Family Golf Centers Inc · 424B1 · On 7/8/96

Confirming Copy   ·   Filed On 7/8/96   ·   SEC File 333-04541   ·   Accession Number 950136-96-569

Prospectus   ·   Rule 424(b)(1)
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 424B1       Definitive Materials                                 228  1,014K 

Document Table of Contents

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Filed Pursuant to Rule 424(b)(1)        
Registration File Nos.        
File No. 333-4541 and File No. 333-7489         

PROSPECTUS                                                                      

3,000,000 SHARES    

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FAMILY GOLF CENTERS, INC.   

COMMON STOCK  

All of the 3,000,000 shares of common stock, par value $0.01 per share    
(the "Common Stock"), offered hereby (the "Offering"), are being sold by        
Family Golf Centers, Inc. (the "Company"). The Common Stock is quoted on the    
Nasdaq National Market under the symbol "FGCI." On July 2, 1996, the last       
sale price of the Common Stock as reported by the Nasdaq National Market was    
$28 1/8 per share. See "Price Range of Common Stock."                           

SEE "RISK FACTORS" BEGINNING ON PAGE 7 HEREIN FOR A DISCUSSION OF   
CERTAIN MATTERS THAT SHOULD BE CONSIDERED BY POTENTIAL INVESTORS.   

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND    
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES   
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE      
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY     
IS A CRIMINAL OFFENSE.  

                                                                · Download Table

                  PRICE TO      UNDERWRITING     PROCEEDS TO 
                   PUBLIC       DISCOUNT (1)     COMPANY (2) 
              --------------  --------------  ---------------
                                                             
Per Share  ..      $27.00          $1.89           $25.11    
Total(3) ....   $81,000,000      $5,670,000      $75,330,000 

(1) The Company and certain stockholders of the Company have agreed to    
 indemnify the several underwriters identified elsewhere herein (the
"Underwriters") against certain liabilities, including liabilities
  under the Securities Act of 1933, as amended (the "Securities Act").
See "Underwriting."                                               

 (2) Before deducting expenses payable by the Company estimated at $500,000.

(3) Certain stockholders of the Company (the "Selling Stockholders") have 
granted the Underwriters a 30-day option to purchase up to 450,000
   additional shares of Common Stock on the same terms and conditions as
set forth above, solely to cover over-allotments, if any. If the  
   Underwriters exercise this option in full, the total Price to Public,
    Underwriting Discount, Proceeds to Company and proceeds to the Selling
Stockholders will be $93,150,000, $6,520,500, $75,330,000 and     
$11,299,500, respectively. See "Principal Stockholders" and       
"Underwriting."                                                   

The shares of Common Stock are offered by the Underwriters, subject to    
prior sale, when, as and if issued to and accepted by the Underwriters and      
subject to approval of certain legal matters by counsel for the Underwriters.   
It is expected that delivery of the Common Stock will be made against payment   
therefor on or about July 9, 1996, in New York, New York.                       

JEFFERIES & COMPANY, INC.                                                       

                                            HAMPSHIRE SECURITIES CORPORATION

July 3, 1996                                                                    

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IMAGE OMITTED     
[Map depicting Locations of Family Golf Centers, Inc. Facilities      
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IMAGES OMITTED ON INSIDE FRONT COVER AND INSIDE BACKCOVER OF PROSPECTUS 
VARIOUS PHOTOGRAPHS DEPICTING FAMILY GOLF CENTERS, INC. FACILITIES

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IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK   
AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH    
TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET, IN THE              
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE    
DISCONTINUED AT ANY TIME.                                                       

IN CONNECTION WITH THE OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP   
MEMBERS (IF ANY) OR THEIR RESPECTIVE AFFILIATES MAY ENGAGE IN PASSIVE MARKET    
MAKING TRANSACTIONS IN THE COMMON STOCK ON THE NASDAQ NATIONAL MARKET IN        
ACCORDANCE WITH RULE 10b-6A UNDER THE SECURITIES EXCHANGE ACT OF 1934. SEE      
"UNDERWRITING."                                                                 

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PROSPECTUS SUMMARY  

The following summary is qualified in its entirety by the more detailed   
information and financial statements, including the notes thereto, appearing    
elsewhere in this Prospectus. Unless otherwise indicated, the information in    
this Prospectus assumes that the Underwriters' over-allotment option is not     
exercised. As used in this Prospectus, the term "Company" means, unless the     
context requires otherwise, Family Golf Centers, Inc. and its subsidiaries.     
Prospective investors are urged to read this Prospectus in its entirety.        

THE COMPANY   

Family Golf Centers, Inc. operates golf centers designed to provide a wide
variety of practice opportunities, including facilities for driving,            
chipping, putting, pitching and sand play. In addition, the Company's golf      
centers typically offer golf lessons instructed by PGA-certified golf           
professionals, full-line pro shops and other amenities to encourage family      
participation. The Company currently owns, leases or manages 24 golf            
facilities, comprised of 17 golf centers and seven combination golf center      
and golf course facilities located in ten states. Of the golf centers, seven    
are currently operated under the name "Golden Bear Golf Centers," licensed      
from Jack Nicklaus' licensing company, Golden Bear Golf Centers, Inc. Of the    
seven combination golf center and golf course facilities, six include par-3     
golf courses, generally designed to facilitate the practice of golf, and one    
includes a regulation 18-hole golf course. The Company has experienced          
significant recent growth, primarily through the acquisition or opening of 20   
facilities since the Company's initial public offering in November 1994. The    
Company's total revenue increased from $1.9 million in 1992 to $12.4 million    
for the year ended December 31, 1995. During the same period, the Company's     
net income increased from a net loss of $22,000 to a net profit of $1.1         
million.                                                                        

The Company's strategy is to grow revenue and net income by (i) increasing
the number of golf centers it owns, leases or manages by (a) identifying and    
acquiring well-located ranges that have the potential for improvement under     
better management and with improved or expanded facilities, including the       
addition of enclosed hitting areas, full-line pro shops, miniature golf         
courses and other amenities and (b) building new centers in locations where     
suitable acquisition opportunities are not available and (ii) seeking to        
realize economies of scale through centralized purchasing, accounting,          
management information systems and cash management.                             

According to the National Golf Foundation (the "NGF"), there were         
approximately 25 million golfers in the United States in 1995. According to     
the Golf Range and Recreational Association, there are currently between        
1,900 and 2,300 stand-alone driving ranges in the United States. The NGF        
estimates that in 1993 92% of all stand-alone driving ranges were managed by    
owner-operators. The Company believes that many of these owner-operated         
ranges are managed by individuals who may lack the experience, expertise and    
financial resources to compete effectively. The Company believes this highly    
fragmented industry presents numerous opportunities for the Company to          
acquire, upgrade and renovate golf centers and driving ranges.                  

The Company believes that it attracts customers to its golf centers       
primarily due to the quality, convenience and comfort of its facilities and     
their appeal to the whole family. The Company's golf centers are designed       
around a driving range with target greens, bunkers and traps to simulate golf   
course conditions. The ranges are lighted to permit night play and the          
hitting tees are enclosed or sheltered from above and from the rear in a        
climate-controlled environment and, in three cases, all or a portion of the     
range is enclosed under an air inflated dome to permit all-weather play.        
There are approximately 80 to 100 hitting tees in facilities with the           
two-tier design and approximately 30 to 60 hitting tees at smaller golf         
centers. In addition to the driving range, the Company's golf centers include   
a number of amenities designed to appeal to golfers and their families, such    
as a 4,000-6,000 square foot clubhouse (including a full-line pro shop,         
locker facilities, a restaurant or snack bar and video games), PGA-certified    
golf instructors, landscaped 18-hole miniature golf courses and a short game    
practice area (with putting green and sand traps). The Company's pro shops      
are stocked with clubs, bags, shoes, apparel, videos and related accessories    
from a number of suppliers, including brand name manufacturers such as          
Karsten Manufacturing Corporation (Ping), Callaway Golf Company, Tommy Armour   
Golf, Wilson Golf Company,                                                      

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Mizuno Golf Company, Spalding Sports Worldwide, Titleist and Footjoy            
Worldwide (Division of American Brands, Inc.), Ashworth Clothing Company and    
Nicklaus Golf Equipment Company.                                                

The Company was incorporated in the State of Delaware on July 13, 1994.   
The Company operates through its wholly-owned subsidiaries, the first of        
which was incorporated on March 27, 1991. The Company's principal executive     
offices are located at 225 Broadhollow Road, Melville, New York 11747 and its   
telephone number is (516) 694-1666 and its World Wide Web address is            
http://www.familygolf.com.                                                      

THE OFFERING  

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Common Stock offered by the Company ...................  3,000,000 shares                                 
Common Stock to be outstanding after the Offering  .... 11,598,025 shares(1)                              
Use of proceeds ....................................... To repay approximately $6.6 million of bank       
                                                        indebtedness, for the acquisition, leasing,       
                                                        development and improvement of golf facilities and
                                                        for general working capital purposes. See "Use of 
                                                        Proceeds."                                        
Nasdaq National Market symbol ......................... FGCI                                              

---------------                                                                 
(1)    Does not include 760,705 shares of Common Stock issuable upon exercise   
of outstanding options and warrants. See "Description of Capital  
Stock--Outstanding Options and Warrants."                         

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SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA AND OTHER DATA  

The following table presents, for the periods and dates indicated, summary
historical and pro forma financial data and other data of the Company. The      
pro forma condensed statements of operations data for the year ended December   
31, 1995 and for the three months ended March 31, 1996 give effect to the       
acquisitions of Pelham Enterprises, Inc., the Hiland Park Golf Course, RFC      
Enterprises, Inc., Upper Hembree Partners, L.P., The Practice Tee, Inc.         
("TPT"), Golf Masters Limited Partnership and Air Dome Limited Partnership      
(collectively, "Valley View"), Owl's Creek Golf Center, Inc., Flemington Golf   
and Sports Center, LLC and associated land, 202 Golf Associates, Inc.           
("Yorktown Heights"), Indian River Golf-O-Rama, Inc. ("Indian River"), K.G.     
Golf, Inc. ("Fairfield"), Catalina Golf Center ("Tucson"), Tree Court Golf &    
Recreational Complex, Inc. ("St. Louis") and Golf & Sports Center of the Palm   
Beaches, Inc. and W.A.G.N. Partners (collectively, "West Palm Beach") as if     
they had been consummated as of January 1, 1995. The pro forma as adjusted      
statement of operations data for the three months ended March 31, 1996 also     
give effect to the sale of 199,124 shares of Common Stock offered hereby by     
the Company at an offering price of $27 per share and the application of the    
net proceeds therefrom to repay bank indebtedness of $5.0 million as            
described under "Use of Proceeds" as if such transaction had occurred as of     
January 1, 1996. The pro forma condensed balance sheet as of March 31, 1996     
gives effect to the acquisition of Yorktown Heights, Indian River, Fairfield,   
Tucson, St. Louis and West Palm Beach as if they had occurred on March 31,      
1996. The pro forma as adjusted balance sheet at March 31, 1996 also gives      
effect to the sale of 3,000,000 shares of Common Stock offered hereby by the    
Company at an offering price of $27 per share and the application of $5.0       
million of the net proceeds therefrom to repay bank indebtedness as described   
under "Use of Proceeds" (excluding $1.6 million borrowed in contemplation of    
a potential acquisition of a golf recreational facility in San Jose,            
California). This information should be read in conjunction with                
"Capitalization," "Selected Financial Data," "Management's Discussion and       
Analysis of Financial Condition and Results of Operations," Pro Forma           
Unaudited Condensed Financial Information and the Company's Financial           
Statements and the notes thereto, each included elsewhere herein. The pro       
forma data set forth below is not necessarily indicative of what the actual     
results of operations would have been had the transactions occurred at the      
dates referred to above, nor do they purport to indicate the results of         
future operations.                                                              

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                                                 YEAR ENDED DECEMBER 31,             THREE MONTHS ENDED MARCH 31,    
                                        ----------------------------------------  ---------------------------------  
                                                                                                          PRO FORMA  
                                                                           PRO                      PRO       AS     
                                                   HISTORICAL             FORMA     HISTORICAL     FORMA   ADJUSTED  
                                        -------------------------------  -------  --------------  ------   --------  
                                         1992     1993    1994    1995     1995    1995    1996    1996      1996    
                                        ------   ------  ------  ------  -------  --------------  ------   --------  
                                                          (IN THOUSANDS, EXCEPT PER SHARE DATA)                      
                                                                                                                     
STATEMENT OF OPERATIONS DATA:                                                                                        
 Total revenue ........................ $1,887    $2,632  $6,362  $12,432  $18,979  $1,782  $3,362  $3,973    $3,973 
 Operating expenses ...................  1,128     2,247   4,215    6,614   12,750   1,061   2,252   2,755     2,755 
 Cost of merchandise sold .............    320       459     750    1,779    2,222     295     457     523       523 
 Selling, general and administrative                                                                                 
  expenses ............................    351       615     548    1,242    2,576     352     643     743       743 
                                        ------    ------  ------  -------  -------  ------  ------  ------    ------ 
 Operating income (loss) ..............     88      (689)    849    2,797    1,431      74      10     (48)      (48)
 Interest expense .....................   (111)     (192)   (313)    (939)  (2,188)    (92)   (100)   (176)      (51)
 Other income .........................      1       106      16       66       76      22     197     125       125 
                                        ------    ------  ------  -------  -------  ------  ------  ------    ------ 
 Income (loss) before income taxes,                                                                                  
  minority interest and extraordinary                                                                                
  item ................................    (22)     (775)    552    1,924     (681)      4     107     (99)      (26)
 Income tax expense (benefit) .........     --        --     (65)     669     (246)      2      38     (36)       (9)
                                        ------    ------  ------  -------  -------  ------  ------  ------    ------ 
Income (loss) before minority                                                                                        
  interest and extraordinary item  ....    (22)     (775)    617    1,255     (435)      2      69     (63)      (17)
 Minority interest in (income) loss  ..     --        12    (129)      --       --      --      --      --        -- 
 Extraordinary item (net of tax                                                                                      
  effect) .............................     --        --      --      181       --      --      --      --        -- 
                                        ------    ------  ------  -------  -------  ------  ------  ------    ------ 
 Net income (loss) .................... $  (22)   $ (763) $  488  $ 1,074  $  (435) $    2  $   69  $  (63)   $  (17)
                                        ======    ======  ======  =======  =======  ======  ======  ======    ====== 
 Net income (loss) per share before                                                                                  
  extraordinary item ..................           $(0.23) $ 0.13  $  0.24  $ (0.08) $ 0.00  $ 0.01  $(0.01)   $ 0.00 
 Extraordinary item ...................               --      --     (.04)      --      --      --      --        -- 
                                                  ------  ------  -------  -------  ------  ------  ------    ------ 
 Net income (loss) per share ..........           $(0.23) $ 0.13  $  0.20  $ (0.08) $ 0.00  $ 0.01  $(0.01)   $ 0.00 
                                                  ======  ======  =======  =======  ======  ======  ======    ====== 
 Weighted average number of common                                                                                   
  shares outstanding ..................            3,272   3,636    5,271    5,637   4,938   8,648   8,779     8,978 
                                                  ======  ======  =======  =======  ======  ======  ======    ====== 

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                                          AT DECEMBER 31, 1995              AT MARCH 31, 1996           
                                         --------------------  -----------------------------------------
                                                                                           PRO FORMA AS 
                                               HISTORICAL        HISTORICAL    PRO FORMA    ADJUSTED(1) 
                                         --------------------  -------------  -----------  -------------
                                                              (DOLLARS IN THOUSANDS)                    
                                                                                                        
BALANCE SHEET DATA:                                                                                     
 Cash and cash equivalents .............        $23,121           $11,147       $ 7,532       $ 77,362  
 Working capital .......................         20,598            12,950         4,373         79,203  
 Total assets ..........................         61,582            63,130        68,800        138,630  
 Short-term borrowings .................                                          5,000                 
 Total long-term debt, including                                                                        
  current maturities ...................          8,193             8,752         8,752          8,752  
 Total stockholders' equity ............         49,388            51,986        52,586        127,416  

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                                                                         THREE MONTHS    
                                            YEAR ENDED DECEMBER 31,     ENDED MARCH 31,  
                                        ------------------------------  ---------------  
                                          1992    1993    1994    1995    1995    1996   
                                        ------  ------  ------  ------  ------  -------  
                                                                                         
OTHER DATA:                                                                              
 Facilities open at beginning of                                                         
  period ..............................     0       1       2       5       5       14   
 Facilities built during period  ......     1       1       2       1       1        1   
 Facilities or management contracts                                                      
  acquired during period ..............     0       0       1       8       0        3   
                                        ------  ------  ------  ------  ------  ------   
 Facilities open at end of period  ....     1       2       5       14      6       18(2)
                                        ======  ======  ======  ======  ======  ======   

(1)    Assumes that as of March 31, 1996 the sale by the Company of 3,000,000   
    shares of Common Stock in the Offering at an offering price of $27 per
share and the application of the net proceeds therefrom to repay  
indebtedness of $5.0 million as set forth in "Use of Proceeds" had
occurred.                                                         

(2)    Subsequent to March 31, 1996, the Company acquired six golf facilities.  

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RISK FACTORS  

Prospective investors should carefully consider the specific factors set  
forth below, as well as the other information included in this Prospectus,      
before deciding to invest in the Common Stock offered hereby. This Prospectus   
contains forward-looking statements that involve risks and uncertainties. The   
Company's actual results could differ materially from the results discussed     
in the forward-looking statements. Factors that could cause or contribute to    
such differences include, but are not limited to, those discussed in "Risk      
Factors," as well as those discussed elsewhere in this Prospectus.              

LIMITED OPERATING HISTORY                                                       

The Company opened its first golf center in March 1992 and, accordingly,  
has only a limited history of operations. The Company generated net income of   
approximately $488,000 during the year ended December 31, 1994, approximately   
$1.1 million during the year ended December 31, 1995 and approximately          
$69,000 for the three months ended March 31, 1996. However, the Company         
experienced losses prior to 1994 and there can be no assurance that the         
Company will operate profitably in the future or that recent results of         
operations will be indicative of future results. See "Risk Factors--Expansion   
Strategy" and Pro Forma Unaudited Condensed Statement of Operations.            

EXPANSION STRATEGY                                                              

The Company's ability to significantly increase revenue, net income and   
operating cash flow over time depends in large part upon its success in         
acquiring or leasing and constructing additional golf facilities at suitable    
locations upon satisfactory terms. There can be no assurance that suitable      
golf facility acquisition or lease opportunities will be available or that      
the Company will be able to consummate acquisition or leasing transactions on   
satisfactory terms. The acquisition of golf facilities may become more          
expensive in the future to the extent that demand and competition increases.    
The likelihood of the success of the Company must be considered in light of     
the problems, expenses, difficulties, complications and delays frequently       
encountered in connection with the construction and opening of new golf         
facilities. See "Risk Factors--Additional Financing Requirements," "Risk        
Factors--Dependence Upon Key Employee; Recruitment of Additional Personnel,"    
"Management's Discussion and Analysis of Financial Condition and Results of     
Operations" and "Business."                                                     

To successfully implement its expansion strategy, the Company must        
integrate acquired or newly- opened golf facilities into its existing           
operations. As the Company grows, there can be no assurance that additional     
golf facilities can be readily assimilated into the Company's operating         
structure. Inability to efficiently integrate golf facilities could have a      
material adverse effect on the Company's financial condition and results of     
operations. In addition, a number of the golf facilities which the Company      
has acquired have, and golf facilities it may acquire in the future may have,   
experienced losses. On a pro forma basis, as adjusted to give effect to the     
acquisitions consummated after January 1, 1995 as if they had occurred as of    
January 1, 1995, the Company had a net loss before extraordinary item of        
$435,000 (as compared to income before extraordinary item of $1.3 million on    
a historical basis) for the year ended December 31, 1995 and a net loss of      
$63,000 (as compared to net income of $69,000 on a historical basis) for the    
three months ended March 31, 1996. There can be no assurance that golf          
facilities recently acquired by the Company or those that the Company may       
acquire in the future will operate profitably and will not adversely affect     
the Company's results of operations. See "Business" and Pro Forma Unaudited     
Condensed Statement of Operations.                                              

TERMINATION OF LEASES                                                           

Although after giving effect to renewal options none of the Company's     
leases for its golf centers or facilities is expected to expire until 2007,     
the leases may be terminated prior to their scheduled expiration should the     
Company default in its obligations thereunder. Such obligations include the     
Company's timely payment of rent and maintenance of adequate insurance          
coverage. The termination of any of the Company's leases could have an          
adverse effect on the Company. If any of the Company's leases were to be        
terminated, there can be no assurance that the Company would be able to enter   
into leases for comparable properties on favorable terms, or at all. See        
"Management's Discussion and Analysis of Financial Condition and Results of     
Operations."                                                                    

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TERMINATION OF MANAGEMENT AGREEMENTS                                            

The Company's management agreement with the City of New York (the "City") 
for the Douglaston, New York golf center, which expires on December 31, 2006,   
is terminable by the City at will. During the year ended December 31, 1995,     
the management agreement accounted for 17% of the Company's total revenue.      
Pursuant to the management agreement, as of March 31, 1996 the Company had      
made approximately $2.3 million of capital improvements to the Douglaston       
center. If the management agreement is terminated, the City may retain, and     
is not obligated to pay the Company for the value of, such capital              
improvements. Unless reimbursed, for accounting purposes the Company would      
immediately have to write off the undepreciated value of these capital          
improvements and the goodwill related to its purchase of the limited            
partners' minority interest (the "Minority Interest") in Alley Pond             
Associates, L.P., which are currently being depreciated and amortized over      
the life of the management agreement. Accordingly, termination of the           
management agreement with the City could have a material adverse effect on      
the Company. See "Business--Properties."                                        

The Company's management agreement with the City of El Segundo for the El 
Segundo golf facility terminates on June 30, 1998, unless earlier terminated    
by either party, with or without cause, as of the end of any operating year     
during the term of the agreement, upon at least 90 days prior written notice.   
Termination of the management agreement with the City of El Segundo may have    
an adverse effect on the Company. See "Business--Properties."                   

GOLDEN BEAR LICENSE                                                             

The Company operates seven of its golf centers, and intends to operate at 
least one additional golf center, under the name "Golden Bear Golf Center"      
pursuant to a non-exclusive license agreement (the "License Agreement"),        
expiring August 2002, with Golden Bear Golf Centers, Inc. (the "Licensor").     
The License Agreement is terminable by the Licensor prior to August 2002        
under certain circumstances, including if the current directors of the          
Company at any time constitute less than 50% of the Company's directors. In     
September 1995, the Company agreed to cure an alleged default of the License    
Agreement (principally by making certain capital improvements by November       
1996). Failure by the Company to take the agreed upon actions by such date      
could result in the termination of the License Agreement. Termination of the    
License Agreement could adversely affect the Company's Golden Bear Golf         
Centers and, possibly, the Company. The value of the "Golden Bear" name is      
dependent, in part, upon the continued popularity of Jack Nicklaus.             
Accordingly, the occurrence of any event which diminishes the reputation of     
Mr. Nicklaus and the related "Golden Bear" symbol could adversely affect the    
Company's Golden Bear Golf Centers. See "Risk Factors--Competition" and         
"Business--Golden Bear License."                                                

COMPETITION                                                                     

The golf center industry is highly competitive and includes competition   
from other golf centers, traditional golf ranges, golf courses and other        
recreational pursuits. The Company may face imitation and other forms of        
competition and the Company cannot prevent or restrain others from utilizing    
a similar operational strategy. Many of the Company's competitors and           
potential competitors have considerably greater financial and other             
resources, experience and customer recognition than does the Company. Until     
September 1995, the Company had the exclusive right to open Golden Bear Golf    
Centers in certain territories. As a result of a change in the License          
Agreement in September 1995, the Licensor now is permitted to establish, or     
license others to establish, "Golden Bear" golf centers that compete with the   
Company's golf centers, including its Golden Bear Golf Centers. Golden Bear     
Golf, Inc., an affiliate of the Licensor, has recently publicly indicated       
that it intends to focus its efforts on the direct ownership and operation of   
golf facilities through the acquisition or development of additional golf       
centers and to pursue new licensees and enter into additional territorial       
development agreements only in locations and territories where it and its       
affiliates do not intend to acquire or develop their own facilities. There      
can be no assurance that such competition will not adversely affect the         
Company's ability to acquire additional properties. See                         
"Business--Competition."                                                        

VULNERABILITY TO WEATHER CONDITIONS AND SEASONAL RESULTS                        

Historically, the second and third quarters of the year have accounted for
a greater portion of the Company's operating revenue than have the first and    
fourth quarters of the year. This is primarily due to an outdoor playing        
season limited by inclement weather. Although most of the Company's driving     
ranges are designed to be all-weather facilities (including the domed           
facilities), and although the Company has recently expanded its operations      
into territories where inclement weather may have less of an impact than        

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in the Northeast, portions of the Company's facilities, including the           
miniature golf courses, are outdoors and vulnerable to weather conditions.      
Also, golfers are less inclined to practice when weather conditions limit       
their ability to play golf on outdoor courses. This seasonal pattern, as well   
as the timing of new center openings and acquisitions, may cause the            
Company's results of operations to vary significantly from quarter to           
quarter. Accordingly, period-to-period comparisons are not necessarily          
meaningful and should not be relied on as indicative of future results. In      
addition, variability in the Company's results of operations could cause the    
Company's stock price to fluctuate following the release of interim results     
of operations or other information and may have a material adverse effect on    
the Company and its stock price. See "Management's Discussion and Analysis of   
Financial Condition and Results of Operations."                                 

ADDITIONAL FINANCING REQUIREMENTS                                               

As of March 31, 1996, the Company had working capital of approximately    
$13.0 million. The Company anticipates, based on its currently proposed         
expansion plans and assumptions relating to its operations, that the net        
proceeds of the Offering, together with availability under its primary credit   
facility and cash flow from operations, will be sufficient to permit the        
Company to conduct its operations and to carry on its contemplated expansion    
over at least the next 12 months. The Company also anticipates that it may      
need to raise substantial additional equity capital in the future to continue   
its longer term expansion plans. There can be no assurance that the Company     
will be able to obtain additional financing on favorable terms or at all. See   
"Use of Proceeds," "Capitalization" and "Management's Discussion and Analysis   
of Financial Condition and Results of Operations."                              

ENVIRONMENTAL REGULATION                                                        

Operations at the Company's golf facilities involve the use and limited   
storage of various hazardous materials such as pesticides, herbicides, motor    
oil, gasoline and paint. Under various federal, state and local laws,           
ordinances and regulations, an owner or operator of real property is            
generally liable for the costs of removal or remediation of hazardous           
substances that are released on or in its property regardless of whether the    
property owner or operator knew of, or was responsible for, the release of      
hazardous materials. The Company has not been informed by any governmental      
authority of any non-compliance or violation of any environmental laws,         
ordinances or regulations and the Company believes that it is in substantial    
compliance with all such laws, ordinances and regulations applicable to its     
properties or operations. However, the Company is aware of one notice of        
violation issued by the New York Department of Environmental Conservation       
(the "DEC") against the owner of the land leased by the Company in Elmsford,    
New York alleging that certain hazardous materials were placed on the site.     
The owner has taken remedial action and the Company does not believe it will    
be affected by the alleged violation. To date, the Company has not incurred     
material costs of remediation in relation to any of its golf facilities and     
the Company knows of no material environmental liability to which it may        
become subject. Although the Company usually hires environmental consultants    
to conduct environmental studies, including invasive procedures such as soil    
sampling or ground water analysis on golf facilities it owns, operates or       
intends to acquire, in some cases only limited invasive procedures are          
conducted on such properties. Even when invasive procedures are used,           
environmental studies may fail to discover all potential environmental          
problems. Accordingly, there may be potential environmental liabilities or      
conditions of which the Company is not aware. See "Business--Governmental       
Regulation."                                                                    

DEPENDENCE UPON KEY EMPLOYEE; RECRUITMENT OF ADDITIONAL PERSONNEL               

The Company is heavily dependent on the services of Dominic Chang, its    
Chairman of the Board, President and Chief Executive Officer. The loss of the   
services of Mr. Chang could materially adversely affect the Company. Mr.        
Chang has entered into an employment agreement with the Company which           
terminates on December 31, 1999. See "Management--Employment Agreements." The   
Company owns, and is the sole beneficiary of, key person life insurance in      
the amount of $1.5 million on the life of Mr. Chang. The Company will also be   
required to hire additional personnel and PGA-certified professionals to        
staff the golf centers it intends to acquire, lease or construct. There can     
be no assurance that the Company will be able to attract and retain qualified   
personnel. See "Business--Operations," "Business--Employees" and                
"Management."                                                                   

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DILUTION                                                                        

Purchasers in the Offering will experience immediate and substantial      
dilution of $16.02 in net tangible book value per share of the Common Stock.    

CONTROL BY CURRENT STOCKHOLDER                                                  

Following the completion of the Offering, Dominic Chang will beneficially 
own 2,822,750 shares of Common Stock, constituting approximately 24.3% of the   
outstanding shares (or if the Underwriters' over-allotment option is            
exercised in full, Mr. Chang will beneficially own 2,549,334 shares of Common   
Stock, constituting approximately 22.0% of the outstanding shares). Mr. Chang   
will, therefore, be able to exercise significant influence with respect to      
the election of the directors of the Company and all matters submitted to a     
vote of the stockholders of the Company, including the acquisition or           
disposition of material assets. See "Management" and "Principal                 
Stockholders."                                                                  

DEPENDENCE ON DISCRETIONARY CONSUMER SPENDING                                   

The amount spent by consumers on discretionary items, such as family and  
entertainment activities like those offered by the Company's golf facilities,   
have historically been dependent upon levels of discretionary income, which     
may be adversely affected by general economic conditions. A decrease in         
consumer spending on golf could have an adverse effect on the Company's         
financial condition and results of operations.                                  

BROAD DISCRETION IN USE OF PROCEEDS                                             

The Company intends to use substantially all of the net proceeds of the   
Offering for the acquisition, leasing, development and improvement of golf      
facilities and for general working capital purposes. Accordingly, the Company   
will have broad discretion as to the application of such proceeds. An           
investor will not have the opportunity to evaluate the economic, financial      
and other relevant information which will be utilized by the Company in         
determining the application of such proceeds in the acquisition, leasing,       
development and improvement of golf facilities. See "Use of Proceeds."          

DIVIDEND POLICY                                                                 

The Company has not paid any cash dividends on the Common Stock since     
inception and does not intend to pay any dividends to its stockholders in the   
foreseeable future. The Company currently intends to reinvest earnings, if      
any, in the development and expansion of its business. See "Dividend Policy."   

SHARES ELIGIBLE FOR FUTURE SALE; REGISTRATION RIGHTS                            

The sale, or availability for sale, of substantial amounts of Common Stock
in the public market subsequent to the Offering pursuant to Rule 144 under      
the Securities Act ("Rule 144") or otherwise could materially adversely         
affect the market price of the Common Stock and could impair the Company's      
ability to raise additional capital through the sale of its equity securities   
or debt financing. In general, under Rule 144 as currently in effect, a         
person (or persons whose shares are aggregated), including a person who may     
be deemed to be an "affiliate" of the Company as that term is defined under     
the Securities Act, would be entitled to sell within any three month period a   
number of shares beneficially owned for at least two years that does not        
exceed the greater of (i) 1% of the then outstanding shares of Common Stock,    
or (ii) the average weekly trading volume in the Common Stock during the four   
calendar weeks preceding such sale. Sales under Rule 144 are also subject to    
certain requirements as to the manner of sale, notice and the availability of   
current public information about the Company. However, a person who is not      
deemed to have been an affiliate of the Company during the 90 days preceding    
a sale by such person and who has beneficially owned shares of Common Stock     
for at least three years may sell such shares without regard to the volume,     
manner of sale or notice requirements of Rule 144.                              

Of the 11,598,025 shares of Common Stock outstanding after the Offering,  
7,980,075 shares will be freely tradeable without restrictions following        
completion of the Offering, unless held by "affiliates" of                      

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the Company who are subject to certain volume limitations and manner of sale    
restrictions, and 3,617,950 will be "restricted securities" as that term is     
defined in Rule 144. The two-year holding period for substantially all of the   
"restricted securities" will have been met by November 1996 and such            
securities may, subject to the agreements described below, be sold without      
registration under the Securities Act, subject to volume limitations and        
other restrictions. The holders of 3,161,950 shares of Common Stock (not        
including those shares to be sold if the Underwriters' over-allotment option    
is exercised) and the holders of options to purchase up to 169,000 shares of    
Common Stock will remain subject to an agreement entered into, in connection    
with the Company's public offering in December 1995 (the "Secondary             
Offering"), pursuant to which they cannot publicly sell or otherwise dispose    
of any securities of the Company until December 13, 1996 without the prior      
written consent of Jefferies & Company, Inc. ("Jefferies"). Mr. Chang has       
pledged 361,750 shares of Common Stock to two banks to secure personal loans,   
and may in the future pledge additional shares to secure additional personal    
loans, which shares are not, or would not be, subject to such agreements.       

The holders of warrants to purchase up to 300,000 shares of Common Stock  
issued to the representatives of the underwriters and their designees in the    
Secondary Offering have certain demand and "piggyback" registration rights      
commencing in December 1996. The holder of warrants to purchase up to 70,000    
shares of Common Stock issued to a consultant have certain "piggyback"          
registration rights and certain demand registration rights commencing one       
month after the closing of the Offering. In addition, as of the date of this    
Prospectus, the holders of an aggregate of 247,100 shares of Common Stock       
(including 76,584 shares to be registered and sold if the Underwriters'         
over-allotment option is exercised in full) have certain "piggyback"            
registration rights, which commence on various dates in 1996. Of these          
247,100 shares, approximately 64,351 are held in escrow, and will be            
released, subject to certain conditions, on various dates in 1996 and 1997.     
See "Description of Capital Stock--Outstanding Options and Warrants."           

PREFERRED STOCK; POSSIBLE ANTI-TAKEOVER EFFECTS OF CERTAIN CHARTER, BY-LAW      
AND CONTRACTUAL PROVISIONS                                                      

The Company's Certificate of Incorporation authorizes the Board of        
Directors to issue up to 2,000,000 shares of preferred stock, par value $.10    
per share. The preferred stock may be issued in one or more series, the terms   
of which may be determined at the time of issuance by the Board of Directors,   
without further action by stockholders. Although no preferred stock is          
currently outstanding and the Company currently has no plans for the issuance   
of any preferred stock, there can be no assurance that the Company will not     
do so in the future. The ability of the Board of Directors to issue preferred   
stock could have the effect of delaying, deferring or preventing a change of    
control of the Company or the removal of existing management and, as a          
result, could prevent the stockholders of the Company from being paid a         
premium over the market value for their shares of Common Stock. The Company's   
By-Laws contain provisions requiring advance notice of stockholder proposals    
and imposing certain procedural restrictions on stockholders wishing to call    
a special meeting of stockholders. In addition, the License Agreement may be    
terminated by the Licensor if the current members of the Company's Board of     
Directors do not constitute at least 50% of the Company's Board of Directors.   
Such provisions could discourage possible future attempts to gain control of    
the Company (which attempts, if stockholders were offered a premium over the    
market value of their Common Stock, might be viewed as beneficial to            
stockholders). See "Business--Golden Bear License" and "Description of          
Capital Stock."                                                                 

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USE OF PROCEEDS   

The net proceeds to be received by the Company from the sale of the       
3,000,000 shares of Common Stock being offered by the Company are estimated     
to be approximately $74.8 million, after deducting underwriting discounts and   
estimated offering expenses payable by the Company, based upon an offering      
price of $27 per share. Approximately $5.0 million of the net proceeds will     
be used to repay indebtedness outstanding under the Company's revolving line    
of credit with Chemical Bank, which expired on June 30, 1996 and which, as of   
June 27, 1996, bore interest at 8.5%. The Company has received a letter of      
intent from Chemical Bank to extend the line of credit to June 30, 1997. Such   
indebtedness was incurred to purchase the Tucson, Arizona, Fairfield, Ohio      
and St. Louis, Missouri golf centers and a portion of the West Palm Beach,      
Florida golf center. If the proposed acquisition of the golf recreational       
facility in San Jose, California is consummated, approximately $1.6 million     
of the net proceeds will be used to repay short-term indebtedness with          
Chemical Bank incurred in contemplation of that acquisition, which              
indebtedness matures on September 5, 1996 and bears interest at 8.5%. See       
"Business--Recently Opened or Acquired Facilities" and "--Other Potential       
Sites." The Company intends to use the balance of the net proceeds of the       
Offering for the acquisition, leasing, development and improvement of golf      
facilities and for general working capital purposes.                            

Pending the uses described above, the net proceeds from the Offering will 
be invested in investment-grade, short-term, interest-bearing securities. The   
Company will not receive any proceeds from the sale of Common Stock by the      
Selling Stockholders in connection with any exercise of the Underwriters'       
over-allotment option.                                                          

PRICE RANGE OF COMMON STOCK   

The Company's Common Stock is quoted on the Nasdaq National Market under  
the symbol "FGCI." The following table sets forth, for the periods indicated,   
the high and low last sale prices for the Common Stock as reported by the       
Nasdaq National Market.                                                         

                                                                · Download Table

                                                     STOCK PRICE      
                                                -------------------   
                                                    HIGH       LOW    
                                                ----------  -------   
                                                                      
CALENDAR YEAR 1994:                                                   
 Fourth Quarter (from November 17, 1994                               
  through December 31, 1994) ..................     $ 7 1/4    $ 5 3/4

CALENDAR YEAR 1995:                                                   
 First Quarter ................................     $ 7 7/8    $ 6    
 Second Quarter ...............................      11          5 1/2
 Third Quarter ................................      19 5/8     10 1/4
 Fourth Quarter ...............................      19         12 3/4

CALENDAR YEAR 1996:                                                   
 First Quarter ................................     $27 3/4    $17 1/8
 Second Quarter ...............................      29 3/4     25 5/8
 Third Quarter (through July 2, 1996)  ........      29 1/8     24 3/4

On July 2, 1996, the last reported sale price for the Company's Common    
Stock on the Nasdaq National Market was $28 1/8 per share. As of June 27,       
1996, there were 90 stockholders of record of the Common Stock.                 

DIVIDEND POLICY   

The Company has neither declared nor paid dividends on its Common Stock   
and does not intend to declare or pay any dividends in the foreseeable          
future. The Company currently intends to retain earnings, if any, for the       
development and expansion of its business. The declaration of dividends in      
the future will be at the election of the Board of Directors and will depend    
upon the earnings, capital requirements and financial position of the           
Company, general economic conditions and other pertinent factors.               

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CAPITALIZATION  

The following table sets forth, at March 31, 1996, the actual short-term  
debt and capitalization of the Company, and the pro forma short-term debt and   
capitalization of the Company as if the acquisitions of Yorktown Heights,       
Indian River, Fairfield, Tucson, St. Louis and West Palm Beach had been         
consummated as of such date and as adjusted to give effect to the sale of       
3,000,000 shares of Common Stock offered hereby by the Company at an offering   
price of $27 per share. This table should be read in conjunction with           
"Management's Discussion and Analysis of Financial Condition and Results of     
Operations," Pro Forma Unaudited Condensed Balance Sheet and notes thereto      
and the Company's Financial Statements and notes thereto, each included         
elsewhere herein.                                                               

                                                        · Enlarge/Download Table

                                                                         AT MARCH 31, 1996          
                                                               -------------------------------------
                                                                                        PRO FORMA AS
                                                                 ACTUAL    PRO FORMA      ADJUSTED  
                                                               ---------  -----------  -------------
                                                                       (DOLLARS IN THOUSANDS)       
                                                                                                    
Current portion of long-term obligations and short-term debt     $ 1,523     $ 6,523      $  1,523  
                                                               =========  ===========  =============
Long-term obligations ........................................   $ 7,229     $ 7,229      $  7,229  
Stockholders' equity (1):                                                                           
 Preferred stock, $0.10 par value, 1,000,000 shares                                                 
  authorized; as adjusted, 2,000,000 shares authorized (2),                                         
  none outstanding ...........................................        --          --            --  
 Common stock, $0.01 par value, 10,000,000 shares authorized;                                       
  as adjusted, 50,000,000 shares authorized (2), 8,489,325                                          
  issued and outstanding (8,520,225 pro forma, 11,520,225 pro                                       
  forma as adjusted) .........................................        85          85           115  
 Additional paid-in capital ..................................    50,909      51,509       126,309  
 Retained earnings ...........................................     1,027       1,027         1,027  
 Treasury stock ..............................................       (35)        (35)          (35) 
                                                               ---------  -----------  -------------
  Total stockholders' equity .................................    51,986      52,586       127,416  
                                                               ---------  -----------  -------------
   Total capitalization ......................................   $59,215     $59,815      $134,645  
                                                               =========  ===========  =============

------------                                                                    
 (1) Does not include any shares issuable upon exercise of outstanding stock
options or warrants.                                              

(2) Gives effect to the increase in the Company's authorized number of    
    shares of preferred stock from 1,000,000 to 2,000,000 and the increase
   in the authorized number of shares of Common Stock from 10,000,000 to
50,000,000 subsequent to March 31, 1996.                          

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SELECTED FINANCIAL DATA   

The following table presents, for the periods and dates indicated, summary
historical and pro forma financial data and other data of the Company. The      
pro forma condensed statements of operations data for the year ended December   
31, 1995 and the three months ended March 31, 1996 give effect to the           
acquisitions of Pelham Enterprises, Inc., the Hiland Park Golf Course, RFC      
Enterprises, Inc., Upper Hembree Partners, L.P., TPT, Valley View, Owl's        
Creek Golf Centers, Inc., Flemington Golf and Sports Center, LLC and            
associated land, Yorktown Heights, Indian River, Fairfield, Tucson, St. Louis   
and West Palm Beach as if they had been consummated as of January 1, 1995.      
The pro forma as adjusted statement of operations data for the three months     
ended March 31, 1996 also give effect to the sale of 199,124 shares of Common   
Stock offered hereby by the Company at an offering price of $27 per share and   
the application of the net proceeds therefrom to repay bank indebtedness of     
$5.0 million as described under "Use of Proceeds" as if such transaction had    
occurred as of January 1, 1996. The pro forma condensed balance sheet as of     
March 31, 1996 gives effect to the acquisition of Yorktown Heights, Indian      
River, Fairfield, Tucson, St. Louis and West Palm Beach as if they had          
occurred on March 31, 1996. The pro forma as adjusted balance sheet at March    
31, 1996 also gives effect to the sale of 3,000,000 shares of Common Stock      
offered hereby by the Company at an offering price of $27 per share and the     
application of $5.0 million of the net proceeds therefrom to repay bank         
indebtedness as described under "Use of Proceeds" (excluding $1.6 million       
borrowed in contemplation of a potential acquisition of a golf recreational     
facility in San Jose, California). This information should be read in           
conjunction with "Capitalization," "Selected Financial Data," "Management's     
Discussion and Analysis of Financial Condition and Results of Operations,"      
Pro Forma Unaudited Condensed Financial Information and the Company's           
Financial Statements and the notes thereto, each included elsewhere herein.     
The pro forma data set forth below is not necessarily indicative of what the    
actual results of operations would have been had the transactions occurred at   
the dates referred to above, nor do they purport to indicate the results of     
future operations.                                                              

                                                        · Enlarge/Download Table


                                                 YEAR ENDED DECEMBER 31,             THREE MONTHS ENDED MARCH 31,    
                                        ----------------------------------------  ---------------------------------  
                                                                                                          PRO FORMA  
                                                                           PRO                      PRO       AS     
                                                   HISTORICAL             FORMA     HISTORICAL     FORMA   ADJUSTED  
                                        -------------------------------  -------  --------------  ------   --------  
                                         1992     1993    1994    1995     1995    1995    1996    1996      1996    
                                        ------   ------  ------  ------  -------  --------------  ------   --------  
                                                          (IN THOUSANDS, EXCEPT PER SHARE DATA)                      
                                                                                                                     
STATEMENT OF OPERATIONS DATA:                                                                                        
 Total revenue ........................ $1,887    $2,632  $6,362  $12,432  $18,979  $1,782  $3,362  $3,973    $3,973 
 Operating expenses ...................  1,128     2,247   4,215    6,614   12,750   1,061   2,252   2,755     2,755 
 Cost of merchandise sold .............    320       459     750    1,779    2,222     295     457     523       523 
 Selling, general and administrative                                                                                 
  expenses ............................    351       615     548    1,242    2,576     352     643     743       743 
                                        ------    ------  ------  -------  -------  ------  ------  ------    ------ 
 Operating income (loss) ..............     88      (689)    849    2,797    1,431      74      10     (48)      (48)
 Interest expense .....................   (111)     (192)   (313)    (939)  (2,188)    (92)   (100)   (176)      (51)
 Other income .........................      1       106      16       66       76      22     197     125       125 
                                        ------    ------  ------  -------  -------  ------  ------  ------    ------ 
 Income (loss) before income taxes,                                                                                  
  minority interest and extraordinary                                                                                
  item ................................    (22)     (775)    552    1,924     (681)      4     107     (99)      (26)
 Income tax expense (benefit) .........     --        --     (65)     669     (246)      2      38     (36)       (9)
                                        ------    ------  ------  -------  -------  ------  ------  ------    ------ 
Income (loss) before minority                                                                                        
  interest and extraordinary item  ....    (22)     (775)    617    1,255     (435)      2      69     (63)      (17)
 Minority interest in (income) loss  ..     --        12    (129)      --       --      --      --      --        -- 
 Extraordinary item (net of tax                                                                                      
  effect) .............................     --        --      --      181       --      --      --      --        -- 
                                        ------    ------  ------  -------  -------  ------  ------  ------    ------ 
 Net income (loss) .................... $  (22)   $ (763) $  488  $ 1,074  $  (435) $    2  $   69  $  (63)   $  (17)
                                        ======    ======  ======  =======  =======  ======  ======  ======    ====== 
 Net income (loss) per share before                                                                                  
  extraordinary item ..................           $(0.23) $ 0.13  $  0.24  $ (0.08) $ 0.00  $ 0.01  $(0.01)   $ 0.00 
 Extraordinary item ...................               --      --     (.04)      --      --      --      --        -- 
                                                  ------  ------  -------  -------  ------  ------  ------    ------ 
 Net income (loss) per share ..........           $(0.23) $ 0.13  $  0.20  $ (0.08) $ 0.00  $ 0.01  $(0.01)   $ 0.00 
                                                  ======  ======  =======  =======  ======  ======  ======    ====== 
 Weighted average number of common                                                                                   
  shares outstanding ..................            3,272   3,636    5,271    5,637   4,938   8,648   8,779     8,978 
                                                  ======  ======  =======  =======  ======  ======  ======    ====== 

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                                                        · Enlarge/Download Table

                                                      AT DECEMBER 31, 1995              AT MARCH 31, 1996           
                                                     --------------------  -----------------------------------------
                                                                                                        PRO FORMA AS
                                                          HISTORICAL        HISTORICAL    PRO FORMA      ADJUSTED(1)
                                                     --------------------  ------------  -----------  --------------
                                                                          (DOLLARS IN THOUSANDS)                    
                                                                                                                    
BALANCE SHEET DATA:                                                                                                 
 Cash and cash equivalents .........................        $23,121           $11,147       $ 7,532       $ 77,362  
 Working capital ...................................         20,598            12,950         4,373         79,203  
 Total assets ......................................         61,582            63,130        68,800        138,630  
 Short-term borrowings .............................                                          5,000                 
 Total long-term debt, including current maturities           8,193             8,752         8,752          8,752  
 Total stockholders' equity ........................         49,388            51,986        52,586        127,416  

                                                        · Enlarge/Download Table


                                                                               THREE MONTHS    
                                                  YEAR ENDED DECEMBER 31,     ENDED MARCH 31,  
                                              ------------------------------  ---------------  
                                                1992    1993    1994    1995    1995    1996   
                                              ------  ------  ------  ------  ------  -------  
                                                                                               
OTHER DATA:                                                                                    
 Facilities open at beginning of period  ....     0       1       2       5       5       14   
 Facilities built during period .............     1       1       2       1       1        1   
 Facilities or management contracts acquired                                                   
  during period .............................     0       0       1       8       0        3   
                                              ------  ------  ------  ------  ------  ------   
 Facilities open at end of period ...........     1       2       5       14      6       18(2)
                                              ======  ======  ======  ======  ======  ======   

------------                                                                    

(1) Assumes that as of March 31, 1996 the sale by the Company of 3,000,000
    shares of Common Stock in the Offering at an offering price of $27 per
share and the application of the net proceeds therefrom to repay  
indebtedness of $5.0 million as set forth in "Use of Proceeds" had
occurred.                                                         

 (2) Subsequent to March 31, 1996, the Company acquired six golf facilities.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF   
FINANCIAL CONDITION AND RESULTS OF OPERATIONS   

The following discussion and analysis should be read in conjunction with  
the Company's Financial Statements and the notes thereto appearing elsewhere    
in this Prospectus. This Prospectus contains forward-looking statements that    
involve risks and uncertainties. The Company's actual results could differ      
materially from the results discussed in the forward-looking statements.        
Factors that could cause or contribute to such differences include, but are     
not limited to, those discussed in "Risk Factors," as well as those discussed   
elsewhere in this Prospectus.                                                   

GENERAL                                                                         

The Company's strategy is to grow revenue and net income by (i) increasing
the number of golf centers it owns, leases or manages by (a) identifying and    
acquiring well-located ranges that have the potential for improvement under     
better management and with improved or expanded facilities, including the       
addition of enclosed hitting areas, full-line pro shops, miniature golf         
courses and other amenities and (b) building new centers in locations where     
suitable acquisition opportunities are not available and (ii) seeking to        
realize economies of scale through centralized purchasing, accounting,          
management information and cash management systems. The Company currently       
owns, leases or manages 24 golf facilities, comprised of 17 golf centers and    
seven combination golf center and golf course facilities. Of the seven          
combination golf center and golf course facilities, six include par-3 golf      
courses, generally designed to facilitate the practice of golf, and one         
includes a regulation 18-hole golf course. The following table sets forth       
certain information as to the Company's golf facilities:                        

                                                        · Enlarge/Download Table


                                                                   OWNED      LEASED      MANAGED      TOTAL  
                                                                 ---------  ----------  -----------  ---------
                                                                                                              
AT JANUARY 1, 1992 .............................................    --          --          --           0    
 Facilities built during 1992 ..................................    --           1          --           1    
 Facilities or management contracts acquired during 1992  ......    --          --          --           0    
                                                                 ---------  ----------  -----------  ---------
AT JANUARY 1, 1993 .............................................    --           1          --           1    
 Facilities built during 1993 ..................................    --           1          --           1    
 Facilities or management contracts acquired during 1993  ......    --          --          --           0    
                                                                 ---------  ----------  -----------  ---------
AT JANUARY 1, 1994 .............................................    --           2          --           2    
 Facilities built during 1994 ..................................    --           1           1           2    
 Facilities or management contracts acquired during 1994  ......    --           1          --           1    
                                                                 ---------  ----------  -----------  ---------
AT JANUARY 1, 1995 .............................................    --           4           1           5    
 Facilities built during 1995 ..................................    --           1          --           1    
 Facilities or management contracts acquired during 1995  ......     6           1           1           8    
                                                                 ---------  ----------  -----------  ---------
AT JANUARY 1, 1996 .............................................     6           6           2          14    
 Facilities built during the first three months of 1996  .......    --           1          --           1    
 Facilities or management contracts acquired during the first                                                 
  three months of 1996 .........................................     2           1          --           3    
 Facilities or management contracts acquired after                                                            
  March 31, 1996 ...............................................     3           3          --           6    
                                                                 ---------  ----------  -----------  ---------
AT JULY 2, 1996 ................................................    11          11          2           24    
                                                                 =========  ==========  ===========  =========

The Company's golf facilities have opened at varying times over the past  
several years. As a result of changes in the number of golf centers open from   
period to period, the seasonality of operations, the completion of the          
Company's initial public offering in November 1994 (the "IPO") and the          
Secondary Offering in December 1995, results of operations for any particular   
period may not be indicative of the results of operations in the future.        

Most of the Company's revenues from its golf centers are derived from     
selling tokens for use in automated range-ball dispensing machines, pro shop    
merchandise sales, charging for rounds of miniature golf, golf lessons and      
management fees. The Company also derives revenues at its golf centers from     
food                                                                            

16