1
Date Filed: April 12, 2002 SEC File No. 333-68532
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 1
SAVON TEAM SPORTS, INC.
----------------------------------------------
(Name of small business issuer in its Charter)
Utah 87-0678911
- ------------------------------ ----------------------
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
5039 South 1075 East, Ogden, Utah 84403 (801) 476-3323
-------------------------------------------------------------
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
3949 - Sporting and Athletic Goods, NEC
--------------------------------------------------------
(Primary Standard Industrial Classification Code Number)
Copies to: Registered Agent:
Elliott N. Taylor, Esq. Michael L. Rubin, President
John C. Thompson, Esq. Savon Team Sports, Inc.
Taylor and Associates, Inc. 5039 South 1075 East
Attorneys and Counselors at Law Ogden, Utah 84403
2681 Parleys Way, Suite 203 Phone: (801) 476-3323
Salt Lake City, Utah 84109 Fax: (801) 627-8298
Phone: (801) 463-6080 ------------------------------------
Fax: (801) 463-6085 (Name, address, including zip code,
and telephone number, including area
code, of agent for service)
Approximate date of proposed sale to the public: As soon as practicable
after the effective date of this post-effective amendment to the Registration
Statement.
CALCULATION OF REGISTRATION FEE
Title of Each Proposed Maximum Proposed Maximum Amount of
Class of Securities Amount to Offering Price Aggregate Offering Registration
to be Registered be Registered per Share Price Fee (1)(2)
- ------------------- ----------------- ---------------- ------------------ ------------
Shares of Common
Stock, $0.001 par
value 1,750,000 Shares $ 0.10 $ 175,000 $ 43.75
<FN>
(1) Estimated solely for purposes of calculating the registration fee based on 1,750,000 shares
of common stock offered at $0.10 per share.
(2) The shares of common stock which are subject to this post-effective amendment were the
subject of a registration statement which became effective December 17, 2001, and which respect
to which the registrant paid filing fees of $43.75. Consequently no additional filing fees are
required. The registration fee was calculated in accordance with Fee Rate Advisory No.13, issued
December 23, 2000, based on $250 per $1,000,000 or .00025 of the aggregate offering amount.
</FN>
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If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
The Registrant hereby amends this registration statement on such dates as may
be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said section
8(a), may determine.
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Table of Contents
Pursuant to Item 502(f) of Regulation S-B
Section Page
- ------- ----
PROSPECTUS SUMMARY ............................................... 5
SUMMARY FINANCIAL INFORMATION..................................... 6
RISK FACTORS ..................................................... 7
Risk Factors Relating to the Business of the Company ........ 7
Risk Factors Relating to the Offering........................ 8
DILUTION ......................................................... 11
COMPARATIVE DATA ................................................. 12
PLAN OF DISTRIBUTION ............................................. 13
USE OF PROCEEDS .................................................. 14
DESCRIPTION OF BUSINESS .......................................... 15
Organization and Corporate History .......................... 15
Business in General ......................................... 15
Plan of Operation ........................................... 15
Products and Services ....................................... 17
Marketing and Distribution .................................. 18
Competition ................................................. 19
Manufacturing, Supplies, and Quality Control ................ 19
Domain Names and Copyrights ................................. 20
Research and Development .................................... 20
Regulation and Environmental Compliance ..................... 20
Employees ................................................... 20
DESCRIPTION OF PROPERTY .......................................... 21
DIRECTORS, EXECUTIVE OFFICERS, AND SIGNIFICANT EMPLOYEES ......... 21
REMUNERATION OF OFFICERS AND DIRECTORS ........................... 22
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS ......... 23
PRINCIPAL SHAREHOLDERS ........................................... 24
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS ........ 25
DESCRIPTION OF CAPITAL STOCK ..................................... 26
LITIGATION ....................................................... 27
LEGALITY OF SHARES ............................................... 27
EXPERTS .......................................................... 28
ADDITIONAL INFORMATION ........................................... 28
INDEX TO FINANCIAL STATEMENTS .................................... 29
FINANCIAL STATEMENTS ............................................. 30
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[FRONT COVER PAGE]
SUBJECT TO COMPLETION -- DATED APRIL 12, 2002
SAVON TEAM SPORTS, INC.
Shares of Common Stock
$0.10 per share
This Prospectus relates to the public offering for cash by Savon Team
Sports, Inc., of a minimum of 750,000 and a maximum of 1,750,000 shares of
common stock. This is our initial public offering, there is no public market
for the Common Stock, and there is no assurance that one will develop
following the Offering described in this Prospectus. See MARKET FOR COMMON
EQUITY AND RELATED SHAREHOLDER MATTERS beginning on page 21.
We are offering the common stock subject to the subscription and payment
of a minimum of 750,000 shares during an offering period expiring September
30, 2002. We reserve the right to close the Offering upon the sale of the
minimum number of shares. See PLAN OF DISTRIBUTION beginning on page 12.
At the date of this Prospectus, Michael Rubin, our president, is the sole
person acting as a sales agent and he will not be paid any commission on the
sale of the Common Stock.
The proceeds from the offering, after the deduction of expenses, will be
used to develop our proposed web site and for working capital. See USE OF
PROCEEDS beginning on page 13.
All funds collected from the sale of the Common Stock will be deposited
in an escrow account with Escrow Specialists, an unaffiliated escrow company
in Ogden, Utah, which will be our escrow agent. If the minimum 750,000 shares
are not sold during and paid for during the offering period, all funds will be
promptly returned to subscribers in full, without paying interest or deducting
expenses. All subscribers' checks should be made payable to "ESCROW
SPECIALISTS-Savon Team Sports, Inc., Escrow Account."
Price Commissions Proceeds to Company
---------- --------------- -----------------------
Per share $ 0.10 $ - $ 0.10
Total Minimum $ 75,000.00 $ - $ 75,000.00
Offering
Total Maximum $175,000.00 $ - $175,000.00
Offering
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK, INCLUDING IMMEDIATE AND
SUBSTANTIAL DILUTION FROM THE PUBLIC OFFERING PRICE. YOU SHOULD CAREFULLY
READ AND CONSIDER THE SECTIONS ENTITLED "RISK FACTORS" BEGINNING AT PAGE 7 AND
"DILUTION" BEGINNING AT PAGE 10.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THE
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is __________, 2002
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and the financial statements and notes thereto appearing elsewhere
in this Prospectus.
Business description ............ Savon Team Sports, Inc. was organized to
take advantage of a potential market for
speciality sports apparel via an Internet
web site. We propose to create a web site
to target an initial market of overseas
United States military installations. We
believe such installations encourage team
sports among troops, and that there is
a resulting need for uniforms and basic
equipment that is not being adequately met
by local providers.
Contact information ............. Savon Team Sports, Inc.
Attn: Michael Rubin, President
5039 South 1075 East, Ogden, UT 84403
Phone: (801) 476-3323
Fax: (603) 627-8298
Securities Offered .............. 1,750,000 shares of Common Stock, par value
$0.001 per share. See DESCRIPTION OF
CAPITAL STOCK.
Shares of Common Stock Outstanding
Prior to the Offering .......... Common Stock: 6,250,000
Shares of Common Stock Outstanding
After the Offering ............. Common Stock: 7,000,000 (Minimum)
8,000,000 (Maximum)
Offering Price Per Share ........ $0.10
Estimated Proceeds After
Offering Expenses .............. $50,000, minimum after $25,000 expenses
$150,000, maximum after $25,000 expenses
Use of Proceeds ................. Our first step is to develop our web site.
We will use the minimum proceeds to develop
the web site to showcase our available
products. We intend to generate revenues
from the sale of products to purchasers via
direct mailing, telephone and email,
initially. We intend to use proceeds above
the minimum for expenses we incur for
additional marketing and sales efforts. See
USE OF PROCEEDS.
Risk Factors .................... We need money for operations, we have no
current revenues, and we do not know how
soon we will be able to generate revenues.
Our business success is dependent on the
business acumen of our president, and our
ability to develop our website as an
effective marketing tool for selling our
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products in a competitive marketplace. You
may not be able to sell your shares if no
public market develops, or only sell at a
loss if the market price is low. The
president owns enough shares to control our
business activities and actions without
shareholder input or consent.
Proposed OTC Bulletin
Board Symbol ................... Common Stock: "SVTS" (See "MARKET FOR
COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS.")
Subscription payments will only be released from the escrow account if the
minimum number of Shares is sold or for the purpose of refunding subscription
payments to the subscribers. Subscribers will not have the use or right to
return of such funds during the escrow period, which may last until September
30, 2002. If the offering is terminated before the minimum number of Shares is
sold, subscription payments will be refunded in full to subscribers, without
paying interest or deducting expenses, by mailing refund checks within two
business days of the termination of the offering.
If the minimum offering is sold within the specified period, the net proceeds
from subscribers will be disbursed to Savon. Shares will be issued and mailed
to subscribers within one week of the disbursement of the minimum net proceeds
to Savon, or within one week of the receipt by Savon of additional
subscription payments once the minimum has been met.
SUMMARY FINANCIAL INFORMATION
The following table shows selected summarized financial data for Savon at the
dates and for the periods indicated. The data should be read in conjunction
with the financial statements and notes included in this Prospectus beginning
on page 28.
STATEMENT OF OPERATIONS DATA:
- ----------------------------- From Inception
(June 28, 2001)
to December 31, 2001
----------------------
Revenues ........................ $ -0-
Expenses ........................ $ 35,792
Net (Loss)....................... $ (35,792)
Basic (Loss) per Share .......... $ -0-
Weighted Average Number
of Shares Outstanding.......... 6,250,000
Actual as of
December 31, 2001
---------------------
BALANCE SHEET DATA:
- ------------------
Total Current Assets............. $ 617
Total Assets..................... $ 617
Total Current Liabilities ....... $ 22,006
Working Capital ................. $ (21,592)
Shareholders' Equity (Deficit)... $ (21,560)
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RISK FACTORS
THE PURCHASE OF OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. BEFORE
INVESTING, YOU SHOULD CONSIDER THE NEGATIVE IMPLICATIONS OF ALL THE MATERIAL
IN THIS PROSPECTUS INCLUDING THE FOLLOWING RISK FACTORS.
RISK FACTORS RELATING TO THE BUSINESS OF THE COMPANY
We are a new company with no operating history for investors to use to
evaluate our business.
- ----------------------------------------------------------------------
Savon has had no operations since its organization and is a "start-up" or
"development stage" company. We have no history of operations you can use to
evaluate our business experience. Because we have no operating history
demonstrating our ability to conduct business, your investment risk is greater
than with an established company. Accordingly, you should not invest in Savon
if you cannot afford the loss of your entire investment.
We need money and we will not be able to continue operating if this offering
is not successful.
- -----------------------------------------------------------------------------
We do not have very much operating capital. As a result the report of our
auditors contains a warning, called a going concern opinion, about Savon's
ability to continue operations. Without money from this offering or the
timely receipt of additional financing from other sources, there is
substantial doubt that Savon can continue in business. We have not identified
any other sources of funds if this offering is unsuccessful. See FINANCIAL
STATEMENTS: Independent Auditors' Report and USE OF PROCEEDS.
We have no revenues and are not sure when we will start generating revenues.
- ---------------------------------------------------------------------------
Savon expects to have an initial operating loss due to the costs and expenses
associated with a start-up operation. As of December 31, 2001, the date of
our most recent financial statements included in this Prospectus, we have no
revenues from the sale of any products or services and had a working capital
deficit of $21,592. We have not yet developed an internet web site with
product descriptions or established the commercial viability of our proposed
products in an untested market. As a result, we cannot predict when or if we
will be able to generate revenues or develop into a successful or profitable
business. See DESCRIPTION OF BUSINESS.
Your investment return may depend on our ability to raise additional funds to
support operations until we generate revenues.
- ------------------------------------------------------------------------------
We may need additional financing before we generate revenues. We do not
anticipate commencing sales operations until the development of our web site.
We may not receive any revenues from sales operations before our available
funds are expended. The funds from this offering may not be adequate for us
to finance our planned operations, or to fully exploit the potential market
for our products. For instance, we may discover that our web site needs to be
upgraded to accept online orders, which would increase our required
development capital by a factor of ten, from our anticipated range of $15,000
to $25,000 to $150,000 to $250,000. Therefore, our ultimate success may depend
on our ability to raise additional capital. We do not know if any additional
funds will be available from any source or, if available, whether sufficient
funds will be available to last until our revenues support our business
operations.
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Because our president has not had experience as a chief executive officer,
investors will not be able to evaluate his experience in that capacity.
- -----------------------------------------------------------------------
We have been and will continue for some time to be dependent on the general
business acumen and experience of our president, Michael Rubin, to make the
business decisions required on behalf of Savon. Although Mr. Rubin has
considerable management experience in general and specific experience in the
retail sporting goods business, he has not previously been the chief executive
responsible for strategic planning and final decisions. Because your
investment hinges on the success of Savon's business, your investment decision
depends primarily on your assessment of Mr. Rubin's ability to implement
Savon's business plan. Accordingly, you should carefully consider the
included information about Mr. Rubin. See MANAGEMENT.
Because we do not plan to accept online orders, we do not know if our product
will be competitive on the Internet.
- -----------------------------------------------------------------------------
We are proposing to develop an Internet web site which will be able to
showcase our products but potential buyers will not be able to make purchases
via the web site because enabling online ordering would be too expensive, at
least initially. Actual purchases will have to be made via telephone or email
ordering. Other companies with substantially greater financial resources,
experience, and technical and marketing personnel may offer similar products
through fully developed e-commerce web sites. We believe that we can achieve
and maintain a competitive advantage by providing good prices and personalized
service, but may still be at a disadvantage in making the Internet marketing
of our products competitive. See DESCRIPTION OF BUSINESS.
Our initial business model depends on an informal arrangement between our
president and his brother without which we might be less profitable.
- ------------------------------------------------------------------------------
Our president has made an informal arrangement with his brother, the owner of
a sporting goods retail store, to obtain products from the store's inventory
at cost because of certain volume discount and other benefits which may accrue
to the store as a result of increasing its own orders. We will be dependent
on this arrangement for most, if not all, of our goods. Although each business
may expect to benefit from the proposed relationship, any change in ownership
or control of either of the two companies could threaten the relationship.
For instance, if Michael Rubin left Savon for any reason, his brother would
most likely terminate the arrangement. Such termination would require us to
set up our own independent vendor accounts which might be on less favorable
terms. Because the profitability of our business model is based, at least in
part, on receiving the favorable pricing treatment contemplated by the
arrangement, the termination would probably hurt our profit margin.
RISK FACTORS RELATING TO THE OFFERING
The book value of your investment will be much lower than the share price.
- -------------------------------------------------------------------------
Persons purchasing shares in this Offering will suffer a substantial and
immediate dilution to the book value of the Common Stock below the offering
price. The book value of our shares at December 31, 2001 was approximately a
negative $0.0035 per share. After sales of the minimum 750,000 shares, the
book value per share will be approximately $0.0076, or a loss to subscribers
of approximately $0.0924 per share. After sales of the maximum 1,750,000
shares, the book value per share will be approximately $0.0192, or a loss to
subscribers of approximately $0.0808 per share. See DILUTION.
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We may issue more stock without shareholder input or consent which could
dilute the book value of your investment.
- ------------------------------------------------------------------------
Although we have no present plans to issue more stock, the Board of Directors
has authority, without action by or vote of the shareholders, to issue all or
part of the authorized but unissued shares. In addition, the Board of
Directors has authority, without action by or vote of the shareholders, to fix
and determine the rights, preferences, and privileges of the Preferred Stock,
which may be given voting rights superior to that of the Common Stock in this
offering. Any issuance of additional shares of Common Stock or Preferred
Stock will dilute the ownership percentage of shareholders and may further
dilute the book value of Savon's shares. See DESCRIPTION OF CAPITAL STOCK.
There is no current market for Savon's stock, and, if no market develops, you
may not be able to sell the stock.
- ----------------------------------------------------------------------------
At the present time, there is no public market for Savon's securities, and we
do not know if a public market will develop after the Offering. Upon
completion of the minimum Offering, Savon will seek a securities broker-
dealer, called a market maker, willing to apply for a trading symbol and trade
our stock. We do not know if such a market maker will continue acting for us,
or that an active market will be developed or maintained. Even if a market
develops, the future market price may be lower than the price you paid because
the determination of the offering price was arbitrary. If no market develops,
or if the future market price is low, you may not be able to sell your shares
or may only be able to sell at a loss. See PLAN OF DISTRIBUTION and MARKET FOR
COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
You cannot withdraw your funds once invested and you will not receive a refund
unless we fail to sell the minimum offering amount of $75,000 prior to
September 30, 2002.
- ------------------------------------------------------------------------------
Investors do not have the right to withdraw invested funds. Subscription
payments will only be released from the escrow account to Savon, if the
minimum number of Shares is sold, or for the purpose of refunding subscription
payments to the subscribers, if the minimum number of shares is not sold.
Therefore, once you have invested, you will not have the use or right to
return of such funds during the escrow period, which may last until September
30, 2002.
You will not receive dividend payments.
- --------------------------------------
Savon has not paid and does not plan to pay dividends in the foreseeable
future even if our operations are profitable. Earnings, if any, will be used
to expand our operations, management salaries, hiring additional staff and
operating expenses, rather than to make distributions to shareholders.
Therefore, the future of your investment depends entirely on the development
of a trading market and the potential increase in the market price of our
stock.
The president owns most of the shares and will control the company.
- ------------------------------------------------------------------
Savon issued 6,250,000 shares of common stock to our president in connection
with our organization. Upon completion of the minimum and/or maximum
Offering, he will have control of approximately 89% and 78%, respectively, of
the outstanding shares. As a result, he will be in a position to elect at
least a majority of the Board of Directors, to dissolve, merge or sell the
assets, and to direct our business affairs without shareholder input or
consent. In addition, his investment of cash per share is considerably less
than the share price in the offering, which means your investment is at
proportionately greater risk because your investment per share is greater.
See DILUTION and COMPARATIVE DATA.
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Your ability to sell shares may be limited if the price of our stock, once
listed, is below $5.00 per share because of special special sales practice
requirements applicable to "designated securities" and "penny stock."
- --------------------------------------------------------------------------
Following completion of this Offering, and upon successful listing of the
Common Stock on the OTC Bulletin Board, if the bid price for our Common Stock
is below $5.00 per share, our Common Stock would be subject to special sales
practice requirements applicable to "designated securities" and "penny stock."
No assurance can be given that the bid price for our Common Stock will be
above $5.00 per share following the Offering. If such $5.00 minimum bid price
is not maintained and another exemption is not available, our Common Stock
would be subject to additional sales practice requirements imposed on broker-
dealers who sell the Common Stock to persons other than established customers
and accredited investors (generally institutions with assets in excess of
$5,000,000 or individuals with net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse). For
transactions covered by these rules, the broker-dealer must make a special
suitability determination for the purchaser and have received the purchaser's
written agreement to the transaction prior to the sale. These limitations
make it difficult for broker dealers to sell penny stocks and most will not
recommend a penny stock or sell a penny stock except to long term customers
who are accredited investors. Because of these limitations many brokers do
not follow penny stock or recommend them to clients. Consequently, the penny
stock rules may affect the ability of broker-dealers to sell our common stock
and also may affect the ability of persons acquiring our common stock to
resell such securities in any trading market that may develop. If brokers do
not recommend Savon to their clients, it may be difficult to establish a
market for the securities or to develop a wide spread shareholder base.
Therefore, an investor trying to resell our shares may have difficulty because
there may be little demand for our shares and even small share sales may
result in a reduction in our share price.
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DILUTION
At December 31, 2001, Savon had a net tangible book value of $(21,592). The
following table sets forth the dilution to persons purchasing Common Stock in
this Offering without taking into account any changes in the net tangible book
value of Savon after December 31, 2001, except the sale of the minimum and
maximum shares of Common Stock offered at the public offering price and
receipt of the minimum $75,000 and the maximum $175,000, gross proceeds
therefrom. The net tangible book value per share is determined by subtracting
total liabilities from the tangible assets of Savon divided by the total
number of shares of Common Stock outstanding.
Minimum Maximum
Shares Shares
Sold Sold
--------- ---------
Public offering price per share $ 0.10 $ 0.10
Net tangible book value per share
before this offering (1) $(0.0035)
Increase per share attributable to
to new investors $ 0.0111 $ 0.0227
Adjusted net tangible book value per
share after this offering $ 0.0076 $ 0.0192
Dilution per share to new investors $ 0.0924 $ 0.0808
Percentage dilution 92.4% 80.8%
- ------------------------
(1) Determined by dividing the number of shares of Common Stock outstanding
into the net tangible book value of Savon.
[This space to end of page intentionally left blank]
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COMPARATIVE DATA
The following chart illustrates the percentage of ownership in Savon held by
the present Shareholder, by the public investors that purchase the minimum and
maximum number of shares of Common Stock in this Offering, and a comparison of
the relative money invested by the present Shareholder of Savon and by the
public investors in this Offering.
Total Total
Shares Purchased Consideration Average
---------------- ---------------- Price
Number % Amount % Per Share
---------------- ---------------- ---------
Minimum Offering
Present Shareholder 6,250,000 89.29 $ 10,000 11.76(1) $ 0.0016(2)
New Investors 750,000 10.71 $ 75,000 88.24(3) $ 0.100
Maximum Offering
Present Shareholder 6,250,000 78.13 $ 10,000 5.41(1) $ 0.0016(2)
New Investors 1,750,000 21.87 $175,000 94.59(3) $ 0.100
- ------------------------
(1) Based on the total cash contributed by the existing Shareholder.
(2) Determined by dividing the number of shares of Common Stock outstanding
at December 31, 2001, into the total consideration paid.
(3) Estimated gross proceeds from the Offering.
PLAN OF DISTRIBUTION
Savon will sell up to 1,750,000 shares of Common Stock to the public on a
"best efforts, 750,000 shares minimum, 1,750,000 shares maximum" basis. If
Savon fails to sell the minimum number of shares of Common Stock prior to
September 30, 2002 the offering will be terminated. In the event of such
termination, subscription payments will be refunded in full to subscribers,
without paying interest or deducting expenses, by mailing refund checks within
two business days of the termination of the offering.
All subscription payments should be made payable to "Escrow Specialists-Savon
Team Sports, Inc., Escrow Account." Escrow Specialists is a private Ogden,
Utah company unrelated to Savon or its president, which will act as Savon's
escrow agent for this offering. Savon will deposit subscription payments no
later than noon of the next business day following receipt in the escrow
account maintained by Escrow Specialists, as escrow agent, pending the sale of
the minimum number of shares of Common Stock within the specified period.
Subscription payments will only be released from the escrow account if the
minimum number of Shares is sold or for the purpose of refunding subscription
payments to the subscribers. Subscribers will not have the use or right to
return of such funds during the escrow period, which may last until September
30, 2002.
If the minimum is sold within the specified period, the net proceeds from
subscribers will be disbursed to Savon. Shares will be issued and mailed to
subscribers within one week of the disbursement of the net proceeds to Savon,
or within one week of the receipt by Savon of additional subscription payments
once the minimum has been met.
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Any changes in the offering's material terms after the registration
statement's effectiveness will terminate the offering and entitle subscribers
to a refund. Material changes include an extension of the offering period, a
change in the offering price, the addition of a minimum purchase requirement,
a change in the amount of proceeds necessary to release the funds in escrow,
or a change in the estimates for application of the proceeds.
The Common Stock is being offered by Michael Rubin, president of Savon and no
commissions will be paid on sales made by Mr. Rubin. Neither the company, its
affiliates, or anyone involved in the marketing of the stock have reserved the
right to purchase shares in order to reach the minimum sales threshold.
Determination of Offering Price
- -------------------------------
Prior to the Offering there has been no market for Savon's Common Stock and
there can be no assurance that a regular trading market will develop on
completion of this Offering. The Offering price of the Common Stock was
determined by Savon and may not be indicative of the market price for the
Common Stock after the Offering or of the value of Savon. At this time, an
investment in Savon, which has no revenues from operations, is an investment
based on the perceived value of Savon's products and potential market, the
president's ability to develop an untested market, and Savon's overall
business strategy, none of which can be quantified. Among the factors
considered in determining the initial public offering price were Savon's
proposed business activities and the scope and nature of the products it
intends to offer and the market it is targeting, Savon's limited operations,
current financial condition and possible need for additional working capital,
its future prospects, the experience of its president, the economics of
Savon's industry in general, prior sales of Savon's common stock, the general
condition of the equity securities market, the anticipated marketability of
Savon's common stock as compared to similar securities of companies considered
comparable to Savon, and other relevant factors. As stated above, the factors
considered are difficult to quantify and the initial public offering price
should be considered arbitrary and may be based more on a perceived value at
this time rather than an actual proven value.
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USE OF PROCEEDS
The gross proceeds to be received by Savon from the sale of the minimum and
the maximum number of shares of Common Stock are estimated at approximately
$75,000 and $175,000, respectively. It is anticipated that during the 12
month period following the Offering, Savon intends to use the proceeds from
the Offering in the following general amounts and order of priority. The
allocation of proceeds is based on Savon's estimates.
Minimum Maximum
ITEM Amount % Amount %
- ---------------------------------- ---------- ----- ---------- -----
Legal Expenses 18,000 24.0 18,000 10.3
Accounting 2,000 2.6 2,000 1.2
Initial Web Site Development 15,000 20.0 25,000 14.3
Marketing and Sales Development 5,000 6.7 20,000 11.4
Working Capital (1) 35,000 46.7 110,000 62.8
---------- ----- ---------- -----
TOTAL NET PROCEEDS $ 75,000 100.0 $ 175,000 100.0
========== ===== ========== =====
(1) It is anticipated that the amounts listed under Working Capital will be
used primarily for the expenses associated with promoting and maintaining the
web site, once it has been developed. If the maximum amount is raised, some
of the funds allocated to Working Capital, up to 20% or $35,000, may be used
for salaries to employees, excluding the president. The president is not
intending to take any compensation until revenues from operations justify it.
The amounts set forth merely indicate the general application of net proceeds
of the Offering. Actual expenditures relating to the development of Savon's
internet web site may differ from the estimates depending on change orders
and/or increased time charges from third parties. Savon recognizes that such
proceeds may be insufficient to enable Savon to fully exploit its business
plan and objectives and Savon may have to seek additional financing through
loans, the sale of additional securities, or other financing arrangements. No
such arrangements exist or are contemplated, and there can be no assurance
that they may be available in the future should the need arise. All funds not
being utilized by Savon for its proposed business will be held in interest
bearing accounts, short term interest bearing certificates of deposit,
treasury bills, or other high grade short term securities. Those funds which
Savon receives, other than from the Offering, will be utilized for the purpose
of paying any additional costs of this Offering and funding Savon business
operations.
15
DESCRIPTION OF BUSINESS
This description of Savon's Business and Plan of Operation may contain
"forward-looking" statements. Examples of forward-looking statements include,
but are not limited to: (a) projections of revenues, capital expenditures,
growth, prospects, dividends, capital structure and other financial matters;
(b) statements of plans and objectives of Savon or its management or Board of
Directors; (c) statements of future economic performance; (d) statements of
assumptions underlying other statements and statements about Savon and its
business relating to the future; and (e) any statements using the words
"anticipate," "expect," "may," "project," "intend" or similar expressions.
Organization and Corporate History
- ----------------------------------
Savon was organized on June 28, 2001, under the laws of the State of Utah, by
Michael L. Rubin, who currently is Savon's sole officer, director and
shareholder. In connection with forming Savon, Mr. Rubin contributed cash to
pay for the initial organization and a portion of the expenses of this
registration. Since inception, Savon's business activities have been limited
to organizational matters including opening a bank account and obtaining the
services of accounting and legal professionals in connection with the
preparation of this offering.
Business in General
- -------------------
Savon Team Sports, Inc (Savon) proposes the creation of an Internet web site
which will target specific niche opportunities within the sporting goods
industry. Savon has reserved the Internet domain name savonteamsports.com,
and information at the web site announces the proposed development and intent
of Savon.
The intent of the web site will be to quickly and efficiently showcase
available products, and provide email and telephone contact information for
Savon to potential purchasers. Should the initial efforts of Savon succeed,
the web site will be expanded and developed into an e-commerce site that will
eventually enable coaches and managers to purchase everything needed for team
sports. However, the costs associated with the development of an e-commerce
web site are substantial, and Savon does not intend to expand the web site to
accommodate actual purchases through the web site until sales revenues are
established and additional funds are raised. Savon believes that although the
convenience such an expanded web site would provide purchasers is important,
the single most important ingredient to our success will be the development of
personal relationships with purchasers via the telephone, e-mail and/or in
person. This key ingredient is crucial to our long term success.
Plan of Operation
- -----------------
Savon's management believes a substantial opportunity exists by providing
competitively priced, high-quality uniforms and sporting goods equipment,
accompanied by excellent personalized service to an international market
consisting of United States overseas military installations. Such
installations encourage and foster team sports among troops, and uniforms and
equipment are basic needs often ill met by local providers.
Thus far, Savon has already identified all military installations located in
foreign countries as well as those located in U.S. Territories. (See
accompanying listings.) Each military installation has a recreation director
who will be contacted by Savon through direct mail or by telephone and who
will then be directed to our web site where our products will be displayed and
described.
16
In addition to the sports teams drawn from the troops, such military
installations frequently also need uniforms and supplies for their youth
programs. Savon intends to identify and contact the individuals on each base
that are in charge of individual leagues and teams for youth programs.
Additional markets that Savon will concurrently pursue include American and/or
English speaking schools in foreign countries. Savon believes such schools
experience the same problems regarding consistency and quality of sports team
products as well as lack of personal service as the military installations.
Therefore, the schools should comprise another prime market for Savon to
initially target. Savon is in the process of compiling a list of target
schools and contact names.
Savon anticipates being able to fund the initial development of Savon's
showcase web site with the offering proceeds from this Prospectus. Once the
web site is developed, Savon will generate income from sales of products.
Three and Six Month Periods Ended December 31, 2001
- ---------------------------------------------------
Revenues and Costs of Sales. Savon is considered a development stage company
and has not yet commenced business operations. Savon had no revenues for the
three and six month periods ended December 31, 2001.
General and Administrative Expense. Total operating expenses for three and
six month periods ended December 31, 2001 were $14,132 and $35,792,
respectively, consisting primarily of legal and accounting expenses related to
Savon's offering. Savon expects to incur increased operating expenses as its
business operations commence. Net loss for the three and six month periods
ended December, 2001 was $14,132 and $35,792 respectively.
Liquidity and Capital Resources
- -------------------------------
To date, Savon has financed its operations solely through capital contributed
by its principal officer. During the six month period ended December 31, 2001,
Mr. Rubin contributed administrative services to the Company valued at $2,400
(six months at $400 per month) and office rental valued at $1,800 (six months
at $300 per month). At December 31, 2001, the Company had a working capital
deficit of $21,592. Because Savon has a working capital deficit, it may need
to borrow additional money from its Principal Shareholder in order to finance
its operating expenses until the completion of this offering. Savon
anticipates that it will be able to sell at least the minimum shares available
in its public offering although it has no commitments from purchasers as of
the date of this Prospectus.
Savon's accompanying financial statements include a going concern
qualification because Savon does not have significant cash or other material
assets, nor has it established any source of revenues to cover its operating
costs and allow it to continue. Savon intends to create its proposed website
to generate revenues from the sale of team sports clothing and equipment. At
this time, however, no such revenues have been generated, nor can management
predict when such revenues may begin.
Given its current financial condition, it is unlikely that Savon could make an
additional public sale of securities or be able to borrow any significant sum
from either a commercial or private lender. The most likely method available
to Savon would be the private sale of its securities. There can be no
assurance that Savon will be able to obtain such additional funding as needed,
or that such funding, if available, can be obtained on terms acceptable to
Savon.
17
If Savon raises the minimum offering amount, Savon expects to be able to
develop its web site, do limited amounts of marketing and sales development
and have enough working capital to offset operating costs for the next twelve
months. If Savon raises the maximum offering amount, Savon will be able to
engage in substantially more marketing and sales activities and have
additional working capital for operating costs, including salaries, for the
next twelve months. In addition, if the minimum is raised, the website will
be a basic listing of products and services with contact information. If the
maximum is raised, the website will include additional still and video
graphics, and more extensive product and services information to make the
presentation more attractive to potential customers. In either case,
customers will have to contact Savon by phone, email or regular mail to place
orders.
Products and Services
- ---------------------
Available products will include everything needed to totally outfit and equip
teams in most sports (baseball, softball, basketball, football, wrestling,
volleyball, and soccer). The following product list covers uniforms and
equipment to be included on the initial web site:
Baseball and Softball - Complete uniform including hats and visors with
embroidery, jerseys with screen printing or twill applique, undershirt such as
turtlenecks, pants or shorts, belts, socks, warm up jackets, and metal or
rubber cleats.
Equipment including wood or aluminum bats, mitts, batting gloves, bat
bags, equipment bags, and batting helmets. Also, catchers' equipment
including helmet, face mask, chest protector and shin guards.
Basketball - Complete uniform including jersey with screenprinting, shorts,
socks, and shoes. Also warm up clothing consisting of shooter's shirt and
warm up
pants.
Equipment including all major brands of basketballs and equipment bags.
Football - Complete uniform and protective equipment including helmet and
facemask, mouthpiece, shoulder pads, jerseys with screen printing, pants with
knee, butt and thigh pads, belts, gloves, cleats, socks, and protective pads
such as forearm pads.
Other equipment including footballs, kicking tees, and equipment bags.
Wrestling - Complete uniforms including wrestling singlets with screen
printing, nylon or fleece warm up suits, wrestling shoes and socks.
Equipment including kneepads and wrestling headgear.
Volleyball - Complete uniforms including jerseys with screen printing,
shorts, socks, warm up suits, and volleyball shoes.
Equipment including top brands of volleyballs, and equipment bags.
Soccer - Complete uniforms including jerseys with screen printing, shorts,
socks, shinguards, sweatsuits, and soccer cleats. Also goalie gear including
jerseys, pants or shorts, and goalie gloves.
Equipment including soccer balls, and equipment bags.
18
In addition to the sale of the above products, Savon will also earn some
revenue through subcontracted screen-printing and embroidery on uniforms for
logos, numbers and even names, if desired. Savon expects to hire a third
party to do the screen-printing and embroidery and pass the cost plus a small
percentage mark-up on to the purchasers of the products. Although the profit
margin for this extra service will be small, Savon believes that offering
items customized in this fashion will increase demand for its products. As
demand for customized products warrants, Savon anticipates acquiring its own
screen-printing and embroidery equipment.
Marketing and Distribution
- --------------------------
Savon's initial marketing efforts will be directed towards the individual
recreation directors for United States military installations in foreign
countries and overseas U.S. territories. Savon has identified 61 U.S.
military installations, including army, navy, air force and marines, in 19
countries as potential targets and is in the process of assembling a contact
list of recreation directors for each installation.
Based on Savon's research, overseas military groups interested in purchasing
team sports equipment currently have three options for purchases - local
sporting goods outlets, catalogue sales, or internet suppliers. Each of these
options appears to have drawbacks which Savon believes it can address. For
local outlets, for instance, Savon's research indicates that the quality of
the products and service provided are inadequate or unsatisfactory.
Catalogues make more high quality products available, but rarely offer the
kinds of screen printing and embroidery service that Savon is prepared to
provide. Other internet sources may also provide a wide range of products,
but web sites may be hard to find and few offer the kind of personalized
printing services that Savon proposes to provide.
Savon believes that we will be able to provide overseas military customers
with better products and services than local suppliers, will be able to match
or beat catalogue or internet prices from other suppliers, and provide a full
spectrum of products and printing and embroidery services not otherwise
available from a single source. In addition, by personally contacting
potential purchasers by telephone, mailers and email, Savon can direct such
potential purchasers to our website, saving them the time and frustration of
searching through a large number of web sites for information.
Following the initial marketing program, Savon believes that it can expect to
develop a market among overseas elementary and secondary schools that receive
assistance and support from the Office of Overseas Schools of the U.S. State
Department, referred to as American-sponsored schools. This potential market
is based on information compiled from the Overseas School Advisory Council
Fact Sheet available on the U.S. State Department web site which includes
contact information for the schools.
According to the Fact Sheet, there are 181 schools in 129 countries with a
total enrollment of almost 95,000 students. The schools vary widely
in size, resources and programs, so Savon will have to do considerable
additional research to narrow the list to identify the best prospects for
contact, but we believe the potential market opportunity is considerable.
Savon intends to distribute any products purchased by its customers via United
States Global Priority Mail and/or other available international priority
delivery services. Customers will be able to specify a delivery method at the
time orders are placed.
19
Competition
- -----------
Savon does not believe that local sporting goods outlets near overseas
military installations offer significant competition because such local
outlets cannot offer the range and quality of products available through
catalogue or web site sales. However, Savon will be competing in general with
many larger, better financed and better established sporting goods retailers
who offer products through catalogues or web sites.
Specific competitors in the area of catalogue sales include East Bay, Baseball
Express, Score, and Markwort. East Bay and Markwort carry a wide variety of
sports equipment and uniforms, but do not offer screenprinting or embroidery
for team uniforms. Baseball Express and Score specialize only in baseball and
soccer equipment, respectively, rather than the full line of team sports
equipment Savon will feature.
Specific competitors in the internet arena which offer all kinds of sporting
goods include SportsDepot.com, TheSportsAuthority.com, and OnlineSports.com,
as well as hundreds of others. Savon will also be competing with all other
web sites that offer sports team products, the largest of which include
EastSideTeamSports.com, and PiercesTeamSports.com. Besides these more
significant web sites, Savon will be competing with many other lesser-known
web sites for sports products. Although Savon believes that its proposed
products and services can be offered at competitive prices, and its initial
target markets are sufficiently unique to give it a competitive advantage,
there can be no assurance that its marketing strategy and showcase web site
will be successful enough to generate sufficient sales for continuing
operations.
Manufacturing, Supplies, and Quality Control
- --------------------------------------------
Savon's president, Michael Rubin, has been working since 1993 for SavOn
Sporting Goods, Inc., a sporting goods retailer and varsity athletic goods
supplier, located in Ogden, Utah (hereinafter referred to as SOSG). SOSG is
owned by Mr. Rubin's brother. However, SOSG has no long range growth plans
beyond its existing market and does not intend to expand its current business
overseas. Therefore, SOSG has consented to initially allow the Company to
fill orders with SOSG inventory, which benefits SOSG by assisting it in
reaching various minimum purchase amounts that trigger additional discounts
from vendors, including maximum sales discounts and free freight. SOSG will
benefit by receiving the additional discounts and, because of the quantities
of merchandise already purchased by SOGS and the existing established personal
relationships SOSG has with vendors, Savon will receive pricing that will
enable it to remain competitive with larger national chains, and competing
internet providers.
The two companies sales and revenues will be totally separate. Savon
will share in the discounts provided by manufacturers by purchasing inventory
from SOSG at net (after discount) pricing as orders are placed by Savon's
customers. SOSG benefits by receiving the discounts when the products are
originally purchased. There will be no limits set by SOSG as to product
availability to Savon. Reorders of merchandise from vendors may be necessary
and can be done as needed.
20
The entire arrangement is an informal one based on anticipated mutual
financial benefit. If the arrangement does not prove beneficial or either
party wishes to end the relationship, Savon can open its own accounts with
vendors. Larger volume purchases receive more favorable pricing in most cases,
but not all. Profitable margins can still be had at lower volume if Savon
purchased its own products independent of SOSG, although the margins might not
be as great.
Besides being able to provide products from the SOSG inventory, Savon will
offer various products made by manufacturers that drop ship merchandise
directly to end purchasers, thus reducing Savon's need for substantial advance
capital for placing orders and/or maintaining a large inventory of warehoused
products. Drop ship simply means that the manufacturer ships directly to the
consumer, eliminating one step in the process of shipping to Savon and then
from Savon to the customer. Savon will be billed for all product shipped to
the customer just the same as if it were shipped to Savon first. Pricing
remains the same as if it were shipped to Savon originally, but there are no
further freight costs incurred by shipping from Savon to the customer. The
manufacturer receives no sharing of revenues from Savon's consequent sale.
Other than its proposed relationship with SOSG, Savon anticipates that it will
not rely on any other single supplier for more than 10% of its products, and
that, if necessary, it could replace any single supplier without any delay or
additional expense.
Domain Names, Trademarks and Copyrights
- ---------------------------------------
Savon has reserved the Internet domain name "savonteamsports.com." Such
initial reservation is for a two year period at an aggregate cost of $75, and
is easily renewed for extended periods thereafter. Of yet, Savon has not
created a logo or any trademarks, but intends to do so as part of the graphics
associated with Savon's proposed web site.
Research and Development
- ------------------------
Other than the proposed expenditures for the creation and development of
Savon's proposed web site as disclosed in the Use of Proceeds, Savon does not
anticipate any research and development costs in the immediate future. Once
the minimum offering is complete, Savon will hire a third party outside source
to develop the web site. Savon intends to request bids from a number of
companies that offer web site construction and maintenance.
Regulation and Environmental Compliance
- ---------------------------------------
Savon is not aware of any need for government approval of its proposed
products and services, nor of any environmental laws relating to its proposed
products and services. To the best of Savon's knowledge, there is no need for
either U.S. or foreign government approval on sales made by Savon to overseas
United States military installations. Their purchases are treated exactly the
same as if they were purchased within the continental United States.
Employees
- ---------
Savon has no paid employees at this time. If its business plan is successful,
Savon expects it will be able to hire part or full time employees to assist in
its operations as needed. Michael Rubin, Savon's president, intends to
continue to work for SOSG on at least a part time consulting basis in addition
to his activities for Savon until such time as Savon's operations require him
to devote all his time to Savon.
21
DESCRIPTION OF PROPERTIES
Executive Office
- ----------------
Savon currently utilizes at no cost approximately 250 square feet of dedicated
office space located at the home of Savon's President, Michael L. Rubin, 5039
South 1075 East, Ogden, Utah 84403. In the opinion of Savon's management, such
office space is sufficient to meet Savon's needs for the next 12 months.
DIRECTORS, EXECUTIVE OFFICERS, AND SIGNIFICANT EMPLOYEES
The following table sets forth the name, age, and position of each executive
officer and director and the term of office of each Director of Savon.
Name Age Position Held Position Since
- ---- --- -------- -------------------
Michael L. Rubin 50 President/Secretary
and Director June 2001
Mr. Rubin is Savon's sole Director and officer. At such time as state law
requires following the issuance of shares in this offering, additional persons
will be appointed to serve as directors of Savon until the next annual meeting
of shareholders. No candidates for director have been selected. The term of
office of each director is one year and until his or her successor is elected
at the Registrant's annual shareholders' meeting and is qualified, subject to
removal by the shareholders. The term of office for each officer is for one
year and until a successor is elected at the annual meeting of the board of
directors and is qualified, subject to removal by the board of directors.
Biographical Information
- ------------------------
Set forth below is certain biographical information with respect to Savon's
existing officer and director.
Mike L. Rubin, 50, graduated in 1973 Magna Cum Laude from the University of
Utah with a Bachelors Degree in Business Finance. From 1973 to 1993, Mr.
Rubin worked in various capacities in the casino industry, eventually becoming
a supervisor and manager. As manager, his duties included scheduling over 70
dealers and floor supervisors, instituting and maintaining proper procedures
and behavior of the dealers and floor supervisors, and attending to a wide
variety of customer needs and complaints.
Since 1993, Mr. Rubin has been Vice President of SavOn Sporting Goods ("SOSG")
in Ogden, Utah, a retail sporting goods supplier owned by Mr. Rubin's brother.
Mr. Rubin's responsibilities and experience for SOSG include: advertising and
marketing, retail sales, purchasing of inventory, scheduling and management of
employees, payroll, accounts receivable, and accounts payable. He has also
provided bids and consummated sales of team sporting goods equipment and
uniforms to schools, city and county recreation organizations, church
teams, and military teams.
22
Resolution of Potential Conflict of Interest
- --------------------------------------------
In the course of his work for SOSG, Mr. Rubin formulated the idea for the
marketing and sales approach he intends to implement for Savon. Mr. Rubin
presented the idea of both the market opportunity and the sales approach to
SOSG before founding Savon. However, SOSG has determined not to try to expand
its operations into this overseas arena or through any similar marketing
approach. Although no formal non-competition agreement has been entered into,
SOSG has determined to remain focused exclusively on its current business with
local northern Utah local sports and local teams. SOSG will reap some
benefits from the association due to the increased volume discounts it may
obtain from its own suppliers by aggregating its orders with Savon. Mr. Rubin
intends to make a gradual transition from his current full time position with
SOSG to a part time consulting position as work for Savon requires more of his
time and efforts. Both SOSG and Mr. Rubin are satisfied that no conflict of
interest exists now or will arise either from Savon's proposed marketing and
sales approach of Mr. Rubin's transition from SOSG to Savon.
REMUNERATION OF OFFICERS AND DIRECTORS
The following table sets forth certain summary information concerning the
compensation paid or accrued since inception to Savon's chief executive
officer and/or any of its other officers that received compensation in excess
of $100,000 during such period (From June 28, 2001 [inception] to December 31,
2001).
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
------------------- ----------------------
Awards Awards Payouts
------ ------ -------
Other Restricted
Name and Annual Stock Options LTIP All other
Principal Position Year Salary($) Bonus($) Compensation Awards /SARs Payout Compensation
- ------------------ ---- ------ -------- ------------ ------ ------- ------ ------------
Michael L. Rubin 2001 $ -0- -0- -0- -0- 00- -0- -0-
President
Employment Agreements
- ---------------------
Savon does not have any employment agreement with Mr. Rubin, its President,
sole Director and the Principal Shareholder of Savon. Mr. Rubin has not
received any compensation in connection with serving as an officer and
director of Savon, and does not intend to receive any compensation until
revenues from operations justify it. During the six months ended December 31,
2001, Mr. Rubin contributed administrative services to the Company valued at
$2,400 (six months at $400 per month) and office rental valued at $1,800 (six
months at $300 per month). See Note 3 to the December 31, 2001 financial
statements.
Board Compensation
- ------------------
Savon's director receives no compensation for attendance at board meetings.
Additional members of the Board of Directors who may be appointed following
the completion of the offering will serve for no compensation until the next
annual meeting of shareholders.
23
Options/Stock Appreciation Rights ("SAR") Grants in Last Fiscal Year
- --------------------------------------------------------------------
No individual grants of stock options (whether or not in tandem with SARs), or
freestanding SARs were made since inception to any of the named executive
officers.
Bonuses and Deferred Compensation
- ---------------------------------
There are no compensation plans or arrangements, including payments to be
received from Savon, with respect to any person named as a director, executive
officer, promoter or control person above which would in any way result in
payments to any such person because of his resignation, retirement, or other
termination of such person's employment with Savon or its subsidiaries, or any
change in control of Savon, or a change in the person's responsibilities.
Compensation Pursuant to Plans
- ------------------------------
Savon has no compensation plan in place.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Lack of Prior Public Market and Possible Volatility of Stock Price
- ------------------------------------------------------------------
Prior to this Offering, there has been no public market for the Common Stock
and there can be no assurance that a significant public market for the Common
Stock will develop or be sustained after the Offering. Savon will seek a
Market Maker to apply to have Savon's Common Stock included for quotation in
the over-the-counter market on the OTC Bulletin Board under the proposed
symbol "Savon" on the successful completion of the minimum Offering. There
can be no assurance that the Market Maker's activities will be continued, or
that an active trading market for Savon's Common Stock will be developed or
maintained. The future market price of the Common Stock may be highly
volatile. There have been periods of extreme fluctuation in the stock market
that, in many cases, were unrelated to the operating performance of, or
announcements concerning the issuers of the affected securities. Securities
of issuers having relatively limited capitalization, limited market makers or
securities recently issued in a public offering are particularly susceptible
to fluctuations based on short-term trading strategies of certain investors.
Although the initial public offering price of the Common Stock reflects
Savon's assessment of current market conditions, there can be no assurance
that such price will be maintained following the Offering.
Possible Sale of Common Stock Pursuant to Rule 144
- --------------------------------------------------
Savon has previously issued shares of Common Stock that constitute "restricted
securities" as that term is defined in Rule 144 adopted under the Securities
Act. Subject to certain restrictions, such securities may generally be sold
in limited amounts one year after their acquisition. Savon issued 6,250,000
shares of Common Stock to Savon's founder in connection with its organization.
The shares of Common Stock issued to Savon's founder may become eligible for
resale under Rule 144 in June 2002. (See "MARKET FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS").
Shareholders
- ------------
As of April 12, 2002, Savon has one shareholder.
24
Control by Existing Shareholder
- -------------------------------
Upon completion of the minimum and/or maximum Offering, approximately 89% and
78%, respectively, of the outstanding shares of Common Stock will be
beneficially owned by the current President and existing Shareholder of Savon.
As a result, the person currently in control of Savon will continue to be in a
position to elect at least a majority of the Board of Directors of Savon, to
dissolve, merge or sell the assets of Savon, and generally, to direct the
affairs of Savon. See SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
Disproportionate Risks
- ----------------------
Upon completion of the minimum Offering, the present Shareholder will own
approximately 89% of the then issued and outstanding shares of Savon, for
which he will have contributed $10,000 cash. Persons purchasing shares of
Common Stock in the minimum Offering will own approximately 11% of the then
issued and outstanding shares, for which they will have paid $75,000, or
approximately 88% of the then invested capital. Upon completion of the
maximum Offering, the present Shareholder will own approximately 78% of the
then issued and outstanding shares of Savon. Persons purchasing shares of
Common Stock in the maximum Offering will own approximately 22% of the then
issued and outstanding shares, for which they will have paid $175,000, or
approximately 95% of the then invested capital. Consequently, the purchasers
in this Offering will bear a disproportionately greater risk investing in
Savon's business than its present Shareholder. See Dilution and Comparative
Data.
PRINCIPAL SHAREHOLDERS
The following table sets forth as of April 12, 2002 the name and address and
the number of shares of Savon's Common Stock, par value $0.001 per share, held
of record or beneficially by each person who held of record, or was known by
Savon to own beneficially, more than 5% of the 6,250,000 shares of Common
Stock issued and outstanding, and the name and shareholdings of each director
and of all officers and directors as a group.
Principal Shareholders: Amount and Percent(2)
Nature of After
Beneficial Before Offering
Class Name and Address Ownership(1) Offering Minimum Maximum
- ------ ---------------- ------------ -------- ------- -------
Common Michael L. Rubin 6,250,000 100.0 89.3 78.1
5039 South 1075 East
Ogden, Utah 84403
Officers and Directors: Amount and Percent(2)
Nature of After
Beneficial Before Offering
Class Name and Address Ownership(1) Offering Minimum Maximum
- ------ ---------------- ------------ -------- ------- -------
Common Michael L. Rubin 6,250,000 100.0 89.3 78.1
5039 South 1075 East
Ogden, Utah 84403
- ------------------------
(1) All shares are owned beneficially and of record by the named shareholder
and the shareholder has sole voting, investment, and dispositive power of the
shares.
(2) All percentages have been rounded to the nearest one-tenth of one percent.
25
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
Transactions with Management and Others
- ---------------------------------------
The information set forth below is provided by Savon based on what Savon
believes may be material to the shareholders in light of all the circumstances
of the particular case. The significance of the transactions disclosed may be
evaluated by each potential investor after taking into account the
relationship of the parties to the transactions and the amounts involved in
the transactions.
Savon was organized on June 28, 2001, primarily through the efforts of Michael
L. Rubin, Savon's sole officer, director and shareholder. Mr. Rubin was issued
6,250,000 shares of Savon's common stock in consideration of $10,000 cash.
Michael Rubin has worked since 1993 for SavOn Sporting Goods ("SOSG") in
Ogden, Utah, a retail sporting goods supplier owned by Mr. Rubin's brother.
SOSG has offered to supply Savon with inventory at cost because of certain
volume discount and other benefits which may accrue to SOSG as a result of
increasing its orders. Because of the family relationship between Mr. Rubin
and his brother, the business relationship of the two companies cannot be
considered an arms length relationship. Any change in ownership of either of
the two companies could threaten the proposed business relationship.
During the six months ended December 31, 2001, Mr. Rubin contributed
administrative services to the Company valued at $2,400 (six months at $400
per month) and office rental valued at $1,800 (six months at $300 per month).
See Note 3 to the December 31, 2001 financial statements.
[This space to end of page intentionally left blank]
26
DESCRIPTION OF CAPITAL STOCK
General
- -------
The Registrant is authorized to issue one hundred million shares of common
stock, par value $0.001 per share (the "Common Stock")and five million shares
of preferred stock, par value $0.001 per share (the "Preferred Stock"). Savon
has 6,250,000 shares of Common Stock and no shares of Preferred Stock issued
and outstanding at April 12, 2001. Although Savon's Board of Directors has no
present intention to do so, the Board of directors has authority, without
action by or vote of Savon's Shareholders, to issue all or part of the
authorized but unissued shares. In addition, Savon's Board of Directors has
authority, without action by or vote of Savon's Shareholders, to fix and
determine the rights, preferences, and privileges of the Preferred Stock,
which may be given voting rights superior to that of the Common Stock, which
power may be used to hinder or deter a takeover proposal, should any occur.
Any issuance of additional shares of Common Stock or Preferred Stock will
dilute the percentage ownership interest of Shareholders and may further
dilute the book value of Savon's shares.
Common Stock
- ------------
The holders of Common Stock are entitled to one vote per share on each matter
submitted to a vote at any meeting of shareholders. Shares of Common Stock do
not carry cumulative voting rights and, therefore, a majority of the shares of
outstanding Common Stock will be able to elect the entire board of directors
and, if they do so, minority shareholders would not be able to elect any
persons to the board of directors. The Registrant's bylaws provide that a
majority of the issued and outstanding shares of the Registrant constitutes a
quorum for shareholders' meetings, except with respect to certain matters for
which a greater percentage quorum is required by statute or the bylaws.
Shareholders of the Registrant have no preemptive rights to acquire additional
shares of Common Stock or other securities. The Common Stock is not subject
to redemption and carries no subscription or conversion rights. In the event
of liquidation of the Registrant, the shares of Common Stock are entitled to
share equally in corporate assets after satisfaction of all liabilities.
Holders of Common Stock are entitled to receive such dividends as the board of
directors may from time to time declare out of funds legally available for the
payment of dividends. The Registrant seeks growth and expansion of its
business through the reinvestment of profits, if any, and does not anticipate
that it will pay dividends in the foreseeable future.
Preferred Stock
- ---------------
The authority to issue the Preferred Stock is vested in the board of directors
of Savon, which has authority to fix and determine the powers, qualifications,
limitations, restrictions, designations, rights, preferences, or other
variations of each class or series within each class which Savon is authorized
to issue. The above described authority of the Board of Directors may be
exercised by corporate resolution from time to time as the Board of directors
sees fit.
27
Non-Cumulative Voting
- ---------------------
The holders of shares of Common Stock of Savon do not have cumulative voting
rights. Thus, the holders of more than 50% of such outstanding shares, voting
for election of directors, can elect all of the directors to be elected, and
in such event, the holders of the remaining shares will not be able to elect
any of Savon's directors. If the maximum number of shares offered hereby are
sold, the present shareholder will own approximately 78% of Savon's issued and
outstanding shares, and in either event, will remain in a position to elect
all of the members of the Board of Directors. Further, if the minimum number
of shares are sold, Mr. Rubin, President of Savon, will own approximately 89%
of Savon's Common Stock and will therefore control Savon (See "PRINCIPAL
SHAREHOLDERS").
Transfer and Warrant Agent
- --------------------------
Savon's transfer agent is Colonial Stock Transfer Company, Salt Lake City,
Utah 84111, Telephone (801) 355-5740 and Facsimile (801) 355-6505.
Market Information
- ------------------
At the present time, there is no public market for any of Savon's securities,
and there is no assurance any market will develop after the Offering. The
development of a trading market following completion of this Offering will be
dependent on Market Makers and other broker-dealers initiating quotations in
interdealer quotation media, in maintaining a trading position, and otherwise
engaging in market making activities in Savon's securities. There is no
assurance that any trading market for Savon's securities will develop
following the Offering. See MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
Reports to Shareholders
- -----------------------
Savon intends to furnish its shareholders with annual reports containing
audited financial statements as soon as practicable at the end of each fiscal
year, commencing with the next fiscal year. In addition, Savon may, from time
to time, issue unaudited interim reports and financial statements, as may be
required under the Securities Exchange Act of 1934, as amended.
Dividend Policy
- ---------------
The holders of Common Stock are entitled to dividends when, and if, declared
by the Board of Directors from funds legally available therefor, subject to
any preference on preferred stock, if applicable, which may then be
outstanding. Savon has not paid a dividend since its incorporation. Because
Savon is in the formative stage and will be engaged in start-up operations for
the next several years, it is not anticipated that funds will be available for
the issuance of dividends in the foreseeable future.
LITIGATION
Savon is not a party to any pending legal proceeding and no such action by or
against it, to the best of its knowledge, has been threatened.
LEGALITY OF SHARES
Taylor and Associates, Inc., Attorneys and Counselors at Law, Salt Lake City,
Utah, counsel to Savon, has rendered an opinion that the Common Stock being
offered hereby, when sold and issued, will be fully paid and nonassessable
under the corporate laws of the state of Utah.
28
EXPERTS
The financial statements included herein and elsewhere in this Registration
Statement, to the extent and for the period indicated in its report, have been
included in this Prospectus and the Registration Statement, in reliance on the
report of HJ & Associates, LLC, Certified Public Accountants, Salt Lake City,
Utah, given on the authority of said firm as experts in accounting and
auditing.
ADDITIONAL INFORMATION
Savon has filed this Registration Statement on Form SB-2 under the Securities
Act with the Commission, SEC File No. 333-38936, under the Securities Act with
respect to the securities offered by this Prospectus. This Prospectus omits
certain information contained in the Registration Statement. For further
information, reference is made to the Registration Statement and to the
exhibits and other schedules filed therewith. Statements contained in this
Prospectus as to the contents of any contract or other document referred to
are not necessarily complete, and where such contract or document is an
exhibit to the Registration Statement, each such statement is deemed to be
qualified and amplified in all respects by the provisions of the exhibit.
Copies of the complete Registration Statement, including exhibits, may be
examined without charge at the Commission's principal offices in Washington,
D.C., and copies of all or any part of the filed materials may be obtained
from the Public Reference Section of the Commission, at 450 Fifth Street,
N.W., Washington, D.C. 20549, on payment the ususal fees for reproduction, or
may be obtain from the Commission's EDGAR Database at http://www.sec.gov.
Savon is subject to Section 15(d) and the reporting requirements of Section 13
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and,
as such, Savon will file annual, quarterly, and current reports with the
Commission containing financial information examined and reported upon, with
an opinion expressed by independent certified public accountants, at least
annually, and Savon may also provide unaudited quarterly or other interim
reports as it deems appropriate. Savon intends to comply with the periodic
reporting requirements of Section 13 of the Exchange Act, and such other of
said statutes' requirements as may become applicable from time to time. Savon
will not be required to file or make the additional reports of Issuers subject
to Section 14 of the Exchange Act, and as such has no plans to submit annual
reports to Shareholders or proxy statements and other reports required of such
issuers, until and unless it may become subject to Section 14 requirements, by
registration of a class of its securities pursuant to Section 12(b) or Section
12(g) of the Exchange Act or otherwise. See DESCRIPTION OF SECURITIES.
29
FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS
Title to Document Page
- ----------------- ----
Independent Auditors' Report of HJ & Associates, LLC 30
Balance Sheet at June 30, 2001 31
Statements of Operations for the Period Ended June 30, 2001 32
Statements of Stockholders' Equity 33
Statements of Cash Flows for the Period Ended June 30, 2001 34
Notes to the Financial Statements June 30, 2001 35
Balance Sheets at December 31, 2001 (Unaudited) and June 30, 2001 37
Statements of Operations for the Three and Six Months Ended
December 31, 2001 and from Inception (June 28, 2001) through
December 31, 2001 38
Statements of Stockholders' Equity 39
Statements of Cash Flows for the Three and Six Months Ended
December 31, 2001 and from Inception (June 28, 2001) through
December 31, 2001 40
Notes to the Financial Statements December 31, 2001 and June 30, 2001 41
[This space to end of page intentionally left blank]
30
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Savon Team Sports, Inc.
(A Development Stage Company)
Salt Lake City, Utah
We have audited the accompanying balance sheet of Savon Team Sports, Inc. (a
development stage company) as of June 30, 2001, and the related statements of
operations, stockholders' equity and cash flows from inception on June 28,
2001 through June 30, 2001. 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 audit in accordance with auditing standards generally
accepted in the United States of America. 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
audit provides 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 Savon Team Sports, Inc. (a
development stage company) as of June 30, 2001 and the results of its
operations and its cash flows from inception on June 28, 2001 through June 30,
2001 in conformity with accounting principles generally accepted in the United
States of America.
The accompanying financial statements has been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has had no operations and limited capital
which together raise substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are also
discussed in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
HJ & Associates, LLC
Salt Lake City, Utah
July 17, 2001
31
SAVON TEAM SPORTS, INC.
(A Development Stage Company)
Balance Sheet
ASSETS
June 30,
2001
----------
CURRENT ASSETS
Cash and cash equivalents $ 10,000
----------
Total Current Assets 10,000
----------
Total Assets $ 10,000
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ -
----------
Total Current Liabilities -
----------
STOCKHOLDERS' EQUITY
Preferred stock at $0.001 par value; authorized 5,000,000
shares, no shares outstanding -
Common stock at $0.001 par value; authorized 100,000.000
shares, 6,250,000 shares issued and outstanding 6,250
Additional paid-in capital 3,750
Deficit accumulated during the development stage -
----------
Total Stockholders' Equity 10,000
----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 10,000
==========
The accompanying notes are an integral part of these financial statements.
32
SAVON TEAM SPORTS, INC.
(A Development Stage Company)
Statement of Operations
From
Inception on
June 28,
2001 Through
June 30,
2001
------------
REVENUES $ -
------------
EXPENSES -
------------
NET LOSS $ -
============
BASIC LOSS PER SHARE $ -
============
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 6,250,000
============
The accompanying notes are an integral part of these financial statements.
33
SAVON TEAM SPORTS, INC.
(A Development Stage Company)
Statement of Stockholders Equity
Deficit
Accumulated
Additional During the
Common Stock Paid-In Development
Shares Amount Capital Stage
--------- --------- ---------- -----------
Balance at inception on
June 28, 2001 - $ - $ - $ -
--------- --------- ---------- -----------
Common stock issued to
founder for cash at $0.0016
per share 6,250,000 6,250 3,750 -
--------- --------- ---------- -----------
Net loss from inception on
June 28, 2001 through
June 30, 2001 - - - -
--------- --------- ---------- -----------
Balance, June 30, 2001 6,250,000 $ 6,250 $ 3,750 $ -
========= ========= ========== ===========
The accompanying notes are an integral part of these financial statements.
34
SAVON TEAM SPORTS, INC.
(A Development Stage Company)
Statement of Cash Flows
From
Inception on
June 28,
2001 Through
June 30,
2001
------------
CASH FLOWS FROM OPERATING ACTIVITIES $ -
------------
CASH FLOWS FROM INVESTING ACTIVITIES -
------------
CASH FLOWS FROM FINANCING ACTIVITIES
Common stock issued for cash 10,000
------------
Net Cash Provided by Financing Activities 10,000
------------
NET INCREASE IN CASH 10,000
------------
CASH AT BEGINNING OF PERIOD -
CASH AT END OF PERIOD $ 10,000
============
SUPPLEMENTAL CASH FLOW INFORMATION
CASH PAID FOR:
Interest $ -
Income taxes $ -
The accompanying notes are an integral part of these financial statements.
35
SAVON TEAM SPORTS, INC.
(A Development Stage Company)
Notes to the Financial Statements
June 30, 2001
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
Savon Team Sports, Inc. (the Company) was incorporated on June 28, 2001 under
the laws of the State of Utah.
The Company has had no operations, and has no assets and liabilities, except
for cash. Accordingly, the Company is dependent upon management and/or
significant shareholders to provide sufficient working capital to preserve the
integrity of the Corporate entity during this phase. It is the intent of
management and significant shareholders to provide sufficient working capital
necessary to support and preserve the integrity of the corporate entity.
b. Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting.
c. Cash and Cash Equivalents
Cash equivalents include short-term, highly liquid investment with maturities
of three months or less at the time of acquisition.
d. Basic Loss Per Share
The computation of basic loss per share of common stock is based on the
weighted average number of shares outstanding during the period of financial
statements.
e. Additional Accounting Policies
Additional accounting policies will be established once planned principal
operations commence.
f. 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
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
g. Costs paid on behalf of Company
Costs paid on behalf of the Company for services provided at no cost to the
Company, such as working for no salary or not charging rent for office space,
will be recorded as an expense by the Company with an offsetting entry to
Additional paid-in capital.
36
SAVON TEAM SPORTS, INC.
(A Development Stage Company)
Notes to the Financial Statements
June 30, 2001
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company does not have significant cash or other
material assets, nor does it have an established source of revenues sufficient
to cover its operating costs and to allow it to continue as a going concern.
It is the intent of the Company to develop a website directed to youth and
adult sports teams located overseas with the United States military. Until
this occurs, shareholders of the Company have committed to meeting the
Company's operating expenses.
NOTE 3 - SUBSEQUENT EVENT
On July 10, 2001, the Company entered into an agreement with its attorney to
file a Form SB-2 registration statement. The Company authorized an offering
of a minimum of 750,000 shares to a maximum of 1,750,000 shares at an offering
price of $0.10/share.
37
SAVON TEAM SPORTS, INC.
(A Development Stage Company)
Balance Sheets
ASSETS
December 31, June 30,
2001 2001
------------ ------------
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 617 $ 10,000
------------ ------------
Total Current Assets 617 10,000
------------ ------------
TOTAL ASSETS $ 617 $ 10,000
============ ============
LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 22,209 $ -
------------ ------------
Total Current Liabilities 22,209 -
------------ ------------
STOCKHOLDERS EQUITY (DEFICIT)
Preferred stock at $0.001 par value;
authorized 5,000,000 shares, no shares
outstanding - -
Common stock at $0.001 par value;
authorized 100,000,000 shares, 6,250,000
shares issued and outstanding 6,250 6,250
Additional paid-in capital 7,950 3,750
Deficit accumulated during the development
stage (35,792) -
------------ ------------
Total Stockholders Equity (Deficit) (21,592) 10,000
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
(DEFICIT) $ 617 $ 10,000
============ ============
The accompanying notes are an integral part of these financial statements.
38
SAVON TEAM SPORTS, INC.
(A Development Stage Company)
Statements of Operations
(Unaudited)
From
For the For the Inception on
Three Months Six Months June 28,
Ended Ended 2001 Through
December 31, December 31, December 31,
2001 2001 2001
------------ ------------ ------------
REVENUES $ - $ - $ -
EXPENSES 14,132 35,792 35,792
------------ ------------ ------------
NET LOSS $ (14,132) $ (35,792) $ (35,792)
============ ============ ============
BASIC LOSS PER SHARE $ (0.00) $ (0.00)
============ ============
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 6,250,000 6,250,000
============ ============
Note: The comparative income statements for the three and six months ended
December 31, 2000 are not presented because the inception date is June 28,
2001.
The accompanying notes are an integral part of these financial statements.
39
SAVON TEAM SPORTS, INC.
(A Development Stage Company)
Statements of Stockholders Equity
Deficit
Accumulated
Additional During the
Common Stock Paid-In Development
Shares Amount Capital Stage
---------- ---------- ------------- -----------
Balance at inception on
June 28, 2001 - $ - $ - $ -
Common stock issued to
founder for cash at $0.0016
per share 6,250,000 6,250 3,750 -
Net loss from inception on
June 28, 2001 through
June 30, 2001 - - - -
---------- ---------- ------------- -----------
Balance, June 30, 2001 6,250,000 6,250 3,750 -
Capital contributed by shareholder
(unaudited) - - 4,200 -
Net loss for the six months
ended December 31, 2001
(unaudited) - - - (35,792)
---------- ---------- ------------- -----------
Balance, December 31, 2001
(unaudited) 6,250,000 $ 6,250 $ 7,950 $ (35,792)
========== ========== ============= ===========
The accompanying notes are an integral part of these financial statements.
40
SAVON TEAM SPORTS, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
From
For the Inception on
Six Months June 28,
Ended 2001 Through
December 31, December 31,
2001 2001
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (35,792) $ (35,792)
Contributed capital for services rendered 4,200 4,200
Changes in operating assets and liabilities:
Increase in accounts payable 22,209 22,209
------------ ------------
Net Cash Provided (Used) by Operating
Activities (9,383) (9,383)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES - -
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Common stock issued for cash - 10,000
------------ ------------
Net Cash Provided by Financing Activities - 10,000
------------ ------------
NET INCREASE (DECREASE) IN CASH (9,383) 617
------------ ------------
CASH AT BEGINNING OF PERIOD 10,000 -
------------ ------------
CASH AT END OF PERIOD $ 617 $ 617
============ ============
SUPPLEMENTAL CASH FLOW INFORMATION
CASH PAID FOR:
Interest $ - $ -
Income taxes $ - $ -
Note: The comparative statement of cash flows for the six months ended
December 31, 2000 is not presented because the inception date is June 28,
2001.
The accompanying notes are an integral part of these financial statements.
41
SAVON TEAM SPORTS, INC.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 2001 and June 30, 2001
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company
without audit. In the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows at December 31, 2001 and for
all periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted. It
is suggested that these condensed financial statements be read in conjunction
with the financial statements and notes thereto included in the Company's June
30, 2001 audited financial statements. The results of operations for period
ended December 31, 2001 is not necessarily indicative of the operating results
for the full years.
NOTE 2 -GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company does not have significant cash or other
material assets, nor does it have an established source of revenues sufficient
to cover its operating costs and to allow it to continue as a going concern.
It is the intent of the Company to develop a website directed to youth and
adult sports teams located overseas with the United States military. Until
this occurs, shareholders of the Company have committed to meeting the
Company's operating expenses.
NOTE 3 -CAPITAL CONTRIBUTIONS
During the six months ended December 31, 2001, an officer of the Company
contributed capital to the Company for wages of $2,400 (six months at $400 per
month) and office rental expense at $1,800 (six months at $300 per month).
42
[BACK COVER PAGE]
SAVON TEAM SPORTS, INC.
1,750,000 Shares
Common Stock
PROSPECTUS
______, 2002
No dealer, salesman or any other person has been authorized to give
information or to make any representations other than those contained in this
Prospectus, and, if given or made, such information or representation must not
be relied upon as having been authorized by Savon. Neither the delivery of the
Prospectus nor any sale made hereunder shall under any circumstances create
any implication that there has been no change in the affairs of Savon since
the date hereof. This Prospectus does not constitute an offer to sell or the
solicitation of an offer to buy any securities covered by this Prospectus in
any state or other jurisdiction to any person to whom it is unlawful to make
such offer in such state or jurisdiction.
Table of Contents
Section Page
- ------- ----
PROSPECTUS SUMMARY......................................................... 5
RISK FACTORS............................................................... 7
PLAN OF DISTRIBUTION.......................................................13
USE OF PROCEEDS............................................................14
DESCRIPTION OF BUSINESS....................................................15
DESCRIPTION OF PROPERTY....................................................16
DIRECTORS, EXECUTIVE OFFICERS, AND SIGNIFICANT EMPLOYEES...................21
REMUNERATION OF OFFICERS AND DIRECTORS.....................................22
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS...................23
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS..............24
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS..................25
DESCRIPTION OF CAPITAL STOCK...............................................26
LITIGATION.................................................................27
LEGALITY OF SHARES.........................................................27
EXPERTS....................................................................28
ADDITIONAL INFORMATION.....................................................28
INDEX TO FINANCIAL STATEMENTS..............................................29
FINANCIAL STATEMENTS.......................................................30
Until September 30, 2002, all dealers effecting transactions in the Common
Stock, whether or not participating in the distribution, may be required to
deliver a Prospectus. This is in addition to the obligation of dealers to
deliver a Prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
43
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 16-10a-901 through 909 of the Utah Revised Business Corporation Act
provides in relevant parts as follows:
(1) A corporation shall have power to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative (other than an action by or in the right of
the corporation) by reason of the fact that he is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses (including attorneys' fees), judgments, fines, and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit, or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit, or proceeding by judgment, order, settlement, conviction, or on
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(2) A corporation shall have power to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending, or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee, or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust, or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred
by him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue, or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the corporation unless and only
to the extent that the court in which such action or suit was brought shall
determine on application that, despite the adjudication of liability but in
view of all circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such court shall deem proper.
(3) To the extent that a director, officer, employee, or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit, or proceeding referred to in 1) or (2) of this subsection, or in
defense of any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him
in connection therewith.
(4) The indemnification provided by this section shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under any bylaws, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as to
44
a person who has ceased to be a director, officer, employee, or agent and
shall inure to the benefit of the heirs, executors, and administrators of such
a person.
The foregoing discussion of indemnification merely summarizes certain
aspects of indemnification provisions and is limited by reference to the above
discussed sections of the Utah Revised Business Corporation Act.
The Registrant's articles of incorporation and bylaws provide that the
Registrant "may indemnify" to the full extent of its power to do so, all
directors, officers, employees, and/or agents. It is anticipated that the
Registrant will indemnify its officers and directors to the full extent
permitted by the above-quoted statute.
Insofar as indemnification by the Registrant for liabilities arising
under the Securities Act may be permitted to officers and directors of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant
is aware that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable.
Limitations on Liability
- ------------------------
The state of Utah has enacted a statute limiting the liability of officers and
directors of Savon and its shareholders in certain circumstances. Management
has determined that it would be advantageous for Savon to include such
indemnification in its Articles of Incorporation to include the protections
provided to officers and directors of Savon pursuant to Section 16-10a-841 of
the Utah Revised Business Corporation Act.
The indemnification would eliminate the personal liability of a director to
Savon or its shareholders for monetary damages for any action taken or any
failure to take any action, as a director, except liability for (a) the amount
of a financial benefit received by a director to which he is not entitled; (b)
an intentional infliction of harm to the corporation or the shareholders; (c)
an unlawful distribution; or (d) an intentional violation of a criminal law.
It should be noted that the provisions eliminating liability of directors
limit the remedies available to a shareholder dissatisfied with a Board
decision which is protected by the provision. An aggrieved shareholder's only
remedy in such a circumstance is to sue to stop the completion of the Board's
action. In many situations, this remedy may not be effective. Shareholders,
for example, may not be aware of a transaction or an event until it is too
late to prevent it. In these cases, the shareholders and Savon could be
injured by a careless Board decision and yet have no effective remedy.
Management believes that limiting director's liability is in the best interest
of the shareholders and Savon, as it should enhance Savon's ability to attract
and retain qualified individuals to serve as directors of Savon by assuring
directors (and potential directors) that their good faith decisions will not
be second-guessed by a court evaluating decisions with the benefit of
hindsight. This is particularly applicable, management believes, in the
recruitment of outside directors who are not employees of Savon and who may,
therefore, bring additional objectivity and experience to the Board of
Directors. Management believes that the diligence exercised by directors
stems primarily from their desire to act in the best interest of Savon and not
from a fear of monetary damage awards. Consequently, management believes that
the level of scrutiny and care exercised by directors will not be lessened by
this provision of the Articles of Incorporation.
45
Indemnification of Officers, Directors and Others
- -------------------------------------------------
This Article has been added to provide that Savon shall indemnify directors to
the fullest extent permitted by the Utah Revised Business Corporation Act and
that Savon may indemnify officers, employees, or agents as authorized by the
bylaws and the Board of Directors. The Board of Directors believes that
indemnification for directors is important to enable Savon to attract and
retain competent directors. The Board of Directors believes that permissive
indemnification for others, as determined by the Board of Directors, is
important because it permits indemnification in appropriate circumstances.
The indemnification provisions in the Articles may require Savon to indemnify
individuals against expenses, including attorney's fees, judgments, fines and
amounts paid in settlement, that may arise by reason of their status or
service as directors, officers, or agents (other than liabilities arising from
willful misconduct of a culpable nature) and to advance expense incurred as a
result of any proceeding against them as to which they could be indemnified,
although Savon has no insurance policies for such indemnification in place.
As a result of such indemnification limitations, any large damage awards that
are not compensated by insurance will come directly from Savon's treasury.
The board of directors has adopted Bylaws to include Article V,
Indemnification of Directors, Officers, Agents and Employees. This Article
parallels the provisions in the Articles of Incorporation.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses(*) to Savon in
connection with the offering described in the Registration Statement:
Registration Fee............................................$ 43.75*
Accounting Fees and Expenses................................ 2,000.00*
Legal Fees and Expenses..................................... 18,000.00*
Blue Sky Fees............................................... 2,500.00*
Printing and Engraving...................................... 1,000.00*
Transfer Agent Fees......................................... 1,000.00*
------
Total Expenses..............................................$24,543.75
======
(*) All figures are estimates.
46
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
Savon issued 6,250,000 shares of Savon's restricted common stock to Savon's
founder, Michael L. Rubin, in connection with Savon's organization in June
2001. The shares were issued for consideration consisting of $10,000 cash.
The securities issued in the foregoing transactions were issued in reliance on
the exemption from registration and the prospectus delivery requirements of
the Securities Act of 1933, as amended (the "Securities Act"), set forth in
Section 3(b) and/or Section 4(2) of the Securities Act and the regulations
promulgated thereunder.
ITEM 27. EXHIBITS
Copies of the following documents have been included as exhibits to this
amended Registration Statement, pursuant to Item 601 of Regulation S-B.
SEC
Exhibit Reference
No. No. Title of Document Location
- ------- --------- ----------------- --------
3.01 3(i) Articles of Incorporation and Amendments Original Filing
3.02 3(ii) Bylaws "
4.01 4 Specimen Stock Certificate "
5.01 5 Opinion of Taylor and Associates, Inc. Amendment 1
Attorneys and Counselors at Law Filing
10.01 10 Amended Proceeds Escrow Agreement This filing
23.01 23 Consent of Taylor and Associates, Inc.,
Attorneys and Counselors at Law "
23.02 23 Consent of HJ & Associates, LLC, This filing
Certified Public Accountants
48
ITEM 28. UNDERTAKINGS
The undersigned Registrant hereby undertakes that it will:
(1) File, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement to (i) include any
Prospectus required by Section 10(a)(3) of the Securities Act; (ii) reflect in
the Prospectus any facts or events which, individually or in the aggregate,
represent a fundamental change to the information in the Registration
Statement; and (iii) include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement.
(2) For the purpose of determining liability under the Securities Act, each
post-effective amendment will be treated as a new Registration Statement of
the securities offered, and the offering of the securities at that time shall
be the initial bona fide offering.
(3) If, applicable, file a post-effective amendment to remove from
registration any of the securities that remain unsold at the end of the
offering.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the small
business issuer has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person in connection with the securities being
registered), the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by the
Registrant is against public policy as expressed in the Securities Act and
will be governed by the final adjudication of such issue.
49
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form SB-2 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned,
thereunder duly authorized, in the city of Ogden, State of Utah, on the 12th
day of April 2002.
SAVON TEAM SPORTS, INC.
By:/S/ Michael L. Rubin
-------------------------------
Michael L. Rubin, President
Pursuant to the requirements of the Securities Act of 1933, as amended, this
amended registration statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title Date
- --------- ----- ----
/S/ Michael L. Rubin Sole Director, April 12, 2002
Chief Executive Officer,
Chief Accounting Officer