and we could be required to
take significant markdowns in inventory causing even greater financial losses.
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Our success depends, in large part, on our ability to identify and
anticipate the changing preferences of our customers and stock our store with a
wide selection of merchandise that appeals to their preferences. Our customers'
preferences for merchandise and particular brands may vary significantly over
time. We cannot guarantee that we will accurately identify or anticipate the
changing preferences of our customers or stock our store with merchandise that
appeals to them. If we do not accurately identify and anticipate our customers'
preferences, we may lose sales or we may overstock merchandise, which may
require us to take significant markdowns on our inventory. In either case, our
revenues could significantly decline and our business and financial results may
suffer.
If we do not increase public awareness of our retail store, we will likely
continue to operate at a loss which could result in the termination of our
operations.
We are a small, one store operation. We need to increase our name
recognition in our market area. We need to increase our customer base. We intend
to use the proceeds of this offering to increase advertising in both traditional
forms and over the internet. Our marketing and advertising efforts are likely to
be expensive and may fail. If we fail to develop sufficient name recognition and
attract new customers we will not be successful and may be required to terminate
our operations.
Our management lacks experience in the golf industry and this lack of experience
may prevent us from increasing our revenues and operating at a profit resulting
in the termination of our operations.
Paul Larsen has operated Ogden Golf since 2000. Prior to that time he had
no experience operating a retail venture or a business involved in the golf
industry. None of our other officers and directors has experience in the golf
business. This lack of experience could hurt our chances of success in building
our business, increase our revenues and building a profitable company.
Risks Related to the Offering
There is no market for our common stock, there may never be an active market and
you may be unable to sell your shares.
There is no trading market for our common stock and it is not anticipated
that a trading market will develop in the foreseeable future. If no market
develops, it may be difficult or impossible for you to resell your shares if you
should desire to do so. We do not anticipate that we will ever be listed on a
securities exchange nor have our common stock quoted on NASDAQ. Following the
completion of this offering, we may attempt to have our shares quoted on the OTC
Bulletin Board or on the OTC "Pink Sheets. The Pink Sheets is not affiliated
with NASDAQ or the OTC Bulletin Board and is not deemed to be a "market" for
trading purposes. There can be no assurance that our shares will ever be quoted
on any OTC medium, or if they are quoted, that there will ever be a market for
our shares. Investors should not purchase shares of our common stock in this
offering unless they can afford to hold such shares for an indefinite period of
time. Even if you are able to sell your shares, we cannot assure you that you
will be able to resell your shares at the purchase price paid or at any price.
9
Costs of being a public company are substantial.
We will be required to file Forms 10-KSB, Forms 10-QSB, Forms 8-K and other
forms with the Securities and Exchange Commission under the requirements of the
Securities act of 1933 as amended and the Securities Exchange act of 1934 as
amended. The costs of such filings for legal fees, accounting fees and
management time will be significant as compared to our current revenues. In
order to fund such costs we will need to increase our revenues as well as use
proceeds from this offering. There can be no assurance that we will be able to
pay the costs associated with such filings in the future. If we cannot fund the
costs of such filings we will be unable to make such filings and will either be
delinquent or will terminate our reporting duties in accordance with the rules
and regulations of the Securities and Exchange Commission. If we attempt to have
our common stock quoted on the OTC Electronic Bulletin Board after this offering
is completed, of which there can be no assurance, we must continue to be current
in all of our required filings.
The selling shareholders will be entitled to sell their shares during the
offering period, and this could hurt our efforts to sell the 400,000 shares we
are offering through ACAP.
The Selling Shareholders may resale their shares during this offering
period when we are trying to sell up to 400,000 of our shares through ACAP. If
we are unable to raise additional capital through the sale of our shares we may
not be able to continue with our operations.
The book value of your investment will be much lower than the share price.
Persons purchasing shares in this offering will suffer a substantial and
immediate dilution to the net tangible book value of our common stock below the
offering price. The book value of our shares at June 30, 2004 was approximately
a negative $.042 per share. The book value of our common stock at December 31,
2004 was a negative $.053 per share, assuming all shares of Series A preferred
stock are converted into shares of common stock. After sales of the minimum
300,000 shares and assuming all shares of Series A. Preferred Stock are
converted to common stock, the book value per share will be approximately a
negative $.004, or a dilution to subscribers of approximately $.504 per share.
After sales of the maximum 400,000 shares, the book value per share will be
approximately $.066 or a dilution to subscribers of approximately $.487 per
share. (See "Dilution.")
You cannot withdraw your funds once invested and you will not receive a refund
unless we fail to sell the minimum offering amount of $150,000 after the full
offering period of up to 150 days from the effective date of the prospectus.
Investors do not have the right to withdraw invested funds. Subscription
payments will be released from the escrow account to us, only if the minimum
number of Shares is sold, or for the purpose of refunding subscription payments
to the subscribers, if the minimum number of shares is not sold. Therefore, once
you have invested, you will not have the use or right to return of such funds
during the escrow period, which may last as long as 150 days from the effective
date of this prospectus.
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The sale of shares by our shareholders could hurt our trading market if a
trading market ever develops.
We have never had a public market for our common stock. It is our intent to
attempt to have a market developed in the future. The registration statement of
which this prospectus is a part, registers all of our issued and outstanding
shares. Because all of our outstanding shares are currently available for sale
if a market existed, we anticipate that when and if a market develops in the
future, many shareholders will desire to liquidate their shares. In such event,
we anticipate that our stock price may be hurt by future sales of our shares or
the perception that such sales may occur.
If management converts their preferred stock into common stock and does not sell
shares in the offering, management would own more than 50% of the outstanding
shares and have total control over the affairs of the Company. In such case,
minority shareholders would have no ability to elect directors or otherwise
control the Company.
Our management currently owns, as a group, a majority of the outstanding
shares of common stock. Members of management also own shares of our preferred
stock which are convertible into common stock subject to certain conditions. If
management does not sell all of their shares under the registration statement of
which this prospectus is a part, management will continue to own more than a
majority of all issued and outstanding shares of common stock then outstanding.
Since we do not have cumulative voting rights for our common stock, management
will continue to have the voting power necessary to elect all directors and
therefore completely control the Company. Although management has fiduciary
duties to minority shareholders, it is possible that management decisions will
be made which will be advantageous to management shareholders and
disadvantageous to minority shareholders.
If our non-employee management were to sell all of their shares pursuant to this
prospectus, there would be no monetary benefit related to their continued
relationship to the Company. If management were to resign as management, it
could result ina disruption of our operations. We may not be able to find
suitable replacement management if this were to occur.
All of our shareholders, including management, are included as Selling
Shareholders. None of our management, except for Paul Larsen, are compensated
for services rendered to the Company. If these non-employee members of
management were to sell all of their shares of our common stock in this
offering, there would be no monetary benefit for them to continue to be involved
with the Company. If our management resigned we would need to find suitable
replacement management of which there can be no assurance. A change of
management could result in a disruption of our operations and may result in
increased expenses for new management compensation. Based upon conversations
with management, we anticipate that management will retain an economic interest
in the Company for the foreseeable future.
Management may purchase shares for the sole purpose of achieving the minimum
offering.
Our management may purchase up to 10% of the total shares of common stock
we are offering pursuant to this prospectus. They may purchase these shares for
the sole purpose of allowing us to reach the minimum offering of 300,000 shares.
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If this happens, it may result in allowing management to resell their own
registered shares in a trading market.
Conversion of preferred stock increases dilution in both percentage ownership
and book value.
In the fourth quarter of 2002 and the first quarter of 2003, we sold 95,000
shares of our Series A Preferred Stock for a total of $19,000. Each share of
Series A preferred stock is convertible into 10 shares of our common stock if
certain financial conditions are met. If the minimum number of shares offered
pursuant to this prospectus is sold, the Series A preferred stock will be
convertible. Accordingly, if the Series A preferred stock is converted into
common stock, a total of 950,000 shares of common stock will be issued to the
Series A preferred stockholders. This amounts to a purchase price of $.02 per
share. This will result in dilution to all other common stockholders in both
percentage ownership of the Company and per-share net tangible book value.
USE OF PROCEEDS
Our net proceeds from this offering, after deducting the 11% sales
commission and offering expenses estimated to range from approximately $26,500
to $27,000 will be from $107,000 to $151,000 depending upon the number of shares
sold. The offering is being made on a best-efforts basis, and we do not know how
many shares will be sold in the offering. The primary purposes of this offering
are to obtain additional capital, create a public market for the common stock,
and facilitate future access to public markets. In general, we intend to use the
net proceeds from this offering to provide us with working capital and to fund
marketing efforts including the development of a website. We will not receive
any proceeds from the sale of the shares of common stock offered by the Selling
Shareholders pursuant to this prospectus. The table below represents our best
estimate of the allocation of the net proceeds, including the priorities for the
use of the proceeds in descending order, based upon our current business plan.
Minimum % Maximum %
-------- ----- -------- -----
Gross Proceeds of Public Offering $150,000 100 $200,000 100
Less:
Underwriting Commissions (1) 16,500 11.00 22,000 11.00
Other Costs of Issuance (2) 26,500 17.66 27,000 13.50
-------- ----- -------- -----
Net Proceeds to Company 107,000 71.33 151,000 75.50
-------- ----- -------- -----
Internet Website Development 15,000 10.00 35,000 17.50
Marketing and Sales Development 30,000 20.00 50,000 25.00
Funding of Operating Losses 40,000 26.77 40,000 20.00
Inventory 10,000 6.70 14,000 7.00
Professional Fees(3) 12,000 8.00 12,000 6.00
-------- ----- -------- -----
TOTAL USE OF NET PROCEEDS $107,000 71.33 $151,000 75.50
(1).Subject to the sale of at least 300,000 shares, the underwriter will be
paid an underwriter's commission of 11% of the gross offering proceeds. (See
"Plan of Distribution.")
12
(2).Including a 1% non-accountable expense allowance paid to the
underwriter and attorney's fees, accountant's fees, registration and filing
fees, costs of printing this prospectus and stock certificates, and registration
and issuance of stock to public investors and other miscellaneous items.
(3).We anticipate that we will use approximately $12,000 of the offering
proceeds to pay professional fees necessary to comply with reporting
requirements of the Securities Exchange Act of 1934 following the completion of
this offering.
The amounts set forth above reflect our intent with respect to using the
offering proceeds. Actual expenditures may differ from those stated above;
however, we do anticipate any difference will be minor. We recognize that such
proceeds may be insufficient to enable us to fully exploit our business plan and
objectives and we may have to seek additional financing through loans, the sale
of additional securities, or other financing arrangements. No such arrangements
exist or are contemplated, and there can be no assurance that they may be
available in the future should the need arise. All funds not being utilized by
us for our proposed business will be held in interest-bearing accounts,
short-term interest-bearing certificates of deposit, treasury bills, or other
high grade short-term securities. Those funds received by us, other than from
the offering, will be utilized for the purpose of paying any additional costs of
this offering and funding our business operations.
DILUTION AND COMPARATIVE INFORMATION
Dilution is a reduction in the value of a purchaser's investment measured
by the difference between the purchase price of the shares purchased and the net
tangible book value of the shares after the purchase takes place. The book value
of a share is equal to shareholder's equity, as shown on the balance sheet,
divided by the number of shares outstanding. We currently have 1,238,500 shares
of common stock issued and outstanding. We also have 95,000 shares of preferred
stock issued and outstanding which are convertible into 950,000 shares of our
common stock. For purposes of calculating dilution, we have assumed that all
shares of Series A Preferred Stock have been converted into common stock.
Therefore, we have assumed that 2,188,500 shares of common stock are outstanding
prior to the issuance of shares in this offering.
The unaudited book value of the Company, as of December 31, 2004 was a
negative $116,492 or approximately a negative $.053 per share assuming the
Series A Preferred Stock is converted into common stock. The following table
sets forth the dilution to persons purchasing common stock in this offering
without taking into account any changes in the net tangible book value after
December 31, 2004, the sale of the minimum and maximum shares of common stock
offered at the public offering price and the receipt of a minimum $150,000 and a
maximum $200,000 gross proceeds from the offering. The net tangible book value
per share is determined by subtracting our total liabilities from our tangible
assets and then dividing the remainder by the total number of shares of our
stock outstanding. Net tangible book value figures representing the effects of
the offering take into account the offering expenses.
13
Minimum Maximum
Shares Shares
Sold Sold
------- -------
Public offering price per share $0.50 $0.50
Net tangible book value per share
before this offering ($.053) ($.053)
Increase per share attributable to
new investors $.049 $.066
Adjusted net tangible book value per
share after this offering ($.004) $.013
Dilution per share to new investors $.504 $.487
Percentage dilution 108 % 98.6 %
Comparative Value
The following tables summarize the number of shares to be purchased from
Ogden Golf as a part of this offering, the number of shares purchased as a
percentage of our total outstanding shares, the aggregate consideration for such
shares, the aggregate consideration as a percentage of total consideration, and
the average consideration paid per share for such shares by all existing
shareholders and the investors in this offering.
Assuming the Sale of All Shares Offered
---------------------------------------
% Aggregate Average
Shares Of Total Consideration Price Per
Purchased Shares Paid % Share
--------- -------- ------------- ---- -------
Present Shareholders 1,238,500 48% $162,545 42% $.13
Preferred Stock Holders* 950,000 37% $ 19,000 5% $.02
Investors in this Offering 400,000 16% $200,000 53% $.50
--------- -------- ------------- ---- -------
TOTALS 2,588,500 100% $381,545 100%
========= ======== ============= ====
14
Assuming 300,000 Shares are Sold
---------------------------------------
% Aggregate Average
Shares Of Total Consideration Price Per
Purchased Shares Paid % Share
--------- -------- ------------- ---- -------
Present Shareholders 1,238,500 48% $162,545 49% $.13
Preferred Stock Holders* 950,000 39% $ 19,000 6% $.02
Investors in this Offering 300,000 13% $150,000 45% $.50
--------- -------- ------------- ---- -------
TOTALS 2,488,500 100% $331,545 100%
* Assumes all Series A Preferred shares are converted into common shares
at the rate of 10 shares of common stock for each preferred share.
MARKET FOR COMMON STOCK AND DIVIDEND POLICY
Market
Currently, there is no market for our common stock. Subject to compliance
with applicable listing standards, we plan to attempt to qualify for listing on
the OTC Bulletin Board.
Holders
As of April 12, 2005, there were 1,238,500 shares of common stock
outstanding and approximately 33 stockholders of record. As of December 22,
2004, there were 95,000 shares of our Series A Preferred Stock owned by three
preferred stockholders. Two of our preferred stock holders are also a common
stock holder. Accordingly, we have a total of 34 shareholders of record.
Dividends
We have not paid any cash dividends since our inception and do not
anticipate or contemplate paying dividends in the foreseeable future. It is the
present intention of management to utilize all available funds for the
development of our business. Furthermore, we anticipate that we will operate at
a loss during the next year, in which case, we would not declare a dividend on
our common stock.
MANAGEMENT'S DISCUSSION AND ANALYSIS
Ogden Golf operates a single retail golf equipment and golf services
business. Ogden Golf intends to expand its operations with the proceeds of this
offering as is described in the Business Section of this prospectus. Ogden
Golf's revenues are primarily derived from the sale of golf clubs, balls, shoes
15
and other golf related equipment and products. We sell name brand clubs as well
as generic type of golf clubs. Revenue is also generated from constructing golf
clubs on a custom basis, from club repairs and from other golf related equipment
services. Our expenses are primarily related to cost of goods sold, salaries,
utilities and the repayment of the real estate loan for our facilities.
Although the golf industry has seen significant and rapid growth in the
last 15 years, during the last three years, equipment sales, on an industry
basis have declined, the number of golf rounds played have declined and the
number of new courses under construction nationally have slowed compared to
previous years.
Local golf retail outlets face growing competition from national chains and
from internet sales. Our store is located in Ogden, UT. There are no national
chain golf stores in the Ogden area and we are aware of only one other non-golf
course retail outlet in the Ogden area.
It appears that internet sales of golf products continue to increase. Our
business plan includes the development of a presence on the world wide web. The
exact nature of such presence is dependent upon the net proceeds we realize from
this offering.
We also intend, with the offering proceeds to increase our advertising and
marketing efforts in small communities near Ogden, UT that are no currently
served by retail golf stores.
A Wal-Mart store has opened within several miles of our store and it has
resulted in a reduction of our revenues during the last six months. We are
unable to predict what future effect the opening of such store will have on our
operations. In general, we believe the serious golfer looking for name brand
products will continue to shop at golf retail stores and on line golf companies.
We have struggled financially since our inception in 2000 and have relied
upon equity and debt investments from friends and family of management to fund
our negative cash flow. We believe that the offering proceeds will allow us to
increase our overall marketing efforts and allow us to explore internet related
marketing efforts, which could result in increased revenues.
As stated in the Risk Factors section of this prospectus, an investment in
Ogden Golf is a high risk investment and should not be made by anyone who cannot
afford the complete loss of his or her investment.
The following discussion of our financial condition and results of
operations should be read in conjunction with our consolidated financial
statements and the related notes, and the other financial information included
in this prospectus. This discussion and analysis contains forward-looking
statements that involve risks and uncertainties. Our actual results may differ
materially from those anticipated in these forward-looking statements as a
result of specified factors, including those set forth in the risk factors
section of this prospectus and elsewhere in this prospectus.
16
Results and Comparison for Fiscal Years
Fiscal year ended June 30, 2004 resulted in a net loss of $66,270 compared
to a net loss of $80,213 for the fiscal year ended June 30, 2003. The Basic and
Diluted Loss per Share for fiscal year 2004 was $.05, compared to a per-share
loss of $.07 for fiscal year 2003. This decrease in the loss per share of $.02
primarily results from (1) a decrease in general and administrative expenses;
(2) a decrease in revenues, (3) a decrease in cost of goods sold; and (4) a
decrease in interest expense. Details of changes in revenues and expenses can be
found below.
Revenues
For the fiscal year ended June 30, 2004, we had total revenues of $79,313
down $7,359 or 8.49% from revenues of $86,672 for fiscal year 2003. We believe
that revenues were down as a result of greater competition, and our reduction in
advertising expenses. We have devoted fewer resources to advertising expenses as
available funds have decreased. We anticipate that if this offering closes, we
will increase our advertising expenditures which we anticipate will result in
increased revenues. However, there can be no assurance that our revenues will
increase on a meaningful basis even if we allocate greater resources to
advertising.
Cost of Goods Sold. As a result of our lower sales in fiscal 2004 compared
to fiscal 2003, our cost of goods sold decreased to $55,415 from $64,451. This
was a descrease of $9,036 or approximately 14%.
Operating Expenses. Our operating expenses in 2004 decreased to $78,160
from $89,988 in 2003, a decrease of $11,828, or 13.14%. The decrease in general
and administrative expenses is a result of decreased legal and accounting
expenses.
Interest Expense. We borrowed the funds necessary to purchase the building
in which our retail store is located. Interest expense consists of interest
accrued on the mortgage. We also incurred interest on the other short term debt.
Interest was $11,908 for the year ended June 30, 2004 compared to $12,346 for
the year ended June 30, 2003.
Results and Comparison for the Three Months and Six Months Ended December 31.
For the three months ended December 31, 2004 we had a net loss of $13,801
compared to a net loss of $12,555 for the three months ended December 31, 2003.
For the six months ended December 31, 2004 we had a net loss of $24,240 compared
to a net loss of $21,190 for the six months ended December 31, 2003. The Basic
and Diluted Loss per Share was $.01 for the three months ended December 31, 2004
and 2003. The Basic and Diluted Loss per Share was $.02 for the six months ended
December 31, 2004 and 2003. On a national basis, during the last several years,
the number of golf rounds played has declined on an annual basis. However, in
Utah during the last several years, new course construction has increased
compared to previous years. We do not know whether golf rounds played has
decreased in Utah during the last several years as it has nationally. A
reduction in golf rounds played in Utah and a reduction in consumer spending
could result in a reduction in our revenues.
17
Revenues. Our revenues for the three months ended December 31, 2004 were
$6,467 compared to $11,896 for the same period ended December 31, 2003, a
decrease of $5,429, or 45.64%. Our revenues for the six months ended December
31, 2004 were $27,561 compared to $37,377 for the same period ended December 31,
2003, a decrease of $9,816, or 26.26%.
Our revenues decreased as a result of the increase in large discount
retailers like Wal-Mart, Costco, Sam's Club and online activity from golf
equipment web sites. We have decreasing revenues for each quarter during the
last fiscal year. Unless we are able to raise additional capital revenues will
likely continue to decrease. If we are unable to raise additional capital and
increase our revenues, we may be required to discontinue our operations. Our
business is seasonal and with April, May and June and the Christmas season being
the periods in which our revenues are typically the greatest. We believe that
with the proceeds of this offering we can increase our advertising, develop a
website and increase our inventory for the summer season and for the 2005
Christmas season.
Cost of Goods Sold
As a result of our lower sales for the three months ended December 31, 2004
compared to the three months ended December 31, 2003, our cost of goods sold
decreased to $5,416 from $6,905. As a result of our lower sales for the six
months ended December 31, 2004 compared to the six months ended December 31,
2003, our cost of goods sold decreased to $20,272 from $24,055.
Operating Expenses
Operating expenses for the three months ended December 31, 2004 were
$11,805 as compared to $14,785 for the same period in fiscal 2003, a reduction
of $2,980 or approximately 20%. Operating expenses for the six months ended
December 31, 2004 were $25,540 as compared to $28,909 for the same period in
fiscal 2003, a reduction of $3,369 or approximately 11.65 %. The reduction in
operating expenses were the result of reductions in professional fees paid to
accoutants.
Interest Expense
Interest expense consists of interest accrued on the loan we obtained to
purchase our building and notes payable to stockholders. Interest was $3,047 for
the three months ended December 31, 2004 compared to $2,761 for the three months
ended December 31, 2003. Interest was $5,989 for the six months ended December
31, 2004 compared to $5,603 for the six months ended December 31, 2003. The
increase in interest was the result of an increase in loans from stockholders.
Liquidity and Capital Resources
We are currently unable to finance our operations from operating activities
and historically have relied on private placements of common stock and preferred
stock to fund our operations. Since our inception, we have financed our
operations through the sale of common stock ($159,970, net proceeds) and
issuance of Series A Preferred Stock ($18,000 net cash proceeds). During 2003
and 2004 through December 31, 2004, we have received loans from our officers and
18
shareholders to fund our operating costs. The loans were made in various amounts
as needed. These loans bear interest at the rate of 10% per annum, are unsecured
and are due on demand. If we are unable to obtain additional capital from the
sale of shares in this offering, we will be required to attempt to obtain
additional loans in order to pay for our deficits in cash flow. A summary of the
loans is as follows:
Lender Date of Loan Loan Amount
------ ------------ -----------
Roycemore Corporation 7/15/03 $ 5,000
Roycemore Corporation 8/02/03 $ 2,500
Roycemore Corporation 8/15/03 $ 10,000
Roycemore Corporation 12/05/03 $ 1,250
Roycemore Corporation 12/09/03 $ 1,250
Mark Scharmann 1/24/04 $ 1,000
Mark Scharmann 2/07/04 $ 3,000
Curtis Kaminska 2/11/04 $ 2,500
Roycemore Corporation 6/06/04 $ 1,500
Paul Larsen 6/30/04 $ 3,500
Paul Larsen 8/14/04 $ 5,000
Roycemore Corporation 8/17/04 $ 5,000
Paul Larsen 10/08/04 $ 5,000
Roycemore Corporation 11/03/04 $ 2,000
Curtis Kaminska 11/12/04 $ 2,000
Hyacinth Resources 11/22/04 $ 1,500
Various Non-Mangement
Shareholders (4) various dates $ 34,800
--------
Total $ 86,800
(1) Officers and Directors of the Company
(2) An affiliate of our president Mark Scharmann
(3) An affiliate of our Director Douglas P. Morris
(4) Thirteen non-management shareholders
We anticipate that following the completion of the offering we will either
enter into long term payment arrangement with the lenders of the loans described
above, or attempt to convert some or a portion the debt to equity. As stated
above the lenders are officers, directors and shareholders of the Company and
each has expressed an interest in assisting the Company in its efforts to
commence profitable operations.
We anticipate that the net proceeds from this offering, together with the
cash flow from operations, will be sufficient to fund our anticipated working
capital and capital expenditures for the 12 months following completion of this
offering.
19
At June 30, 2004 we had total assets of $150,127 of which $11,876 was cash.
At June 30, 2003 we had total assets of $154,515 of which $9,319 was cash. At
December 31, 2004, we had total assets of $138,481, of which $5,744 was cash.
Since November of 2002, we have raised $31,200 in cash from the sale of our
equity securities in private transactions and since June of 2002 and we have
obtained loans (that are still outstanding) in the amount of $86,800 from
stockholders.
Our total liabilities at June 30, 2004 were $242,379 including $91,767 for
our mortgage to Barnes Banks. Interest accrues on the mortgage at the rate of
11.25% per annum. We make monthly payments of $1,608 and the entire amount of
the mortgage is due in a balloon payment in September 2005. At June 30, 2003,
our total liabilities were $185,343. At June 30, 2003, our mortgage was
$106,241. At December 31, 2004, our total liabilities were $254,974.
Our stockholders' equity at June 30, 2004 was a negative $92,252 compared
to stockholders' equity at June 30, 2003 of a negative $30,828. Our stockholders
equity at December 31, 2004 was a negative $116,492.
Cash provided by financing activities was approximately $48,072 for the
fiscal year ended June 30, 2004, and $41,182 for the fiscal year ended June 30,
2003. In 2004, the cash provided by financing activities resulted primarily from
loans from shareholders and in 2003 from the issuance of capital stock. Cash
provided by financing activities was $25,926 for the six months ended December
31, 2004. These financing activities included loans totaling $30,800 made to
Ogden Golf. These loans are unsecured, due on demand and bear interest at the
rate of 10% per annum.
We have sustained losses of $66,270 and $80,213 for the years ended June
30, 2004 and June 30, 2003, respectively. In addition, operating activities have
used cash of $45,515 and $49,011 for the years ended June 30, 2004, and 2003,
respectively. We have sustained losses of $13,801 and $12,555 for the three
months ended December 31, 2004, and 2003, respectively. We have sustained losses
of $24,240 and $21,190 for the six months ended December 31, 2004, and 2003,
respectively. In addition, operating activities have used cash of $32,058 and
$26,081 for the six months ended December 31, 2004, and 2003, respectively.
Our ability to continue as a going concern is dependent upon our ability to
generate sufficient cash flows to meet our obligations on a timely basis, to
obtain additional financing, and ultimately to attain profitable operations.
Management plans include obtaining additional equity financing and our
management believes that profitability and cash flows from our operations will
improve and will provide the necessary capital to fund operations due to the
continued success of existing products and the introduction of new products.
There is no assurance, however, that these efforts will result in profitable
operations or in our Company's ability to meet obligations when due.
Our working capital requirements and other capital requirements for the
foreseeable future will be primarily funded through the issuance of equity
securities until we are able to meet our working capital needs with positive
cash flows provided from operations; after this point, we will likely increase
expenditures so as to accelerate our revenue and profitability growth. We
believe that proceeds from subsequent issuance of equity securities will enable
us to establish profitable operations and positive cash flows from operations.
20
However, there is no assurance that profitable operations or positive cash flows
from our operations will ever be realized.
We are currently attempting to raise equity capital through the issuance of
our common stock in this offering. There can be no assurance that any shares
offered will be sold. There can be no assurance that we will be able to raise
sufficient capital necessary to allow us to continue with our operations on our
current scale. If additional funds are raised through the issuance of equity
securities, the percentage of our shares owned by existing stockholders will be
reduced, stockholders may experience additional dilution.
Recently Issued Accounting Standards
We believe that recently issued financial standards will not have a
significant impact on our results of operations, financial position, or cash
flows. See footnotes to the attached financial statements.
Inflation
We do not expect the impact of inflation on operations to be significant.
Forward-looking Statements
Some of the statements contained in this prospectus discuss future
expectations, contain projections of results of operations or financial
condition or state other "forward-looking" information. Those statements are
subject to known and unknown risks, uncertainties and other factors that could
cause the actual results to differ materially from those contemplated by the
statements. The forward-looking information is based on various factors and was
derived using numerous assumptions. Important factors that may cause actual
results to differ from projections include, for example:
o We have achieved limited revenues since our formation and there can be
no assurance that our revenues will ever significantly increase.
o We have incurred substantial losses and anticipate continued losses in
the foreseeable future.
o The golf equipment industry is highly competitive and is dominated by
national firms selling equipment in retail stores or on an online,
internet basis.
o The golf industry in general is not currently experiencing growth.
o We are subject to all of those risks set forth in the "Risk Factors"
section of this prospectus.
21
BUSINESS OF OGDEN GOLF CO. CORPORATION
General
Ogden Golf Co. Corporation was organized on May 10, 2000, under the laws of
the State of Utah, by Paul W. Larsen. In connection with our formation, Mr.
Larsen purchased the assets of an existing retail golf shop from an unrelated
third party through a combination of bank debt and personal funds. We acquired
the assets totaling $188,517 and assumed liabilities totaling $142,047 in
exchange for issuing Mr. Larsen 500,000 shares of our common stock.
We are located in Ogden, Utah and are a retailer of brand-named golf clubs,
bags, apparel, and accessories merchandise. In addition, we offer custom golf
club-making, fitting, repair, and tune-up services to our customers throughout
Northern Utah. Our retail business is seasonal, with the heaviest sales during
March, April and May, when outdoor spring activities commence, and in November
and December because of holiday gift purchases.
We have been undercapitalized since our inception and have relied upon
friends and relatives to fund our operating losses, primarily through purchases
of our stock in private transactions. Our plan is to use the net proceeds from
the sale of shares offered pursuant to this prospectus, to increase our
advertising and marketing efforts in Ogden and in surrounding areas. We have not
completed marketing plans and will likely not until we have funds available from
our sale of shares pursuant to this prospectus. We anticipate that we will
continue to operate at a loss for the foreseeable future.
Our current plans include direct mailing, newspaper advertising and the
development of a website through which we can potentially increase our customer
bases both in Ogden and in surrounding areas in northern Utah, southern Idaho
and southwestern Wyoming.
Although some members of our management have prior experience with blank
check companies, we have no current plans to engage in a merger or acquisition
following the effective date of the registration statement. We intend to
continue to operate our current golf business.
The Golf Industry in the United States
Market Size and Growth Characteristics. Based on a study by the National
Sporting Goods Association(R), or NSGA, retail sales of new golf equipment grew
from $2.5 billion to $3.9 billion, or at a compound annual rate of 4.6%, from
1991 to 2001. However, retail sales of new golf equipment and accessories
declined from approximately $3.9 billion in 2001 to $3.3 billion in 2002 and
were estimated to remain at approximately $3.3 billion in 2003. The number of
golf rounds played also declined in 2002. The popularity of golf, as well as
golf equipment sales, has been, and is expected to be, influenced by the
following factors:
Favorable Demographic Trends. The aging of the huge baby boomer population
segment will continue to have a positive impact on golf equipment spending.
Research by the National Golf Foundation(R), or NGF(R), shows that golfers 45
and older represent 39% of the golfer population yet account for 47% of
golf-related spending.
22
Growth in Golf Course Facilities. Whereas there was significant growth in
the early 1990s in new course development, new courses are opening at a
decreasing rate as the market adjusts to participation levels. According to the
Golf 20/20 Industry Report, the rate of new course openings in the years 2000 to
2002 went from 3.2% to 2.3% to 1.5% in 2002, resulting in a total of
approximately 15,800 regulation golf courses (at least nine regulation holes) in
the United States at the end of 2002. Most of this growth has been attributable
to new public or daily fee courses, which now represent over 70% of all golf
course facilities, significantly improving access to the game. The growth of
alternative facilities including driving ranges, par 3 courses, and other golf
learning centers has also improved access to the game.
Industry Initiatives. Over the past few years, there have been numerous
initiatives supported by the PGA of America, LPGA, USGA(R), World Golf
Foundation, and others to increase golf participation. These include programs
such as "The First Tee," designed to introduce golf to juniors, "First Lesson
Free," offering discounted or free introductory lessons to beginning golfers,
"Link Up 2 Golf," and over 70 "Nike Golf Learning Centers," designed to attract,
develop, and retain golfers.
Increased Visibility. Visibility of golf and golf equipment has been
enhanced by increased media coverage of PGA events, greater exposure on
television, including The Golf Channel(R), an increased number of tour and
special events and outings, and the emergence of superstars such as Tiger Woods
and Annika Sorenstam. In addition, advertising and promotions by equipment
manufacturers have increased, and high-profile, sporting-goods manufacturers,
such as Nike, have entered the golf equipment market.
Significant Technological Advances in Golf Equipment. Over the past ten
years, there have been significant technological advances in club head and shaft
construction, design, and materials. The continuous introduction of this
improved technology, together with advertising and promotions by equipment
manufacturers emphasizing the importance of equipment to one's game, has
encouraged golfers to change equipment frequently.
The National Golf Foundation reports substantial information related to the
business of golf each year and provides interested persons with answers to
several frequently asked questions about the game and business of golf in the
United States. Certain statistical information regarding the number of golfers
and the growth of golf in the U.S. from 1986 through 1999 and how much those
golfers spend on golf are provided below:
o There are approximately 26.2 million golfers age 18 and over in the U.S.
o Approximately 6.3 million are avid golfers; i.e., they play 15 or more
rounds per year.
o More than 45% of all U.S. golfers (11.9 million) are between the ages of 18
and 39. Seniors (age 50 and over) comprise another 33% or 8.6 million. The
rest of the golfer population falls into the forty-something and Junior
(age 12-17) categories at 21% and 8%, respectively.
23
o Today's typical golfer is male, just over 40 years old, has a household
income of $71,558 and plays 22 rounds per year.
o Female golfers make up 22% (5.76 million) of the U.S. golfer population, up
from 4.6 million in 1986.
o Women spend about $6 billion on golf merchandise and playing fees.
o The average woman golfer is 42 years old, has an average household income
of $70,541, and play 18 rounds per year.
o Since 1986 the number of golfers has increased 34%, from 19.9 million to
26.7 million.
o Since 1986, the number of women playing golf has risen 11%, from 4.6
million to 5.1 million.
o Since 1986, the number of junior golfers has increased 43% to 2.1 million.
o The number of golf courses in the U.S. has increased 28% since 1986, from
13,353 to 17,108 courses.
o About 30% of the courses built over the past five years have been additions
to existing facilities.
o The rate of new golf course construction has increased significantly over
the past 15 years, from an average of about 150 a year to more than 400 a
year.
o Since 1986, overall golfer spending in the U.S. on fees and equipment has
grown from $7.8 to $22.2 billion.
o Golfers spent $24.3 billion in 2002 on equipment and fees.
o They spent $19.7 billion on green fees and dues in 2002, and $4.7 billion
on golf club purchases.
o Avid golfers (25+ rounds annually) make up the smallest player segment
(23%), but accounted for 53% of all golf-related spending in 1999.
Retail Channels of Distribution. The retail channel for new golf clubs is
highly competitive and fragmented. According to the NGF, the primary channel is
the specialty golf store, accounting for 44% of the retail market, followed by
golf course pro-shops (28%), full-line sporting goods stores (11%), mass
merchants (7%), catalogs (5%), the internet (4%), and other (1%). While
specialty golf retailers have by far the largest market share, this channel is
highly fragmented, with the top ten golf retail chains accounting for an
24
estimated 25% of the total number of retail outlets in the U.S. Most of these
chains are regional, many are franchised, and all are privately held.
The national Golf Foundation website is at www.ngf.org/faq.
The foregoing factors have been key to the golf industry's growth over the
past several years. Individual participant interest in golf and the money spent
enjoying the game have helped fuel an industry that accounts for over $22.2
billion in sales annually. The golf industry's past growth had fostered many new
businesses to support that growth. Notwithstanding growth in the golf industry
since 1986, during the last two years, the golf industry's revenues have not
increased significantly. On March 20, 2003, the National Golf Foundation
reported that the total rounds of golf played dropped 3% in 2002 as compared to
2001. It was further reported that during the same period there was a lack of
growth in the number of golfers. Merchandise sales at golf facilities (courses)
decreased from $2.19 billion in 2001 to $2.17 billion in 2002.
Merchandise and Services
Through our retail store located in Ogden, Utah, we offer brand-named golf
merchandise (i.e. Taylor Made, Ping, Footjoy, Nike, Datrek, Titleist, Maxfli,
Spalding), including:
o Golf club sets and individual drivers, woods, irons, wedges and putters.
o Golf equipment and accessories, including bags, pull carts, towels,
umbrellas, gloves, golf balls and tees.
o Golf apparel, including shirts, sweaters, pullovers, wind and rain gear,
shoes, hats and visors.
In addition, we offer custom golf club-making, fitting, repair, and tune-up
services. In connection with these services, we sell individual club components,
including club heads, shafts, and grips.
Because we believe that custom fitted clubs allow golfers to shoot lower
scores, we take club-making and fitting very seriously. We believe that we can
enhance our business by focusing our business on the custom club-making and
fitting aspects because we have greater control over the cost of our custom
products and services than we have over other brand-named products we might
offer our customers.
We purchase a variety of components to custom build clubs or repair clubs.
We build custom clubs with dynamics that work within a golfer's swing and we do
not expect golfers to try to change swings to match the clubs. We assemble our
custom clubs to meet existing swing dynamics. In doing so, we utilize two
different methods to fit golfers with custom clubs: dynamic and static.
1. Dynamic fitting is conducted in person by first evaluating a golfer's
swingspeed, loading, and lie measurements, while the golfer is hitting his or
25
her current clubs, our test clubs, and other demo clubs as we provide analytical
observation. Our goal is to build an individual club or set of clubs that a
golfer can use within current swing dynamics, in conjunction with an overall
evaluation of the golfer's current golf game, equipment, and goals.
2. Static fitting is generally our first step in club fitting. Physical
measurements and estimated club yardages vary between all golfers. Sometimes
players of the same height may require different club lengths and lie angles.
Lie angle is the angle between the sole of the club and the golfers hands and is
generally measured in terms of standard angle, flat angle or upright angle.
Players with longer arms have shorter wrist to floor measurements, which
generally results in a flatter lie angle for the custom built club. Players with
shorter arms have a longer wrist to floor measurement which generally results in
a more upright lie angle for the custom built club. Static fitting also relies
on an evaluation of the golfer's current golf game, equipment, and goals;
however, we do not perform an individual analysis of swing dynamics.
Benefits of our custom club-making services can include:
o A golfer receives clubs built to his or her specifications at reasonable
prices.
o A golfer receives clubs with matching flex, torque, kick points, and swing
weighting*.
o A golfer receives 100% lifetime guarantee of workmanship.
o A golfer receives consultation and analysis of his or her game, clubs, grip
and swing.
o A golfer can achieve lower scoring with clubs built specifically for his
swing style and speed.
* Flex refers to the ability of a golf shaft to bend as forces are applied
to it during the swing. Those forces are generated by the type of swing that a
golfer has - fast or slow, smooth or jerky. There are five basic ratings for
shaft flex: Extra Stiff, Stiff, Regular, Senior, and Ladies flex. Having a flex
that doesn't match the needs of your swing will result in the clubface being
misaligned at impact, causing your shots to go off target. Shaft flex impacts,
either directly or indirectly, the accuracy, trajectory, and distance of a
golfer's shot.
*Torque is a measure of how much a force acting on an object causes that
object to rotate. The object rotates about an axis, which we will call the pivot
point. The shaft is the object that is rotating within the club head (The pivot
point).
*Kick Points - When a golf shaft is flexed, there is one point along its
length that becomes the most bent. It's the place where the radius of curvature
is the shortest. This is called the "kick point" and it is not the same for all
shafts. The taper of a shaft and its internal construction determine where the
kick point will be. The significance of the kick point is how it affects
trajectory. The kick point acts as a hinge. If the kick point is low on a club,
the head will hinge around a shorter radius and the head will pivot skyward
26
faster during impact, resulting in a ball that will take a higher initial
trajectory than if the kick point was located further up the shaft.
*Swing Weighting- Whereas a club's total weight refers to how much it
weighs when placed on a scale, a club's swing weight refers to how light or
heavy if feels to swing. Swing weight is determined by the ratio of weight
concentrated in both ends of the club. The clubhead end is always heavier than
the grip end. Swing weight is identified using a letter combined with a number,
e.g. C-3 and D-1; the higher each one is, the heavier the swing weight. For
example, a club measuring C-5 has a heavier swing weight than C-4; and a club
measuring D-1 is heavier than a C-5. Drivers are usually balanced around D-2 for
men while wedges are usually heavier, around a D-5. Drivers for women are
usually around a C-5 swing weight.
We have one full-time and one part-time employee. Our full-time employee is
Paul Larson, a director of the Company. With this limited personnel, we are able
to manage our walk-in business as well as complete repair or assembly of three
to five clubs per day. To date, this has been sufficient to meet our customers'
needs. If, as a result of this offering we are able to increase our repair and
assembly business by a substantive amount, we will likely hire one or more
additional part-time or full-time employees.
We also offer reshafting, head changes, and repairs for broken shafts and
damaged club heads. In addition, we can regrip clubs with a multiple of
different brand-named grips. Our reshafting and repair service is prompt and our
work is 100% guaranteed.
Marketing Strategy and Principal Market
Our principal marketing strategy for our merchandise and services is three
fold:
1. Continue to offer our customers brand-named equipment, apparel and
accessories.
2. Emphasize our custom club-making, fitting, and repair services to our
current customer base with a focus on workmanship and quick turnaround.
3. Expand our customer base outside of Northern Utah through radio and
print media and by offering information regarding our products and services via
an internet website. We intend to attempt to expand our customer base into Davis
County and Salt Lake in the state of Utah, as well as into southern Idaho and
southwest Wyoming.
We do not currently intend to open additional retail outlets.
We have currently designated $30,000 to $50,000 of the offering proceeds
for advertising and marketing efforts. We are unable to determine whether this
amount of money will be sufficient to increase our customer base and revenues on
a substantial basis. Our marketing strategy is significantly dependent upon
available capital and therefore, we will not finalize our marketing strategy
until we have completed this offering.
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Geographical Expansion
We are located in Ogden, Utah, which is approximately 45 miles from Salt
Lake City. Ogden is the largest city in Utah north of Salt Lake City. Ogden is
approximately 30 miles from Logan, Utah, 60 miles from the Idaho-Utah state line
and 40 miles from the Wyoming-Utah state line. Additionally, Ogden is
approximately 20 miles south of Brigham City, Utah. Each of these communities
and areas are comprised of towns smaller than Ogden but in many of these
communities there are 9 or 18 hole golf courses. In general, there is a lack of
specialty retail golf shops in these areas. We do not believe that there are any
national discount golf stores in these areas.
We believe that with increased advertising in each of these areas, we will
be able to expand our customer base into each of these areas. We intend through
traditional advertising as well as through developing an internet presence,
golfers in these area can be attracted as customers. We do not believe there are
any national discount retail golf stores in these areas. Typically, golf pro
shops located at golf courses do not offer an extensive product line. We believe
that our product line, prices and technical repair services will be an attract
alternative for customers living in these areas. Therefore, we believe that by
increasing awareness of our business within these areas, it can result in
increased customer base and increased revenues. Prior to this offering, we have
not had adequate capital to expand our advertising and marketing efforts into
these areas.
We do face competition in Salt Lake City and with other retails stores in
the Ogden area. We do not anticipate that we will effectively compete in the
Salt Lake City market, but we believe that with increased name recognition and
customer awareness, we will be able to expand our customer base in Ogden and the
surrounding area.
Web Site Development
A portion of the proceeds of this offering will be utilized to fund the
initial development of our web site. We have obtained quotes and estimates for
web site design from various local web site/database developers, who have
provided bids ranging from $5,000 to $35,000. However, we will not begin to
develop the website unless we receive the minimum amount of funds from investors
in this offering.
Through our website, we hope to expand our market presence. We will attempt
to develop a website that will be user friendly and easy to navigate. Through
our website, we will advertise golf-related products. The exact format of the
website has not been finalized and will not be finalized until we have
additional capital from this offering. We do not anticipate that our website
will initially enable customers to order on line.
We have not conducted any market studies regarding a potential website and
do not know for certain if we can develop a website that will increase our
business presence in our market or our revenues.
After our website is operational, we plan to focus next on expanding the
scope of our Internet presence. We hope to achieve such expansion by registering
28
with major search engines with the goal of placing our website at the top of
search results. This typically requires pre-funding with certain search engines.
We do not currently have adequate financial resources to conduct such
registration. We also intend to expand the popularity of our website by
improving its features. Specifically, we hope to continually expand our product
offerings as well as the services we provide. We believe that we can increase
the number of visitors to our proposed website by providing products desired by
customers and insightful, interesting information and services.
The intent of the web site will be to quickly and efficiently showcase
available merchandise and service, and provide telephone contact information to
potential purchasers. Should our efforts succeed, our web site may be expanded
and developed into an e-commerce site that will eventually enable our customers
to purchase merchandise. However, the costs associated with the development of
an e-commerce web site are substantial, and we do not intend to expand the
website to accommodate actual purchases through the website until sales revenues
are established and substantial additional funds are raised.
Advertising and Marketing.
We intend to promote the products we sell and services we provide with
advertising, posters, direct mail, and special offer flyers to our customers. We
intend to attempt to advertise the products and services in local newspapers and
other publications and other websites that are already known to golfing
consumers. We hope to promote our website as a convenient way for golfers to
research and purchase golfing equipment and accessories.
Purchasing of Merchandise and Inventory
Our merchandise is obtained from numerous manufacturers and suppliers,
based on purchase orders for specific products and quantities. We purchase
either directly from manufacturers, through buying groups or from manufacturer
representatives. We do not have any long-term supply agreements although certain
suppliers require minimum purchase commitments. In addition, we do not believe
that we are dependent on any one supplier and that there are alternate sources
available.
In connection with our retail sale of merchandise, certain manufacturers of
brand-named products do prohibit us from advertising their products at a
discounted price. There is no assurance that these brand-named manufacturers
will supply us with merchandise as needed. We believe it is important to our
business to continue to offer brand-named products to our customers.
Our experience with suppliers is that golf clubs, other equipment and
components are readily available on the time table in which we request delivery
from manufacturers, manufacturer representatives and other suppliers. From
time-to-time a new "hot" product hits the market and our orders are put on back
order. This does not happen often and has not created significant difficulties
for us.
29
Competition
We believe that we are the only specialized golf store in Ogden, UT
offering name brand golf equipment and personalize golf related services.
Currently the only specialized golf store competitor that we are aware of in
Ogden, Utah is 36th Street Golf Company which primarily offers knock off copies
of name brand golf equipment but does not offer name brand equipment. Although
we do not compete with this business in the name brand equipment business, we do
compete with them for customers that may be looking for lower price products
without brand name affiliation. We also compete with general sporting goods
stores, golf course pro shops, and discount department stores such as Wal-Mart,
K-Mart. The department stores and sporting goods stores which sell clubs do not
offer custom club fitting, club repair, club making or other services that we
offer.
Potentially, our greatest competition could come from national discount
golf stores, the numbers of which have grown in recent years. However, the
geographical areas in which we compete and intend to compete are smaller cities
and communities which do not have national golf stores and in some instances, do
not have any retail golf stores. These smaller cities and communities are
located in our general geographical area.
We also compete with entities engaged in the sale of similar merchandise by
telephone, internet and mail order sales. The largest telephone and mail order
competitor that advertises through catalogs is much larger and has greater
financial resources than we do. Major competitors that advertise through
national magazine advertisements include Golf Smith, Nevada Bob's and Edwin
Watts. None of these firms have physical locations in our area, but are
significant competitors for customers.
Principal competitive factors faced by us in the sale of merchandise
generally are price, quality, personal service, merchandise selection,
convenience, and customer loyalty. There can be no assurance that we will ever
be able to effectively compete in our market.
Two retail golf stores recently terminated operations in Ogden, Utah,
including one which was part of a national chain.
Domain Name
We have reserved the internet domain name "golfers-green.com." Such initial
reservation is through September 2004 at a cost of $35.00 per year, and is
easily renewed for extended periods thereafter. Of yet, we have not created a
logo or any trademarks, but intend to do so as part of the graphics associated
with our proposed web site.
Regulation and Environmental Compliance
Other than state and local business license requirements, we are not aware
of any need for government approval for the sale of our merchandise or services,
nor of any environmental laws relating to its proposed products and services.
30
Employees
As of December, 2004, we had one full-time employee who is Paul Larson, a
director of the Company and the President of Ogden Discount golf, and one
part-time employee. We anticipate that we will be able to hire additional
full-time or part-time employees if our business operations increase.
Facilities
We own the building in which our retail store is located. The building is
located at 1781 Washington Boulevard, Ogden, Utah and consists of approximately
2,595 square feet. The building secures a loan to Barnes Bank in the amount of
$139,539. We are required to make monthly payments of $1,608 on the loan amount.
A balloon payment of $117,154 is due on September 20, 2005.
MANAGEMENT
The following table sets forth the name, address, age and position of each
officer and director of the Company:
Name Age Position
- ---- --- --------
Mark A. Scharmann 46 President/Director
Douglas P. Morris 49 Vice President Director
Robert R. Peterson 50 Secretary/Treasurer/Director
Paul Larsen 47 Director and President of Ogden
Discount Golf
Curtis Kaminska 47 Director
Background information concerning the Company's officers and directors is
as follows:
Paul Larsen. Mr. Larsen has operated Ogden Golf since April 2000. He is the
president and a director of our subsidiary, Ogden Discount Golf. From July 1982
to April 2000, Paul worked as a senior information technology technician at
Alliant Techsystems (formerly Thiokol Corporation) in Promontory, Utah.
According to its website, ATK is a $2.2 billion aerospace and defense company
and is involved in propulsion, composite structures, munitions, precision
capabilities, and civil and sporting ammunition. He attended Weber State
University in Ogden, Utah with an emphasis in Physical Education and Information
Technology Systems.
Douglas P. Morris. Mr. Morris was appointed as an officer and director of
Ogden Golf Co. Corporation in November 2002. Since 1997, Mr. Morris has been an
officer and director of Celtic Investment, Inc., a publicly traded financial
services company. Celtic Investment owns Celtic Bank, an FDIC insured industrial
loan company chartered under the laws of the State of Utah. Since 1990, Mr.
Morris has also owned and operated H & M Capital Investments, Inc., (H & M). H &
M is a privately held business consulting firm. H & M consults with privately
31
held and publicly held corporations relating to management, merger and
acquisitions, debt and equity financing, capital market access, and market
support for publicly traded securities. There is no affiliation between H & M
and Ogden Golf and we do not currently anticipate that we will have any
affiliation with H&M in the future. Mr. Morris was an outside director of
Millennium Electronics from 1997 to 1999. Millennium was involved in the
computer memory and hardware business. Its operations were unsuccessful and in
1999, it terminated its operations and transferred its assets to a secured
creditor. In June 2000, Mr. Morris was appointed an officer and director of
Millennium. Millennium had no operations from 1999 to February 2004 and its
business plan was to look for reverse merger type of acquisition. In February
2004, Millennium changed its name to Speaking Roses International, Inc. in
connection with an asset acquisition and Mr. Morris resigned as an officer and
director. Mr. Morris is a director of CCC Globalcom, a Houston based
telecommunications company. Mr. Morris is the owner of Hyacinth Resources, Inc.,
a privately held company which holds investments purchased by Mr. Morris. There
is no affiliation between Hyacinth Resources and Ogden Golf and we do not
currently anticipate that we will have any affiliation in the future except for
Hyacinth Resources' ownership of shares of Ogden Golf. Mr. Morris has a BA from
Brigham Young University and a Masters in Public Administration from the
University of Southern California.
Mark Scharmann. Mr. Scharmann was a founder of Ogden Golf and was
reappointed to the Board of Directors in November 2002. Mr. Scharmann has been a
private investor and business consultant since 1981. Mr. Scharmann became
involved in the consulting business following his compilation and editing in
1980 of a publication called Digest of Stocks Listed on the Intermountain Stock
Exchange. In 1981 he compiled and edited an 800 page publication called the OTC
Penny Stock Digest. Mr. Scharmann has not served as a business consultant for
Ogden Golf, has not been compensated as a business consultant and we currently
don't anticipate that he will act as a business consultant for Ogden Golf in the
future. From 1982 to 1996, he was the president of Royal Oak Resources
Corporation. In 1996, Royal Oak Resources completed an acquisition and in
connection therewith changed its name to Hitcom Corporation. Mr. Scharmann was
the President of Norvex, Inc., a blank check company which completed an
acquisition and in connection therewith, changed its name to Capital Title
Group, Inc. Mr. Scharmann is a promoter of Nightingale, Inc., a publicly-held
corporation blank check company. He is also an officer and director of Pacific
Alliance Corporation, an inactive public company which was previously in the
television programming delivery business. Ogden Golf has no affiliation with any
of the companies referred to in this paragraph and we do not anticipate that we
will be affiliated with any of these companies in the future. Mr. Scharmann
graduated from Weber State University in 1997 with a Bachelors of Integrated
Studies with emphasis in Business, Psychology and Health.
Curtis Kaminska. Mr. Kaminska has been a director of the Company since
August 2002. He is also vice president and a director of our subsidiary, Ogden
Discount Golf. Mr. Kaminska has been a pilot for Delta Airlines since 1987. He
has over 20 years experience with Delta, the U.S. Air Force and the Utah
National Guard. From 1999 to the present, he has owned and operated KEE, Inc., a
business consulting company based in Ogden, Utah. There is no affiliation
between Ogden Golf and Kee, Inc. and we do not anticipate there will be any
affiliation in the future. He earned his BS Degree in Business with an emphasis
in marketing from Utah State University, Logan, Utah in 1981, and an MBA degree
from New Mexico Highlands University in 1986.
32
Robert R. Peterson. Mr. Peterson has been a director of the Company since
August 2002. He is also secretary/treasurer and director of our subsidiary,
Ogden Discount Golf. Mr. Peterson has been controller of Fresenius Medical Care,
Ogden, Utah, since 1998. From 1997-98, he was controller of Weider Nutrition
International, Salt Lake City, Utah. From 1995-97, he was controller of Autoliv,
Ogden Utah. From 1989-95, he was Manager of Budgets and Pricing for Autoliv.
From 1979-89, he was Senior Financial Analyst for Morton Thiokol, Promontory,
Utah. He earned an MBA from the University of Phoenix in Salt Lake City in 1989,
and a BS degree in Marketing and Economics from Utah State University, Logan,
Utah in 1977.
No Board Committees
We do not have any committees established by our Board of Directors.
Accordingly we have no audit committee, compensation committee, nominating
committee or any other committee. We do not anticipate that we will be listed on
a securities exchange or on NASDAQ. If we were ever to meet the qualifications
for listing on a securities exchange or for quotation on NASDAQ, we would be
required to have an audit committee and possibly other board committees. Except
for Paul Larsen, none of directors are employees of the Company.
MANAGEMENT COMPENSATION
The following table sets forth the aggregate cash compensation paid by the
Company for services rendered during the last three years to the Company's Chief
Executive Officer and to the Company's most highly compensated executive
officers other than the CEO, whose annual salary and bonus exceeded $100,000:
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
----------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other All
Name and Year Annual Restrict Option/ LTIP Other
Principal Ended ($) ($) Compen- Stock SAR's Payouts Compensa-
Position 6/30 Salary (1) Bonus sation ($) Awards ($) (#) ($) tion ($)
- -------------------------------------------------------------------------------------------
Paul Larsen* 2004 $35,000 -0- -0- -0- -0- $ -0- $-0-
President 2003 $35,144 -0- -0- -0- -0- -0- -0-
2002 $39,800 -0- -0- -0- -0- -0- -0-
* Mr. Larsen is no longer the President of Ogden Golf, but is the President of
our wholly owned subsidiary.
Mark A. Scharmann, the current president of the Ogden Golf received no
compensation from Ogden Golf since its formation.
33
Options Grants in Last Fiscal Year
There were no grants of stock options made during the fiscal year ended
June 30, 2004.
Stock Options Held at End of Fiscal 2004
No stock options or stock appreciation rights were owned by our officers
and directors at June 30, 2004, the end of our last fiscal year.
Compensation of Directors
We do not currently compensate our directors for director services to the
Company or our subsidiary. We anticipate that more formal compensation
arrangements with our directors will be finalized within the next fiscal year.
Employment Agreements
We have no written employment agreements with our management. Currently, we
are paying Paul Larsen, a director of Ogden Golf and president and director of
subsidiary, $35,000 per year.
Stock Option Plans and Other Incentive Compensation Plans
We have not adopted any option plans or other incentive compensation plans
as of the date of this prospectus. We anticipate that our Board of Directors
will, in the near future, adopt incentive compensation plans to provide rewards
and incentives to our employees, directors and agents. We have not granted any
options to any person as of the date of this prospectus.
PRINCIPAL STOCKHOLDERS
The following table sets forth information concerning the beneficial
ownership of Ogden Golf common stock as of April 12, 2005, by each director and
executive officer, all directors and officers as a group, and each person known
to Ogden Golf to beneficially own 5% or more of its outstanding common stock.
Percentage Owned
Name and Address --------------------------------------
of Beneficial Owner Shares Owned Before Offering After Offering(1)(4)
------------------- ------------ --------------- --------------------
Paul Larsen 660,000 31% 25%
Douglas P. Morris (2) 712,500 33% 27%
Mark A. Scharmann (3) 312,500 13% 11%
Robert R. Peterson 10,000 .1% .04%
Curtis Kaminska 10,000 .1% .04%
All officers and Directors as a group 1,705,500 78% 70%
(5 persons) (5)
Total Shares of Common Stock Issued 1,238,500 100% 48%
Total Shares Issued (1) 2,188,500 100% 85%
34
(1) Assumes all 95,000 shares of Series A Preferred Stock are converted into
950,000 shares of common stock.
(2) Includes 12,500 shares of common stock owned by Hyacinth Resources, Inc., an
affiliate of Mr. Morris and 700,000 shares of common stock issuable to Hyacinth
Resources, Inc. upon the conversion of 70,000 shares of Series A. preferred
stock into common stock. Hyacinth Resources, Inc. is a Utah corporation owned by
Mr. Morris and is used by Mr. Morris to make investments in various ventures. It
has no operations except for the ownership of securities.
(3) Includes 60,000 shares of common stock owned by Scharmann and 200,000 shares
of common stock issuable to Mr. Scharmann upon the conversion of 20,000 shares
of Series A Preferred Stock into common stock and 52,500 shares owned of record
by Roycemore Corporation and affiliate of Mr. Scharmann. Mr. Scharmann is a
shareholder of Roycemore Corporation and his wife Rachel Scharmann is an officer
of Roycemore Corporation. Apart from Mr. Scharmann's involvement in both Ogden
Golf and Roycemore Corporation, there is no affiliation between Ogden Golf and
Roycemore corporation.
(4) Assumes all 400,000 shares offered are sold.
(5) Each officer and director listed above is able to sell all of his holdings
in this offering.
DESCRIPTION OF SECURITIES
We are authorized to issue up to 100,000,000 shares of common stock, no par
value and 5,000,0000 shares of preferred stock, no par value. As of April 12,
2005, there were 1,238,500 shares of our common stock issued and outstanding. We
have designated 100,000 shares of our preferred stock as Series A preferred
stock. As of April 12, 2005, there were 95,000 shares of Series A Preferred
stock issued and outstanding. The following is a summary of the material rights
and privileges of our common stock and preferred stock.
Common Stock
Subject to the rights of the holders of any preferred stock which may be
outstanding, each holder of common stock on the applicable record date is
entitled to receive such dividends as may be declared by the Board of Directors
out of funds legally available therefor, and in the event of liquidation, to
share pro rata in any distribution of our assets after payment or providing for
the payment of liabilities and the liquidation preference of any outstanding
preferred stock. Each holder of common stock is entitled to one vote for each
share held of record on the applicable record date on all matters presented to a
vote of stockholders, including the election of directors. Holders of common
stock have no cumulative voting rights or preemptive rights to purchase or
subscribe for any stock or other securities. Except as disclosed herein, there
are no conversion rights or redemption or sinking fund provisions with respect
35
to the common stock. All outstanding shares of common stock are, and the shares
of common stock offered hereby will be, when issued, fully paid and
nonassessable.
Preferred Stock
Our Board of Directors is empowered, without approval of the stockholders,
to cause shares of preferred stock to be issued in one or more series, with the
numbers of shares of each series to be determined by it. The Board of Directors
is also authorized to fix and determine variations in the designations,
preferences, and special rights (including, without limitation, special voting
rights, preferential rights to receive dividends or assets upon liquidation,
rights of conversion into common stock or other securities, redemption
provisions and sinking fund provisions) between the preferred stock or any
series thereof and the common stock. The shares of preferred stock or any series
thereof may have full or limited voting powers or be without voting powers.
Although we have no present intent to issue additional shares of preferred
stock, the issuance of shares of preferred stock, or the issuance of rights to
purchase such shares, could be used to discourage an unsolicited acquisition
proposal. For instance, the issuance of a series of preferred stock might impede
a business combination by including class voting rights that would enable the
holders to block such a transaction, or such issuance might facilitate a
business combination by including voting rights that would provide a required
percentage vote of the stockholders. In addition, under certain circumstances,
the issuance of preferred stock could adversely affect the voting power of the
holders of the common stock. Although the Board of Directors is required to make
any determination to issue such stock based on its judgment as to the best
interests of our stockholders, the Board of Directors could act in a manner that
would discourage an acquisition attempt or other transaction that some or a
majority of the stockholders might believe to be in their best interests or in
which stockholders might receive a premium for their stock over the then market
price of such stock.
Series A Preferred Stock
In November 2002, our Board of Directors adopted a resolution designating a
Series A preferred stock consisting of 100,000 shares. A total of 95,000 shares
of Series A Preferred stock have been issued. The following description of the
Series A preferred stock is a summary only.
Dividends. No dividends shall accrue or be payable on the Series A
preferred stock.
Liquidation Distribution upon Dissolution. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company, then, before
any distribution or payment shall be made to the holders of any junior stock,
the holders of Series A preferred stock shall be entitled to be paid in full an
amount equal to $.20 per share, together with accrued and unpaid dividends and
any accumulated dividends to such distribution or payment date, whether earned
or declared.
36
Conversion of Series A Preferred Stock into Common Stock. The holders of
the Series A preferred stock may convert their shares of Series A Preferred
Stock into Common Stock only if one or both of the following events occurs:
(a) The Company operates at a profit during any fiscal year ending
prior to June 30, 2005; or
(b) On or before June 30, 2005, the Company's shareholders' equity
increases by $100,000 or more over the Company's shareholders' equity as of
September 30, 2002.
If neither of the above-listed conditions occurs, the Series A preferred
stock may not be converted into common stock and may remain outstanding with no
dividend rights and no voting rights, but with a liquidation preference of $.20
per share in the event the Company is dissolved. At the sole option of the
Company if the Series A Preferred Stock is not convertible it may be redeemed at
Stated Value of $.20 per share.
Subject to and upon compliance with the conditions described above, at the
option of the holder thereof, any share of the Series A preferred stock may be
converted into ten (10) shares of common stock ("Conversion Ratio"). Our
shareholders' equity at June 30, 2002 was $5,385. In order for the Series A
Preferred Stock to become convertible into common stock, our shareholder equity
must be at least $105,385 by June 30, 2005. As of December 31, 2004, our
shareholders' equity was a negative $116,492. Accordingly, our shareholders
equity must increase from a negative $116,492 to a positive $105,385 by June 30,
2005 (a total of $221,877) or the Series A Preferred Stock will not be
exercisable.
Voting Rights. The holders of Series A preferred stock shall have no voting
rights prior to conversion of the Series A preferred stock into common stock
except as otherwise provided by the Utah Revised Business Corporations Act.
Dividends
We have not paid any cash dividends since our inception and do not
anticipate or contemplate paying dividends in the foreseeable future. It is the
present intention of management to utilize all available funds for the
development of our business. Furthermore, we anticipate that we will operate at
a loss during the next year, in which case, we would not declare a dividend on
our common stock.
Transfer Agent
Our transfer agent is Fidelity Transfer, 1800 South West Temple, Salt Lake
City, Utah 84115, telephone (801) 484-7222.
37
Limitation of Liability and Indemnification of Directors and Officers
Our Articles of Incorporation and our By-laws contain provisions that
eliminate the personal liability of our directors to us or our stockholders for
monetary damages for breach of their fiduciary duty as a director to the fullest
extent permitted by the Utah Revised Business Corporations Act, except for
liability for:
o any breach of their duty of loyalty to us or our stockholders;
o acts or omissions not in good faith or which involve intentional
misconduct;
o misconduct or a knowing violation of law;
o unlawful payments of dividends or unlawful stock repurchases or
redemptions;
o any act or omission occurring prior to our incorporation; and
o any transaction from which the director derived an improper personal
benefit.
Our Articles of Incorporation and By-laws also contain provisions that
require us to indemnify our directors and permit us to indemnify our
incorporators, directors and officers to the fullest extent permitted by Utah
law, including circumstances where indemnification would be discretionary.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers, and persons controlling us in connection
with the foregoing provisions, or otherwise, we have been advised that in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act, and is unenforceable.
PLAN OF DISTRIBUTION
Shares Offered By Ogden Golf
We are offering to sell, on a best efforts basis, up to 400,000 newly
issued shares of our common stock at $.50 per share. We have appointed ACAP
Financial Inc. ("ACAP"), as our exclusive underwriter (as that term is defined
in Section 2(a)(11) of the Securities Act of 1933, as amended), to sell up to
400,000 shares of common stock to the public on a "best efforts, all or none"
basis for the first 300,000 shares and on a "best efforts" basis thereafter at
the public offering price of $.50 per share. There can be no assurance that any
of these shares will be sold. If ACAP fails to sell a minimum of 300,000 of the
offered shares within 120 days (which may be extended for 30 days) from the
effective date of this prospectus, the offering will be terminated and the
subscription proceeds will be promptly refunded in full to subscribers, without
interest thereon or any deductions therefrom.
All subscription payments should be made payable to "Irwin Union Bank -
Ogden Golf Co. Corporation., Escrow Account." All subscription payments will be
38
deposited by noon of the business day following receipt and held in an escrow
account at Irwin Union Bank, 224 South 200 West, Suite 100, Salt Lake City, Utah
84101, (801) 532-3033, as escrow agent, pending the sale of a minimum of 300,000
shares within a 120 day period (unless extended for an additional 30 days). The
subscription proceeds will be withdrawn from the escrow account only for the
purpose of purchasing the shares offered hereby, if a minimum of 300,000 shares
offered hereunder are sold or for the purpose of refunding subscription payments
to the subscribers.
Subject to the sale of at least 300,000 shares, prior to the termination of
this offering, we have agreed to pay to ACAP an Underwriting Commission of 11%
of the total offering price ($.055 per share) or a minimum of $16,500 and a
maximum of $22,000.
We have agreed to pay to ACAP an accountable expense allowance of 1% of the
gross offering proceeds. ACAP's expenses, if any, which exceed the accountable
expense allowance, will be borne by ACAP. We will also pay for the expenses
necessary to qualify the shares for sale in various states that the ACAP may
designate.
Officers and directors of the Company may purchase shares offered by the
Company in this offering on the same terms and conditions as all other investors
but are under no obligation to purchase any shares. Officers and directors may
purchase shares for the sole purpose of assisting the Company to achieve the
minimum offering amount. However, the Company will not sell more than 10% of
shares offered pursuant to this prospectus to all officers and directors as a
group. No officer or director has agreed to purchase any shares in the offering.
The Company currently intends to register and offer the shares for sale in
the State of Utah. The Company may subsequently elect to register and offer the
shares in other states.
Underwriter's Warrants
Subject to the sale of at least 300,000 of the shares we are offering
through ACAP, we have agreed to sell to ACAP for a price of $100, payable at the
time of closing, Warrants ("Underwriter Warrants") to purchase shares of our
common stock (an amount equal to 10% of the total shares sold by ACAP pursuant
to this offering). The Underwriter's Warrants may not be exercised, sold,
transferred, assigned or hypothecated for a period of one year from the
effective date of this offering, except that Warrants to be acquired by the
Underwriter may be assigned or transferred to the officers of the Underwriter,
to participating dealers that sell shares in the offering, or to such
participating dealers' officers. The Warrants will be exercisable for a period
of four years commencing one year from the date of this prospectus. If the
Warrants are not exercised during their term, they shall automatically expire.
The purchase price of the shares underlying the Warrants will be $.83 per share
during the exercise period. We will set aside and at all times have available, a
sufficient number of shares of our common stock to be issued upon the exercise
of the Underwriter Warrants. Any transfer or assignment of the Warrants and the
underlying shares by the Underwriter to any person, must be in accordance with
the provisions of the Securities Act of 1933, as amended.
During the period commencing one year after the date of the prospectus and
ending four years later, we will file, not more than once, a registration
39
statement under the Securities Act of 1933, as amended, registering the shares
acquired upon the exercise of the Underwriter's Warrants, at the request of the
holders of at least a majority of such shares. All expenses of such registration
will be borne by us. Further, in the event we register any of our securities
during the five-year period following the effective date of this offering, the
holders of the Underwriter's Warrants and/or underlying shares shall have the
right to register all or part of the underlying shares in conjunction with the
Company's registration statement. In such event, we shall bear the entire cost
and expense of registration. The above registration rights will be available
upon the exercise of the Warrants.
It may be expected that the Underwriter's Warrants will be exercised only
if it is advantageous to the holders of the Underwriter's Warrants. The value of
our common stock may be diluted as a result of the exercise of the Warrants.
Therefore, for the life of the Underwriter's Warrants, the holders thereof are
given, at a nominal cost, the opportunity to profit from an increase in the
market price of our Common Stock. The terms upon which we could obtain capital
during the exercise period may be adversely affected. The holders of the
Underwriter's Warrants might be expected to exercise the Warrants at a time when
we would, in all likelihood, be able to obtain any additionally needed capital
on terms more favorable than those provided for in the Underwriter's Warrants.
Any gain realized by the Underwriter on the resale of the Underwriter's Warrants
or the underlying shares may be deemed to be additional underwriting
compensation. The Underwriter's Warrants will contain provisions protecting the
holder against dilution of the equity interest represented thereby.
Additional Matters
ACAP may allow concessions to certain selected dealers who are members of
the National Association of Securities Dealers, Inc., and that such dealers may
reallow concessions to certain other dealers who are members of the National
Association of Securities Dealers, Inc. The amount of such concessions will be
determined through negotiations between the Underwriter and the selected dealers
or such selected dealers and other dealers, as the case may be.
We and ACAP have agreed to indemnify each other against certain
liabilities, including liabilities arising under the Securities Act of 1933. We
have been informed that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable.
Our management may provide ACAP with a list of certain persons, including
our officers, directors and affiliates and others, whom our management believes
may be interested in purchasing shares of our common stock in the offering. ACAP
may sell the shares to such persons if such persons reside in a state where our
common stock can be sold and where ACAP can sell the shares. Such sales may be
made for the express purpose of making sure that all shares offered hereby are
sold. Any purchases made by officers, directors or affiliates will be for
investment purposes and not for further distribution. ACAP will distribute the
Shares according to ACAP's best business judgment and ACAP has no obligation to
sell any of the Shares to any person.. In no event will ACAP sell more than 10
percent of the Shares to our officers, directors or affiliates.
40
"Penny Stock" Rules May Make Buying Or Selling Our Common Stock Difficult.
Trading in our securities is subject to the "penny stock" rules. The SEC
has adopted regulations that generally define a penny stock to be any equity
security that has a market price of less than $5.00 per share, subject to
certain exceptions. These rules require that any broker-dealer who recommends
our securities to persons other than prior customers and accredited investors,
must, prior to the sale, make a special written suitability determination for
the purchaser and receive the purchaser's written agreement to execute the
transaction. Unless an exception is available, the regulations require the
delivery, prior to any transaction involving a penny stock, of a disclosure
schedule explaining the penny stock market and the risks associated with trading
in the penny stock market. In addition, broker-dealers must disclose commissions
payable to both the broker-dealer and the registered representative and current
quotations for the securities they offer. The additional burdens imposed upon
broker-dealers by such requirements may discourage broker-dealers from effecting
transactions in our securities, which could severely limit the market price and
liquidity of our securities. Broker-dealers who sell penny stocks to certain
types of investors are required to comply with the Commission's regulations
concerning the transfer of penny stocks. These regulations require
broker-dealers to:
o Make a suitability determination prior to selling a penny stock to the
purchaser;
o Receive the purchaser's written consent to the transaction; and
o Provide certain written disclosures to the purchaser.
These requirements may restrict the ability of broker-dealers to sell our common
stock and may affect your ability to resell our common stock.
OTC Bulletin Board Considerations
Following the completion of this offering we intend to have our shares
quoted on the OTC Bulletin Board ("OTCBB"). If for any reason we are unable to
have our shares quoted on the OTCBB, we will attempt to have our shares quoted
on the Pink Sheets. The OTCBB is separate and distinct from the NASDAQ stock
market. NASDAQ has no business relationship with issuers of securities quoted on
the OTC Bulletin Board. The SEC's order handling rules, which apply to
NASDAQ-listed securities, do not apply to securities quoted on the OTC Bulletin
Board. The Pink Sheets is not affiliated with NASDAQ or the OTCBB and is not
considered a market.
Although the NASDAQ stock market has rigorous listing standards to ensure
the high quality of its issuers, and can delist issuers for not meeting those
standards, the OTC Bulletin Board has limited standards. Rather, it is the
market maker who chooses to quote a security on the system, files the
application, and is obligated to comply with keeping information about the
issuer in its files. The NASD cannot deny an application by a market maker to
quote the stock of a company. The only requirement for inclusion in the bulletin
board is that the issuer be current in its reporting requirements with the SEC.
41
Investors may have greater difficulty in getting orders filled because it
is anticipated that if our stock trades on a public market, it initially will
trade on the OTC Bulletin Board rather than on NASDAQ. Investors' orders may be
filled at a price much different than expected when an order is placed. Trading
activity in general is not conducted as efficiently and effectively as with
NASDAQ-listed securities. Investors must contact a broker-dealer to trade OTC
Bulletin Board securities. Investors do not have direct access to the bulletin
board service. For bulletin board securities, there only has to be one market
maker.
Bulletin board transactions are conducted almost entirely manually. Because
there are no automated systems for negotiating trades on the bulletin board,
they are conducted via telephone. In times of heavy market volume, the
limitations of this process may result in a significant increase in the time it
takes to execute investor orders. Therefore, when investors place market orders
- - an order to buy or sell a specific number of shares at the current market
price - it is possible for the price of a stock to go up or down significantly
during the lapse of time between placing a market order and getting execution.
Because bulletin board stocks are usually not followed by analysts, there may be
lower trading volume than for NASDAQ-listed securities.
Although we intend to attempt to have our shares quoted on the bulletin
board, we do not expect that there will be any active market for our shares.
Selling Shareholders
The selling shareholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange market or trading facility on which our
shares are traded or in private transactions. The selling shareholders will sell
their shares at $.50 per share until our securities are listed on the OTC
Bulletin Board or other specified market and thereafter at prevailing market
prices or at privately negotiated prices. Those selling shareholders that are
officers, directors or 10% or greater shareholders are deemed to be affiliates
of the Company and will, during this offering, offer the shares at $.50 per
share. These affiliates are deemed to be "underwriters" under the rules and
regulations of the Securities and Exchange Commission. The selling shareholders
may use any one or more of the following methods when selling shares:
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o privately negotiated transactions;
o short sales;
42
o broker-dealers may agree with the selling shareholders to sell a
specified number of such shares at a stipulated price per share;
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
The selling shareholders may also sell shares under Rule 144 promulgated
under the Securities Act, if available, rather than under this prospectus. The
selling shareholders may also engage in short sales against the box, puts and
calls and other transactions in our securities or derivatives of our securities
and may sell or deliver shares in connection with these trades.
Notwithstanding anything else contained in this section to the contrary,
those selling shareholders that are officers, directors or 10% or greater
shareholders are deemed to be affiliates of the Company and will, during this
offering, offer the shares at $.50 per share. These affiliates are deemed to be
"underwriters" under the rules and regulations of the Securities and Exchange
Commission.
The selling shareholders may pledge their shares to their brokers under the
margin provisions of customer agreements. If a selling stockholder defaults on a
margin loan, the broker may, from time to time, offer and sell the pledged
shares. Broker-dealers engaged by the selling shareholder may arrange for other
broker-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling shareholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated.
The selling shareholders and any broker-dealers or agents that are involved
in selling the shares may be deemed to be "underwriters" within the meaning of
the Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act.
We have agreed to pay all fees and expenses incident to the registration of
the shares, including certain fees and disbursements of counsel to the selling
shareholders. We have agreed to indemnify the selling shareholders against
certain losses, claims, damages and liabilities, including liabilities under the
Securities Act. The selling shareholders have also agreed to indemnify us, our
directors, officers, agents and representatives against certain liabilities,
including certain liabilities under the Securities Act. The selling shareholders
and other persons participating in the distribution of the shares offered hereby
are subject to the applicable requirements of Regulation M promulgated under the
Securities Exchange Act of 1934 in connection with the sales of the shares
SELLING SHAREHOLDERS
The following table details the name of each selling shareholder, the
number of shares owned by the selling shareholder, and the number of shares that
may be offered for resale under this prospectus. Because each selling
43
shareholder may offer all, some or none of the shares it holds, and because
there are currently no agreements, arrangements, or understandings with respect
to the sale of any of the shares, no definitive estimate as to the number of
shares that will be held by each selling stockholder after the offering can be
provided. The following table has been prepared on the assumption that all
shares offered under this prospectus will be sold to parties unaffiliated with
the selling shareholders. Except as indicated, none of the selling shareholders
has had a significant relationship with us within the past three years, other
than as a result of the ownership of our shares or other securities. Unless
otherwise indicated, the selling shareholders have sole voting and investment
power with their respective shares. The selling shareholders will sell their
shares at $.50 per share until our securities are listed on the OTC Bulletin
Board or other specified market and thereafter at prevailing market prices or at
privately negotiated prices. Those selling shareholders that are officers,
directors or 10% or greater shareholders are deemed to be affiliates of the
Company and will, during this offering, offer the shares at $.50 per share.
These affiliates are deemed to be "underwriters" under the rules and regulations
of the Securities and Exchange Commission.
Number of Common
Shares Beneficially Common Shares
Name of Selling Stockholder Owned Prior to Offering Offered Hereby (1)
- --------------------------- ----------------------- ------------------
Larsen, Paul 660,000 660,000
Scharmann, Mark A. 60,000 60,000
Knudson, David 50,000 50,000
Taylor, Elliott N. 50,000 50,000
Lehmberg, David 25,000 25,000
Stagg, Niel 25,000 25,000
Scharmann, Stephen 10,000 10,000
Scharmann, Darrell L. 20,000 20,000
Chapman Spira & Carson, LLC (2) 12,500 12,500
David Anthony Investments (3) 12,500 12,500
Witz, Barry 12,500 12,500
First Atlantis Trading Corp. (4) 12,500 12,500
Hyacinth Resources (5) 12,500 12,500
Roycemore Corp. (6) 52,500 52,500
Grilz, Richard 10,000 10,000
Kaminska, Curtis 10,000 10,000
OM Capital Corp. (7) 20,000 20,000
Grilz, Bill 10,000 10,000
Yamashita, Betty Hong 4,000 4,000
Dolan, John W. 4,000 4,000
Marriott, Rodney G. 4,000 4,000
Hall, Wade D. 10,000 10,000
George, Lawrence E. 10,000 10,000
Hanley, Lori 12,500 12,500
Petersen, Robert 10,000 10,000
Rubin, Mike 5,000 5,000
Maxfield, Brent 12,500 12,500
44
Warsinske, Michael 12,500 12,500
Croft Investments LTP (8) 25,000 25,000
Rod H. Larsen 25,000 25,000
Richard S. Robinson 25,000 25,000
Dan Rich 4,000 4,000
Cory Powers 10,000 10,000
(1) The selling shareholders may, but are not required to, sell shares in
connection with this offering.
(2) The control person of this shareholder is Robert Spira.
(3) The control person of this shareholder is David A. Logan.
(4) The control person of this shareholder is Lynn Tanner.
(5) The control person of this shareholder is Douglas P. Morris, a director
of Ogden Golf.
(6) The control person of this shareholder is Mark Scharmann, the president
of Ogden Golf.
(7) The control person of this shareholder is William Glaser.
(8) The control person of this shareholder is Milton Barbarosh.
The selling shareholders also include the following holders of our Series
A Preferred Stock.
Series A Convertible Common
Preferred Into Shares
Stock Common Offered
--------- ----------- -------
Hyacinth Resources 70,000 700,000 700,000
Mark A. Scharmann 20,000 200,000 200,000
Northcliffe Consulting 5,000 50,000 50,000
The following selling shareholders have material relationships with Ogden
Golf:
Paul Larsen Director of Ogden Golf and president and director of
Subsidiary
Mark Scharmann President and a director of Ogden Golf, Mr. Scharmann
is a control person of selling shareholder Roycemore
Corporation
Hyacinth Resources owned by Douglas P, Morris, vice president and a
director of Ogden Golf
Robert Peterson Secretary, Treasurer and Director of Ogden Golf
Curtis Kaminska Director of Ogden Golf.
None of the selling shareholders are broker-dealers or are affiliated with
a broker-dealer. Lori Hanley, a selling shareholder, is the wife of Patrick
Hanley who is employed as a broker for ACAP, the underwriter of this offering.
45
CERTAIN TRANSACTIONS
In connection with our formation, Paul Larsen , a director of Ogden Golf
and president and director of subsidiary, purchased the assets of an existing
retail golf shop from an unrelated third party through a combination of bank
debt and personal funds. We acquired the assets totaling $188,517 and assumed
liabilities totaling $142,047 in exchange for issuing Mr. Larsen 500,000 shares
of our common stock.
In 2001, the Company loaned $12,480 to Paul Larsen, our then president and
currently a director of Ogden Golf and president and director of subsidiary.
Such loan was due September 30, 2004 but has been extended to September 30,
2005. No interest accrued on such loan prior to September 30, 2004 but interest
accrues from and After April 1, 2004 at the rate of five percent per annum. The
loan is unsecured. The current principal balance of this loan is $9,000.
Paul Larsen, a director of Ogden Golf and president and director of
subsidiary, has personally guaranteed our loan from Barnes Bank.
Hyacinth Resources, Inc., an affiliate of Douglas P. Morris, a director of
the Company, purchased 70,000 shares of our Series A Preferred Stock from us for
$14,000. The 70,000 shares of Series A Preferred Stock are convertible into
700,000 shares of our common stock if certain conditions are met.
Mark A. Scharmann, an officer and director of the Company, purchased 20,000
shares of our Series A Preferred Stock from us for $4,000. The 20,000 shares of
Series A Preferred Stock are convertible into 200,000 shares of our common stock
if certain conditions are met.
Officers and stockholders of Ogden Golf have made loans to Ogden Golf which
are currently outstanding. Each of these loans is payable on demand bears
interest at 10% per annum and is unsecured. The following chart provides
information about those loans made by officers directors and stockholders of
Ogden Golf:
Lender Date of Loan Loan Amount
Roycemore Corporation 7/15/03 $ 5,000
Roycemore Corporation 8/02/03 $ 2,500
Roycemore Corporation 8/15/03 $ 10,000
Roycemore Corporation 12/05/03 $ 1,250
Roycemore Corporation 12/09/03 $ 1,250
Mark Scharmann 1/24/04 $ 1,000
Mark Scharmann 2/07/04 $ 3,000
Curtis Kaminska 2/11/04 $ 2,500
Roycemore Corporation 6/06/04 $ 1,500
Paul Larsen 6/30/04 $ 3,500
Paul Larsen 8/14/04 $ 5,000
Roycemore Corporation 8/17/04 $ 5,000
46
Paul Larsen 10/08/04 $ 5,000
Roycemore Corporation 11/03/04 $ 2,000
Curtis Kaminska 11/12/04 $ 2,000
Hyacinth Resources 11/22/04 $ 1,500
Non-Management
Shareholders various dates $ 34,800
LEGAL PROCEEDINGS
We are not a party to any material legal proceedings.
SHARES ELIGIBLE FOR FUTURE SALE
As of the date of this prospectus, we have 1,238,500 shares of common stock
issued and outstanding. We also have outstanding 95,000 shares of Series A
preferred stock which is convertible into 950,000 shares of our common stock.
All of these shares have been registered under the Securities Act for resale by
the holders. We are unable to estimate the amount, timing or nature of future
sales of outstanding common stock. Sales of substantial amounts of the common
stock in the public market may hurt the stock's market price.
All 1,238,500 shares of our common stock that are issued and outstanding
have been owned by the owners of such shares for more than two years and all
1,238,500 shares are currently eligible for resale pursuant to Rule 144 of the
Securities Act of 1933, as amended ("Rule 144"). Our outstanding Series A
Preferred Stock was issued more than two years ago. If such shares of Series A
Preferred Stock are converted into shares of common stock pursuant to the terms
and conditions of the Series A Preferred Stock, the shares of common stock
issued in such conversion will be immediately available for resale under Rule
144 pursuant to Rule 144(d)(3)(ii).
Prior to this offering, there has been no market for our common stock. We
cannot predict the effect, if any, that market sales of shares of our common
stock or the availability of shares of our common stock for sale will have on
the market price of our common stock prevailing from time to time. Nevertheless,
sales of substantial amounts of our common stock in the public market could
adversely affect the market price of our common stock and could impair our
future ability to raise capital through the sale of our equity securities.
We have registered all outstanding shares pursuant to the registration
statement of which this prospectus is a part.
All of the shares offered by the Company and sold in this offering (
minimum of 300,000 and a maximum of 400,000) will be freely tradeable without
restriction or further registration under the Securities Act, unless the shares
are purchased by "affiliates" of Ogden Golf, as that term is defined in Rule 144
under the Securities Act. The shares offered by the selling shareholders may be
sold as described in the "Selling Shareholders" section of this prospectus. For
those securities which are issued in the future but not registered, they may be
sold in the public market only if registered or if they qualify for an exemption
from registration under Rule 144 under the Securities Act.
47
Rule 144
In general, under Rule 144, a person who has owned shares of our common
stock for at least one year would be entitled to sell within any three-month
period a number of shares that does not exceed the greater of:
o 1% of the number of shares of common stock then outstanding, or
o the average weekly trading volume of the common stock during the four
calendar weeks preceding the filing of a notice on Form 144 with
respect to that sale.
Sales under Rule 144 are also governed by manner of sale provisions and
notice requirements and current public information about us must be available.
In addition, a person who is deemed not to have been our affiliate at any
time during the three months preceding a sale by him or her and who has
beneficially owned his or her shares for at least two years, may sell the shares
in the public market under Rule 144(k) without regard to the volume limitations,
manner of sale provisions, notice requirements, or the availability of current
information we refer to above.
EXPERTS
Our June 30, 2004 and June 30, 2003 financial statements included in this
prospectus and in the registration statement have been audited by Spector &
Wong, CPA's, independent certified public accountants, to the extent and for the
periods detailed in their reports, and which appear in this prospectus and in
the registration statement, and are included in reliance upon those reports
given as a result of the authority of that firm as experts in accounting and
auditing.
On September 1, 2003 the Board of Directors of Ogden Golf , upon
recommendation of its Board of Directors, dismissed WSRP as Ogden Golf's
independent accountants and appointed the firm of Spector & Wong, to serve as
independent public accountants of the Company for the fiscal year ending June
30, 2003.
WSRP's report on our financial statements for the fiscal year ended June
30, 2002 did not contained any qualification. Spector & Wong's report on our
financial statements for the fiscal year ended June 30, 2003 and June 30, 2004
contained a qualified opinion as to the uncertainty of Ogden Golf to continue as
a going concern qualification.
During the years ended June 30, 2002 and 2001 and through the date hereof,
there were no disagreements with WSRP on any matter of accounting principle or
practice, financial statement disclosure, or auditing scope or procedure which,
if not resolved to WSRP's satisfaction, would have caused them to make reference
to the subject matter of such disagreements in connection with their report on
our financial statements for such years; and there were no reportable events as
defined in Item 304(a)(1)(iv) of Regulation S-K.
48
We provided WSRP with a copy of the foregoing disclosures. Attached to the
registration statement of which this prospectus is a part as Exhibit 99.1, is a
copy of WSRP's letter, dated March 3, 2004, stating its agreement with such
statements.
During the years ended June 30, 2002 and 2001 and through the date hereof,
we did not consult with Spector & Wong with respect to the application of
accounting principles to a specified transaction, either completed or proposed,
or the type of audit opinion that might be rendered on our financial statements,
or any other matters or reportable events as set forth in Items 304(a)(2)(i) and
(ii) of Regulation S-K.
LEGAL MATTERS
Certain legal matters in connection with this offering have been passed
upon for us by the law firm of Cohne, Rappaport & Segal, attorneys at law, 525
East 100 South, Fifth Floor, Salt Lake City, Utah, 84102. Northcliffe
Consulting, L.L.C., an affiliate of A.O. Headman, Jr., owns 5,000 shares of our
Series A Preferred Stock. Mr. Headman is a shareholder in Cohne, Rappaport &
Segal.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to our directors, officers and controlling persons
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by us of expenses incurred or paid by one of
our directors, officers or controlling persons in the successful defense of any
action, suit or proceeding) is asserted by that director, officer or controlling
person in connection with the securities being registered, we will, unless in
the opinion of our counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether that
indemnification by us is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of that issue.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus forms part of a registration statement on Form SB-2 that we
filed with the SEC under the Securities Act with respect to the shares and
contains all the information which we believe is significant to you in
considering whether to make an investment in our common stock. We refer you to
the registration statement for further information about us, our common stock
and this offering, including the full texts of exhibits, some of which have been
summarized in this prospectus. At your request, we will provide you, without
charge, a copy of any exhibits to the registration statement incorporated by
reference in this prospectus.
49
If you want more information, write or call us at: 1781 Washington
Boulevard, Ogden, Utah 84401, and our telephone number is (801) 627-4442; Attn:
Paul Larsen.
Upon the effectiveness of the registration statement of which this
prospectus forms a part, we will become subject to the reporting requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") and will
file reports and other information with the SEC as required under the Exchange
Act. Such reports and other information filed by the Company are available for
inspection and copying at the public reference facilities of the SEC, 450 Fifth
Street, N.W., Washington, D.C. 20459. Copies of such material may be obtained by
mail from the Public Reference Section of the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the public reference
rooms. The SEC also maintains a World Wide Web site on the Internet at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the SEC.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY BE USED ONLY WHERE IT IS LEGAL
TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY BE ACCURATE ONLY
ON THE DATE OF THIS DOCUMENT.
50
OGDEN GOLF CO. CORPORATION
BALANCE SHEET (Unaudited)
December 31, 2004
- --------------------------------------------------------------------------------
ASSETS
Current Assets
Cash $ 5,744
Inventories 21,844
Prepaid insurance 936
----------
Total current assets 28,524
----------
Property and Equipment, net of accumulated depreciation
of $12,364 95,236
Other Assets
Loan cost, net of accumulated amortization of $2,052 146
Investments 4,000
Loan to stockholder 10,575
----------
Total other assets 14,721
----------
----------
TOTAL ASSETS $ 138,481
==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable $ 3,530
Accrued expenses 27,642
Unearned Income 1,465
Notes payable to stockholders 86,800
Bank credit cards payable 35,569
Notes payable to bank 99,968
----------
Total current liabilities 254,974
----------
Stockholders' Deficit
Series A Preferred stock, $0.20 stated value, authorized
100,000 shares; issued and outstanding 95,000 shares 19,000
Common stock, no par value, authorized 100,000,000 shares;
issued and outstanding 1,233,500 171,970
Paid-in capital 4,846
Accumulated deficit (312,309)
----------
Total stockholders' deficit (116,492)
----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 138,481
==========
See Notes to Interim Unaudited Financial Statements
F-1
OGDEN GOLF CO. CORPORATION
STATEMENTS OF OPERATIONS (Unaudited)
For three months ended For six months ended
December 31, December 31,
2004 2003 2004 2003
- -------------------------------------------------------------------------------------
Sales $ 6,467 $ 11,896 $ 27,561 $ 37,377
Cost of Sales 5,416 6,905 20,272 24,055
---------------------------------------------------
Gross Profit 1,051 4,991 7,289 13,322
Selling, general and
administrative expenses 11,805 14,785 25,540 28,909
---------------------------------------------------
Operating (loss) (10,754) (9,794) (18,252) (15,587)
Other (expenses):
Interest expenses (3,047) (2,761) (5,989) (5,603)
---------------------------------------------------
Net (loss) before taxes (13,801) (12,555) (24,240) (21,190)
Provision for income taxes - - - -
---------------------------------------------------
Net (loss) $ (13,801) $ (12,555) $ (24,240) $ (21,190)
===================================================
Basic and diluted net (loss)
per share $ (0.01) $ (0.01) $ (0.02) $ (0.02)
===================================================
Weighted average number of
common shares 1,233,500 1,233,500 1,233,500 1,233,500
See Notes to Interim Unaudited Financial Statements
F-2
OGDEN GOLF CO. CORPORATION
STATEMENTS OF CASH FLOWS (Unaudited)
For the six months ended December, 2004 2003
- ---------------------------------------------------------------------------------------
Cash Flow from Operating Activities:
Net (loss) $ (24,240) $ (21,190)
Adjustments to reconcile net (loss) to net cash (used in)
operations:
Depreciation and amortization 1,339 1,504
(Increase) Decrease in:
Inventories 4,183 9,096
Prepaids and other assets 217 50
Interest receivable on notes receivable (225) -
Increase (decrease) in:
Accounts payable and accrued expenses (13,707) (15,541)
Unearned income 375 -
-------------------------
Net cash flow (used in) operating activities (32,058) (26,081)
-------------------------
Cash Flow from Investing Activities - -
-------------------------
Cash Flow from Financing Activities:
Additions to short-term liabilities 376 10,399
Repayments of long-term debt (5,250) (5,233)
Cash received from stockholders' loan 30,800 20,000
-------------------------
Net cash flow provided by financing activities 25,926 25,166
-------------------------
Net (decrease) in cash (6,132) (915)
Cash balance at beginning of period 11,876 9,319
-------------------------
Cash balance at end of period $ 5,744 $ 8,404
=========================
Supplemental Disclosures of Cash Flow Information
Interest Paid $ 2,510 $ 4,832
Income Taxes Paid $ - $ -
See Notes to Interim Unaudited Financial Statements
F-3
OGDEN GOLF CO. CORPORATION
NOTES TO INTERIM UNAUDITED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1 - NATURE OF BUSINESS
Ogden Golf Co. Corporation ("the Company") was incorporated in Utah on May 10,
2000. The Company is engaged in the marketing and sales of golf equipment and
supplies to customers generally located in the state of Utah.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Presentation of Interim Information The accompanying financial information at
December 31, 2004 and for the three and six months ended December 31, 2004 and
2003 is unaudited, but includes all adjustments (consisting only of normal
recurring adjustments) that the Company considers necessary for a fair
presentation of the financial information set forth herein, in accordance with
accounting principles generally accepted in the United States ("U.S. GAAP") for
interim financial information, and with the instructions to its registration
statement on Form SB-2. Accordingly, such information does not include all of
the information and footnotes required by U.S. GAAP for annual financial
statements. For further information, refer to the financial statements and
footnotes thereto included in the Company's registration statement on Form SB-2
for the year ended June 30, 2004.
The results for the three and six months ended December 31, 2004 may not be
indicative of results for the year ending June 30, 2005 or any future periods.
Income (Loss) Per Common Share The Company accounts for income (loss) per share
in accordance with SFAS No. 128, "Earnings Per Share." SFAS No. 128 requires
that presentation of basic and diluted earnings per share for entities with
complex capital structures. Basic earnings per share includes no dilution and is
computed by dividing net income (loss) available to common stockholders by the
weighted average number of common stock outstanding for the period. Diluted
earnings per share reflects the potential dilution of securities that could
share in the earnings of an entity. Diluted net loss per common share does not
differ from basic net loss per common share since potential shares of common
stock from the conversion of preferred stock are anti-dilutive for the period
presented. Equivalent common shares excluded from diluted net loss per share
totalled 950,000 for the six months ended December 31, 2004 and 2003,
respectively.
NOTE 3 - LIQUIDITY
At June 30, 2004, the Company reported an accumulated deficit of $288,068,
incurred a net loss of $66,270 and used $45,515 of cash in operations during the
year ended June 30, 2004. For the six month period ending December 31, 2004, the
Company reported an accumulated deficit of $312,309, incurred a net loss of
$24,240 and used $32,058 of cash in operations.
The Company is currently funded either through debt financing or equity
financing. The Company plans to register with the Securities and Exchange
Commission and list the Company's stock on a public exchange in order to attract
additional investment capital. Management believes that such actions will have a
positive effect on the Company's results of operations going forward and, as a
result, believes it will have sufficient capital resources to meet its current
obligations. In the event that such cash from operations is insufficient to
sustain ongoing operations, the Company may be required to seek additional
external funding. There can be no assurance that such funding can be obtained on
terms acceptable to the Company.
NOTE 4 - NOTES PAYABLE TO STOCKHOLDERS
The Company had notes payable to stockholders in the amounts of $86,800 as of
December 31, 2004. The notes bear interest at 10% per annum, unsecured and due
on demand.
F-4
NOTE 5 - PREFERRED STOCK
The Company is authorized to issue 5,000,000 shares of no par value preferred
stock. On December 19, 2002 the Company designated 100,000 shares of preferred
stock as "Series A Preferred Stock." Series A preferred stock has a stated value
of twenty cents. As of December 31, 2004, the Company had 95,000 shares of
Series A preferred stock issued and outstanding. The preferred stock is either
to be redeemed by the Company at the stated value or convertible to common stock
at a ratio of 10 shares of common stock to 1 share of preferred stock if either
of two contingencies occur: 1) The company shows a net profit for any period
through June 30, 2005; or 2) the total stockholders' equity balance of the
Company increases more than $100,000 between June 30, 2002 and June 30, 2005. As
of December 31, 2004, none of these contingencies occurred. The holders of
Series A preferred stock shall have no voting rights prior to conversion of the
Series A preferred stock into common stock. No dividends shall accrue or be
payable on the Series A preferred stock. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company, the holders
of Series A preferred stock shall be entitle to be paid in full an amount equal
to twenty cents per share.
NOTE 6 - NET (LOSS) PER SHARE
The following table sets forth the computation of basic and diluted net loss per
share:
For three months For six months
ended ended
December 31, December 31,
2004 2003 2004 2003
-----------------------------------------------
Numerator:
Net (loss) $ (13,801) $ (12,555) $ (24,240) $ (21,190)
Denominator:
Weighted average common shares
outstanding 1,233,500 1,233,500 1,233,500 1,233,500
Basic and diluted net (loss) per share $ (0.01) $ (0.01) $ (0.02) $ (0.02)
NOTE 7 - SEGMENT INFORMATION
The Company is currently managed and operated as one business. The entire
business is managed by a single management team that reports to the Company's
President. The Company does not operate separate lines of business or separate
business entities with respect to any of its product candidates. Accordingly,
the Company does not prepare discrete financial information with respect to
separate product areas or by location and dose not have separately reportable
segments as defined by SFAS No. 131 "Disclosures about Segments of an Enterprise
and Related Information".
NOTE 8 - GUARANTEES
The Company from time to time enters into certain types of contracts that
contingently require the Company to indemnify parties against third-party
claims. These contracts primarily relate to: (i) divestiture agreements, under
which the Company may provide customary indemnifications to purchasers of the
Company's businesses or assets; and (ii) certain agreements with the Company's
officers, directors and employees, under which the Company may be required to
indemnify such persons for liabilities arising our of their employment
relationship.
F-5
NOTE 8 - GUARANTEES (Continued)
The terms of such obligations vary. Generally, a maximum obligation is not
explicitly stated. Because the obligated amounts of these types of agreements
often are not explicitly stated, the overall maximum amount of the obligation
cannot be reasonably estimated. Historically, the Company has not been obligated
to make significant payments for these obligations, and no liabilities have been
recorded for these obligations on its balance sheet as of December 31, 2004.
In general, the Company offers a one-year warranty for most of the products it
sold. To date, the Company has not incurred any material costs associated with
these warranties.
NOTE 9 - WHOLLY OWNED SUBSIDIARY
In January 2003 the Company formed Ogden Discount Golf, Inc. as a wholly-owned
subsidiary. The Company intends to transfer its retail golf operations and
related assets and liabilities to the subsidiary. At December 31, 2004, the
subsidiary was inactive and none of the Company's operations, assets or
liabilities had been transferred to the subsidiary.
F-6
HAROLD Y. SPECTOR, CPA SPECTOR & WONG, LLP 80 SOUTH LAKE AVENUE
CAROL S. WONG, CPA Certified Public Accountants SUITE 723
(888) 584-5577 PASADENA, CA 91101
FAX (626) 584-6447
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and stockholders
of Ogden Golf Co. Corporation
We have audited the accompanying balance sheets of Ogden Golf Co. Corporation (a
Utah corporation), as of June 30, 2004 and 2003, and the related statements of
operations, changes in stockholders' deficit, and cash flows for the years ended
June 30, 2004 and 2003. 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 audit in accordance with the Public Company Accounting
Oversight Board (United States). 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 Ogden Golf Co. Corporation as
of June 30, 2004 and 2003, and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company's operating losses and working capital
deficiency raise substantial doubt about its ability to continue as a going
concern. Management's plans regarding those matters are also described in Note
3. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
/s/ Spector and Wong, LLP
Pasadena, California
March 23, 2005
F-7
OGDEN GOLF CO. CORPORATION
BALANCE SHEETS
For the years ended June 30, 2004 2003
- --------------------------------------------------------------------------------
ASSETS
Current Assets
Cash $ 11,876 $ 9,319
Inventories 26,027 28,251
Prepaid insurance 933 462
Loan to officer 10,350 12,480
--------------------
Total current assets 49,187 50,512
--------------------
Property and Equipment, net of accumulated depreciation
of $11,025 and $8,403, respectively 96,575 99,197
Other Assets
Loan cost, net of accumulated amortization
of $1,832 and 1,392, respectively 366 806
Investments 4,000 4,000
--------------------
Total other assets 4,366 4,806
--------------------
TOTAL ASSETS $ 150,127 $154,515
====================
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable $ 16,670 $ 18,137
Accrued expenses 28,208 16,472
Unearned income 1,090 265
Credit Bankcard 35,193 24,003
Notes payable, stockholders 56,000 10,000
Current portion of long-term debt 13,451 10,225
--------------------
Total current liabilities 150,612 79,102
--------------------
Long-term debt 91,767 106,241
Stockholders' Deficit
Series A Preferred stock, $0.20 stated value, authorized
100,000 shares; issued and outstanding 95,000 shares 19,000 19,000
Common stock, no par value, authorized 100,000,000 shares;
issued and outstanding 1,233,500 171,970 171,970
Paid-in capital 4,846 -
Accumulated deficit (288,068) (221,798)
--------------------
Total stockholders deficit (92,252) (30,828)
--------------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 150,127 $154,515
====================
See Notes to Financial Statements
F-8
OGDEN GOLF CO. CORPORATION
STATEMENTS OF OPERATIONS
For the years ended June 30, 2004 2003
- --------------------------------------------------------------------------------
Sales $ 79,313 $ 86,672
Cost of Sales 55,415 64,451
------------------------
Gross Profit 23,897 22,221
Selling, general and administrative expenses 78,160 89,988
------------------------
Operating (loss) (54,262) (67,767)
Other (expenses):
Interest expenses (11,908) (12,346)
------------------------
Net (loss) before taxes (66,170) (80,113)
Provision for income taxes 100 100
------------------------
Net (loss) (66,270) (80,213)
========================
Basic and diluted net (loss) per share $ (0.05) $ (0.07)
========================
Weighted average number of common shares 1,233,500 1,176,375
See Notes to Financial Statements
F-9
OGDEN GOLF CO. CORPORATION
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
For the years ended June 30, 2004 and 2003
Preferred Stock Common Stock
----------------------------------- Paid-in Accumulated
Shares Amount Shares Amount Capital Deficit Total
- --------------------------------------------------------------------------------------------------
Balance at June 30, 2002 $ 1,109,500 $146,970 $ - $(141,585) $ 5,385
- -
Issuance of preferred stock for:
Cash 90,000 18,000 - - - - 18,000
Legal fees 5,000 1,000 - - - - 1,000
Issuance of common stock for cash - - 124,000 25,000 - - 25,000
Net (loss) for the year (80,213) (80,213)
-----------------------------------------------------------------
Balance at June 30, 2003 95,000 19,000 1,233,500 171,970 - (221,798) (30,828)
Forgiven officer
compensation - - - - 4,846 4,846
Net (loss) for the year (66,270) (66,270)
-----------------------------------------------------------------
Balance at June 30, 2004 95,000 $19,000 1,233,500 $171,970 $4,846 $(288,068) $(92,252)
=================================================================
See Notes to Financial Statements
F-10
OGDEN GOLF CO. CORPORATION
STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------
For the years ended June 30, 2004 2003
- --------------------------------------------------------------------------------
Cash Flow from Operating Activities:
Net (loss) $(66,270) $(80,213)
Adjustments to reconcile net (loss) to net cash (used
in) operations:
Depreciation and amortization 3,062 3,117
Stock for services - 1,000
Forgiven officer compensation 4,846 -
(Increase) Decrease in:
Inventories 2,224 12,468
Prepaids and other assets (471) (61)
Increase (decrease) in:
Accounts payable and accrued expenses 10,269 15,913
Unearned income 825 (1,235)
---------------------
Net cash (used in) operating activities (45,515) (49,011)
---------------------
Cash Flow from Investing Activities - -
---------------------
Cash Flow from Financing Activities:
Additions to credit bankcard 11,190 1,701
Repayments of long-term debt (11,248) (11,019)
Cash received from stockholders' loan 48,130 7,500
Proceeds from issuance of preferred stock - 18,000
Proceeds from issuance of common stock - 25,000
---------------------
Net cash flow provided by financing activities 48,072 41,182
---------------------
Net increase (decrease) in cash 2,557 (7,829)
Cash balance at beginning of year 9,319 17,148
---------------------
Cash balance at end of year $ 11,876 $ 9,319
=====================
Supplemental Disclosures of Cash Flow Information
Interest Paid $ 6,408 $ 11,533
Income Taxes Paid $ - $ 100
See Notes to Financial Statements
F-11
OGDEN GOLF CO. CORPORATION
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1 - NATURE OF BUSINESS
Ogden Golf Co. Corporation ("the Company") was incorporated in Utah on May 10,
2000. The Company is engaged in the marketing and sales of golf equipment and
supplies to customers generally located in the state of Utah.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates The preparation of the accompanying financial statements in
conformity with accounting principles generally accepted in the United States
requires management to make certain estimates and assumptions that directly
affect the results of reported assets, liabilities, revenue, and expenses.
Actual results may differ from these estimates.
Revenue Recognition Revenue is recognized at the point of sales or as goods are
delivered to and accepted by customers and are billable, provided that no
significant obligations remain and collectibility is reasonably assured.
Recognition of revenue from sale of gift certificates is deferred until the
certificates are redeemed for merchandise or expire one year from date of
purchase.
Cash and Cash Equivalents For purposes of the statements of cash flows, the
Company considers all highly liquid debt instruments with an original maturity
of three months or less to be cash equivalents.
Fair Value of Financial Instruments The carrying amounts of the financial
instruments have been estimated by management to approximate fair value.
Inventories Inventories are valued at the lower of cost or market (first-in,
first-out) or net realizable value.
Property and Equipment Property and equipment are valued at cost. Maintenance
and repair costs are charged to expenses as incurred. Depreciation is computed
on the straight-line method based on the estimated useful lives of the assets,
generally 5 to 39 years. Depreciation expense for years ended June 30, 2004 and
2003 was $2,623 and $2,677, respectively.
Amortization of Loan Cost Loan cost is stated at cost and are amortized using
the straight-line method over the life of the loan, which is 5 years.
Investment The Company owns twelve collectible sets of golf clubs that were
purchased at a cost of $4,000. The company has no intention to sell any of the
collectible sets in the near future. The Company recorded this purchase as an
investment.
Income Taxes Income tax expense is based on pretax financial accounting income.
Deferred tax assets and liabilities are recognized for the expected tax
consequences of temporary differences between the tax bases of assets and
liabilities and their reported amounts. Valuation allowances are established, if
necessary, to reduce deferred tax assets to the amount that will more likely
than not be realized.
Advertising Costs All costs associated with advertising and promoting the
Company's goods and services are expensed as incurred. Advertising expense for
the years ended June 30, 2004 and 2003 was $446 and $1,830, respectively.
Derivatives In June 1998, the Financial Accounting Standards Board (FASB) issued
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", as
amended by SFAS No. 138, which was issued in June 2000. SFAS No. 133 establishes
accounting and reporting standards for derivative instruments. The Company
currently does not use derivative financial products for hedging or speculative
purposes and as a result, does not anticipate any impact on the Company's
financial statements.
F-12
OGDEN GOLF CO. CORPORATION
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income (Loss) Per Common Share The Company accounts for income (loss) per share
in accordance with SFAS No. 128, "Earnings Per Share." SFAS No. 128 requires
that presentation of basic and diluted earnings per share for entities with
complex capital structures. Basic earnings per share includes no dilution and is
computed by dividing net income (loss) available to common stockholders by the
weighted average number of common stock outstanding for the period. Diluted
earnings per share reflects the potential dilution of securities that could
share in the earnings of an entity. Diluted net loss per common share does not
differ from basic net loss per common share since potential shares of common
stock from the conversion of preferred stock are anti-dilutive for the period
presented. Equivalent common shares excluded from diluted net (loss) per share
totalled 950,000 for years ended June 30, 2004 and 2003.
New Accounting Standards In December 2003, the FASB issued SFAS No. 132,
"Employers' Disclosures about Pensions and Other Postretirement Benefits." SFAS
No. 132 amends SFAS No. 87, 88, and 106, "Employers' Accounting for Pensions,"
"Employers' Accounting for Settlements and Curtailments of Defined Benefit
Pension Plans and for Termination Benefits," and "Employers' Accounting for
Postretirement Benefits other than Pensions," to require additional disclosures
to those in the original Statement 132 about the assets, obligations, cash flows
and net periodic benefit cost of defined benefit pension plans and other defined
benefit postretirement plans. The required information should be provided
separately for pension plans and for other postretirement benefit plans. The
Company does not have any pensions and other postretirement benefits. The
Company does not anticipate that the adoption of SFAS No. 132 will have material
impact on its balance sheet or statements of operations and cash flows.
NOTE 3- GOING CONCERN
The Company has incurred substantial losses, has accumulated deficit, and needs
additional working capital. Those matters raise substantial doubt about the
Company's ability to continue as a going concern. Management of the Company is
developing a plan to reduce operating expenses and obtain an infusion of capital
through either public or private investment. The ability of the Company to
continue as a going concern is dependent on management's successful reduction of
operating expenses and successful capital infusion. The financial statements do
not include any adjustments that might be necessary if the Company is unable to
continue as a going concern.
NOTE 4 - PROPERTY AND EQUIPMENT
Property and equipment as of June 30, 2004 and 2003 is summarized as follows :
June 30,
2004 2003
-------------------
Building and improvements $ 96,600 $ 96,600
Equipment 1,000 1,000
Land 10,000 10,000
-------------------
107,600 107,600
Less accumulated depreciation (11,025) (8,403)
-------------------
Property and Equipment, net $ 96,575 $ 99,197
===================
NOTE 5 - LOAN TO OFFICER
On March 30, 2004, the Board of Directors granted a bonus of $3,480 to the CEO,
which was used to forgive part of his loan owed to the Company. The remaining
balance of the loan bears interest at 5% per annum commencing June 30, 2001 and
is due on March 31, 2005. As of June 30, 2004, the loan balance was $10,350,
including an interest receivable of $1,350.
F-13
OGDEN GOLF CO. CORPORATION
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 6 - CREDIT BANKCARD
The Company had a business credit bankcard with a financial institution. The
credit bankcard has a $38,000 credit limit and carries an interest rate 13% at
June 30, 2004. The outstanding balance on this credit bankcard as of June 30,
2004 and 2003 was $35,193 and $24,003, respectively.
NOTE 7 - LONG-TERM DEBT
Long-term debt as of June 30, 2004 and 2003 consists of the following:
June 30,
2004 2003
--------------------
Note payable to a bank, due in monthly
installments of $1,608, including interest
at prime plus 1.75%, with a balloon
payment due in September 2005. Secured
by real property and equipment $105,218 $116,466
Less: current portion (13,451) (10,225)
--------------------
Long-term debt $ 91,767 $106,241
====================
Maturities of long-term debt are as follows:
June 30, Amount
-------- ------------
2005 $ 13,451
2006 91,767
------------
$105,218
============
NOTE 8 - PREFERRED STOCK
The Company is authorized to issue 5,000,000 shares of no par value preferred
stock. On December 19, 2002 the Company designated 100,000 shares of preferred
stock as "Series A Preferred Stock." Series A preferred stock has a stated value
of twenty cents. As of June 30, 2004, the Company had 95,000 shares of Series A
preferred stock issued and outstanding. The preferred stock is either to be
redeemed by the Company at the stated value or convertible to common stock at a
ratio of 10 shares of common stock to 1 share of preferred stock if either of
two contingencies occur: 1) the Company shows a net profit for any period
through June 30, 2005; or 2) the total stockholders' equity balance of the
Company increases more than $100,000 between June 30, 2002 and June 30, 2005. As
of June 30, 2004, none of these contingencies occurred. The holders of Series A
preferred stock shall have no voting rights prior to conversion of the Series A
preferred stock into common stock. No dividends shall accrue or be payable on
the Series A preferred stock. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the holders of Series A
preferred stock shall be entitled to be paid in full an amount equal to twenty
cents per share.
F-14
OGDEN GOLF CO. CORPORATION
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 9 - INCOME TAX
The components of income tax expense related to continuing operations are as
follows:
Current $100
Deferred -
----
$100
====
As of June 30, 2004, the Company has net operating loss carryforwards,
approximately of $275,075 to reduce future taxable income. To the extent not
utilized, the carryforwards will begin to expire through 2024. The Company's
ability to utilize its net operating loss carryforwards is uncertain and thus a
valuation reserve has been provided against the Company's net deferred tax
assets.
The net deferred tax assets consist of the following:
June 30,
2004 2003
---------------------------------------------------------
Deferred tax assets:
Net operating loss carryforwards $ 106,437 $ 84,047
Contribution carryover 686 638
Organizational costs disallowed 156 234
Less: valuation allowance (107,279) (84,919)
---------------------
Total net deferred tax assets $ - $ -
=====================
NOTE 10 - NET (LOSS) PER SHARE
The following table sets forth the computation of basic and diluted net loss per
share:
For years ended
June 30,
2004 2003
-----------------------
Numerator:
Net (loss) (66,270) (80,213)
Denominator:
Weighted average common shares outstanding 1,233,500 1,176,375
Basic and diluted net (loss) per share $ (0.05) $ (0.07)
NOTE 11 - RELATED PARTIES TRANSACTIONS
The Company had notes payable to related parties in the amounts of $56,000 and
$10,000 as of June 30, 2004 and 2003, respectively. The notes bear interest at
10% per annum, unsecured and due on demand.
During the fiscal year ended June 30, 2004, the officer elected to forgive the
compensation in the amount of $4,846 due to shortage of funds. The forgiven
compensation was included in paid-in capital.
F-15
OGDEN GOLF CO. CORPORATION
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 12 - SEGMENT INFORMATION
The Company is currently managed and operated as one business. The entire
business is managed by a single management team that reports to the Company's
President. The Company does not operate separate lines of business or separate
business entities with respect to any of its product candidates. Accordingly,
the Company does not prepare discrete financial information with respect to
separate product areas or by location and does not have separately reportable
segments as defined by SFAS No. 131 "Disclosures about Segments of an Enterprise
and Related Information".
NOTE 13 - GUARANTEES
The Company from time to time enters into certain types of contracts that
contingently require the Company to indemnify parties against third-party
claims. These contracts primarily relate to: (i) divestiture agreements, under
which the Company may provide customary indemnifications to purchasers of the
Company's businesses or assets; and (ii) certain agreements with the Company's
officers, directors and employees, under which the Company may be required to
indemnify such persons for liabilities arising our of their employment
relationship.
The terms of such obligations vary. Generally, a maximum obligation is not
explicitly stated. Because the obligated amounts of these types of agreements
often are not explicitly stated, the overall maximum amount of the obligation
cannot be reasonably estimated. Historically, the Company has not been obligated
to make significant payments for these obligations, and no liabilities have been
recorded for these obligations on its balance sheet as of June 30, 2004.
In general, the Company offers a one-year warranty for most of the products it
sold. To date, the Company has not incurred any material costs associated with
these warranties.
NOTE 14 - WHOLLY OWNED SUBSIDIARY
In January 2003 the Company formed Ogden Discount Golf, Inc. as a wholly-owned
subsidiary. The Company intends to transfer its retail golf operations and
related assets and liabilities to the subsidiary. At June 30, 2004 the
subsidiary was inactive and none of the Company's operations, assets or
liabilities had been transferred to the subsidiary.
F-16
Table of Contents
- -----------------
Page
Prospectus Summary.......................2
Risk Factors.............................5 OGDEN GOLF CO. CORPORATION
Use of Proceeds.........................12
Dilution and Comparative Information....13
Market for Common Stock and Dividend
Policy...............................15
Management's Discussion and Analysis....15
Business of Ogden Golf Co. Corporation..22
Management..............................31 400,000 SHARES OF
Management Compensation.................33 COMMON STOCK
Principal Stockholders..................34
Description of Securities...............35 --------------------
Plan of Distribution....................38
Selling Shareholders....................43 PROSPECTUS
Certain Transactions....................46
Legal Proceedings.......................47 --------------------
Shares Eligible for Future Sale.........47
Experts.................................48
Legal Matters...........................49 April 14, 2005
Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities.........................49
Where You Can Find More Information.....49
Financial Statements...................F-1
UNTIL JULY 13, 2005, 90 DAYS AFTER THE DATE OF THIS PROSPECTUS, ALL DEALERS THAT
BUY, SELL OR TRADE THE SHARES, WHETHER OR NOT PARTICIPATING IN THIS OFFERING,
MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS DELIVERY REQUIREMENT IS IN
ADDITION TO THE OBLIGATIONS OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.