UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
Ultimate Sports, Inc.
(Name of Small Business Issuer in its charter)
Indiana 35-1771259 (State or other jurisdiction of (I.R.S. Employer Identification No.) Incorporation or organization) |
2119 North 15th Street, Lafayette, IN 47904
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (765) 423-2984
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
To be so registered Each class is to be registered
None Not Applicable
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Securities to be registered under Section 12(g) of the Act:
Common Stock no par value per share
(Title of class)
TABLE OF CONTENTS
PART I
Page
Item 1. Description of Business 1
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Item 3. Description of Property 14
Item 4. Security Ownership of Certain Beneficial Owners and Management 14
Item 5. Directors, Executive Officers, Promoters and Control Persons 15
Item 6. Executive Compensation 16
Item 7. Certain Relationships and Related Transactions 17
Item 8. Description of Securities 17
PART II
Item 1. Market Price of and Dividends on the Registrant's Common
Equity and Other Shareholder Matters 18
Item 2. Legal Proceedings 18
Item 3. Changes in and Disagreements with Accountants 18
Item 4. Recent Sales of Unregistered Securities 19
Item 5. Indemnification of Directors and Officers 22
PART F/S
Financial Statements 23
PART III
Items 1 and 2. Index to Exhibits and Description of Exhibits 33
Signatures 33
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Forward Looking Statements
This registration statement contains statements that plan for or anticipate the future operations of our company. Forward looking statements include those about our market position, our competitive position, product development of our X2 ski, our Shaper Wear Bar, our plans for expansion of our dealer program, trade show activities, licensing agreements, joint ventures, in-house manufacturing and our business generally and statements that are not historical in nature. In this registration statement forward looking statements are generally identified by words such as "anticipate", "plan", "believe", "expect", "estimate", "propose" and words of similar import. Although we offer any forward looking statements herein as reasonable, because the nature of such statements necessarily contemplates future risks and uncertainties, there are factors that may cause actual results to differ materially from those expressed or implied by our forward looking statements. For example, a few of the uncertainties that could affect the outcome of our forward looking statements include the following:
1. our ability to accomplish production and sale of our X2 ski and Shaper Wear Bar,
2. the extent to which our X2 ski and Shaper Wear Bar when produced and marketed will be favorably received by manufacturers end-use customers,
3. the extent to which our expansion of our dealer program will increase revenues, and
4. the extent to which our marketing efforts with end-use customers through trade shows, catalog distribution and otherwise will increase revenues.
In light of the significant uncertainties inherent in our forward looking statements these statements should not be regarded as representations by us that our objectives and plans will be achieved. Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 which provide a "safe harbor" for similar statements by certain existing public companies do not apply to us.
INFORMATION REQUIRED IN REGISTRATION STATEMENT
PART I
Item 1. Description of Business.
ORGANIZATION AND HISTORY
Our company was incorporated under laws of the State of Indiana on December 6, 1988 by our founder and current President Kevin W. Metheny. Thereafter, Mr. Metheny designed and invented a plastic snowmobile ski for which United States patents were granted on August 20, 1991 and September 8, 1996. Prior to that time snowmobiles skis were made of steel or aluminum. Although
these patents are currently in force, there have been no skis manufactured under either of the patents during the three years period to end December 31, 2001. In the years following issue of our patents to the date hereof, we have been engaged in the business of assembling and selling a fully configured snowmobile ski which consists of a plastic ski bottom, a wear bar which is attached to the bottom of the ski and functions as a mechanism to control guiding and turning of the ski, a handle which is attached to the front tip of the ski and a mount shoe which is affixed to the top of the ski and permits attachment of the fully assembled ski to a snowmobile. During this period we have also separately sold each of those components and other snowmobile accessories.
Because we did not have manufacturing facilities, and do not at the date hereof have such facilities, each of the components of our fully configured skis has been manufactured for us by other firms. And, during the foregoing specified period we have purchased from Poly-Hi Solidur all of our plastic ski bottoms manufactured under our patents or to our design and specification.
Because of our limited financial resources in the early years of our operation we were unable to challenge actions which we believe infringed our patent rights. In these circumstances and the limited scope of our patents, PPD Industries, Inc. of Sherbrooke, Quebec, Canada and Plastic Specialties, Mfg. of Hutchinson, Minnesota became manufacturers of plastic snowmobile ski bottoms. We, therefore, deem these two firms and Poly-Hi Solidur to be our competitors. See "Description of Business - Competition" herein.
The two market segments for sales of our plastic ski bottom were a manufacturer of snowmobiles and what is referred to in the snowmobile industry as the "aftermarket" which is made up of sales to consumers for replacement skis for those that have exhausted their useful lives and for particular uses such as on different terrain, various snow conditions and racing. During the period from approximately 1996 through the year 1999 the lesser portion of our sales of snowmobile skis were made in the aftermarket and the major portion of our sale of plastic ski bottoms were made to one major customer, Yamaha Motor Co. Ltd, Snowmobile Division, of Japan ("Yamaha"). See "Description of Business - Competition", and "Description of Business - Marketing and Sales" herein.
During the period under discussion we sold to Yamaha one-half of its annual purchase of plastic snowmobile ski bottoms. These skis were manufactured for us by Poly-Hi Solidur. The other one-half of Yamaha's annual purchase of plastic snowmobile skis was purchased from PPD Industries, Inc.
We did not have a long term agreement with Yamaha covering sale of our ski bottoms to it. Our sales to this customer were negotiated in the spring of each year for delivery in the following autumn or winter. In January 2000, for the purpose of reducing the cost of our skis to a level competitive with the price of skis purchased by it from PPD Industries, Inc. and for other reasons known exclusively to it, Yamaha prevailed upon our company to forego, in the future, our direct sale of plastic snowmobile ski bottoms to it. Accordingly, beginning in the year 2000, pursuant to a Representation Agreement between our company and Poly-Hi Solidur signed in August of 1996 and
first implemented in January of 2000, and continuing to the date hereof, Poly-Hi Solidur manufactures plastic skis pursuant to design and specifications agreed upon by our company and Yamaha and Poly-Hi Solidur and sells those skis directly to Yamaha. We receive the payment of a commission of 10 percent of the proceeds of these sales. As a consequence of our having foregone direct sale of our plastic snowmobile ski bottoms to Yamaha and our acceptance of commission income on sales of plastic snowmobile ski bottoms by Poly-Hi Solidur to Yamaha, our gross revenues from operation have been substantially reduced. See "Financial Statements" and "Managements Discussion and Analysis of Financial Condition and Results of Operations" herein.
CURRENT OPERATIONS
Our Snowmobile Skis
We are principally engaged in assembling and selling in the North American aftermarket a fully configured plastic snowmobile ski which includes a plastic ski bottom in as many as ten bright colors, a shoe mount attached to the plastic ski and a wear bar fitted to the plastic ski bottom for turning of the ski which fully configured skis are ready for mounting on a snowmobile chassis in fully functioning condition. We produce these skis in six models for recreational, commercial and racing uses. Our skis are designed and manufactured for use on different terrains such as on established and groomed trails, racing courses and on open generally controlled terrain. Also, our skis are designed for use on varying surface conditions including packed snow trails, icy surfaces, powder snow, grass and, when adapted with wheels, on asphalt surfaces. See "Description of Business Product Development" herein.
Our plastic skis are manufactured for use on standard size snowmobiles and for mini-snow sleds, they are generally modular and can be mounted on any of the snowmobiles of the major manufacturers such as the Yamaha, Polaris, Arctic Cat and Ski-Doo snowmobiles.
The plastic ski bottoms, shoe mounts, wear bars and handles are all components of our fully configured snowmobile skis that are manufactured for us by outside manufacturers. We are not dependent on a single manufacturer for any of these component parts and we are not subject to a materially adverse disruption in our assembly and sale of our skis if any given manufacturer should be unable to furnish us with a particular component.
At the present time the major portion of our skis are sold through distributors and dealers and at retail in the so-called "aftermarket" to existing users of snowmobiles as replacements for those on snowmobiles as furnished by the manufacturers of snowmobiles, for worn or unsatisfactory skis, for use on particular terrain or snow conditions and for racing purposes.
Accessories
We provide our customers a series of high performance mount shoe kits manufactured by outside manufacturers to our design and specification for attachment to plastic skis for various snowmobile
models of major manufacturers of the Arctic Cat, Ski-Doo, Polaris and Yamaha snowmobiles. Some of our mount shoes fit all models of snowmobiles. The mount shoes we provide are designed so as to allow for positioning the plastic ski in a manner that suits performance of the plastic ski in selected terrain and snow conditions.
In addition, we offer our customers wear bars, the turning component of
fully assembled snowmobile skies, in a series of hardened high carbon steel
designed by us for durability and long wear with normal use and
manufactured for us by outside manufacturers. See "Description of Business
- Product Development" herein.
Our accessories include attachments to our plastic skis which permit adjustments to the tip of the skis in order to minimize or absorb the impact from harsh conditions of terrain. Also, included in the snowmobile accessories we provide our customers are: chassis scales for each ski and each rear suspension shock point to monitor proper weight distribution of a snowmobile; spindle alignment bars which fit all snowmobiles and are designed by us to regulate the camber angles and toe-in toe-out settings of plastic skis; a ski alignment kit which is used to position plastic skis in a proper alignment.
We provide a Chassis Rack for elevation and suspension of a snowmobile which provides access for maintenance, repair and adjustments to the operating components of a snowmobile.
Snowmobile Clothing
As a distributor for Tek-Rider, a clothing manufacturer, we sell a variety of protective clothing for snowmobile riders which consists of the Super Sport Tekvest, the Sport Tekvest, shoulder pads, the Tekvest Pro lite, SX Competition Pants, SX Competition Gloves, the Tekcape the SX and the XC Pullovers and the "Convertible" XC and Sno X Jackets.
LIMITED WARRANTY
We provide a one year limited warranty covering breakage due to defects in workmanship and/or material covering our Tunnelight(TM) ski.
PRODUCT DEVELOPMENT
The X2 Ski
Our President, Kevin W. Metheny, has designed and invented a plastic snowmobile ski for our company which we refer to as the X2. We believe this ski, when manufactured, will have characteristics that will be far superior to plastic snowmobile skis generally in use as of the date hereof. We believe these characteristics are patentable and our patent attorney is preparing a patent application therefor at the date hereof. No assurance can be given that a patent will be forthcoming.
In the event that a patent is issued covering the X2 ski, we do not have
the facilities in-house to
manufacture this ski. We estimate that to acquire such facilities would cost us approximately $700,000. No assurance can be given that we could obtain these funds from internally generated revenues, from vendor financing, lease-purchase arrangements, equity financing, bank financing, or otherwise. Also, no assurance can be given that any other commercial means such as licensing the production of this ski could be accomplished. Moreover, assuming that the X2 ski is produced by us no assurance can be given that such operation will be commercially successful. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" herein.
The Shaper Wear Bar
Our President, Kevin W. Metheny, has invented a wear bar which we refer to as the Shaper Wear Bar. This appliance attaches to the bottom of a plastic ski and functions to guide and turn that ski. A patent for the wear bar is pending. We propose to license the production and sale of the Shaper Wear Bar to an outside manufacturer. There can be no assurance that a patent will be issued or that we will be able to license production and sale of the Shaper Wear Bar and that such operations will be commercially successful. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" herein.
MARKETING AND SALES
General
During the year ended December 31, 1999 and in prior years the substantial portion of our sales of plastic ski bottoms were made directly to Yamaha Motor Co. Ltd. Snowmobile Division of Japan which generated the substantial portion of our revenues. Those plastic ski bottoms were manufactured for us by Poly-Hi Solidur. See "Description of Business Organization and History" and "Financial Statements" herein.
Beginning in the year 2000 to the date hereof we have been wholly engaged in selling fully configured plastic snowmobile skis which consist of ski bottoms, shoe mounts, wear bars and handles as well as each of those components separately and other related accessories in the so-called aftermarket in North America. The aftermarket is the market composed of consumers, directly or through distributors and dealers, who purchase plastic skis and accessories as replacements for their snowmobile skis or for particular use on different terrain, snow conditions or racing. All of these skis and accessories are manufactured for us by outside vendors.
Market Segments
Direct Sales to Consumers. During the three-years period ending on the date hereof, and in prior years, we followed a practice of advertising our products in magazines relevant to snowmobile users and distributing a catalog of our products to previous customers, dealers and distributors. During that period of time approximately 50 percent of our revenues were generated by sales of our products in this market segment.
Distributors and Dealers. During the aforesaid period, approximately 50 percent of our products were sold principally through wholesale distributors and to a lesser extent through retail dealers in snowmobiles and accessories. At the date hereof we have three sales representatives who represent us with retail dealers throughout North America. We propose to increase the number of our sales representatives and to substantially increase the sales of our products in this manner, but there is no assurance that we can do so. To the extent that we can expand our sales through dealers our gross revenues would significantly increase. See "Management's Discussion and Analysis of Financial Condition and Results of Operation" herein.
Marketing Events
During the three years ended at the date hereof, we have participated in approximately 20 trade shows each year where we displayed and sold our products. Approximately eight of those events were characterized as consumer shows generally held in the northern tier of the United States. We have an agreement with Leisure Features, Inc., a major sponsor of these trade shows, which provides for that firm to furnish us with five display booths for our products at these shows for a period of five years beginning in the year 2001. During the period from September 1, 2001 to the date hereof our sales to end-use customers at trade shows increased by 20 percent over the same period in the year 2000.
Also, during the aforementioned period we have participated annually in approximately 12 trade shows sponsored by distributors or dealers in snowmobiles and accessories where our products were put on display and sold. Some of these shows were sponsored by wholesale distributors, one of whom is Sports Unlimited which firm has been our major distributor. At these shows the sales we make are made through the sponsoring dealer or distributor.
We, also, display and sell our products at approximately 22 snowmobile racing events each year. During the three years period specified above we have sponsored teams for most of those racing events and at the date hereof we are sponsor for two racing teams.
Market Share
Based on data published by the International Association of Snowmobile Manufacturers ("IASM"), which, from our experience in the industry, we believe to be reliable, our share of the aftermarket sales of plastic snowmobile skis has been approximately 12-1/2 percent of that market for the three years period ended at the date hereof. See "Description of Business Competition" herein.
COMPETITION
General
Competition in both the manufacture and sale of plastic snowmobile skis in the North American market is intense and complex. Factors influencing this competition include the relative performance
of different skis, styling, fit and finish, useful life of skis, brand loyalty and price.
Competitive Companies
Manufacturers of the snowmobiles known as the: Yamaha, Polaris, Arctic Cat and Ski-Doo are the four major competitors in that industry. They are a major competitive force in the market for plastic ski bottoms which they purchase for mounting on their snowmobiles and for sale as replacement skis in the aftermarket from the four major manufacturers of plastic snowmobile skis: Poly-Hi Solidur of Fort Wayne, Indiana, PPD Industries of Sherbrooke, Quebec, Canada, and Plastic Specialties Mfg. of Hutchinson, Minnesota and Global Plastics of Minnesota. One of these manufacturers of plastic ski bottoms also sell their skis in the aftermarket. The manufacturers of the Yamaha, Polaris, Arctic Cat and Ski-Doo are also a significant competitive force in aftermarket sales of replacement plastic skis. In addition to our company, there are six other firms that sell plastic snowmobile skis in the aftermarket, which are: C & A Pro, Starting Line Products, Simmons, Cornoplast, V-Trac and Kimpex. See "Description of Business Marketing and Sales" herein.
Competitive Position of USI
Although we are not a dominant competitive force, we believe we are a significant force in the assembly, marketing and sales of plastic snowmobile skis and accessories in the North America aftermarket. During prior years when we were directly selling plastic ski bottoms to Yamaha Motor Co. Ltd., Snowmobile Division, of Japan ("Yamaha") we were in direct competition with PPD Industries, which firm sold to Yamaha one half of its annual purchase of snowmobile plastic ski bottoms and we sold the other one half of such purchases to Yamaha. The plastic ski bottoms we sold to Yamaha during the foregoing period were manufactured by Poly-Hi Solidur pursuant to our design and specification. See "Description of Business Organization and History" herein.
Our relationship with Poly-Hi Solidur and Yamaha is both complex and competitive by reason of our commission arrangement with Poly-Hi Solidur and Yamaha and because Poly-Hi Solidur sells so-called "factory" plastic ski bottoms to Yamaha not only for assembly on its snowmobiles but for its resale in the aftermarket for replacement plastic skis. We, also, sell certain models of our plastic ski bottoms and accessories directly to Yamaha Canada for resale in the aftermarket which plastic skis are manufactured to our design and specifications by and furnished to us by Poly-Hi Solidur. Poly-Hi Solidur also sells plastic ski bottoms to several of our direct competitors in the aftermarket.
Following our loss of direct sales of our plastic skis to Yamaha in January 2000, to the date hereof we have been principally engaged in assembling and selling ski bottoms, our fully configured plastic skis and accessories in the retail aftermarket, the ski bottoms therefor being manufactured for us by Poly-Hi Solidur. Our competitors in this aftermarket are the four major snowmobile manufacturers who sell replacement skis in that market, the four major manufacturers of plastic skis who also sell plastic skis to the six other firms with which we compete for sale of plastic snowmobile skis in the aftermarket. We are at a competitive disadvantage in respect of the pricing of our plastic skis in relation to the four major manufacturers of snowmobiles who purchase their plastic replacement ski
bottoms at a lesser price than we must pay for the plastic ski bottoms which we purchase for resale in the aftermarket. We are, also, at a competitive disadvantage with the four manufacturers of snowmobiles with respect to their distributor and dealer relations which are more extensive, numerous and established than are our distributor and dealer relations. We are, also, at a pricing disadvantage in relation to the four major manufacturers of plastic snowmobile skis with respect to their sales of skis to our competitors in the aftermarket. We believe we are on an equal competitive footing with respect to the six firms who, also, sell plastic snowmobile skis in the aftermarket and must purchase plastic ski bottoms from one of the manufacturers thereof. See "Description of Business - Marketing and Sales" herein.
The four manufacturers of snowmobiles and the four manufacturers of plastic ski bottoms have greater financial and other resources than have we.
Our Methods of Competition
With respect to the competitive factors identified above we endeavor:
(a) to offer skis at relatively high, mid-range and low prices which
correspond with the preferences of our customers,
(b) to have manufactured for us to or our design and specification
skis which satisfy different demands for performance such as for
general trail use, for difficult terrain, for different snow
conditions and for racing purposes,
(c) to provide a fully configured ski, that is, with its shoe mount,
wear bar and handle in modular form so that it can be mounted on all
models of snowmobiles,
(d) to offer skis in as many as ten bright colors with a fine fit and
finish intended to appeal to preferences of our customers for
physically attractive skis,
(e) to provide skis which have a useful life for as many as 6000
miles of travel as compared with the useful life of snowmobiles skis
generally in use of approximately 1100 to 1500 miles of travel,
(f) to provide skis of a quality superior to that with which
snowmobiles are equipped as delivered from the manufacturers.
(g) to exploit our ten years of providing snowmobile skis to Yamaha
and to the aftermarket and the consequent recognition of our brand
name "USI". See "Description of Business - Marketing and Sales"
herein.
GOVERNMENT REGULATION
Environmental Protection Laws and Regulations
The environmental laws and regulations of the federal government and the various states pertaining to air, water, noise pollution and hazardous materials do not directly effect our operations or the use of our products.
To the extent that environmental laws and regulations directly effect the manufacturers of snowmobiles so as to limit the volume of their production of snowmobiles and limit the use of snowmobiles by consumers there would be a corresponding limitation in the sales of our skis in the aftermarket. To the date hereof we have experienced no limiting effect on sales of our product as a direct or indirect effect of environmental laws or regulation.
Safety Regulations
Our operations are subject to the federal laws and regulations administered by the Occupational Safety and Health Administration and we are subject to inspection by that agency. We believe we are in compliance with those laws and regulations and to date there has been no complaint lodged against our company by that agency or similar agency of the State of Indiana or local government having jurisdiction over our operations.
The Snowmobile Safety and Certification Committee ("SSCC") of the ISMA has voluntarily adopted safety standards for the use of snowmobiles. These standards require testing and evaluation for safety of all models of snowmobile manufactured by members of the ISMA. Although we are not a member of the ISMA or the SSCC, all of our skis have been tested and evaluated for safety and have satisfied the standards of the SSCC.
Also, the Specialty Vehicle Institute of America is an association that promotes the safe and responsible use of specialty vehicles, including snowmobiles, throughout the United States. Although, we are not a member of this association, our skis conform with the standards and guidelines of this institute.
OUR EMPLOYEES
Other than executive personnel, we have five full time employees, two of whom are engaged in clerical and administrative services and three of whom are engaged in production activities. We are not a party to a collective bargaining agreement. See "Certain Relationships and Related Transactions" herein.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
GENERALLY
The following discussion and analysis should be read in conjunction with our financial statements and related notes included with this registration statement. This material should not be construed to imply that the matters discussed will necessarily continue, favorably or unfavorably, into the future or that any projection herein will necessarily or actually be the results of operations in the future. Our discussion and analysis herein is only a best present assessment by management of our company.
In most years following our inception in 1988, we have operated with a profit or with minimal losses. As a consequence of our loss of direct sales of plastic ski bottoms to Yamaha beginning in January of the year ended December 31, 2000 we have continued to experience substantial losses from operation. See "Description of Business Organization and History" herein.
RESULTS OF OPERATIONS
The following table shows, for the periods stated, major line items from our statements of income as a percentage of sales. The trends reflected in the table below may not be indicative of our future results of operations.
Year ended December 31, Ten Months Ended October 31,
(Audited) (Unaudited)
1999 2000 2000 2001
Sales $2,104,899 $919,751 $655,404 $518,757
Cost of Sales 76% 88% 86% 87%
Gross Profit 24% 12% 14% 13%
Commissions 0% 10% 12% 6%
Selling expense 12% 14% 13% 20%
Salaries and Related expenses 6% 11% 13% 16%
Office and Administration 3% 14% 15% 19%
Net Income (Loss) (-1%) (26%) (28%) (51%)
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COMPARISON OF YEARS ENDED DECEMBER 31, 1999 AND DECEMBER 31, 2000
Sales. Our sales decreased by 44 percent to $919,751 for the year ended December 31, 2000 from $2,104,899 for the year ended December 31, 1999. This materially adverse effect upon our results of operation was caused primarily by our loss of direct sales of ski bottoms to Yamaha. (See "Description of Business - Organization and History" herein.) This decrease in sales of ski bottoms was only partially offset by $92,679 in commission income on sales of skis in the year 2000 by Poly-Hi Solidur to Yamaha pursuant to our Representative Agreement with Poly-Hi Solidur.
We propose to increase our revenues from operation and, thereby, offset the loss of revenue from direct sale of ski bottoms to Yamaha by pursuing the following actions:
- Currently the major portion of our skis and accessories are sold through distributors in the aftermarket to dealers and end-use consumers. We are endeavoring to reduce this reliance on distributors by increasing our sales to dealers. In this regard, we have at the date hereof increased our staff by three sales representatives who represent us with dealers and are compensated by a small monthly advance and commission on sales to dealers. As our financial resources permit we will increase the number of such sales representatives. To the extent that our sales are made through dealers rather than through distributors, we anticipate
revenues on that portion of our sales will increase by approximately 35 percent. See "Description of Business - Marketing and Sales" herein.
- We propose to grant a license for the production and sale of our Shaper Wear Bars to an outside manufacturer, which we expect to become effective within approximately three-months time and which for the fiscal period to end December 31, 2002 will result in a significant increase in our revenues from operations. See "Description of Business Product Development" herein.
- We propose to undertake either the manufacture and sale principally to manufacturers of snowmobiles of our X2 plastic ski in-house or to contract for its manufacture by an outside vendor in circumstances where we own the tooling necessary for manufacture of our ski or by a joint venture arrangement with a manufacturer. By undertaking the manufacture of the X2 ski in either of these manners we will be able to market this ski directly to manufacturers of snowmobiles and in the aftermarket at prices well below the price of our competitors, and thereby substantially replace and go beyond our prior revenues from direct sales of ski bottoms to Yamaha. See "Description of Business - Product Development" herein.
Cost of Sales. Our cost of sales as a percentage of sales increased by 12 percent for the year 2000 over the year 1999 as reflected in costs of sales of $1,591,929 and $806,200, respectively.
We attribute this percentage increase to our costs of labor remaining at equivalent levels for the years 1999 and 2000 while, in the year 2000, sales fell off by 44 percent as a consequence of the loss of direct sales of ski bottoms to Yamaha. If we are able to effect a licensing agreement for the production of our Shaper Wear Bar and the manufacture of our X2 ski we estimate that the cost of sales as a percentage of sales will decline to approximately 25 percent during the period to end December 31, 2003. See "Description of Business - Product Development" herein.
Gross Profit. Our gross profit decreased by 50 percent in the year 2000 from the year 1999. As a percentage of sales, gross profit declined to 12 percent for the year 2000 from 24 percent for the year 1999. We attribute this decline to be primarily due to the loss of our direct sale of ski bottoms to Yamaha in the year 2000. If we are able to effect production of our Shaper Wear Bar under a licensing agreement and to commence manufacture of our X2 ski we expect our gross profit as a percentage of sales will increase to a percentage in the range of 50 percent to 25 percent.
Commissions. We had no commission income in the year 1999. Our first commission income for the year 2000 was $92,679 which was approximately 10 percent of sales. We estimate that our commission income will not vary materially in dollar amount, but will, in the future, become immaterial as a percentage of sales as we undertake production of our Shaper Wear Bar and our X2 skis and as our dealership program grows.
Salaries and Related Expenses. The increase in salaries and related expenses as a percentage of sales to 11 percent for the year 2000 from 6 percent for the year 1999 we attribute primarily to the
loss of our direct sales of skis to Yamaha in the year 2000.
Office and Administration. As a percentage of sales our office and administrative expenses increased to 14 percent for the year 2000 from three percent for the year 1999 and by the dollar amount of $54,068.
Selling Expense. As a percentage of sales our selling expense increased to 14 percent for the year ended December 31, 2000 from 12 percent for the year ended December 31, 1999.
Net Income (Loss). As a percentage of sales our loss of (26) percent for the year 2000 as compared with our loss of (-1) percent for the year 1999 we attribute entirely to the loss of our direct sale of ski bottoms to Yamaha in the year 2000. We expect this circumstance and trend to continue until we generate revenues from the production of our Shaper Wear Bar, the manufacture and sale of our X2 ski and from expansion of our dealership program.
COMPARISON OF TEN MONTHS ENDED OCTOBER 31, 2000 AND OCTOBER 31, 2001
Sales. Our sales for the period ended October 31, 2001 decreased sharply as compared with sales for the period ended October 31, 2000 amounting to a decrease of $136,647 and a decrease of 21 percent. This is a continuation of the trend which developed in the year ended December 31, 2000 and which we expect will continue until such time as we are able to manufacture and sell our X2 ski and license production of our Shaper Wear Bar.
During the period beginning September 1, 2001 and ended at the date hereof our sales derived from five trade shows were increased by $18,000 or 31 percent compared with the same period in the year 2000. See "Description of Business - Product Development" herein.
Cost of Sales. Our cost of sales as a percentage of sales increased only marginally for the ten months ended October 31, 2001 as compared with the ten months period ended October 31, 2000.
Gross Profit. Our gross profit for the ten months ended October 31, 2001 as compared with the ten months ended October 31, 2000 decreased by $27,741, a decrease of 30 percent.
Commissions. We had commission income of $76,735 for the ten months ended October 31, 2000 and commission income of $33,393 for the ten months ended October 31, 2001, a decrease of 56 percent.
Selling Expense. As a percentage of sales our selling expense for the ten months period ended October 31, 2001 increased by seven percent over the ten months period ended October 31, 2000.
Salaries and Related Expenses. These expenses increased by three percent
for the ten months period ended October 31, 2001, as compared with the ten
months period ended October 31, 2000.
Office and Administration. As a percentage of sales these expenses increased by four percent in the ten months period ended October 31, 2001 as compared with the ten months period ended October 31, 2000.
Net Income (Loss). As a percentage of sales our net loss increased to 47 percent for the period ended October 31, 2001 amounting to an increase of 60 percent as compared with the ten months period ended October 31, 2000.
Liquidity and Capital Resources
In prior years through the year ended December 31, 1999, our capital requirements were provided by our internal revenues, vendor financing and commercial loans, principally bank loans secured by our inventory. Beginning in the year ended December 31, 2000 and continuing through the ten months period ended October 31, 2001 internal revenues, vendor financing and commercial loans have been insufficient to sustain our operations. During the period ended December 31, 2000 and through to the period ended November 7, 2001 our need for capital funds was provided by the proceeds from the private placement of our shares described in this registration statement amounting to a total of $374,500 which amount was employed as working capital.
For the thirteen month period to end December 31, 2002, we anticipate our need for capital funds will be sufficient and provided by:
- Internally generated revenues from
(a) a license agreement or joint venture agreement for the production of our Shaper Wear Bar,
(b) the production of our X2 ski through:
(i) an arrangement where we will own the necessary tooling
equipment and molding of the X2 would be performed by an outside
manufacturer, which arrangement would include our financing of
the tooling equipment by a contribution of vendor financing and
internally generated revenue;
(ii) our joint venture with an outside manufacturer under terms
providing for the costs of manufacture of the X2 ski to be borne
by our joint venture partner;
(iii) our internal manufacture and sale of the X2 ski in which
circumstance we would require approximately $700,000 to undertake
manufacture of the X2 ski in-house. We would propose obtaining
that sum of money through a public offering of our common stock.
To a lesser extent we propose to achieve an increase in internally generated revenues from (a) increased sales in the aftermarket to dealers and (b) increased sales to end-use customers.
We can give no assurances that our capital requirements for the thirteen
months to end December 31,
2002 will be met by any one or more of the activities discussed immediately above. If our capital needs are not provided from such activities there would be a materially adverse effect on our capital requirements, liquidity and results of operations.
Inflation
We do not believe that inflation, which has been limited for our entire operating history, has had a material effect to date on our net sales or results of operations.
Seasons/Weather
Our business is of its inherent nature related to the winter season. During the period when we were making direct sales of our skis to Yamaha, these sales were made in the spring of each year and were not affected by snowfall in the ensuing winter season. During the three-years period to end December 31, 2001, there have been periods of light snow in regions of North America where we customarily sell our skis in the aftermarket. We have attempted to accommodate to this circumstance by concentrating our aftermarket sales efforts in those regions where there has been a greater snowfall. Nevertheless, the absence of snow or light snow in some regions has had an adverse effect upon our revenues and results of operations.
Item 3. Description of Property.
Our Facilities
We are headquartered in Lafayette, Indiana, where we lease approximately 8500 square feet of office space, under a lease on a month to month basis at a monthly costs of $2100. We find that our current facilities are adequate for the level of operations we now conduct. We believe adequate space for expansion is available in the vicinity at rates comparable to our current rental expense. With growth we will add equipment, hardware and software as well as furnishings for an expanded staff and we will also require insurance for coverage of any added property. We currently do not have insurance coverage on our limited amount of equipment; however, we anticipate insurance coverage for any new equipment purchases. We carry general liability insurance in an amount we believe adequate with Henriott Insurance Company. See "Certain Relationships and Related Transactions" herein.
Item 4. Share Ownership of Management and Certain Beneficial Owners
The following table sets forth certain information concerning the Common Share ownership in our company as of November 30, 2001, of each person who is known to us to be the beneficial owner of more than five percent of our Common Shares, by each of our executive officers and directors; and by executive officers and directors as a group. This information was furnished to us by the persons identified and we are informed that each of these persons has the sole voting and investment power over the shares specified as beneficially owned by each of these persons.
Name and Address Number of Percent of of Beneficial Owner Shares Class Kevin W. Metheny 4,500,000 52% 2119 N. 15th St. Lafayette, IN Rick D. Thomas 1,500,000 17% 2119 N. 15th St. Lafayette, IN Martin J. Maasen 1,500,000 17% 2119 N. 15th St. Lafayette, IN Officers and Directors, as a group 7,500,000 86% |
Item 5. Directors, Executive Officers, Promoters and Control Persons.
The following table sets forth the names and addresses of our current directors and executive officers, their ages and the date when each director commenced holding that position.
Name Position Age Director Since Kevin W. Metheny President 2119 N 15th St Chief Executive Officer 48 12-6-1988 Lafayette, IN 47904 Rick D. Thomas Secretary/Treasurer 2119 N. 15th St. Director 42 7-26-2000 Lafayette, IN 47904 Martin J. Maassen Chairman of Board 2119 N. 15th St. of Directors 58 7-26-2000 Lafayette, IN 47904 |
Set forth below is certain information concerning our officers and directors.
Kevin W. Metheny
Mr. Metheny was awarded a Bachelor of Arts degree in 1973 by Bismark Jr. College, Bismark, North Dakota, a Bachelor of Arts degree in 1977 by Purdue University, West Lafayette, Indiana, with a major in Industrial Design, a minor in Mechanical Engineering and a Master of Arts degree in 1981
by Purdue University with a major in Industrial Design.
During the years 1981 to 1988, Mr. Metheny was the President and sole
shareholder of Design Dimensions International Inc., an Indiana
corporation. That corporation was engaged in industrial design consulting
and product modeling and construction and among its major clients were:
Kimball International, Sealed Power Corp. and Mac Tools.
Mr. Metheny founded our corporation in 1988 and has acted as its President and Chief Executive Officer from that date to the date hereof. His duties, also, include the invention, design and patent of our principal products.
Rick D. Thomas
While serving in the United States Army in the Army Medical Department, Mr. Thomas was awarded an Associate of Arts degree by Craighton University, Omaha, Nebraska and worked as a Radiological Technologist practicing at Ft. Sam Houston, San Antonio, Texas.
Following his honorable discharge from the United States Army, Mr. Thomas returned to Indianapolis where he worked as a radiology technician at Riley Children's Hospital and completed training as an Auto Service Technician. From the year 1987 to the date hereof Mr. Thomas has been engaged in the business of owning and operating a chain of eight automotive repair business and gasoline service stations. He is currently the owner of the Fourteenth Street Auto Care and Repair Company including a gasoline station.
In addition to his duties as Secretary and Treasurer of our company, Mr. Thomas represents our company in negotiations with our vendors, dealers and distributors, with snowmobile industry associations and administers our sponsorship of snowmobile racing teams.
Martin J. Maassen, M.D.
Doctor Maassen was awarded a Bachelor of Arts degree by Indiana University, Bloomington, Indiana in 1972. In 1974 he was awarded a Doctor of Internal Medicine degree from Indiana University. He has, heretofore, served as a staff Physician in the Emergency Department of Jackson County, Deaconess, Union and St. Elizabeth Hospitals in Indiana. From 1984 to the present time he has served as a staff Physician in the Emergency Department of the St. Elizabeth Hospital, in Lafayette, Indiana. He is an expert in computer technologies and the application thereof in the field of medicine.
Item 6. Executive Compensation.
Compensation of Executive Officers
Mr. Kevin W. Metheny is our only executive officer currently receiving any remuneration for his services. His only compensation is an annual salary of $104,000 which he receives on a monthly
basis. He is reimbursed for expenses attendant to the performance of his duties as President.
Compensation of Directors
Members of our Board of Directors receive no compensation for their service as directors. They are reimbursed for expenses attendant to the performance of their duties as directors.
Item 7. Certain Relationships and Related Transactions.
Pamela Metheny, the wife of our President Kevin W. Metheny, is employed by our company as a secretary/office administrator. Her compensation is fixed at a level commensurate with the compensation afforded in the community of our operations for services of a similar nature.
The registrant occupies the premises described herein under Item 3. Description of Property pursuant to an arrangement with Rick D. Thomas, a director and officer of the registrant and his wife, Ann, whereby the registrant pays the monthly amount due on a loan and mortgage on these premises given by Mr. Thomas and his wife.
Item 8. Description of Securities.
DESCRIPTION OF OUR CAPITAL STOCK
The following summary description of our capital stock is qualified in its entirety by reference to our certificate of incorporation and bylaws, copies of which are available for examination at our offices at 2119 North 15th Street, Lafayette, Indiana 47049. Our authorized capital stock consists of 50,000,000 Common Shares having no par value per share of which at October 31, 2001, there were 8,603,300 shares issued and outstanding.
Common Shares
The holders of Common Shares are entitled to one vote per share on all matters to be voted upon by all holders of Common Shares. They are entitled to receive their proportion of any dividends as may be declared from time to time by the board of directors out of legally available funds. The holders of Common Shares are entitled to share proportionately in all assets remaining after payment of our liabilities in the event of the liquidation, dissolution or winding up of our company. The holders of Common Shares have no preemptive or conversion rights. There are no redemption or sinking fund provisions applicable to the Common Shares. All of the Common Shares now outstanding are fully paid and nonassessable.
Transfer agent
The transfer agent for the securities of our company is Interwest Transfer
Company of Salt Lake City, Utah.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and Other Shareholders Matters.
No Established Market
Our shares of Common Stock at the date hereof are not traded on any exchange or in the over-the-counter market.
As of the date hereof there is no established market for our shares of Common
Stock. Also, at that date:
a. there are no shares of our Common Stock which are subject to
options, warrants nor are there any outstanding securities of our
company which are convertible into shares of our Common Stock,
b. there are no shares of our Common Stock eligible for sale under Rule 144 and there are no shares of our Common Stock which our company has agreed to register for sale
c. there are no shares of our Common Stock that are being or proposed to be publicly offered for sale.
Dividend Policy
During the three-years period ended at the date hereof our company has not declared nor distributed any dividends. We do not anticipate that our company will declare and distribute any dividends in the foreseeable future.
Item 2. Legal Proceedings.
To the date hereof there have been no legal claims against us relating to injury or death occasioned by the use of our skis or any of the other products we market. We are not currently a party plaintiff or defendant to any material legal proceeding.
We maintain product liability insurance of $1,000,000 in the aggregate which does not require any self-insured retention which is per occurrence coverage for accidents which may occur in the policy year irrespective of the date when a claim may be made. We believe we have adequate product liability insurance coverage.
Item 3. Changes in and Disagreements with Accountants.
We have not changed auditors or accountants during the three-years period
ended at the date hereof
nor have we had any disagreements with our auditors and accountants during that period.
Item 4. Recent Sales of Unregistered Securities.
During the period beginning July 26, 2000 and ended November 7, 2001 the registrant sold shares of its Common Stock as follows:
A. In connection with a reorganization of its management, including an increase in the number of directors from one to five members, 8,350,000 shares of registrant's Common Stock were issued as of July 26, 2000 to the following individuals:
Name and
Address No. of Shares Consideration
Kevin W. Metheny 4,500,000 exchange for 450 shs.*
2119 N. 15th St.
Lafayette, IN
Rick D. Thomas 1,500,000 agreement to act as Director
2119 N. 15th St. and Secretary
Lafayette, IN
Martin J. Maassen 1,500,000 agreement to act as Director
2119 N. 15th St. and Chairman of the Board
Lafayette, IN
Gunther Than 425,000 agreement to act as Director
2119 N. 15th St. and provide financial advice
Lafayette, IN
Thomas Cloutier 425,000 agreement to act as Director
2119 N. 15th St. and provide financial advice
Lafayette, IN
---------
Total Shares 8,350,000 shs.
----------
|
* These shares were issued to effect a forward split in authorized Common Stock from 1000 shares to 50,000,000 authorized on April 15, 2000 by Kevin W. Metheny the sole shareholder who held on that date 450 shares.
The registrant claims that issue of the foregoing 8,350,000 shares of Common
Stock was exempted from registration under Section 5 of the Securities Act of
1933 under Section 4(2) of that Act as
transactions by an issuer not involving any public offering and consistent with the principles set forth in Securities & Exchange Commission v. Ralston Purina Co. 346 U.S. 119 (June 8, 1953) where each of the above identified individuals had available to him all the information that would have been provided to him by registration of the transaction, could fend for himself and did not require the protection of registration under that act. There was no underwriting commission or other form of compensation paid to any person for the issue of any of the foregoing shares.
B. Beginning on September 22, 2000 and ended on November 7, 2001 the registrant made private placement transactions of its Common Stock exempt from registration under Section 5 of the Securities Act of 1933 pursuant to Section 4(2) of that Act as transactions by an issuer not involving any public offering and as provided for under Rule 506 of Regulation D of the Securities and Exchange Commission to the following individuals:
Accredited Investors
Name and Address No. of Shares Consideration
Michael Bagnoli 20,000 $ 25,000
40 Redwood Court
Lafayette, IN 47905
John C. McArthur 10,000 12,500
999 Greenbay Road
Winnetka, IL 60091
David M. Kersey 100,000 125,000
10557 E U.S. 24
Idaville, IN 47950
Donald G. Kesner 20,000 25,000
1601 Stanforth Ave
Lafayette, IN 47905
Derek and Sybil Shareville 12,000 15,000
6700 Indian Bluff
Battlegound, IN 47920
Alan R. Koester 20,000 25,000
2533 Rainbow Drive
Lafayette, IN 47904
20
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Tom Anderson d/b/a 20,000 25,000
Leisure Features Agreed to provide
2918 Progress Road Promotional services
Madison, WI 53716
Richard Godlewski 20,000 25,000
P. O. Box 6453 Agreed to provide
Lafayette, IN 47903 Legal services
------- --------
Total Accredited Investors 222,000 shs. $277,500
======= ========
|
Sophisticated Investors(1)
Name and Address No. of Shares Consideration
Casey Pickerill 1,600 $ 2,000
3005 Greenbush Street
Lafayette, IN 47904
Cindy M. Alford 4,000 5,000
67 Walnut St.
Lafayette, IN 47905
John and Deborah Cusack 10,000 12,500
3521 S. 9th Street
Lafayette, IN 47909
Ellen Thompson (2) 42,000 52,500
1600, 147th Ave S.W.
Minot, ND 58701
Christine Randolph 8,000 10,000
25 N. 21st Street
Lafayette, IN
Eric or Leiloni Olafson (3) 8,000 10,000
21 N. 9th Street
Minot, ND 58701
Bryan S. and Jill A. Thompson (4) 12,000 15,000
7657 12th Avenue N
Upham, ND 58789
21
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Michael L. Lowe 16,000 20,000
601 Main
Monticello, IN 47960
------- --------
Total Sophisticated Investors 101,600 shs. $127,000
======= ========
|
(2) Ellen Thompson is a sister of Kevin W. Metheny, President of the registrant.
(3) Leiloni Olafson is a niece of Kevin W. Metheny, President of the registrant.
(4) Bryan S. Thompson is a nephew of Kevin W. Metheny, President of the registrant.
Item 5. Indemnification of Directors and Officers.
Our By-Laws provide for indemnification of our officers and directors against liabilities and expenses incurred in connection with litigation or proceedings against them arising out of their actions related to the affairs of our company, except in certain cases such as short swing profits in improper purchase and sale or sale and purchase of securities of our company, or where such liabilities and expenses are reimbursed by insurance proceeds or in case of an illegal profit or advantage is obtained by such officer or director. We are informed that the Securities and Exchange Commission has taken the position that indemnification of officers and directors, in certain cases, is against public policy.
PART F/S
Financial Statements.
The following financial statements are included in this registration statement.
Description Page
Report of Independent Auditors dated May 16, 2001 F-1
Exhibit "A" Balance Sheets as of the years ended
December 31, 1999 and 2000 and October 31,
2000 and 2001 (unaudited) F-2
22
|
Exhibit "B" Statements of Income for the years ended
December 31, 1999 and 2000 and for the ten
months ended October 31, 2000 and 2001
(unaudited) F-3
Exhibit "C" Statements of Cash Flow for the years
ended December 31, 1999 and 2000 and for
the ten months period ended October 31, 2000
and 2001 (unaudited) F-4
Exhibit "D" Statements of Changes in Stockholders'
Equity for the years ended December 31, 1999
and 2000 and for the ten months period ended
October 31, 2000 and 2001 (unaudited) F-5
Notes to Financial Statements F-6
|
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Ultimate Sports, Inc.
We have audited the accompanying balance sheets of Ultimate Sports, Inc. as of December 31, 2000 and 1999 the related statements of income, changes in 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 audit.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Ultimate Sports, Inc. as of December 31, 2000 and 1999, and the results of its operations, changes in its stockholders' equity and cash flows for the years then ended in conformity with generally accepted accounting principles.
/s/ Davis, Sita & Company, P.A.
Davis, Sita & Company, P.A.
May 16, 2001
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EXHIBIT "A"
ULTIMATE SPORTS, INC.
BALANCE SHEETS
DECEMBER 31, 1999 AND 2000 AND OCTOBER 31, 2000 AND 2001 (unaudited)
ASSETS
December 31, October 31,
1999 2000 2000 2001
(unaudited)
CURRENT ASSETS:
Cash $ 22,032 $ 26,400 $ 21,724 $ 2,823
Accounts receivable 113,494 174,774 81,643 120,357
Inventory 604,465 516,215 553,970 419,603
Prepaid income taxes 7,119 7,119 7,119 7,119
Prepaid lease 2,920 3,627 3,627 3,627
Deferred tax asset 1,500 85,500 85,500 85,500
-------- -------- -------- --------
Total current assets 751,530 813,635 753,583 639,029
-------- -------- -------- --------
FIXED ASSETS:
Equipment and vehicles 321,614 349,819 340,089 356,942
Less accumulated depreciation (268,737) (278,239) (278,239) (297,190)
-------- -------- -------- --------
Cost less depreciation 52,877 71,580 61,850 59,752
-------- -------- -------- --------
TOTAL ASSETS $ 804,407 $ 885,215 $ 815,433 $ 698,781
======== ======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and
accrued expense $ 274,198 $ 403,208 $ 278,487 $ 247,469
Loan from shareholders - 38,148 38,148 31,075
Notes payable 344,407 74,043 - 60,319
-------- -------- -------- --------
Total current liabilities 618,605 515,399 316,635 338,863
LONG-TERM LIABILITIES:
Notes payable 25,217 299,736 385,504 298,229
-------- -------- -------- --------
Total liabilities 643,822 815,135 702,139 637,092
STOCKHOLDERS' EQUITY:
Common stock, no par value
1,000 shares authorized,
450 shares issued 19,700 - - -
50,000,000 shares authorized,
8,388,000 shares issued - - 67,200 -
8,404,000 shares issued - 87,200 - -
8,603,300 shares issued - - - 336,700
Retained earnings (deficit) 140,885 (17,120) 46,094 (275,011)
-------- -------- -------- --------
Total stockholders' equity 160,585 70,080 113,294 61,689
-------- -------- -------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS'EQUITY $ 804,407 $ 885,215 $ 815,433 $ 698,781
======== ======== ======== ========
|
See Accompanying Notes
EXHIBIT "B"
ULTIMATE SPORTS, INC.
STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 2000 AND
THE TEN MONTHS ENDED OCTOBER 31, 2000 AND 2001 (unaudited)
December 31, October 31,
1999 2000 2000 2001
(unaudited)
REVENUE:
Sales $ 2,104,899 $ 919,751 $ 655,404 $ 518,757
Less cost of sales 1,591,929 806,200 562,802 453,896
---------- ---------- ---------- ----------
Gross profit 512,970 113,551 92,602 64,861
Commissions - 92,679 76,735 33,393
---------- ---------- ---------- ----------
Total income 512,970 206,230 169,337 98,254
EXPENSES:
Salaries and related expenses 126,245 98,567 84,830 85,419
Office and administration 72,864 126,932 96,717 98,708
Selling expenses 248,045 128,479 83,434 101,682
Interest expense 33,842 43,225 37,914 32,969
Depreciation 42,581 25,300 25,300 23,658
Rent 7,114 25,732 21,433 22,728
Total expenses 530,691 448,235 349,628 365,164
---------- ---------- ---------- ----------
Net loss (17,721) (242,005) (180,291) (266,910)
Gain on sale of assets 5,351 - - 9,019
---------- ---------- ---------- ----------
Net loss (12,370) (242,005) (180,291) (257,891)
Income tax benefit 1,500 84,000 85,500 -
---------- ---------- ---------- ----------
Net loss for the periods $ (10,870) $ (158,005) $ (94,791) $ (257,891)
========== ========== ========== ==========
|
See Accompanying Notes
EXHIBIT "C"
ULTIMATE SPORTS, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS MONTHS ENDED DECEMBER 31, 1999 AND 2000 AND
THE TEN MONTHS ENDED OCTOBER 31, 2000 AND 2001 (unaudited)
December 31, October 31,
1999 2000 2000 2001
(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss for the periods - Exhibit "B" $ (10,870) $ (158,005) $ (94,791) $ (257,891)
--------- --------- --------- ---------
Adjustments to reconcile net loss
with net cash used in operations:
Depreciation 42,581 25,300 25,300 23,658
Gain on sales of assets (5,531) - - (9,019)
Changes in assets and liabilities:
Accounts receivable (14,443) (61,280) 31,851 54,417
Inventory 5,218 88,250 50,495 96,612
Prepaid expense (2,920) (707) (707) -
Income tax receivable (3,715) - - -
Deferred tax asset (1,500) (84,000) (84,000) -
Accounts payable and accrued expenses $ (95,581) $ 129,010 $ 4,289 $ (155,739)
--------- --------- --------- ---------
Net cash used in operations (86,761) (61,432) (67,563) (247,962)
--------- --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment (12,841) (44,003) (34,273) (11,830)
Proceeds from sales of equipment 8,000 - - 9,019
--------- --------- --------- ---------
Net cash used in investing activities (4,841) (44,003) (34,273) (2,811)
--------- --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Loan (to) from shareholders (1,752) 38,148 38,148 (7,073)
Notes payable (net) 84,377 4,155 15,880 (15,231)
Sale of common stock - 67,500 47,500 249,500
--------- --------- --------- ---------
Net cash provided by financing
activities 82,625 109,803 101,528 227,196
--------- --------- --------- ---------
Net increase (decrease) in cash (8,977) 4,368 (308) (23,577)
Cash, beginning of year 31,009 22,032 22,032 26,400
--------- --------- --------- ---------
Cash, end of year $ 22,032 $ 26,400 $ 21,724 $ 2,823
========= ========= ========= =========
OTHER DISCLOSURES:
Interest paid $ 33,842 $ 43,225 $ 37,914 $ 32,969
========= ========= ========= =========
|
See Accompanying Notes
EXHIBIT "D"
ULTIMATE SPORTS, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 2000 AND
THE TEN MONTHS ENDED OCTOBER 31, 2000 AND 2001 (unaudited)
Total
Common Retained Stockholders'
Stock Earnings Equity
Balances, at
January 1, 1999 $ 19,700 $ 151,755 $ 171,455
Net income (loss) - (10,870) (10,870)
--------- --------- ---------
Balances at
December 31, 1999 19,700 140,885 160,585
Issuance of common stock 47,500 - 47,500
Net income (loss) - (94,791) (94,791)
--------- --------- ---------
Balances, at
October 31, 2000 (unaudited) 67,200 46,094 113,294
Issuance of common stock 20,000 - 20,000
Net income (loss) - (63,214) (63,214)
--------- --------- ---------
Balances, at
December 31, 2000 87,200 (17,120) 70,080
Issuance of common stock 249,500 - 249,500
Net income (loss) - (257,891) (257,891)
--------- --------- ---------
Balances, at
October 31, 2001 (unaudited) $ 336,700 $ (275,011) $ 61,689
========= ========= =========
|
See Accompanying Notes
ULTIMATE SPORTS, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 2000 AND OCTOBER 31, 2000 AND 2001 (unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Ultimate Sports, Inc. ("The Company") is an Indiana corporation organized on December 6, 1988. The Company is engaged in the business of designing and assembling snowmobile skis. The Company has offices in West Lafayette, Indiana.
Accounting Year
The Company has elected a calendar accounting period beginning on January 1 and ending December 31 each year.
Method of Accounting
The financial statements of Ultimate Sports, Inc. have been prepared on the accrual basis of accounting. Under this method, certain revenues are recognized when earned, and certain expenses and purchases of assets are recognized when the obligation incurred.
Management's Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Accounts Receivable
Management considers all accounts receivable at December 31, 2000 and 1999 to be collectible.
Property and Equipment
Property and equipment are stated at cost. Depreciation is computed under accelerated method with useful lives ranging from 5 to 7 years. Expenditures for major renewals and betterments which extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred.
Inventory
Inventories are stated at the lower of cost or market. Substantially all inventory is pledged as collateral on bank loans.
ULTIMATE SPORTS, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 2000 AND OCTOBER 31, 2000 AND 2001 (unaudited)
NOTE 2 - NOTES PAYABLE
The following is a summary of notes payable as of December 31, 1999 and 2000
and October 31, 2000 and 2001:
December 31, October 31,
1999 2000 2000 2001
(unaudited)
Note payable to The Farmers
State Bank, payable $6,513
per month which includes
interest at 12% per annum.
Secured by accounts receivable,
inventory and equipment. $ - $ 278,994 $ 288,087 $ 286,099
Note payable to The Farmers
State Bank, interest at 10%,
payable June 1, 2000.
Secured by the Company's
assets and personal guarantees
of the stockholders. 25,000 - - -
Note payable to The Farmers
State Bank, interest at 10%
payable March 1, 2003.
Secured by the Company's
assets and personal guarantees
of the stockholders. 198,335 - - -
Line of credit loan from
SunTrust Credit, up to
$50,000, payable in monthly
installments of $1,466,
which includes interest at prime
plus 4% (13.5% at 12/31/2000).
The loan is unsecured. - 45,382 46,309 37,005
Secured installment loans for
purchases of equipment at
various monthly payments with
interest at 7%-10%. 46,288 49,406 51,108 35,444
-------- -------- -------- --------
Total $ 369,623 $ 373,779 $ 385,504 $ 358,548
======== ======== ======== ========
|
Loan maturities for each of the five years following December 31, 2000 as follows:
2001 $ 74,043
2002 77,219
2003 87,057
2004 83,168
2005 52,292
--------
$ 373,779
|
ULTIMATE SPORTS, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 2000 AND OCTOBER 31, 2000 AND 2001 (unaudited)
NOTE 3 - LOAN FROM SHAREHOLDERS
During 2000, the founder shareholder advanced funds to the Company. The loans are due on demand, without interest and are unsecured.
NOTE 4 - INCOME TAXES
The Company is subject to Federal and Sate income taxes on its earnings.
Since the Company has a net loss on its financial statements of $12,370 in 1999,
$242,005 in 2000, there is no current income tax liability reflected on the
financial statements.
Information relative to income taxes:
December 31,
1999 2000
Net loss per financial statements $ 12,370 $ 242,005
Differences due primarily to
non-deductible expenses 4,060 2,142
-------- --------
Net loss-income tax basis $ 8,310 $ 239,863
======== ========
Calculation of deferred tax asset:
Estimated income tax benefit
derived from carryback and
carryforward of net operating
losses $ 1,500 $ 84,000
======== ========
Estimated amount recoverable
from carryback of net operating
losses to prior years taxable
income in accordance with income
tax regulations $ 1,500 $ 12,000
Estimated recoverable amount
which is dependent on future
taxable income - 72,000
-------- --------
Total 1,500 84,000
Add prior year deferred tax asset - 1,500
-------- --------
Total deferred tax asset $ - $ 85,500
======== ========
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ULTIMATE SPORTS, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 2000 AND OCTOBER 31, 2000 AND 2001 (unaudited)
Although the Company has realized a net operating loss for the year ended December 31, 2000, the deferred tax asset has been recognized because the Company has operated at a profit for most of its existence and management has identified the reasons for its current loss and has taken constructive steps to bring the Company back to a profitable status.
NOTE 5 - MAJOR CUSTOMER
During 2000 the Company entered into a representation agreement with Poly Hi Solidur. Under the terms of the agreement the Company would no longer sell its products directly to Yamaha Snowmobile division, but instead would be paid a commission by Poly Hi for sales that the Company arranges between Poly Hi and Yamaha. As a result of this agreement, the Company was paid $92,679 for commission in 2000, which represents a significant portion of its total income.
PART III
Item 1. and 2. Index to Exhibits and Description of Exhibits.
Exhibit No. Description Location
2.1 Articles of Incorporation as amended Attached
2.2 Current By-Laws Attached
3.1 Form of Common Stock Certificate Attached
6.1 Line of Credit with the Farmers State Bank
Dated May 4, 2001 Attached
6.2 Promissory Note to Farmers State Bank
Dated July 11, 2001 Attached
6.3 Agreement regarding Trade Shows with
Leisure Features
Dated September 28, 2001 Attached
6.4 Agreement with Poly-Hi Solidur providing
for commission to registrant on sales of
skis sold by Poly-Hi Solidur to Yamaha
(to be furnished by amendment)
6.5 Agreement between registrant and Rick D. and
Ann Thomas covering registrant's occupation of
its facilities (to be furnished by amendment)
23.1 Consent of auditor Attached
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SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the registrant caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.
Ultimate Sports, Inc.
Martin J. Maassen, M.D.
By: /s/ Martin J. Maassen
Signature
Chairman of the Board
Title
Date: December 20, 2001
|
Rick D. Thomas
By: /s/ Rick D. Thomas
Signature
Secretary
Title
Date: December 20, 2001
|
EXHIBIT 2.1
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
CERTIFICATE OF INCORPORATION
OF
ULTIMATE SPORTS, INC.
I, EVAN BAYH, Secretary of State of Indiana, hereby certify that Articles of Incorporation of the above corporation, have been presented to me at my office accompanied by the fees prescribed by law; that I have found such Articles conform to law; all as prescribed by the provisions of the
Indiana Business Corporation Law,
as amended.
NOW, THEREFORE, I hereby issue to such Corporation this Certificate of Incorporation, and further certify that its corporate existence will begin December 06, 1988.
In Witness Whereof, I have hereunto set my hand and affixed the seal of the State of Indiana, at the City of Indianapolis, this Sixth day of December, 1988
/s/ Evan Bayh EVAN BAYH, Secretary of State By /s/ Deputy |
ARTICLES OF INCORPORATION Provided by: EVAN BAYH
State Form 4159 (R5/1-88) Secretary of State
Room 155, State House
Indianapolis, Indiana 46204
(317) 232-6576
Indiana Code 23-1-21-2
FILING FEE: $90.00
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INSTRUCTIONS: Use 8 1/2 x 11 inch white paper for inserts Filing requirements - Present original and one copy to the address in the upper right corner of this form
ARTICLES OF INCORPORATION OF
(Indicate the appropriate act)
The undersigned desiring to form a corporation (herein after referred to as
"Corporation") pursuant to the provisions of:
[X] Indiana Business Corporation Law
[ ] Indiana Professional Corporation Act 1983
As amended, executes the following Articles of Incorporation:
ARTICLE I NAME
Name of Corporation
Ultimate Sports, Inc.
(The name must contain the work "Corporation," "Incorporated," "Limited,"
"Company" or an abbreviation of one of those words.)
ARTICLE II REGISTERED OFFICE AND AGENT
(The street address of the corporation's initial registered office in Indiana and the name of its initial registered agent at that office is:):
Name of Agent
Kevin W. Metheny
Street Address of Registered Office Zip Code
345 Burnetts Road, West Lafayette, Indiana 47906
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ARTICLE III AUTHORIZED SHARES
Number of shares: 1000
The total number of shares which the corporation is authorized to issue
is at least one class of shares, is hereby authorized unlimited voting
rights, and is entitled to receive net assets of the Corporation upon
dissolution.
ARTICLE IV INCORPORATORS
(The name(s) and address(es) of the Incorporator(s) of the corporation:)
NUMBER and STREET
NAME OR BUILDING CITY STATE ZIP CODE
Kevin W. Metheny 345 Burnetts Road W. Lafayette IN 47906
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In Witness Whereof, the undersigned being all the incorporators of said corporation execute these Articles of Incorporation and verify, subject to penalties of perjury, that the statements contained herein are true.
this 5th day of December 1988.
Signature Printed Name
/s/ Kevin W. Metheny Kevin W. Metheny
This instrument was prepared by (Name)
Edward Chosnek
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Address (Street, number, city and state) Zip Code
Pearlman & Chosnek, P. O. Box 708, Lafayette, Indiana 47902
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State of Indiana
Office of the Secretary of State
|
CERTIFICATE OF AMENDMENT
of
ULTIMATE SPORTS, INC.
I, SUE ANNE GILROY, Secretary of State of Indiana, hereby certify that Articles of Amendment of the above For-Profit Domestic Corporation have been presented to me at my office, accompanied by the fees prescribed by law and that the documentation presented conforms to law as prescribed by the provisions of the Indiana Business Corporation Law.
NOW, THEREFORE, with this document I certify that said transaction will become effective Monday, April 09, 2001.
In Witness Whereof, I have caused to be affixed my signature and the seal of the State of Indiana at the City of Indianapolis, April 9, 2001.
/s/ Sue Anne Gilroy SUE ANNE GILROY, SECRETARY OF STATE |
ARTICLES OF AMENDMENT OF THE SUE ANNE GILROY ARTICLES OF INCORPORATION SECRETARY OF STATE
State Form 38333 (R8 / 12-96) CORPORATIONS DIVISION
Approved by State Board of Accounts 1995 302 W. Washington St., Rm E018
Indianapolis, IN 46204
Telephone: (317) 232-6576
Indiana Code: 23-1-38-1 et. Seq.
FILING FEE: $30.00
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INSTRUCTIONS: Use 8 1/2" x 11" white paper for inserts.
Present original and two copies to address in upper right hand
corner of this form. Please TYPE or PRINT.
ARTICLES OF AMENDMENT OF THE
ARTICLES OF INCORPORATION OF:
Name of Corporation Date of Incorporation
ULTIMATE SPORTS, INC. December 6, 1988
The undersigned officers of the above referenced Corporation (hereinafter
referred to as the "Corporation") existing pursuant to the provisions of
(indicate appropriate act)
[X] Indiana Business Corporation Law
[ ] Indiana Professional Corporation Act of 1983
as amended (hereinafter referred to as the "Act"), desiring to give notice of
corporate action effectuating amendment of certain provisions of its Articles
of Incorporation, certify the following facts:
ARTICLE I AMENDMENT(S)
The exact text of Article(s) III Authorized Shares of the Articles
(NOTE: If amending the name of corporation, write Article "I" in space above and write "The name of the Corporation is "___________" below.)
Resolved that the total number of shares which the Corporation has authority to issue is 50,000,000.
ARTICLE II
Date of each amendment's adoption:
July 26, 2000
(Continued on reverse side)
ARTICLE III Manner of Adoption and Vote
Mark applicable section: NOTE - Only in limited situations does Indiana law permit an Amendment without shareholder approval. Because a name change requires shareholder approval, Section 2 must be marked and either A or B completed.
[X] SECTION 1 This amendment was adopted by the Board of Directors or Incorporators and shareholder action was not required.
[X] SECTION 2 The shareholders of the Corporation entitled to vote in respect to the amendment adopted the proposed amendment. The amendment was adopted by: (Shareholder approval may be by either A or B).
A. Vote of such shareholders during a meeting called by the
Board of Directors. The result of such vote is as follows:
___ Shares entitled to vote.
___ Number of shares represented at the meeting.
___ Shares voted in favor.
___ Shares voted against.
B. Unanimous written consent executed on July 26, 2000 and signed by all shareholders entitled to vote.
ARTICLE IV Compliance with Legal Requirements
The manner of the adoption of the Articles of Amendment and the vote by which they were adopted constitute full legal compliance with the provisions of the Act, the Articles of Incorporation, and the By-Laws of the Corporation.
I hereby verify, subject to the penalties of perjury, that the statements contained herein are true, this 29th day of March, 2001
Signature of current officer Printed name of officer or chairman of the board or chairman of the board /s/ Martin J. Maassen Martin J. Maassen Signature's title Chairman of the Board |
EXHIBIT 2.2
BY-LAWS
OF
ULTIMATE SPORTS, INC.
in effect as of November 30, 2001
ARTICLE I
Identification
Section 1.01. Name. The name of the Corporation is Ultimate Sports, Inc. (hereinafter referred to as the "Corporation").
Section 1.02. Registered Office and Registered Agent. The street address of the Registered Office of the Corporation is 2119 North 15th Street, Lafayette, Indiana 47904, and the name of its Registered Agent is Kevin W. Metheny.
ARTICLE II
Shareholders
Section 2.01. Place of Meetings. All meetings of the shareholders shall be held a such place, within or outside the state of Indiana, as the Board of Directors shall in each case fix,
Section 2.02. Annual Meeting. The annual meeting of the shareholders shall be held once each year at such time and place as the Board of Directors may in each case fix.
Section 2.03. Special Meeting. A special meeting of the shareholders shall be called by the Secretary to consider such matters as the Board of Directors shall deem necessary, desirable and as required by law and upon the request of shareholders in keeping with and as provided by law.
Section 2.04. Notice of Meeting. Written notice of each meeting of the shareholders stating the place, day, and hour of such meeting, and in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered or mailed by the Secretary, or by the officers or persons calling the meeting, to each shareholder of record entitled to vote, at his address of record no fewer than ten (10) days nor more than sixty (60) days before the date of the meeting. Notice of any such meeting may be waived in writing by any shareholder before or after the date and time stated in the notice and such waiver shall be included with the minutes. Attendance at any such meeting, in person or by proxy, shall constitute a waiver of notice of such meeting unless the shareholder objects to holding the meeting or transacting business at the beginning of the meeting, and shall constitute a waiver of objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the notice unless the shareholder objects to consideration of the matter when it is presented. Notice of any adjourned meeting of shareholders shall not be required to be given if the time and place thereof are announced at the meeting at which the adjournment is taken, except as may be expressly required by law.
The address of any shareholder appearing on the records of the Corporation shall be deemed to be the latest address of such shareholder appearing in the records maintained by the transfer agent for the class of stock held by such shareholder.
Section 2.05. Ordinary Voting Rights. Each shareholder shall have one vote for each share of common stock. If presented with an agreement signed by both nominee and beneficial owner, the beneficial owner shall be recognized by the Corporation as the shareholder.
Section 2.06. Record date and Voting Lists. Unless otherwise fixed by the Board of Directors, the record date for determining shareholders entitled to notice and to vote at any shareholders' meeting is the close of business on the day before the first notice is sent to shareholders. The Secretary of the Corporation shall make, at least five business days before each meeting, an alphabetical list of the shareholders entitled to notice of such meeting, with the address and number of shares so entitled to vote held by each, which list shall be on file at the principal office of the Corporation and subject to inspection by any shareholder or his authorized agent. Such list shall be produced and kept open at the time and place of the meeting.
Section 2.07. Quorum. At any meeting of the shareholders, a majority of the shares of the Corporation then outstanding, represented in person or by proxy, shall constitute a quorum. Except as otherwise provided by the Indiana Business Corporation Law, as amended, or by express provision of the Articles of Incorporation or these By-Laws, a majority of said quorum may decide any question which may properly come before any meeting except voting for directors, which may be decided by a plurality.
Section 2.08. Action by Unanimous Written Consent Without a Meeting. Any action which is required or permitted to be taken at a meeting of the shareholders may be taken without a meeting if one or more written consents describing the action taken is signed by each shareholder. A copy of the consent shall be filed with the minutes of the meetings of the shareholders. Action taken by such consent or consents is effective when the last shareholder signs the consent, unless the consent specifies a different prior or subsequent effective date.
Section 2.09. Simultaneous Communication. Any or all shareholders may participate in an annual or special meeting of shareholders by, or through the use of, any means of communication by which all shareholders participating may simultaneously hear each other during the meeting. Such shareholder participating in a meeting by this means is deemed to be present in person at the meeting.
ARTICLE III
Board of Directors
Section 3.01. Number. The number of directors shall be at least three, but not more than five, as may be prescribed or changed from time to time by resolution of the Board of Directors, provided, however that a decrease in the number of directors shall not shorten an Incumbent director's term.
Section 3.02. Election, Tenure, Removal, Resignation and Vacancies. The directors shall be elected by the shareholders at their annual meeting.
All directors elected as aforesaid except in the case of earlier resignation, removal or death, shall hold office until their respective successors are chosen and qualified. The shareholders may remove any director, with or without cause, only by the affirmative vote of a majority of the actual number of shares entitled to vote for the election of such director at any shareholders meeting called for that purpose. A director may resign at any time by delivering written notice to the Board or to the Secretary of the Corporation, and such resignation shall become effective upon the receipt of such notice or at such later time specified therein.
Any vacancy occurring on the Board of Directors shall only by filled by vote of those shareholders entitled to elect such Director at a special meeting called for that purpose.
Section 3.03. Annual Meeting. The Board of Directors shall meet each year immediately after the annual meeting of the shareholders at the place where the annual meeting of the shareholders was held, for the purpose of electing officers and for the conduct of any other business that may be brought before the meeting. Such meeting shall be held without notice. If such meeting is not held, the election of officers may be had at any subsequent meeting of the Board of Directors.
Section 3.04. Special Meetings. Special meetings of the Board of Directors may be held upon the call of the President or two or more members of the Board of Directors at any place, within or outside the State of Indiana. Notice, specifying the date, time and place of the meeting, shall be given to each director either personally or by telephone at least twenty- four (24) hours before the meeting or by mail, telegraph or cable at least forty-eight (48) hours prior to the time of the meeting. Notice is effective when received. A director's attendance at or participation in a meeting waives any required notice of the meeting unless the director at the beginning of the meeting (or promptly upon arrival) objects to holding the meeting or transacting business and does not thereafter vote for or assent to action taken at the meeting. Notice of any meeting may be waived in writing, either before or after the meeting and must be signed by the director entitled to the notice and filed with the minutes of the meeting.
Section 3.05. Quorum. At any meeting of the Board of Directors, a
majority of the number of directors in office immediately before the meeting
begins shall constitute a quorum for the transaction of any business. Except
as otherwise provided by the Indiana Business Corporation Law, as amended, if
a quorum is present when a vote is taken, a majority of such quorum may
decide any questions properly brought before any meeting. A director who is
present at the meeting is deemed to have assented to any action taken unless
(a) he objects at the beginning of the meeting (or promptly upon his arrival)
to holding the meeting or transacting business at the meeting, (b) his
dissent or abstention for the action taken as entered in the minutes of the
meeting or (c) he delivers written notice of his dissent or abstention to the
presiding officer of the meeting before its adjournment or to the Secretary
of the Corporation immediately after adjournment of the meeting. The right
of dissent or abstention is not available to a Director who votes in favor of
the action taken.
Section 3.06. Action by unanimous Written Consent Without a Meeting. Any action which is required or permitted to be taken at a meeting of the Board of Directors or of any committee thereof may be taken without a meeting if one or more written consents describing the action to be taken is signed by each director or member of said committee, as the case may be. A copy of the consent or consents shall be filed with the minutes of the meetings of the Board of Directors. Action taken by such consent is effective when the last director signs the consent unless the consent specifies a different prior or subsequent effective date.
Section 3.07. Simultaneous Communication. Any or all directors may participate in an annual or special meeting of directors by, or through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting, such director participating in a meeting by this means is deemed to be present in person at the meeting.
Section 3.08. Committees. By resolution, the Board of Directors may create one or more committees and appoint one or more members of the Board of Directors to serve on them at the pleasure of the Board, and such committee may exercise the authority of the Board of Directors, except as otherwise provided in the Indiana Business Corporation Law. The sections of these By- Laws concerning regular and special meetings, action without a meeting, simultaneous communication, and quorum apply to committees and their members as well.
ARTICLE IV
Officers
Section 4.01. Principal Officers. The principal officers shall consist of a President, A Secretary, a Treasurer, and such other officers as the Board of Directors may from time to time determine and elect or appoint. Such officer may appoint an assistant officer, if so authorized by the Board of Directors.
Section 4.02. Qualifications. Any two or more offices may be held by the same persons. An officer need not be a director or shareholder.
Section 4.03. Election, Tenure, Removal and Resignation. The principal officers shall be elected by the Board of Directors, at their annual meeting and, unless sooner removed, shall serve until the next annual meeting of the Board of Directors or until his successor shall have been duly chosen and qualified. The Board of Directors may remove an officer at any time with or without cause, and any officer who appoints an assistant officer may remove the appointed assistant at any time by giving written notice to the Board of Directors and such removal shall become effective upon receipt of such notice or at such later time specified therein. Any vacancy in any office shall be filled by the Board of Directors and the officer so chosen shall hold office for the unexpired portion of the term, or until his successor is chosen and qualified unless sooner removed as provided by law.
Section 4.04. President. The President shall have the authority and the duty to manage the affairs of the Corporation subject to approval of the Board of Directors and shall be its chief executive officer. He shall preside at all meetings of the shareholders and directors, and shall be an ex-officio member of all committees. Subject to the control and direction of the Board of Directors,
he may enter into any contract or execute and deliver any instrument in the name or on behalf of the Corporation. The President shall discharge all the duties inherent to a presiding officer and shall have such other powers and perform such duties as are delegated to him by the Board of Directors or as prescribed by law or these By-Laws.
Section 4.05. The Secretary. The Secretary shall keep or cause to be kept in the books provided for that purpose the minutes of the directors' and shareholder meetings and shall perform a like duty for all committees appointed by the Board of Directors, when required. He shall have the custody and care of the minutes, stock books and stock records of the Corporation. He shall attend to the giving and serving of all notices of the Corporation, and in general, shall perform all duties incident to the office of Secretary and such other duties as may be assigned to him by the President or that the Board of Directors may prescribe.
Section 4.06. The Treasurer. The Treasurer shall keep correct and complete records of account, showing accurately at all times the financial condition of the Corporation. He shall deposit all funds of the Corporation coming into his hands in such banks or depositories to be designated by the Board of Directors, and shall keep such bank account in the name of the Corporation, and, in general, shall perform all duties incident to the office of Treasurer and such other duties as may be assigned to him by the President or that of the Board of Directors may prescribe.
Section 4.07. Other Officers. All other officers shall have such powers and perform such duties as are delegated to them by the Board of Directors or by direction of an officer authorized by the Board of Directors to prescribe the duties of other officers.
Section 4.08. Salaries. The salaries of the principal officers shall be fixed from time to time by the Board of Directors, and the salaries if any subordinate officers may be fixed by the President.
Section 4.09. Delegation of Authority. In the case of the absence for incapacity of any officer, or for any other reason that the Board of Directors may deem sufficient, the Board of Directors may delegate any or all of the duties or powers of such officer to any other officer or to any director.
ARTICLE V
Shares
Section 5.01. Consideration for Shares. The Board of Directors shall cause the Corporation to issue shares of the Corporation for such consideration as the Board of Directors determines to be adequate.
Section 5.02. Payment of Shares. The consideration for the issuance of shares of the Corporation may consist of any tangible or intangible property or benefit to the Corporation, including cash, promissory notes, services performed, contracts for services to be performed. When the Corporation receives the consideration for which the Board of Directors authorized the issuance of shares, the shares issued therefore are fully paid and nonassessable. In the event the Corporation
authorizes the issuance of shares for promissory notes or for promises to render services in the future, the Corporation shall report in writing to the shareholders the number of shares authorized to be so issued with or before the notice of the next shareholders' meeting. In the absence of actual fraud in the transaction, the determination of the Board of Directors as to the adequacy of the consideration shall be conclusive.
Section 5.03. Issuance of Certificates. Each holder of shares of the Corporation shall be entitled to one or more certificates signed by the President and the Secretary, stating the name of the registered holder, the number of shares represented by such certificate, and that such shares are fully and nonassessable, provided, that if such shares are not fully paid, the certificate shall be legibly stamped to indicate the percent which has been paid, and as further payments are made, the certificates shall be stamped accordingly.
If the Corporation is authorized to issue shares of more than one class, every certificate shall state the kind and class of shares represented thereby, and the relative rights, interest, preferences and restrictions of such class, or a summary thereof; provided that such statement may be omitted from the certificate if it shall be conspicuously set forth upon the face or back of the certificate that any such statement, in full, will be furnished by the Corporation to any shareholder upon written request and without charge.
Section 5.04. Transfer of Shares. Shares shall be transferable only on the books of the Corporation by the registered holder thereof either personally or by his duly authorized attorney upon the surrender of the certificate or certificates representing the same, properly endorsed. Upon the transfer of shares of the Corporation, the certificates evidencing such shares shall be returned to the Corporation, cancelled and preserved, and new certificates issued.
The Corporation may impose restrictions on the registration or transfer of capital stock of the Corporation by means of these By-Laws, the Articles of Incorporation, or by an agreement with the shareholders. The shareholder may agree among themselves to impose a restriction of the transfer or registration of the transfer of shares. A restriction which is authorized by the Indiana Business Corporation Law and which has its existence noted conspicuously on the front or back of the Corporation's stock certificate is valid and enforceable against the holder or a transferee of the holder of the Corporation's stock certificate. If noted on the certificate the restriction is enforceable against a person without knowledge of the restriction.
Section 5.05. Loss, Theft, or Destruction. In case of alleged loss, theft or destruction of a certificate for shares, another certificate may be issued in lieu thereof, but the Board of Directors may require the owner of such lost, stolen, or destroyed certificate to furnish an affidavit as to the loss or destruction and agree (personally or through a surety) to indemnify the Corporation against any claim that may be made on account of the alleged loss, theft or destruction.
ARTICLE VI
Amendments
Section 6.01. Amendment of By-Laws. The Board of Directors shall have
the power to make, amend, or rescind the By-Laws of the Corporation, but only
(1) at a meeting of the Board of Directors specifically called for such
purpose or (2) by unanimous vote of all members of the Board of Directors at
any meeting or (3) by unanimous written consent executed by all members of
the Board of Directors without a meeting, provided, however, that any change
in these By-Laws that changes the quorum or voting requirements for action by
the Board of Directors must meet the same quorum requirement or whichever is
greater.
ARTICLE VII
Provisions for Regulations of the Business and Conduct of Affairs of the Corporation
Section 7.01. Books and Records. The Corporation shall maintain appropriate accounting records, minutes of all meetings of its shareholders and Board of Directors, a record of all actions taken by the shareholders and Board of Directors without a meeting, and a record of all actions taken by a committee of the Board of Directors in place of the Board of Directors on behalf of the Corporation. The Corporation or its agent shall maintain a complete and accurate shareholders' list giving the names and addresses held by each. All such books, records and lists of the Corporation shall be open to inspection and copying during the usual business hours for all proper purposes by every shareholder of the Corporation, if the shareholder gives the Corporation written notice at least five (5) days before the date on which the shareholder wishes to inspect and copy, together with a description of the shareholder's purpose for the request and of the records desired. Upon the written request of any shareholder to the Corporation, the Corporation shall mail to such shareholder its most recent annual financial statements that include for the fiscal year most recently completed, a balance sheet as of the end of that year, an income statement, and a statement of changes in shareholders equity.
Section 7.02. Director Conflicts of Interest. Any contract or other transaction between the Corporation and any corporation in which this Corporation owns a majority of the capital stock or between the Corporation and any corporation which owns a majority of the capital stock of the Corporation shall be valid and binding, notwithstanding that the directors or officers of this Corporation are identical or that some or all of the directors or officers, or both, are also directors or officers of such other corporation.
No contract or other transaction between the Corporation and one or more of its directors or any other corporation, partnership, firm, association or entity in which one or more of its directors is a director or officer of has a direct or indirect interest shall be either void or voidable because such director was present at the meeting of the Board of Directors of a committee thereof which authorizes, approves or ratifies such transaction or because his vote is counted for such purposes if any one (1) of the following is true:
(a) The material facts of the transaction and the director's interest were disclosed or known to the Board of Directors or a committee of the Board of Directors which authorized, approved, or ratified the transaction by a vote or consent sufficient for the purpose without counting the vote or consent of such interested director; or
(b) The material facts of the transaction and the director's interest were disclosed or known to the shareholders entitled to vote (including any shares owned or voted by a director who has a direct or indirect interest) and they authorized, approved or ratified such transaction; or
(c) The transaction was fair to the Corporation.
This section shall not be construed to invalidate any contract or other transaction which would otherwise be valid under the common or statutory law applicable thereto.
Section 7.03. Indemnification of Directors and Officers.
(a) Definitions. For purposes of this Section, the following terms shall have the following meanings:
(1) "Liability" and "Expenses" shall mean monetary obligations incurred by or on behalf of a director or officer in connection with the investigation, defense or appeal of a Proceeding or in satisfying a claim thereunder and shall include, but shall not be limited to, attorneys' fees and disbursements, amounts of judgements, fines or penalties, excise taxes assessed with respect to an employee benefit plan, and amounts paid in settlement by or on behalf of a director or officer.
(2) "Other Enterprise" shall mean any corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, whether for profit or not, for which a director or officer is or was serving, at the request of the Corporation, as a director, officer, partner, trustee, employee or agent.
(3) "Proceeding" shall mean any claim, action, suit or proceeding (whether brought by or in the right of the Corporation or Other Enterprise or otherwise), civil, criminal, administrative or investigative, whether formal or informal, and whether actual or threatened or in connection with an appeal relating thereto, in which a director or officer may become involved, as a party or otherwise, (i) by reason of his being or having been a director or officer of the Corporation (and, if applicable, an officer, employee or agent of the Corporation) or as a director, officer, partner, trustee, employee of agent of an Other Enterprise or arising out of his status as such, or (ii) by reason of any past or future action taken or not taken by a director or officer in any such capacity, whether or not he continues to be such at the time he incurs Liabilities and Expenses under the Proceeding.
(4) "Standard of Conduct" shall mean that a director or officer, based on facts then known to the director or officer, discharged the duties as a director or officer, including duties as a member of a committee, in good faith in that he reasonably believed to be or not to be opposed to the bet interests of the
Corporation or Other Enterprise, as the case may be, and, in addition, in any criminal Proceeding had reasonable cause to believe his conduct was lawful or had no reasonable cause to believe that his conduct was unlawful. The termination of any Proceeding, by judgement, order, termination of any Proceeding, by judgement, order, statement (whether with or without court approval) or conviction or upon a plea of guilty, shall not create a presumption that the director or officer did not meet the Standard of Conduct. The termination of any Proceeding by a consent decree or upon a plea of nolo contendere, or its equivalent, shall create the presumption that the director or officer met the Standard of Conduct.
(b) Indemnification. If a director or officer is made a party to or threatened to be made a party to any Proceeding, the Corporation shall indemnify the director or officer against Liabilities and Expenses incurred by him in connection with such Proceeding in the following circumstances:
(1) If a director or officer has been wholly successful on the merits or otherwise with respect to any such Proceeding, he shall be entitled to indemnification for Liabilities and Expenses as a matter of right. If a Proceeding is terminated against the director or officer by consent decree or upon a plea of nolo contendere, or its equivalent, the director or officer shall not be deemed to have been "wholly successful" with respect to such Proceeding.
(2) In all other situations, a director or officer shall be entitled to indemnification for Liabilities and Expenses as a matter of right if (i) the director or officer has met the Standard of Conduct and (ii) with respect to any action or failure to act by the director or officer which is at issue in such Proceeding, such action or failure to act did not constitute willful misconduct or recklessness. To be entitled to indemnification pursuant to this Subparagraph (b)(2), the director or officer must notify the Corporation of the commencement of the Proceeding in accordance with Paragraph (c) and request indemnification. A review of the request for indemnification and the facts and circumstances underlying the Proceeding shall be made in accordance with one of the procedures described below; and the director or officer shall be entitled to indemnification as a matter of right unless, in accordance with such procedure, it is determined beyond a reasonable doubt that (i) the director or officer breached or failed to perform the duties of the office in compliance with the Standard of Conduct, and (ii) the breach or failure to perform constituted willful misconduct or recklessness. Any one of the following procedures may be used to make the review and determination of a director's or officer's request for indemnification under this Subparagraph (b)(2):
(A) by the Board of Directors by a majority vote of a quorum consisting of directors who are not parties to, or who have been wholly successful with respect to, such Proceeding;
(B) if a quorum cannot be obtained under (A) above, by a majority vote of a committee duly designated by the Board of Directors (in the designation of which, directors who are parties to such Proceeding may participate), consisting solely of two or more directors who are not parties to, or who have been wholly successful with respect to, such Proceeding; or
(C) by independent legal counsel selected by the Board of Directors or its committee in the manner prescribed under (A) and (B) above.
Any determination made in accordance with the above procedures shall be binding on the Corporation and the director or officer.
(3) If several claims, issues or matters of action are involved, a director or officer may be entitled to indemnification as to some matters even though he is not entitled to indemnification as to other matters.
(4) The indemnification herein provided shall be applicable to Proceedings made or commenced after the adoption of this Section, whether arising from acts or omissions to act which occurred before or after the adoption of this Section.
(c) Prepaid Liabilities and Expenses. The Liabilities and Expenses which are incurred or are payable by a director or officer in connection with any Proceeding shall be paid by the Corporation in advance, with the understanding and agreement between such director or officer with the Corporation, that, in the event it shall ultimately be determined as provided herein that the director or officer was not entitled to be indemnified, or was not entitled to by fully indemnified, the director or office shall repay to the Corporation such amount, or the appropriate portion thereof, so paid or advanced.
(d) Exceptions to Indemnification. Notwithstanding any other provisions of this Section to the contrary, the Corporation shall not indemnify a direction or officer:
(1) for any Liabilities or Expenses incurred in a suit against a director or officer for accounting of profits allegedly made from the purchase or sale of securities of the Corporation brought pursuant to the provisions of Section 16(b) of th Securities Exchange Act of 1934 and any amendments thereto or the provision of any similar federal, state or local statutory
law;
(2) for any Liabilities and Expenses for which payment is actually made to or on behalf of a director or officer under a valid and collectible insurance policy, except in respect of any excess beyond the amount of payment under such insurance; or
(3) for any Liabilities or Expenses incurred in a suit or claim against the director or officer arising out of or based upon actions attributable to the director or officer in which the director or officer gained any person profit or advantage to which he was not legally entitled.
(e) Notification and Defense of Proceeding. Promptly after receipt by a director or officer of notice of the commencement of any Proceeding, the director or officer will, if a request for indemnification in respect thereof is to be made against the Corporation under this Section, notify the Corporation of the commencement thereof; but the failure to so notify the Corporation will not relieve it from any obligation which it may have to the director or officer otherwise than under this Section. With respect to any such Proceeding as to which the director or officer notifies the Corporation of the commencement thereof:
(1) The Corporation will be entitled to participate therein at its own expense.
(2) Except as otherwise provided below, to the extent that it may so desire, the Corporation, jointly with any other indemnifying party similarly notified, will be entitled to assume the defense thereof, with counsel reasonably satisfactory to the director or officer. After notice from the Corporation to the director or officer of its election to assume the defense of the director or officer in the Proceeding, the Corporation will not be liable to the director or officer under this Section for any legal or other Expenses subsequently incurred by the director or officer in connection with the defense thereof other than reasonable costs of investigation or as otherwise provided below. The director or officer shall have the right to employ counsel in such Proceeding, but the Expenses of such counsel incurred after notice from the Corporation of its assumption of the defense thereof shall be at the expense of the director or officer unless:
(A) the employment of counsel by the director or officer has been authorized by the Corporation;
(B) the director or officer shall have reasonably concluded that there may be a conflict of interest between the Corporation and the director or officer in the conduct of the defense of such Proceeding: or
(C) the Corporation shall not in fact have employed counsel to assume the defense of such Proceeding;
In each of which cases the Expenses of counsel employed by the director or officer shall be paid by the Corporation. The Corporation shall not be entitled
to assume the defense of any Proceeding brought by or in the right of the Corporation or as to which the director or officer shall have made the conclusion provided for in (B) above.
(3) The Corporation shall not be liable to indemnify a director or officer under this Section for any amounts paid in settlement of any Proceeding without the Corporation's prior written consent. The Corporation shall not settle any action or claim in any manner which would impose any penalty or limitation on a director or officer without the director or officer's proper written consent. Neither the Corporation nor a director or officer will unreasonably withhold its or his consent to any proposed settlement.
(f) Other Rights and Remedies. The rights and indemnification provided under this Section are not exhaustive and shall be in addition to any rights to which a director or officer may otherwise be entitled by contract or as a matter of law. Irrespective of the provisions of this Section, the Corporation may, at any time and from tine to time, indemnify directors, officers, employees and other persons to the full extent permitted by the provisions of the Indiana Business Corporation Law, or any successor law, as then in effect, whether with regard to past or future matters.
(g) Continuation of Indemnity. All obligations of the Corporation under this Section shall survive the termination of a director's or officer's service in any capacity covered by this Section.
(h) Insurance. The Corporation may purchase and maintain insurance on behalf of any director, officer, or other person or any person who is or was serving at the request of the Corporation as a director, officer, partner, trustee or agent of an Other Enterprise against any liability asserted against such person and incurred by such person in any capacity or arising out of his status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of applicable statutes, this Section or otherwise.
(i) Benefit. The provisions of this Section shall inure to the benefit of each director or officer and his respective heirs, personal representatives and assigns and the Corporation, its successors and assigns.
(j) Severability. In case any one or more of the provisions contained in this Section shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Section, but this Section shall be construed as if such invalid, illegal or unenforceable provision or provisions had never been contained herein.
Section 7.04. Contracts, Checks, Notes, etc., and Special Corporate Acts. Except as provided herein, all contracts and agreements entered into by the Corporation and all check, drafts, bills of exchange, and orders for the payment of money shall, in the conduct of the ordinary business
of the Corporation, unless otherwise required by law, be signed either by the President or the Treasurer, separately. Any one of the documents heretofore mentioned in this Section for use outside the ordinary course of business of the Corporation, or any deeds, mortgages, notes, or bonds of the Corporation shall be executed by and require the signature of both the President and one other officer.
Section 7.05. Distributions. The Board of Directors shall have the power, subject to any restrictions and limitations contained in the Indiana Business Corporation Law or in the Articles of Incorporation, to declare and pay any dividends or distributions upon the outstanding capital stock of the Corporation to its shareholders as and when they deem expedient. The Board of Directors may fix a record date, declaration date and payment date with respect to any share dividend or distribution to the Corporation's shareholders entitled to receive payment of a distribution, the end of the day on which the resolution of the Board of Directors declaring such dividend is adopted will be the record date for such determination.
Dated November 30, 2001
/s/ Rick D. Thomas Rick D. Thomas Secretary |
EXHIBIT 3.1
[Front of Certificate]
Number Shares
Incorporated Under the Laws of the State of Indiana
ULTIMATE SPORTS, INC.
The Corporation is authorized to issue 50,000,000 shares - No Par Value
THIS CERTIFIES THAT
is the owner of
fully paid and non-assessable Shares of the above Corporation transferable only on the books of the Corporation by the holder hereof in person or by duly authorized Attorney upon surrender of this Certificate properly endorsed.
In Witness Whereof, the said Corporation has caused this Certificate to be signed by its duly authorized officers and to be sealed with the Seal of the Corporation
Dated: Rick D. Thomas Kevin W. Metheny Secretary President |
[Back of Certificate]
NOTICE: Signature must be guaranteed by a firm which is a
member of a registered national stock exchange, or by a
bank (other than a saving bank), or a trust company.
The following abbreviations, when used in the
inscription on the face of this certificate, shall be
construed as though they were written out in full
according to applicable laws or regulations.
TEN COM as tenants in common
TEN ENT as tenants by the entireties
JT TEN as joint tenants with right of survivorship
and not as tenants in common
UNI GIFT MIN ACT . . . . Custodian . . . .
(Cust) (Minor)
under Uniform Gifts to minors
Act . . . . . .
(State)
|
Additional abbreviations may also be used though not in the above list.
For Value Received, _____________________ hereby sell,
assign and transfer unto ______________________________________ Please insert social security or other identifying number of assignee
Dated
Notice: The signature of this assignment must correspond
with the name as written upon the face of the
certificate in every particular without alteration
or enlargement or any change whatever
|
EXHIBIT 6.1
Ultimate Sports, Inc. The Farmers State Bank Line of Credit No. 35325
2119 N 15th St 309 S Prairie Street Date 05-04-2001
Lafayette, IN 47904 Brookston, IN 47923-0159 Max. Credit Amt. 50,000.00
Loan Ref. No. 35325
BORROWER'S NAME LENDER'S NAME
AND ADDRESS AND ADDRESS
"I" includes each "You" means the lender, its
borrower above, successors and assigns.
jointly and severally.
You have extended to me a line of credit in the
AMOUNT OF fifty thousand and no/100 $50,000.00
You will make loans to me from time to time until 12:00 p.m. on 05-04-2002.
Although the line of credit expires on that date, I will remain obligated
to perform all my duties under this agreement so long as I owe you any
money advanced according to the terms of this agreement, as evidenced by
any note or notes I have signed promising to repay these amounts.
This line of credit is an agreement between you and me. It is not
intended that any third party receive any benefit from this agreement,
whether by direct payment, reliance for future payment or in any other
manner. This agreement is not a letter of credit.
1. AMOUNT: This line of credit is:
X OBLIGATORY: You may not refuse to make a loan to me under
this line of credit unless one of the following occurs:
a. I have borrowed the maximum amount available to me;
b. This line of credit has expired;
c. I have defaulted on the note (or notes) which show my
indebtedness under this line of credit;
d. I have violated any term of this line of credit or any note
or other agreement entered into in connection with this line
of credit;
___ DISCRETIONARY: You may refuse to make a loan to me under this
line of credit once the aggregate outstanding advances equal or
exceed ________.
Subject to the obligatory or discretionary limitations above, this line of
credit is:
X OPEN-END (Business or Agricultural only): I may borrow up
to the maximum amount of principal more than one time.
___ CLOSED-END: I may borrow up to the maximum only one time.
2. PROMISSORY NOTE: I will repay any advances made according to this line of credit agreement as set out in the promissory note, I signed on 05-04-2001, or any note(s) I sign at a later time which represent advances under this agreement. The note(s) set(s) out the terms relating to maturity, interest rate, repayment and advances. If indicated on the promissory note, the advances will be made as follows: funds to be advanced for operating expenses for Ultimate Sports, Inc.
3. RELATED DOCUMENTS: I have signed the following documents in connection with this line of credit and note(s) entered into in accordance with this line of credit:
X security agreement dated 07-28-2000
X UCC 1 recorded 08-17-00
___ mortgage dated ________
___ guaranty dated ________
4. REMEDIES: If I am in default on the note(s) you may:
a. take any action as provided in the related documents;
b. without notice to me, terminate this line of credit.
By selecting any of these remedies you do not give up your right to
later use any other remedy. By deciding not to use any remedy should
I default, you do not waive your right to later consider the event a
default, if it happens again.
5. COSTS AND FEES: If you hire an attorney to enforce this agreement I will pay your reasonable attorney's fees, where permitted by law. I will also pay your court costs and costs of collection, where permitted by law.
6. COVENANTS: For as long as this line of credit is in effect or I owe
you money for advances made in accordance with the line of credit, I
will do the following:
a. maintain books and records of my operations relating to the need
for this line of credit;
b. permit you or any of your representatives to inspect and/or copy
these records;
c. provide to you any documentation requested by you which support
the reason for making any advance under this line of credit;
d. permit you to make any advance payable to the seller (or seller
and me) of any items being purchased with that advance;
7. NOTICES: All notices or other correspondence with me should be sent to my address stated above. The notice or correspondence shall be effective when deposited in the mail, first class, or delivered to me in person.
8. MISCELLANEOUS: This line of credit may not be changed except by a written agreement signed by you and me. The law of the state in which you are located will govern this agreement. Any term of this agreement which is contrary to applicable law will not be effective, unless the law permits you and me to agree to such a variation.
For the Lender SIGNATURES: I AGREE TO THE TERMS OF THIS LINE
OF CREDIT. I HAVE RECEIVED A COPY ON TODAY'S
DATE
Lori S. Heath /s/ Kevin W. Metheny
Title: Sr. Vice President Kevin W. Metheny, President
/s/ Kevin W. Metheny
Kevin W. Metheny, Individually
/s/ Pamela J. Metheny
Pamela J. Metheny, Individually
|
Ultimate Sports, Inc. The Farmers State Bank Loan Number 35325
2119 N 15th St 309 S Prairie Street Date 05-04-2001
Lafayette, IN 47904 Brookston, IN 47923-0159 Maturity Date 05-04-2005
Loan Amount $50,000.00
Renewal of
BORROWER'S NAME LENDER'S NAME
AND ADDRESS AND ADDRESS
"I" includes each "You" means the lender, its
borrower above, successors and assigns.
jointly and severally.
|
For value received, I promise to pay to you, or your order, at your address listed above the PRINCIPAL sum of fifty thousand 00/100 Dollars $50,000.00
___ Single Advance: I will receive all of this principal sum on ________.
No additional advances are contemplated under this note.
X Multiple Advance: The principal sum shown above is the maximum amount of principal I can borrow under this note. On 05-04-2001 I will receive the amount of $30,000.00 and future principal advances are contemplated.
Conditions: The conditions for future advances are funds to be advanced for operating expenses for Ultimate Sports, Inc.
X Open End Credit: You and I agree that I may borrow up to
the maximum amount of principal more than one time. This
feature is subject to all other conditions and expires on
05-04-2002.
___ Closed End Credit: You and I agree that I may borrow up to the
maximum only one time (and subject to all other conditions).
INTEREST: I agree to pay interest on the outstanding principal balance from 05-04-2001 at the rate of 9.000% per year until 05-04-2002.
___ Variable Rate: This rate may then change as stated below.
___ Index Rate: The future rate will be ________ the following index
rate:
___ No Index: The future rate will not be subject to any internal or
external index. It will be entirely in your control.
___ Frequency and Timing: The rate on this note may change as often
as ________.
A change in the interest rate will take effect ________.
___ Limitations: During the term of this loan, the applicable annual
interest rate will not be more than ________% or less than
________%. The rate may not change more than ________% each
________.
Effect of Variable Rate: A change in the interest rate will have the
following effect on the payments:
___ The amount of each scheduled payment w ill change.
___ The amount of the final payment will change.
ACCRUAL METHOD: Interest will be calculated on an Actual/365 basis.
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this
note owing after maturity, and until paid in full, as stated below:
___ on the same fixed or variable rate basis in effect before
maturity (as indicated above).
X at a rate equal to initial rate plus 3%.
___ LATE CHARGE: If a payment is made more than ____ days after it is due, I agree to pay a late charge of ________.
___ ADDITIONAL CHARGES: In addition to interest, I agree to pay the following charges which __ are __ are not included in the principal amount above:
PAYMENTS: I agree to pay this note as follows:
Monthly payments of accrued interest calculated on the amount of credit
outstanding beginning on 06-04-2001 and principal due on 05-04-2002.
___ Unpaid Interest: Any accrued interest not paid when due (whether due by reason of a schedule of payments or due because of Lender's demand) will become part of the principal thereafter, and will bear interest at the interest rate in effect from time to time as provided for in this agreement.
ADDITIONAL TERMS:
X SECURITY: This note is separately secured by (describe separate document by type and date): Security Agreement dated July 28, 2000 and UCC 1 recorded with Secretary of State
PURPOSE: The purpose of this loan is operating line of credit.
SIGNATURES: I AGREE TO THE TERMS OF THIS NOTE (INCLUDING THOSE ON PAGE 2).
I have received a copy on today's date.
Ultimate Sports, Inc.
/s/ Kevin W. Metheny Kevin W. Metheny, President /s/ Kevin W. Metheny Kevin W. Metheny, Individually /s/ Pamela J. Metheny Pamela J. Metheny, Individually Signature for Lender |
Lori S. Heath, Vice President
DEFINITIONS: As used on page 1, "X" means the terms that apply to this
loan. "I," "me" or "my" means each Borrower who signs this note and each
other person or legal entity (including guarantors, endorsers, and
sureties) who agrees to pay this note (together referred to as "us").
"You" or "your" means the Lender and its successors and assigns.
APPLICABLE LAW: The law of the state of Indiana will govern this note.
Any term of this note which is contrary to applicable law will not be
effective, unless the law permits you and me to agree to such a variation.
If any provision of this agreement cannot be enforced according to its
terms, this fact will not affect the enforceability of the remainder of
this agreement. No modification of this agreement may be made without your
express written consent. Time is of the essence in this agreement.
PAYMENTS: Each payment I make on this note will first reduce the amount I
owe you for charges which are neither interest nor principal. The
remainder of each payment will then reduce accrued unpaid interest, and
then unpaid principal. If you and I agree to a different application of
payments, we will describe our agreement on this note. I may prepay a part
of, or the entire balance of this loan without penalty, unless we specify
to the contrary on this note. Any partial prepayment will not excuse or
reduce any later scheduled payment until this note is paid in full (unless,
when I make the prepayment, you and I agree in writing to the contrary).
INTEREST: Interest accrues on the principal remaining unpaid from time to
time, until paid in full. If I receive the principal in more than one
advance, each advance will start to earn interest only when I receive the
advance. The interest rate in effect on this note at any given time will
apply to the entire principal advanced at that time. You and I may provide
in this agreement for accrued interest not paid when due to be added to
principal. Notwithstanding anything to the contrary, I do not agree to pay
and you do not intend to charge any rate of interest that is higher than
the maximum rate of interest you could charge under applicable law for the
extension of credit that is agreed to here (either before or after
maturity). If any notice of interest accrual is sent and is in error, we
mutually agree to correct it, and if you actually collect more interest
than allowed by law and this agreement, you agree to refund it to me.
INDEX RATE: The index will serve only as a device for setting the rate on
this note. You do not guarantee by selecting this index, or the margin,
that the rate on this note will be the same rate you charge on any other
loans or class of loans to me or other borrowers.
ACCRUAL METHOD: The amount of interest that I will pay on this loan will
be calculated using the interest rate and accrual method stated on page 1
of this note. For the purpose of interest calculation, the accrual method
will determine the number of days in a "year." If no accrual method is
stated, then you may use any reasonable accrual method for calculating
interest.
POST MATURITY RATE: For purposes of deciding when the "Post Maturity Rate"
(shown on page 1) applies, the term "maturity" means the date of the last
scheduled payment indicated on page 1 of this note or the date you
accelerate payment on the note, whichever is earlier.
SINGLE ADVANCE LOANS: If this is a single advance loan, you and I expect
that you will make only one advance of principal. However, you may add
other amounts to the principal if you make any payments described in the
"PAYMENTS BY LENDER" paragraph below, or if we have agreed that accrued
interest not paid when due may be added to principal.
MULTIPLE ADVANCE LOANS: If this is a multiple advance loan, you and I
expect that you will make more than one advance of principal. If this is
closed end credit, repaying a part of the principal will not entitle me to
additional credit.
PAYMENTS BY LENDER: If you are authorized to pay, on my behalf, charges I
am obligated to pay (such as property insurance premiums), then you may
treat those payments made by you as advances and add them to the unpaid
principal under this note, or you may demand immediate payment of the
charges.
SET-OFF: I agree that you may set off any amount due and payable under
this note against any right I have to receive money from you.
"Right to receive money from you" means:
(1) any deposit account balance I have with you;
(2) any money owed to me on an item presented to you or in your
possession for collection or exchange; and
(3) any repurchase agreement or other nondeposit obligation.
"Any amount due and payable under this note" means the total amount of
which you are entitled to demand payment under the terms of this note at
the time you set off. This total includes any balance the due date for
which you properly accelerate under this note.
If my right to receive money from you is also owned by someone who has
not agreed to pay this note, your right of set-off will apply to my
interest in the obligation and to any other amounts I could withdraw on my
sole request or endorsement. Your right of set-off does not apply to an
account or other obligation where my rights are only as a representative.
It also does not apply to any Individual Retirement Account or other tax-
deferred retirement account.
You will not be liable for the dishonor of any check when the dishonor
occurs because you set off this debt against any of my accounts. I agree
to hold you harmless from any such claims arising as a result of your
exercise of your right of set-off.
REAL ESTATE OR RESIDENCE SECURITY: If this note is secured by real estate
or a residence that is personal property, the existence of a default and
your remedies for such a default will be determined by applicable law, by
the terms of any separate instrument creating the security interest and, to
the extent not prohibited by law and not contrary to the terms of the
separate security instrument, by the "Default" and "Remedies" paragraphs
herein.
DEFAULT: I will be in default if any one or more of the following occur
(1) I fail to make a payment on time or in the amount due; (2) I fail to
keep the property insured, if required; (3) I fail to pay, or keep any
promise on any debt or agreement I have with you; (4) any other creditor of
mine attempts to collect any debt I owe him through court proceedings; (5)
I die, am declared incompetent, make an assignment for the benefit of
creditors, or become insolvent (either because my liabilities exceed my
assets or I am unable to pay my debts as they become due); (6) I make any
written statement or provide any financial information that is untrue or
inaccurate at the time it was provided; (7) I do or fail to do something
which causes you to believe that you will have difficulty collecting the
amount I owe you; (8) any collateral securing this note is used in a manner
or for a purpose which threatens confiscation by a legal authority; (9) I
change my name or assume an additional name without first notifying you
before making such a change; (10) I fail to plant, cultivate and harvest
crops in due season; (11) any loan proceeds are used for a purpose that
will contribute to excessive erosion of highly erodible land or to the
conversion of wetlands to produce an agricultural commodity, as further
explained in 7 C.F.R. Part 1940, Subpart G, Exhibit M.
REMEDIES: If I am in default on this note you have, but are not limited to,
the following remedies:
(1) You may demand immediate payment of all I owe you under this note
(principal, accrued unpaid interest and other accrued charges).
(2) You may set off this debt against any right I have to the payment
of money from you, subject to the terms of the "Set-Off"
paragraph herein.
(3) You may demand security, additional security, or additional
parties to be obligated to pay this note as a condition for not
using any other remedy.
(4) You may refuse to make advances to me or allow purchases on
credit by me.
(5) You may use any remedy you have under state or federal law.
By selecting any one or more of these remedies you do not give up your
right to later use any other remedy. By waiving your right to declare an
event to be a default, you do not waive your right to later consider the
event as a default if it continues or happens again.
COLLECTION COSTS AND ATTORNEY'S FEES: I agree to pay all costs of
collection, replevin or any other or similar type of cost if I am in
default. In addition, if you hire an attorney to collect this note, I also
agree to pay any fee you incur with such attorney plus court costs (except
where prohibited by law). To the extent permitted by the United States
Bankruptcy Code, I also agree to pay the reasonable attorney's fees and
costs you incur to collect this debt as awarded by any court exercising
jurisdiction under the Bankruptcy Code,
WAIVER: I give up my rights to require you to do certain things. I will
not require you to:
(1) demand payment of amounts due (presentment);
(2) obtain official certification of nonpayment (protest); or
(3) give notice that amounts due have not been paid (notice of
dishonor).
I waive any defenses I have based on suretyship or impairment of
collateral. I also give up any rights I may have under any valuation and
appraisement laws which apply to me.
OBLIGATIONS INDEPENDENT: I understand that I must pay this note even if
someone else has also agreed to pay it (by, for example, signing this form
or a separate guarantee or endorsement). You may sue me alone, or anyone
else who is obligated on this note, or any number of us together, to
collect this note. You may do so without any notice that it has not been
paid (notice of dishonor). You may without notice release any party to
this agreement without releasing any other party. If you give up any of
your rights, with or without notice, it will not affect my duty to pay this
note. Any extension of new credit to any of us, or renewal of this note by
all or less than all of us will not release me from my duty to pay it. (Of
course, you are entitled to only one payment in full.) I agree that you
may at your option extend this note or the debt represented by this note,
or any portion of the note or debt, from time to time without limit or
notice and for any term without affecting my liability for payment of the
note. I will not assign my obligation under this agreement without your
prior written approval.
CREDIT INFORMATION: I agree and authorize you to obtain credit information
about me from time to time (for example, by requesting a credit report) and
to report to others your credit experience with me (such as a credit
reporting agency). I agree to provide you, upon request, any financial
statement or information you may deem necessary. I warrant that the
financial statements and information I provide to you are or will be
accurate, correct and complete.
NOTICE: Unless otherwise required by law, any notice to me shall be given
by delivering it or by mailing it by first class mail addressed to me at my
last known address. My current address is on page 1. I agree to inform
you in writing of any change in my address. I will give any notice to you
by mailing it first class to your address stated on page 1 of this
agreement, or to any other address that you have designated.
EXHIBIT 6.2
Ultimate Sports, Inc. The Farmers State Bank Loan Number 35434
2119 N 15th St 309 S Prairie Street Date 07-11-2001
Lafayette, IN 47904 Brookston, IN 47923-0159 Maturity Date 07-11-2005
Loan Amount $256,938.49
Renewal of $256,938.49
BORROWER'S NAME LENDER'S NAME
AND ADDRESS AND ADDRESS
"I" includes each "You" means the lender, its
borrower above, successors and assigns.
jointly and severally.
For value received, I promise to pay to you, or your order, at your address listed above the PRINCIPAL sum of two hundred fifty six thousand nine hundred thirty eight and 49/100 Dollars $256,938.49
X Single Advance: I will receive all of this principal sum on 07-11-2001. No additional advances are contemplated under this note.
___ Multiple Advance: The principal sum shown above is the maximum amount of principal I can borrow under this note. On ________ I will receive the amount of $________ and future principal advances are contemplated.
Conditions: The conditions for future advances are ___________________
___ Open End Credit: You and I agree that I may borrow up to the maximum amount of principal more than one time. This feature is subject to all other conditions and expires on ________. ___ Closed End Credit: You and I agree that I may borrow up to the maximum only one time (and subject to all other conditions).
INTEREST: I agree to pay interest on the outstanding principal balance from 07-11-2001 at the rate of 9.500% per year until 07-11-2005.
___ Variable Rate: This rate may then change as stated below.
___ Index Rate: The future rate will be ________ the following index
rate:
___ No Index: The future rate will not be subject to any internal or
external index. It will be entirely in your control.
___ Frequency and Timing: The rate on this note may change as often
as ________.
A change in the interest rate will take effect ________.
___ Limitations: During the term of this loan, the applicable annual
interest rate will not be more than ________% or less than
________%. The rate may not change more than ________% each
________.
Effect of Variable Rate: A change in the interest rate will have the
following effect on the payments:
___ The amount of each scheduled payment will change.
___ The amount of the final payment will change.
ACCRUAL METHOD: Interest will be calculated on an Actual/365 basis.
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this
note owing after maturity, and until paid in full, as stated below:
X on the same fixed or variable rate basis in effect before
maturity (as indicated above).
___ at a rate equal to ________
X LATE CHARGE: If a payment is made more than 10 days after it is due, I agree to pay a late charge of 5.000% of the late amount
___ ADDITIONAL CHARGES: In addition to interest, I agree to pay the following charges which __ are __ are not included in the principal amount above:
PAYMENTS: I agree to pay this note as follows:
48 monthly payments of $6,456.81 beginning 08-11-2001.
___ Unpaid Interest: Any accrued interest not paid when due (whether due by reason of a schedule of payments or due because of Lender's demand) will become part of the principal thereafter, and will bear interest at the interest rate in effect from time to time as provided for in this agreement.
ADDITIONAL TERMS: Annual financial statements and tax returns to be submitted to The Farmers State Bank, Brookston.
X SECURITY: This note is separately secured by (describe separate document by type and date): Security Agreement dated July 28, 2000 and UCC 1 recorded with Secretary of State
PURPOSE: The purpose of this loan is Renewal #34944 to lower rate.
SIGNATURES: I AGREE TO THE TERMS OF THIS NOTE (INCLUDING THOSE ON PAGE 2).
I have received a copy on today's date.
Ultimate Sports, Inc.
/s/ Kevin W. Metheny Kevin W. Metheny, President /s/ Kevin W. Metheny Kevin W. Metheny, Individually /s/ Pamela J. Metheny Pamela J. Metheny, Individually Signature for Lender |
Lori S. Heath, Vice President
DEFINITIONS: As used on page 1, "X" means the terms that apply to this
loan. "I," "me" or "my" means each Borrower who signs this note and each
other person or legal entity (including guarantors, endorsers, and
sureties) who agrees to pay this note (together referred to as "us").
"You" or "your" means the Lender and its successors and assigns.
APPLICABLE LAW: The law of the state of Indiana will govern this note.
Any term of this note which is contrary to applicable law will not be
effective, unless the law permits you and me to agree to such a variation.
If any provision of this agreement cannot be enforced according to its
terms, this fact will not affect the enforceability of the remainder of
this agreement. No modification of this agreement may be made without your
express written consent. Time is of the essence in this agreement.
PAYMENTS: Each payment I make on this note will first reduce the amount I
owe you for charges which are neither interest nor principal. The
remainder of each payment will then reduce accrued unpaid interest, and
then unpaid principal. If you and I agree to a different application of
payments, we will describe our agreement on this note. I may prepay a part
of, or the entire balance of this loan without penalty, unless we specify
to the contrary on this note. Any partial prepayment will not excuse or
reduce any later scheduled payment until this note is paid in full (unless,
when I make the prepayment, you and I agree in writing to the contrary).
INTEREST: Interest accrues on the principal remaining unpaid from time to
time, until paid in full. If I receive the principal in more than one
advance, each advance will start to earn interest only when I receive the
advance. The interest rate in effect on this note at any given time will
apply to the entire principal advanced at that time. You and I may provide
in this agreement for accrued interest not paid when due to be added to
principal. Notwithstanding anything to the contrary, I do not agree to pay
and you do not intend to charge any rate of interest that is higher than
the maximum rate of interest you could charge under applicable law for the
extension of credit that is agreed to here (either before or after
maturity). If any notice of interest accrual is sent and is in error, we
mutually agree to correct it, and if you actually collect more interest
than allowed by law and this agreement, you agree to refund it to me.
INDEX RATE: The index will serve only as a device for setting the rate on
this note. You do not guarantee by selecting this index, or the margin,
that the rate on this note will be the same rate you charge on any other
loans or class of loans to me or other borrowers.
ACCRUAL METHOD: The amount of interest that I will pay on this loan will
be calculated using the interest rate and accrual method stated on page 1
of this note. For the purpose of interest calculation, the accrual method
will determine the number of days in a "year." If no accrual method is
stated, then you may use any reasonable accrual method for calculating
interest.
POST MATURITY RATE: For purposes of deciding when the "Post Maturity Rate"
(shown on page 1) applies, the term "maturity" means the date of the last
scheduled payment indicated on page 1 of this note or the date you
accelerate payment on the note, whichever is earlier.
SINGLE ADVANCE LOANS: If this is a single advance loan, you and I expect
that you will make only one advance of principal. However, you may add
other amounts to the principal if you make any payments described in the
"PAYMENTS BY LENDER" paragraph below, or if we have agreed that accrued
interest not paid when due may be added to principal.
MULTIPLE ADVANCE LOANS: If this is a multiple advance loan, you and I
expect that you will make more than one advance of principal. If this is
closed end credit, repaying a part of the principal will not entitle me to
additional credit.
PAYMENTS BY LENDER: If you are authorized to pay, on my behalf, charges I
am obligated to pay (such as property insurance premiums), then you may
treat those payments made by you as advances and add them to the unpaid
principal under this note, or you may demand immediate payment of the
charges.
SET-OFF: I agree that you may set off any amount due and payable under
this note against any right I have to receive money from you.
"Right to receive money from you" means:
(1) any deposit account balance I have with you;
(2) any money owed to me on an item presented to you or in your
possession for collection or exchange; and
(3) any repurchase agreement or other nondeposit obligation.
"Any amount due and payable under this note" means the total amount of
which you are entitled to demand payment under the terms of this note at
the time you set off. This total includes any balance the due date for
which you properly accelerate under this note.
If my right to receive money from you is also owned by someone who has
not agreed to pay this note, your right of set-off will apply to my
interest in the obligation and to any other amounts I could withdraw on my
sole request or endorsement. Your right of set-off does not apply to an
account or other obligation where my rights are only as a representative.
It also does not apply to any Individual Retirement Account or other tax-
deferred retirement account.
You will not be liable for the dishonor of any check when the dishonor
occurs because you set off this debt against any of my accounts. I agree
to hold you harmless from any such claims arising as a result of your
exercise of your right of set-off.
REAL ESTATE OR RESIDENCE SECURITY: If this note is secured by real estate
or a residence that is personal property, the existence of a default and
your remedies for such a default will be determined by applicable law, by
the terms of any separate instrument creating the security interest and, to
the extent not prohibited by law and not contrary to the terms of the
separate security instrument, by the "Default" and "Remedies" paragraphs
herein.
DEFAULT: I will be in default if any one or more of the following occur
(1) I fail to make a payment on time or in the amount due; (2) I fail to
keep the property insured, if required; (3) I fail to pay, or keep any
promise on any debt or agreement I have with you; (4) any other creditor of
mine attempts to collect any debt I owe him through court proceedings; (5)
I die, am declared incompetent, make an assignment for the benefit of
creditors, or become insolvent (either because my liabilities exceed my
assets or I am unable to pay my debts as they become due); (6) I make any
written statement or provide any financial information that is untrue or
inaccurate at the time it was provided; (7) I do or fail to do something
which causes you to believe that you will have difficulty collecting the
amount I owe you; (8) any collateral securing this note is used in a manner
or for a purpose which threatens confiscation by a legal authority; (9) I
change my name or assume an additional name without first notifying you
before making such a change; (10) I fail to plant, cultivate and harvest
crops in due season; (11) any loan proceeds are used for a purpose that
will contribute to excessive erosion of highly erodible land or to the
conversion of wetlands to produce an agricultural commodity, as further
explained in 7 C.F.R. Part 1940, Subpart G, Exhibit M.
REMEDIES: If I am in default on this note you have, but are not limited to,
the following remedies:
(1) You may demand immediate payment of all I owe you under this note
(principal, accrued unpaid interest and other accrued charges).
(2) You may set off this debt against any right I have to the payment
of money from you, subject to the terms of the "Set-Off"
paragraph herein.
(3) You may demand security, additional security, or additional
parties to be obligated to pay this note as a condition for not
using any other remedy.
(4) You may refuse to make advances to me or allow purchases on
credit by me.
(5) You may use any remedy you have under state or federal law.
By selecting any one or more of these remedies you do not give up your
right to later use any other remedy. By waiving your right to declare an
event to be a default, you do not waive your right to later consider the
event as a default if it continues or happens again.
COLLECTION COSTS AND ATTORNEY'S FEES: I agree to pay all costs of
collection, replevin or any other or similar type of cost if I am in
default. In addition, if you hire an attorney to collect this note, I also
agree to pay any fee you incur with such attorney plus court costs (except
where prohibited by law). To the extent permitted by the United States
Bankruptcy Code, I also agree to pay the reasonable attorney's fees and
costs you incur to collect this debt as awarded by any court exercising
jurisdiction under the Bankruptcy Code,
WAIVER: I give up my rights to require you to do certain things. I will
not require you to:
(1) demand payment of amounts due (presentment);
(2) obtain official certification of nonpayment (protest); or
(3) give notice that amounts due have not been paid (notice of
dishonor).
I waive any defenses I have based on suretyship or impairment of
collateral. I also give up any rights I may have under any valuation and
appraisement laws which apply to me.
OBLIGATIONS INDEPENDENT: I understand that I must pay this note even if
someone else has also agreed to pay it (by, for example, signing this form
or a separate guarantee or endorsement). You may sue me alone, or anyone
else who is obligated on this note, or any number of us together, to
collect this note. You may do so without any notice that it has not been
paid (notice of dishonor). You may without notice release any party to
this agreement without releasing any other party. If you give up any of
your rights, with or without notice, it will not affect my duty to pay this
note. Any extension of new credit to any of us, or renewal of this note by
all or less than all of us will not release me from my duty to pay it. (Of
course, you are entitled to only one payment in full.) I agree that you
may at your option extend this note or the debt represented by this note,
or any portion of the note or debt, from time to time without limit or
notice and for any term without affecting my liability for payment of the
note. I will not assign my obligation under this agreement without your
prior written approval.
CREDIT INFORMATION: I agree and authorize you to obtain credit information
about me from time to time (for example, by requesting a credit report) and
to report to others your credit experience with me (such as a credit
reporting agency). I agree to provide you, upon request, any financial
statement or information you may deem necessary. I warrant that the
financial statements and information I provide to you are or will be
accurate, correct and complete.
NOTICE: Unless otherwise required by law, any notice to me shall be given
by delivering it or by mailing it by first class mail addressed to me at my
last known address. My current address is on page 1. I agree to inform
you in writing of any change in my address. I will give any notice to you
by mailing it first class to your address stated on page 1 of this
agreement, or to any other address that you have designated.
EXHIBIT 6.3
Ultimate Sports, Inc. 2119 North 15th Street Lafayette, IN 47904 PH. 765-423-2984 Fax: 765-742-7258
This agreement is made effective as of September 1, 2001, by and between Ultimate Sports, Inc., of 2119 North 15th Street, Lafayette, Indiana 47904, and Leisure Features, of P.O. Box 14104, 2918 Progress Road, Madison, Wisconsin, 53716.
In this agreement, the party who is contracting to receive services shall be referred to as "USI" or "Company," and the party who will be providing the services shall be referred to as "Consultant."
Consultant has a business of providing advertising and sports promotion and is willing to provide these services to USI based on this background to assist the Company in making sales throughout North America and Canada. Consultant agrees to provide "booth space" at various Trade Show locations in North America, for a period of 5 (five) years, commencing with the date of the agreement. In order to compensate Consultant for certain marketing expenses, Consultant will be paid 25,000 shares of non- registered Ultimate Sports, Inc. common stock.
Party receiving services:
Ultimate Sports, Inc.
By: /s/ Kevin Metheny
Kevin Metheny, President
Party providing services:
Leisure Features
By: /s/ Tom Anderson
Tom Anderson
Date: 9-28-01
|
EXHIBIT 23.1
David, Sita & Company, P.A.
Certified Public Accountants - Management Consultants
Consent of Independent Auditor
We consent to incorporation in the Registration Statement on Form 10SB of Ultimate Sports, Inc. dated December 20, 2001, of our reports of our audit dated May 16, 2001 of the financial statements of Ultimate Sports, Inc. for the years ended December 31, 1999 and December 31, 2000.
December 17, 2001
Greenbelt, Maryland
Davis, Sita & Company, P.A.
/s/ Charles Davis, III, CPA |