-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TMQT3ObCnLe0F7LZfFakL8+9TkAD2RqT3FB617lSAy77x/jmw3xrSaTtS2gT+teK vi2FwGj7uDbB+yklLHjzwg== 0001016193-03-000083.txt : 20030806 0001016193-03-000083.hdr.sgml : 20030806 20030806172309 ACCESSION NUMBER: 0001016193-03-000083 CONFORMED SUBMISSION TYPE: SB-2/A PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20030806 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OGDEN GOLF CO CORP CENTRAL INDEX KEY: 0001133818 STANDARD INDUSTRIAL CLASSIFICATION: [3949] IRS NUMBER: 870652870 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SB-2/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-105075 FILM NUMBER: 03827107 BUSINESS ADDRESS: STREET 1: 1781 WASHINGTON BLVD CITY: OGDEN STATE: UT ZIP: 84404 BUSINESS PHONE: 8016274442 MAIL ADDRESS: STREET 1: 1781 WASHINGTON BLVD CITY: OGDEN STATE: UT ZIP: 84404 SB-2/A 1 sb2amnd1-0803.txt As filed with the Securities and Exchange Commission on August 6, 2003 Registration No. 333-105075 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Amendment No.1 FORM SB-2 REGISTRATION STATEMENT Under The Securities Act of 1933 OGDEN GOLF CO. CORPORATION (Exact name of Small Business Issuer as specified in charter) Utah (3949) 87-0652870 ---- ------ ------------ (State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer Incorporation or Organization) Classification Code Number Identification Number) 1781 Washington Blvd. Ogden, UT 84401 (801) 627-4442 Fax (801) 627-0605 (Address and telephone number of principal executive office) Paul Larsen 1781 Washington Blvd. Ogden, UT 84401 (801) 627-4442 (Name, address and telephone number of agent for service) with copies to: A.O. Headman, Jr., Esq. Cohne, Rappaport & Segal 525 East 100 South Fifth Floor (801) 532-2666 Salt Lake City, Utah 84102 Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] 3 CALCULATION OF REGISTRATION FEE ================================================================================ Proposed Proposed Maximum Maximum Title of Each Amount Offering Aggregate Amount of Class of Securities Being Price Per Offering Registration Being Registered Registered Unit Price Fee - -------------------------------------------------------------------------------- Common Stock, no par value (1) 400,000 $ .50 $ 200,000 $ 66.67 - -------------------------------------------------------------------------------- Common Stock, no par value (2) 1,238,500 $ .50 $ 618,250 $206.09 - -------------------------------------------------------------------------------- Common Stock, no par value (3) 950,000 $ .50 $ 475,000 $158.33 ================================================================================ Total 2,588,500 $1,293,250 $431.09 ================================================================================ (1) Represents the shares offered by Ogden Golf Co. Corporation pursuant to this Registration Statement. The gross offering proceeds are estimated solely for the purpose of calculating the registration fee in accordance with Rule 457 under the Securities Act of 1933, as amended. (2) These shares are registered on behalf of selling shareholders and the offering price and gross offering proceeds are estimated solely for the purpose of calculating the registration fee in accordance with Rule 457 under the Securities Act of 1933, as amended. (3) Represents shares issuable upon the conversion into common stock of outstanding shares of Series A Preferred Stock issued by Ogden Golf Co. Corporation. These shares are registered on behalf of selling shareholders and the offering price and gross offering proceeds are estimated solely for the purpose of calculating the registration fee in accordance with Rule 457 under the Securities Act of 1933, as amended. The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. 2 SUBJECT TO COMPLETION, DATED MAY 7, 2003 PRELIMINARY 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. 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 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 may 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. 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 The minimum escrow amount of $150,000 must be deposited into escrow within 120 days (which may be extended for thirty days) from the effective date of this Prospectus. In the event that less than $150,000 is deposited into the escrow account within 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 ______________, 2003 3 The information in this Prospectus is not complete and may be changed. These securities may not be sold 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. 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. 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 March 31, 2003, we have incurred a cumulative loss of $196,544. Offices Our retail store and our executive offices are at 1781 Washington Boulevard, Ogden, UT 84401, and our telephone number is (801) 627-4442. 4 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 300,0000 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 120 days from the effective date of this registration statement, 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. Following the initial closing of the sale of the minimum number of shares, we may continue to offer the remaining shares on the same terms as set forth in this prospectus for an additional 30 days from the date of the initial closing. 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 at least 300,000 shares are sold in the offering. If at least 300,000 shares are sold by ACAP Financial, we will also pay an accountable expense allowance to ACAP of 1% of the gross offering proceeds. If at least 300,000 shares are sold by ACAP Financial, we will also issue ACAP Financial a warrant to purchase up to 40,000 shares of our common stock (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. The selling shareholders may sell their shares either on the open market at market prices in ordinary broker transactions or in negotiated transactions, and they may pay broker commissions in connection with such transactions. The selling shareholders may offer their shares at a price that is lower than the price we offer our shares. 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 may be 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. Common Stock Common stock outstanding 1,238,500 shares 5 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: 9 Months Year Ended Year Ended Ended 6/30/02 6/30/01 3/31/03 ---------- ---------- --------- Sales . . . . . . . . . . . . . . . . . . . . $108,095 $119,548 $ 53,134 Gross Profit. . . . . . . . . . . . . . . . . 28,681 33,203 3,110 Expenses . . . . . . . . . . . . . . . . . . 78,107 90,123 20,197 Net (Loss) . . . . . . . . . . . . . . . . . (63,143) (73,874) (20,317) Basic (Loss) per Share . . . . . . . . . . . (0.06) (0.10) (0.02) Actual as Actual as Actual as of 6/30/02 of 6/30/01 of 3/31/03 ---------- ---------- --------- Balance Sheet Date: Total Current Assets . . . . . . . . . . . . $ 58,268 $ 77,560 $ 48,158 Total Assets . . . . . . . . . . . . . . . . 177,868 200,277 165,421 Total Current Liabilities . . . . . . . . . . 54,439 42,805 59,767 Total Long Term Liabilities . . . . . . . 118,044 131,944 112,228 Working Capital . . . . . . . . . . . . . . . 3,829 34,755 (11,609) Shareholders' Equity (Deficit) . . . . . . . 5,385 25,528 (6,574) 6 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 We have Incurred Significant Operating Losses; There is no Assurance We Will be Profitable in the Future. We have incurred significant operating losses since our inception. At March 31, 2003, our accumulated deficit was more than $196,544. There can be no assurance that we will ever operate at a profit. We Expect Net Losses to Occur Through at Least 2003. We expect to continue experiencing losses through at least the end of the year 2003. 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. We Will Likely Need Additional Financing in Order to Fully Implement Our Business Plan. 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 delay or abandonment of some or all of our operations, which could result in a total loss of your investment. Our Success Depends on the Continued Popularity of Golf and the Growth of the Market for Golf-related Products. 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 7 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 quality 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 our 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. 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 have 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. For the year ended June 30, 2002, we had total revenues of $108,095 and a loss of $63,043. For the nine months ended March 31, 2003 we had total revenues of $53,134 and a loss of $54,959. 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. 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 8 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 and Profits May Be Adversely Affected If We and Our Suppliers Fail to Successfully Develop and Introduce New Products. Our future success will depend, in part, upon our and 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 and Profitability May Be Adversely Affected If New Competitors Enter the Golf Products Industry. 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. If We Do Not Accurately Predict Our Sales During Our Peak Seasons and They Are Lower than We Expect, Our Profitability May Be Materially Adversely Affected. 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 9 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. If We Lose the Services of Paul Larsen, We May Not Be Able to Manage Our Operations and Implement Our Growth Strategy Effectively. 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 onany 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. 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 quality 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. We Need to Build a Public Awareness of Our Retail Store. 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. 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 Other Ventures. In order to increase our revenues and the potential for returns to our shareholders, we may look to acquire other businesses engaged in the golf industry. We have not identified any potential acquisitions and there is a possibility that we will never attempt to acquire any other business operation. No person should invest in the Company on the 10 basis that we will acquire, or even attempt to acquire, any other business whether in the golf industry or outside of the golf industry. Our immediate plan is to attempt to expand the operations of our current retail golf store through increased advertising and marketing efforts. However, if we do acquire, or attempt to acquire, one or more other business operations, whether in the golf industry or outside of the golf industry, it will subject our shareholders, including the investors in this offering, to a variety of risks which may be unique to a potential acquisition in addition to those risk factors described in this prospectus. Risks Relate to the Offering There Is No Market for Our Common Stock 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. 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. We Don't Anticipate That We Will Pay Any Dividend. We have never paid any cash dividends on our common stock and we do not anticipate paying cash dividends on our common stock in the future. The future payment of dividends is directly dependent upon our future earnings, capital requirements, financial requirements and other factors to be determined by our Board of Directors. It is anticipated that future earnings, if any, which may be generated from our operations will be used to finance our growth, and that cash dividends will not be paid to our stockholders. 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, 2002 was approximately $.00485 per share. The book value of our common stock at March 31, 2003 was a negative $.003 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 $.0410, or a dilution to subscribers of approximately $.459 per share. After sales of the maximum 400,000 shares, the book value per share will be approximately $.056 or a dilution to subscribers of approximately $.44 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. Our Management Has Broad Discretion in the Application of the Net Proceeds from this Offering. Our management presently intends to utilize a substantial 11 portion of the net proceeds of this offering for the specific purposes set forth in "Use of Proceeds." However, we have broad discretion with respect to redirecting the application and allocation of the net proceeds of this offering in light of changes in circumstances and the availability of certain business opportunities. As a result, any return on investment to investors will be substantially dependent upon the discretion and judgment of our management with respect to the application and allocation of the net proceeds of the offering. (See "Use of Proceeds.") 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. 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. "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 12 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"). 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. 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. 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. 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 13 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 Working Capital (3) 22,000 14.70 26,000 13.00 -------- ----- -------- ----- 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.") (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 working capital will be used to acquire inventory, to pay professional fees and, to comply with reporting requirements of the Securities Exchange Act of 1934. The amounts set forth merely indicate the general application of net proceeds of the offering. Actual expenditures relating to the development of our internet website may differ from the estimates depending on change orders and/or increased time charges from third parties. 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. 14 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 2,155,500 shares of common stock are outstanding prior to the issuance of shares in this offering. The unaudited book value of the Company, as of March 31, 2003 was a negative $6,574 or approximately a negative $.003 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 March 31, 2003, 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. Minimum Maximum Shares Shares Sold Sold --------- --------- Public offering price per share (1) (4) $ 0.50 $ 0.50 Net tangible book value per share before this offering (2) (4) ($ 0.003) ($ 0.003) Increase per share attributable to new investors (3) (4) $ 0.042 $ 0.057 Adjusted net tangible book value per share after this offering (4) $ 0.0404 $ 0.0558 Dilution per share to new investors $ 0.4596 $ 0.442 Percentage dilution (4) 91.5% 88.4% 15 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% ========= ======== ============= ==== 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% ========= ======== ============= ==== o Assumes all Series A Preferred shares are converted into common shares at the rate of 10 shares of common stock for each preferred share. 16 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 of NASD. Holders As of July 31, 2003, there were 1,238,500 shares of common stock outstanding and approximately 36 stockholders of record. As of July 31, 2003, there were 95,000 shares of our Series A Preferred Stock owned by three preferred stockholders. 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 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. Results and Comparison for Fiscal Years Fiscal year ended June 30, 2002 resulted in a net loss of $63,143 compared to a net loss of $73,874 for the fiscal year ended June 30, 2001. The Basic and Diluted Loss per Share for fiscal year 2002 was $0.06, compared to a per-share loss of $.10 for fiscal year 2001. This decrease in the loss per share of $0.04 primarily results from (1) a decrease in general and administrative expenses; (2) a decrease in cost of goods sold; and (3) a decrease in interest expense. Details of changes in revenues and expenses can be found below. Revenues Revenues of $108,095 for fiscal year 2002 were down $11,453 or 9.58% from revenues of $119,548 for fiscal year 2001. 17 Cost of Goods Sold As a result of our lower sales in fiscal 2002 compared to fiscal 2001, our cost of goods sold decreased to $79,414 which was $6,931 or 8.03%, from fiscal year 2001. This decrease is due to a decrease in sales. Operating Expenses Our operating expenses in 2002 of $78,107 represented a decrease of $12,016, or 13.33%, from fiscal year 2001, when operating expenses (including depreciation) were $90,123. The decrease in general and administrative expenses is a result of lower personnel and operating costs. 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 Company's credit card. Interest was $13,617 for the year ended June 30, 2002 compared to $16,854 for the year ended June 30, 2001. Results and Comparison for the Nine Months Ended March The nine months ended March 31, 2003 resulted in a net loss of $13,033, compared to a net loss of $21,629 for the nine months ended March 31, 2002. The Basic and Diluted Loss per Share is $.05 and $.05 for the nine months ended March 31, 2003 and 2002, respectively. We are not aware of any trends that will materially effect our business except for a slight reduction in consumer spending Revenues Revenues of $52,134 for the nine months ended March 31, 2003 were down by $15,269, or 22%, from the same period in 2002 when revenues were $68,402. The decrease in revenues was attributed to our lack of capital with which to advertise and market our products and business. We anticipate that revenues will remain constant for the next year unless we are able to raise capital in this offering which will be used, among other things, for increase advertising and marketing. If we cannot increase our capital we will not be able to continue operating. Our business is seasonal and with April, May and June and the Christmas season being the periods in which are revenues are typically the greatest. We believe that with the proceeds of this offering we can increase our advertising, develop a web side and increase our inventory for the 2003 Christmas season. Cost of Goods Sold As a result of our lower sales for the nine months ended March 31, 2003 compared to the nine months ended March 31, 2002, our cost of goods sold decreased to $40,101 from $46,774, or approximately 14%. This decrease is due to a decrease in sales. 18 Operating Expenses Operating expenses of $55,842 remained esssentially the same for the nine months ended March 31, 2003 compared to operatinmg expenses of $56,073 for the nine months ended March 31, 2002. Interest Expense Interest expense consists of interest accrued on the loan we obtained to purchase our building. Interest was $6,529 for the six months ended March 31, 2003 compared to $6,893 for the six months ended December 31, 2001. 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 ($14,000 net proceeds). 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. At June 30, 2001 we had total assets of $200,277 of which $15,444 was cash. At June 30, 2002 we had total assets of $177,868 of which $17,148 was cash. At March 31, 2003, we had total assets of $165,421, of which $16,770 was cash. Since November of 2002, we raised $29,200 from the sale of our securities in private transactions. Our total liabilities at June 30, 2001 were $174,749 including $136,071 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, 2002, our total liabilities were $172,483. At June 30, 2002, our mortgage had been reduced to $127,485 but our current liabilities had increased to $54,439 from the $42,805 in current liabilities at June 30, 2001. At March 31, 2003, our total liabilities were $171,995. Our stockholders' equity at June 30, 2002 was $5,385 compared to stockholders' equity at June 30, 2001 of $25,528. Our stockholders equity at March 31, 2003 was a negative $6,574. Cash provided by financing activities was approximately $59,954 for the fiscal year ended June 30, 2001, and $39,407 for the fiscal year ended June 30, 2002. In each period, the cash provided by financing activities resulted primarily from the issuance of capital stock. Cash provided by financing activities was $45,519 for the nine months ended March 31, 2003. We have sustained losses of $63,143 and $73,774 for the years ended June 30, 2002 and June 30, 2001, respectively. In addition, operating activities have used cash of $37,703 and $52,706 for the years ended June 30, 2002, and 2001, respectively. We have sustained losses of $45,146 and $36,782 for the nine 19 months ended March 31, 2003, and 2002, respectively. In addition, operating activities have used cash of $45,519 and $40,197 for the nine months ended March 31, 2003, and 2002, 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. 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. 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: 20 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. 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 user 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 market 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.. 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 the types of new golf equipment and accessories sold in our stores were approximately $3.9 billion in 2001. Golf clubs accounted for $2.5 billion, with the balance represented by 21 balls, bags, gloves, and other golf accessories. The NSGA estimates that retail sales of new golf equipment have grown from $2.5 billion to $3.9 billion, or at a compound annual rate of 4.6%, over the past 10 years. However, sales of new golf equipment as well as the number of golf rounds played in 2002 declined due primarily to weaker overall trends in consumer spending and unfavorable weather conditions. 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. 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 past three years has gone 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 22 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 plan 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. 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. 23 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 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. Merchandize 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 24 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 use what we believe to be high quality 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 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 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 quality 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 clubs built with quality components and 100% lifetime guarantee of workmanship. o A golfer receives consultation and analysis of his or her game, clubs, grip and swing. o A golfer achieves added confidence and lower scoring. * 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). 25 *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 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 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 high-quality, brand-named equipment, apparel and accessories. 2. Emphasize our custom club-making, fitting, and repair services to our current customer base with a focus of quality components, guaranteed 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 significant dependent upon available capital and therefore, we will not finalize our marketing strategy until we have completed this offering. 26 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 advertised 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 are 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 effective 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 attempt to develop a website that will be user friendly and easy to navigate. Through our website, we will offer golf-related products. Our website will allow the user to take advantage of the services we will offer, such as golf tips, photo gallery and possibly an interactive game management tool. 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 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 27 offerings as well as the services we provide. We believe that we can increase the number of visitors to our proposed website by providing quality products 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 e-mail and 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. We believe that although the convenience such an expanded website would provide customers is important, the single most important ingredient to our success will be the development of personal relationships with purchasers via the telephone, e-mail and/or in person. This key ingredient is crucial to our long-term success. 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 quality 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 manufacture 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 and has not created significant difficulties for us. Competition We compete with general sporting goods stores, golf course pro shops, other golf merchandise and service stores, discount department stores such as K-Mart, catalog stores and other retailers. We believe that our greatest competition comes form the discount golf stores, the numbers of which have grown in recent 28 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 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 are Nevada Bob's and Edwin Watts. Principal competitive factors faced by us in the sale of merchandise generally are price, quality, personal service, merchandise selection, convenience, and customer loyalty. We believe that by offering local golfers high quality products and services, personal attention and competitive prices we can 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 2003 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. Employees As of August 2, 2003, we had one full-time employee and one part time employee. We have been able to hire a sufficient quantity of qualified sales and repair personnel from the local area to meet our staffing needs and seasonal demands so that no special training, other than orientation to our merchandise and club repair equipment, is required. 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. 29 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 44 President/Director Douglas P. Morris 47 Vice President Director Robert R. Peterson 47 Secretary/Treasurer/Director Paul Larsen 45 Director and President of Ogden Discount Golf Curtis Kaminska 45 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 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 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. 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 continues to be an inactive company and its business plan is to look for reverse merger type of acquisition. Mr. Morris is a director of CCC Globalcom, a Houston based telecommunications company. 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 30 Exchange. In 1981 he compiled and edited an 800 page publication called the OTC Penny Stock Digest. 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. He has also been an officer and director of several other blind pool companies. 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. 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. Robert R. Peterson. Mr. Peterson has been a director of the Company since August 2002. He is also secretary/treasurer and an 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. 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 $100,000: 31 - ------------------------------------------------------------------------------- SUMMARY COMPENSATION TABLE Long Term Compensation
AnnualCompensation Awards Payouts ------------------ ------------------ ------- (a) (b) (c) (d) (e) (g) (h) (i) Other All Name and Year Annual Restrict Option/ LTIP Other Principal Ended ($) ($) Compen- Stock SAR's Payouts Compensa- Position 6/30 Salary(1) Bonus sation($) Award($) (#) ($) tion($) - -------------------------------------------------------------------------------------------- Paul Larsen* 2002 $39,800 -0- -0- -0- -0- $ -0- $ -0- President 2001 $47,750 -0- -0- -0- -0- -0- -0- - --------------------------------------------------------------------------------------------
* Mr. Larsen is no longer the President of the Company, but is the President of our wholly owned subsidiary. Options Grants in Last Fiscal Year There were no grants of stock options made during the fiscal year ended June 30, 2002 to our executive officers. Stock Options Held at End of Fiscal 2002 No stock options or stock appreciation rights were owned by our officers and directors at June 30, 2002, 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, our president $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. 32 PRINCIPAL STOCKHOLDERS The following table sets forth information concerning the beneficial ownership of Ogden Golf common stock as of July 31, 2003, 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(5) ------------------- ------------ --------------- ----------------- Paul Larsen 660,000 31% 25% Douglas P. Morris (2) 712,500 33% 27% Mark A. Scharmann (3) 260,000 12% 10% Robert R. Peterson 10,000 .1% .4% Curtis Kaminska 10,000 .1% .4% All officers and Directors as a group 1,652,500 77% 69% (5 persons) Total Shares of Common Stock Issued 1,238,500 100% 48% Total Shares Issued (4) 2,188,500 100% 85%
(1) Based upon shares of common stock issued and assuming all shares of preferred stock are converted into 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. (4) Assumes all 95,000 shares of Series A Preferred Stock are converted into 950,000 shares of common stock. (5) Assumes all 400,000 shares offered are sold. 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 July 31, 2003, there were 1,238,500 shares of our common stock issued and outstanding. We 33 have designated 100,000 shares of our preferred stock as Series A preferred stock. As of July 31, 2003, 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 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. 34 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. 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 pursuant to Section 8 above, 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, at the sole option of the Company, be redeemed at Stated Value. 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"). 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. Transfer Agent Our transfer agent is Fidelity Transfer, 1800 South West Temple, Salt Lake City, Utah 84115, telephone (801) 484-7222. 35 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 permits 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 agent 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 $.50 per share. There can be no assurance that any of these shares will be sold. If ACAP fails to sell a minimum of 300,000 of the offered shares within 120 days (which may be extended for 30 days) from the effective date of this prospectus, the offering will be terminated and the subscription proceeds will be promptly refunded in full to subscribers, without interest thereon or any deductions therefrom. All subscription payments should be made payable to "Irwin Union Bank - Ogden Golf Co. Corporation., Escrow Account." All subscription payments will be deposited by noon of the business day following receipt and held in an escrow account at Irwin Union Bank, 15 West South Temple, Suite 950, Salt Lake City, 36 Utah 84101, as escrow agent, pending the sale of a minimum of 300,000 shares within a 120 day period (unless extended for an additional 30 days). The subscription proceeds will be withdrawn from the escrow account only for the purpose of purchasing the shares offered hereby, if a minimum of 300,000 shares offered hereunder are sold or for the purpose of refunding subscription payments to the subscribers. Subject to the sale of at least 300,000 shares, prior to the termination of this offering, we have agreed to pay to ACAP an Underwriting Commission of 11% of the total offering price ($.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 but are under no obligation to do so. 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 80,000 shares 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 its 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 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 37 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 our 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. 38 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. These sales may be at fixed or negotiated prices. 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; 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 may be 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 39 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 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. 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 40 Chapman Spira & Carson, LLC 12,500 12,500 David Anthony Investments 12,500 12,500 Witz, Barry 12,500 12,500 First Atlantis Trading Corp. 12,500 12,500 Hyacinth Resources 12,500 12,500 Roycemore Corp. 52,500 52,500 Grilz, Richard 10,000 10,000 Kaminska, Curtis 10,000 10,000 OM Capital Corp. 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 Warsinske, Michael 12,500 12,500 Croft Investments LTP 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 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 41 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. CERTAIN TRANSACTIONS In connection with our formation, Paul Larsen our president, 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 president. Such loan is due December 31, 2003. No interest accrues on such loan and the loan is unsecured. Paul Larsen, the President of the Company, 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. 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. 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 42 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 250,000 and a maximum of 2,000,000) 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, 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. 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, 2002 and 2001 financial statements and schedule included in this Prospectus and in the Registration Statement have been audited by Wisan, Smith Racker & Prescott, LLP, 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. 43 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. If you want more information, write or call us at: 1781 Washington Boulevard, Ogden, Utah 84401, and our telephone number is (810) 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 44 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. 45 OGDEN GOLF CO. CORPORATION INTERIM FINANCIAL STATEMENTS March 31, 2003 F-1 C O N T E N T S Page INTERIM BALANCE SHEETS, MARCH 31, 2003 AND JUNE 30, 2002......................................................... F-3 INTERIM STATEMENTS OF OPERATIONS FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2003 AND 2002............................... F-5 INTERIM STATEMENTS OF OPERATIONS FOR THE NINE MONTH PERIODS ENDED MARCH 31, 2003 AND 2002............................... F-6 INTERIM STATEMENTS OF CASH FLOWS .......................................... F-7 NOTES TO INTERIM FINANCIAL STATEMENTS ..................................... F-9 F-2 OGDEN GOLF CO. CORPORATION INTERIM BALANCE SHEETS March 31, 2003 and June 30, 2002 March 31, June 30, 2003 2002 (Unaudited) (Audited) ----------- ----------- ASSETS CURRENT ASSETS Cash and cash equivelents $ 16,770 $ 17,148 Inventories 31,274 40,719 Prepaid expenses 114 401 ----------- ----------- TOTAL CURRENT ASSETS 48,158 58,268 PROPERTY AND EQUIPMENT 99,867 101,874 OTHER ASSETS Stockholder notes receivable 12,480 12,480 Loan costs, net of accumulated amortization of $1,282 and $952, respectively 916 1,246 Investment in collectible assets 4,000 4,000 ----------- ----------- TOTAL ASSETS $ 165,421 $ 177,868 =========== =========== The accompanying notes are an integral part of the interim financial statements. F-3 OGDEN GOLF CO. CORPORATION INTERIM BALANCE SHEETS (CONTINUED) March 31, 2003 and June 30, 2002 March 31, June 30, 2003 2002 (Unaudited) (Audited) ----------- ----------- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 11,682 $ 14,809 Short-term liabilities 23,691 22,302 Accrued expenses 2,607 3,787 Unearned income 1,900 1,500 Current portion of long-term liabilities 9,887 9,441 Stockholder notes payable 10,000 2,500 Income taxes payable - 100 ----------- ----------- TOTAL CURRENT LIABILITIES 59,767 54,439 LONG-TERM LIABILITIES 112,228 118,044 STOCKHOLDERS' EQUITY Preferred stock, no par value 5,000,000 shares authorized 95,000 and 0 shares issued 19,000 - Common stock, no par value 100,000,000 shares authorized 1,228,500 and 1,109,500 shares issued and outstanding 170,970 146,970 Retained deficit (196,544) (141,585) ----------- ----------- TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (6,574) 5,385 ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 165,421 $ 177,868 =========== =========== The accompanying notes are an integral part of the interim financial statements. F-4 OGDEN GOLF CO. CORPORATION INTERIM STATEMENTS OF OPERATIONS Three-month periods ended March 31, 2003 and 2002 (Unaudited) Three-Month Periods Ended March 31, ---------------------------- 2003 2002 ------------- ------------ INCOME Sales $ 13,133 $ 13,848 Cost of goods sold 10,023 12,400 ------------- ------------ GROSS PROFIT 3,110 1,448 EXPENSES General and administrative 19,418 15,865 Depreciation and amortization 779 779 ------------- ------------ 20,197 16,644 ------------- ------------ OPERATING LOSS (17,087) (15,196) OTHER INCOME (EXPENSE) Interest expense (3,284) (3,376) ------------- ------------ Loss before income taxes (20,371) (18,572) Income tax expense - - ------------- ------------ NET LOSS $ (20,371) $ (18,572) ============= ============ Basic and diluted loss per common share $ (0.02) $ (0.02) ============= ============ Weighted average number of shares outstanding 1,202,733 1,048,944 ============= ============ The accompanying notes are an integral part of the interim financial statements. F-5 OGDEN GOLF CO. CORPORATION INTERIM STATEMENTS OF OPERATIONS Nine-month periods ended March 31, 2003 and 2002 (Unaudited) Nine-Month Periods Ended March 31, ---------------------------- 2003 2002 ------------- ------------ INCOME Sales $ 53,134 $ 68,403 Cost of goods sold 40,101 46,774 ------------- ------------ GROSS PROFIT 13,033 21,629 EXPENSES General and administrative 55,842 56,073 Depreciation and amortization 2,337 2,338 ------------- ------------ 58,179 58,411 ------------- ------------ OPERATING LOSS (45,146) (36,782) OTHER INCOME (EXPENSE) Interest expense (9,813) (10,269) ------------- ------------ Loss before income taxes (54,959) (47,051) Income tax expense - - ------------- ------------ NET LOSS $ (54,959) $ (47,051) ============= ============ Basic and diluted loss per common share $ (0.05) $ (0.05) ============= ============ Weighted average number of shares outstanding 1,153,590 998,576 ============= ============ The accompanying notes are an integral part of the interim financial statements. F-6 OGDEN GOLF CO. CORPORATION INTERIM STATEMENTS OF CASH FLOWS Nine-month periods ended March 31, 2003 and 2002 (Unaudited) Nine-Month Periods Ended March 31, ---------------------------- 2003 2002 ------------- ------------ CASHFLOWS FROM OPERATING ACTIVITIES Net loss $ (54,959) $ (47,051) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation 2,007 2,008 Amortization 330 330 Stock issued for services 1,000 - (Increase) decrease in assets: Inventories 9,445 12,444 Prepaid expenses 287 356 Increase (decrease) in liabilities: Accounts payable (3,127) (6,490) Accrued expenses (1,180) (1,694) Unearned income 400 - Income taxes payable (100) (100) ------------- ------------ Net cash used by operating activities (45,897) (40,197) CASH FLOWS FROM FINANCING ACTIVITIES Cash received from stockholder loan 7,500 - Cash received from short-term liabilities 3,339 3,578 Cash paid to reduce short-term liabilities (1,950) (1,975) Cash paid to reduce long-term liabilities (5,370) (6,375) Cash received from issuance of preferred stock 18,000 - Cash received from issuance of common stock 24,000 32,500 ------------- ------------ Net cash flows from financing activities 45,519 27,728 ------------- ------------ NET DECREASE IN CASH AND CASH EQUIVALENTS (378) (12,469) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 17,148 15,444 ------------- ------------ CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 16,770 $ 2,975 ============= ============ The accompanying notes are an integral part of the interim financial statements. F-7 OGDEN GOLF CO. CORPORATION INTERIM STATEMENTS OF CASH FLOWS (CONTINUED) Nine-months ended March 31, 2003 and 2002 (Unaudited) NON-CASH FINANCING ACTIVITIES: During the nine-month period ended March 31, 2003, the Company issued 5,000 shares of Class A Preferred Stock in exchange for services totaling $1,000. SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION: Nine-Month Periods Ended March 31, ---------------------------- 2003 2002 ------------- ------------ Cash paid for interest $ 9,813 $ 10,269 ============= ============ Cash paid for income taxes $ 100 $ 100 ============= ============ The accompanying notes are an integral part of the interim financial statements. F-8 OGDEN GOLF CO. CORPORATION NOTES TO INTERIM FINANCIAL STATEMENTS March 31, 2003 (Unaudited) NOTE 1- BASIS OF PRESENTATION The accompanying interim financial statements of Ogden Golf Co. Corporation have been prepared in conformity with accounting principles generally accepted in the United States, consistent in all material respects with those applied in the Company's audited financial statements for the year ended June 30, 2002 included in its registration statement on Form SB-2. The interim financial information is unaudited, but reflects all normal adjustments, which are, in the opinion of management, necessary to provide a fair statement of results for the interim periods presented. Certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been omitted. It is suggested that these interim financial statements be read in conjunction with the financial statements and notes thereto included in the Company's audited financial statements included in its registration statement on Form SB-2. The results of operations for the periods ended March 31, 2003 and 2002 are not necessarily indicative of the operating results for the full years. NOTE 2 - LIQUIDITY At June 30, 2002, the Company reported a retained deficit of $141,585, incurred a net loss of $63,143 and used $37,703 of cash in operations during the year ended June 30, 2002. For the nine-month period ended March 31, 2003, the Company reported a retained deficit of $196,544, incurred a net loss of $54,959 and used $45,897 of cash in operations. The Company has secured commitments from certain individuals to provide equity funding to the Company during the coming year. The Company also 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 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 3 - STOCKHOLDER NOTES PAYABLE During the period ended March 31, 2003, the Company borrowed an additional $7,500 from stockholders. The total notes outstanding of $10,000 bear interest at 10% per annum and will become due during the coming year. F-9 OGDEN GOLF CO. CORPORATION NOTES TO INTERIM FINANCIAL STATEMENTS March 31, 2003 (Unaudited) NOTE 4 - INCOME TAXES At March 31, 2003, the Company's deferred tax assets are offset by a valuation allowance. In assessing the realization of deferred tax assets based on the requirements of Statement of Financial Accounting Standards No. 109, management has considered whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Management has considered the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on the projections for future taxable income over the periods that the deferred tax assets are deductible, management believes it is more likely than not that the Company will not realize the benefits of these deductible differences. NOTE 5 - PREFERRED STOCK During the period ended March 31, 2003, the Company issued 20,000 shares of preferred stock in exchange for consideration totaling $4,000. The Company also issued 5,000 shares of preferred stock in exchange for services totaling $1,000. The preferred stock is non-voting and bears no dividends. It has a liquidation preference of $0.20 per share. The preferred stock is 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. At March 31, 2003, neither of these contingencies had occurred. NOTE 6 - LOSS PER COMMON SHARE Basic and diluted loss per common share is calculated by dividing net loss by the weighted number of common shares outstanding during the period. Amounts applicable to common stockholders are not affected by the preferences of outstanding shares of preferred stock. Potential common shares (900,000 shares) from the future conversion of preferred stock were excluded from the calculation of diluted loss per share because their effect would reduce the loss per common share. F-10 OGDEN GOLF CO. CORPORATION NOTES TO INTERIM FINANCIAL STATEMENTS March 31, 2003 (Unaudited) NOTE 7 - 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 March 31, 2003 the subsidiary was inactive and none of the Company's operations, assets or liabilities had been transferred to the subsidiary. NOTE 8 - SUBSEQUENT EVENTS Subsequent to March 31, 2003, the Company issued 10,000 shares of common stock in exchange for consideration totaling $2,000. F-11 OGDEN GOLF CO. CORPORATION FINANCIAL STATEMENTS June 30, 2002 and 2001 F-12 C O N T E N T S Page INDEPENDENT AUDITORS' REPORT.............................................. F-14 BALANCE SHEETS............................................................ F-15 STATEMENTS OF OPERATIONS.................................................. F-17 STATEMENTS OF STOCKHOLDERS' EQUITY........................................ F-18 STATEMENTS OF CASH FLOWS.................................................. F-19 NOTES TO FINANCIAL STATEMENTS............................................. F-21 GENERAL AND ADMINISTRATIVE EXPENSES (SCHEDULE 1).......................... F-27 F-13 INDEPENDENT AUDITORS' REPORT Board of Directors Ogden Golf Co. Corporation Ogden, Utah We have audited the accompanying balance sheets of Ogden Golf Co. Corporation (a Utah corporation) as of June 30, 2002 and 2001, and the related statements of operations, stockholders' equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with U.S. generally accepted auditing standards. Those standards require that we plan and perform the audits 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, 2002 and 2001, and the results of its operations and its cash flows for the years then ended in conformity with U.S. generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information in Schedule 1 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Wisan, Smith, Racker & Prescott, LLP. Salt Lake City, Utah September 12, 2002 F-14 OGDEN GOLF CO. CORPORATION BALANCE SHEETS June 30, 2002 and 2001 2002 2001 ----------- ----------- ASSETS CURRENT ASSETS Cash and cash equivelents $ 17,148 $ 15,444 Inventories 40,719 58,718 Prepaid expenses 401 3,398 ----------- ----------- TOTAL CURRENT ASSETS 58,268 77,560 PROPERTY AND EQUIPMENT 101,874 104,552 OTHER ASSETS Stockholder notes receivable 12,480 12,480 Loan costs, net of accumulated amortization of $952 and $513, respectively 1,246 1,685 Investment in collectible assets 4,000 4,000 ----------- ----------- TOTAL ASSETS $ 177,868 $ 200,277 =========== =========== The accompanying notes are an integral part of the financial statements. F-15 OGDEN GOLF CO. CORPORATION BALANCE SHEETS (CONTINUED) June 30, 2002 and 2001 2002 2001 ----------- ----------- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 14,809 $ 13,844 Short-term liabilities 22,302 19,809 Accrued expenses 3,787 4,625 Unearned income 1,500 300 Current portion of long-term liabilities 9,441 4,127 Stockholder notes payable 2,500 - Income taxes payable 100 100 ----------- ----------- TOTAL CURRENT LIABILITIES 54,439 42,805 LONG-TERM LIABILITIES 118,044 131,944 STOCKHOLDERS' EQUITY Preferred stock, no par value 5,000,000 shares authorized No shares issued - - Common stock, no par value 100,000,000 shares authorized 1,109,500 and 942,500 shares issued and outstanding 146,970 106,470 Stock subscriptions receivable - (2,500) Retained deficit (141,585) (78,442) ----------- ----------- TOTAL STOCKHOLDERS' EQUITY 5,835 25,528 ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 177,868 $ 200,277 =========== =========== The accompanying notes are an integral part of the financial statements. F-16 OGDEN GOLF CO. CORPORATION STATEMENTS OF OPERATIONS Years ended June 30, 2002 and 2001 2002 2001 ------------- ------------ INCOME Sales $ 108,095 $ 119,548 Cost of goods sold 79,414 86,345 ------------- ------------ GROSS PROFIT 28,681 33,203 EXPENSES General and administrative (Schedule 1) 74,990 87,035 Depreciation and amortization 3,117 3,088 ------------- ------------ 78,107 90,123 ------------- ------------ OPERATING LOSS (49,426) (56,920) OTHER INCOME (EXPENSE) Interest expense (13,617) (16,854) ------------- ------------ (13,617) (16,854) ------------- ------------ Loss before income taxes (63,043) (73,774) Income tax expense 100 100 ------------- ------------ NET LOSS $ (63,143) $ (73,874) ============= ============ Basic and diluted loss per share $ (0.06) $ (0.10) The accompanying notes are an integral part of the financial statements. F-17 OGDEN GOLF CO. CORPORATION STATEMENTS OF STOCKHOLDERS' EQUITY Years ended June 30, 2002 and 2001
Common Stock Stock Retained -------------------- Subscriptions Earnings Shares Value Receivable (Deficit) Total --------- --------- ------------- ---------- --------- Balance June 30, 2000 650,000 $ 61,470 $ - $ (4,568) $ 56,902 Issuance of common stock: Sale of common stock 280,000 42,500 - - 42,500 Stock subscriptions 12,500 2,500 (2,500) - - Net loss for year - - - (73,874) (73,874) ---------- --------- ------------- ---------- --------- Balance June 30, 2001 942,500 106,470 (2,500) (78,442) 25,528 Issuance of common stock: Sale of common stock 179,500 43,000 - - 43,000 Stock subscriptions (12,500) (2,500) 2,500 - - Net loss for year - - - (63,143) (63,143) ---------- --------- ------------- ---------- --------- Balance June 30, 2002 1,109,500 $146,970 $ - $(141,585) $ 5,385
The accompanying notes are an integral part of the financial statements. F-18 OGDEN GOLF CO. CORPORATION STATEMENTS OF CASH FLOWS Years ended June 30, 2002 and 2001 2002 2001 ------------- ------------ CASHFLOWS FROM OPERATING ACTIVITIES Net loss $ (63,143) $ (73,874) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation 2,677 2,648 Amortization 440 440 (Increase) decrease in assets: Inventories 17,999 10,335 Prepaid expenses 2,997 1,216 Increase (decrease) in liabilities: Accounts payable 965 6,452 Accrued expenses (838) (223) Unearned income 1,200 300 ------------- ------------ Net cash used by operating activities (37,703) (52,706) CASH FLOWS FROM INVESTING ACTIVITIES Cash paid for purchases of equipment - (6,600) Cash loaned to stockholder - (12,480) ------------- ------------ Net cash flows from (used by) investing - (19,080) activities CASH FLOWS FROM FINANCING ACTIVITIES Cash received from short-term liabilities 5,368 21,690 Cash paid to reduce short-term liabilities (2,875) (1,881) Cash received from stockholder loan 2,500 - Cash paid to reduce long-term liabilities (8,586) (2,355) Cash received from issuance of common stock 43,000 42,500 ------------- ------------ Net cash flows from financing activities 39,407 59,954 ------------- ------------ NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,704 (11,832) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 15,444 27,276 ------------- ------------ CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 17,148 $ 15,444 ============= ============ The accompanying notes are an integral part of the financial statements. F-19 OGDEN GOLF CO. CORPORATION STATEMENTS OF CASH FLOWS (CONTINUED) Years ended June 30, 2002 and 2001 SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION: 2002 2001 ------- ------- Cash paid for interest $13,617 $16,854 Cash paid for income taxes $ 100 $ 100 Non-cash financing activities: Issuance of 12,500 shares of common stock in exchange for promise to receive future consideration $ - $ 2,500 The accompanying notes are an integral part of the financial statements. F-20 OGDEN GOLF CO. CORPORATION NOTES TO FINANCIAL STATEMENTS June 30, 2002 and 2001 NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES The Company's accounting policies conform to U.S. generally accepted accounting principles. The following policies are considered to be significant: Business Activities The Company is engaged in the marketing and sales of golf equipment and supplies to customers generally located in the state of Utah. Cash and Cash Equivalents Cash equivalents are generally comprised of certain highly liquid investments with original maturities of less than three months. Inventories Inventories are valued at the lower of cost or market (first-in, first-out), or net realizable value. Property and Equipment Depreciation expense is computed on the straight-line method in amounts sufficient to write off the cost of depreciable assets over their estimated useful lives. Normal maintenance and repair items are charged to costs and expenses as incurred. The cost and accumulated depreciation of property and equipment sold or otherwise retired are removed from the accounts and gain or loss on disposition is reflected in net income in the period of disposition. Loan Costs Amortization expense is computed on the straight-line method in amounts sufficient to write off loan costs over the life of the loan. Revenue Recognition The Company generally recognizes revenue when there is persuasive evidence of an arrangement, services have been rendered, the price is fixed and determinable and collectibility is reasonably assured. More specifically, revenue is recognized at the point of sale or as goods are delivered to customers and are billable. 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. F-21 OGDEN GOLF CO. CORPORATION NOTES TO FINANCIAL STATEMENTS June 30, 2002 and 2001 NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Income Taxes The Company uses the asset and liability approach to financial accounting and reporting for income taxes. The difference between the financial statement and tax bases of assets and liabilities is determined annually. Deferred income tax assets and liabilities are computed for those differences that have future tax consequences using the currently enacted tax laws and rates that apply to the periods in which they are expected to affect taxable income. Valuation allowances are established, if necessary, to reduce deferred tax assets to the amount that will more likely than not be realized. Income tax expense is the current tax payable or refundable for the period plus or minus the net change in the deferred tax assets and liabilities. Financial Instruments and Concentration of Credit Risk The estimated fair values of financial instruments, which include cash equivalents, accounts receivable, accounts payable and accrued expenses, approximate their carrying values because of the short-term maturity of these instruments. Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of stockholder notes receivable. Advertising and Promotion All costs associated with advertising and promoting the Company's goods and services are expensed in the period incurred Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE 2 - LIQUIDITY At June 30, 2002, the Company reported a retained deficit of $141,585, incurred a net loss of $63,143 and used $37,703 cash in operations during 2002. The Company has secured commitments from certain individuals to provide equity funding to the Company during the coming year. The Company also 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 cash from operations are 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. F-22 OGDEN GOLF CO. CORPORATION NOTES TO FINANCIAL STATEMENTS June 30, 2002 and 2001 NOTE 3 - CASH AND CASH EQUIVALENTS The Company maintains its cash in bank deposit accounts that, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk with cash and cash equivalents. NOTE 4 - PROPERTY AND EQUIPMENT Property and equipment as of June 30, 2002 and 2001 are detailed in the following summary: 2002 2001 -------- -------- Cost: Buildings and improvements $ 96,600 $ 96,600 Equipment 1,000 1,000 Land 10,000 10,000 -------- -------- 107,600 107,600 Less accumulated depreciation (5,726) (3,048) -------- -------- Net book value $101,874 $104,552 ======== ======== NOTE 5 - STOCKHOLDER LOANS RECEIVABLE During the year ended June 30, 2001, the Company loaned $12,480 to one of its stockholders. The loans are noninterest-bearing loans with no specified repayment schedule. The loans have been classified as non-current assets as the Company does not expect to be repaid during the next fiscal year. NOTE 6 - INVESTMENT IN COLLECTIBLE ASSETS The Company owns 12 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 during the coming year. NOTE 7 - SHORT-TERM LIABILITIES During the year ended June 30, 2001, the Company opened and utilized a business credit bankcard with a financial institution. The bankcard has a $30,000 limit and bears interest at a variable rate of prime plus 8.75% (13.5% and 15.75% at June 30, 2002 and 2001, respectively). Payments during 2002 totaled $3,325 including interest of $2,904 ($1,881 including interest of $1,615 in 2001). F-23 OGDEN GOLF CO. CORPORATION NOTES TO FINANCIAL STATEMENTS June 30, 2002 and 2001 NOTE 8 - UNEARNED INCOME At June 30, 2002, the Company had outstanding gift certificates totaling $1,500 ($300 in 2001). The gift certificates will expire on various dates throughout the coming year. NOTE 9 - STOCKHOLDER NOTE PAYABLE During 2002, the Company executed a note payable to a stockholder in exchange for consideration totaling $2,500. The note bears interest at 10% per annum and will become due during 2003. NOTE 10 - INCOME TAXES The components of income tax expense related to continuing operations are as follows: 2002 2001 -------- -------- Current $ 100 $ 100 Deferred - - -------- -------- $ 100 $ 100 ======== ======== Current income tax expense relates to state-required minimum income tax payable. The net deferred income taxes in the accompanying balance sheets include the following amounts of deferred income tax assets and liabilities: 2002 2001 -------- -------- Deferred income tax assets: Net operating loss carryforward $ 27,900 $ 1,300 Organization costs disallowed 100 300 Contributions disallowed 200 - -------- -------- 28,200 1,600 Valuation allowance (28,100) (1,500) -------- -------- Total deferred income tax assets 100 100 Less deferred income tax liabilities: Depreciation differences 100 100 -------- -------- Total deferred income tax liabilities 100 100 -------- -------- Net deferred income tax asset (liability) $ - $ - ======== ======== The federal net operating loss carryforwards expire beginning in 2020. F-24 OGDEN GOLF CO. CORPORATION NOTES TO FINANCIAL STATEMENTS June 30, 2002 and 2001 NOTE 10 - INCOME TAXES (CONTINUED) At June 30, 2002 and 2001, the Company's deferred tax assets are offset by a valuation allowance. In assessing the realization of deferred tax assets, management has considered whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Management has considered the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on the projections for future taxable income over the periods that the deferred tax assets are deductible, management believes it is more likely that the Company will not realize the benefits of these deductible differences. NOTE 11 - LONG-TERM LIABILITIES The Company's long-term liabilities at June 30, 2002 and 2001 consist of the following: 2002 2001 -------- -------- Note to a bank, interest at 11.25%, due in monthly installments of $1,608, including interest, with a balloon payment due in September 2005, secured by property and equipment $127,485 $136,071 Less current portion of long-term liabilities (9,441) (4,127) -------- -------- Long-term liabilities exclusing current portion $118,044 $131,944 ======== ======== The scheduled maturities of long-term liabilities as of June 30, 2002 are as follows: 2003 $ 9,441 2004 10,225 2005 11,074 2006 96,745 2007 - Thereafter - -------- $127,485 ======== F-25 OGDEN GOLF CO. CORPORATION NOTES TO FINANCIAL STATEMENTS June 30, 2002 and 2001 NOTE 12 - STOCKHOLDERS' EQUITY During the year ended June 30, 2001 the Company issued 12,500 shares of common stock to an individual in exchange for a promise to receive future consideration totaling $2,500. The right to receive this future consideration is reflected as stock subscriptions receivable on the balance sheet. During 2002, the Company received full payment of this receivable. NOTE 13 - EARNINGS PER SHARE The following table illustrates the annual computation of basic and diluted EPS for the years ended June 30, 2002 and 2001: Income Shares Per-Share (Numerator) (Denominator) Amount ----------- ------------- --------- 2002 ---- Basic and diluted EPS Net loss available to common stockholders $ (63,163) $ 1,022,204 $ (0.06) =========== ============= ========= 2001 ---- Basic and diluted EPS Net loss available to common stockholders $ (73,874) $ 761,320 $ (0.10) =========== ============= ========= NOTE 14 - ADVERTISING The amount charged to advertising expense for the years ended June 30, 2002 and 2001 totaled $4,813 and $2,618, respectively. F-26 Schedule 1 OGDEN GOLF CO. CORPORATION GENERAL AND ADMINISTRATIVE EXPENSES Years ended June 30, 2002 and 2001 2002 2001 -------- -------- Accounting and legal $ 12,528 $ 12,795 Advertising 4,813 2,618 Bad debts - 516 Bank charges 3,263 2,180 Contributions 530 300 Insurance 1,472 1,661 Meals and entertainment - 401 Miscellaneous 2,635 2,458 Office supplies 498 1,614 Payroll taxes 3,120 4,166 Penalties 9 21 Repairs and maintenance - 1,122 Salaries 39,808 47,750 Security 325 269 Taxes and licenses 793 1,150 Telephone 2,156 3,665 Travel 407 1,915 Utilities 2,633 2,434 -------- -------- TOTAL GENERAL AND ADMINISTRATIVE EXPENSES $ 74,990 $ 87,035 ======== ======== F-27 Table of Contents Page Prospectus Summary......................3 Risk Factors............................6 OGDEN GOLF CO. CORPORATION Use of Proceeds........................13 Dilution and Comparative Information...14 Market for Common Stock and Dividend Policy..............................16 Managements Discussion and Analysis....17 Business of Ogden Golf Co. Corporation.21 Management.............................27 400,000 SHARES OF Management Compensation................28 COMMON STOCK Principal Shareholders.................29 Description of Securities..............30 -------------------- Plan of Distribution...................34 Selling Shareholders...................37 PROSPECTUS Certain Transactions...................38 Legal Proceedings......................39 -------------------- Shares Eligible for Future Sale........39 Experts................................39 Legal Matters..........................39 ___________, 2003 Disclosure of Commission Position on Indemnification for Securities Act Liabilities........................39 Where You Can Find More Information....40 Financial Statements...................41 UNTIL ____________, 2003, ____ DAYS AFTER THE DATE OF THIS PROSPECTUS, ALL DEALERS THAT BUY, SELL OR TRADE THE SHARES, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAYBE 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. PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 24. Indemnification of Directors and Officers Sections 16-10a-901 through 909 of the Utah Revised Business Corporations Act empower a Utah corporation to indemnify officers, directors, employees and agents. Pursuant to this authorization, Ogden Golf Co. Corporation has adopted Bylaws which provide for indemnification. Article V of our Bylaws provide as follows: ss. 5.1. Indemnification of Directors. The corporation shall indemnify any individual made a party to a proceeding because he is or was a director of the corporation, against liability incurred in the proceeding, but only if the corporation has authorized the payment in accordance with ss. 16-10a-906 of the Utah Revised Business Corporation Act and a determination has been made in accordance with the procedures set forth in such ss. 16-10a-906 that the director met the standards of conduct in paragraph (a), (b) and (c) below. A. Standard of Conduct. The individual shall demonstrate that: (1) he conducted himself in good faith; and (2) he reasonably believed that his conduct was in, or not opposed to, the corporation's best interests; (3) in the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful. B. No Indemnification Permitted in Certain Circumstances. The Corporation shall not indemnify a director under this ss. 5.1 of Article V: (1) in connection with a proceeding by or in the right of the corporation in which the director was adjudged liable to the corporation; or (2) in connection with any other proceeding charging improper personal benefit to him, whether or not involving action in his official capacity, in which he was adjudged liable on the basis that personal benefit was improperly received by him. C. Indemnification in Derivative Actions Limited. Indemnification permitted under this ss. 5.1 of Article V in connection with a proceeding by or in the right of the corporation is limited to reasonable expenses incurred in connection with the proceeding. II-1 ss. 5.2. Advance Expenses for Directors. If a determination is made, following the procedures of ' 16-10a-906 of the Utah Revised Business Corporation Act that the director has met the following requirements; and if an authorization of payment is made, following the procedures and standards set forth inss.16-10a-906, then unless otherwise provided in the Articles of Incorporation, the company shall pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if: (1) The director furnishes the corporation a written affirmation of his good faith belief that he has met the standard of conduct described in ss. 5.1 of this Article V. (2) the director furnishes the corporation a written undertaking, executed personally or on his belief, to repay the advance if it is ultimately determined that he did not meet the standard of conduct (which undertaking must be in unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make repayment); and (3) a determination is made that the facts then known to those making the determination would not preclude indemnification under ss. 5.1 of this Article V or under the Utah Revised Business Corporation Act. ss. 5.3. Indemnification of Officers, Agents, and Employees Who Are Not Directors. Unless otherwise provided in the Articles of Incorporation, the Board of Directors may indemnify and advance expenses to any officer, employee, or agent of the corporation, who is not a director of the corporation, to any extent consistent with public policy, as determined by the general or specific action of the Board of Directors. As to indemnification for liabilities arising under the Securities Act of 1933 for directors, officers or persons controlling the registrant, we have been informed that in the opinion of the Securities and Exchange Commission this indemnification is against public policy and unenforceable. See section entitled "Disclosure of Commission Position on Indemnification for Securities Act Liabilities." Item 25. Other Expenses of Issuance and Distribution We estimate that our expenses in connection with this registration statement will be as follows: Securities and Exchange Commission registration fee $ 426 Legal fees and expenses 20,000 Underwriters expense allowance 2,000 Accounting fees and expenses 3,000 Printing 1,000 Miscellaneous 574 --------- Total $ 27,000 II-2 Item 26. Recent Sales of Unregistered Securities During the last three years, Ogden Golf Co. Corporation sold the securities listed below in unregistered transactions. Each of the sale was sold in reliance on the exemption provided for in Section 4(2) of the Securities Act of 1933, as amended. No underwriting fee or other compensation was paid in connection with the issuance of shares. Consideration Name Date Shares Issued Paid - ---- ------- ------------- ------------- Larsen, Paul 5/10/00 500,000 $____ Scharmann, Mark A. 6/30/00 50,000 $0.10 Knudson, David 6/30/00 50,000 $0.10 Taylor, Elliott N. 6/30/00 50,000 $0.10 Larsen, Paul 10/11/00 50,000 $0.10 Lehmberg, David 11/18/00 25,000 $0.20 Stagg, Niel 5/3/01 25,000 $0.20 Scharmann, Stephen 5/29/01 10,000 $0.25 Scharmann, Darrell L. 2/21/01 20,000 $0.25 Larsen, Paul W. 10/11/00 100,000 $0.10 Chapman Spira & Carson, LLC 6/15/01 12,500 $0.20 David Anthony Investments 6/15/01 12,500 $0.20 Witz, Barry 6/15/01 12,500 $0.20 First Atlantis Trading Corp. 6/15/01 12,500 $0.20 Hyacinth Resources 9/1/01 10,000 $0.20 Roycemore Corp. 9/1/01 32,500 $0.25 Grilz, Richard 10/9/01 10,000 $0.25 Kaminska, Curtis 11/28/01 10,000 $0.25 OM Capital Corp. 11/28/01 20,000 $0.25 Roycemore Corp. 2/15/02 10,000 $0.25 Grilz, Bill 2/15/02 10,000 $0.25 Yamashita, Betty Hong 4/18/02 4,000 $0.25 Dolan, John W. 4/18/02 4,000 $0.25 Marriott, Rodney G. 4/18/02 4,000 $0.25 Hall, Wade D. 5/31/02 10,000 $0.25 George, Lawrence E. 5/31/02 10,000 $0.25 Hanley, Lori 8/24/01 10,000 $0.20 Larsen, Paul 1/30/02 10,000 $0.25 Scharmann, Mark A. 2/20/02 10,000 $0.25 Roycemore Corp 4/5/02 10,000 $0.25 Hyacinth Resources 9/1/01 2,500 $0.20 Hanley, Lori 8/24/01 2,500 $0.20 Petersen, Robert 10/15/02 10,000 $0.20 Rubin, Mike 10/18/02 5,000 $0.20 Warsinke, Michael 10/18/02 12,500 $0.20 Maxfield, Brent 10/18/02 10,000 $0.25 Richard S. Robinson 2/7/03 25,000 $0.20 Rod H. Larsen 2/7/03 5,000 $0.20 Dan C. Rich 2/15/03 1,000 $0.20 II-3 Croft Investments 2/7/03 25,000 $0.20 Cory Powers 4/1/03 10,000 $0.20 In December 2002, the Company sold shares of its Series A Preferred Stock to the following: Name Shares Consideration Paid - ---- ------ ------------------ Hyacinth Resources 70,000 $14,000.00 Mark A. Scharmann 20,000 4,000.00 Northcliffe Consulting 5,000 $ 1,000.00 in services There are a total of ____ shareholders of the Company of which 5 are officers and directors. The remaining shareholders are friends and relatives of the management of the Company. We have been informed by management, that shareholders met with company officers or directors prior to purchasing shares, were given the opportunity to ask questions, were given financial statements. Various risk factors were discussed. Because of the personal relationships shareholders had with officers and directors, officers and directors were familiar with the financial positions, investment background, professional backgrounds and educational backgrounds of the investors. No general solicitation was used in connection any offer or sale and no commission or other compensation was paid in connection with any sale. All purchasers represented in writing or orally that they acquired the securities for their own accounts. A resale legend has been provided for the stock certificates stating that the securities have not been registered under the Securities Act of 1933 and cannot be resold or otherwise transferred without registration or an exemption (such as that provided by Rule 144). No sales of securities, registered or unregistered, have been undertaken by the Company other than the issuances described above. Item 27. Exhibits. The following exhibits are filed as part of this registration statement. Exhibit numbers correspond to the exhibit requirements of Regulation S-B. Exhibit Number Description ------- ----------- 1.1 Underwriting Agreement* 1.2 Form of Escrow Agreement * 1.3 Underwriter Warrant Agreement * 1.4 Participating Dealers' Agreement * 3.1 Articles of Incorporation * 3.2 Amendment to Articles of Incorporation * 3.3 Bylaws * 4.1 Specimen common stock certificate * 5.1 Opinion Regarding Legality and Consent - Cohne, Rappaport & Segal 10.1 Promissory Note - Barnes Bank 10.2 Business Loan Agreement II-4 10.3 Security Agreement 21.1 Subsidiaries of Registrant * 23.1 Consent of Wisan, Smith, Rocker & Prescott, LLP 24.1 Power of Attorney (Included on Signature Page) * * Previously filed. Item 28. Undertakings. 1. To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement to: (i) include any prospectus required by Section 10 (a) (3) of the Securities Act; (ii) reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement; and Notwithstanding the forgoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation From the low or high end of the estimated maximum offering range may be reflected in the form of prospects filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in the volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) include any additional or changed material information with respect to the plan of distribution. 2. That for the purpose of determining any liability under the Securities Act, each post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 3. To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. 4. That for the purpose of determining any liability under the Securities Act, to treat the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant under Rule 424(b)(1) or (4), or 497(h) under the Securities Act as part of this Registration Statement as of the time the Commission declared it effective. Insofar as indemnification for liabilities under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions or otherwise, the Registrant has been advised that in the opinion of the 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 the Registrant of expenses II-5 incurred or paid by a director, officer or controlling person of the Registrant in a successful defense of any action, suit or proceeding) is asserted by a director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issuer. II-6 SIGNATURES In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form SB-2 and authorizes this registration statement to be signed on its behalf by the undersigned, in the City of Ogden, State of Utah on August 6, 2003. OGDEN GOLF CO. CORPORATION By /s/ Mark A. Scharmann ------------------------------- Mark A. Scharmann President Principal Executive Officer By /s/ Robert R. Peterson ------------------------------- Robert R. Peterson Secretary/Treasurer Principal Financial Officer KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Mark A. Scharmann his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place, and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. In accordance with the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Date Title Signature August 6, 2003 President and /s/ Mark A. Scharmann Director ---------------------- Mark A. Scharmann August 6, 2003 Sec/Treas/and /s/ Robert R. Petersen Director ---------------------- Robert R. Petersen August 6, 2003 Vice President /s/ Douglas P. Morris Director ---------------------- Douglas P. Morris August 6, 2003 Director /s/ Paul Larsen ---------------------- Paul Larsen August 6, 2003 Director /s/ Curtis Kaminska ---------------------- Curtis Kaminska II-7 EX-5 3 ex5-1_0803.txt Exhibit 5.1 Form SB-2 Ogden Golf Co. Corporation [LETTERHEAD OF COHNE, RAPPAPORT & SEGAL] August 5, 2003 Board of Directors Ogden Golf Co. Corporation. 1781 Washingto Boulevard Ogden, UT 84401 Re: Ogden Golf Co. Corporation Registration Statement on Form SB-2 Gentlemen: We have acted as special counsel Ogden Golf Co. Corporation (the "Company") in connection with the proposed registration of shares (the "Shares") of the Company's common stock, no par value (the "Common Stock"), on a registration statement on Form SB-2 filed by the Company with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the "Securities Act"). This registration statement, as it may be amended or supplemented from time to time, including all exhibits thereto, is referred to hereinafter as the "Registration Statement." The Shares consist of up to (i) 400,000 shares offered by the Company, (ii) 950,000 shares of Common Stock issuable upon conversion of the Company's Series A Convertible Preferred Stock (the "Conversion Shares") and (iii) 1,238,500 shares of Common Stock offered by Selling Shareholders. In this regard, we have examined: (i) the Company's Articles of Incorporation and Bylaws, each as amended and as presently in effect; (ii) the Registration Statement; and (iii) such officers' certificates, resolutions, minutes, corporate records and other documents as we have deemed necessary or appropriate for purposes of rendering the opinions expressed herein. In rendering such opinions, we have assumed the authenticity of all documents and records examined, the conformity with the original documents of all documents submitted to us as copies and the genuineness of all signatures. The opinions expressed herein are based solely upon our review of the documents and other materials expressly referred to above. We have not reviewed any other documents in rendering such opinions. Such opinions are therefore qualified by the scope of that document examination. The opinions expressed herein are based solely upon our review of the documents and other materials expressly referred to above. We have not reviewed any other documents in rendering such opinions. Such opinions are therefore qualified by the scope of that document examination. Based upon and subject to the foregoing, and on such other examinations of law and fact as we have deemed necessary or appropriate in connection herewith, we are of the opinion that: (1) the shares offered by the Company when issued and the shares that will be issued upon conversion of the Series A Convertible Preferred Stock, all in accordance with the terms thereof, will be, duly authorized, validly issued, fully paid and nonassessable shares of Common Stock; (2) the 1,238,500 shares offered by the selling shareholders are duly authorized, validly issued, fully paid and nonassessable shares of Common Stock; and (3) the 95,000 shares of Series A preferred stock shareholders are duly authorized, validly issued, fully paid and nonassessable shares of preferred stock. This opinion is limited to the law of the State of Utah and the federal securities laws of the United States. Except as expressly otherwise noted herein, this opinion is given as of the date hereof. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. By giving such consent, we do not hereby admit that we fall within the category of persons whose consent is required pursuant to Section 7 of the Securities Act. Very truly yours, /s/ Cohne, Rappaport & Segal. EX-10 4 ex10-1_0803.txt Exhibit 10.1 Form SB-2 Ogden Golf Co. Corporation PROMISSORY NOTE
- ------------------------------------------------------------------------------------- Principal Loan Date Maturity Loan No. Call Collater Account Officer Initials $139,539.02 09-20-2000 09-20-2005 664000346 1E 154 SLW - ------------------------------------------------------------------------------------- References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing "***" has been omitted due to text length limitations. - -------------------------------------------------------------------------------------
Borrower: Ogden Golf Co. Corporation Lender: Barnes Banking Company (TIN: 87-0652870) South Ogden 1781 Washington Blvd. 1840 East Skyline Drive Ogden, UT 84401 South Ogden, UT 84403 ================================================================================ Principal Amount: $139,539.02 Initial Rate: 11.250% Date of Note: September 20,2000 PROMISE TO PAY. OGDEN GOLF CO. CORPORATION ("Borrower") promises to pay to BARNES BANKING COMPANY ("Lender"), or order, in lawful money of the United States of America, the principal amount of One Hundred Thirty-Nine Thousand Five Hundred Thirty-Nine & 02/l00 Dollars ($139,539.02), together with interest on the unpaid principal balance from September 20, 2000, until paid in full. The interest rate will not increase above 18.000%. PAYMENT. Subject to any payment changes resulting from changes in the Index, Borrower will pay this loan on demand. Payment in full is due immediately upon Lender's demand. If no demand is made, Borrower will pay this loan in 59 regular payments of $1,608.25 each and one irregular last payment estimated at $117,154.17. Borrower's first payment is due October 20, 2000, and all subsequent payments are due on the same day of each month after that. Borrower's final payment will be due on September 20, 2005, and will be for all principal and all accrued interest not yet paid. Payments include principal and interest. Unless otherwise agreed or required by applicable law, payments will be applied first to any unpaid collection costs and any late charges, then to any unpaid interest, and any remaining amount to principal. Interest on this Note is computed on a 365/365 simple interest basis; that is, by applying the ratio of the annual interest rate over the number of days in a year, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes in an independent index which is the THE NEW YORK PRIME RATE ADVERTISED IN THE WALL STREET JOURNAL (the "Index"). The index is not necessarily the lowest rate charged by Lender on its loans. If the Index becomes unavailable during the term of this loan, Lender may designate a substitute index after notice to Borrower. Lender will tell Borrower the current Index rate upon Borrower's request. The interest rate charge will not occur more often than each MONTH. Borrower understands that Lender may make loans based on other rates as well. The Index currently is 9.500% per annum. The interest rate to be applied to the paid principal balance of this Note will be at a rate of 1.750 percentage points over the Index, resulting in an initial rate of 11.250% per annum. Notwithstanding the foregoing, the variable interest rate or rates provided for in this Note will be subject to the following minimum and maximum rates. NOTICE: Under no circumstances will the interest rate on this Note be less than 5.000% per annum or more than the lesser of 18.000% per annum or the maximum rate allowed by applicable law. Whenever increases occur in the interest rate, Lender, at its option, may do one or more of the following: (A) increase Borrower's payments to ensure Borrower's loan will pay off by its original final maturity date, (B) increase Borrower's payments to cover accruing interest, (C) increase the number of Borrower's payments, and (D) continue Borrower's payments at the same amount and increase Borrower's final payment. PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance charges are earned fully as of the date of the loan and will not be subject to refund upon early payment (whether voluntary or as a result of default), except as otherwise required by law. Except for the foregoing, Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due and may result in Borrower's making fewer payment. Borrower agrees not to send Lender payments marked "paid in full," "without recourse," or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: BARNES BANKING COMPANY, SOUTH OGDEN, 1840 EAST SKYLINE DRIVE, SOUTH OGDEN, UT 84403. LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged $100.00. INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the total sum due under this Note will bear interest from the date of acceleration or maturity at the variable interest rate on this Note. The interest rate will not exceed the minimum rate permitted by applicable law. DEFAULT. Each of the following shall constitute an event of default ("Event of Default") under this Note: Payment Default. Borrower fails to make any payment when due under this Note. Other Defaults. Borrower fails to comply with or to perform an other term, obligation, covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower. False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or 2 the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Insolvency. The dissolution or termination of Borrower' s existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or resonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note. In the event of a death, Lender, at its option, may, but shall not be required to, permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and, in doing so, cure any Event of Default. Change in Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impaired. Cure Provisions. If any default, other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve (12) months, it may be cured (and no event of default will have occurred) if Borrower, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiates steps which Lender deems in Lender`s sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance on this Note and all accrued unpaid interest immediately due, and then Borrower will pay that amount. 3 ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's reasonable attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including without limitation all reasonable attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. If not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law. GOVERNING LAW. This Note will be governed by, construed and enforced in accordance with federal law and the laws of the State of Utah. This Note has been accepted by Lender in the State of Utah. CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of WEBER County, State of Utah. RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness against any and all such accounts. COLLATERAL. Borrower acknowledges this Note is secured by a Deed of Trust dated September 20,2000, in the amount of $139,539.02, to a trustee in favor of lender of real property located at 1781 Washington Blvd., Ogden, Weber, Utah 84401, all terms and conditions of which are hereby incorporated and made a part of this Note. Also secured by all inventory now owned or hereafter acquired. SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender and its successors and assigns. GENERAL PROVISIONS. This Note and [sic] is payable on demand. The inclusion of specific default provisions or rights of Lender shall not preclude Lender's right to declare payment of this Note on its demand. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may 4 modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE. BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE. BORROWER: OGDEN GOLF CO. CORPORATION BY: /s/ Paul Larsen, President of Ogden Golf Co. Corporation 5 EX-10 5 ex10-2_0803.txt Exhibit 10.2 Form SB-2 Ogden Golf Co. Corporation BUSINESS LOAN AGREEMENT
- -------------------------------------------------------------------------------------------- Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials $139,539.02 09-20-2000 09-20-2005 664000346 1E 154 SLW - ---------------------------------------------------------------------- --------------------
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing "***" has been omitted due to text length limitations. - -------------------------------------------------------------------------------- Borrower: Ogden Golf Co. Corporation Lender: Barnes Banking Company (TIN: 87-0652870) South Ogden 1781 Washington Blvd. 1840 East Skyline Drive Ogden, UT 84401 South Ogden, UT 84403 ================================================================================ THIS BUSINESS LOAN AGREEMENT dated September 20, 2000, is made and executed between OGDEN GOLF CO. CORPORATION ("Borrower") and BARNES BANKING COMPANY ("Lender") on the following terms and conditions. Borrower has received prior commercial loans from Lender or has applied to Lender for a commercial loan or loans or other financial accommodations, including those which may be described on any exhibit or schedule attached to this Agreement ("Loan"). Borrower understands and agrees that: (A) in granting, renewing, or extending any Loan, Lender is relying upon Borrower's representations, warranties, and agreements as set forth in this Agreement, and (B) all such Loans shall be and remain subject to the terms and conditions of this Agreement. TERM. This Agreement shall be effective as of September 20, 2000, and shall continue in full force and effect until such time as all of Borrower's Loans in favor of Lender have been paid in full, including principal, interest, costs, expenses, attorneys' fees, and other fees and charges, or until September 20, 2005. CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial Advance and each subsequent Advance under this Agreement shall be subject to the fulfillment to Lender's satisfaction of all of the conditions set forth in this Agreement and in the Related Documents. Loan Documents. Borrower shall provide to Lender the following documents for the Loan: (1) the Note; (2) Security Agreements granting to Lender security interests in the Collateral; (3) financing statements perfecting Lender's Security Interests; (4) evidence of insurance as required below; (5) guaranties; (6) together with all such Related Documents as Lender may require for the Loan; all in form and substance satisfactory to Lender and Lender's counsel. Borrower's Authorization. Borrower shall have provided in form and substance satisfactory to Lender properly certified resolutions, duly authorizing the execution and delivery of this Agreement, the Note and the Related Documents. In addition, Borrower shall have provided such other resolutions, authorizations, documents and instruments as Lender or its counsel, may require. Payment of Fees and Expenses. Borrower shall have paid to Lender all fees, charges, and other expenses which are then due and payable as specified in this Agreement or any Related Document. Representations and Warranties. The representations and warranties set forth in this Agreement, in the Related Documents, and in any document or certificate delivered to Lender under this Agreement are true and correct. No Event of Default. There shall not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement or under any Related Document. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date of each disbursement of loan proceeds, as of the date of any renewal, extension or modification of any Loan, and at all times any Indebtedness exists: Organization. Borrower is a corporation for profit which is, and at all times shall be, duly organized, validly existing, and in good standing under and by virtue of the laws of the State of Utah. Borrower is duly authorized to transact business in all other states in which Borrower is doing business, having obtained all necessary filings, governmental licenses and approvals for each state in which Borrower is doing business. Specifically, Borrower is, and at all times shall be, duly qualified as a foreign corporation in all states in which the failure to so qualify would have a material adverse effect on its business or financial condition. Borrower has the full power and authority to own its properties and to transact the business in which it is presently engaged or presently proposes to engage. Borrower maintains its principle [sic] office at 1781 Washington Blvd., Ogden, UT 84401. Unless Borrower has designated otherwise in writing, this is the principle office at which Borrower keeps its books and records including its records concerning the Collateral. Borrower will notify Lender of any change in the location of Borrower's principle office. Borrower shall do all things necessary to preserve and to keep in full force and effect its existence, rights and privileges, and shall comply with all regulations, rules, ordinances, statutes, orders and decrees of any governmental or quasi-governmental authority or court applicable to Borrower and Borrower's business activities. Assumed Business Names. Borrower has filed or recorded all documents or filings required by law relating to all assumed business names used by Borrower. Excluding the name of Borrower, the following is a complete list of all assumed business names under which Borrower does business: None. Authorization. Borrower's execution, delivery, and performance of this Agreement and all the Related Documents have been duly authorized by all necessary action by Borrower and do not conflict with, result in a violation of, or constitute a default under (1) any provision of borrower's articles of incorporation or organization, or bylaws, or any agreement or other instrument binding upon Borrower or (2) any law, governmental regulation, court decree, or order applicable to Borrower or to Borrower's properties. 2 Financial Information. Each of Borrower's financial statements supplied to Lender truly and completely disclosed Borrower's financial condition as of the date of the statement, and there has been no material adverse change in Borrower's financial condition subsequent to the date of the most recent financial statement supplied to Lender. Borrower has no material contingent obligations except as disclosed in such financial statements. Legal Effect. This Agreement constitutes, and any instrument or agreement Borrower is required to give under this Agreement when delivered will constitute legal, valid, and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms. Properties. Except as contemplated by this Agreement or as previously disclosed in Borrower's financial statements or in writing to Lender and as accepted by Lender, and except for property tax liens for taxes not presently due and payable, Borrower owns and has good title to all of Borrower's properties free and clear of all Security Interests, and has not executed any security documents or financing statements relating to such properties. All of Borrower's properties are titled in Borrower's legal name, and Borrower has not used, or filed a financing statement under, any other name for at least the last five (5) years. Hazardous Substances. Except as disclosed to and acknowledged by Lender in writing, Borrower represents and warrants that: (1) During the period of Borrower's ownership of Borrower's Collateral, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from any of the Collateral. (2) Borrower has no knowledge of or reason to believe that there has been (a) any breach or violation of any Environmental Laws; (b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Collateral by any prior owners or occupants of any of the Collateral; or (c) any actual or threatened litigation or claims of any kind by any person relating to such matters. (3) Neither Borrower nor any tenant, contractor, agent or other authorized user of any of the Collateral shall use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or from any of the Collateral; and any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations, and ordinances, including without limitation all Environmental Laws. Borrower authorizes Lender and its agents to enter upon the Collateral to make such inspections and tests as Lender may deem appropriate to determine compliance of the Collateral with this section of the Agreement. Any inspections or tests made by Lender shall be at Borrower's expense and for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Borrower or to any other person. The representations and warranties contained herein are based on Borrower's due diligence in investigating the Collateral for hazardous waste and Hazardous Substances. Borrower hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Borrower becomes liable for cleanup or other costs under any such laws, and (2) agrees to indemnify and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Agreement or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release of a 3 hazardous waste or substance on the Collateral. The provisions of this section of the Agreement, including the obligation to indemnify, shall survive the payment of the Indebtedness and the termination, expiration or satisfaction of this Agreement and shall not be affected by Lender's acquisition of any interest in any of the Collateral, whether by foreclosure or otherwise. Litigation and Claims. No litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Borrower is pending or threatened, and no other event has occurred which may materially adversely affect Borrower's financial condition or properties, other than litigation, claims, or other events, if any, that have been disclosed to and acknowledged by Lender in writing. Taxes. To the best of Borrower's knowledge, all of Borrower's tax returns and reports that are or were required to be filed, have been filed, and all taxes, assessments and other governmental charges have been paid in full, except those presently being or to be contested by Borrower in good faith in the ordinary course of business and for which adequate reserves have been provided. Lien Priority. Unless otherwise previously disclosed to Lender in writing, Borrower has not entered into or granted any Security Agreements, or permitted the filing or attachment of any Security Interests on or affecting any of the Collateral directly or indirectly securing repayment of Borrower's Loan and Note, that would be prior or that may in any way be superior to Lender's Security Interests and rights in and to such Collateral. Binding Effect. This Agreement, the Note, all Security Agreements (if any), and all Related Documents are binding upon the signers thereof, as well as upon their successors, representatives and assigns, and are legally enforceable in accordance with their respective terms. AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long as this Agreement remains in effect, Borrower will: Notices of Claims and Litigation. Promptly inform Lender in writing of (1) all material adverse changes in Borrower's financial condition, and (2) all existing and all threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower or any Guarantor which could materially affect the financial condition of Borrower or the financial condition of any Guarantor. Financial Records. Maintain its books and records in accordance with GAAP, applied on a consistent basis, and permit Lender to examine and audit Borrower's books and records at all reasonable times. Financial Statements. Furnish Lender with such financial statements and other related information at such frequencies and in such detail as Lender may reasonably request. 4 Additional Information. Furnish such additional information and statements, as Lender may request from time to time. Insurance. Maintain fire and other risk insurance, public liability insurance, and such other insurance as Lender may require with respect to Borrower's properties and operations, in form, amounts, coverages and with insurance companies acceptable to Lender. Borrower, upon request of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be cancelled or diminished without at least thirty (30) days prior written notice to Lender. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Borrower or any other person. In connection with all policies covering assets in which Lender holds or is offered a security interest for the Loans, Borrower will provide Lender with such Lender's loss payable or other endorsements as Lender may require. Insurance Reports. Furnish to Lender, upon request of Lender, reports on each existing insurance policy showing such information as Lender may reasonably request, including without limitation the following: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the properties insured; (5) the then current property values on the basis of which insurance has been obtained, and the manner of determining those values; and (6) the expiration date of the policy. In addition, upon request of Lender (however not more often than annually), Borrower will have an independent appraiser satisfactory to Lender determine as applicable, the actual cash value or replacement cost of any Collateral. The cost of such appraisal shall be paid by Borrower. Guaranties. Prior to disbursement of any Loan proceeds, furnish executed guaranties of the Loans in favor of Lender, executed by the guarantor named below, on Lender's forms, and in the amount and under the conditions set forth in those guaranties. Name of Guarantor Amount ----------------- ------ PAUL LARSEN $139,539.02 Other Agreements. Comply with all terms and conditions of all other agreements, whether nor or hereafter existing, between Borrower and any other party and notify Lender immediately in writing of any default in connection with any other such agreements. Loan Proceeds. Use all loan proceeds solely for Borrower's business operations, unless specifically consented to the contrary by Lender in writing. Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness and obligations, including without limitation all assessments, taxes, governmental charges, levies and liens, of every kind and nature, imposed upon Borrower or its properties, income, or profits, prior to the date on which penalties would attach, and all lawful claims that, if unpaid, might become a lien or charge upon any of Borrower's properties, income, or profits. 5 Performance. Perform and comply, in a timely manner, with all terms, conditions, and provisions set forth in this Agreement, in the Related Documents, and in all other instruments and agreements between Borrower and Lender. Borrower shall notify Lender immediately in writing of any default in connection with any agreement. Operations. Maintain executive and management personnel with substantially the same qualifications and experience as the present executive and management personnel; provide written notice to Lender of any change in executive and management personnel; conduct its business affairs in a reasonable and prudent manner. Environmental Studies. Promptly conduct and complete, at Borrower's expense, all such investigations, studies, samplings and testings as may be requested by Lender or any governmental authority relative to any substance, or any waste or by-product of any substance defined as toxic or a hazardous substance under applicable federal, state, or local law, rule, regulation, order or directive, at or affecting any property or any facility owned, leased or used by Borrower. Compliance with Governmental Requirements. Comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the conduct of Borrower's properties, businesses and operations, and to the use or occupancy of the Collateral, including without limitation, the Americans With Disabilities Act. Borrower may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Borrower has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Collateral are not jeopardized. Lender may require Borrower to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest. Inspection. Permit employees or agents of Lender at any reasonable time to inspect any and all Collateral for the Loan or Loans and Borrower's other properties and to examine or audit Borrower's books, accounts, and records and to make copies and memoranda of Borrower's books, accounts, and records. If Borrower now or at any time hereafter maintains any records (including without limitation computer generated records and computer software programs for the generation of such records) in the possession of a third party, Borrower, upon request of Lender, shall notify such party to permit Lender free access to such records at all reasonable times and to provide Lender with copies of any records it may request, all at Borrower's expense. Compliance Certificates. Unless waived in writing by Lender, provide Lender at least annually and at the time of each disbursement of Loan proceeds, with a certificate executed by Borrower's chief financial officer, or other officer or person acceptable to Lender, certifying that the representations and warranties set forth in this Agreement are true and correct as of the date of the certificate and further certifying that, as of the date of the certificate, no Event of Default exists under this Agreement. 6 Environmental Compliance and Reports. Borrower shall comply in all respects with any and all Environmental Laws; not cause or permit to exist, as a result of an intentional or unintentional action or omission on Borrower's part or on the part of any third party, on property owned and/or occupied by Borrower, any environmental activity where damage may result to the environment, unless such environmental activity is pursuant to and in compliance with the conditions of a permit issued by the appropriate federal, state or local governmental authorities; shall furnish to Lender promptly and in any event within thirty (30) days after receipt thereof a copy of any notice, summons, lien, citation, directive, letter or other communication from any governmental agency or instrumentality concerning any intentional or unintentional action or omission on Borrower's part in connection with any environmental activity whether or not there is damage to the environment and/or other natural resources. Additional Assurances. Make, execute and deliver to Lender such promissory notes, mortgages, deeds of trust, security agreements, assignments, financing statements, instruments, documents and other agreements as Lender or its attorneys may reasonably request to evidence and secure the loans and to perfect all Security Interests. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Collateral or if Borrower fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Borrower's failure to discharge or pay when due any amounts Borrower is required to discharge or pay under this Agreement or any Related Documents, Lender on Borrower's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on any Collateral and paying all costs for insuring, maintaining and preserving any Collateral. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Borrower. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the prior written consent of Lender: Indebtedness and Liens. (1) Except for trade debt incurred in the normal course of business and indebtedness to Lender contemplated by this Agreement, create, incur or assume indebtedness for borrowed money, including capital leases, (2) sell, transfer, mortgage, assign, pledge, lease, grant a security interest in, or encumber any of Borrower's assets (except as allowed as Permitted Liens), or (3) sell with recourse any of Borrower's accounts, except to Lender. Continuity of Operations. (1) Engage in any business activities substantially different than those in which Borrower is presently engaged, (2) cease operations, liquidate, merge, transfer, acquire or consolidate 7 with any other entity, change its name, dissolve or transfer or sell Collateral out of the ordinary course of business, or (3) pay any dividends on Borrower's stock (other than dividends payable in its stock), provided, however that notwithstanding the foregoing, but only so long as no Event of Default has occurred and is continuing or would result from the payment of dividends, if Borrower is a "Subchapter S Corporation" (as defined in the Internal Revenue Code of 1986, as amended), Borrower may pay cash dividends on its stock to its shareholder from time to time in amounts necessary to enable the shareholders to pay income taxes and make estimated income tax payments to satisfy their liabilities under federal and state law which arise solely from their status as Shareholders of a Subchapter S Corporation because of their ownership of shares of Borrower's stock, or purchase or retire any of Borrower's outstanding shares or alter or amend Borrower's capital structure. Loans, Acquisitions and Guaranties. (1) Loan, invest in or advance money or assets, (2) purchase, create or acquire any interest in any other enterprise or entity, or (3) incur any obligation as surety or guarantor other than in the ordinary course of business. CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to Borrower, whether under this Agreement or under any other agreement, Lender shall have no obligation to make Loan Advances or to disburse Loan proceeds if: (A) Borrower or any Guarantor is in default under the terms of this Agreement or any of the Related Documents or any other agreement that Borrower or any Guarantor has with Lender; (B) Borrower or any Guarantor dies, becomes incompetent or becomes insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse change in Borrower's financial condition, in the financial condition of any Guarantor, or in the value of any Collateral securing any Loan; or (D) any Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such Guarantor's guaranty of the Loan or any other loan with Lender. RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against any and all such accounts. DEFAULT. Each of the following shall constitute an Event of Default under this Agreement. Payment Default. Borrower fails to make any payment when due under the Loan. Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower. 8 False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Agreement, the Note, or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Insolvency. The dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. Defective Collateralization. This Agreement or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the Loan. This includes a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. In the event of a death, Lender, at its option, may, but shall not be required to, permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and, in doing so, cure any Event of Default. Change in Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower. Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the Loan is impaired. Right to Cure. If any default, other than a default on Indebtedness, is curable and if Borrower or Grantor, as the case may be, has not been given a notice of a similar default within the preceding twelve (12) months, it may be cured (and no Event of Default will have occurred) if Borrower or Grantor, as the case may be, after receiving written notice from Lender demanding cure of such default: (1) cure the default within fifteen (15) days, immediately initiate steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continue and 9 complete all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where otherwise provided in this Agreement or the Related Documents, all commitments and obligations of Lender under this Agreement or the Related Documents or any other agreement immediately will terminate (including any obligation to make further Loan Advances or disbursements), and, at Lender's option, all Indebtedness immediately will become due and payable, all without notice of any kind to Borrower, except that in the case of an Event of Default of the type described in the "Insolvency" subsection above, such acceleration shall be automatic and not optional. In addition, Lender shall have all the rights and remedies provided in the Related Documents or available at law, in equity, or otherwise. Except as may be prohibited by applicable law, all of Lender's rights and remedies shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Borrower or of any Grantor shall not affect Lender's right to declare a default and to exercise its rights and remedies. MISCELLENEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement. Amendments. This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys' Fees; Expenses. Borrower agrees to pay upon demand all of Lender's costs and expenses, including Lender's reasonable attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help enforce this Agreement, and Borrower shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's reasonable attorneys' fees and legal expenses whether or not Lender's salaried employee and whether or not there is a lawsuit, including reasonable attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Borrower also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement. Consent to Loan Participation. Borrower agrees and consents to Lender's sale or transfer, whether now or later, of one or more participation interests in the Loan to one or more purchasers, whether related or unrelated to Lender. Lender may provide, without any limitation whatsoever, to any one or more purchasers, or potential purchasers, any information or knowledge Lender may have about Borrower or about any other matter relating to the Loan, and Borrower hereby waives any rights to privacy Borrower may 10 have with respect to such matters. Borrower additionally waives any and all notices of sale of participation interests, as well as all notices of any repurchase of such participation interests. Borrower also agrees that the purchasers of any such participation interests will be considered as the absolute owners of such interest in the Loan and will have all the rights granted under the participation agreement or agreements governing the sale of such participation interests. Borrower further waives all rights of offset or counterclaim that it may have now or later against Lender or against any purchaser of such a participation interest and unconditionally agrees that either Lender or such purchaser may enforce Borrower's obligation under the Loan irrespective of the failure or insolvency of any holder of any interest in the Loan. Borrower further agrees that the purchaser of any such participation interests may enforce its interests irrespective of any personal claims or defenses that Borrower may have against Lender. Governing Law. This Agreement will be governed by, construed and enforced in accordance with federal law and the laws of the State of Utah. This Agreement has been accepted by Lender in the State of Utah. Choice of Venue. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of WEBER county, State of Utah. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Borrower, or between Lender and any Grantor, shall constitute a waiver of any of Lender's rights or of any of Borrower's or any Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Notices. Unless otherwise provided by applicable law, any notice required to be given under this Agreement or required by law shall be given in writing, and shall be effective when actually delivered in accordance with the law or with this Agreement, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Agreement. Any party may change its address for notices under this Agreement by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Borrower agrees to keep Lender informed at all times of Borrower's current address. Unless otherwise provided by applicable law, if there is more than one Borrower, any notice given by Lender to any Borrower is deemed to be notice given to all Borrowers. 11 Severability. If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Agreement. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement. Subsidiaries and Affiliates of Borrower. To the extent the context of any provisions of this Agreement makes it appropriate, including without limitation any representation, warranty or covenant, the word "Borrower" as used in this Agreement shall include all of Borrower's subsidiaries and affiliates. Notwithstanding the foregoing however, under no circumstances shall this Agreement be construed to require Lender to make any Loan or other financial accommodation to any of Borrower's subsidiaries or affiliates. Successors and Assigns. All covenants and agreements contained by or on behalf of Borrower shall bind Borrower's successors and assigns and shall inure to the benefit of Lender and its successors and assigns. Borrower shall not, however, have the right to assign Borrower's rights under this Agreement or any interest therein, without the prior written consent of Lender. Survival of Representations and Warranties. Borrower understands and agrees that in making the Loan, Lender is relying on all representations, warranties, and covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to Lender under this Agreement or the Related Documents. Borrower further agrees that regardless of any investigation made by Lender, all such representations, warranties and covenants will survive the making of the Loan and delivery to Lender of the Related Documents, shall be continuing in nature, and shall remain in full force and effect until such time as Borrower's Indebtedness shall be paid in full, or until this Agreement shall be terminated in the manner provided above, whichever is the last to occur. Time is of the Essence. Time is of the essence in the performance of this Agreement. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code. Accounting words and terms not otherwise defined in this Agreement shall have the meanings assigned to them in accordance with generally accepted accounting principles as in effect on the date of this Agreement. Advance. The word "Advance" means a disbursement of Loan funds made, or to be made, to Borrower or on Borrower's behalf on a line of credit or multiple advance basis under the terms and conditions of this Agreement. 12 Agreement. The word "Agreement" means this Business Loan Agreement, as this Business Loan Agreement may be amended or modified from time to time, together with all exhibits and schedules attached to this Business Loan Agreement from time to time. Borrower. The word "Borrower" means OGDEN GOLF CO. CORPORATION, and all other persons and entities signing the Note in whatever capacity. Collateral. The word "Collateral" means all property and assets granted as collateral security for a Loan, whether real or personal property, whether granted directly or indirectly, whether granted now or in the future, and whether granted in the form of a security interest, mortgage, collateral mortgage, deed of trust, assignment, pledge, chattel mortgage, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor's lien, equipment trust, conditional sale, trust receipt, lien, charge, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever, whether created by law, contract, or otherwise. Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. Event of Default. The words "Event of Default" mean any of the Events of Default set forth in this Agreement in the Default section of this Agreement. GAAP. The word "GAAP" means generally accepted accounting principles. Grantor. The word "Grantor" means each and all of the persons or entities granting a Security Interest in any Collateral for the Loan, including without limitation all Borrowers granting such a Security Interest. Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Loan. Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The 13 words "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. Indebtedness. The word "Indebtedness" means the indebtedness evidenced by the Note or Related Documents, including all principal and interest together with all other indebtedness and costs and expenses for which Borrower is responsible under this Agreement or under any of the Related Documents. Lender. The word "Lender" means BARNES BANKING COMPANY, its successors and assigns. Loan. The word "Loan" means any and all loans and financial accommodations from Lender to Borrower whether now or hereafter existing, and however evidenced, including without limitation those loans and financial accommodations described herein or described on any exhibit or schedule attached to this Agreement from time to time. Note. The word "Note" means the Note executed by Borrower in the principal amount of $139,539.02 dated September 20, 2000, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the note or credit agreement. Permitted Liens. The words "Permitted Liens" mean (1) liens and security interests securing Indebtedness owed y Borrower to Lender; (2) liens for taxes, assessments, or similar charges either not yet due or being contested in good faith; (3) liens of materialmen, mechanics, warehousemen, or carriers, or other like liens arising in the ordinary course of business and securing obligations which are not yet delinquent; (4) purchase money liens or purchase money security interests upon or in any property acquired or held by Borrower in the ordinary course of business to secure indebtedness outstanding on the date of this Agreement or permitted to be incurred under the paragraph of this Agreement titled "Indebtedness and Liens;" (5) liens and security interests which, as of the date of this Agreement, have been disclosed to and approved by the Lender in writing; and (6) those liens and security interests which in the aggregate constitute an immaterial and insignificant monetary amount with respect to the net value of Borrower's assets. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the loan. Security Agreement. The words "Security Agreement" mean and include without limitation any agreements, promises, covenants, arrangements, understandings or other agreements, whether created by law, contract, or otherwise, evidencing, governing, representing, or creating a Security Interest. 14 Security Interest. The words "Security Interest" mean, without limitation, any and all types of collateral security, present and future, whether in the form of a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor's lien, equipment trust, conditional sale, trust receipt, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever whether created by law, contract, or otherwise. FINAL AGREEMENT. Borrower understands that this Agreement and the related loan documents are the final expression of the agreement between Lender and Borrower and may not be contradicted by evidence of any alleged oral agreement. BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED SEPTEMBER 20, 2000. BORROWER: OGDEN GOLF CO. CORPORATION BY: /s/ Paul Larsen, President of Ogden Golf Co. Corporation LENDER: BARNES BANKING COMPANY X /s/ Stephanie Wallace Authorized Signer 15 EX-10 6 ex10-3_0803.txt Exhibit 10.3 Form SB-2 Ogden Golf Co. Corporation COMMERCIAL SECURITY AGREEMENT
- -------------------------------------------------------------------------------------------- Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials $139,539.02 09-20-2000 09-20-2005 664000346 1E 154 SLW - --------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing "***" has been omitted due to text length limitations. - -------------------------------------------------------------------------------- Grantor: Ogden Golf Co. Corporation Lender: Barnes Banking Company (TIN: 87-0652870) South Ogden 1781 Washington Blvd. 1840 East Skyline Drive Ogden, UT 84401 South Ogden, UT 84403 ================================================================================ THIS COMMERCIAL SECURITY AGREEMENT dated September 20, 2000, is made and executed between OGDEN GOLF CO. CORPORATION ("Grantor") and BARNES BANKING COMPANY ("Lender"). GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender a security interest in the Collateral to secure the Indebtedness and agrees that Lender shall have the rights stated in this Agreement with respect to the Collateral, in addition to all other rights which Lender may have by law. COLLATERAL DESCRIPTION. The word "Collateral" as used in this Agreement means the following described property, whether now owned or hereafter acquired, whether now existing or hereafter arising, and wherever located, in which Grantor is giving to Lender a security interest for the payment of the Indebtedness and performance of all other obligations under the Note and this Agreement: All Inventory now owned or hereafter acquired. In addition, the word "Collateral" also includes all the following, whether now owned or hereafter acquired, whether now existing or hereafter arising, and wherever located: (A) All accessions, attachments, accessories, tools, parts, supplies, replacements and additions to any of the collateral described herein, whether added now or later. (B) All products and produce of any of the property described in this Collateral section. (C) All accounts, general intangibles, instruments, rents, monies, payments, and all other rights, arising out of a sale, lease, or other disposition of any of the property described in this Collateral section. (D) All proceeds (including insurance proceeds) from the sale, destruction, loss, or other disposition of any of the property described in this Collateral section, and sums due from a third party who has damaged or destroyed the Collateral or from that party's insurer, whether due to judgment, settlement or other process. (E) All records and data relating to any of the property described in this Collateral section, whether in the form of a writing, photograph, microfilm, microfiche, or electronic media, together with all of the Grantor's right, title, and interest in and to all computer software required to utilize, create, maintain, and process any such records or data on electronic media. Despite any other provision of this Agreement, Lender is not granted, and will not have, a nonpurchase money security interest in household goods, to the extent such a security interest would be prohibited by applicable law. In addition, if because of the type of any Property, Lender is required to give a notice of the right to cancel under Truth in Lending for the Indebtedness, then Lender will not have a security interest in such Collateral unless and until such a notice is given. RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Grantor's accounts with Lender (whether checking, savings, or some other account). This includes all accounts Grantor holds jointly with someone else and all accounts Grantor may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Grantor authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against any and all such accounts. GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. With respect to the Collateral, Grantor represents and promises to Lender that: Perfection of Security Interest. Grantor agrees to execute financing statements and to take whatever other actions are requested by Lender to perfect and continue Lender's security interest in the Collateral. Upon request of Lender, Grantor will deliver to Lender any and all of the documents evidencing or constituting the Collateral, and Grantor will note Lender's interest upon any and all chattel paper if not delivered to Lender for possession by Lender. Notices to Lender. Grantor will promptly notify Lender in writing at Lender's address shown above (or such other addresses as Lender may designate from time to time) prior to any (1) change in Grantor's name; (2) change in Grantor's assumed business name(s); (3) change in management of the corporation Grantor; (4) change in the authorized signer(s); (5) change in Grantor's principal office address; (6) conversion of Grantor to a new or different type of business entity; or (7) change in any other aspect of Grantor that directly or indirectly relates to any agreements between Grantor and Lender. No change in Grantor's name will take effect until after Lender has been notified. No Violation. The execution and delivery of this Agreement will not violate any law or agreement governing Grantor or to which Grantor is a party, and its certificate or articles of incorporation and bylaws do not prohibit any term or condition of this Agreement. Enforceability of Collateral. To the extent the Collateral consists of accounts, chattel paper, or general intangibles, as defined by the Uniform Commercial Code, the Collateral is enforceable in accordance with its terms, is genuine, and fully complies with all applicable laws and 2 regulations concerning form, content and manner of preparation and execution, and all persons appearing to be obligated on the Collateral have authority and capacity to contract and are in fact obligated as they appear to be on the Collateral. There shall be no setoffs or counterclaims against any of the Collateral, and no agreement shall have been made under which any deductions or discounts may be claimed concerning the Collateral except those disclosed to Lender in writing. Location of the Collateral. Except in the ordinary course of Grantor's business, Grantor agrees to keep the Collateral at Grantor's address shown above or at such other locations as are acceptable to Lender. Upon Lender's request, Grantor will deliver to Lender in form satisfactory to Lender a schedule of real properties and Collateral locations relating to Grantor's operations, including without limitation the following: (1) all real property Grantor owns or is purchasing; (2) all real property Grantor is renting or leasing; (3) all storage facilities Grantor owns, rents, leases, or uses; and (4) all other properties were Collateral is or may be located. Removal of the Collateral. Except in the ordinary course of Grantor's business, including the sales of inventory, Grantor shall not remove the Collateral from its existing location without Lender's prior written consent. To the extent that the Collateral consists of vehicles, or other titled property, Grantor shall not take or permit any action which would require application for certificates of title for the vehicles outside the State of Utah, without Lender's prior written consent. Grantor shall, whenever requested, advise Lender of the exact location of the Collateral Transactions Involving Collateral. Except for inventory sold or accounts collected in the ordinary course of Grantor's business, or as otherwise provided for in this Agreement, Grantor shall not sell, offer to sell, or otherwise transfer or dispose of the Collateral. While Grantor is not in default under this Agreement, Grantor may sell inventory, but only int he ordinary course of its business and only to buyers who qualify as a buyer in the ordinary course of business. A sale in the ordinary course of Grantor's business doe s not include a transfer in partial or total satisfaction of a debt or any bulk sale. Grantor shall not pledge, mortgage, encumber or otherwise permit the Collateral to be subject to any lien, security interest, encumbrance, or charge, other than the security interest provided for in this Agreement, without the prior written consent of Lender. This includes security interests even if junior in right to the security interests granted under this Agreement. Unless waived by Lender, all proceeds from any disposition of the Collateral (for whatever reason) shall be held in trust for Lender and shall not be commingled with any other funds; provided however, this requirement shall not constitute consent by Lender to any sale or other disposition. Upon receipt, Grantor shall immediately deliver any such proceeds to Lender. Title. Grantor represents and warrants to Lender that Grantor holds good and marketable title to the Collateral, free and clear of all liens and encumbrances except for the lien of this Agreement. No financing statement covering any of the Collateral is on file in any public office other than those which reflect the security interest created by this Agreement or to which Lender has specifically consented. Grantor shall defend Lender's rights in the Collateral against the claims and demands of all other persons. 3 Repairs and Maintenance. Grantor agrees to keep and maintain, and to cause others to keep and maintain, the Collateral in good order, repair and condition at all times while this Agreement remains in effect. Grantor further agrees to pay when due all claims for work done on, or services rendered or material furnished in connection with the Collateral so that no lien or encumbrance may ever attach to or be filed against the Collateral. Inspection of Collateral. Lender and Lender's designated representatives and agents shall have the right at all reasonable times to examine and inspect the Collateral wherever located. Taxes, Assessments and Liens. Grantor will pay when due all taxes, assessments and liens upon the Collateral, its use or operation, upon this Agreement, upon any promissory note or notes evidencing the Indebtedness, or upon any of the other Related Documents. Grantor may withhold any such payment or may elect to contest any lien if Grantor is in good faith conducting an appropriate proceeding to contest the obligation to pay and so long as Lender's interest in the Collateral is not jeopardized in Lender's sole opinion. If the Collateral is subjected to a lien which is not discharged within fifteen (15) days, Grantor shall deposit with Lender cash, a sufficient corporate surety bond or other security satisfactory to Lender in an amount adequate to provide for the discharge of the lien plus any interest, costs, reasonable attorneys' fees or other charges that could accrue as a result of foreclosure or sale of the Collateral. In any contest Grantor shall defend itself and Lender and shall satisfy any final adverse judgment before enforcement against the Collateral. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Grantor further agrees to furnish Lender with evidence that such taxes, assessments, and governmental and other charges have been paid in full and in a timely manner. Grantor may withhold any such payment or may elect to contest any lien if Grantor is in good faith conducting an appropriate proceeding to contest the obligation to pay and so long as Lender's interest in the Collateral is not jeopardized. Compliance with Governmental Requirements. Grantor shall comply promptly with all laws, ordinances, rules and regulations of all governmental authorities, now or hereafter in effect, applicable to the ownership, production, disposition, to use of the Collateral. Grantor may contest in good faith any such law, ordinance or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Lender's interest in the Collateral, in Lender's opinion, is not jeopardized. Hazardous Substances. Grantor represents and warrants that the Collateral never has been, and never will be so long as this Agreement remains a lien on the Collateral, used in violation of any Environmental Laws or for the generation, manufacture, storage, transportation, treatment, disposal, release or threatened release of any Hazardous Substance. The representations and warranties contained herein are based on Grantor's due diligence in investigating the Collateral for Hazardous Substances. Grantor hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any Environmental Laws, and (2) agrees to indemnify and hold harmless Lender against any and all claims and losses resulting 4 from a breach of this provision of this Agreement. This obligation to indemnify shall survive the payment of the Indebtedness and the satisfaction of this Agreement. Maintenance of Casualty Insurance. Grantor shall procure and maintain all risks insurance, including without limitation fire, theft and liability coverage together with such other insurance as Lender may require with respect to the Collateral, in form, amounts, coverages and basis reasonably acceptable to Lender and issued by a company or companies reasonably acceptable to Lender. Grantor, upon request of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be cancelled or diminished without at least thirty (30) days' prior written notice to Lender and not including any disclaimer of the insurer's liability for failure to give such a notice. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. In connection with all policies covering assets in which Lender holds or is offered a security interest, Grantor will provide Lender with such loss payable or other endorsements as Lender may require. If Grantor at any time fails to obtain or maintain any insurance as required under this Agreement, Lender may (but shall not be obligated to) obtain such insurance as Lender deems appropriate, including if Lender so chooses "single interest insurance," which will covers only Lender's interest in the Collateral. Application of Insurance Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Collateral. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty. All proceeds of any insurance on the Collateral, including accrued proceeds thereon, shall be held by Lender as part of the Collateral. If Lender consents to repair or replacement of the damaged or destroyed Collateral, Lender shall, upon satisfactory proof of expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration. If Lender does not consent to repair or replacement of the Collateral, Lender shall retain a sufficient amount of the proceeds to pay all of the Indebtedness, and shall pay the balance to Grantor. Any proceeds which have not been disbursed within six (6) months after their receipt and which Grantor has not committed to the repair or restoration of the Collateral shall be used to prepay the Indebtedness. Insurance Reserves. Lender may require Grantor to maintain with Lender reserves for payment of insurance premiums, which reserves shall be created by monthly payments from Grantor of a sum estimated by Lender to be sufficient to produce, at least fifteen (15) days before the premium due date, amounts at least equal to the insurance premiums to be paid. If fifteen (15) days before payment is due, the reserve funds are insufficient, Grantor shall upon demand pay any deficiency to Lender. The reserve funds shall be held by Lender as a general deposit and shall constitute a non-interest-bearing account which Lender may satisfy by payment of the insurance premiums required to be paid by Grantor as they become due. Lender does not hold the reserve funds in trust fort Grantor, and Lender is not the agent of Grantor for payment of the insurance premiums required to be paid by Grantor. The responsibility for the payment of premiums shall remain Grantor's sole responsibility. 5 Insurance Reports. Grantor, upon request of ender, shall furnish to Lender reports on each existing policy of insurance showing such information as Lender may reasonably request including the following: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the property insured; (5) the then current value on the basis of which insurance has been obtained and the manner of determining that value; and (6) the expiration date of the policy. In addition, Grantor shall upon request by Lender (however not more often than annually) have an independent appraiser satisfactory to Lender determine, as applicable, the cash value or replacement cost of the Collateral. GRANTOR'S RIGHT TO POSSESSION. Until default, Grantor may have possession of the tangible personal property and beneficial use of all the Collateral and may use it in any lawful manner not inconsistent with this Agreement or the Related Documents, provided that Grantor's right to possession and beneficial use shall not apply to any Collateral where possession of the Collateral by Lender is required by law to perfect Lender's security interest in such Collateral. If Lender at any time has possession of any Collateral, whether before or after an Event of Default, Lender shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral if Lender takes such action for that purpose as Grantor shall request or as Lender, in Lender's sole discretion, shall deem appropriate under the circumstances, but failure to honor any request by Grantor shall not of itself be deemed to be a failure to exercise reasonable care. Lender shall not be required to take any steps necessary to preserve any rights in the Collateral against prior parties, nor to protect, preserve or maintain any security interest given to secure the Indebtedness. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Collateral or if Grantor fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge or pay under this Agreement or any Related Documents, Lender on Grantor's behalf may (but shall not be obligated to ) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Collateral and paying all costs for insuring, maintaining and preserving the Collateral. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Agreement also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: Payment Default. Grantor fails to make any payment when due under the Indebtedness. Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any of 6 the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Grantor. False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this Agreement, the Note, or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Defective Collateralization. This Agreement or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason. Insolvency. The dissolution or termination of Grantor's existence as a going business, the insolvency of Grantor, the appointment of a receiver for any part of Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency against any collateral securing the Indebtedness. This includes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Events Affecting Guarantor. Any of the preceding events occurs with respect to Guarantor of any of the Indebtedness or Guarantor dies or becomes incompetent or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Cure Provisions. If any default, other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Agreement within the preceding twelve (12) months, it may be cured (and no event of default will have occurred) if Grantor, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this Agreement, at any time thereafter, Lender shall have all the rights of a secured party under the Utah Uniform Commercial Code. In addition and without limitation, Lender may exercise any oen or more of the following rights and remedies: 7 Accelerated Indebtedness. Lender may declare the entire Indebtedness, including any prepayment penalty which Grantor would be required to pay, immediately due and payable, without notice of any kind to Grantor. Assemble Collateral. Lender may require Grantor to deliver to Lender all or any portion of the Collateral and any and all certificates of title and other documents relating to the Collateral. Lender may require Grantor to assemble the Collateral and make it available to Lender at a place to be designated by Lender. Lender also shall have full power to enter upon the property of Grantor to take possession of and remove the Collateral. If the Collateral contains other goods not covered by this Agreement at the time of repossession, Grantor agrees Lender may take such other goods, provided that Lender makes reasonable efforts to return them to Grantor after repossession. Sell the Collateral. Lender shall have full power to sell, lease, transfer, or otherwise deal with the Collateral or proceeds thereof in Lender's own name or that of Grantor. Lender may sell the Collateral at public auction or private sale. Unless the Collateral threatens to decline speedily in value or is of a type customarily sold on a recognized market, Lender will give Grantor reasonable notice of the time after which any private sale or any other intended disposition of the Collateral is to be made. The requirements of reasonable notice shall be met if such notice is given at least fifteen (15) days before the time of the sale or disposition. All expenses relating to the disposition of the Collateral, including without limitation the expenses of retaking, holding, insuring, preparing for sale and selling the Collateral, shall become a part of the Indebtedness secured by this Agreement and shall be payable on demand, with interest at the Note rate from date of expenditure until repaid. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Collateral, with the power to protect and preserve the Collateral, to operate the Collateral preceding foreclosure or sale, and to collect the Rents from the Collateral and apply the proceeds, over and above the cost of the receivership, against the Indebtedness. grantor hereby waives any requirement that the receiver be impartial and disinterested as to all of the parties and agrees that employment by Lender shall not disqualify a person from serving as a receiver. Collect Revenues, Apply Accounts. Lender, either itself or through a receiver, may collect the payments, rents, income, and revenues from the Collateral. Lender may at any time in Lender's discretion transfer any Collateral into Lender's own name or that of Lender's nominee and receive the payments, rents, income, and revenues therefrom and hold the same as security for the Indebtedness or apply it to payment of the Indebtedness in such order of preference as Lender may determine. Insofar as the Collateral consists of accounts, general intangibles, insurance policies, instruments, chattel paper, choses in action, or similar property, Lender may demand, collect, receipt for, settle, compromise, adjust, sue for, foreclose, or realize on the Collateral as Lender may determine, whether or not Indebtedness or Collateral is then due. For these purposes, Lender may, on behalf of and in the name of Grantor, receive, open and dispose of mail addressed to Grantor; change any address to which mail and payments are to be sent; and endorse notes, checks, drafts, money orders, documents of title, instruments and items pertaining to payment, shipment, or storage of 8 any collateral. To facilitate collection, Lender may notify account debtors and obligors on any Collateral to make payments directly to Lender. Obtain Deficiency. If Lender chooses to sell any or all of the Collateral, Lender may obtain a judgment against Grantor for any deficiency remaining on the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this Agreement. Grantor shall be liable for a deficiency even if the transaction described in this subsection is a sale of accounts or chattel paper. Other Rights and Remedies. Lender shall have all the rights and remedies of a secured creditor under the provisions of the Uniform Commercial Code, as may be amended from time to time. In addition, Lender shall have and may exercise any or all other rights and remedies it may have available at law, in equity, or otherwise. Election of Remedies. Except as may be prohibited by applicable law, all of Lender's rights and remedies, whether evidenced by this Agreement, the Related Documents, or by any other writing, shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Grantor under this Agreement, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement. Amendments. This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Attorneys' Fees; Expenses. Grantor agrees to pay upon demand all of Lender's costs and expenses, including Lender's reasonable attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help enforce this Agreement, and Grantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender's reasonable attorneys' fees and legal expenses whether or not Lender's salaried employee and whether or not there is a lawsuit, include reasonable attorneys' fees and legal expenses of bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Grantor also shall pay all court costs and such additional fees as may be directed by the court. Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement. Governing Law. This agreement will be governed by, construed and enforced in accordance with federal law and the laws of the State of Utah. This Agreement has been accepted by Lender in the State of Utah. 9 Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of WEBER county, State of Utah. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lenders right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Notices. Unless otherwise provided by applicable law, any notice required to be given under this Agreement or required by law shall be given in writing, and shall be effective when actually delivered in accordance with the law or with this Agreement, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Agreement. Any party may change its address for notices under this Agreement by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address. Unless otherwise provided by applicable law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. Power of Attorney. Grantor hereby appoints Lender as Grantor's irrevocable attorney-in-fact for the purpose of executing any documents necessary to perfect or to continue the security interest granted in this Agreement. Lender may at any time, and without further authorization from Grantor, file a carbon, photographic or other reproduction of any financing statement or of this Agreement for use as a financing statement. Grantor will reimburse Lender for all expenses for the perfection and the continuation of the perfection of Lender's security interest in the Collateral. Severability. If a court o competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Agreement. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement. 10 Successors and Assigns. Subject to any limitations stated in this Agreement on transfer of Grantor's interest, this Agreement shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Collateral becomes vested in a person other than Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Agreement or liability under the Indebtedness. Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Agreement shall survive the execution and delivery of this Agreement, shall be continuing in nature, and shall remain in full force and effect until such time as Grantor's Indebtedness shall be paid in full. Time is of the Essence. Time is of the essence in the performance of this Agreement. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code: Agreement. The word "Agreement" means this Commercial Security Agreement, as this Commercial Security Agreement may be amended or modified from time to time, together with all exhibits and schedules attached to this Commercial Security Agreement from time to time. Borrower. The word "Borrower" means OGDEN GOLF CO. CORPORATION, and all other persons and entities signing the Note in whatever capacity. Collateral. The word "Collateral" means all of Grantor's right, title and interest in and to all the Collateral as described in the Collateral Description section of this Agreement. Default. The word "Default" means the Default set forth in this Agreement in the section titled "Default." Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. Event of Default. The words "Event of Default" mean any of the Events of Default set forth in this Agreement in the Default section of this Agreement. 11 Grantor. The word "Grantor" means OGDEN GOLF CO. CORPORATION. Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Indebtedness. Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any faction thereof and asbestos. Indebtedness. The word "Indebtedness" means the indebtedness evidenced by the Note or Related Documents, including all principal and interest together with all other indebtedness and costs and expenses for which Grantor is responsible under this Agreement or under any of the Related Documents. Lender. The word "Lender means BARNES BANKING COMPANY, it successors and assigns. Note. The word "Note" means the Note executed by Grantor in the principal amount of $139,539.02 dated September 20, 2000, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the note or credit agreement. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness. GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY AGREEMENT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED SEPTEMBER 20, 2000. GRANTOR: OGDEN GOLF CO. CORPORATION BY: /s/ Paul Larsen, President of Ogden Golf Co. Corporation 12 EX-23 7 ex23-1_0803.txt Exhibit 23.1 Form SB-2 Ogden Golf Co. Corporation CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the use in the Prospectus constituting a part of this Registration Statement of our report dated September 12, 2002, relating to the financial statements of Ogden Golf Co. Corporation, as of June 30, 2002 and 2001 and for the years then ended. We also consent to the reference to us under the caption "Experts" in the Prospectus. /s/ Wisan, Smith, Racker & Prescott, LLP Salt Lake City, Utah August 5, 2003 -----END PRIVACY-ENHANCED MESSAGE-----