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LAS VEGAS LUCKY 7’s, LLC A Nevada Limited liability Company
CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM
2328 10th Avenue North
Suite 402
Lake Worth, Florida 33416
LAS VEGAS LUCKY 7’s, LLC
A NEVADA LIMITED LIABILITY COMPANY
CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM
Memorandum No. ______
Name of Prospective Investor__________________________________
OFFERING OF 100 MEMBERSHIP INTERESTS AT $13,000 PER INTEREST
Las Vegas Lucky 7’s, LLC, a Nevada limited liability company (the "Company"), hereby
offers (the "Offering") to sell 100 of its membership interests (the "Membership Interests”), at
$13,000 per interest. The Membership Interests are being offered by the Company on a
"best efforts" basis. There is no assurance that any of the Membership Interests will be sold
and there is no firm commitment by any person to purchase or sell any of the Membership
Interests. There is no minimum offering.
THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE, INVOLVE A
HIGH DEGREE OF RISK AND SHOULD BE PURCHASED ONLY BY PERSONS WHO
CAN AFFORD TO LOOSE THEIR ENTIRE INVESTMENT. THE SECURITIES
OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE FEDERAL
SECURITIES LAWS OR THE LAWS OF ANY STATE, BUT ARE BEING OFFERED
AND SOLD PURSUANT TO CERTAIN EXEMPTIONS THEREUNDER. THESE
SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR BY ANY STATE AGENCY, NOR HAS ANY SUCH
REGULATORY BODY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
DATED: July 6, 2016
NOTICE TO INVESTORS
THIS MEMORANDUM HAS BEEN PREPARED FOR DISTRIBUTION TO A LIMITED NUMBER OF ELIGIBLE
PERSONS FOR THEIR CONFIDENTIAL USE AND INFORMATION IN EVALUATING AN INVESTMENT IN THE
COMPANY. AS YOU READ THIS MEMORANDUM, PLEASE NOTE THE FOLLOWING IMPORTANT FACTS:
PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS MEMORANDUM
AS LEGAL, TAX OR INVESTMENT ADVICE. EACH PROSPECTIVE INVESTOR SHOULD CONSULT
HIS OWN ATTORNEY, ACCOUNTANT AND BUSINESS ADVISOR AS TO THE PURCHASE OF
OWNERSHIP INTERESTS.
THIS OFFERING OF MEMBERSHIP INTERESTS IS BEING MADE IN RELIANCE UPON CERTAIN
EXEMPTIONS FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND CERTAIN STATE SECURITIES LAWS. THE MEMBERSHIP INTERESTS ARE BEING OFFERED TO
A LIMITED NUMBER OF PROSPECTIVE INVESTORS MEETING MINIMUM SUITABILITY
STANDARDS OR ACCREDITED INVESTORS AS DEFINED UNDER THE SECURITIES ACT. THE
MEMBERSHIP INTERESTS ARE NOT TRANSFERABLE WITHOUT THE SATISFACTION OF CERTAIN
CONDITIONS, INCLUDING REGISTRATION OR THE AVAILABILITY OF AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT AND THE SECURITIES LAWS OF CERTAIN STATES.
THE MEMBERSHIP INTERESTS OFFERED HEREBY ARE RESTRICTED SECURITIES FOR WHICH NO
PUBLIC OR OTHER MARKET CURRENTLY EXISTS OR IS EXPECTED TO DEVELOP.
AN INVESTMENT IN THE MEMBERSHIP INTERESTS IS HIGHLY SPECULATIVE, INVOLVES A HIGH
DEGREE OF RISK AND IS SUITABLE ONLY FOR INVESTORS WITH SUBSTANTIAL MEANS WHO
CAN BEAR THE ECONOMIC RISK OF THE INVESTMENT, AND WHO ARE ABLE TO WITHSTAND
THE TOTAL LOSS OF THEIR INVESTMENT. AN INVESTMENT IN THE COMPANY MUST BE
CONSIDERED A LONG-TERM INVESTMENT. SEE 'RISK FACTORS'.
THE PERSON NAMED ABOVE AS A PROSPECTIVE INVESTOR, BY ACCEPTING DELIVERY OF
THIS MEMORANDUM, AGREES TO IMMEDIATELY RETURN THIS MEMORANDUM AND ALL
ATTACHED OR ENCLOSED DOCUMENTS TO THE COMPANY IF THE PROSPECTIVE INVESTOR
DOES NOT ELECT TO MAKE A SUBSCRIPTION OR IF HIS ENTIRE SUBSCRIPTION IS REJECTED
BY THE COMPANY. THE PERSON NAMED ABOVE AS A PROSPECTIVE INVESTOR ALSO
AGREES TO MAINTAIN STRICT CONFIDENTIALITY OF THIS MEMORANDUM AND ALL
INFORMATION CONTAINED HEREIN.
ALTHOUGH MANAGEMENT OF THE COMPANY BELIEVES THAT THIS MEMORANDUM
CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS OF ALL DOCUMENTS PURPORTED TO
BE SUMMARIZED HEREIN, REFERENCE IS HEREBY MADE TO THE ACTUAL DOCUMENTS FOR
COMPLETE INFORMATION CONCERNING THE RIGHTS AND OBLIGATIONS OF THE PARTIES
THERETO. COPIES OF SUCH DOCUMENTS ARE AVAILABLE UPON REQUEST FROM THE
COMPANY AND ALL SUCH SUMMARIES ARE QUALIFIED IN THEIR ENTIRETY BY THIS
REFERENCE.
DURING THE COURSE OF THE OFFERING AND PRIOR TO SALE, PROSPECTIVE INVESTORS ARE
URGED AND INVITED TO ASK QUESTIONS OF AND TO OBTAIN ADDITIONAL INFORMATION
FROM THE COMPANY CONCERNING THE TERMS AND CONDITIONS OF THE OFFERING, THE
COMPANY AND ITS PROPOSED BUSINESS AND ANY OTHER RELEVANT MATTERS
(INCLUDING BUT NOT LIMITED TO ADDITIONAL INFORMATION TO VERIFY THE ACCURACY
OF THE INFORMATION SET FORTH HEREIN). SUCH INFORMATION WILL BE PROVIDED TO THE
EXTENT THAT THE OFFICERS OF THE COMPANY POSSESS SUCH INFORMATION OR CAN
ACQUIRE IT WITHOUT UNREASONABLE EFFORT OR EXPENSE.
IN MAKING AN INVESTMENT DECISION, PROSPECTIVE INVESTORS MUST RELY ON THEIR
OWN EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS
OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE
NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR
REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT
CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. PROSPECTIVE INVESTORS SHOULD BE AWARE
THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME. PURCHASE OF THE MEMBERSHIP INTERESTS SHOULD BE MADE
FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO RESELL.
WHERE YOU CAN FIND MORE INFORMATION
This Memorandum includes or incorporates by reference information with respect to market share,
industry conditions and forecasts that the Company obtained from internal industry research,
publicly available information (including industry publications and surveys), and surveys and
market research provided by consultants. The publicly available information and the reports,
forecasts and other research provided by consultants generally state that the information
contained therein has been obtained from sources believed to be reliable, but there can be no
assurance as to the accuracy and completeness of such information. The Company has not
independently verified any of the data from third-party sources, nor has the Company ascertained
the underlying economic assumptions relied upon therein. Similarly, the Company's internal
research and forecasts are based upon the Company's management’s understanding of industry
conditions, and such information has not been verified by any independent sources.
Las Vegas Lucky 7’s, LLC
Confidential Private Placement Memorandum
Membership Interest Description
Price: $13,000 per Membership Interest
Total Membership Interests Offered: 100
Private Placement Memorandum
SUMMARY OF THE OFFERING
Las Vegas Lucky 7’s, LLC (the "Company") was formed in the State of Nevada on July __, 2016 to
engage the establishment and creation of a professional rugby team located in the City of Las
Vegas (the “Rugby Team”), which will participate in the new professional arena rugby league (the
“League”). The manager of the Company will be Pro Arena Rugby, Inc., a Florida corporation
(“PAR”), which was formed to create and establish the new professional arena rugby league with
a planned inaugural season in 2017. PAR is also the wholly-owned subsidiary of Zoom Companies,
Inc., a publicly trade4d corporation (“Zoom”). The goal is to establish PAR as a global sports
presence to capitalize on the expanding interest in aggressive sports by the prime 18 to 34 year old
male demographic as well as fill a need for arena operators to provide added value to their
stakeholders, sponsors and patrons. See “DESCRIPTION OF BUSINESS”.
The Company’s registered and principal executive offices are located at 2328 10th Avenue North,
Suite 402, Lake Worth, Florida 33416, and its general telephone is 754-234-3611.
Terms of Offering
The Company is offering an investment opportunity in the Company. The Membership Interests will
be offered on a "best efforts" basis. The Membership Interests will be offered to Accredited Investors
under exemptions from the registration requirements of the federal securities laws and under similar
exemptions under applicable state securities laws. See "Subscription Documents".
Proceeds from subscriptions for the Offering received and accepted by the Company will be
available immediately for investment. The Offering will be terminated at the discretion of
management of the Company. Investors will become members of the Company upon the receipt
and acceptance by management of their subscriptions on the date such subscription was
accepted by the Company. The total initial equity offering is $1,300,000. The initial offering
contemplates sufficient capitalization to cover team development and operational costs for the
next 6 months to pursue creation and establishment of the League.
The Company has a manager, which is PAR, the wholly-owned subsidiary of Zoom.
Management
PAR will receive certain fees in connection with its role and duties performed as a manger of the
Company. However, the Manger shall not receive any other compensation in connection with the
Offering, except for reimbursement of certain Organizational and Offering Expenses. The Company
will pay all expenses directly related to its business operations. These expenses also include, but are
not limited to, all taxes, coach and player fees, office expenses, office rent, insurance, travel,
consulting, professional fees, maintenance, utilities and any extraordinary expenses.
Risk Factors
Investors are cautioned that the Offering and the Company involve certain risks, which are more
fully described below in "RISK FACTORS."
RISK FACTORS
An investment in the Membership Interests involves a number of very significant risks. You should
carefully consider the following risks and uncertainties in addition to other information in evaluating
us and our business before purchasing the Membership Interests. The Company's business,
operating results and financial condition could be seriously harmed due to any of the following
risks. The risks described below are all of the material risks that management is currently aware of
that the Company is facing. Additional risks not presently known to management may also impair
the Company’s business operations. You could lose all or part of your investment due to any of
these risks.
You should carefully consider the risks, uncertainties and other factors described below because
they could materially and adversely affect our business, financial condition, operating results and
prospects. Also, you should be aware that the risks and uncertainties described below are not the
only ones facing us. Additional risks and uncertainties that we do not yet know of, or that we
currently believe are immaterial, may also impair our business operations and financial results. Our
business, financial condition or results of operations could be harmed by any of these risks. You
may lose all or part of your investment.
RISKS RELATING TO THE COMPANY’S BUSINESS AND TO THE PROFESSIONAL RUGBY INDOOR ARENA
LEAGUE
The Company has no operating history upon which investors can evaluate our future prospects. We
may never attain profitability.
The Company was recently incorporated and has no operating history and no assets other than
cash. The Company has directed its business focus towards the creation and development of the
Rugby Team to participate in the League. PAR was specifically developed to act as manager of
the Company and other limited liability companies created and established to own, operate and
run other professional rugby teams to participate in the League. Both the Company and PAR have
had little to no operating history upon which an evaluation of their respective business plans or
performances and prospects can be made.
To date there has not been an indoor professional rugby league in the United States. Our
professional sporting rugby league events are directly targeted to mature audiences with an
interest in sophisticated contact sports “alternative” sports who are looking for entertainment,
athleticism and drama. Our proposed operations are therefore subject to all of the risks inherent in
light of the expenses, difficulties, complications and delays frequently encountered in connection
with the formation of any new business, the development of live events, as well as those risks that
are specific to our proposed business in particular. The risks include, but are not limited to, the
possibility that we will not be able to develop or properly promote our Rugby team, other
associated teams or the League and resulting live events. To successfully introduce and market our
live events at a profit, we must establish brand name recognition and competition for fun and
excitement for our live events. There are no assurances that the Company can successfully
address these challenges. We are also dependent on raising substantial additional capital to
attain these goals. If it is unsuccessful, the Company and its business, financial condition and
operating results will be materially and adversely affected.
Given the limited operating history, management has little basis on which to forecast future market
acceptance of our rugby sporting events. It is difficult to accurately forecast future revenues
because the business of the Company is new and its market has not been fully identified or
developed. If our rugby sporting events do not gain in popularity, the business, operating results
and financial condition of the Company will be materially and adversely affected. Moreover, the
Company may be unable to adjust its spending in a timely manner to compensate for any
unanticipated reduction in revenue. As a result, any significant reduction in revenues would
immediately and adversely affect the business, financial condition and operating results of the
Company.
Our failure to fully fund the creation and establishment of further rugby teams and create the
League and manage growth, diversification and changes to our business could harm our business.
As of the date of this Private Placement Memorandum, there are no other established rugby teams
to be located in various cities to participate in the League or the League itself. The Las Vegas
rugby team is the first team to be created and organized. Also, the Company currently has no
revenue or material market following. The failure to successfully manage and monetize any
growth, including creation and establishment of further teams and the League itself, and to
successfully diversify our rugby sporting events business in the future could harm the success and
longevity of our Company.
We may not achieve or sustain profitability in the future.
We have not generated any revenue since inception. We anticipate that our operating expenses
will increase as we continue to invest to grow our business, pay athletes and coaches, broker live
events, acquire customers and develop our business platform. These efforts may prove more
expensive than we currently anticipate, and we may not succeed in generating sufficient
revenues to offset these higher expenses. If we are unable to do so, the Company and its business,
financial condition and operating results could be materially and adversely affected.
We cannot predict our future capital needs and we may not be able to secure additional
financing.
At the successful close of this Offering, we anticipate raising approximately $300,000 in gross
proceeds from accredited investors. We believe that we will have sufficient funds to meet our
presently anticipated working capital requirements. This belief is based on our operating plan,
which in turn is based on assumptions, which may prove to be incorrect. In addition, we will likely
need to raise significant additional funds in order to implement our business plan, market and
promote our professional rugby sporting events, retain talent in coaches and players, support our
growth, develop new events, respond to competitive pressures, acquire or invest in
complementary or competitive businesses or technologies, or take advantage of unanticipated
opportunities. We will require further financing, in addition to this Offering, in order to meet our
plans for expansion. We cannot be sure that this additional financing, if needed, will be available
on acceptable terms or at all. Furthermore, any debt financing, if available may involve restrictive
covenants, which may limit our operating flexibility with respect to business matters. If additional
funds are raised through the issuance of membership interests, the percentage ownership of our
existing members will be reduced and our members may experience additional dilution in net
book value. If adequate funds are not available on acceptable terms, or at all, we may be unable
to develop or enhance our products and services, take advantage of future opportunities, repay
debt obligations as they become due, or respond to competitive pressures, any of which would
have a material adverse effect on our business, prospects, financial condition, and results of
operations.
The failure to create popular live events and televised programming from time to time could
adversely impact our business.
The creation, marketing and distribution of the Rugby Team and its participation in our live
professional rugby sporting events entertainment is the core of our business and is critical to our
ability to developing a fan base and generate revenues. A failure to identify, acquire and
maintain a target audience and following would materially adversely affect us. A failure to
develop creative and entertaining professional indoor arena rugby live events would likely lead to
a decline in the popularity of our brand of entertainment and would adversely affect our ability to
generate revenues and could have a material adverse effect on our business, operating results
and financial condition.
The loss of the creative services of William Forhan, Jace Simmons and Clark Forhan could
adversely impact our business.
For the foreseeable future, we will heavily depend on the vision and services of William Forhan,
Jace Simmons and Clark Forhan. In addition to Mr. William Forhan serving as a key officer and
director of PAR, our Manager, Mr. William Forhan leads our creative team that develops our
League and live events. The loss of either William Forhan, Jace Simmons or Clark Forhan due to
retirement, disability or death will have a material adverse effect on our business, operating results
and financial condition. We do not carry key man life insurance on either individual.
Our insurance may not be adequate.
Our professional indoor arena rugby live events will expose our team rugby players and employees
who are involved in the production of those events to the risk of travel and performance-related
accidents, the consequences of which may not be fully covered by insurance. Although we intend
to obtain general liability insurance and umbrella insurance policies, and although our rugby
players are responsible for obtaining their own health, disability and life insurance, we cannot
assure you that the consequences of any accident or injury will be fully covered by insurance. Our
liability resulting from any accident or injury not covered by our insurance could have a material
adverse effect on our business, operating results and financial condition.
We will face a variety of risks if we expand into new or complementary businesses in the future.
Our core operations have consisted of the initial development and promotion of our Rugby Team
and the League and our branded merchandise. Currently, there has not been a live sporting
event. Our current strategic objectives include not only further developing and enhancing our
existing business but also entering into new or complementary businesses, such as merchandising,
the creation of new forms of entertainment and brands and the development of branded
location-based entertainment businesses. The following risks associated with expanding into new or
complementary businesses by acquisition, strategic alliance, investment, licensing or other
arrangements could have a material adverse effect on our business, operating results and
financial condition:
. potential diversion of management's attention and resources from our existing business and an
inability to recruit or develop the necessary management resources to manage new businesses;
. unanticipated liabilities or contingencies from new or complementary businesses or ventures;
. reduced earnings due to increased goodwill amortization, increased interest costs and
additional costs related to the integration of acquisitions;
. potential reallocations of resources due to the growing complexity of our business and
strategy;
. competition from companies then engaged in the new or complementary businesses that we
are entering;
. possible additional regulatory requirements and compliance costs;
. dilution of our stockholders' percentage ownership and/or an increase of our leverage when
issuing equity or convertible debt securities or incurring debt; and
. potential unavailability on acceptable terms, or at all, of additional financing necessary for
expansion.
If we cannot maintain our corporate culture as we grow, we could lose the innovation, teamwork
and focus that contribute crucially to our business.
We believe that a critical component of our success will be dependent on a corporate culture
that fosters innovation, encourages teamwork, cultivates creativity and promotes focus on
execution, all involving the professional indoor arena rugby league. We have invested substantial
time, energy and resources in building a highly collaborative team that works together effectively
in a non-hierarchical environment designed to promote openness, honesty, mutual respect and
pursuit of common goals. As we grow, we may find it difficult to maintain these valuable aspects of
our corporate culture. Any failure to preserve our culture could negatively impact our future
success, including our ability to attract and retain employees, encourage innovation and
teamwork and effectively focus on and pursue our corporate objectives.
Degradation in our stature and reputation in the market could harm our business.
Our League and Rugby Team brand names will be very important to us, and any degradation in
our stature and reputation in the professional indoor arena rugby market may adversely affect our
business.
RISKS RELATED TO OUR INDUSTRY
The failure to retain or continue to recruit key performers could harm our business.
Our success depends, in large part, upon our ability to recruit, train and retain coaches and
athletic players who have the physical presence, athletic ability and charisma to play indoor
arena rugby. Our players should have some degree of professional rugby training. We cannot
assure you that we will be able to continue to identify, train, and retain such coaches and athletes
in the future. Additionally, we cannot assure you that we will be able to retain any current coaches
and athletes. Our financial results depend, in part, on the popularity of our key athletes on each
rugby team within the League. Our failure to attract and retain rugby players, or a serious or
untimely injury to, or the death of, any of our key rugby players, could have a material adverse
effect on our business, operating results and financial condition.
We may be prohibited from promoting and conducting our indoor arena rugby live events if we do
not comply with applicable regulations.
In various states in the United States and certain Canadian provinces, athletic commissions and
other applicable regulatory agencies may require us to comply with their regulations in order for us
to promote and conduct our professional indoor arena rugby live events. In the event we are
required to comply with such regulation and subsequently fail to comply with such regulations of a
particular jurisdiction, we may be prohibited from promoting and conducting our indoor arena
rugby live events in that jurisdiction. The inability to present our live events over an extended period
of time or in a number of jurisdictions could have a material adverse effect on our business,
operating results and financial condition. We are currently regulated by USA Rugby and potentially
other such regulatory agencies if rules change.
A decline in general economic conditions or in the popularity of our brand of mature
entertainment could adversely impact our business.
Because our operations are affected by general economic conditions and consumer tastes, our
future success is unpredictable. The demand for entertainment and leisure activities tends to be
highly sensitive to consumers' disposable incomes, and thus a decline in general economic
conditions could, in turn, have a material adverse effect on our business, operating results and
financial condition.
Public tastes are unpredictable and subject to change and may be affected by changes in the
country's political and social climate. A change in public tastes could have a material adverse
effect on our business, operating results and financial condition.
The entertainment market in which we operate is highly competitive, and we may not be able to
compete effectively, especially against competitors with greater financial resources or
marketplace presence.
In our entertainment market, we compete on a national basis primarily with other sports, such as
soccer, football, etc. We may compete with other indoor professional sports and league in
particular aspects of our business, including viewership, access to arenas and the sale and
licensing of branded merchandise. We also directly compete to find, hire and retain talented
athletes and coaches and certain other professional rugby leagues may have substantially greater
financial resources than we do. Other sources of competition in our sports entertainment market
could also be regional promoters of wrestling MMA events. Any significant loss of viewers and
venues or players and coaches could have a material adverse effect on our business, operating
results and financial condition.
Our business could be adversely impacted if we are unable to protect our intellectual property
rights.
Our competitive advantage will depend in substantial part on our ability to protect any
trademarks, service marks, copyrighted material and characters, trade names and other
intellectual property rights that we acquire in the course of our professional indoor arena rugby
business.
Other parties may attempt to infringe on our intellectual property rights and may thereby dilute our
brand in the marketplace. Any such infringement of our intellectual property rights would also likely
result in our commitment of time and resources to protect these rights. One or more adverse
judgments with respect to these intellectual property rights could have a material adverse effect
on our business, operating results and financial condition.
Conversely, competitors may also attempt to contest or challenge our ability to utilize one or more
marks or slogans. We will be required to expend sum of our capital defending our rights and, may
not be successful.
A decline in general economic conditions could adversely affect our business.
Our operations are affected by general economic conditions, which generally may affect
consumers' disposable income. The demand for entertainment and leisure activities tends to be
highly sensitive to the level of consumers' disposable income. A decline in general economic
conditions could reduce the level of discretionary income that our fans and potential fans have to
spend on our live indoor arena rugby games and products, which could adversely affect our
revenues.
RISKS RELATED TO THIS PRIVATE PLACEMENT OFFERING
There is no market for the Company’s Membership Interests and a market may never develop,
which would render investors’ investments illiquid.
As of the date of this Private Placement Memorandum, our Membership Interests are not listed on
any stock market making the selling and trading of our Membership Interests exceedingly difficult.
Without a secondary market, one is not easily able to sell or trade our Membership Interests after
purchasing them, and therefore may be stuck with their Membership Interests, rendering them
illiquid.
The Company’s Manager has broad discretion over the use of proceeds from this offering, and the
failure of management to apply these funds effectively could seriously harm our business.
The Company and its Manager will have broad discretion as to how to spend the proceeds from
this Private Placement Offering, and members may not agree with how the funds are used. You will
not have the opportunity to evaluate the economic, financial or other information on which
management will base its decisions on how to use the proceeds. Management may not be
successful in using the proceeds from this Private Placement Offering in ways that will yield
favorable operating results. See "Use of Proceeds".
The offering price of the Membership Interests has been arbitrarily determined by the Company
and such offering should not be used by an investor as an indicator of the fair market value of the
shares.
Currently there is no public market for the Company’s Membership Interests. The offering price for
the Membership Interests has been arbitrarily determined by the Company and does not
necessarily bear any direct relationship to the assets, operations, book or other established criteria
of value of the Company. Thus an investor should be aware that the offering price does not reflect
the fair market price of Membership Interests.
USE OF PROCEEDS
Price to Public (1) Commissions (2) Proceeds
Per Membership Interest $13,000 $1690 $11,310
Selling all of the Membership Interests in this private placement offering will result in gross proceeds
of $1,300,000 after estimated legal and accounting. The funds will be made immediately available
to the Company and used at management’s discretion to commence structuring the rugby team.
Subscription agreements and monies paid are irrevocable and funds will only be returned upon
rejection of the subscription by the Company.
(1) The price to investors of the Membership Interests has been arbitrarily determined by
management and is not based on earnings or any other recognized criterion of value, nor
is it a representation that each Membership Interests has a market value of or can be sold
at that The Company price.
(2) Intends to offer the Membership Interests to the public through its Manager and its officers
and directors. No commissions or any other form of remuneration will be paid on sales
made directly to the public by the Manager of the Company. The Company may pay
commission to licensed broker dealers and their agents if it deems appropriate in its sole
discretion. Such commission will not exceed 13% of the offering price. Management has
estimated that such commission if paid may amount to $169,000 for all Membership
interests.
We generally expect to disburse the proceeds from this offering for all Membership Interests in the
priority set forth below:
$300,000 for creation and establishment of the Rugby Team, less commissions;
$1,000,000 in operating expenses, less commissions
DESCRIPTION OF BUSINESS
Our manager, Pro Arena Rugby, Inc. (“PAR”), is a corporation organized under the laws of the
State of Florida for the purpose of creating, establishing and organizing a professional indoor rugby
sports organization focused on a niche segment of the “alternative” sports industry (the “Rugby
League”). PAR was formed to produce and operate the Rugby League with an inaugural season
planned for 2017. The goal is to establish PAR as a global sports presence to capitalize on the
expanding interest in aggressive sports by the prime 18 to 34 year old male demographic as well as
fill a need for arena operators to provide added value to their stakeholders, sponsors and patrons.
The PAR business model is designed to leverage the attraction to fast-paced, aggressive and
violent sports action by the targeted demographic. The viability and profitability of this niche have
been proven in the past few years with the incredible growth and success of billion dollar
enterprises like the UFC and X-Games.
The Company’s source of revenue will be from: (i) sponsorships; (ii) tickets sales; (iii) merchandise
and concessions. Management believes that sponsorship of the Rugby Team and games will give
broadcasters and advertisers an effective and efficient way to tap into the enormous buying
power and purchasing influence of the 18 - 34 year old male in the same way that has proven
successful with other alternative sports/entertainment ventures. Management further believes that
many of the same core elements driving the appeal and attraction of those sports are present in
the PAR model:
• Fits in an arena venue
• Easy understanding of how the game is played
• Compelling competition
• Broadcast presence
• Identifiable and compelling personalities
• Sustainable scheduling
• Perceived rough “alternative” action
THE GAME OF ARENA RUGBY
The new sport of professional indoor arena rugby combines the best elements of live action sports
competition, with the thrill of aggression and rough action — all packaged as a heart-thumping,
can’t-look-away, entertainment spectacle. Management believes that in general rugby is one of
the fastest growing sports in the United States with participation increasing 350% since 2004 and
currently over 1,000,000 participants. It is the second largest team sport in the world and will be part
of the 2016 Olympic Games.
• Indoor arena rugby is very fast paced — basically the fast-break of basketball and the two
minute drill of football rolled into one.
• Rugby as a sport has always been perceived as one of the rough action sports.
• Ticket prices can be affordable by comparison to other professional sports.
• Indoor arena rugby permits the maximum entertainment environment with all the amenities of
an indoor arena and without negative revenue exposure from bad weather.
• Rugby is an Olympic sport.
• The 18-34 year old male target market has been acquainted with rugby on university
campuses for decades.
• “Seven-a-Side” Rugby has been played in America for over 100 years.
• The U.S. can provide internationally competitive American indoor rugby players.
• Arena Rugby can operate in summer months, without competing with other aggressive sports
in the fall.
• Arena Rugby can be marketed in major market cities and is not subject to tertiary advertising
budgets found in smaller markets.
The excitement of indoor rugby begins with 7 players per side. It’s played on artificial turf within the
confines of an ice hockey rink-sized field. PAR is fast-paced madness with “on-the-fly” substitutions
that creates an electric atmosphere of hard hitting action, speed and drama. The Manager
intends to commence League play summer of 2017 with ten telecasts and one pay-per-view
championship event. The Rugby Team will be participating with approximately ten other league
teams established in different cities for the purpose of participating in the League.
THE RUGBY TEAM
As with all American professional sports leagues, PAR will organize the League through the use of
five geographical regions. Each geographical region will contain up to six teams. Through research
and careful consideration, PAR has established the following regions for the League:
Midwest Region North East Region Start Date: Summer
2017 Start Date: Summer 2017
Cities Cities
Chicago Boston
Cincinnatti Brooklyn
Cleveland New York
Detroit Newark
Minneapolis Philadelphia
Pittsburgh Washington D.C.
South East Region Central Region West Coast Region
Start Date: Summer 2018
Start Date: Summer 2018
Start Date: Summer 2018
Cities Cities Cities
Atlanta Dallas Las Vegas
Charlotte Denver Los Angeles
Jacksonville Houston Phoenix
Miami Kansas City Portland
New Orleans Salt Lake City San Diego
As noted in the table above, our intentions are to have the Central and West Coast regions be the
only active regions for the League’s inaugural 2017 season while the remaining three regions will
officially join the League for the start of the 2018 season. PAR engaged in considerable amount of
demographic research and, therefore, the cities within each region were selected based on
market size (i.e. population), availability of existing facilities capable of hosting a team, and
general history of the ability to successfully support sports teams, both professionally and
collegiately.
PAR intends to conduct a private placement offering to raise funds for the creation of each and
every additional team as located within the respective city. The initial steps will be to form a limited
liability company of which PAR shall be the manager. Investors will subscribe for membership
interests in the respective limited liability company with targeted capital amounts to be raised as
set forth below:
Each team will be owned and governed by the respective limited liability company and PAR shall
act as the manager of each limited liability company. The role of PAR as a manager will be
determined and set forth in the operating agreement between the respective limited liability
company. The offering and capital raise amounts established for each team located in the
respective city were determined by examining market size and demographics and the potential
yearly revenue earnings each city has the potential to yield based on these factors. Below are
certain samples of team names and potential logos:
Potential Team Names and Logos
BROADCASTING
The Company’s Manager, PAR, intends to create and commence a broadcasting plan to develop
and produce four games per week starting June 3, 2017. It is further planned that two national
games and two local games will be broadcasted each week during the twelve week regular
season totaling 48 broadcasted games. Additionally, the Rugby League will broadcast six playoff
games and conclude its 2017 season with the broadcast of its championship game in September
2017.
As of the date of this Private Placement Memorandum, negotiations for broadcasting any League
games has not commenced. However, management of PAR believes it is strategically poised to
initiate these negotiations with various sports broadcast networks that may include ESPN and Fox
Sports to commence when the League’s official schedule for 2017 has been fully developed.
In addition to the game presentation, each broadcast will provide League updates, promotion of
upcoming telecasts and reinforcement of the PAR championship game on pay-per-view. The
presentation of each telecast will instill drama, energy, empathy and excitement by
dimensionalizing the athlete through storytelling. To achieve this, the presentation will appeal to
the viewer’s sense of drama by punctuating the rise of one man or team (the winner) and the fall
of another (the loser). The telecast will highlight the extreme athleticism as well as the physical and
mental toughness it takes to play rugby. The presentation will tell the story line repetitively and
create excitement and anticipation for upcoming broadcasts as well as drive traffic to the PAR
website. One of the goals in working with our planned network partnership will be to illuminate the
earnest and hardworking characteristics of the “PAR” athlete. Human interest stories will take
‘center stage’ and be ‘threaded’ throughout every production. Loyalty, family and passion are just
some of the ingredients necessary to bring the audience closer to the athlete and the team. The
audience must have heroes to cheer for and villains to disdain.
PAR will also capitalize on the old school, blue-blood traditional look and feel of rugby. The Rugby
Team and the other PAR rugby teams will be defined by a rough edge but played by gentlemen.
Differentiation from other sports will assist us in attracting a loyal, niche audience. In addition,
management believes that this “personality,” if captured artistically and effectively, will greatly
expand merchandise sales opportunities.
REVENUES
The Manager anticipates that revenues will be generated by the Company in a number of
methods as follows: (i) patrons purchasing game tickets at average ticket price of $45 with
estimated 10,000 fans attending each game; (ii)sponsorship derive income; (iii) network and
content distribution; and (iv) launching of our online TV channel, which will be offered to
subscribers at a fee of $24.99 per season.
We are also currently developing a full line of merchandise (i.e. team jerseys, t-shirts, hats, etc.) that
will be sold online and at the live events
The Manager, PAR, has established a media revenue sharing plan with regards to profits remaining
from revenue obtained through media sales and sponsorship sales during each season. These
payments are only distributed to the Company after all commissions are deducted and paid and
after all television or radio production costs are deducted and paid. Each Member (current in
league payments, fines, etc. with PAR) in the Company will receive their percentage of the
remaining income or profit directly attributable to the profits generated on an annual basis if
approved by the Manager.
The revenue sharing payments to the Company will be paid based on PAR distributing back 80% of
the revenue to the Company. Subsequently, each member of the Company shall be distributed
their pro-rata share determined by dividing 80% by the number of Membership Interests held of
record during the period of time under which such revenue was earned by PAR.
Assumption Detail
Operating Expenses
Operating Expenses
EBITDA
EBITDA 2017 2018 2019
Revenues * $2,700,000.00 $3,800,000.00 $5,300,000.00
Expenses * $1,000,000.00 $1,300,000.00 $1,700,000.00
EBITDA * $1,700,000.00 $2,500,000.00 $3,600,000.00
* Rounded
Valuation Market
Capitalization 2017 2018 2019
EBITDA $1,700,000.00 $2,500,000.00 $3,600,000.00
@ 5x Profit $8,500,000.00
$12,500,000.00 $18,000,000.00
@ 10x Profit $17,000,000.00
$25,000,000.00 $36,000,000.00
MARKETING
Management believes that with the brutal action similar to that of a MMA fight and the compelling
dynamic of a team sport, our Rugby Team and the League can be positioned in a unique and
profitable niche within the sports/entertainment market. Management further believes that by
properly positioning PAR in the minds of the primary target will require an integrated branding and
marketing effort. To leverage and maximize the initial marketing budget, each element will be
designed to complement the PAR positioning statement. Key marketing highlights are: (i) the 18-34
year old male targeted market has been acquainted with rugby on university campuses for
decades; (ii) arena rugby can be marketed as one of the most cost effective ways to reach the
18-34 demographic; and (iii) arena rugby can operate in summer months without competing with
other similar sports that take place in the fall.
The initial primary marketing goal will be to establish the Rugby Team and League as a new and
exciting sport that delivers a unique combination of action and entertainment. The existing
perceptions of the sport of rugby will be a positive with some segments of the market and a
negative with others. By carefully crafting and executing a strategic marketing message,
management believes that the Company, the Rugby Team and the League can both capitalize
on the existing good will and position themselves as a new alternative to mainstream sports.
A secondary marketing goal will be to highlight and communicate the unique entertainment value
that the Rugby Team and League will provide. The Company and its Manager, PAR, intend to
utilize a wide range of traditional marketing methods. Social media will be a large component of
its marketing practices to communicate our message and build the PAR professional indoor arena
rugby brand essence. We will be strategically targeting millennials through the use of popular
social media platforms, such as Facebook, Twitter, Instagram, etc.
MANAGEMENT'S DISCUSSION AND ANALYSIS
The Company was organized on July 6, 2016 and does not have any assets or capital. The
Manager of the Company, PAR, was recently organized on January 2, 2016 and is the wholly-
owned subsidiary of Zoom, Inc. Zoom, Inc. is a fully reporting company under the Securities
Exchange Act of 1934, as amended. The financial statements for PAR are attached hereto as
Exhibit A. PAR has been capitalized with $100 and it has no liabilities.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS OF THE MANAGER
The following table includes the names and positions held of our executive officers and directors of
PAR, which is the Company’s Manager, as of the date of this Private Placement Memorandum:
NAME AGE POSITION
William Forhan 71 President/Treasurer and a Director
Biography
William Forhan. Mr. Forhan has been the sole officer and director of Par since inception. Mr. Forhan
has also been serving as Zoom Companies, Inc. Chief Executive Officer and member of its Board of
Directors since its inception on January 20, 2009. From approximately June 1, 2011 until September
11, 2014 Mr. Forhan served as chief executive officer of Medytox Solutions Inc. an OTCBB public
Company symbol “MMMS.” From approximately July 1 2005 until June 1, 2011, Mr. Forhan was chief
executive officer of Casino Players Inc., a public OTCBB Company with trading symbol of “CSNO”
and a casino rep company sending players to 20 casinos in North America. From approximately
July 19, 2010 until January 11, 2011, Mr. Forhan was founder, chairman and chief executive officer
of National Asset Recovery Corp; completing a reverse merger with a public entity and trading as
an OTCBB company with the symbol "REPO." Mr. Forhan created the business from the first
employee to over 25 staff focused as a repo forwarding company in the repo asset recovery
industry.
From approximately July 1, 2008 until July 15, 2009, Mr. Forhan provided SEC compliance and
consulting services to Next Interactive, Inc. an OTCBB Company, symbol “NXOI” specializing
in upscale international tours and cruise sailings primarily to the Caribbean. Mr. Forhan’s job duties
included assisting with a reverse merger with an OTCBB Company and completing two TV network
acquisitions. The company was successful in completing the reverse merger and both acquisitions
in October 2008. From July 2002 until June 28, 2008, Mr. Forhan served as the chief executive officer
and chairman of Invicta Group, Inc. (OTCBB: IVIT). Invicta Group, Inc. was an Internet media
company that sold advertising online to travel suppliers (hotels, tourist boards, tour operators and
Cruise Lines) that offer discounts to Invicta’ s travel enthusiast's email database of 10,000,000.
From June 1999 until January 2000, Mr. Forhan served as co-founder and president of
ByeByeNow.com, Inc. a South Florida Dot Com Company focusing as an Internet travel company,
which also owned 150 full service travel agencies franchise locations and 250 cruise only franchise
agencies generating the industry’s largest cruise revenues exceeding $250,000,000 a year; total
annual revenues exceeding $500,000,000. From June 1997 through January 2000, Mr. Forhan served
as chairman and chief executive officer of Aviation Industries Corp. (OTCBB: AVIA), a publicly
traded holding company specializing in the travel industry, owning 15% ownership in Key Wee
airlines operating seven 727 aircraft serving Newark to Florida and Puerto Rico as a discount
scheduled airline. The company also owned several subsidiaries: a corporate travel company,
Business Travel of Atlanta; an airline gate in Gulfport, MS serving arrival and departure charter
aircraft,; a new fleet of 4 luxury motor coaches that shuttled airport/hotel arrival and departures to
and from Gulf Port, MS plus tours to New Orleans.
From January 1994 to January 2000, Mr. Forhan served as chairman and chief executive officer of
Casino Airlink Inc. (OTCBB: POKR) a tour operator operating one Boeing 727 jet aircraft offering
casino tours and gaming casino junkets for clients from Ft. Lauderdale, Orlando and St. Petersburg,
Florida to Gulfport, MS.
EXECUTIVE COMPENSATION
Management has not been compensated pursuant to his executive role or as member of the
board of directors of PAR.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our Articles of Organization and Operating Agreement provide for mandatory indemnification of
our officers and directors, except where such person has been adjudicated liable by reason of his
negligence or willful misconduct toward the Company or such other corporation in the
performance of his duties as such officer or director. Our Operating Agreement also authorizes the
purchase of director and officer liability insurance to insure them against any liability asserted
against or incurred by such person in that capacity or arising from such person's status as a
director, officer, employee, fiduciary, or agent, whether or not the corporation would have the
power to indemnify such person under the applicable law.
DESCRIPTION OF AUTHORIZED CAPITAL
GENERAL
The following is a description of our capital structure and the provisions of our Articles of
Organization and Operating Agreement and only as a summary.
Our Articles of Organization authorize the issuance of 100 Membership Interests. As of the date of
this Memorandum, there are no Membership Interests issued and outstanding.
MEMBERSHIP INTERESTS
Holders of Membership Interests have full voting rights, one vote for each Membership Interest held
of record. Members are entitled to receive distributions as may be declared by the Manager out
of funds legally available therefore and share pro rata in any such distributions to members upon
liquidation. Members have no conversion, pre-emptive or subscription rights. All outstanding
Membership Interests are deemed fully paid and non-assessable.
OPERATING AGREEMENT
In accordance with Nevada Revised Statutes, the Company has entered into that certain
operating agreement dated July 6, 2016 (the “Operating Agreement”) with the Manager and
each of the primary members of the Company, who are identified as the initial investors in the
Company pursuant to this Offering (the “Primary Members”). The relevant terms and provisions of
the Operating Agreement are as follows.
Members
The Company shall issue Membership Interests to the Primary Members and may, from time to time
in accordance with the terms and conditions of the Operating Agreement, issue Membership
Interests to one or more subsequent members (“Subsequent Members” and collectively with the
Primary Members, the “Members”). Primary Members remain as Primary Members for so long as
they hold Membership Interests. Succeeding holders of the Membership Interests of Primary
Members shall not be deemed as “Primary Members” unless a majority of the Membership Interests
of the remaining Primary Members votes to designate the seceding holder of Membership Interests
as a “Primary Member with 60 days of the transfer or sale of that Primary Members’ Member
Interest.” For purposes of the Operating Agreement, the Primary Member and any such
Subsequent Members shall be deemed “Members” of the Company. Subject to the conditions
therein, the Members shall have the right to vote upon all matters upon which Members have the
right to vote under the Act or under the Operating Agreement, in proportion to their respective
percentage voting interest in the Company.
Management
The Company shall be managed solely by one or more managers (the “Manager”). Members
holding over 50% of the Membership Interests may, at any time, affirmatively vote to replace the
existing Manager with one or more new Managers provided that the holders of the majority of
Membership Interests of the Primary Members affirm the action. No voting Member (other than the
Manager) shall, without the prior consent of the Manager or the designee of the Manager, take
any action on behalf of, or in the name of, the Company, or enter into any contract, agreement,
commitment or obligation binding upon the Company, or perform any act in any way relating to
the Company or the Company’s assets. For purposes of clarity, there may be more than one
Manager at any time, but there may not be more than five (5) Managers. If there are two (2)
Managers, both Managers must vote in favor of an action for the Managers to take action on a
topic. If there are three (3) or more Managers, a majority of the Managers must vote in favor of
taking action for such action to be approved by the Managers. In the event there is more than
one Manager, the Manager can be referred to as the Board of Managers. The Initial Board of
Managers shall consist of designees of Pro Arena Rugby, Inc.
Voting
The Manager shall not take any of the following actions, unless and until the majority of
Membership Interests of the Primary Members affirm the action:
• A sale, lease, exchange or other disposition of all or substantially all the
assets of the Company;
• A merger or consolidation involving the Company, if the Company is not the
surviving entity;
• The incurrence of any loan, credit obligation, guarantee, sale/leaseback
arrangement or other indebtedness by the Company, or the issuance by the Company of any
bonds, debentures, notes or other debt securities, in an amount greater than $1,000,000;
• The making of any charitable contribution in any form to any charitable
organization at the behest of any Member in an amount over $10,000; provided, however, that
charitable contributions in which the Company receives sponsorship rights or other material
marketing advantages are specifically excluded from this provision;
• the creation of a new class or series of ownership interest in the Company;
• The incurrence or guarantee of any indebtedness for or on behalf of any
Member; and
• The dissolution, liquidation or winding up of the Company.
Liability of Members
All debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise,
shall be solely the debts, obligations and liabilities of the Company and no Member shall be
obligated personally for any such debt, obligation or liability of the Company solely by reason of
being a Member or Manager.
New Members
The Manager may admit a new Subsequent Member to the Company only if: (a) such proposed
new Subsequent Member delivers to the Company his required capital contribution; (b) the
proposed new Subsequent Member agrees in writing to be bound by the terms of the Operating
Agreement by becoming a party thereto; and (c) the proposed new Subsequent Member delivers
such additional documentation as the Manager shall reasonably require to so admit such
proposed new Subsequent Member to the Company. Upon the admission of a new Subsequent
Member to the Company, the capital accounts of the Members, and the calculations that are
based on the capital accounts, shall be adjusted appropriately.
Meetings of Members
Apart from an annual meeting to be held yearly at the discretion of the Manager, no regular,
special or other meetings of Members are required to be held. Any action that may be taken at a
meeting of Members may be taken without a meeting by written consent in accordance with the
Act provided the action is taken with the written consent of a majority of the Member Interests and
the written consent of Members holding at least over 50% of the Member Interests of the Primary
Members. Meetings of the Members, for any purpose or purposes, may be called at any time by a
vote of the Members holding a majority of Member Interests, or by the Manager. The Members
may designate any place as the place of meeting for any meeting of the Members. If no
designation is made, the place of meeting shall be the principal place of business of the
Company. Members holding at least over 50% of the Member Interests and Members holding at
least over 50% of the Member Interests of the Primary Member Interests represented in person, by
telephonic participation, or by proxy, shall constitute a quorum at any meeting of Members.
Capital Accounts
A separate capital account shall be maintained for each Member that has a Membership Interest
in the Company. The capital account of each Member shall be increased by (i) the amount of any
cash and the fair market value of any property or services contributed to the Company by such
Member (net of any liability secured by such contributed property that the Company is considered
to assume or take subject to); and (ii) the amount of income or profits allocated to such Member.
The capital account of each Member shall be reduced by (i) the amount of any cash and the fair
market value of any property distributed to the Member by the Company (net of liabilities secured by
such distributed property that the Member is considered to assume or take subject to on account of his
Membership Interest); and (ii) the amount of expenses or loss allocated to the Member. If any property
other than cash is distributed to a Member, the Capital Accounts of the Members shall be adjusted as
if the property had instead been sold by the Company for a price equal to its fair market value and the
proceeds thereafter distributed to the Members.
Guaranteed payments (“Guaranteed Payments”) for salary, wages, fees, payments on loans,
rents, etc., may be made to the Members. Guaranteed Payments shall not be deemed to be
distributions to the Members on account of their Member Interests, and shall not be charged to the
Members’ capital accounts.
Allocations and Distributions
Allocations of Profits and Losses. Profits and losses, after deducting Guaranteed Payments, if any,
shall be allocated among the Members in proportion to their percentage Membership Interests.
Any special allocations necessary to comply with the requirements set forth in Code Section 704
and the corresponding Regulations including, without limitation, the qualified income offset and
minimum gain chargeback provisions contained therein, shall be made if the Manager deems
these actions to be appropriate.
Distributions. Subject to applicable law, the Manager shall determine in its sole discretion the
amount and timing of all distributions of cash, or other assets, by the Company to the Members
(“Distributions”). Except as otherwise provided in the Operating Agreement, Distributions shall be
made to all the Members in proportion to their percentage Membership Interests. Notwithstanding
the foregoing, within sixty (60) days after the Company files its annual Federal income tax return,
the Manager shall, to the extent consistent with prudent business judgment, cause the Company
to declare and pay Distributions, if any, proportionate to their Membership Interests.
All such Distributions shall be made only to the Members who, according to the books and records
of the Company, are the holders of record on the actual date of Distribution. The Manager may
base a determination that a Distribution of cash may be made based on a balance sheet, profit
and loss statement, cash flow statement or other relevant information of or about the Company.
Neither the Company nor the Manager shall incur any liability for making Distributions.
Right of First Refusal
Offer. If any Member (the “Selling Member”) who wishes to transfer all or a part of his or her
Membership Interests shall receive a bone fide offer for such Membership Interests, they must
provide a written offer addressed to the Company (the “Offer”). The Offer shall set forth the
number of Membership Interests subject to the Offer, the identity of any third party that may
purchase the Member Interests, and the amount of consideration requested by any third party for
the Membership Interests (the “Offered Membership Interests”) and contain a legally cognizable
offer to sell the Offered Membership Interests to the Company. The Company may, in its sole
discretion, reject the Offer and prohibit the Selling Member from transferring all or part of their
Membership Interests.
Option of the Company. The Company shall have a non-assignable option to purchase all or any
of the Membership Interests at the purchase price per Membership Interest based on the
reasonable fair market value of the Membership Interests or the amount of the offer from any third
party, whichever is less.). Such option shall be exercisable by the Company by giving a Notice to
the Selling Member within seven (7) business days after receiving the Offer. If the Selling Member is
then a Manager of the Company, he shall not participate in the determination by the Company of
whether or not it shall exercise its option to purchase the Membership Interests, as such decision
shall be made by a majority vote of the other Managers, if any or, in the event there are no other
Mangers, by vote of the majority of the Membership Interests of the Primary Members.
Obligation to Purchase. If the Company elects to purchase all or part of the Membership Interests
contained in an Offer, then the Company (to the extent that it has so elected) shall be obligated
to purchase, and the Selling Member shall be obligated to sell, such Membership Interests within
thirty (30) days of the last election to purchase the Offered Membership Interests. The Company
may, in its sole discretion, purchase the Membership Interests by means of an interest free
promissory note, not be of duration greater than 12 months.
Death or Incompetency of a Member
Upon the death or adjudicated incompetency of a Member, the Member’s estate, beneficiary
or legal guardian, as the case may be (“Personal Representative”), may, at the option of the
Company, sell, transfer and assign all of the deceased or incompetent Membership Interests to
the Company for a purchase price reflecting fair market value. The Company may, in its sole
discretion, purchase the Membership Interests by means of an interest free promissory note, not be
of duration greater than 12 months.
Conversion to “C” Corporation
With the approval of Members holding at least a majority of Member Interests and holders of the
majority of Membership Interests of the Primary Members, the Company may be reconstituted as a
“C” corporation. In the event the Company may be reconstituted as a “C” corporation, the
Membership Interests (and all securities issuances) shall be proportionately adjusted to shares or
similar securities, and the Operating Agreement shall be terminated and replaced by bylaws of
the “C” corporation.
BENEFICIAL OWNERSHIP
As of this date of this Private Placement Memorandum, none of the officers or directors hold an
equity interest or have a beneficial ownership interest in the Membership Interests of the Company.
RELATED PARTIES AND CERTAIN TRANSACTIONS
DIRECTOR INDEPENDENCE
At this time PAR does not have a policy that its directors or a majority be independent of
management as PAR has at this time only one director. It is the intention of PAR to implement a
policy that a majority of the Board members be independent of PAR’s management as the
number of Board members increases. A Director is considered independent if the Board
affirmatively determines that the Director (or an immediate family member) does not have any
direct or indirect material relationship with PAR or its affiliates or any member of senior
management of PAR or his or her affiliates. The term “affiliate” means any corporation or other
entity that controls, is controlled by, or under common control with the Company, evidenced by
the power to elect a majority of the Board of Directors or comparable governing body of such
entity. The term “immediate family member” means spouse, parents, children, siblings, mothers-
and fathers-in-law, sons- and daughters-in law, brothers- and sisters-in-laws and anyone (other than
domestic employees) sharing the Director’s home.
TERMS OF THE OFFERING
Subject to the conditions set forth in this Memorandum and in accordance with the terms and
conditions of the Articles of Organization and the Operating Agreement, the Membership Interests
are being offered by the Company on a "best efforts” basis. The full purchase price is payable in
cash upon subscription. Each investor will be required to meet certain investor suitability standards
and also comply with his respective state requirements, if any, as to financial qualifications. There is
no assurance as to the number of Membership Interests will be sold, if any.
PLAN OF DISTRIBUTION
The Membership Interests are being offered directly to the public by the Manager, PAR, and its
officers and directors. No commissions or any other remuneration will be paid on sales of the
Membership Interests made directly to the public by any such officer or director.
This Offering will terminate at the discretion of the Company. The Offering will remain open for an
indefinite period of time until either a certain number of Membership Interests have been sold as
determined by the Company or the Company, in its sole discretion, terminates the Offering,
whichever date occurs earlier.
HOW TO SUBSCRIBE
Prospective investors who satisfy the investor suitability standards set forth in the Subscription
Agreement under "Suitability Standards" may subscribe for the Membership Interests by
completing, signing and delivering to the Company an executed copy of the Subscription
Documents to be furnished by the Company. All subscriptions must be accompanied by a check
payable to the order of "Pro Arena Rugby Las Vegas LLC" in the amount subscribed for. By his or
her execution of the Subscription Documents, the investor agrees to all the terms of the
Subscription Agreement of the Company. The Board of Directors has the unconditional right to
accept or reject any subscription in whole or in part in its sole discretion for any reason. If the Board
of Directors rejects or fails to accept any subscription, or part of any subscription, the subscription
and the funds paid by the investor, without interest, will be returned to the subscriber. A subscriber
cannot cancel or withdraw his or her subscription.
WHO MAY INVEST
An investment in the Membership Interests offered hereby is highly speculative and involves a high
degree of risk, including the risk of the entire loss of the investment. In addition, these securities lack
liquidity as compared to other securities investments. There is not currently and may never be any
public or private market for the Membership Interests. Additionally, these securities are "restricted
securities" as such term is defined under the Securities Act and may not be resold or transferred
without compliance with applicable federal and state securities laws. Accordingly, an investment
in the Membership Interests is suitable only for persons of substantial financial means who meet the
definition of "Accredited Investors" under Regulation D". See "SUBSCRIPTION AGREEMENT."
RESTRICTION OF TRANSFER
The Membership Interests offered hereby has not been registered under the Securities Act or the
securities laws of any state. Consequently, investors may not subsequently sell any of the securities
acquired in this Offering unless those securities are subsequently registered under applicable
securities laws or unless exemptions from such registration are available. Accordingly, investors
herein must be prepared to bear the economic risk of the investment and the total loss of their
investment.
INVESTOR REPRESENTATIONS
Each prospective investor represents to the Company by execution of the Confidential Purchaser
Questionnaire that, among other things, the prospective investor:
(i) is familiar with the terms of the Offering and this Memorandum, and has received and reviewed
all other documents he has requested from the Company;
(ii) is able to bear the economic risk of an investment in the Membership Interests offered hereby
and the total loss of his investment;
(iii) is purchasing the Membership Interests for his own account and not with a view to resell or
otherwise participate in a public distribution of the Membership Interests; and
(iv) has such knowledge and experience in financial and business matters that he is capable of
evaluating the merits and risks of the prospective investment in the Membership Interests.
Prospective investors who wish to subscribe for the common stock must represent to the Company
that they meet certain suitability standards by completing and returning to the Company a
Subscription Agreement available from the Company. Prospective investors who are acting in a
fiduciary capacity must submit documentation to the Company to demonstrate their authority to
so act.
CONFIDENTIALITY
The Company will to the extent allowed by the Securities Act of 1933, as amended, and the
various state securities laws, keep confidential the identities of investors in the Company and the
information supplied to the Board of Directors by said investors in the Confidential Purchaser
Questionnaire.
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